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.     

Toward an Applied Meaning for Ethics in Business

The field of business ethics has been active for several decades, but it has yet to develop a generally agreed upon applied ethical perspective for the discipline. Academics in business disciplines have developed useful science-based models explaining why business people behave ethically but without a generally accepted definition of ethical behavior. Academics in moral philosophy have attempted to formulate what they believe ethical behavior is, but many seem to ignore or reject the basic mission of business. The purpose of this article is to offer one view of ethics in business that accommodates the mission of business. This purpose is achieved by reviewing the mission of ethics in applied disciplines like business and melding it into the mission of business in capitalistic societies.     

Managerial and Peer Influence on Ethical Behavioral Intentions in a Personal Selling Context

This article evaluates the relationship between the ethical behavioral intentions of 374 future salespeople and the ethical climate of the firm. The ethical philosophy (high or low) of top management, immediate sales managers, and the peers of potential sales people were examined to see if they influenced: (1) comfort levels with the philosophy of the firm and (2) likelihood of engaging in unethical sales behavior. Ethical behavior measures included 14 situations such as deceptive sales tactics, deceptive pricing, and unethical behavior toward the employer.     

Organizational Factors Encouraging Ethical Decision Making: An Exploration into the Case of an Exemplar

What factors in the organizational culture of an ethically exemplary corporation are responsible for encouraging ethical decision making? This question was analyzed through an exploratory case study of a top pharmaceutical company that is a global leader in ethics. The participating organization is renowned in public opinion polls of ethics, credibility, and trust. This research explored organizational culture, communication in issues management and public relations, management theory, and deontological or utilitarian moral philosophy as factors that might encourage ethical analysis. Our understanding of organiza tional ethics is enhanced by elucidating factors the case revealed as encouraging ethical analysisan organizational culture that emphasizes the importance of ethics, Theory Y management, a symmetrical worldview valuing innovation and dialogue, a counseling role for issues management or public relations in the dominant coalition, rewarding ethical behavior, ethical analysis using moral philosophy, consistency between individual values and organizational philosophy, and ethics training. These factors, and perhaps others as yet unidentified, worked together to create an environment that encouraged ethical decision making at the exemplar organization.     

A Personalistic Appraisal of Maslow’s Needs Theory of Motivation: From “Humanistic” Psychology to Integral Humanism

Abraham Maslow’s needs theory is one of the most influential motivation theories in management and organizational behavior. What are its anthropological and ethical presuppositions? Are they consistent with sound business philosophy and ethics? This paper analyzes and assesses the anthropological and ethical underpinnings of Maslow’s needs theory from a personalistic framework, and concludes that they are flawed. Built on materialistic naturalism, the theory’s “humanistic” claims are subverted by its reductionist, individualistic approach to the human being, which ends up in a needs-based ethics that understands goodness, virtue, and rights in instinctual, subjectivistic, and relativistic terms. Its moral imperative, “Be yourself!,” is either the materialistic fiat of genetic drives or the voluntaristic command of unbridled will. Significant implications for business educators, managers, and organizations are discussed, along with recommendations. Managerial theories and approaches that reduce personality to individuality are inconsistent with proper anthropological and ethical business principles. Adopting those individualistic theories may ultimately undermine organizational effectiveness, and the very essence of business as human activity and of management as human calling. Instead, personalistic anthropology and virtue ethics, rooted in Aristotelian–Thomistic thought, soundly account for properly human nature and the good life. Business educators and practitioners are encouraged to embrace this integral, truly humanistic framework for motivation, and management theory and practice.     

Ethical Problems, Conflicts and Beliefs of Small Business Professionals

This paper presents the results of a national study of the beliefs and perceptions of small business professionals concerning ethics within their company and business in general. The study examined their views on the relationship between success and ethical conduct as well as the extent and nature of ethical conflicts experienced by the respondents. Some comparisons are made with similar studies that have been conducted in the past. Respondents have the most ethical conflicts with customers and employees, and with regard to honesty in contracts/agreements. Most also believe that ethical standards are lower than they were 10 and 20 years ago, primarily because society's moral standards are lower. Additionally, they believe that the behavior of top management has the most influence on decisions in ethical situations. Finally, consistent with prior studies, they believe that they have the most responsibility to customers, ahead of employees and stockholders.     

