Neither bad apple nor bad barrel: how the societal context impacts unethical behavior in organizations

Every time another corporate scandal captures media headlines, the ‘bad apple vs. bad barrel’ discussion starts anew. Yet this debate overlooks the influence of the broader societal context on organizational behavior. In this article, we argue that misbehaviors of organizations (the ‘barrels’) and their members (the ‘apples’) cannot be addressed properly without a clear understanding of their broader context (the ‘larder’). Whereas previously, a strong societal framework dampened the practical application of the Homo economicus concept (business actors as perfectly rational and egocentric utility‐maximizing agents without any moral concern), specialization, individualization and globalization led to a business world disembedded from broader societal norms. This emancipated business world promotes a literal interpretation of Homo economicus among business organizations and their members. Consequently, we argue that the first step toward ‘healthier’ apples and barrels is to sanitize the larder, that is, adapt the framework in which organizations and their members evolve.     

The institutionalization of unethical behavior

There is a possibility that the ethical problems that have recently surfaced at General Electric, E. F. Hutton and General Dynamics are not simple anomalies, but the direct result of corporate pressures on individual managers. The author looks at the nature of these pressures, which come from the strategic planning systems in use at most large corporations, and concludes that the current emphasis upon improvements in competitive positioning have led many managers to take actions that are directly contrary to the moral standards, either explicit or implied, of their organizations. LaRue Hosmer is Professor of Policy and Control at the Graduate School of Business Administration of the University of Michigan. He was the founder and president of a company that manufactured heavy equipment for sawmills and papermills. He has been teaching Business Policy, Small Business Management and Entrepreneurship at The University of Michigan since 1972, with visiting appointments during that period at Stanford and Yale. His research interests are in managerial ethics, corporate responsibility and strategic implementation. He is the co-author of The Entrepreneurial Function (Prentice-Hall, 1977) and the author of Strategic Management: Text and Cases on Business Policy (Prentice-Hall, 1982), Formation Planning (McGraw-Hill, 1984), Managerial Ethics (in press) and Making Strategy Work (in press).     

Gender differences in proclivity for unethical behavior

This paper explores possible connections between gender and the willingness to engage in unethical business behavior. Two approaches to gender and ethics are presented: the structural approach and the socialization approach. Data from a sample of 213 business school students reveal that men are more than two times as likely as women to engage in actions regarded as unethical but it is also important to note that relatively few would engage in any of these actions with the exception of buying stock with inside information. Fifty percent of the males were willing to buy stock with insider information. Overall, the results support the gender socialization approach.Michael Betz is Professor of Sociology at the University of Tennessee in Knoxville. He has published articles on income inequality, accountability, gender and work, and job satisfaction. Currently he is working on the effect of gender on ethical decision making and accountability as a mechanism of social control.Lenahan O'Connell is Assistant Professor of Sociology at Carson-Newman College. His research focuses on gender differences in work experience. He is currently studying discrimination law enforcement in addition to continuing research with Michael Betz and Jon Shepard on ethics at work.Jon M. Shepard is currently Chairman of the Department of Management and Professor of Sociology at the University of Kentucky. His research interests include comparative management (particularly Japanese and American), ethics in business, the social responsibility of business, and the accountability of institutions in industrial society.     

Linking globalization of entrepreneurship in small organizations

The field of entrepreneurship spans a wide variety of topic areas, and among the most important is that of the small and medium-sized enterprise (SME). The aim of this paper is to link entrepreneurship and SMEs. Attempting to generalize the outcomes of entrepreneurship in small organizations from different sectors, countries or industries should be activities that are part of daily life on an international scale. In extracting and transferring the outcomes of this research into entrepreneurship and SMEs, policy makers should see an aspect that must be consolidated within the environment of international globalization that surrounds us. It should not be forgotten that what starts out as small (i.e. an SME) can become large over time and this entrepreneurship can form a part of a new organizational structure. A brief overview of the contents of each of the articles included in this special issue on the globalization of entrepreneurship in small organizations is also presented herein.      

