Procedural Instrumentality and Audit Group Judgment: An Exploration of the Impact of Cognitive Fallibility and Ability Differences

The issue of auditor judgment prowess and resultant decision-making success has been an important topic in the behavioral auditing area for many years and has generated a voluminous research literature. However, relatively little literature exists on how differences in individual group member cognitive heuristics (fallibility) and ability impact the group process, and are impacted upon by the group process. This issue is important since so much of audit firm decision-making has its origins in audit group deliberations (Hunton 2001). Accordingly, understanding circumstances that give rise to either more flawed (‘process losses’), or better (‘process gains’), group decision-making outcomes are important even though the literature generally recognizes the superiority of group over individual decision-making (e.g., Rich et al. 1997). The model developed here is intended to develop a better understanding of cognitive factors that impact positively or negatively on audit group process. We then develop a four stage model of group decision-making, during which the differing assets and liabilities (cognitive, ability, expertise) of audit group members are combined. The four stages are diversity, controvery, insight and resolution. These are then described at length.     

The Perceptions of Consumers Regarding Online Retailers’ Ethics and Their Relationship with Consumers’ General Internet Expertise and Word of Mouth: A Preliminary Analysis

Ethical concerns of Internet users continue to rise. Accordingly, several scholars have called for systematic empirical research to address these issues. This study examines the conceptualization and measurement of consumers’ perceptions regarding the ethics of online retailers (CPEOR). Also, this research represents a first step into the analysis of the relationship between CPEOR, consumers’ general Internet expertise and reported positive word of mouth (WOM). Results, from a convenience sample of 357 online shoppers, suggest that CPEOR can be operationalized as a second-order construct composed of four dimensions: security, privacy, fulfillment, and non-deception. Our findings also indicate that consumers’ general Internet expertise significantly improves CPEOR and CPEOR are strongly predictive of consumers’ WOM. Managerial and research implications are offered.     

Can corporate codes of ethics influence behavior?

There is increasing public interest in understanding the nature of corporate ethics due to the knowledge that unethical decisions and activities frequently undermine the performance and abilities of many organizations. Of the current literature found on the topic of ways organizations can influence ethical behavior, a majority is found on the issue of corporate codes of ethics.Most discussions on codes of ethics evaluate the contents of the codes and offer opinions on their wording, content, and/or value. Unfortunately, very little research has been devoted towards discovering whether they are effective in promoting ethical decision-making behavior. Thus, due to the lack of empirical research on this particular topic, this paper attempts to further address this issue.Data was obtained through the use of a fifteen-item questionnaire, in which seven of the items were scenarios on the topic of ethical behavior, and the remaining eight questions were concerned with demographic information. The survey was administered to 150 business students at a large university.The results indicated that corporate codes of ethics are not influential in determining a person's ethical decision-making behavior.     

Managers’ Moral Decision-Making Patterns Over Time: A Multidimensional Approach

Taking multidimensional ethics scale approach, this article describes an empirical survey of top managers’ moral decision-making patterns and their change from 1994 to 2004 during morally problematic situations in the Finnish context. The survey questionnaire consisted of four moral dilemmas and a multidimensional scale with six ethical dimensions: justice, deontology, relativism, utilitarianism, egoism and female ethics. The managers evaluated their decision-making in the problems using the multidimensional ethics scale. Altogether 880 questionnaires were analysed statistically. It is concluded that relying on the utilitarian principles is a core ethical evaluation criterion amongst top business managers in Finland. This study proves that managers’ moral decision-making patterns change over time. According to the results of this research, managers’ moral decision-making became more multidimensional during the study period. The change is explained by (1) the inclusion of female ethics items in the scale which allows managers to show more diversity in their decision- making, (2) the change in the Finnish economic context from depression to economic prosperity and growth during the study period, which is conducive to the spread of post materialist values, such as the importance of social relations and (3) the increasing public discussion of the importance ethical issues in business.     

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.     

