How Can I Become a Responsible Subject? Towards a Practice-Based Ethics of Responsiveness

Approaches to business ethics can be roughly divided into two streams: ‹codes of behavior’ and ‹forms of subjectification’, with code-oriented approaches clearly dominating the field. Through an elaboration of poststructuralist approaches to moral philosophy, this paper questions the emphasis on codes of behaviour and, thus, the conceptions of the moral and responsible subject that are inherent in rule-based approaches. As a consequence of this critique, the concept of a practice-based ‹ethics of responsiveness’ in which ethics is never final but rather always ‹to come’, is investigated. In such an approach the ethical self is understood as being continuously constituted within power/knowledge relations. Following this line, we ask how one can become a responsible subject while also acknowledging certain limits of full responsibility. We thereby explore responsibility as a considered but unconditional openness in response to the other.     

The Ethical Rational of Business for the Poor – Integrating the Concepts Bottom of the Pyramid,Sustainable Development,and Corporate Citizenship

The first United Nations Millennium Development Goal calls for a distinct reduction of worldwide poverty. It is now widely accepted that the private sector is a crucial partner in achieving this ambitious target. Building on this insight, the ‹Bottom of the Pyramid’ concept provides a framework that highlights the untapped opportunities with the ‹poorest of the poor’, while at the same time acknowledging the abilities and resources of private enterprises for poverty alleviation. This article connects the idea of business with the poor to sustainable development and especially to the notions of inter- and intragenerational justice. These principles of justice can be linked with the ‹Bottom of the Pyramid’ approach directly through the Rawlsian principles to foster holistic thinking. On this basis, the article offers a normative-ethical reasoning of corporations’ possible responsibilities for the poorest of the poor. Today’s state of worldwide inequalities is likely to generate future tensions between the privileged western world and the uncounted mass of poor (let alone the ethical dubiousness of this status). However, it is at the same time problematic if not even impossible to improve the situation of the poor by simply copying the resource intensive western way of living to the ‹Bottom of the Pyramid’ due to the limited carrying capacity of the earth. After highlighting possible moral dilemmas which may occur through such a potential trade off, this article concludes with an outlook on how the concepts ‹Bottom of the Pyramid’ and sustainable development could be combined.     

Organisational Control and the Self: Critiques and Normative Expectations

This article explores the normative assumptions about the self that are implicitly and explicitly embedded in critiques of organisational control. Two problematic aspects of control are examined – the capacity of some organisations to produce unquestioning commitment, and the elicitation of ‹false’ selves. Drawing on the work of Rom Harré, and some examples of organisational-self processes gone awry, I investigate the dynamics involved and how they violate the normative expectations that we hold regarding the self, particularly its moral autonomy and authenticity. The article concludes by arguing that, despite post-structuralist challenges, some notion of a ‹core’ or ‹real’ self still holds salience for employees negotiating their identities within regimes of control. The assumptions and expectations surrounding this aspect of self are also a pivotal element in the western intellectual tradition that promotes and enables critique.     

In Defence of Principles? A Response to Lurie and Albin

This article presents a response to a recent article by Yotam Lurie and Robert Albin in which they discuss and present the merits of casuistry as a method for resolving moral dilemmas in business, principally by developing ‹edifying’ perspectives on the situation, and in doing so highlight the shortcomings of principles (such as the categorical imperative) in generating insights and thereby moral choices. The present article accepts the importance of cases and examples as a source of insight, but argues that the process of conceptualisation involved in understanding these necessarily involves some reference to principles. However, principles and cases are best seen as complementary to the ethical decision-making process rather than in opposition. The complementary functions of these are highlighted in processes such as reflection upon experience, in applications of moral imagination and in the integration of emotive and cognitive elements in ethical choice.     

Ethics Statements of Public Relations Firms: What Do They Say?

This study was designed to examine the prevalence of a code of ethics and to analyze its content among public relations agencies in the United States. Of the 1,562 public relations agencies reviewed, 605 (38.7%) provided an ethical statement. Among the ethical statements provided by these public relations agencies, ‹respect to clients,’ ‹service,’ ‹strategic,’ and ‹results’ were the values most frequently emphasized. On the other hand, ‹balance,’ ‹fairness,’ ‹honor,’ ‹social responsibility,’ and ‹independence’ were the least frequently mentioned in the ethical codes. Also, none of the sampled agencies included any sanctions regarding enforcement of their particular codes of ethics.     

