How Strong are the Ethical Preferences of Senior Business Executives?

How do senior business executives rank their preferences for various ethical principles? And how strongly do the executives believe in these principles? Also, how do these preference rankings relate to the way the executives see the future (wherein business decisions play out)? Research on these questions may provide us with an appreciation of the complexities of ethical behavior in management beyond the traditional issues concerning ethical decision-making in business. Based on a survey of 585 vice presidents of U.S. businesses it was found that: (1) there is a distinct set of principles of ethical conduct that is considered favorable as opposed to another set considered unfavorable among a comprehensive list of 14 ethical principles; (2) the executives believed overwhelmingly that their own individual ethical preferences are better than those of other executives; (3) the strength of their preferences for ethical principles is associated with whether the executives are relatively near-future oriented or more distant-future oriented; and (4), there are very few significant differences in terms of gender, age, education level, private/public education, prestigious/other schools, business/non-business academic backgrounds, and length of job experience. Implications of these findings are discussed.     

‘An Empirical Investigation of the Relationships among a Consumer’s Personal Values, Ethical Ideology and Ethical Beliefs’

This study provides an additional partial test of the Hunt–Vitell theory [1986, Journal of Macromarketing, 8, 5–16; 1993, ‘The General Theory of Marketing Ethics: A Retrospective and Revision’, in N. C. Smith and J. A. Quelch (eds.), Ethics in Marketing (Irwin Inc., Homewood), pp. 775–784], within the consumer ethics context. Using structural equation modeling, the relationships among an individual’s personal values (conceptualized by the typology of Schwartz [1992, ‘Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries’, in M. P. Zanna (ed.), Advances in Experimental Social Psychology (Vol. 25, Academic Press, Orlando), pp. 1–65] ethical ideology and ethical beliefs are investigated. The validity of the model is assessed in a two-step procedure. First, a measurement model of constructs is tested for key validity dimensions. Next, the hypothesized causal relationships are examined in several path models, comparing no mediation, partial and complete mediation of ethical ideology. The empirical results indicate that individual differences in value priorities (resultant conservation and resultant self-enhancement) directly and indirectly (through idealism) influence the judgment of ethically questionable consumer practices. These findings may significantly contribute to the theoretical understanding of ethical decision-making.     

Causal Effects of Regulatory, Organizational and Personal Factors on Ethical Sensitivity

Prior researchers have studied individual components of a theoretical decision-making model. This paper presents the results of a more complete study of the model components and presents limited support of theory. The study examines the relative importance of regulatory, organizational, and personal constructs on an individual's ethical sensitivity. Auditors from the major international accounting firms, located in two southeastern cities, are surveyed. Structural equation modeling is used to allow for the simultaneous evaluation of the three constructs of interest. The results indicate that the regulatory and organizational constructs are negatively correlated with the personal experience construct. The three constructs are not significant causal factors on ethical sensitivity. This result may be due to the manner in which ethical sensitivity is typically measured or may indicate that the complexity of the ethical decision-making process is not fully captured in the theoretical models. Thus, the models suggested in the prior literature and the results presented in prior studies of the individual components may need to be reconsidered.     

Influences in Ethical Dilemmas of Increasing Intensity

This study attempts to extend the literature in ethics research by developing and testing a model of an individual's ethical system which identifies the sources of influence on the decision process. The model is developed from an interdisciplinary literature review and includes six subsystems or spheres that exert influence on an individual: the workplace, family, religion, legal system, community, and profession. The study also examines the role of materiality in the decision-making process.Using this model, empirical tests identify the spheres that exert the most influence on the decision-maker facing an ethical dilemma. In addition, the relative importance of the spheres and the interaction among the spheres is examined. Findings show that: (1) individuals rate variables at different levels of importance as the materiality of the breach changes and (2) the spheres that are considered most important for minor ethical breaches are different than the spheres considered most influential in a major ethical situation.Exploratory factor analysis suggests that the variables representing the spheres can be summarized by three factors. Further, it indicates that these factors change with materiality.     