A Chinese Perspective: Business Ethics in China Now and in the Future

China now manufactures or assembles over 50% of the world’s products. However, the world has been reeling from daily accounts of defective “Made in China” products. China has been at the forefront of growing concern, not only about its products and enterprises, but also about its business ethics. This article analyzes recent events connected with the Made in China label from the perspective of evolving Chinese business ethics. Part 1 analyzes three of these events. Part 2 details and analyzes the state of business ethics in China today. Part 3 concludes by exploring the future of business ethics in China. The main conclusion is that business ethics in China faces two kinds of ethical challenges: how to restrict the lawless in as short a period of time as possible and how to protect and advance the interests of employees, investors, and the public through corporate management and public administration.     

Returning to Rawls: Social Contracting,Social Justice,and Transcending the Limitations of Locke

A generation ago, the field of business ethics largely abandoned analyzing the broader issue of social justice to focus upon more micro concerns. Donaldson applied the social contract tradition of Locke and Rawls to the ethics of management decision-making, and with Dunfee, has advanced this project ever since. Current events suggest that if the field is to remain relevant it needs to return to examining social and economic fairness, and␣Rawl’s approach to social contracting suggests a way to start. First, however, the field needs to discard the weaker and counterproductive aspects of its Lockean legacy: Locke’s hostility to government activism and his indifference with regard to outcomes for the bulk of society. Donaldson’s and Dunfee’s social contracting approach is not suited to, nor was it designed to, analyze or resolve broad issues of social and economic justice. Their postulated network of communities upon which they rely is problematic in a number of ways, and while they take the legal and political status quo into account, their method does not deal with the historical reality that, as the economic and social environment changes, promoting greater justice requires new and sometimes coercive government interventions. Rawls’s work, however, does acknowledge the historically demonstrable necessity of using the power of government to help to achieve desirable social outcomes. While he rejected Mill’s methodology, Rawls was inspired by the earlier philosopher’s concerns for social justice at a time of major economic change. The field would do well to follow the example of both men in this respect. Richard Marens is an Assistant Professor in Management at California State University, Sacramento. He has published articles on shareholder activism, management history, employee ownership, corporate law, and the evolution of Catholic Social Teaching. He is currently researching the social role of finance from both historical and contemporary perspectives.     

Hume’s Theory of Business Ethics Revisited

Hume’s examination of the conventions of property, trade, and contract addresses the moral foundations that make business possible. In this light, Hume’s theory of justice is also a foundational work in business ethics. In Hume’s analysis of these conventions, both philosophers and game theorists have correctly identified “proto” game-theoretic elements. One of the few attempts to offer a Humean theory of business ethics rests on this game-theoretic interpretation of Hume’s argument. This article argues that game-theoretic reasoning is only one part of a Humean business ethics and this can be shown by further analyzing Hume’s theory of justice. As we examine his theory, it becomes clear that Hume is not trying to show how it is always rational to respect the rules of business. Hume is not engaging in, or attempting, a reconciliation project and neither is a Humean business ethics. The final section of the article is a brief Humean analysis of the effectiveness of codes of ethics. The purpose of this section is not to decide the issue but to show how a Humean approach is both useful, relevant, and involves more than reconciling rationality and morality.     

Regulatory Reform and the U.S. Manufacturing Sector

The Bush administration, through the Office of Management and Budget, Office of Information and Regulatory Affairs (OMB/OIRA), has shown renewed interest in regulatory reform as an important public issue, especially as it pertains to the nation’s manufacturing sector. On March 9, 2005, OMB/OIRA announced that Federal agencies will be taking practical steps of an administrative nature to reduce the cost burden on manufacturing firms operating in the United States by acting on 76 suggested reforms of federal regulations suggested by the public. Recommended actions range from gathering and reporting additional information to issuing modernized regulations, with reforms to be implemented through rulemaking procedures that include an opportunity for public participation. JEL Classification L510     

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.     

