Business Ethics Index: Measuring Consumer Sentiments Toward Business Ethical Practices

The present study describes the development of an ongoing and systematic index to measure consumers’ sentiments towards business ethical practices. The Business Ethics Index (BEI) is based on the well established measurements of consumer sentiments, namely the ICS (Index of Consumer Sentiment) and CBCCI (Conference Board Consumer Confidence Index). The BEI is comprised of 4 measurements representing the dimensions of “personal-vicarious” and “past-future.” Data from 503 telephone interviews were used to calculate a BEI of 107. This indicates an overall positive consumer sentiment towards the ethical behavior of business. Future calculations of the BEI are planned which will allow for the estimation of the latent dynamics of trends in consumer sentiments toward American business ethics.     

宗教文化视角下东西方商业伦理观差异比较及启示

商业伦理影响着经济的进步,宗教文化影响着商业伦理的发展,在历史变迁中,宗教文化对东西方商业伦理观存在着不同程度的影响。文章论述了商业伦理的内涵及其与宗教文化的关系,阐述了宗教文化视角下东西方商业伦理观在金钱观念、契约观念、诚信观念和社会责任观念四个方面存在着差异,并进行了比较分析。根据对东西方商业伦理观的差异分析,得出结论并从四个方面得出相应的启示以提升中国商业伦理水平。     

Exposure to Ethics Education and the Perception of Linkage between Organizational Ethical Behavior and Business Outcomes

This study focused on the effects of individual characteristics and exposure to ethics education on perceptions of the linkage between organizational ethical practices and business outcomes. Using a stratified sampling approach, 817 students were randomly selected from a population of approximately 1310 business students in an AACSB accredited college of business. Three hundred and twenty eight of the subjects were freshmen, 380 were seniors, and 109 were working managers and professionals enrolled in a night-time MBA program. Overall, the respondents included 438 male students and 379 female students. Exposure to ethics in the curriculum had a significant impact on student perceptions of what should be the ideal linkages between organizational ethical practices and business outcomes. Gender based differences were found with female students having a higher expectation regarding what should be the “ethics practices and business outcomes” link. Exposure to ethics in the curriculum had a positive moderating influence on the gender-based effects on perceptions of ideal ethical climate. The interaction effect showed that exposure to ethical education may have a positive impact on males and allow them to catch up with females in their ethical sensitivities concerning the ideal linkage between organizational ethical behavior and business outcomes. Further, consistent with the literature, the study found that gender differences in ethical attitudes regarding the ideal ethical climate, while significant for undergraduates, appeared to narrow considerably for the working professionals who were part-time MBA students. Harsh Luthar is an Associate Professor of Management at Bryant University. He received his Ph.D. from Virginia Polytechnic University, Pamplin College of Business, in the Department of Management. His research interests include international differences and cross-cultural issues impacting global human resource practices, ethical attitudes of students, and the nature of spiritual leadership. Ranjan Karri is an Assistant Professor of Management at Bryant University. He received his Ph.D. in strategic management from Washington State University. His research interests include corporate and business strategies, enterpreneurship, ethical leadership and corporate governance.     

Ethical Cycles and Trends: Evidence and Implications

Recent high-profile corporate scandals are reminiscent of the corporate raider scandals of the 1980s, suggesting that ethical scandals may occur in waves. This article provides a framework for analysis of this question by suggesting that ethical attitudes may be cyclical about long-term secular trends. We provide some empirical evidence from previously published work for the existence of cycles as well as a potential mechanism for their propagation, namely widespread publicity about a particularly salient event, e.g., Enron. Further, we posit that long-run secular trends would be affected through more deliberate, cognitive means, e.g., instruction in business ethics. We also discuss an important research implication, namely that traditional cross-sectional “book-end” studies surveying ethical attitudes at two different points in time may be unable to disentangle short-run cyclical movements from long-term secular trends.      

