Ethical Marginality: The Icarus Syndrome and Banality of Wrongdoing

This study proposes a conceptual model to explain persistent, accepted-as-normal corporate wrongdoing (hereafter banality of wrongdoing), particularly for high performance organizations. The model describes five explanatory variables: the culture of competition, ends-biased leadership, missionary zeal, legitimizing myth, and the corporate cocoon. Our thesis is that the nature of competition drives both legitimate and illegitimate goal-seeking to adopt an iconoclastic (rule-breaking) orientation. High performance organizations are favorable hosts for wrongdoing because high performance requires aggressive behavior at the ethical margins of what is acceptable. The way leadership reacts to competition sets the stage for ethical or unethical cultures to develop. Ends-biased leadership will project strong vision, using ideology and legitimizing myth as tools to inspire and motivate. The resulting missionary zeal justifies using questionable means because of the perceived value of the end. One critical method for building strong culture is creating a sense of being separate and apart from the ordinary. This cocoon effect may create a self-referential value system that is significantly at odds with mainstream culture and in which wrongdoing is banal. We intend an empirical study of the variables described in this model.     

Team Ethical Cultures Within an Organization: A Differentiation Perspective on Their Existence and Relevance

Studies on the ethical culture of organizations have mainly focused on ethical culture at the organizational level. This study explores ethical culture at the team level because this can add a more detailed understanding of the ethics of an organization, which is necessary for more customized and effective management interventions. To find out whether various teams within an organization can have different ethical cultures, we employ the differentiation perspective and conduct a survey of 180 teams from one organization. The results show that there are significant differences between the ethical cultures of teams. These differences are relevant given the different relationships that were established between high and low clusters of team ethical culture and two outcome variables (i.e., the frequency of unethical behavior and employee responses to unethical behavior). The results also show that the dimensions of ethical cultures among teams have different patterns, which indicates the usefulness of using a multidimensional scale for capturing further differences among team ethical cultures.

     

Ethical Codes of Conduct and Organizational Context: A Study of the Relationship Between Codes of Conduct, Employee Behavior and Organizational Values

Codes of ethics are being increasingly adopted in organizations worldwide, yet their effects on employee perceptions and behavior have not been thoroughly addressed. This study used a sample of 613 management accountants drawn from the United States to study the relationship between corporate and professional codes of ethics and employee attitudes and behaviors. The presence of corporate codes of ethics was associated with less perceived wrongdoing in organizations, but not with an increased propensity to report observed unethical behavior. Further, organizations that adopted formal codes of ethics exhibited value orientations that went beyond financial performance to include responsibility to the commonweal. In contrast to corporate codes of ethics, professional codes of ethical conduct had no influence on perceived wrongdoing in organization nor these codes affect the propensity to report observed unethical activities.     

The Relationship between Unethical Behavior and the Dimensions of the Ethical Climate Questionnaire

This study examined the relationship between unethical employee behavior and the dimensions of the Ethical Climate Questionnaire (ECQ). In order to explore the relationship between the dimensions of the ECQ and unethical behavior, the factor structure of five previously identified empirical models and the hypothesized nine-dimension model for the ECQ was tested with a confirmatory factor analysis. The analysis revealed that the hypothesized nine-dimension model provided as good or even better fit to the data than the five empirically derived models. Therefore, the nine-dimensional model was used to examine the criterion-related validity of the ECQ. The results demonstrated that the nine ethical climate dimensions were correlated with some of the unethical behaviors examined in this study, but not others. However, the results clearly demonstrated that most of the ethical climate dimensions were significantly related to an aggregate measure of unethical behavior. It was suggested that these results might account for the differences in previous studies on the criterion-related validity of the ECQ. The results also replicated a previous report that the association between unethical behavior and ethical climate is stronger in organizations that do not have a code of ethics. Finally, a difference was observed in the ethical climates for organizations with a code of ethics and organizations without a code of ethics.     

Consideration of Moral Intensity in Ethicality Judgements: Its Relationship with Whistle-blowing and Need-for-Cognition

Within the theoretical framework of the moral intensity model of ethical decision making (Jones, 1991), two studies ascertained the contention that ethicality judgements are contingent upon the perceived intensity of the moral issue. In addition, Study 1 extended the validity of the moral intensity notion to whistle-blowing behaviour; Study 2 addressed the effect of the individual difference variable, need-for-cognition, on differential utilization of intensity dimensions in the ethical decision process. A scenario approach was used in both studies. Results have provided convergent support for the issue-contingency nature of ethical decisions. Study 1 also showed that felt empathy for potential victims predicted the likelihood of whistle-blowing behaviour, and that the perceived overall ethicality of a wrongdoing predicted felt empathy when potential victims are psychologically and physically close. Results of Study 2 further suggested a greater utilization of issue-relevant information by high need-for-cognition individuals in ethical decision making.     