Are Students Really Less Ethical Than Business Practitioners?

Past research provides evidence of lower ethical standards amongst the student population when compared to business practitioners, using business-based survey instruments. This study examines the adequacy of this conventional research tool by assessing the influence of scenario context (university or business setting) on ethical intentions using data from 243 commerce tertiary students.Students tended to respond more ethically to issues set in a university context than to equivalent issues in a business setting. The tolerance level for unethical behaviour in both contexts was also found to decline with full-time work experience and age. However, full-time work experience appears to be the major variable influencing ethical ratings set in a business context, whereas age was found to predict the ethical judgements of students in the university scenarios. The overall pattern of responses indicates that ethical standards vary according to scenario context.The study illustrates the importance of considering respondents' exposure to the settings concerned when conducting ethical studies using scenario-based instruments. Respondents should have adequate knowledge and exposure to the type of setting they are asked to evaluate. Results of this study argue for caution in the interpretation of past findings involving student samples responding to ethical issues in business settings.     

Does Ethics Statement of a Public Relations Firm Make a Difference? Yes it Does!!

Attempting to determine solutions for unethical practices in the field, this research was designed to assess the effectiveness of public relations firms’ ethics statements in decreasing the incidence of malpractice. This study revealed an encouraging finding that practitioners working in firms with ethical parameters were significantly more likely to engage in ethical practices. Moreover, educating public relations practitioners about the content of ethics statement could positively influence their ethical practices. At the same time, this study’s findings suggest further questions for consideration in future scholarship and in the application of ethics statements to practice within the field.     

The Moderating Effect of Individuals' Perceptions of Ethical Work Climate on Ethical Judgments and Behavioral Intentions

Dimensions of the ethical work climate, as conceptualized by Victor and Cullen (1988), are potentially important influences on individual ethical decision-making in the organizational context. The present study examined the direct and indirect effects of individuals' perceptions of work climate on their ethical judgments and behavioral intentions regarding an ethical dilemma. A national sample of marketers was surveyed in a scenario-based research study. The results indicated that, although perceived climate dimensions did not have a direct effect on behavioral intentions, there were significant moderating effects. Climates perceived as emphasizing social responsibility and rules/codes moderated the individual ethical judgment-behavioral intentions relationship such that individuals were less likely to say that they would engage in a questionable selling practice even when they themselves did not believe the practice to be unethical. Respondents were somewhat more likely to form intentions consistent with their judgment that the questionable practice was morally acceptable when the ethical climate was characterized by an emphasis on team/friendship.     

Global Labor and Worksite Standards: A Strategic Ethical Analysis of Shareholder Employee Relations Resolutions

The purpose of this paper is to analyze from a strategic ethical perspective four selected shareholder resolutions reported by the Social Issues Service of the Investor Responsibility Research Center regarding international labor and workplace standards. Particular attention will be paid to specific employee relations issues at the operating and tactical level of individual multinational firms. The paper concludes with policy recommendations for proxy statements.     

Organizational influences on individual ethical behavior in public accounting

A framework is presented for studying ethical conduct in public accounting practice. Four levels of analysis are distinguished: individual, local office, multi-office firm and professional institute. Several propositions are derived from the framework and discussed: (1) The effects of ethical vs. unethical behavior on an accountant's prospects for advancement are asymmetrical in nature; (2) the way individuals perceive or frame the decision problem at hand will make an ethical response more or less likely; (3) the economic incentives present in competitive markets influence the work goals of firms and offices, and lead to ethical dilemmas for individuals; and (4) initiatives at the firm or institute level aimed at compliance with professional ethical standards will by themselves have little effect on individual ethical behavior. Research into ethical behavior of practitioners will capture self-conscious and biased responses unless it is designed so as to permit indirect observation and recording of spontaneous comments. To assure valid research findings, practitioners should be interviewed and their motives assessed indirectly. A longitudinal approach is recommended, beginning with students who are choosing an accounting career. Two types of questions for use in these interviews are described.Paul J. Schlachter is an assistant professor in the School of Accounting, Florida International University. As a certified management accountant (CMA), he studies ethical dilemmas in both corporate and public accounting, in south Florida and in Latin America.     