Reflecting on the Common Discourse on Piracy and Intellectual Property Rights: A Divergent Perspective

The common discourse on intellectual property rights rests mainly on utilitarian ground, with implications on the question of justice as well as moral significance. It runs like this: Intellectual property rights are to reward the originators for his/her intellectual labour mainly in monetary terms, thereby providing incentives for originators to engage in future innovative labouring. Without such incentives, few, if not none, will engage in creative activities and the whole human community will, thereby, suffer because of reduced inventions. However, such utilitarian argument on piracy as de-motivation may not be necessarily justified. In fact, intellectual property arrangement is one among different institutions concerning how the society may handle new ideas and creative works. In reality, private ownership over one’s intellectual product is merely a modern western concept that is being ‹advertised’ as being normative, which, by itself, is highly debatable. Alarming still, such normative argument assumes both justness and moral dimensions. This article will analyse whether such argument is philosophically sound.     

Understanding Insurance Customer Dishonesty: Outline of a Situational Approach

The paper takes a look at insurance customer dishonesty as a special case of consumer ethics, understood as a way of situation handling, as a moral choice between right and wrong, such as between self-interest vs. common-interest, in other words, a “moral temptation”. After briefly raising the question if different schools, of moral philosophy would conceptualize such moral temptations differently, the paper presents ‘moral psychology’ as a frame of reference, with a focus on cognitive moral development, moral attitude and moral neutralization. Conceptualization questions can’t be answered finally without thinking at the same time of empirical research design and instrument design decisions, e.g. choosing between experiment vs. questionnaire studies, designing suitable moral temptation situations as an experiment vs. questionnaires with scenario vignettes. The paper discusses then experiences from a 2004 pilot survey, with a main focus on a few insurance dishonesty scenarios with follow-up questions. The paper has an open end, i.e. outlines desirable future theoretical, empirical and practical work with insurance customer dishonesty.     

Organisational Spirituality – A Literature Review

The jury remains out about the bottom-line relevance of organisational spirituality. This article reviews the arguments made thus far, using those sources most commonly cited as providing ‹evidence’ that organisational spirituality adds value to the bottom line. Having collated the evidence, this article offers some observation about the robustness of this existing ‹business case’. It then offers some preliminary conclusions on the literature review, examining the merits of pursuing a ‹business case’ in this field and identifying some specific questions for future research.     

Moral Memory: Why and How Moral Companies Manage Tradition

Recent research on the role of ethics in the organizational culture literature found practically the whole literature reduced to a debate between ethical rationalism and ethical relativism. The role of the past in the form of tradition to maintain and improve moral reflection is completely missing. To address this gap in the literature on the level of practice, the concepts of moral memory and moral tradition are applied to data on 22 companies that have long-standing moral practices. In this way, the practice of moral traditions can be explored with recent conceptual advances and a list of best practices delineated. Moral memory is the recollection of and attachment to the succession of past events and experiences that maintains moral tradition. Moral tradition is the continuing transmission and reception of related moral themes through multiple generations of employees. It is found that companies that maintain moral traditions tend to develop “family” cultures with considerable compassion for workers as persons who have non-economic needs and rights. These companies also temper the role of leadership, insisting that leaders are responsible for and are evaluated by the company’s moral traditions. Finally, moral traditions are essential mechanisms through which companies paradoxically both stimulate and limit competitive behavior. Steven P. Feldman is Associate Professor of Management Policy, Weatherhead School of Management, Case Western Reserve University. Over the last decade, Dr. Feldman’s research has explored the role of moral memory and moral tradition in the ethical aspects of organizations. His book, Memory as a Moral Decision: The Role of Ethics in Organizational Culture (2002), found that the emotional and cognitive aspects of memory to be key in establishing moral organizational cultures. The moral importance of the past in the present has received little attention in the literature on organizational culture. Winner of the Distinguished Lectureship in Business Ethics from the American Fulbright Program, Dr.␣Feldman will be carrying out research on ethical issues in American-Chinese business relations in Shanghai in 2007.     

The Strength of an Accounting Firm’s Ethical Environment and the Quality of Auditors’ Judgments

This study examines the impact of the strength of an accounting firm’s ethical environment (presence and reinforcement vis-à-vis the presence of a code of conduct) on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial ‹between subjects’ experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring participants to make judgments in respect of an inventory writedown. Based on prior research, and as hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank.     

