Some Ethical Issues in Computation and Disclosure of Interest Rate and Cost of Credit

Although the mathematics of interest is very precise, the practice of charging computing and disclosing interest or cost of credit is full of variations and therefore often questionable on ethical grounds. The purpose of this paper is to examine some of the prevalent practices which are incorrect, illogical, unfair or deceptive. Both utilitarian and formalist schools of ethical theory would find these practices to be inappropriate. The paper will specifically look at unfair practices in the areas of estimation of intrayear rates, use of 360 days in a year, the "rule of 78th", interest rate ('APR') advertising, and computation of unpaid balance by credit card issuers to figure interest costs.The current practices are not in the best interest of the average consumer. There is, therefore, an urgent need for new legislation, change in regulatory code and disclosure requirement for eliminating these unethical practices. The author recommends that the Truth in Lending Code of the Federal Reserve should require the disclosure of the effective APR if the periodic rate is determined by dividing the 'APR' by the number of payment period in a year; the use of 360 days in a year methods and the "Rule of 78ths" should be immediately discontinued; Deceptive advertising, which tend to understate the true cost of credit or hides hidden costs and fees should be outlawed; interest should be payable with the same frequency as the frequency of compounding and credit card holders should be provided with a comparative example of various methods of balance computation.     

The ethics of impression management

There are differences among forms of impression management that are relevant to its ethical evaluation. Sometimes, moral appraisal is to do with impression management as a tactic of influence, but not about deception. In other cases, an audience is given a true or a false impression, and ethical questions of deception arise, but they are made more complex by the need to consider the responsibility of an audience in reaching its conclusions. Cases where that is an issue blend into a third category in which impression management is joint social performance. Such cases raise additional possibilities of the problematic influence of one agent by another, but also begin to move ethical concerns from the behaviour of an individual agent to the social practices that sustain their expectations. Such social practices invite ethical appraisal because they may impose constraints. But they may also provide opportunities for achievement and pursuit of excellence.     

Disentangling the Effects of Perceived Deception and Anticipated Harm on Consumer Responses to Deceptive Advertising

Previous behavioral research on advertising deception has focused on the extent to which consumers would be misled by claims and implications of advertisements. The present research examines the effect of an important, but largely neglected, dimension: the severity of anticipated harm as a result of being deceived. Two experiments disentangle the effect of anticipated harm on consumer brand attitudes and purchase intentions from that of perceived deception. Interestingly, greater harmfulness increases diagnosticity of perceived deception, which partially accounts for consumers’ negative reactions to deceptive advertising. Theoretical, methodological, and ethical implications are discussed.     

The Nature of Ethics Codes in Franchise Associations Around the Globe

The worldwide growth of franchising has been phenomenal during the past decade. At the same time there has been increased media attention to questionable business practices in franchising. Similar to some trade associations and professions, franchising has sought self-regulation by developing codes of conduct or ethics. This study examines the codes of ethics covering franchising activities in 21 countries. The results reveal that there is considerable variation in the activities/issues covered by the codes. Specifically, the codes cover most stages of the franchising relationship, focus on a narrow set of stakeholders, are short on ethical guidance, and offer few enforcement provisions. The implications of these findings for international franchising and research are discussed.     

Negotiating with the Chinese: Are They More Likely to Use Unethical Strategies?

It is always a challenge to deal with ethical dilemmas in negotiations and it is even more difficult when the other party is from a different culture. Understanding the differences between what is ethically appropriate and what is not in an international context has thus become important for a better understanding of different negotiation practices across the globe. This study explores the likelihood of Chinese negotiators’ using unethical strategies in negotiations by examining Chinese managerial employees’ perceived appropriateness of five categories of ethically questionable strategies. The results show that, in comparison with their counterparts from the USA, Chinese managers are more likely to consider it appropriate to use ethically questionable negotiation strategies in all five categories except the traditional bargaining strategies. In addition, contrary to the West where women tend to maintain higher ethical standards, no gender difference is found in China in the perceived appropriateness of using these strategies in all but one category. Implications for negotiation practitioners and international managers that often participate in international negotiations with the Chinese are then discussed, along with potential future research directions.     

