Three Primary Trust Pathways Underlying Ethical Considerations

The role of trust pathways in achieving a competitive advantage is becoming increasingly important for effective ethical consideration policies in all business and non-business sectors. This paper argues that there are three primary trust pathways of rational choice, rule-based trust, and category-based trust that underscore the basis of trust relationships. The implementation of these primary trust pathways is strongly influenced by expertise level, incomplete information, rapidly shifting environments, and/or time-pressure. The refinement of the interaction of information exchange and framing of problems can produce three secondary higher-level trust pathways of third party-based trust, role-based trust, and knowledge-based trust. These six different trust pathways that guide ethical consideration issues are discussed with a Throughput Modeling theoretical approach.     

The Effect of National Culture on Whistle-Blowing Perceptions

Society continues to be concerned about the impact of ethics on decision making. While many researchers have focused on this issue, the increased globalization of today's business suggests that more emphasis should be given to the potential impact of culture on ethical decisions. The current study is based, in part, on the work of Hofstede (1980, 1991) who identified multiple dimensions on which countries differ in terms of culture. As such, it gives consideration to the impact of national culture on ethical decision making. The study focuses on ethical decisions made by U.S. and Taiwanese accounting students and examines cross-cultural differences in business-related ethical perceptions. Results indicated significant differences between the ethical perspectives and judgments of U.S. and Taiwanese accounting students in a whistle-blowing scenario, particularly with respect to Hofstede's individualism dimension. These findings enhance our understanding of cross-cultural ethical differences. The implications of these results are discussed and suggested areas for future research are proposed.     

Business ethics cases and decision models: A call for relevancy in the classroom

Classroom cases and decision making models used in the teaching of business ethics may be inconsistent with the actual needs of practicing manager students. Three summary cases written by practicing manager students are included in this paper as well as evidence that concerns a focus more on interpersonal dilemmas rather than top management decisions. As well, the relevancy of philosophical perspectives of ethical decision models is questioned. More practical, hands-on models for ethical decisions are provided. Finally, conclusions of relevancy for the field are drawn.David L. Mathison is an Associate Professor of Management at Loyola Marymount University in Los Angeles. He teaches primary management, policy and business ethics. His research and writing reflects a diversity of interests which include business ethics, women in management, and perception studies as they relate to assessment interviewing.     

The Effect of Groupwork on Ethical Decision-Making of Accountancy Students

Recent accounting scandals involving the collapse of large corporate firms have brought into question the adequacy of ethics education within accounting programs. This paper investigates the ethical decisions of accountancy students and in particular analyses the effect of group (as opposed to individual) decision-making on ethical decisions. Final year accountancy students (sample size of 165) were randomly allocated into two experimental conditions. The participants were then presented with five (5) ethical vignettes. One experimental condition involved completing the ethical decisions as individuals (60). The other involved completing the ethical decision-making as a group of 3–4 participants (34). A consistent pattern of behaviour was observed in the analysis of individual versus group responses. Individuals displayed stronger tendencies than groups to take the extreme actions of acting either unethically or ethically (whistleblowing), whereas groups displayed stronger tendencies to take the safer (neutral) options. It was concluded that groups reached consensus decisions, in an ethical context, probably as a result of peer pressure. The significant implication of this finding is in relation to the emphasis accounting programs place on group work. Group work may enhance students’ abilities to work as a team. However, as revealed in this study’s results, group work may not be an effective means of producing the optimal decision in all subject matter areas, especially complex areas such as ethical decision-making.     

Mixed Motives and Ethical Decisions in Business

Discerning the motives that lead businesspeople to make ethical decisions in economic contexts is important, for it aids the moral evaluation of such decisions. But conventional economic theory has for too long assumed an egoist model of motivation, to which many contrast an altruist view of ethical choices. The result is to see business decision making as implying dilemmas. On the other hand, we argue, if one assumes multiple motives, economic and ethical, in ordinary business decisions, a more fruitful model of ethical motivation in such decisions emerges. In this paper multiple motives are assumed to be the norm in a world of large organizations, complex decisions and stakeholder management. An example of a technology acquisition decision, with environmental overtones is presented in illustration of this approach. A method for discerning motives, primarily in terms of behavioural efficacy is presented. On this basis a two step approach to morally evaluating mixed motives in business decisions is proposed. First, the fit of motives with substantive ethical values should be ascertained, and then the efficacy of moral motives in yielding ethical behaviour and outcomes should be determined. This approach, we conclude, offers a much more concrete model of the actual role of moral motives in business decision making. It also signals the importance of moral learning in organizations.     