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.     

Do the Right Thing! Developing Ethical Behavior in Financial Institutions

Organizational culture and employee conduct in financial institutions are coming under increasing scrutiny by regulators who seek to identify the underlying sources of unethical behavior. The literature on ethics in the workplace has often emphasized the importance of the alignment of systems and processes with organizational values and the role of the leader in creating an ethical culture. Less is known about how individual employees experience the ethical decision-making process, especially in complex and high-risk business environments where there are discrepancies between an organization’s formal ethical standards and its informal practices. This article combines ethical decision-making models with key concepts from organization and adult learning theories to develop a deeper and more nuanced view of how individuals in financial institutions deal with ethical issues that arise in their daily work. Eight practical ideas are formulated to help financial institutions narrow the gap between formal ethical standards and actual practices and develop a culture that promotes ethical behavior: challenging authority, creating opportunities for discourse, valuing positive emotion, making time for reflection, rewarding ethical behavior, strengthening escalation processes, eliciting feedback, and establishing a learning culture.     

Individual and Organizational Antecedents of Professional Ethics of Public Relations Practitioners in Korea

This study examines the effects of individual ethical values and organizational factors on the professional ethics of PR practitioners in Korea by considering a person–situation interactionist model. Individual ethical values are used as individual factors, and organizational factors consist of an organization’s reward and punishment for ethical/unethical behavior, the behavior of peers, and the ethical integrity of the chief ethics officer. The professional ethics of PR practitioners (the dependent variable) are classified into the following three dimensions: professional ethics for the public, the client, and the PR industry. The results indicate that agency practitioners were more likely to be committed to their profession than to their organization, whereas in-house practitioners were more likely to be committed to their organization than to their profession. That is, in-house practitioners showed weak professional commitment, indicating that they perceived themselves as employees, not as PR professionals. Organizational factors such as reward, punishment, and peers’ ethical behavior had considerable influence on the professional ethics of in-house practitioners, whereas they had little influence on agency practitioners. Organizational factors as well as individual ethical values were more likely to influence the professional ethics of in-house practitioners than that of agency practitioners. Thus, to foster in-house practitioners’ professional ethics and commitment, professional associations in the PR industry should make efforts to provide in-house practitioners with more information on the PR industry and more opportunities for interacting and maintaining communication with their colleagues in the industry.     

An Empirical Investigation of the Relationships between Ethical Beliefs, Ethical Ideology, Political Preference and Need for Closure

An analysis is presented of the relationships between consumers ethical beliefs, ethical ideology, Machiavellianism, political preference and the individual difference variable "need for closure". It is based on a representative survey of 286 Belgian respondents. Standard measurement tools of proven reliability and robustness are used to measure ethical beliefs (consumer ethics scale), ethical ideology (ethical positioning), Machiavellianism (Mach IV scale) and need for closure. The analysis finds the following. First, individuals with a high need for closure tend to have beliefs that are more ethical as regards possible consumer actions, and score higher on idealism and lower on Machiavellianism, than those with a low need for closure. Second, a correlation exists between political preference and ethical beliefs. Third, a significant relationship exists between ethical ideology and political preference for the two largest political parties. Fourth, individuals with a high and low need for closure have different political preferences for right-wing and left-wing parties.     

Ethical Decision Making in the Public Accounting Profession: An Extension of Ajzen’s Theory of Planned Behavior

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues.     

Introduction to the Special Issue on the Impact of Network Ethics on Business Practices

Modern public relations practices have been dominated by appeals to impulses, desires, and images that affect publics defined predominantly in demographic terms. This paper argues that abandoning basic rhetorical assumptions about the ability of ordinary people to engage in practical reason has serious ethical implications for the marketplace as well as for society in general. The study applies recent rhetorical scholarship on issues of public discourse and rhetorical culture to public relations practices, considering how rhetoric can contribute to more effective and ethical public discourse in our dominant modes of marketplace communication.     