Linking management behavior to ethical philosophy

This study investigates current linkages between ethical theory and management behavior. The vignettes used in this investigation represent ethical dilemmas in the areas of coercion and control, conflict of interest, physical environment, and personal integrity. The results indicate that even with the heightened state of ethical awareness that has evolved in recent years the link between ethical philosophy and management behavior remains basically the same as it was in the mid 1980s. Specifically, practitioners still rely almost totally on the utilitarian ethical philosophy when making business decisions.Shane R. Premeaux is a Professor of Marketing, and the Associate Dean at McNeese State University, Lake Charles, Louisiana. He is an avid author with over fifty articles appearing in such journals asPersonnel, Peronnel Journal, Personnel Administrator, Transportation Journal, theLogistics and Transportation Review, and theJournal of Small Business Management. He has also co-authored books entitled:Personal Selling: Function, Theory, and Practice, 3rd ed.,Supervision, 2nd ed.,Human Resources Management, 4th ed.,Management and Organization Behavior, 1st ed., andManagement Concepts, Practices, and Skills, 5th ed.R. Wayne Mondy is a Professor of Management and Dean of the College of Business at McNeese State University. Dr. Mondy has authored or co-authored seven college textbooks, two trade books, fifty-one articles, and twenty papers. Dr. Mondy is an avid author with numerous articles in various refereed journals. He has coauthored the following books:Staffing the Contemporary Organization, 1st ed.,Personal Selling: Function, Theory, and Practice, 3rd ed.,Supervision, 2nd ed.,Human Resources Management, 4th ed.,Management and Organizational Behavior, 1st ed., andManagement Concepts, Practices, and Skills, 5th ed.     

The effectiveness of corporate communicative responses to accusations of unethical behavior

When corporations are accused of unethical behaviour by external actors, executives from those organizations are usually compelled to offer communicative responses to defend their corporate image. To demonstrate the effect that corporate executives' communicative responses have on third parties' perception of corporate image, we present the Corporate Communicative Response Model in this paper. Of the five potential communicative responses contained in this model (no response, denial, excuse, justification, and concession), results from our empirical test demonstrate that a concession is the most effective and robust communicative option.Jeffrey L. Bradford is an Assistant Professor in the Marketing Department at Bowling Green State University. His primary research interests are in the areas of marketing ethics and public policy. His previous research has been published inJournal of Business Ethics, andJournal of Business Strategies.Dennis E. Garrett is an Associate Professor in the Marketing Department at Marquette University. His primary research interests are in the areas of marketing ethics and consumer complaints. His previous research has been published inJournal of Marketing, Journal of Marketing Research, Journal of Business Ethics, Communication Monographs, andBusiness and Society Review. He is also a co-author ofMarketing Theory: Evolution and Evaluation (1988, John Wiley & Sons).     

Developing a measure to capture marketing faculty's perceptions of unethical behavior

The study explores the factor structure of the Sirgy et al. [Sirgy MJ, Johar JS, Gao T. Toward a code of ethics for marketing educators. Journal of Business Ethics 2006; 63(1): 1-20] measure of marketing faculty's perceptions of unethical behavior and tests its predictive validity. We surveyed members of the Academy of Marketing Science regarding their perceptions of acceptability of 142 behaviors that marketing faculty may encounter in their roles as teacher, researcher, administrator, consultant, professional colleague, and college professor. We used exploratory factor analyses to reveal the factor structures of the items grouped by four faculty roles: teaching, research, administrative service, and professional service. We then tested the measure's predictive validity by testing for demographic differences (gender, age, rank, tenure, and level of education) with respect to the 23 types of unethical faculty behaviors. The final measure can be used by marketing-related associations to gauge the norms of faculty conduct, which in turn can help them develop their own academic code of ethics.     

How sales managers control unethical sales force behavior

Researchers have studied marketing ethics from several perspectives. Few studies, however, have analyzed supervisory reactions to unethical behavior by salespeople. The results of this study using a 2 × 3 factorial design showed that the performance level of the salesperson and the consequences of the salesperson's actions influenced some types of discipline used by a sample of 246 sales managers. The findings both support and contradict prior research on how sales managers respond to unethical sales force behavior.James B. DeConinck is an Assistant Professor of Marketing at The University of Dayton. His publications have appeared inThe Journal of Business Research, The Journal of Business Ethics, andThe Journal of Applied Business Research. Prior to being in academics, he held industry positions in transportation and sales.     