Mission-Driven Organizations in Japan: Management Philosophy and Individual Outcomes

Previous studies imply that management philosophy has become an essential ethical foundation for a number of mission-driven organizations in Japan. This study examines how management philosophy might be influential to individuals with a sample of 1019 Japanese employees. The article develops a framework for analyzing the adoption of management philosophy and individual attitudinal and behavioral outcomes. Factor analysis shows that adoption of the management philosophy can be categorized into two dimensions, identification with management philosophy, and sensemaking of that management philosophy. Regression results indicate that while philosophy-oriented practice might affect individual adoption of management philosophy, the adoption of the management philosophy is positively related to both job involvement and organizational citizenship behavior. Furthermore, the results of structural equation analysis indicate that both dimensions of the adoption of the management philosophy might mediate the relationship between organizational practice and individual outcomes. The research not only increases our understandings into the effectiveness of the management philosophy as an essential ethical foundation, but also provides intriguing implication regarding the organizational measures required to enhance the mission-driven culture.     

Economic rationality and ethical behaviour: ethical business between venality and sacrifice

This paper argues that economic rationality and ethical behavior cannot be reduced one to the other, thus casting doubt on the validity of assertions such as 'profit is ethical' or 'ethics pays'. In order to express ethical dilemmas in a way which opposes economic interest with ethical concerns, we propose a model of rational behavior that combines these two irreducible dimensions in an open but not arbitrary manner. Behaviors that are neither ethical nor profitable are considered irrational (non-arbitrariness). However, behaviors that are profitable but unethical, and behaviors that are ethical but not profitable, are all treated as rational (openness). Combining ethical concerns with economic interest, ethical business is in turn seen as an optimal form of rationality between venality and sacrifice. Because everyone prefers to communicate that they act ethically, ethical business remains ambiguous until some economic interest is actually sacrificed. We argue, however, that ethical business has an interest in demonstrating its consistency between communication and behavior by a transparent attitude. On the other hand, venal behaviors must remain confidential to hide the corresponding lack of consistency. This discursive approach based on transparency and confidentiality helps to further distinguish between ethical and unethical business behaviors.     

Business Should Be Its Own Therapist: Observing the "Governance Ethics" of Taiwanese Enterprises

Taiwanese enterprises generally display a tacit acceptance and practice of globally-recognized business ethics such as the respect of human rights. Yet some Taiwanese business supervisors subscribe instead to a philosophy of leadership, dubbed "pseudo-harmony", which actively seeks to evade responsibility and any conflict of interest with profitability. Meanwhile other Taiwanese entrepreneurs are even less enlightened, dictatorially upholding self-serving regimes which operate on a philosophy which is euphemistically referred to as "householder management".These attitudes result in the sub-optimal development of "organizational democratization" within Taiwanese enterprises and hi-light the fragility of "ethical leadership" in Taiwan. There is a strong argument, therefore, that Taiwanese business needs to become both its own analyst and therapist if it is to enhance its "governance ethics". Only this way can the nation's enterprises evolve their ethical responsibilities to stakeholders and sustain their competitiveness in a global market that increasingly demands an adherence to ethical standards.     

Interorganizational Ethics: Standards of Behavior

The traditional basis for advocating ethical business conduct has been morality defined in philosophical or religious terms. However, fairness and moral obligation have provided little incentive for anything like universal ethical business behavior.The idea that "good ethics is good business" as an incentive is looked upon with skepticism by those with bottom line responsibility. However, if managers were aware of the extent to which certain business behaviors impose significant costs on individual transactions and relationships, a valid incentive would exist.The need for such standards has intensified with the fundamental shifts in business philosophy, structure, and practice along with profound changes in product markets and supply sources. The universal standards, ISO 9000 for product and service quality, and ISO 14000 for environmental issues were created and implemented to cope with problems in their respective areas and they providea model which can be adapted to the realms of ethics.     

Ethical behavior perceptions in Russia: Do ethics-related programs and individual characteristics matter?

This paper aims to analyze how individual differences and ethics-related programs predict Russian business students and working adults' perception of personal business ethics. This research evaluates the business ethics perceptions based on surveys of 1,207 managers, employees, and business students in Russia. This study finds the significant correlations between individual differences (gender, age, education level, and management experience), ethics-related programs (business ethics courses taught in universities, ethics and diversity professional development training), and personal business ethics' perceptions of Russian business students and working adults. We also find that individual differences moderate the relationship between ethics-related programs and how the personal business ethics of Russian business students and working adults are perceived. These findings advance current literature by revealing that age moderates the relationship between ethics-related programs (formal ethic courses, ethics, and diversity trainings) and personal ethical behavior perceptions of working adults and business students in Russia. Our study found that gender had a significant positive moderating effect on relationship of organizational code of ethics, formal ethic courses, and diversity professional development with personal ethical behavior perceptions. The relation between personal ethical behavior perceptions and the presence of an organizational code of ethics was negative and marginally moderated by age and managerial experience. This study contributes to business ethics research by deepening the understanding of the impact of individual differences on the relationship between ethics-related programs and personal business ethics' perceptions.     

