Ethical Decision Making: Special or No Different?

Theories of ethical decision making assume it is a process that is special, or different in some regard, from typical individual decision making. Empirical results of the most widely known theories in the field of business ethics contain numerous inconsistencies and contradictions. In an attempt to assess why we continue to lack understanding of how individuals make ethical decisions at work, an inductive study of ethical decision making was conducted. The results of this preliminary study suggest that ethical decision making might not be meaningfully “special” or different from other decision making processes. The implications of this research are potentially significant in that they challenge the fundamental assumption of existing ethical decision making research. This research could serve as an impetus for further examination of whether ethical decision making is meaningfully different from other decision making processes. Such studies could create new directions for the field of business ethics.     

Are Ethical Banks Different? A Comparative Analysis Using the Radical Affinity Index

This article studies the differences between traditional financial intermediaries (commercial banks, savings banks and cooperative banks) and ethical banks based on property rights, in which the owner decides the ideology, principles, standards and objectives of the organisation. In ethical banking, affinity centres on positive social and ethical values. The article consequently focuses on an index proposed both to differentiate ethical banks from other types of banks, and also to pinpoint the differences between the various ethical banks themselves. This is the Radical Affinity Index (RAI), which groups banks together in terms of their stance on ethical commitment, concentrating on ethical ideology and principles (information transparency, placement of assets, guarantees and participation) and using a sample of 114 European banks. The evidence shows that transparency of information and placement of assets are factors that differentiate ethical banks from other financial intermediaries. Guarantees and participation are characteristics specific to ethical banks; these variables, however, do not offer clear evidence to our analysis.     

Ethical Attitudes of Accounting Practitioners: Are Rank and Ethical Attitudes Related?

We address a previous finding in the business ethics literature in which accounting professionals in higher rank levels, i.e., “manager” or “partner” of auditing firms, appear to have lower moral reasoning ability than their junior counterparts. Prior investigations have relied upon a similar methodology for estimating ethical beliefs, namely testing “moral reasoning ability” using either the Moral Judgment Interview or Defining Issues Test. In the present study, we use a multiple vignettes approach to test for the existence of the inverse rank-ethical beliefs effect. With only 2 of the 30 vignettes resulting in both managers and partners being more accepting of the ethically charged behaviors, the results presented here using this alternative methodology are generally not supportive of the inverse rank-ethical beliefs phenomenon. We also use a multivariate analysis in order to control for demographic characteristics. Our results suggest that the most robust predictor of ethical attitudes among accounting practitioners is age, not rank within a firm.     

Moral Reasoning Skills: Are Entrepreneurs Different?

Drawing on existing theory in the fields of business ethics, entrepreneurship, and psychology, this research provides an initial empirical exploration of whether entrepreneurs use cognitive reasoning processes which reflect a higher level of moral development than the level of moral development that has been empirically observed either in middle-level managers or in the general adult population. The Defining Issues Test was used to measure the level of moral reasoning skill of the entrepreneurs in this study. Although the study was limited by a small sample size and the inherent difficulty of making accurate comparisons across other empirical studies, the results of this study suggest that entrepreneurs may exhibit moral reasoning skills at a slightly higher level than middle-level managers or the general adult population.     

Are German Banks Different?

In recent years there has been a vigorous revival of the long-standing debate about the uniqueness of German banks. To date little consensus has been reached; while some see few differences between the role of banks in Germany and in other countries, others claim that universal banks' equity shareholdings in and nomination of representatives to the boards of nonfinancial firms are the key institutional features driving the rest of the German model of long-term investment in high-quality, internationally competitive manufacturing. This article argues that the uniqueness of the German banking system lies (1) in its unusually high capacity to provide industrial finance in the form of long-term debt capital, and (2) in its avoidance of the speculative boom-credit crunch cycle experienced by almost every other advanced industrialized country in the 1980s and early 1990s. These two key characteristics are attributable to a regulatory framework which involves strict prudential regulation, access to long-term refinancing sources, and a federalist form of corporatism. Furthermore, the behavior of German banks must be analyzed within a broader institutional system of economic governance which includes corporatist labor market institutions and a relatively large and modern SME sector.     

Determinants of International Activities: Are SMEs Different?