Accountants’ Value Preferences and Moral Reasoning

This paper examines relationships between accountants’ personal values and their moral reasoning. In particular, we hypothesize that there is an inverse relationship between accountants’ “Conformity” values and principled moral reasoning. This investigation is important because the literature suggests that conformity with rule-based standards may be one reason for professional accountants’ relatively lower scores on measures of moral reasoning (Abdolmohammadi et al. J Bus Ethics 16 (1997) 1717). We administered the Rokeach Values Survey (RVS) (Rokeach: 1973, The Nature of Human Values (The Free Press, New York)) and the Defining Issues Test (DIT) (Rest: 1979, Development in Judgment Moral Issues (University of Minnesota Press, Minneapolis, MN)) to164 graduating accounting students enrolled in capstone courses at two universities in the Northeastern United States. As potential entrants into the accounting profession, these subjects bring their values and moral reasoning to bear on attitudes and behaviors in the workplace. We find a highly significant inverse relationship between “Conformity” values and principled moral reasoning (i.e., those who prefer Conformity values have lower levels of moral reasoning). However, we also find that accounting students as a group do not prefer Conformity values above other values such as Self-actualization and Idealism, and we find positive relationships between Self-actualization and Idealism values and moral reasoning. Implications for values and ethics research are discussed.An earlier version of this paper was presented at a workshop at Bentley College and we have greatly benefited from participants comments, especially those of Jean Bedard, Marty Howe, James Hunton, Mark Nixon, and Jay Thibodeau.Mohammad J. Abdolmohammadi is the John E. Rhodes Professor of Accountancy at Bentley College. Having interest primarily in behavioral auditing and ethics research, professor Abdolmohammadi has published extensively in Accounting and Business Research, The Accounting Review, Advances in Accounting, Auditing: a Journal of Practice and Theory, Behavioral Research In Accounting, Contemporary Accounting Research, Journal of Business Ethics, Teaching Business Ethics, and Organizational Behavior and Human Decision Processes among others.C. Richard Baker is Professor of Accounting at Adelphi University. His primary research interests are in regulatory, ethical and disciplinary aspects of the public accounting profession. He has published over fifty journal articles in accounting and ethics research.     

Normative Self-Interest or Moral Hypocrisy?: The Importance of Context

We re-examine the construct of Moral Hypocrisy from the perspective of normative self-interest. Arguing that some degree of self-interest is culturally acceptable and indeed expected, we postulate that a pattern of behavior is more indicative of moral hypocrisy than a single action. Contrary to previous findings, our results indicate that a significant majority of subjects (N = 136) exhibited fair behavior, and that ideals of caring and fairness, when measured in context of the scenario, were predictive of those behaviors. Moreover, measures of Individualism/Collectivism appear more predictive of self-interested behavior than out-of-context responses to moral ideals. Implications for research and practice are discussed. George W. Watson received his Ph.D. from Virginia Tech, his M.B.A. from California State at Fullerton, an M.S. in Systems Management from the Naval Postgraduate School in Monterey, an a B.A. in Business Administration from the University of Washington, Seattle. His teaching focus is on corporate social responsibility and ethics. Dr.Watson’s current research interests include moral psychology,ethical decision making, and ideology. He has published in Business Ethics Quarterly, Business and Society, and the Journal of Business Ethics. Farooq Sheikh received his BS in Physics from Indiana University of Pennsylvania, and his Ph.D. from Smeal College of Business, Penn State University. He is currently Assistant Professor of Operations Management, School of Business at the State University of New York at Geneseo. Dr. Sheik’s research interests include rational and behavioral models in business operations, bounded-rational behavioral models in population games, social norms, game theory and cross-disciplinary research involving behavioral models.     

The Effects of Moral Development and Adverse Selection Conditions on Managers’ Project Continuance Decisions: A Study in the Pacific-Rim Region