An integrative model for understanding and managing ethical behavior in business organizations

Managing ethical behavior is a one of the most pervasive and complex problems facing business organizations today. Employees' decisions to behave ethically or unethically are influenced by a myriad of individual and situational factors. Background, personality, decision history, managerial philosophy, and reinforcement are but a few of the factors which have been identified by researchers as determinants of employees' behavior when faced with ethical dilemmas. The literature related to ethical behavior is reviewed in this article, and a model for understanding ethical behavior in business organizations is proposed. It is concluded that managing ethics in business organizations requires that managers engage in a concentrated effort which involves espousing ethics, behaving ethically, developing screening mechanisms, providing ethical training, creating ethics units and reinforcing ethical behavior. W. Edward Stead, Ph.D., is Professor of Management at East Tennessee State University, Johnson City, TN. His research interests include ethical behavior, cancer in the workplace, social strategy implementation, the ethical implications of cost-benefit analysis, and managing professional employees. His articles have appeared in Psychological Reports, Personnel Journal, Business and Society Review, and the Journal of Accountancy among others, and he has published cases in leading business policy and social responsibility texts. Dan L. Worrell, Ph.D., is Professor of Management and Department Chairperson at Appalachian State University, Boone, NC. He has published articles in such Journals as Academy of Management Journal, Journal of Management, Business Horizons, and Psychological Reports among others. His research interests include managerial succession, ethical behavior and social responsibility. Jean Garner Stead, Ph.D., is Associate Professor of Management at East Tennessee State University, Johnson City, TN. Her research interests include ethical behavior, cancer in the work place, social strategy implementation, and the ethical implications of cost-benefit analysis. Her articles have appeared in Psychological Reports, Personnel Journal, Business and Society Review and the International Journal of Management among others, and she has published cases in leading business policy and social responsibility texts.     

Imperfect markets: Business ethics as an easy virtue

This paper marks a radical diversion from the large body of prevailing literature in business ethics which primarily views the issue in individual-personal terms, i.e., corporate executive and employee, and suggests that making corporations more ethical would primarily come through changes in executive behavior. While this approach has strong intellectual roots in moral philosophy and religion, it fails in explaining the persistence of unethical and illegal behavior among corporations of all sizes, financial health, competitive market conditions, and, level of individual executive compensation. This paper argues for a fundamentally different approach to understanding ethical behavior, or lack thereof, among corporations and their executives. It is asserted that an overwhelmingly large rationale and/or inducement for proactive ethical business behavior is rooted in competitive aspects of particular markets, and industry structures prevailing in those markets. Furthermore, while highly competitive markets may promote efficiency, they do not guarantee ethical behavior and may indeed provide greater opportunities and incentives for unethical business behavior. Thus, by following the current prognosis, we could be wasting enormous resources in terms of teaching business ethics, and creating and imposing corporate codes of conduct. We assert that these approaches would at best make a marginal improvement in the ethical performance of corporations while at the same time exacerbate the problem by ignoring more fundamental, structural issues. Imperfect markets, with their above-market profits, are a necessary but insufficient condition for corporations to behave ethically. It is only under conditions of imperfect markets that individual executives can play an important role in guiding their corporations toward greater ethical norms. These are undertaken for a variety of reasons, including, protecting a corporation's good name, public expectations, competitive norms, and, corporate culture and individual executive's predilections, to name a few.S. Prakash Sethi is Professor and Acting Director, Center for Management, Baruch College, The City University of New York. He has widely published in the areas of corporate social responsibility, international business, business ethics, and corporate strategy and public policy. His most recent publication isMultinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestle and the Infant Formula Controversy (Kluwer, 1994).     

How should managers treat ethics in international business?

Business ethics concern the consideration of moral in corporate decision making. International managers may be confronted with a variety of ethical dilemmas, usually due to differences among national markets in what constitutes legal or acceptable practice. Beliefs about what constitutes ethical business behavior commonly stem from one of four moral philosophies: teleology, deontology, the theory of justice, and cultural relativism. A framework incorporating all four is presented here which should provide a useful decision tool for international managers. An application of the framework and the complexities associated with it are presented next. We conclude that an effective integration of the company's perspective on ethics and the business behavior of the employees is critical and that it depends on top management, and the entire organization, demonstrating that they are serious about ethical business behavior on an ongoing basis. © 1998 John Wiley & Sons, Inc.     