Ethical consumerism and wage levels: Evidence from an experimental market

This paper contributes to the promotion of multidisciplinary research on ethical consumerism by providing experimental evidence on consumer's willingness to reward sellers by paying higher wages to their workers. We analyze repeated interactions occurring between workers, sellers, and consumers within the framework of an experimental market. By successfully performing a task, workers allow sellers to offer a good through a market. Sellers set the price of goods and decide the wages of workers. Consumers enter the market sequentially and decide whether to accept one of the offers or to leave the market. Our data show that, especially in the first periods of the experiment, some sellers opt to pay high wages to their workers. However, this behavior is not rewarded by consumers, whose purchasing choices are almost exclusively driven by self-interest. In our interpretation, the connection between workers and sellers that connotes our experimental design, with workers who allow sellers to enter the market, may induce consumers to believe that eventual sacrifices for paying high wages to workers must be entirely on sellers. Our result suggests that the more salient is made the importance of some stakeholders in allowing the firm's activity, the fewer consumers' may be willing to sacrifice their monetary payoff to improve these stakeholders' condition.     

Business Should Be Its Own Therapist: Observing the "Governance Ethics" of Taiwanese Enterprises

Taiwanese enterprises generally display a tacit acceptance and practice of globally-recognized business ethics such as the respect of human rights. Yet some Taiwanese business supervisors subscribe instead to a philosophy of leadership, dubbed "pseudo-harmony", which actively seeks to evade responsibility and any conflict of interest with profitability. Meanwhile other Taiwanese entrepreneurs are even less enlightened, dictatorially upholding self-serving regimes which operate on a philosophy which is euphemistically referred to as "householder management".These attitudes result in the sub-optimal development of "organizational democratization" within Taiwanese enterprises and hi-light the fragility of "ethical leadership" in Taiwan. There is a strong argument, therefore, that Taiwanese business needs to become both its own analyst and therapist if it is to enhance its "governance ethics". Only this way can the nation's enterprises evolve their ethical responsibilities to stakeholders and sustain their competitiveness in a global market that increasingly demands an adherence to ethical standards.     

Recognizing Business Ethics: Practical and Ethical Challenges in Awarding Prizes for Good Corporate Behaviour

There seems to be a proliferation of prizes and rankings for ethical business over the past decade. Our principal aims in this article are twofold: to initiate an academic discussion of the epistemic and normative stakes in business-ethics competitions; and to help organizers of such competitions to think through some of these issues and the design options for dealing with them. We have been able to find no substantive literature – academic or otherwise – that addresses either of these two broad topics and audiences. Our modest aim, therefore, is to suggest an agenda of issues, and to begin to explore and analyse some of the possible arguments for and against various philosophical or practical solutions. Part I explores the challenges facing a prize-organizing committee, including problems derived from what Rawls calls the “fact of pluralism” in democratic societies (reasonable people will always disagree over some basic values, including those relevant to evaluating business practices), and epistemic issues about how we can justify qualitative judgments on the basis of incomplete quantitative data. We also try to identify risks and opportunity costs for ethics-prize granters. In Part II we spell out (a) a range of design options and (b) some advice about how any particular prize-awarding committee might select among these options to best achieve its goals (which typically involve highlighting and publicizing best practices for ethical business).     

The Relationship of Ethical Decision-Making to Business Ethics and Performance in Taiwan

This paper examines the relationship of ethical decision-making by individuals to corporate business ethics and organizational performance of three groups: (i) SMEs (small and medium enterprises), (ii) Outstanding SMEs (the Key Stone Award winners) and (iii) Large Enterprises, in order to provide a reference for Taiwanese entrepreneurs to practice better business ethics. The survey method involved random sampling of 132 enterprises within three groups. Some 524 out of 1320 questionnaires were valid. The survey results demonstrated that ethical decision-making by individuals, corporate business ethics and organizational performance are highly related. In summary, then, high levels of organizational performance were directly attributable to high levels of applied corporate and individual ethics. Furthermore, there is a demonstrable tendency for Outstanding SMEs to reject ethically unsound practices such as padded expense accounts, tax evasion and misleading advertising. The measurement criteria used to assess organizational performance, however, did not include an objective evaluation of financial performance.     