Will I Fake It? The Interplay of Gender, Machiavellianism, and Self-monitoring on Strategies for Honesty in Job Interviews

The use of deception during social interactions is a serious ethical concern for business. Interpersonal Deception Theory (IDT) proposes that strategies for using deception are influenced by personal factors. We tested this proposal by assessing participants’ strategies for using deception during an employment interview. Specifically, we examined three personal factors [gender, Machiavellianism, and self-monitoring (SM)] and intentions toward four types of deceptive behaviors (Extensive Image Creation, Image Protection, Ingratiation, and Slight Image Creation). We used path analysis to examine the intentions of 125 undergraduate students. Our results partially confirm the proposal of IDT by showing that intentions toward using Extensive Image Creation (i.e., generating wholly untrue personal information) are higher for men than women. Intentions toward Image Protection (i.e., hiding unattractive personal truths) are higher for men and for women high in Machiavellianism relative to women low in Machiavellianism. Intentions toward using deceptive Ingratiation are highest for men and high Machiavellianism women, but only when sufficient SM skills are present. For intentions toward Slight Image Creation (i.e., mild exaggerations to personal truths) there are no gender, Machiavellianism, or SM effects. Our research has implications for understanding how deception in the workplace can begin before an individual is hired, and we offer suggestions for several lines of future research.     

Consumer cynicism and perceived deception in vanity sizing: The moderating role of retailer (dis)honesty

While prior scholarship has acknowledged the overall positive influence of vanity sizing on consumer outcomes, no work to date has addressed the psychological process that occurs when consumers suspect retailers of dishonest sizing information. This is an important process to understand because perceptions of deceptive retailer motives lead consumers to react negatively to the product and the retailer, regardless of the retailer's actual motives. Thus, this research utilizes attribution theory to examine perceived deception as a mediator between consumer cynicism (a dispositional trait) and consumer outcomes. The results reveal that at higher levels of consumer cynicism, prior knowledge of deceptive sizing practices has an amplifying effect on the influence of consumer cynicism on perceived deception, while retailer honesty with sizing issues helps to block this influence. Further, perceived deception leads to reduced consumer outcomes, confirming prior findings in the literature.     

Ethical Practice in the Accounting Publishing Process: Contrasting Opinions of Authors and Editors

Academic accounting researchers often offer anecdotal evidence that the publishing process is rife with unfair and unethical practices, and similar contradictory evidence supports accounting journal editors' claims that the process is fair and ethical. This study compares the perceptions of accounting authors and editors on the ethicacy and frequency of specific author, editor and reviewer practices. Both authors and editors are in general agreement about the ethical nature of editors and author practices. However, there are significant differences between the groups regarding reviewer behavior, and regarding the frequency of occurrence of questionable author, editor and reviewer practices. Additionally, the majority of authors believe that codes of publishing ethics are needed, while editors do not. Women authors are significantly more supportive of such ethical codes when compared to their male counterparts.     

Ethno‐cultural considerations in negotiation: pretense,deception and lies in the Greek workplace

A retrospect into ethos, this study examines the impact of individualism, collectivism, ethical idealism and interpersonal trust on negotiators' attitudes toward questionable negotiation tactics in Greece. A thousand survey questionnaires were administered to Greek employees, of which 327 usable responses were collected. Our findings empirically corroborated a classification of three groups of negotiation tactics, namely, pretense, deception and lies. Individualism–collectivism and ethical idealism were found to be related, and interpersonal trust was found to be unrelated, to attitudes toward questionable negotiation tactics. Emphasizing the non‐US and non‐Western European nature of the empirical data collected, the originality of this research further stems from the development of a comprehensive research framework about questionable negotiation tactics in Greece.     

Deception in the Case of One Sender and Multiple Receivers

Much if not all of the literature on interpersonal communication and deception has focused on the interaction between two people, with one person attempting to deceive the other. This paper seeks to extend the prior literature by presenting some initial thoughts on deceptive communication when there is one deceiver and multiple receivers. Viewing deceptive communication as a dynamic, strategic process, individual, situational, and group factors that may inform the deceiver of a particular strategy are presented.     