Importance of and approaches to incorporating ethics into the accounting classroom

Accounting educators are being called on to provide a greater emphasis on ethics education. This paper examines three important issues concerning ethics education in accounting. First, the question of whether ethics can indeed be taught is examined. Next, several innovative approaches are presented which have been used by accounting educators to integrate ethics into the classroom. Finally, results of a survey of students concerning their perspectives of ethical issues in accounting education, the accounting profession, and society at large are presented and discussed. Survey results reveal that students consider a lack of ethics damaging to the accounting profession and society. Results also indicate that accounting students are seeking ethical and moral direction.David S. Kerr is an Assistant Professor in the Department of Accounting at Texas A&M University. Dr. Kerr's research interests include ethics and behavioral decision making in accounting, group judgment/decision making, and audit planning.L. Murphy Smith, is a Price Waterhouse Teaching Excellence Professor of Accounting at Texas A&M University. His major research interests are information systems, auditing, and international issues.     

Using and Valuing Accounting Information: Joint Decision Making Between Accountants and Retail Managers

Using accounting information can be complex and difficult because it requires joint decision making between two groups, accountants and line managers, whose different perspectives may interfere with communication and exchange. Interpersonal tension and mistrust may further intensify barriers to problem solving. Deutsch's theory of cooperation and competition was used to examine the interaction between managers and accountants as they made decisions with accounting information. Thirty-three managers from a large food retailer were interviewed on critical incidents. Structural equation and other results support the argument that cooperative goal interdependence induces an open-minded discussion of opposing views. This in turn results in productive decisions and strong relationships which in turn lead to appreciating and valuing the importance of collecting and using accounting and financial information. These relationships seemed to hold across accounting roles. Results were interpreted as suggesting that developing strongly cooperative goals and the skills of constructive controversy can facilitate productive problem solving between accountants and line managers.     

Towards a Design Science of Ethical Decision Support

Ethical decision making involves complex emotional, cognitive, social, and philosophical challenges. Even if someone wants to be ethical, he or she may not have clearly articulated what that means, or know how to go about making a decision consistent with his or her values. Information technology may be able to help. A decision support system could offer individuals and groups some guidance, assisting them in making a decision that reflects their underlying values. The first step towards a design science of ethical decision support is to develop a theoretical base on which first-generation systems can be built. This paper brings together work in cognitive, social and moral psychology, information systems, and philosophy relevant to ethical decision making. Attributes of a system that would support ethical decision making are described.     

Ethics-Related Responses to Specific Situation Vignettes: Evidence of Gender-Based Differences and Occupational Socialization

This research presents findings from a study of gender-based differences in an ethical decision situation. The study focuses on gender as it relates to situational factors and accounting experience. The primary element of interest is how the gender of the actor (the person described in each vignette) influences the evaluation/assessment of the ethical/unethical decisions. While previous research has provided evidence of ethical differences relating to the gender of the responding subjects, limited evidence has been presented relating to situational issues that may influence assessments of ethical decisions.This research uses four accounting environment vignettes to survey the responses of accountants and accounting students to the ethical/unethical nature of the actions that are taken. In addition, how likely the accountants believe they are to take the same actions is also surveyed. The subjects are a representative sample of practicing accountants in the U.S. and senior/graduate accounting majors at a state university in the southwestern United States.The survey finds that occupational socialization is occurring up to a point. When specific rules are violated or tested, males and females behave similarly, thus illustrating that they have learned from their environment – occupational socialization. Alternatively, when gray areas are involved, they either tend to behave differently or assess the behavior of others differently, pointing to evidence of gender socialization.     

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.     

Socialization of business practitioners: learning to reflect on current business practices

An approach to ethical coursework in business schools which draws upon Schon's concept of the reflective practitioner is described. It is argued that an approach which promotes reflective practice guards against the dualism in models of ethical decision making which oppose philosophical and psychological perspectives. Workshop activities which can be used to facilitate students' ability to reflect on ethical situations are discussed. In particular, the critical incident technique encourages students to analyse strategies they have used to cope with ethical dilemmas in terms of their previous or contemporary experiences and value systems, and to examine these on the basis of philosophical principles.Joy Cullen is a Senior Lecturer in Education at Massey University, New Zealand. She has an MA with first class honours and a Ph.D. in educational psychology. Her teaching and research interests are in the areas of cognition and learning.Michael W. Small (see Business Ethics and Commercial Morality: Report of the Royal Commission into Commercial Activities).     