In this paper we econometrically investigate the factors determining the choice of a specific internationalisation strategy. We distinguish four strategies, ranging from “serving foreign markets through exports only” up to “exporting and locating abroad several business functions such as distribution, production and R & D”. These strategies are evaluated against the reference category “domestic sales only” (multinomial logit model). The analysis, to a large extent, confirms Dunning’s well-known OLI paradigm. O-advantages turn out to be the main drivers of internationalisation, irrespective of firm size and internationalisation strategy. However, the knowledge-base on which O-advantages of smaller firms rests is more narrow than that of large companies. Whereas the former rely, in relative terms, primarily on capabilities related to incremental innovations, the latter draw to a higher extent on assets enabling them to be competitive in terms of far-reaching innovations. L-advantages (wages, regulatory framework, etc.) primarily are relevant in case of small firms; but even for this size class, O-advantages are dominant.     

Ethical Decision Making: Are Men and Women Treated Differently?

This exploratory study finds that ethical choices made by decision makers are influenced by a social factor, the gender of other individuals affected by the decisions. In contrast to Schminke's (1997) study this investigation focuses on ethical decision making and finds that both men and women are more often charitable to women participants in most situations, although this effect appears to be greater for men. This study contributes to extant literature on ethical decision making by identifying participant gender (gender) as a critical influence on ethical choices. Respondent sex (sex) effects are also found in some situations. In response to Robertson's (1993) call, several methodological improvements on past studies are made, and behavioral intentions as indicants of future ethical behaviors, rather than ethical attitudes, are employed. Managerial implications are drawn and suggestions for future research are made.     

Are Ethical Responses Linked to Locus of Control?

Locus of control (LOC) has received considerable attention in the psychological literature. However, there is limited research and inconclusive results reported from the research examining its potential relationship to ethical beliefs and attitudes.This research examines how the locus of control of university students (n = 671) can be linked to their ethical responses concerning academic-behavior items. Whenever the students were asked about their personal beliefs concerning the unethical nature of academic-environment behaviors, the results indicated significant differences ( 0.05) by the internal/external LOC designation on 21 of the 27 items. Because a review of the literature indicated that there might be an interaction of LOC scores, gender, and age, an analysis of variance was performed. An ANOVA was used to analyze the ethical responses using a 3-level age classification (AGECLASS) variable and a 4-level LOC/GENDER variable (INTMale, EXTMale, INTFemale, EXTFemale). Overall results indicated both AGECLASS and LOC/GENDER variables to be significant on the survey responses.     

Ethical Dilemmas in Teaching About Ethical Dilemmas: Obstacle or Opportunity?

Teaching Business Ethics -     

New Producer Services Businesses: Are They Any Different From New Manufacturing Ventures?

Based upon the presumed importance of manufacturing firms in both wealth and job generation, the majority of research in the field of new ventures over the past 20 years has focused upon this sector. However, with the down-sizing of many large organisations and the growth of spin-outs and management buy-outs, many of which continue to serve their former owners, attention has shifted to a questioning of the role of ‘producer services'. This article adds to this debate by posing one broad research question: Are there any significant differences in the characteristics of new business founders and new business performance and growth between ‘manufacturing’ and ‘producer services' business? Overall, the paper concludes that there are many more similarities than there are differences. However, the final discriminant model also confirms many of the anticipated trends.     

Are Ethical Consumers Happy? Effects of Ethical Consumers' Motivations Based on Empathy Versus Self-orientation on Their Happiness

Some business schools have come under considerable criticism for what observers see as their complicit involvement in the corporate scandals and financial crises of the last 15 years. Much of the discussion about changes that schools might undertake has been focused on curriculum issues. However, revisiting the curriculum does not get at the root cause of the problem. Instead, it might create a new challenge: the risk of decoupling the discussion of the curriculum from broader issues of institutional purpose. In this article, we argue that the most pressing need facing business schools is not to teach new courses to be responsive to social demands and stay relevant. Instead, it is to revisit their basic mission—the principles and beliefs on which they were founded—and then to re-evaluate their curriculum design choices in this light. We contrast the Spartan and Athenian educational paradigms as a way of shedding light on the nature of a coherent response.     

Organizational Ethical Culture: Real or Imagined?

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

Are Ethical Codes of Conduct Toothless Tigers for Dealing with Employment Discrimination?

This study examined the influence of two organizational context variables, codes of conduct and supervisor advice, on personnel decisions in an experimental simulation. Specifically, we studied personnel evaluations and decisions in a situation where codes of conduct conflict with supervisor advice. Past studies showed that supervisors’ advice to prefer ingroup over outgroup candidates leads to discriminatory personnel selection decisions. We extended this line of research by studying how codes of conduct and code enforcement may reduce this form of discrimination. Eighty German managers evaluated and selected candidates from an applicant pool including Germans (ingroup members) and foreigners (outgroup members). Supervisor advice to prefer ingroup members lowered suitability ratings of outgroup members as well as their chances to be selected for an interview. Ethical codes of conduct referring to equal opportunities limited this form of discrimination, but only when codes were enforced by sanctions and integrated into organizational every-day practice. The implications of these findings for research and practice are discussed.