Perceptions of Organizational Ethicality: Do Inflated Perceptions of Self Lead to Inflated Perceptions of the Organization?

Scholars have suggested that the tendency for an individual to perceive him- or herself as more ethical than others might influence the individual's perceptions of his or her organization's ethics. The purpose of this study is to consider if and/or when such a relationship exists. A thorough consideration of the nature of perceptions of relative ethicality suggests that a positive self-bias would negatively influence perceptions of organizational ethicality. The results of an empirical study involving working managers and employees of a hospital support that argument. Furthermore, the results indicate that organizational identification, perceived organizational cohesion, and an individual's insulation also influence individual perceptions of relative organizational ethicality. The findings illuminate this particular phenomenon and further our understanding of the relationship between the individual and the organization, more generally.     

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 Effect of Ethical Orientation and Professional Commitment on Earnings Management Behavior

The purpose of this study is twofold. The first objective is to examine the impact of an individual’s ethical ideology and level of professional commitment on the earnings management decision. The second objective is to observe whether the presence of a personal benefit affects an individual’s ethical orientation or professional commitment within the context of an opportunity to manage earnings. Using a sample of 375 undergraduate business majors, our results suggest a significant relationship between an individual’s ethical orientation and decision-making. Further, participants with higher levels of professional commitment seem to be less likely to engage in earnings management behavior and less likely to behave opportunistically. These results have the potential to add to our understanding of certain behaviors in entry-level personnel and should be of interest to managers, practitioners, academicians, and researchers.     

Ethical Ideology and Ethical Judgments in the Portuguese Accounting Profession

The purpose of the present study is to examine the attitudes of Portuguese chartered accountants with respect to questions of ethical nature that can arise in their professional activity. Respondents were asked to respond to the Ethics Position Questionnaire developed by Forsyth (Journal of Personality and Social Psychology 39(1), 175–184, 1980), in order to determine their idealism and relativism levels. Subsequently, they answered questions about five scenarios related to accounting practices, with the objective of measuring their ethical judgments. Based on the idealism and relativism levels of our respondents, they were classified into one of four groups, representing different ethical ideologies (absolutism, exceptionism, subjectivism, and situationism). The results indicated that age was the major determinant of relativism. Contrary to previous research, older respondents revealed themselves significantly more relativistic than younger ones. Gender seems to be the most important determinant of ethical judgments; against expectations, men evidenced significantly stricter judgments than women in two of the five scenarios. Findings also indicated that respondents’ ethical judgments did not differ significantly based on their ethical ideology, supporting the idea that ethical ideology is not an important determinant of ethical judgments.     

An Examination of Differences in Ethical Decision-Making Between Canadian Business Students and Accounting Professionals

This study investigates the differences in individuals' ethical decision making between Canadian university business students and accounting professionals. We examine the differences in three measures known to be important in the ethical decision-making process: ethical awareness, ethical orientation, and intention to perform questionable acts. We tested for differences in these three measures in eight different questionable actions among three groups: students starting business studies, those in their final year of university, and professional accountants.The measures of awareness capture the extent to which respondents felt that a particular action was unethical according to each of several ethical criteria. We found few differences between the two student groups on these measures, suggesting that their education had minimal effect on raising their awareness of the ethical issues in the vignettes. Indeed, overall, the graduating student's scores were marginally lower than those of the entry-level students. However, the professionals viewed some actions as significantly less ethical than did the graduating students.The measures of ethical orientation capture the weight respondents placed on each of the criteria above in their evaluation of the overall morality of an action. The differences between the three groups were generally small, and were a function of the vignette, consistent with Jones' (1991) model of issue-contingent ethical reasoning.The measures of intention capture the extent to which a respondent perceives that s/he would perform the action. There were significant differences between the groups in three of the eight vignettes, driven by a difference between the professionals and the other two student groups. The awareness measures were strong predictors of intention. We discuss the implications of these findings for professional training and future research.