Perceived correlates of illegal behavior in organizations

A survey was conducted of the perceived correlates of illegal abuses in the electronics industry. Human resource directors of thirty-one firms responded to a questionnaire which assessed their perceptions of the degree to which illegal behavior was caused by (1) deficiencies in the moral character of employees (2) the clarity of expectations and standards describing illegal behavior and (3) the presence of reinforcements and punishments contingent on these behaviors. All three variables were related to the frequency of abuses in three areas of organizational crime (e.g. administrative, labor, environment) and three areas of personal crime (theft, falsifying records kickbacks) as reported by the directors and/or indicated by archival records. The implications of these findings are discussed in terms of how organizations may reduce illegal activity. Mitchell, Terence R., Edward E. Carlson Professor of Business Administration and Professor of Psychology, University of Washington. Professor Mitchell's interests are decision making, leadership, and social responsibility. He has recently published articles on these topics in Organizational Behavior and Human Decision Processes, The Academy of Management Review, The Journal of the Academy of Management, and the Journal of Applied Psychology. He is co-author (with J. Larson) of People in Organizations, and a joint author of Birnbaum, Scott and Mitchell, Organization Theory: A Structural and Behavioral Analysis. Mitchell is a fellow of the American Psychological Association, and the American Academy of Management. He is also a member of the Society for Organizational Behavior. Daniels, Denise is a graduate student in organizational behavior and human resources management. Denise's interests are motivation, self-efficacy, and groups. She has recently published in the Journal of Applied Psychology and has presented papers at the Academy of Management national meeting. Hopper, Heidi is a graduate student in organizational behavior and human resources management. Heidi's interests are accountability, attributions, and motivation. She has recently published in the Journal of Applied Psychology and has presented papers at the Academy of Management national meeting. Jane George-Falvy is a Ph.D. Candidate in Organizational Behavior. She received a B.A. degree in psychology. Her primary research interests include the areas of learning and motivation. She has recently co-authored articles which have appeared in the Journal of Applied Psychology, the Academy of Management Best Paper Proceedings, and Group and Organization Management. Her dissertation explores the moderating effects of task complexity and learning stage on the relationship between participation in goal setting and task performance. Gerald R. Ferris is Professor of Labor and Industrial Relations, of Business Administration, and of Psychology, and Caterpillar Foundation University Scholar at the University of Illinois at Urbana-Champaign. He also is the Director of the Center for Human Resource Management at the University of Illinois. He received a Ph.D. in Business Administration from the University of Illinois at Urbana-Champaign, and subsequently served on the Department of Management faculty at Texas A&M University. Ferris is the author of numerous articles published in such journals as the Journal of Applied Psychology, Organizational Behavior and Human Decision Processes, Personnel Psychology, Academy of Management Journal, and Academy of Management Review, and he serves as editor of the annual series, Research in Personnel and Human Resources Management.     

The challenge of ethical behavior in organizations

This paper is designed to do three things while discussing the challenge of ethical behavior in organization. First, it discusses some reasons why unethical behavior occurs in organization. Secondly, the paper highlights the importance of organizational culture in establishing an ethical climate within an organization. Finally, the paper presents some suggestions for creating and maintaining an ethically-oriented culture.Ronald R. Sims is Associate Professor in the School of Business Administration at the College of William and Mary. His research interests include ethical behavior, experiential learning, employee and management training and development, and organizational transitions. His articles have appeared in a variety of scholarly and practitioner-oriented journals.     

Danger signs of unethical behavior: How to determine if your firm is at ethical risk

This paper is designed to do three things. First, it discusses some of the key trends in business ethics in the academic and corporate communities. Initiatives like the Arthur Andersen Business Ethics Program are noted. Secondly, the paper examines certain basic misconceptions about the field and concludes that the adage that good ethics is good business is still true. Finally, the paper highlights fourteen business attitudes or practices that may put a firm at ethical risk. For example, the paper discusses the risk of using ethics as simply a public relations initiative.Man's life is not a state of unalloyed happiness. The earth is no paradise. Although this is not the fault of social institutions, people are wont to hold them responsible for it. The foundation of any and every civilization, including our own, is private ownership of the means of production. Whoever wishes to criticize modern civilization, therefore, begins with private property. It is blamed for everything that does not please the critic, especially those evils that have their origin in the fact that private property has been hampered and restrained in various respects so that its full social potentialities cannot be realized.¹ Ludwig von Mises Robert Allan Cooke is Director of the Institute for Business Ethics at DePaul University. He has served as a member of the executive board of the Corporate Responsibility Group of Chicago, the educational subcommittee of Chicago United, and as an academic advisor for the Heartland Institute. He serves as project liason on the advisory council of the Arthur Andersen Business Ethics Program. He is also a management consultant in corporate training who frequently lectures to business and civic groups. His most recent publication is: The Ethical Side of Takeovers and Mergers, with Earl Young, Essentials of Business Ethics (New American Library, 1990).     

