Ethical Decision Making in Multinational Organizations: A Culture-Based Model

The purpose of this paper is to analyze the relationship between national culture and ethical decision making. Established theories of ethics and moral development are reviewed and a culture-based model of ethical decision making in organizations is derived. Although the body of knowledge in both cross-cultural management and ethics is well documented, researchers have failed to integrate the influence of cultural values into the ethical decision-making paradigm. A conceptual understanding of how managers from different nations make decisions about highly ethical issues will provide business ethics researchers with a sound theoretical foundation upon which future empirical inquiry can be based.     

The impact of the work environment on ethical decision making: Some Australian evidence

Business ethics has emerged in recent years as a field of significant scholarly endeavour. Particularly well documented is the existence of ethical conflict at work and the reported inseparability of business decisions and moral consequences. However, to date, the majority of studies have been conducted in the American business context.This paper examines the concept of ethical conflict as experienced by employees in the Australian context. According to a sample of Western Australian managers, ethical conflicts at work do occur — with relative frequency. Of considerable concern is the high incidence of cases where the demands of superiors are deemed to be the cause of this conflict. This finding is particularly disturbing as superiors are also the primary influence on employee ethical decision making. It would see that the ethics role models are also the instigators of unethical behaviour.This research has confirmed in the Western Australian context that the values of top management do have significant impact on the ethical choices made by employees. The management of organisational culture, therefore, is a key to raising ethical standards in business. The institutionalisation of ethics by such formal means as codes of ethics is a necessary, but insufficient, condition of ensuring ethical behaviour in organisations. Management of the informal climate is pivotal to the achievement of ethical organisational behaviour.Geoffrey Soutar is Professor of Management at Curtin University of Technology. He has particular interests in marketing and, in recent times, in the marketing of services. He has published widely across a number of management areas and has acted as consultant for both private and public sector organisations as well as for a number of unions.Margaret McNeil is a Lecturer in the School of Management at Curtin University of Technology. Her research interests include corporate innovation and financial services marketing. Consultancy has been in the areas of financial services, professional services and non-profit organisations.Caron Molster is a Research Assistant in the School of Management at Curtin University of Technology. She has a research interest in the area of ethics, having completed her thesis on this topic.     

Case Studies of Ethics Scandals: Effects on Ethical Perceptions of Finance Students

Ethics instructors often use cases to help students understand ethics within a corporate context, but we need to know more about the impact a case-based pedagogy has on students’ ability to make ethical decisions. We used a pre- and post-test methodology to assess the effect of using cases to teach ethics in a finance course. We also wanted to determine whether recent corporate ethics scandals might have impacted students’ perceptions of the importance and prevalence of ethics in business, so we used in-depth case studies of several of the major scandals (e.g., Enron, Tyco, Adelphia). Our results are somewhat surprising since studying ethics scandals positively impacts students’ ethical decision making and their perceptions of the ethics of businesspeople.     

Ethics and the role of the manager

In order to understand the way in which the results of a study of business ethics could enter into the actual conduct of business, I formulate and examine five models of the role of the manager which can be found in the literature of management theory. These I call the engineering model, the economic model, the management of values model, the formal organization model, and the political model. While none of these models is wholly adequate, each provides important theoretical insights into the relevance of ethics to management decision making which can be of use in the examination of specific cases.John R. Boatright is Professor of Philosophy at John Carroll University. He is the author is several articles in the areas of ethical theory and the history of ethics.     

The Link Between Management Behavior and Ethical Philosophy in the Wake of the Enron Convictions

The current linkages between ethical theory and management behavior are investigated in the wake of the much-publicized convictions of Enron executives. The vignettes used in this investigation represent ethical dilemmas in the areas of coercion and control, conflict of interest, physical environment, and personal integrity. Since 2003, and after the successful prosecution of Enron executives, the link between ethical philosophy and management behavior has shifted somewhat dramatically. There has been a significant change in the rational basis for managerial decision making. In 2003, even after the Enron scandal was publicized, practitioners still relied heavily on both act and rule utilitarian ethical philosophies when making business decisions. Currently, the majority of respondents are likely to select ethically appropriate actions based on either rule utilitarian or rights rationales. It appears that ethical behavior is now more in line with ethical rhetoric, which may positively impact the ethical climate of business decision making. Apparently, business scandals of the past did not really impact actual ethical behavior much, but the high-profile prosecutions, convictions, and jail sentences may have impressed on managers that now is the time to incorporate ethics into business decisions.     

Normative Stakeholder Theory and Aristotle: The Link Between Ethics and Politics

Stakeholder theory is an important part of modern business ethics. Many scholars argue for a normative instead of an instrumental approach to stakeholder theory. Recent examples of such an approach show that problems appear with respect to the ethical foundation as well as the specification of the norms and the relation between corporate and individual responsibilities. This paper argues for the relevance of Aristotle's ideas on ethics and politics, and especially the link between them, for stakeholder theory. An Aristotelian approach suggests that the corporation should be considered as existing to allow the decision maker, who normally is a manager, to live a complete and good life and to make decisions that involve the interests of different stakeholders. This approach leads to a number of implications regarding the role of organizational politics and the managerial function.     