Predicting Counterproductive Work Behavior from Guilt Proneness

We investigated the relationship between guilt proneness and counterproductive work behavior (CWB) using a diverse sample of employed adults working in a variety of different industries at various levels in their organizations. CWB refers to behaviors that harm or are intended to harm organizations or people in organizations. Guilt proneness is a personality trait characterized by a predisposition to experience negative feelings about personal wrongdoing. CWB was engaged in less frequently by individuals high in guilt proneness compared to those low in guilt proneness, controlling for other known correlates of CWB. CWB was also predicted by gender, age, intention to turnover, interpersonal conflict at work, and negative affect at work. Given the detrimental impact of CWB on people and organizations, it may be wise for employers to consider guilt proneness when making hiring decisions.     

A New Scale to Measure Executive Servant Leadership: Development,Analysis, and Implications for Research

This article introduces a new scale to measure executive servant leadership, situating the need for this scale within the context of ethical leadership and its impacts on followers, organizations and the greater society. The literature on servant leadership is reviewed and servant leadership is compared to other concepts that share dimensions of ethical leadership (e.g., transformational, authentic, and spiritual leadership). Next, the Executive Servant Leadership Scale (ESLS) is introduced, and its contributions and limitations discussed. We conclude with an agenda for future research, describing ways the measure can be used to test hypotheses about organizational moral climate, ethical organizational culture, corporate responsibility, and institutional theory.     

Culture, economic development, and national ethical attitudes

To understand the influence of culture on ethical attitudes, a variety of countries must be compared simultaneously to avoid confounding of cultural dimensions. This study uses data from the World Values Survey to develop a measure of ethical attitudes that shows partial measurement invariance across 44 countries. Regressing the resulting latent means on four cultural dimensions [Hofstede G. Culture's Consequences: comparing values, behaviors, institutions, and organizations across nations. 2nd ed. Beverly Hills, CA: Sage Publications, 2001] and per capita gross domestic product (PCGDP) reveals effects that are not suggested by examining the predictors in isolation, and explains more variance than analysis of the raw means. However, the model does not account for ethical attitudes reported in Brazil, Japan, and the Philippines. In the remaining 41 countries, uncertainty avoidance, power distance, and PCGDP are found to have negative influences on national ethical attitudes.     

Organizational Ethical Culture: Real or Imagined?

Can companies be identified by how ethical they are? The concept of organizational culture suggests that organizations have identifiable cultures of which ethics are a part. By definition culture is the shared beliefs of an organization's members, hence the ethical culture of an organization would be reflected in the beliefs about the ethics of an organization which are shared by its members. Thus, it is logical to conceptualize the ethics of different organizations as existing on a continuum bounded at one end by unethical companies and at the other, highly ethical companies. This research assesses the efficacy of the existing measure of organizational ethical culture for identifying the ethical status of organizations on a this continuum. Results suggest that the Ethical Culture Questionnaire designed by Trevino, Butterfield and McCabe (1995) measures individual perceptions regarding organizational ethics but does not identify shared beliefs about an organizationÕs ethical culture.     

The shortened Corporate Ethical Virtues scale: Measurement invariance and mean differences across two occupational groups

So far, the field of business ethics lacks validated measures for assessing virtues at the organizational level. The aim of this study is to investigate the measurement invariance of a shortened Corporate Ethical Virtues scale. In this manner, we contribute to validating an instrument that is both psychometrically sound and efficient to use. We conducted two survey studies of two independent groups (managers and school psychologists). Confirmatory factor analysis supported the eight‐factor model of the scale, and we found it to be invariant in two different occupational groups. The managers gave higher appraisals of ethical culture than the psychologists did in seven out of the eight dimensions. We found that despite the contextual differences, the shortened scale measures the eight dimensions of organizational ethical virtues, as intended. Thus, the use of this more compact scale can be recommended for future studies, which will hopefully stimulate more research on ethical culture in various work contexts.     