Deception and defection from ethical norms in market relationships: a general analytic framework

Market relationships built on trust and governed by commonly accepted ethical norms are generally viewed as economically positive and beneficial to both parties; however, such relationships are occasionally the situs of a variety of unexpected and ethically questionable behaviours. This study examines the narratives provided by participants who share their experience as an exchange partner in a market relationship or as a close observer of an exchange partner in a market relationship to identify the use of short‐term deceptions and ethics defections in managing these relationships. The data demonstrate a number of instances in which one exchange partner is willing to deceive another. Situations identified include deceiving current customers, new customers, current suppliers, governmental bodies, and employees and managers for the purposes of: protecting an existing relationship, pursuing a new relationship, ensuring product or service quality, and exerting control over a relationship. This research develops a general analytic framework for the occurrence of deception and defection from ethical norms in market relationships from elements of the study participants' narrative reports. This framework can be used by future researchers to design studies that examine the specific antecedents of these behaviours.     

Collaborative collective bargaining: Toward an ethically defensible approach to labor negotiations

In this paper I explain the present adversarial collective bargaining process (ACB) and then critique it on legal and ethical grounds. A new methodology, that I describe as the collaborative collective bargaining process (CCB), will then be explained and similarly critiqued. I argue that replacing the present ACB model with the CCB model will result in better long-term results for all parties concerned. This is because the ACB model is comparable, in many respects, to the adversarial process used in court litigation. It is a combat model based on power. ACB makes the battle lines clear, and it grants victory to the more convincing display of power, but it leaves casualties. Indeed it cannot operate except upon the casualties of the opposing party, and those casualties are the basis for ever-renewed combat. Tactics employed in ACB to achieve victory include deception, lying and the abandonment of truth as a moral value. I argue that, in sharp contrast, CCB can foster an environment which encourages candor and truthfulness. By following the CCB model, the parties can avoid the negative and self-defeating elements of ACB and can work together toward mutually beneficial goals by the use of an ethically defensible approach to labor negotiations. Frederick R. Post, J.D., M.B.A., is Assistant Professor of Business Law and Management at The University of Toledo. His research interests include business ethics and labor management relations. Professor Post teaches labor policy courses. Previously, he spent twelve years as a labor lawyer and has represented employers as chief negotiator in adversarial collective bargaining with many private sector international unions. He is the author of A Management Perspective on Collective Bargaining (1985) and Unionization Under the National Labor Relations Act: Organizing Through Collective Bargaining (1979).     

Transparency and Assurance Minding the Credibility Gap

There is a growing realisation that the current upward trend in levels of disclosure of social, ethical and environmental performance by corporations and other organisations is not being accompanied by simultaneous greater levels of public trust. Low levels of confidence in the information communicated in public reporting is probably undermining the impetus for this disclosure.This article suggests that this credibility gap can be narrowed through the use of third party independent assurance. However, this is not an unqualified panacea. Much verification and assurance practice itself has to date been of questionable robustness, reliability and consistency, and has been framed by financial assurance models that are inadequate for the broader, qualitative dimensions of social, ethical and environmental performance. The paper argues that there is need for a universal standard for the provision of assurance of social, ethical and environmental reporting, and indeed for the credibility of the assurance providers themselves. The new AA1000S Assurance Standard, developed by the Institute of Social and Ethical AccountAbility, offers an approach and a tool for addressing these gaps.     

The Moderating Effect of Individuals' Perceptions of Ethical Work Climate on Ethical Judgments and Behavioral Intentions

Dimensions of the ethical work climate, as conceptualized by Victor and Cullen (1988), are potentially important influences on individual ethical decision-making in the organizational context. The present study examined the direct and indirect effects of individuals' perceptions of work climate on their ethical judgments and behavioral intentions regarding an ethical dilemma. A national sample of marketers was surveyed in a scenario-based research study. The results indicated that, although perceived climate dimensions did not have a direct effect on behavioral intentions, there were significant moderating effects. Climates perceived as emphasizing social responsibility and rules/codes moderated the individual ethical judgment-behavioral intentions relationship such that individuals were less likely to say that they would engage in a questionable selling practice even when they themselves did not believe the practice to be unethical. Respondents were somewhat more likely to form intentions consistent with their judgment that the questionable practice was morally acceptable when the ethical climate was characterized by an emphasis on team/friendship.     