According to agency theory, agents base their economic decisions on self-interests when adverse selection conditions exist. However, cognitive moral development theory predicts that ethics/morals may influence decision-makers not to behave egoistically. Rutledge and Karim (1999; Accounting, Organizations and Society 24(2), 173–184) find both the moral reasoning level of the managers and an adverse selection condition affect a manager’s project evaluation decisions significantly. Since prior studies have shown that national␣culture might influence the application of agency theory in project evaluation, this current study uses a different moral development measurement to reexamine Rutledge and Karim’s hypotheses in another culture. A total of 73 Taiwanese executive MBA students with an average of 12.17 years work experience participated in this study. We found that both moral development level and adverse selection conditions significantly affect managers’ project continuance decisions. The interaction effect of these two factors indicates that, when adverse selection conditions exist, participants with a high level of moral development exhibit less of a tendency to continue an unprofitable project than those with a low level of moral development. With subjects from a different culture, our results confirm the findings of Rutldege and Karim. That is, the effects of moral development and adverse selection conditions on managers’ project continuance decisions are robust and can be generalized to different cultures. Implications of the findings of this study to multinational firms are also discussed. C. Janie Chang, Ph.D., is the Vern Odmark Professor of Accountancy at San Diego State University. She received her Ph.D. from the University of California, Irvine. She is the co-editor of the Review of Accounting and Finance, and has published in the areas of auditing, managerial accounting, and information systems to investigate information processing of experts. She has also studied cross-cultural issues related to professional judgments and decisions in auditing and managerial accounting. Sin-Hui Yen, Ph.D., is currently a Professor of Accounting at Tamkang University in Taiwan. He received his Ph.D. from national Taiwan University. He is the executive editor of the Journal of Contemporary Accounting, and has published in the areas of accounting and finance to investigate human information processes, as well as ethical issues related to business professionals.     

Design and Validation of a Novel New Instrument for Measuring the Effect of Moral Intensity on Accountants’ Propensity to Manage Earnings

The goal of this study was to construct a valid new instrument to measure the effect of moral intensity on managers’ propensity to manage earnings. More specifically, this study is a pilot study of the impact of moral intensity on financial accountants’ propensity to manage earnings. The instrument, once validated, will be used in a full-study of managers in the hotel industry. Different ethical scenarios were presented to respondents in the survey; each ethical scenario was designed in both high or low moral intensity form, to reflect the importance of the moral dilemma at hand. The results were analysed by factor analysis. The findings of this study have positively validated the instrument, with three of the five moral intensity components identified as having appropriate eigenvalues. This indicates that they have a significant influence in the study. The first factor captures the social consensus dimension and one scenario of the proximity dimension. The second factor indicates an interaction between the temporal immediacy and the magnitude of consequences dimension. The third dimension is probability of effect and one scenario of the proximity dimension. In addition, t-tests indicated that the manipulation of high and low conditions within each scenario were also successful. One limitation of the study might be the use of undergraduate accounting students as manager proxies, although prior evidence suggests use of accounting students as proxies is a valid approach in this type of study. This is a highly novel project as most prior studies have focussed on moral intensity and the general ethical decision-making process.     

Using the PET Assessment Instrument to Help Students Identify Factors that Could Impede Moral Behavior

We present an instrument developed to explain to students the concept of the personal ethical threshold (PET). The PET represents an individual’s susceptibility to situational pressure in his or her organization that makes moral behavior more personally difficult. Further, the PET varies according to the moral intensity of the issue at hand, such that individuals are less vulnerable to situational pressure for issues of high moral intensity, i.e., those with greater consequences for others. A higher PET reflects an individual’s greater likelihood of adhering to the morally correct path, even in the face of high situational pressures (personal costs) and low moral intensity (collective importance). PET questionnaires were completed by 506 students representing eight business schools throughout the United States. Relationships between respondents’ PET and their gender, age, and major field of study, as well as the geographical location of their school, are explored. Results indicate that older students have higher PETs and that students attending schools in the northeastern part of the United States have lower PETs. These findings are discussed. It is argued that the PET instrument can be used to help students identify organizational pressures and intrapersonal processes that can impede their moral behavior in organizations.     

The Effects of Satisfaction with a Client’s Management During a Prior Audit Engagement,Trust, and Moral Reasoning on Auditors’ Perceived Risk of Management Fraud

The recent accounting scandals have raised concerns regarding the closeness of auditor–client relationships. Critics argue that as the relationship lengthens a bond develops and auditors’ professional skepticism may be replaced with trust. However, Statement on Auditing Standards No. 99 states that auditors “should conduct the engagement with a mindset that recognizes the possibility that a material misstatement due to fraud could be present, regardless of any past experience with the entity and regardless of the auditor’s belief about management’s honesty and integrity” (AICPA 2002, Statement on Auditing Standards No. 99, paragraph 13, p. 10). The purpose of this study is to investigate whether auditors develop trust in a client’s management and whether this trust affects auditors’ decisions. Specifically, this study examines whether auditors’ satisfaction with a client’s management during a prior audit engagement affects auditors’ self-reported trust in that client’s management and whether that trust affects their fraud risk assessment. The decision to trust a client’s management should be an ethical decision because excessive trust may impair auditors’ skepticism, which auditors are required to maintain by their professional responsibilities. We therefore also investigate whether auditors’ trust is affected by their moral reasoning. An experimental case was completed by 89 professional auditors, all with experience assessing the risk of fraud. The results suggest auditors’ satisfaction with the client affects their trust in the client (higher satisfaction associated with higher trust and lower satisfaction associated with lower trust). Further, after an overall unsatisfying experience, auditors’ trust affects their fraud risk assessments. However, after an overall satisfying experience, their trust does not affect their fraud risk assessments. The results indicate auditors are able to maintain their professional skepticism after satisfying past experiences with the client regardless of their beliefs about the honesty and trustworthiness of the client’s management. Lastly, auditors’ moral reasoning was not related to their trust in the client’s management.     