Personal Ethics and Business Ethics: The Ethical Attitudes of Owner/ Managers of Small Business

To date, the study of business ethics has been largely the study of the ethics of large companies. This paper is concerned with owner/managers of small firms and the link between the personal ethics of the owner/manager and his or her attitude to ethical problems in business. By using active membership of an organisation with an overt ethical dimension (for example, a church) as a surrogate for personal ethics the research provides some, though not unequivocal, support for the models of Trevino and others that suggest a link between personal ethics and business ethics.     

A suggested approach to linking decision styles with business ethics

This essay seeks to link management action with business ethics. It utilizes two conceptual models of decision making (bounded rationality and preferred decision styles) to examine the important processes of information gathering and information processing. This analysis is then related to the ethical aspects of a business decision to help explain differences in the selection of ethical criteria.John E. Fleming is Professor of Management, School of Business Administration, University of Southern California. He worked in industry for fifteen years before joining the faculty at USC. His areas of academic research are business ethics, corporate strategy, and public policy.     

The legal and ethical components of executive decision-making: A course for business managers

The debate on whether and how to teach business ethics in graduate business programs continues. The authors of this article suggest specific content and processes for a course aimed at giving MBA candidates the awareness, tools, and mental processes necessary to recognize and address ethical issues in decision making. The inclusion of labor law, discrimination issues, consumer protection legislation, securities laws, and an overview of the U.S. Constitution and the Bill of Rights coupled with the development of utilitarian, deontological, and egalitarian analysis of ethical issues provides the tools and processes necessary for ethical decision making. These tools and processes are applied in several class experiences using cases, moral audits, and the development of a code of ethics to help students acquire the knowledge, skills, and values needed in ethical decision making.S. Andrew Ostapski is Associate Professor of Management and Information Systems at the College of Business Administration, Valdosta State University, Valdosta, Georgia. His teaching and research interests include the legal environment, business ethics, and international business.John E. Oliver, is presently Professor and Head of the Department of Management and Information Systems at Valdosta State University's College of Business Administration.Gaston T. Gonzalez is an Aggregate Professor at Universidad Simon Bolivar and Visiting Professor at IESA both at Caracas, Venezuela. His teaching and research interests focus on strategic management, business transformation through information technology, and the application of system thinking to the institutionalization of ethics in organizations.     

Attitudes of students and accounting practitioners concerning the ethical acceptability of earnings management

There are many ways that accountants and managers can influence the reported accounting results of their organizational units. When such influence is directed at changing the amount of reported earnings, it is known as earnings management. The purpose of this paper is to present the results of surveys of undergraduate students, MBA students, and practicing accountants concerning their attitudes on the ethical acceptability of earnings management. Analysis of the survey results reveals how the attitudes of the three groups differ and what variables are associated with these differences. Based on the analysis, the authors suggest changes in accounting education curriculum and ethics awareness programs in business which might increase students' and practitioners' sensitivity to the ethical ramifications of earnings management.Marilyn Fischer, is Assistant Professor of Philosophy at the University of Dayton in Dayton, Ohio. She specializes in workplace ethics, particularly in the nonprofit sector, and has published articles in business ethics, and social and political philosophy.Kenneth Rosenzweig, is Associate Professor of Accounting at the University of Dayton in Dayton, Ohio. He specializes in teaching management accounting, and has published articles in a wide variety of accounting areas.     

The Applicability of a Contingent Factors Model to Accounting Ethics Research

This paper discusses the relevancy of a contingent factors model posited by Jones for conducting accounting ethics research. Using a sample of 37 experienced Australian auditing managers and partners of all of the ‘Big Four’ multinational accounting firms, we find that the contextual model developed by Jones can help guide accounting ethics research by isolating the contingent factors that affect ethical decision making. Moreover, we examine how the factors differ across different accounting settings. Implications for accounting ethics research and accounting practice are then discussed.Jeffrey R. Cohen, PhD is an Associate Professor at the Carroll School of management at Boston College. His research focuses primarily on behavioral ethics issues as well as investigating governance from a behavioral perspective.Nonna Martinov Bennie is a Senior Lecturer at Sydney University. Her research focuses on ethical issues in auditing as well as issues surrounding materiality judgments.     

Business Ethics – to Teach Or Not to Teach?

While some studies have explored the effects of taking business ethics classes on business students, several shortcomings in them invite greater scrutiny of this critical issue (cf. Robertson, 1993). In contrast to previous research, this study more directly assesses the impact of taking business ethics class on ethical decisions made by future business executives. To determine if teaching business ethics modifies behaviors or behavioral intentions, the current study examines decisions made in ethical situations rather than inferring the same by measuring attitudes, values, etc. Furthermore, these were measured in three different business contexts: whistle blowing, recruitment, and industrial espionage, to enhance the generalizability of the findings. Finally, unlike most previous studies, a within-subject's design was chosen to eliminate confounds that may be caused by not controlling for individual differences (Glenn, 1992). The current results indicate that business ethics classes have minimal effect on ethical decision making in any of the three contexts investigated, empirically providing support for Wolfe's (1993) and Wynd and Mager's (1989) position that teaching business ethics may have limited benefits.     