‘The Impact of Corporate Ethical Values and Enforcement of Ethical Codes on the Perceived Importance of Ethics in Business: A Comparison of U.S. and Spanish Managers’

This two country study examines the effect of corporate ethical values and enforcement of a code of ethics on perceptions of the role of ethics in the overall success of the firm. Additionally, the impact of organizational commitment and of individual variables such as ethical idealism and relativism was examined. The rationale for examining the perceived importance of the role of ethics in this manner is to determine the extent to which the organization itself can influence employee perceptions regarding ethics and social responsibility. Results indicate that all of the variables tested, except relativism, impacted upon one’s perceptions of the importance of ethics and social responsibility. Perceptions of the importance of ethics and social responsibility also varied depending upon country of residence with the U.S. sample having somewhat higher perceptions concerning the importance of ethics and social responsibility than their counterparts in Spain. Furthermore, when comparing the two samples, the U.S. sample had significantly higher corporate ethical values, greater enforcement of ethical codes, less organizational commitment and both lower idealism and relativism.     

The Missing Dynamic: Corporations, Individuals and Contracts

In this article we discuss whether it pays to invest ethically. Our aim is to examine corporate social responsibility from philosophical, moral and practical points of views. We focus on two main issues related to ethical investments. Firstly we discuss the moral dilemma of how capitalism has changed its shape in today’s world and from ‘blaming the business’ there is a general attempt to use the markets to promote ethics values and corporate social responsibility. Secondly, we analyze the growth of ethical investment funds in the UK today, and their performance, and highlight some of the institutional investors involved in the management of ethical funds. We discuss whether ethical investments really succeed in reducing the conflict between profit-making and social responsibility as they promise or whether they use commercial rhetoric and market mechanism to merely sell us our own perceived values back. We conclude that the paper has a key contribution in setting the scene for future research in an area that is evolving and of fundamental importance to companies, investors and various stakeholder groups.     

Bridging Ethics and Self Leadership: Overcoming Ethical Discrepancies Between Employee and Organizational Standards

In spite of extensive study and efforts to improve business ethics and increase corporate social responsibility, a quick review of almost any business publication will show that breaches of ethics are a common occurrence in the business community. In this paper we explore reasons for potential discrepancies or gaps between organizational and individual ethical standards, the consequences of such discrepancies, and possible methods of reducing the detrimental effects of these differences. The concept of self-leadership, as constructed through social learning theory is examined, and shown to be a potentially valuable tool for employees' use in making reasoned decisions in varying organizational ethical climates. Specifically, the authors will show how the practice of self-leadership can be employed as an important means to improve moral action within the firm.     

Ethical Commitment,Financial Performance,and Valuation: An Empirical Investigation of Korean Companies

A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with anecdotal evidence, we have found a significant association between the ethical commitment of Korean companies and their valuation on the Korean stock market. However, the result reveals that the association between ethical commitment and financial performance is not significantly supported. Tae Hee Choi received Ph.D. from the Ohio State University, Ohio, USA. Presently working as Assistant Professor in accounting at the KDI School of Public Policy and Management. Research interests are business ethics, capital market, financial accounting, managerial accounting, and valuation. Jinchul Jung received Ph.D. from Kent State University, Ohio, USA. Presently working as Assistant Professor of Business Administration Department in the College of Business at Chosun University. Research interests are business ethics, family-supportive program, and organizational commitment.     