Conflicts between entrepreneurs and investors: the impact of perceived unethical behavior

This paper examines the impact of perceived unethical behavior by entrepreneurs, angel investors and venture capitalists on their conflict process. For this purpose, we use an embedded case study design to provide a diversity of perspectives on the topic at hand. From the eye of the beholder, i.e. investor, entrepreneur or both, 11 conflict situations were analyzed for any perceived unethical behavior. Based on findings from within- and cross-case analysis, we propose that perceived unethical behavior among venture partners triggers conflicts between them through increased fault attribution or blaming. Further, we propose that perceived unethical behavior affects venture partners’ choice of conflict management strategy and increases the likelihood of conflict escalation and of conflict having a negative partnership outcome such as failure or another form of involuntary exit. As such, this paper contributes to the entrepreneurship literature by addressing calls for more research on the darker sides of investor–investee relationships.     

Ethical beliefs of MIS professionals: The frequency and opportunity for unethical behavior

The frequency and opportunity for unethical behavior by MIS professionals is examined empirically. In addition, the importance of top management's ethical stance, one's sense of social responsibility and the existence of codes of ethics in determining perceptions of the frequency and opportunity for unethical behavior are tested.Results indicate that MIS professionals are perceived as having the opportunity to engage in unethical practices, but that they seldom do so. Additionally, successful MIS professionals are perceived as ethical. Finally, while company codes of ethics were uncommon, top management was seen as supporting high ethical standards. Scott J. Vitell is an Assistant Professor of Marketing at the University of Mississippi. His publications have appeared in the Journal of Macromarketing, the Journal of Business Ethics, Research in Marketing, various national and regional proceedings, and elsewhere. Donald L. Davis is Associate Professor and Director of Management Information Systems Programs in the School of Business at The University of Mississippi. He has published in OMEGA, Journal of Operations Management, Human Systems Management and other journals. His current research interests are in user-system interfaces in DSS, expert systems, and nueral nets.     

Factors influencing student perceptions of unethical behavior by personal salespeople: An experimental investigation

Historically, students have held negative perceptions about the ethics of salespeople. Using an experiment, this study explores which factors affect students' perceptions of how frequently salespeople behave unethically. Additionally, the study investigates whether the same factors influence the degree to which certain behaviors are considered serious ethical violations.John R. Sparks is an Assistant Professor of Marketing at the University of Dayton.Mark Johlke is a doctoral candidate in marketing at Texas Tech University. Dr. Sparks' research interests are in the areas of marketing ethics and marketing communication. Mr. Johlke's research interests are in sales management.     

Peer reporting of unethical behavior: The influence of justice evaluations and social context factors

This field survey in a fast food restaurant setting tested the hypothesized influences of two social context variables (role responsibility and interests of group members) and justice evaluations (distributive, procedural, and retributive) on respondents' inclination to report theft and their theft reporting behavior. The results provided mixed support for the hypotheses. Inclination to report a peer for theft was associated with role responsibility, the interests of group members, and procedural justice perceptions. Actual reporting behavior was associated with the inclination to report and with retributive justice evaluations. Implications for future research and for management are discussed.Bart Victor is Associate Professor of Management in the Kenan Flagler School of Business at the University of North Carolina at Chapel Hill. He earned his Ph.D. in management. His research interests have focused on culture and climates in organizations and problems in organizational design.Linda Klebe Trevino is Assistant Professor of Organizational Behavior at the Mary Jean and Frank B. Smeal College of Business Administration, The Pennsylvania State University. She received her Ph.D. in management. Her research focuses on the management of ethical-unethical behavior in organizations and justice in disciplinary situations.Debra L. Shapiro is Associate Professor of Business Administration in the Kenan Flagler School of Business at the University of North Carolina at Chapel Hill. Her research regards managing conflict in organizations, via procedural justice, interactional justice, negotiation tactics, and grievance procedures.     