Gender Differences in Ethical Perceptions of Salespeople: An Empirical Examination in Turkey

Researchers on gender and ethical decision-making have recently emphasized the differences between men's and women's ethical perceptions. This study is concerned with the perceptions of salespeople working in clothing and medical equipment sectors in Turkey. It regards the perceptions of colleagues of opposing genders in ethically questionable situations. The evaluation of salespeople's responses for 14 ethical scenarios indicates that there is no significant difference in ethical perception based on gender. Each gender predicted that their counterpart's response would be the same as their own. The study also examined the effects of some demographic factors as well as the firm's sector on the salespeople's ethical perceptions and found that there are both differences and similarities in detail between genders of salespeople within ethically questionable situations.     

A Cross-Cultural Comparison of Ethical Attitudes of Business Managers: India Korea and the United States

Culture has been identified as a significant determinant of ethical attitudes of business managers. This research studies the impact of culture on the ethical attitudes of business managers in India, Korea and the United States using multivariate statistical analysis. Employing Geert Hofstede's cultural typology, this study examines the relationship between his five cultural dimensions (individualism, power distance, uncertainty avoidance, masculinity, and long-term orientation) and business managers' ethical attitudes. The study uses primary data collected from 345 business manager participants of Executive MBA programs in selected business schools in India, Korea and the United States using Hofstede's Value Survey Module (94) and an instrument designed by the researchers to measure respondents' ethical attitudes (attitudes toward business ethics in general and toward twelve common questionable practices in particular). Results indicate that national culture has a strong influence on business managers' ethical attitudes. In addition to national culture, respondents' general attitudes toward business ethics are related to their personal integrity; their attitudes toward questionable business practices are related to the external environment and gender, as well as to their personal integrity. A strong relationship exists between cultural dimensions of individualism and power distance and respondents' ethical attitudes toward certain questionable practices. The analysis of the relationship between cultural dimensions of masculinity, uncertainty avoidance and long-term orientation and respondents' ethical attitudes toward questionable practices produced mixed results, likely due to the lack of notable differences in cultural dimension scores among the countries surveyed.     

Consumers' Perceptions of Online and Offline Retailer Deception: A Moderated Mediation Analysis

This research examines the effects of consumers' perceptions of retailers' deceptive practices on their evaluations of online and offline retailers. Results from two samples of consumers (shopping in online versus offline channels) show the direct and indirect influence of consumers' perceptions of retailers' deceptive practices on consumers' evaluations, including product satisfaction, retailer satisfaction and word-of-mouth. Perceptions of deception influence retailer satisfaction through product satisfaction, and word-of-mouth through retailer satisfaction. These mediated effects are further moderated by the online vs. offline purchase channel. Implications for theory and management are discussed.     

Can Bonus Packs Mislead Consumers? A Demonstration of How Behavioural Consumer Research Can Inform Unfair Commercial Practices Law on the Example of the ECJ’s Mars Judgement

The use of psychological findings in EU internal market regulation has gained interest, particularly in the area of unfair commercial practices. This study investigates consumer perceptions of bonus packs containing an oversized indication of the “extra” volume in the package, such as in the Mars case. The Mars case serves as a standard reference in EU unfair commercial practices law which is used as a benchmark to determine the “average consumer.” Our study demonstrates how an experiment can be set up to provide empirically based insights on whether a practice is “deceptive.” Results of our experiment show that consumers overestimate the extra volume when confronted with an oversized indication compared to control conditions, which is first empirical evidence that this practice is potentially deceptive.     

Establishing Organizational Ethical Climates: How Do Managerial Practices Work?

Over the past two decades, Victor and Cullen’s (Adm Sci Q 33:101–125, 1988) typology of ethical climates has been employed by many academics in research on issues of ethical climates. However, little is known about how managerial practices such as communication and empowerment influence ethical climates, especially from a functional perspective. The current study used a survey of employees from Taiwan’s top 100 patent-owning companies to examine how communication and empowerment affect organizational ethical climates. The results confirm the relationship between these two managerial practices and organizational ethical climates. We discuss our results and their implications for both future academic research and practice.     

Ethical Investment Processes and Outcomes

There is a growing body of literature on ethical or socially responsible investment across a range of disciplines. This paper highlights the key themes in the field and identifies some of the major theoretical and practical challenges facing both scholars and practitioners. One of these challenges is understanding better the complexity of the relationship between such investment practices and corporate behaviour. Noting that ethical investment is seldom characterised by agreement about what it actully constitutes, and that much of the extant research focuses on a narrow set of issues, the paper argues that there are benefits associated with examining ethical investment as a process.