A Word to the Wise: How Managers and Policy-Makers can Encourage Employees to Report Wrongdoing

When successful and ethical managers are alerted to possible organizational wrongdoing, they take corrective action before the problems become crises. However, recent research [e.g., Rynes et al. (2007, Academy of Management Journal 50(5), 987–1008)] indicates that many organizations fail to implement evidence-based practices (i.e., practices that are consistent with research findings), in many aspects of human resource management. In this paper, we draw from years of research on whistle-blowing by social scientists and legal scholars and offer concrete suggestions to managers who are interested in encouraging internal reporting of problems requiring attention, and to observers of questionable activity who are considering reporting it. We also identify ways that research suggests policy-makers can have a more positive influence. We hope that these suggestions will help foster evidence-based practice regarding whistle-blowing.     

An Empirical Examination of the Relationship Between Ethical Climate and Ethical Behavior from Multiple Levels of Analysis

Victor and Cullen (1988) identified several dimensions of ethical climate that exist in organizations and organizational subunits. We tested the relationship between these dimensions of ethical climate and ethical behavior at different levels of analysis. Using Within and Between Analysis (WABA) (cf. Dansereau, Alutto and Yammarino, 1984), partial support was found for a relationship between dimensions of ethical climate and ethical behavior.     

Effects of justice and utilitarianism on ethical decision making: a cross‐cultural examination of gender similarities and differences

This study investigates the relationship between intention to behave ethically and gender within the context of national culture. Using Reidenbach and Robin's measures of the ethical dimensions of justice and utilitarianism in a sample of business students from three different countries, we found that gender is significantly related to the respondents' intention to behave ethically. Women relied on both justice as well as utilitarianism when making moral decisions. By contrast, men relied only on justice, and did not rely on utilitarianism when faced with the same ethical issues. Further, women's intention to behave was contextual, significantly affected by two national culture dimensions (uncertainty avoidance and individualism), whereas men's decisions were more universal, and not related to national culture dimensions.     

A Cross-Cultural Comparison of Ethical Attitudes of Business Managers: India Korea and the United States

Culture has been identified as a significant determinant of ethical attitudes of business managers. This research studies the impact of culture on the ethical attitudes of business managers in India, Korea and the United States using multivariate statistical analysis. Employing Geert Hofstede's cultural typology, this study examines the relationship between his five cultural dimensions (individualism, power distance, uncertainty avoidance, masculinity, and long-term orientation) and business managers' ethical attitudes. The study uses primary data collected from 345 business manager participants of Executive MBA programs in selected business schools in India, Korea and the United States using Hofstede's Value Survey Module (94) and an instrument designed by the researchers to measure respondents' ethical attitudes (attitudes toward business ethics in general and toward twelve common questionable practices in particular). Results indicate that national culture has a strong influence on business managers' ethical attitudes. In addition to national culture, respondents' general attitudes toward business ethics are related to their personal integrity; their attitudes toward questionable business practices are related to the external environment and gender, as well as to their personal integrity. A strong relationship exists between cultural dimensions of individualism and power distance and respondents' ethical attitudes toward certain questionable practices. The analysis of the relationship between cultural dimensions of masculinity, uncertainty avoidance and long-term orientation and respondents' ethical attitudes toward questionable practices produced mixed results, likely due to the lack of notable differences in cultural dimension scores among the countries surveyed.     

Mission-Driven Organizations in Japan: Management Philosophy and Individual Outcomes

Previous studies imply that management philosophy has become an essential ethical foundation for a number of mission-driven organizations in Japan. This study examines how management philosophy might be influential to individuals with a sample of 1019 Japanese employees. The article develops a framework for analyzing the adoption of management philosophy and individual attitudinal and behavioral outcomes. Factor analysis shows that adoption of the management philosophy can be categorized into two dimensions, identification with management philosophy, and sensemaking of that management philosophy. Regression results indicate that while philosophy-oriented practice might affect individual adoption of management philosophy, the adoption of the management philosophy is positively related to both job involvement and organizational citizenship behavior. Furthermore, the results of structural equation analysis indicate that both dimensions of the adoption of the management philosophy might mediate the relationship between organizational practice and individual outcomes. The research not only increases our understandings into the effectiveness of the management philosophy as an essential ethical foundation, but also provides intriguing implication regarding the organizational measures required to enhance the mission-driven culture.     