Allhoff on Business Bluffing

The moral status of business bluffing is a controversial issue. On the one hand, bluffing would seem to be relevantly similar to lying and deception. Because of this, business bluffing can be taken to be an activity that is at least prima facie morally condemnable. On the other hand, it has often been claimed that in business bluffing is part of the game and that therefore there is nothing morally questionable in business bluffing. In a recent issue of this journal, Fritz Allhoff puts forward a novel defence of business bluffing. In this article, I will examine Allhoff’s arguments for the moral acceptability of business bluffing and argue that they are implausible. Dr. Jukka Varelius is a Visiting Fellow in the Centre for Professional Ethics at the University of Central Lancashire, UK. His research concentrates on questions of biomedical ethics, psychiatric ethics, and business ethics. His publications include ‘Voluntary euthanasia, physician-assisted suicide and the goals of medicine’ Journal of Medicine and Philosophy 2006, 31 (2): 1--18, ‘Execution by lethal injection, euthanasia, organ-donation and the proper goals of medicine’ Bioethics, forthcoming, and ‘Autonomy, well-being and the case of the refusing patient’ Medicine, Health Care and Philosophy, forthcoming.     

The Ethics of Online Retailing: A Scale Development and Validation from the Consumers’ Perspective

While e-commerce has witnessed extensive growth in recent years, so has consumers’ concerns regarding ethical issues surrounding online shopping. The vast majority of earlier research on this area is conceptual in nature, and limited in scope by focusing on consumers’ privacy issues. This study develops a reliable and valid scale to measure consumers’ perceptions regarding the ethics of online retailers (CPEOR). Findings indicate that the four factors of the scale – security, privacy, non-deception and fulfillment/reliability – are strongly predictive of online consumers’ satisfaction and trust. The results offer important implications for e-retailers and are likely to stimulate further research in the area of e-ethics from the consumers’ perspective. Sergio Román is an Associate Professor of Marketing at the University of Murcia (Spain). He has been a Visiting Scholar at the University of Arizona. His articles have appeared in the Journal of Business Research, International Marketing Review, International Journal of Market Research, European Journal of Marketing and Journal of Marketing Management. His research interests are focused on personal selling and sales management, international marketing and business ethics.     

Are Audit-related Ethical Decisions Dependent upon Mood?

This study explores the impact of mood on individuals’ ethical decision-making processes through the Graham [Graham, J. W.: 1986, Research in Organizational Behavior 8, 1–52] model of Principled Organizational Dissent. In particular, the research addresses how an individual’s mood influences his or her willingness to report the unethical actions of a colleague. Participants’ experienced an affectively charged, unrelated event and were then asked to make a decision regarding whistle-blowing intentions in a public accounting context. As expected, negative mood was associated with lower intentions to report the unethical actions of others to a superior within the organization. The Graham model, which proposes that reporting intentions are impacted by the three determinants of seriousness, personal responsibility and cost, was employed to more clearly understand the nature of the affect–reporting intention relationship. The role of affect was explained by demonstrating that two determinants mediate the relationship between mood and whistle-blowing intentions. Specifically, as seriousness and responsibility have a positive impact on reporting intentions, the reduction of these perceptions by negative mood reduces the intent to report. The negative impact of personal cost on reporting intentions was significant, although not as a mediator of mood.Mary Curtis is an Associate Professor of Auditing and Accounting Information Systems in the Department of Accounting at the University of North Texas. Her research interests include Judgment and Decision-making in accounting and issues related to Information Systems Auditing.     

Assessing Gender Differences in Computer Professionals’ Self-Regulatory Efficacy Concerning Information Privacy Practices