Cultural Crossvergence and Social Desirability Bias: Ethical Evaluations by Chinese and Canadian Business Students

The purpose of this study is to determine whether there are cross-cultural differences between Chinese and Canadian business students with respect to their assessment of the ethicality of various business behaviors. Using a sample of 147 business students, the results indicate cultural crossvergence; the Chinese (72 students) and Canadians (75 students) exhibit different ethical attitudes toward questionable business practices at the individual level but not at the corporate level. A social desirability bias (a tendency to deny socially unacceptable actions and to admit to socially desirable ones) is also found to be a cross-cultural phenomenon, with the Canadians demonstrating a greater bias than the Chinese. Finally, this bias causes respondents to increase their assessment of the un-ethicality of questionable business activities.

Ethical Theory and Business Practices: The Case of Discourse Ethics

By focusing on the reasoned debate in the discourse-ethical approach to business ethics, this paper discusses the possibilities and limitations of moral reasoning as well as applied economic and business ethics. Business ethics, it is contended, can be looked at from the standpoint of two criteria: justification and application. These criteria are used to compare three approaches: the Integrative Business Ethics, developed by Swiss philosopher Peter Ulrich, the Cultural Business Ethics of the Nuremberg School in German business ethics, and the concept of “Good Conservation” by Frederick Bird. It is argued that discourse-ethical approaches can be called upon for justifying moral principles. Improving the chances of their application, however, necessitates a good understanding of lifeworlds and culturally developed institutional settings. Bearing this in mind, further research perspectives stressing a linkage between discourse-ethical and critical approaches in social sciences are suggested.Dr. Thomas Beschorner is head of the research group “Social Learning and Sustainability” at University of Oldenburg, Germany and currently Visiting-Professor at McGill University, Montreal, Canada     

Seven Pillars of Business Ethics: Toward a Comprehensive Framework

This article first addresses the question of “why” we teach business ethics. Our answer to “why” provides both a response to those who oppose business ethics courses and a direction for course content. We believe a solid, comprehensive course in business ethics should address not only moral philosophy, ethical dilemmas, and corporate social responsibility – the traditional pillars of the disciple – but also additional areas necessary to make sense of the goings-on in the business world and in the news. These “new pillars,” that we advocate include moral psychology, organizational design and behavior, motivational theory, and a unit on how society, business, and law interact. This last unit builds upon the work of Francis P. McHugh (1988) who urged an integration of “disciplines related to business ethics.” Our seventh pillar would encompass an integration of law, socio-political theory, and policy to demonstrate how business helps construct its own regulatory framework. The concluding recommendation is for a comprehensive “Seven Pillars” of business ethics approach. William Arthur Wines holds a B.S.B.A. with distinction from Northwestern University and a J.D. from the University of Michigan. He is admitted to the practice of law in Minnesota and the State of Washington. His research has appeared in over three dozen journals including the American Business Law Journal, Arizona Law Review, Economics of Education Review, Delaware Journal of Corporate Law, Denver Journal of International Law and Policy, Journal of Business Ethics, Labor Law Journal, Marquette Law Review, Nebraska Law Review, and The William and Mary Journal of Women and the Law. He is the author of two volumes of readings in business ethics and “Ethics, Law, and Business”, published by Lawrence Erlbaum Associates, Inc. in 2006. This material is subject to various copyright laws. Please do not transmit electronically, quote, or copy without the prior written permission of the author.     

Shaping Ethical Perceptions: An Empirical Assessment of the Influence of Business Education,Culture, and Demographic Factors

Recent events at Enron, K-Mart, Adelphia, and Tyson would seem to suggest that managers are still experiencing ethical lapses. These lapses are somewhat surprising and disappointing given the heightened focus on ethical considerations within business contexts during the past decade. This study is designed, therefore, to increase our understanding of the forces that shape ethical perceptions by considering the effects of business school education as well as a number of other individual-level factors (such as intra-national culture, area of specialization within business, and gender) that may exert an influence on ethical perceptions. We found significant effects for business education, self-reported intra-national culture, area of specialization within business, and gender for some and/or all areas of ethics examined (i.e., deceit, fraud, self-interest, influence dealing, and coercion). One of our most encouraging findings is that tolerance for unethical behavior appears to decrease with formal business education. Despite the prevalent stereotype that business students are only interested in the bottom line or that business schools transform idealistic freshman into self-serving business graduates, our results suggest otherwise. Given the heightened criticism of the ethicality of contemporary managerial behavior, it is heartening to note that, even as adults, individuals can be positively affected by integration of ethics training.     