The Impact of Cultural Differences on the Convergence of International Accounting Codes of Ethics

The International Federation of Accountants (IFAC) has issued a revised “Code of Ethics for Professional Accountants” (IFAC Code). The IFAC Code is intended to be a model code of ethics for national accounting organizations throughout the world. Prior research demonstrates that approximately 50% of IFAC member organizations have adopted the IFAC Code as their organizational code of conduct. There is therefore empirical evidence that international convergence of accounting ethical standards is occurring. We employ Hofstede’s (2008, http://www.geert-hofstede.com/hofstede_dimensions.php) cultural dimensions in an attempt to empirically explain accounting organizations’ decisions about whether to adopt the IFAC Code or to retain their organization-specific code. Our results indicate that accounting organizations in cultures with high levels of Individualism and Uncertainty Avoidance are less likely to adopt the model IFAC Code. Organizations in high Individualism and Uncertainty Avoidance societies are therefore less likely to surrender the setting of ethical standards to an outside, international organization.     

Varieties of Win–Win Solutions to Problems with Ethical Dimensions

The purpose of this article is to help educators and managers learn about a variety of win–win solutions to problems with ethical dimensions. The hope is that the larger the variety of win–win solutions we can consider, the higher the probability that we can find at least one that satisfies both ethical and material concerns. This article is motivated by the experiences of managers who have found that they need win–win solutions because it is very difficult to effectively advocate ethical solutions to problems that lose money or do not make money for their organizations. The purpose of the article is not to build theory or a theoretical taxonomy of win–win solutions, but to gather from eclectic theoretical and applied sources a variety of win–win solutions that can help solve problems with ethical dimensions. Examples of the types of win–win solutions are illustrated. Ethical problems with win–win solutions are also considered.     

Going the (Ethical) Distance

Nearly every day we participate in the vast, interconnected global economy. In doing so, we engage in chains of transactions that ultimately result in our benefiting from, or enabling, wrongdoing by others. In some cases this seems to be in itself wrong, but in many cases it seems unproblematic. I develop a concept of ‘ethical distance’ and argue that our responsibility for the wrongdoing of others is a function of our ethical distance from it. Furthermore, I argue that the concept of moral responsibility is vague, but that when we become clearly responsible for wrongdoing by others, we ought to sever our connection to it.     

A preliminary investigation of the relationship between selected organizational characteristics and external whistleblowing by employees

Whistleblowing by employees to regulatory agencies and other parties external to the organization can have serious consequences both for the whistleblower and the company involved. Research has largely focused on individual and group variables that affect individuals' decision to blow the whistle on perceived wrongdoing.This study examined the relationship between selected organizational characteristics and the perceived level of external whistleblowing by employees in 240 organizations. Data collected in a nationwide survey of human resource executives were analyzed using analysis of variance.Results indicated that executives of larger organizations perceived a higher level of employee-voiced concerns to the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration, as well as a higher overall level of external whistleblowing. Executives of organizations with union employees perceived a higher level of employee-voiced concerns to the EEOC, the media, and a higher overall level of external whistleblowing. Executives of organizations in the manufacturing industry group perceived a higher level of employee-voiced concerns to the Occupational Safety and Health Administration.The implications of these findings are discussed, and limitations of the research are addressed. The paper concludes with several suggestions for continued research.Tim Barnett is an Assistant Professor of Management at Louisiana Tech University. His current research interests include ethical issues in human resources management and ethical decision making. His work has appeared in various journals, including theJournal of Business Research, theJournal of Business Communication, and theJournal of Business Ethics.     

Does it Pay to Be Ethical? Examining the Relationship Between Organisations’ Ethical Culture and Innovativeness

In this article, we examine the relationship between ethical organisational culture and organisational innovativeness. A quantitative empirical analysis is based on a survey of a total of 719 respondents from all levels of three Finnish organisations, both general staff and managers. The organisations belong to both the private and public sectors. The results of this study show that organisations’ ethical culture is associated with their organisational innovativeness, and that different dimensions of ethical culture are associated with different dimensions of organisational innovativeness. The ethical culture of the organisation had a specific role in process and behavioural innovativeness. It was found that congruency of management was the single dimension with the highest effect on organisational innovativeness overall and specifically on process and behavioural innovativeness. These findings suggest that when organisations are aiming for specific outcomes, such as organisational innovativeness, they need to be aware of what dimensions of ethical culture are particularly relevant.