Ethical Standards for Stockbrokers: Fiduciary or Suitability?

What are the ethical obligations of the sellers of financial products to their customers? Stockbrokers in the U.S. have a legal and ethical requirement to recommend only “suitable” investments to their customers. This is a fairly weak standard. Currently, there are proposals to raise the standard to a fiduciary one in which the recommendations would have to be in the best interests of the clients. Brokers sell solutions to financial problems. Similar to an auto mechanic or a doctor, the product often consists of both the professional advice and its implementation. There are numerous conflicts of interest between brokerage firms and their customers in that the products that pay the highest commissions may not be the best ones for the customers. The societal perspective adds complications, however. Society depends on modern financial markets to raise capital for productive enterprises and to spread risk. Issuers of financial products need distribution channels for their products just like the producers of any other products. Commissions create powerful incentives for the distribution channels, but at the same time produce conflicts of interest—a type of ethical pollution. Just as our society tolerates some pollution as a byproduct of other useful activities, it may be useful to tolerate some of these financial conflicts of interest. The nature of the relationship should govern the ethical standard. Those selling advice, regardless of how they label themselves, should adhere to a best-interest fiduciary standard. More limited relationships should be limited to the mandate involved in the relationship.     

Pay Inversion at Universities: Is it Ethical?

This paper examines an important issue facing academia-pay inversion. It discusses how inversion is accompanied by ethical issues including secrecy, moral dilemmas for faculty, honesty, and keeping promises. It then examines this issue from five ethical viewpoints: a legalistic perspective, ethical egoism, utilitarianism, distributive justice, and Kants deontological approach. As part of the discussion, the effect of the moral philosophy on the universitys corporate culture is examined, with attention given to morale and productivity. Finally, alternatives to pay inversion that universities may want to consider are discussed.     

Who Shall Lead Us? How Cultural Values and Ethical Ideologies Guide Young Marketers’ Evaluations of the Transformational Manager–Leader

Today’s young marketers transition from schools and into the workforce with a variety of career options in sales, advertising, and general marketing after graduation. Beyond their discipline-specific knowledge of market research, consumer behavior, and marketing communications, these individuals bring along their own set of personal values and ideologies that may influence how they engage the people, personalities, and priorities of the business organization. As new generations of young professionals enter the publicly scrutinized fields of sales and marketing, they are expected to make morally grounded decisions that may be informed by these values and ideologies. This study frames this state of affairs by examining the inquiry “Who Shall Lead Us?” whereby young marketers evaluate the fitness of a leadership climate in which they would potentially work. Here, individual cultural values and ethical ideologies are posited to influence evaluations of transformational leadership.     

You Support Diversity,But Are You Ethical? Examining the Interactive Effects of Diversity and Ethical Climate Perceptions on Turnover Intentions

Efforts to identify antecedents of employee turnover are likely to offer value to organizations through money saved on recruitment and new-hire training. The authors utilized the stakeholder perspective to corporate social responsibility to examine the effects of a perceived climate for ethics on the relationship between diversity climate and voluntary turnover intentions. Specifically, they examined how ethics climate (employees’ perceptions that their organization values and enforces ethically correct behavior) affected the diversity climate–turnover intentions relationship. Results indicated that ethics climate moderated the diversity climate–turnover intentions relationship. Turnover intentions were lowest among workers perceiving both a pro-diversity and highly ethical climate. These results reinforce the need to communicate both diversity values and ethical standards to employees.     

Making Drones to Kill Civilians: Is it Ethical?

A drone industry has emerged in the US, initially funded almost exclusively for military applications. There are now also other uses both governmental and commercial (in the US and abroad). Many military drones are still being made, however, especially for surveillance and targeted killings. Regarding the latter, this essay calls into question their legality and morality. It recognizes that the issues are complex and controversial, but less so as to the killing of non-combatant civilians. The government using drones for targeted killings maintains secrecy and appeals to non-traditional justifications. Most scholars who assess these killer drone practices support citizen immunity, either by favoring a modified just war theory that prioritizes civilians’ right to life or by challenging official deviations from applicable laws. They accordingly declare such killing immoral if not a war crime. The manufacturers of these killer drones are not themselves the killers, but they are abetters, i.e., sine qua non facilitators. So, I argue that any company concerned about its corporate social responsibility should cease manufacturing them.