The Role of Business Schools in Ethics Education in Iceland: The Managers’ Perspective

This article explores managers’ views on various ways in which business schools can contribute to providing solid ethics education to their students, who will ultimately become the next generation of business leaders. One thousand top level managers of Icelandic firms were approached and asked a number of questions aimed at establishing their view on the relationship between ethics education and the role of business schools in forming and developing business ethics education. Icelandic businesses were badly hurt by the 2008 crisis, and therefore Iceland provides an interesting foundation for an empirical study of this sort as the aftermath of the crisis has encouraged managers to consciously reflect on the way their business was and should be conducted. Based on the results of the survey, a few main themes have developed. First, it appears that according to practicing managers, business schools should not be held responsible for employees’ unethical behavior. Nevertheless, managers believe that business schools should assist future employees in understanding ethics by including business ethics in teaching curricula. Second, managers believe that the workplace is not where ethics are learned, while also insisting that former students should already have strong ethical standards when entering the workplace. Third, managers call for business schools not only to contribute more to influencing students’ ethical standards, but also to reshape the knowledge and capabilities of practicing managers through re-training and continuous education. Based on the results of the study, the article also offers some recommendations on how to begin reformulating the approach to business ethics education in Iceland, and perhaps elsewhere.     

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.     

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.     

Using Computer-Based Simulation Exercises to Teach Business Ethics

This paper discusses how to introduce ethical dilemmas into computer-based business simulation exercise to teach business ethics. Simulations have an inherent advantage over other pedagogies for teaching ethics because simulations provide students with both an intellectual and a behavioral exposure to the topic. Issues addressed include considerations before writing ethical dilemmas, the writing of ethical dilemmas, and process issues for introducing ethical dilemmas. An example is developed and discussed. Through the process described, instructors can better prepare students for a lifetime of tough business decisions.     

An Ethics of Care or an Ethics of Justice

A conflict within the community of those investigating business ethics is whether decision makers are motivated by an ethics of justice or an ethics of caring. The proposition put forward in this paper is that ethical orientations are strongly related to cultural backgrounds. Specifically, Hofstede's cultural stereotyping using his masculine-feminine dimension may well match a culture's reliance on justice or caring when decisions are made. A study of college graduates from six countries showed that Hofstede's dimension was remarkably accurate in predicating a justice or caring orientation for decision makers from five of the six countries.     

Living (not learning) ethics

Much has been written recently about both the urgency and efficacy of teaching business ethics. The results of our survey of AACSB member schools confirm prior reports of similar surveys: The teaching of business ethics is indiscriminate, unorganized, and undisciplined in most North American schools of business. If universities are to be taken seriously in their efforts to create more ethical awareness and better moral decision-making skills among their graduates, they must provide a rigorous and well-developed system in which students can live ethics instead of merely learn ethics. A system must be devised to allow students to discover and refine their own values rather than simply learning ethical theories from an intellectual point of view.After reviewing the literature on business ethics in undergraduate curricula, we make a series of recommendations to deliver experiential ethical education for business students. The recommendations include student and faculty written codes of ethics, emphasis on ethical theory within the existing required legal environment course, applied ethics in the functional area capstones using alternative learning, a discussion of employee (and employer) rights and responsibilities during the curriculum capstone course, and a public service requirement for graduation. These recommendations may be implemented without substantive additional cost or programming requirements.Joseph Solberg is an Assistant Professor of Business Law at Illinois State University. His teaching and research interests are centered on the legal and ethical environments of business and the pedagogy of business ethics. He is a member of the American and Midwest Academies and Legal Studies in Business.Kelly Strong is an Assistant Professor of Management at Illinois State University. His teaching and research interests include business ethics, business and society, and strategic issues management. He has published articles in the Journal of Business Ethics and other scholarly outlets in the areas of ethics education, business and society, and ethical decision making.Charles McGuire, Jr. is Professor of Business Law and Chair of the Finance, Insurance and Law Department at Illinois State University. His interests are in the areas of business law and the legal environment of business as well as government regulation. He has published text-books and supplements on the legal environment of business in addition to scholarly works in the American Business Law Journal, among others.     

What is Different about Socially Responsible Funds? A Holdings-Based Analysis

Using samples from the U.S. and Puerto Rico, we examine cross-cultural differences in cultural value dimensions, and relate these to act and rule utilitarian orientations, and ethical decision making of business professionals. Although these places share the same legal environment, culturally they are distinct. In addition to tests of between-group differences, a model in which utilitarian orientation mediates the influence of cultural values on ethical decisions was evaluated at the individual level of analysis. Results indicated national culture differences on three cultural values, but no between-group differences on utilitarian orientations and ethical decisions. Significant indirect effects were found; act utilitarian orientation mediated the effects of two values activity orientation and universalism on ethical decision making. Implications for international management practices and business ethics are discussed.