Considerations in Ethical Decision-Making and Software Piracy

Individuals are faced with the many opportunities to pirate. The decision to pirate or not may be related to an individual's attitudes toward other ethical issues. A person's ethical and moral predispositions and the judgments that they use to make decisions may be consistent across various ethical dilemmas and may indicate their likelihood to pirate software. This paper investigates the relationship between religion and a theoretical ethical decision making process that an individual uses when evaluating ethical or unethical situations. An ethical decision making model was studied for general unethical scenarios and for the unethical behavior of software piracy. The research model was tested via path analysis using structural equation modeling and was found to be appropriate for the sample data. The results suggest that there is a relationship between religion and the stages of an ethical decision making process regarding general ethical situations and software piracy.     

Ethical ideology and ethical judgment regarding ethical issues in business

Differences in ethical ideology are thought to influence individuals' reasoning about moral issues (Forsyth and Nye, 1990; Forsyth, 1992). To date, relatively little research has addressed this proposition in terms of business-related ethical issues. In the present study, four groups, representing four distinct ethical ideologies, were created based on the two dimensions of the Ethical Position Questionnaire (idealism and relativism), as posited by Forsyth (1980). The ethical judgments of individuals regarding several business-related issues varied, depending upon their ethical ideology.Tim Barnett is Assistant Professor of Management at Louisiana Tech University. He has published in such journals asPersonnel Psychology, theJournal of Business Research, andHuman Relations. His research interests include ethical decision making and ethical issues in HRM.Ken Bass is Assistant Professor of Management at East Carolina State University. He has articles published in several journals, including theJournal of Personal Selling and Sales Management. His research interests include ethical decision making, ethical strategy, and methodology.Gene Brown is Associate Professor Marketing at Louisiana Tech University. He is published in such journals as theJournal of Retailing, the Journal of the Academy of Marketing Science, theJournal of Business Research, Psychology and Marketing, and Industrial Marketing Management. His main interests include personal selling, retailing, ethics, and methodology.     

A Cross-Cultural Comparison of the Deliberative Reasoning of Canadian and Chinese Accounting Students

Absract  Using Hofstede’s culture theory (1980, 2001, Culture’s Consequences: Comparing Values, Behaviours, Institutions, and Organizations Across Nation. Sage, NewYork), the current study incorporates the moral development (e.g. Thorne, 2000; Thorne and Magnan, 2000; Thorne et al., 2003) and multidimensional ethics scale (e.g. Cohen et al., 1993; Cohen et al., 1996b; Cohen et al., 2001; Flory et al., 1992) approaches to compare the ethical reasoning and decisions of Canadian and Mainland Chinese final year undergraduate accounting students. The results indicate that Canadian accounting students’ formulation of an intention to act on a particular ethical dilemma (deliberative reasoning) as measured by the moral development approach (Thorne, 2000) was higher than Mainland Chinese accounting students. The current study proposes that the five factors identified by the multidimensional ethics scale (MES), as being relevant to ethical decision making can be placed into␣the three levels of ethical reasoning identified by Kohlberg’s (1958, The Development of Modes of Moral Thinking and Choice in the Years Ten to Sixteen. University of Chicago, Doctoral dissertation) theory of cognitive moral development. Canadian accounting students used post-conventional MES factors (moral equity, contractualism, and utilitarianism) more frequently and made more ethical audit decisions than Chinese accounting students. Lin Ge is an accountant at Guest-tek Interactive Entertainment Ltd. Her research interest includes ethics and judgment of accountants and auditors, cross-cultural studies and international business. Stuart Thomas, Ph.D., is associate professor of accounting in the Faculty of Management at the University of Lethbridge, Alberta, Canada. He has published in the Journal of Business Ethics, Business and Society, Research on Professional Responsibility and Ethics in Accounting, Advances in Management Accounting and the Journal of Accounting Case Research. His research interests focus on ethical decision making and the effects of pay schemes on performance and standard setting.     