An Analysis of the Ethical Codes of Corporations and Business Schools

Reports of ethical lapses in the business world have been numerous and widespread. Ethical awareness in business education has received a great deal of attention because of the number and severity of business scandals. Given Sarbanes-Oxley legislation and recent Association to Advance Collegiate Schools of Business International’s (AACSBI) recommendations, this study examined respective websites of Securities and Exchange Commission (SEC) regulated public companies and AACSBI-accredited business schools for ethical policy statement content. The analysis was accomplished by classifying ethical expressions into a framework consisting of the attributes of thematic content and focus/themes partially based on the 2004 research of Gaumnitz and Lere. Findings indicate that public companies have been diligent in presenting website ethical content that closely follows authoritative recommendations. Business schools appear not to have prioritized such disclosure to the extent done so by public companies. Although there was improvement between two samples taken in 2005 and 2007, this study provides evidence that many accredited business schools have little or no disclosed ethical expectations in their mission, vision, goals, or other similar types of statements on their websites. Additional findings provide several opportunities for future research.     

Processes and Consequences in Business EthicalDilemmas: The Oil Industry and Climate Change

We present a model of rational behavior by which we characterize business ethical dilemmas as trade-offs between processes and consequences. As an illustration, we formulate the oil industry's business ethical dilemma as a trade-off between a socially detrimental process (emitting greenhouse gases, hence inducing a risk of climate change) and a self-interested consequence (profits). The proposed framework allows us to specify two types of strategies, differing by whether priority is given to the consequences or to the processes. We analyze and illustrate these strategies at both the behavioral and the discursive levels. In particular, communication strategies raise questions about good faith in business argumentation, in the sense that business discourse may or may not be consistent with actual assumptions and/or actual behaviors. We conclude on possible drivers of more ethical business behavior.     

Ethics Programs, Perceived Corporate Social Responsibility and Job Satisfaction

Companies offer ethics codes and training to increase employees’ ethical conduct. These programs can also enhance individual work attitudes because ethical organizations are typically valued. Socially responsible companies are likely viewed as ethical organizations and should therefore prompt similar employee job responses. Using survey information collected from 313 business professionals, this exploratory study proposed that perceived corporate social responsibility would mediate the positive relationships between ethics codes/training and job satisfaction. Results indicated that corporate social responsibility fully or partially mediated the positive associations between four ethics program variables and individual job satisfaction, suggesting that companies might better manage employees’ ethical perceptions and work attitudes with multiple policies, an approach endorsed in the ethics literature. Sean Valentine (D.B.A., Louisiana Tech University) is an Associate Professor of Management in the college of Business at the University of Wyoming. His teaching and research interests include business ethics, organizational behavior, and human resource management. He has published in journals such as Behavioral Research in Accounting, Journal of Business Research, Journal of Personal Selling & Sales Management, and Journal of Business Ethics. Gary Fleischman (Ph.D., Texas Tech University) is an Associate Professor and is the McGee Hearne and Paiz Faculty Scholar in Accounting at the University of Wyoming. His teaching expertise is in accounting and entrepreneurship and his research interests are in business ethics and behavioral business research. He has published in journals such as Behavioral Research in Accounting, The International Journal of Accounting and Journal of Business Ethics.     

有限道德、确定效应与供应商伦理管理的实验研究

企业决策者对供应商行为准确无偏的伦理判断是有效供应商伦理管理的起点。但是,在有限道德的制约下,企业决策者的伦理判断会出现受害对象确定性偏差,进而影响企业对供应商的伦理管理。运用认知心理学实验方法,采用两因素混合设计与情境法,设计三种不符合伦理规范行为的模拟场景,并把每种行为描述成“受害对象确定”与“不确定”两种情形,研究供应商不符合伦理规范行为的受害对象是否确定、行为类型对企业对供应商行为的伦理判断与伦理管理的影响。方差分析的结果表明受害对象是否确定与行为类型对伦理判断与伦理管理主效应均显著;回归分析结果表明伦理判断对受害对象是否确定与伦理管理二者之间的中介效应也显著。     

Moral reasoning and business ethics: Implications for research,education, and management

This paper reviews Kohlberg's (1969) theory of cognitive moral development, highlighting moral reasoning research relevant to the business ethics domain. Implications for future business ethics research, higher education and training, and the management of ethical/unethical behavior are discussed.Linda Klebe Trevino is Assistant Professor of Organizational Behavior at the Mary Jean and Frank B. Smeal College of Business Administration, The Pennsylvania State University. She received her Ph.D. in management from Texas A&M University. Her current research focuses on ethical decision-making behavior in organizations, justice perceptions in disciplinary situations, and new information technologies in managerial communication.     

Putting ethics into investment

The article sets out to consider the practice of ethical investment in the light of some basic principles of moral philosophy. After establishing some principles which have been applied to individual or social conduct, it reviews the application of ethics to business, and the precedents established for investment. Because of the links between ethical investment and single‐issue campaigning, there is a detailed consideration of the relationship between campaigning groups and the issues they are concerned with on the one hand, and ethical investment on the other. The conclusion is reached that ethical investment is as much a process as a series of specific aims, and that a diversified ethical fund must consider matters in the round, within the scope of current knowledge, and must avoid an absolutist agenda.