Examining the Effects of Moral Development Level,Self-Concept,and Self-Monitoring on Consumers’ Ethical Attitudes

This study investigates the possible effects of self-concept, self-monitoring, and moral development level on dimensions of consumers’ ethical attitudes. “Actively benefiting from illegal activities,” “actively benefiting from deceptive practices,” and “no harm/no foul 1–2” are defined by factor analysis as four dimensions of Turkish consumers’ ethical attitudes. Logistic regression analysis is applied to data collected from 516 Turkish households. Results indicate that self-monitoring and moral development level predicted consumer ethics in relation to “actively benefiting from questionable practices” and “no harm/no foul” dimensions. Actual self-concept is also a predictor variable in relation to “no harm/no foul” dimension. Age and gender make significant differences in consumers’ ethical attribute dimensions.     

An Investigation of Real Versus Perceived CSP in S&;P-500 Firms

Firms are spending billions annually in the name of corporate social responsibility (CSR). Whilst markets are increasingly willing to reward good and responsible firms, they lack the instruments to measure corporate social performance (CSP). To convince investors and other stakeholders, firms invest heavily in building a reputation for good corporate behaviour. This article argues that reputations for CSP are often unrepresentative of true CSP and investigates how differences in ‹perceived’ and ‹actual’ – as measured by the Fortune and KLD databases, respectively – can partly be explained by firm characteristics. Amongst other things, it finds that overrated firms are more likely to be relatively big, profitable, operating in non-polluting but competitive industries and with no history of wrong doings to their primary stakeholders. They will also typically spend a lot of effort satisfying the claims of their secondary stakeholders. Above all, the results emphasise the need for researchers to recognise that the databases measure different phenomenon and are not interchangeable.     

Living in Agreement with a Contract: The Management of Moral and Viable Firm–Stakeholder Relationships

In a contractual firm–stakeholder relationship the participants are expected to act according to the agreement and for mutual benefit. By acting against the agreement at the expense of the other participant, however, may result in higher individual profits within a short period of time. Building on the unlocked iterated prisoner’s dilemma (PD) setting, Scanlon’s [Scanlon, T.␣M.: 1998, What We Owe to Each Other (Belknap Press of Harvard University Press, Cambridge, Mass)] version of contractualism, and the social dilemma literature, this article considers what types of behaviors should be followed by both parties in an established firm–stakeholder relationship in order to reach an outcome that is defensible both in terms of morality and viability. It is argued that a normative foundation, which advises firms and stakeholders to ground their behavior on principles that could not reasonably be rejected by others, forms a basis for moral and viable behavior that can be expressed in the form of a strategic rule that excludes defection and utilizes the option to exit in response to the other participant’s defection. Then, a set of testable propositions is developed that describe how a firm and its stakeholders can further promote moral and viable relationships.Kalle Pajunen received his Ph.D. in strategic management. His current research interests include research methodologies, turnaround processes, stakeholder theory, strategic leadership, and business ethics. His recent articles appear (or are forthcoming) for instance in Advances in Strategic Management, Human Relations, Journal of Management Studies, and Leadership.     

Perceptions of the Ethical Climate in the Korean Tourism Industry

This study investigates the ethical climate types presented in the Korean tourism industry, the differences in the perceptions of these ethical climate types based on individual/organizational characteristics, and the influence of ethical climate types based on job satisfaction/organizational commitment. Empirical findings of this study identify six ethical climate types and demonstrate significant difference and significant influence of the proposed relationships. This research contributes to the existing body of academic work by using empirical data collected from 820 respondents across 14 companies within the Korean tourism industry, to demonstrate the relationship between actual ethical climate types and ethical climate related factors. The findings of this study identify the new factor ‹moral caring,’ which describes an environment characterized by decisions that maximize collective interest, but based on an individual employee’s personal values and ethics. Such a factor has important implications for the service industry, where face-to-face encounters typify the relationship between employee and consumer.