Concerns with improper collection and usage of personal information by businesses or governments have been seen as critical to the success of the emerging electronic commerce. In this regard, computer professionals have the oversight responsibility for information privacy because they have the most extensive knowledge of their organization’s systems and programs, as well as an intimate understanding of the data. Thus, the competence of these professionals in ensuring sound practice of information privacy is of great importance to both researchers and practitioners. This research addresses the question of whether male computer professionals differ from their female counterparts in their self-regulatory efficacy to protect personal information privacy. A total of 103 male and 65 female subjects surveyed in Taiwan responded to a 10-item questionnaire that includes three measures: protection (protecting privacy information), non-distribution (not distributing privacy information to others), and non-acquisition (not acquiring privacy information). The findings show (1) significant gender differences exist in the subjects’ overall self-regulatory efficacy for information privacy, and, in particular, (2) that female subjects in this study exhibited a higher level of self-regulatory efficacy than males for the protection and non-acquisition of personal privacy information. The identification of the factorial structure of the self-regulatory efficacy concerning information privacy may contribute to future research directed to examining the links between privacy efficacy and psychological variables, such as ethical attitude, ethical intention, and self-esteem. Studies can also be extended to investigate how different cultural practices of morality and computer use in men and women may shape the different development patterns of privacy self-efficacy. Understanding the different cultural practices may then shed light on the social sources of privacy competence and the appropriate remedies that can be provided to improve the situation. Feng-Yang Kuo holds a B.S. degree in Management Science from Chiao-Tung University, Taiwan and a Ph.D.degree in Information Systems from University of Arizona. He was a faculty of Information Systems at University of Colorado at Denver from 1985 to 1997 and is currently an associate professor of Information Management in Sun Yat-Sen University, Taiwan. He has published articles in Communications of ACM, MIS Quarterly, Communications of AIS, Journal of Business Ethics, Information & Management, Journal of Systems and Software, Decision Support Systems, and Sun Yat-Sen Management Review. Among his current interests are information ethics, managerial cognition, and human-computer interfaces. Cathy S.Lin Professor Cathy S.Lin is an assistant professor of Information Management at National University of Kaohsiung, Taiwan. Her Ph.D.is in Management Information Systems from National Sun Yat-Sen University. She has published articles in the Information & Management, Journal of Information Management, and Sun Yat-Sen Management Review. Among her current interests are information ethics, ethical decision making, electronic commerce, and information management. Meng-Hsiang Hsu Professor Meng-Hsiang Hsu is a professor of information management at National Kaohsiung of First University of Science and Technology. His Ph.D. is in Management Information Systems from National Sun Yat-Sen University. He has published articles in the J. of Business Ethics, Behavior & information Technology, Decision Support System, and Industrial Management and Data Systems. Among his current interests are knowledge management, information ethics, strategic information systems, and electronic commerce.     

Environmental Sustainability Versus Profit Maximization: Overcoming Systemic Constraints on Implementing Normatively Preferable Alternatives

There is a systemic condition inherent in contemporary markets that compel managers not to pursue more morally preferable initiatives if those initiatives will require actions that conflict with profit maximization. Normative arguments for implementing morally preferable practices within the existing system fail because they are insufficient to counter-act the systemic conditions affecting decision-making that is focused on maximizing profit as the primary operational value. To overcome this constraint we must elevate a more normatively preferable value, ‚ideal environmental sustainability,’ to the level of being the primary filtering value through which other competing values are evaluated, prioritized, and implemented. In order for this to occur in practice, a change must be made relative to the laws, rules, and regulations that define and guide the market. This can be done by suitably defining the epistemic constraint of impartiality utilizing Rawls’ notion of a ‚veil of ignorance’ as a heuristic device. John K. Alexander is an Adjunct at Grand Valley State University (Allendale MI) and Grand Rapids Community College (Grand Rapids MI). Areas of interest include Socratic, philosophy, business/organizational ethics, health care ethics, and philosophy of management. He has published papers in HEC Forum, Teaching Philosophy, Philosophy of Management, Journal of Business Ethics and Business Ethics Quarterly. Prior to becoming a visiting professor at GVSU in 2001, he had thirty-five years experience working and managing in foundries.     

Electronic Monitoring and Privacy Issues in Business-Marketing: The Ethics of the DoubleClick Experience

The paper examines the ethics of electronic monitoring for advertising purposes and the implications for Internet user privacy using as a backdrop DoubleClick Incs recent controversy over matching previously anonymous user profiles with personally identifiable information. It explores various ethical theories that are applicable to understand privacy issues in electronic monitoring. It is argued that, despite the fact that electronic monitoring always constitutes an invasion of privacy, it can still be ethically justified on both Utilitarian and Kantian grounds. From a Utilitarian perspective the emphasis must be on minimizing potential harms. From a Kantian perspective the emphasis must be on giving users complete information so that they can make informed decisions as to whether they are willing to be monitored. Considering the Internet advertising industrys current actions, computer users and government regulators would be well advised, both practically and ethically, to move to a user control model in electronic monitoring.     