Privacy versus accessibility: The impact of situationally conditioned belief

The information age we are living in and the technology that supports it, raises new ethical concerns. Among these concerns are privacy — the rights of individuals to withold information they consider sensitive, and accessibility — the rights of individuals to obtain information that is relevant to the decisions they must make. Arguments about potential impacts of information technology on privacy and accessibility mask and underlying conflict — that one person's beliefs about their right to relevant information is likely to conflict with another person's belief's about their right to withold information they consider sensitive. This paper proposes that the conflict is likely to be a function of the role the individuals plays in the decision making situation — situationally conditioned belief (SCB) — rather than a function of the person's underlying ethical values.This paper presents an empirical study involving information privacy and accessibility in routine business and market decisions, designed to reveal the presence of SCBs. The results indicate that SCBs cause a gap in beliefs about information accessibility and privacy. Impacts of the SCB gap are discussed. A negotiation technique called information exchange is suggested as a means of closing the SCB gap in routine business and market transactions. Dr. Laura Lally received her Ph.D. in Information Systems. Dr. Lally pursues research on the impacts of information technology on a nation's culture, on business profitability, and on the ethical choices faced by individuals. She has published articles in Decision Sciences, the Information Society, the Journal of Global Information Management and in the Journal of End User Computing. She is currently investigating the risk factors involved in process reengineering under a grant from the National Science Foundation.     

Ethics and the Auditing Culture: Rethinking the Foundation of Accounting and Auditing

Although the foundation of financial accounting and auditing has traditionally been based upon a rule-based framework, the concept of a principle-based approach has been periodically advocated since being incorporated into the AICPA Code of Conduct in 1989. Recent high profile events indicate that the accountants and auditors involved have followed rule-based ethical perspectives and have failed to protect investors and stakeholders – resulting in a wave of scandals and charges of unethical conduct. In this paper we describe how the rule-based traditions of auditing became a convenient vehicle that perpetuated the unethical conduct of firms such as Enron and Arthur Andersen. We present a model of ten ethical perspectives and briefly describe how these ten ethical perspectives impact rule-based and principle-based ethical conduct for accountants and auditors. We conclude by identifying six specific suggestions that the accounting and auditing profession should consider to restore public trust and to improve the ethical conduct of accountants and auditors.     

High Stakes Decision Making: Normative,Descriptive and Prescriptive Considerations

This paper reviews the state of the art of research on individual decision-making in high-stakes, low-probability settings. A central theme is that resolving high-stakes decisions optimally poses a formidable challenge not only to naïve decision makers, but also to users of more sophisticated tools, such as decision analysis. Such decisions are difficult to make because precise information about probabilities is not available, and the dynamics of the decision are complex. When faced with such problems, naïve decision-makers fall prey to a wide range of potentially harmful biases, such as failing to recognize a high-stakes problem, ignoring the information about probabilities that does exist, and responding to complexity by accepting the status quo. A proposed agenda for future research focuses on how the process and outcomes of high-stakes decision making might be improved.     

A model of decision-making incorporating ethical values

A model is presented which describes the process decision-makers follow when faced with problems containing ethical dimensions. The model, based upon the empirical literature, is designed to provide guidance to researchers studying ethical behavior in business. The model portrays the decision-maker with a set of personal values which are mediated by elements of the organization's culture. The combination of personal values and organizational influences yields decisions which may be significantly different from those made based upon personal values alone. Inclusion of the personal values of the decision-maker as the dominant individual input and an explicit discussion of the ethical decision process make this model more comprehensive than other recent ethics models. David J. Fritzsche is Visiting Professor in the Department of Managing and Organization at the University of Washington. His articles have appeared in numerous journals and books. He is also a co-author of the Business Policy Game, a strategic management simulation.     

Ethical perspectives on the foreign direct investment decision

This paper examines the foreign direct investment decision from an ethical perspective, and considers the moral agency involved in such decisions, with emphasis upon the corporate decision-maker. Historical capital allocation models once regarded as both financially and ethically normative are shown to be deficient in today's environment. Work of modern western philososphical and theological ethicists is included in analyses of the applicability of selected ethical approaches or metaphors to multinational foreign direct investment decisions and the corporate manager's role and responsibility as corporate decision-maker and moral agent. The ethical perspectives reviewed can serve as an aid to the individual manager's determination of what constitutes a responsible exercise of decision-making power. Marjorie T. Stanley is Professor of Finance, M. J. Neeley School of Business, Texas Christian University. She was visiting Professor of Finance and Scholar in Residence, Institute for Business Ethics, DePaul University, 1986–87. She has related publications in, e.g., Ethics and the Multinational Enterprise (ed., Hoffman, et al), Journal of International Business Studies, California Management Review, The Financial Review, and Management International Review.