Religious Intensity,Evangelical Christianity,and Business Ethics: An Empirical Study

Research on the relationship between religious commitment and business ethics has produced widely varying results and made the impact of such commitment unclear. This study presents an empirical investigation based on a questionnaire survey of business managers and professionals in the United States yielding a database of 1234 respondents. Respondents evaluated the ethical acceptability of 16 business decisions. Findings varied with the way in which the religion variable was measured. Little relationship between religious commitment and ethical judgment was found when responses were compared on the basis of broad faith categories – Catholic, Protestant, Jewish, other religions, and no religion. However, respondents who indicated that religious interests were of high or moderate importance to them demonstrated a higher level of ethical judgment (less accepting of unethical decisions) than others in their evaluations. Evangelical Christians also showed a higher level of ethical judgment.     

Ethical Decision-Making by Consumers: The Roles of Product Harm and Consumer Vulnerability

The primary purpose of this study was to examine the effects of perceptions of product harm and consumer vulnerability on ethical evaluations of target marketing strategies. We first established whether subjects are able to accurately judge the harmfulness of a product through labeling alone, and whether they could differentiate consumers who were more or less vulnerable. The results suggest that without the presence of a prime, subjects who depended on implicit memory or guess were able to detect differences in “sin” and “non-sin” products and consumer vulnerability, but were far less likely to be able to distinguish among high and low levels of product harm and consumer vulnerability. The inability to accurately identify high and low levels of product harm and consumer vulnerability impacted their perceptions of the ethicality of target marketing strategies, such that only four out of 18 target marketing strategies were judged as unethical. Thus, our findings contradict previous research that found subjects judged many more of the integrated strategies as unethical [Smith and Cooper-Martin, J Market 61(1997) 1]. Our results suggest that assessing ethical evaluations of strategies varying in product harm, and consumer vulnerability may only be relevant if consumers can accurately identify product harm.     

Consumers’ Ethical Beliefs: The Roles of Money,Religiosity and Attitude toward Business

This article presents the results of a study that investigated the roles that one’s money ethic, religiosity and attitude toward business play in determining consumer attitudes/beliefs in various situations regarding questionable consumer practices. Two dimensions of religiosity – intrinsic and extrinsic religiousness – were studied. A global scale of money ethic was examined, as was a global measure of attitude toward business. Results indicate that both types of religiosity as well as one’s money ethic and attitude toward business were significant determinants of at least some types of consumer ethical beliefs. Scott J. Vitell is Phil B. Hardin Professor of Marketing at the University of Mississippi. He received his Ph.D. in Marketing from Texas Tech University. His recent publications have appeared in the Journal of the Academy of Marketing Science, the Journal of Retailing, the Journal of Business Ethics and the Journal of Consumer Marketing, among others. Jatinder J. Singh is a Ph.D. student in marketing at the University of Mississippi. He received his masters from Punjab Technical University, India. He has authored papers previously published in the Journal of Business Ethics and a paper for the American Marketing Association’s Winter Educators’ Conference. Joseph G.P. Paolillo is a Professor of Management in the School of Business at the University of Mississippi. He received his Ph.D. from the University of Oregon, Eugene in Organization and Management. His publications have appeared in the Journal of Management, Journal of Management Studies, Human Relations, Group and Organization Studies, The Accounting Review, Journal of Advertising and Journal of Business Ethics, among several others.