Loose with the Truth: Predicting Deception in Negotiation

Using a simulated, two-party negotiation, we examined how characteristics of the actor, target, and situation affected deception. To trigger deception, we used an issue that had no value for one of the two parties (indifference issue). We found support for an opportunistic betrayal model of deception: deception increased when the other party was perceived as benevolent, trustworthy, and as having integrity. Negotiators’ goals also affected the use of deception. Individualistic, cooperative, and mixed dyads responded differently to information about the other party’s trustworthiness, benevolence, and integrity when deciding to either misrepresent or leverage their indifference issue. Mixed dyads displayed opportunistic betrayal. Negotiators in all-cooperative and all-individualistic dyads used different information in deciding whether to leverage their indifference issues and used the same information (benevolence) differently in deciding whether to misrepresent the value of their indifference issue. Mara Olekalns is a Professor of Management (Negotiations) at the Melbourne Business School, University of Melbourne. Her research focuses on communication processes in negotiation. In her research, she has investigated how strategy sequences shape negotiation outcomes. She is extending this research to investigate how impressions and communication shape trust in negotiation. Her work on communication processes in negotiation has been published in Journal of Applied Psychology, Human Communication Research, Journal of Experimental Social Psychology, Personality and Social Psychology Bulletin, and Organizational Behavior and Human Decision Processes. Philip L. Smith is a Professor in the Department of Psychology, University of Melbourne. His primary research interest is in building quantitative models of the human visual system. He also applies his modeling expertise to analyses of communication processes in negotiation, focusing on the relationships between situational and dispositional factors, strategy sequences and negotiation outcomes. It has been published in leading management and psychology journals, including Human Communication Research, Journal of Experimental Social Psychology, Personality and Social Psychology Bulletin, and Organizational Behavior and Human Decision Processes. Authors' Note The research reported in this paper was supported by a Discovery Grant from the Australian Research Council. We thank Ania Ratzik and Rudi Crncec for assistance with data coding. Correspondence should be addressed to Mara Olekalns, Melbourne Business School, University of Melbourne, 200 Leicester St, Carlton, Victoria, 3053, Australia or via email to m.olekalns@mbs.edu     

Just Doing Business or Doing Just Business: Google,Microsoft, Yahoo! and the Business of Censoring China’s Internet

This paper addresses the criticism recently directed at Internet companies who have chosen to do business in China. Currently, in order to conduct business in China, companies must agree to the Chinese government’s rule of self-censoring any information the government deems inappropriate. We start by explaining how some of these companies have violated the human rights of Chinese citizens to freely trade information. We then analyze whether the justifications and excuses offered by these companies are sufficient to absolve them of moral responsibility. We argue that both justifications and excuses offered are insufficient. Wilfully abiding by unjust laws, albeit necessary to do business in China, should not trump moral actions that protect rights. “This is not something we did enthusiastically, or not something that we are proud of at all.”– Elliot Schrage answering questions from Congress regarding Google’s decision to censor its Internet searches in China Neil Haddow is currently finishing his PhD in philosophy at the University of Waterloo. His interests are moral and political philosophy at the theoretical and applied levels. He is the co-author of another paper forthcoming in The Journal of Business Ethics on age discrimination and automobile insurance. G. Elijah Dann presently lectures for the Department of Philosophy at the University of Toronto. He is author of After Rorty: The possibilities for ethics and religious belief (Continuum Press, 2006), and is editor of a forthcoming book on Christianity entitled, Leaving Fundamentalism (Wilfrid Laurier University Press, 2007).     

Do What Consumers Say Matter? The Misalignment of Preferences with Unconstrained Ethical Intentions

Nearly all studies of consumers’ willingness to engage in ethical or socially responsible purchasing behavior is based on unconstrained survey response methods. In the present article we ask the question of how well does asking consumers the extent to which they care about a specific social or ethical issue relate to how they would behave in a more constrained environment where there is no socially acceptable response. The results of a comparison between traditional survey questions of “intention to purchase” and estimates of individuals willingness-to-pay for social attributes in products reveal that simple survey questions are too “noisy” to provide operationally meaningful information and overstate intentions to a considerable extent. Pat Auger is Associate Professor at the Melbourne Business School. Timothy M. Devinney is Professor and Professorial Research Fellow at the Australian Graduate School of Management.     

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.