Instilling ethical behavior in organizations: A survey of Canadian companies

An organization's management control system can play an important role in influencing ethical behavior among employees. In this paper a theoretical framework of control is developed by linking various ethics related control mechanisms reported in the literature to the primary components of a management control system. In addition, the findings of a survey of the Financial Post's Top 1 000 Canadian industrial and service companies are reported. The survey investigated organizations' use of ethical codes of conduct, whistleblowing systems, ethics committees, judiciary boards, employee training in ethics, and ethics focused corporate governance and reward systems. The findings indicate that ethics related control mechanisms, particularly codes of conduct, are being used by a good number of organizations. However, closer analysis of the data suggests that many companies may only be paying lip service to the importance of promoting ethical behavior.R. Murray Lindsay is Professor of Accounting, Linda M. Lindsay is Assistant Professor of Accounting, and V. Bruce Irvine is Professor of Accounting at the College of Commerce, University of Saskatchewan. The authors share a teaching and research interest which focuses on examining the behavioral effects of management accounting and control systems on employee behaviour.     

An integrative model for understanding and managing ethical behavior in business organizations

Managing ethical behavior is a one of the most pervasive and complex problems facing business organizations today. Employees' decisions to behave ethically or unethically are influenced by a myriad of individual and situational factors. Background, personality, decision history, managerial philosophy, and reinforcement are but a few of the factors which have been identified by researchers as determinants of employees' behavior when faced with ethical dilemmas. The literature related to ethical behavior is reviewed in this article, and a model for understanding ethical behavior in business organizations is proposed. It is concluded that managing ethics in business organizations requires that managers engage in a concentrated effort which involves espousing ethics, behaving ethically, developing screening mechanisms, providing ethical training, creating ethics units and reinforcing ethical behavior. W. Edward Stead, Ph.D., is Professor of Management at East Tennessee State University, Johnson City, TN. His research interests include ethical behavior, cancer in the workplace, social strategy implementation, the ethical implications of cost-benefit analysis, and managing professional employees. His articles have appeared in Psychological Reports, Personnel Journal, Business and Society Review, and the Journal of Accountancy among others, and he has published cases in leading business policy and social responsibility texts. Dan L. Worrell, Ph.D., is Professor of Management and Department Chairperson at Appalachian State University, Boone, NC. He has published articles in such Journals as Academy of Management Journal, Journal of Management, Business Horizons, and Psychological Reports among others. His research interests include managerial succession, ethical behavior and social responsibility. Jean Garner Stead, Ph.D., is Associate Professor of Management at East Tennessee State University, Johnson City, TN. Her research interests include ethical behavior, cancer in the work place, social strategy implementation, and the ethical implications of cost-benefit analysis. Her articles have appeared in Psychological Reports, Personnel Journal, Business and Society Review and the International Journal of Management among others, and she has published cases in leading business policy and social responsibility texts.     

Linking employee development activity,social exchange and organizational citizenship behavior

The authors examined ‘perceived beneficiary’ of employee development (self, organization) for relationships with employee development activity. Perceived organizational support served as a moderator. The authors conclude that employees may engage in development activities to partly benefit their organization to the extent that a positive exchange relationship exists. Correlational data also show that development behavior is related to organizational citizenship behavior, and this is particularly true for work‐related development activity. This research links employee development with social exchange and organizational citizenship, providing implications for both research and practice.     

Unethical behavior in organizations: empirical findings that challenge CSR and egoism theory

In the egoism philosophical framework, it is contended that when organizations focus on their long‐term interests, they, without knowing it, advance the interests of society as a whole, which is perceived as ethical. In this research, this premise is challenged using data collected from the social media outlets of 29 randomly selected companies from the 2013 Fortune 500 list. Through qualitative comparative analysis, the exact opposite was found. In fact, the organizations that focused on striving for their long‐term success are perceived as unethical. It was also found that socially responsible organizations are perceived as ethical whereas those that misrepresent their positions and attempt to influence the decisions of others are perceived as unethical. Implications for managers are discussed, and future directions are suggested.     

The appearance standard: Criteria and remedies for when a mere appearance of unethical behavior is morally unacceptable

While there are companies whose codes of ethics state that mere appearance of unethical behavior by employees is morally unacceptable, this so‐called appearance standard has hardly received any attention in the business ethics literature. Using corporate integrity theory, this article explores the criteria that may explain how mere appearances of unethical behavior can arise (i.e., the presence of conflicts of interests, the entanglement of these interests, a reputation for lack of integrity, and deviant outcomes) and those that may make such appearances morally unacceptable (i.e., foreseeability, avoidability, and seriousness). The article proposes remedies for preventing and resolving instances when mere appearance of unethical behavior is morally unacceptable.