The Effect of Ethical Orientation and Professional Commitment on Earnings Management Behavior

The purpose of this study is twofold. The first objective is to examine the impact of an individual’s ethical ideology and level of professional commitment on the earnings management decision. The second objective is to observe whether the presence of a personal benefit affects an individual’s ethical orientation or professional commitment within the context of an opportunity to manage earnings. Using a sample of 375 undergraduate business majors, our results suggest a significant relationship between an individual’s ethical orientation and decision-making. Further, participants with higher levels of professional commitment seem to be less likely to engage in earnings management behavior and less likely to behave opportunistically. These results have the potential to add to our understanding of certain behaviors in entry-level personnel and should be of interest to managers, practitioners, academicians, and researchers.     

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.     

Organizational harm,legal condemnation and stakeholder retaliation: A typology,research agenda and application

The essence of the ethical issues pertinent to business activities is the harm or benefit that occurs as part of a company's resource transformation process. A typology is developed that sorts ethical issues according to three variables: (1) the nature of the harm, (2) the nature of those harmed and (3) the transformation stage where the harm occurs. Propositions are formulated that would enable analysts and practitioners to predict the degree of legal condemnation of, and stakeholder retaliation to, harms generated by questionable moral reasoning. An organizational harm analysis is then constructed as a decision making tool that could supplement cost/benefit analysis.Denis Collins is a Doctoral Candidate at the Katz Graduate School of Business of the University of Pittsburgh and a Research Associate with the BG Productivity and Gainsharing Institute. He has published several articles in the areas of business ethics, social philosophy and participatory management.     

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.     

Ethical Leadership: Assessing the Value of a Multifoci Social Exchange Perspective

In this study, we comprehensively examine the relationships between ethical leadership, social exchange, and employee commitment. We find that organizational and supervisory ethical leadership are positively related to employee commitment to the organization and supervisor, respectively. We also find that different types of social exchange relationships mediate these relationships. Our results suggest that the application of a multifoci social exchange perspective to the context of ethical leadership is indeed useful: As hypothesized, within-foci effects (e.g., the relationship between organizational ethical leadership and commitment to the organization) are stronger than cross-foci effects (e.g., the relationship between supervisory ethical leadership and commitment to the organization). In addition, in contrast to the “trickle down” model of ethical leadership (Mayer et al. in Org Behav Hum Decis Process 108:1–13, 2009), our results suggest that organizational ethical leadership is both directly and indirectly related to employee outcomes.     

The Impact of Professional Commitment and Anticipatory Socialization on Accounting Students’ Ethical Orientation

The accounting profession has emphasized the need for ethics education in the accounting curriculum. The current study examines professional commitment and anticipatory socialization, operationalized by perception of financial reporting, as possible determinants of Accounting students’ ethical perceptions and intentions. Accounting students with higher levels of professional commitment and higher perception of the importance of financial reporting were more likely to perceive questionable actions as unethical and less likely to engage in such actions compared to those students with lower commitment and lower perception of financial reporting. The results have implications for accounting instructors and accounting employers as they socialize students in the accounting profession at this early stage.     

The challenge of preparing ethically responsible managers: Closing the rhetoric-reality gap

This article begins by questioning the commitment of business, government, and education leaders to the goal of ensuring that our public and private sector organizations are directed by ethically responsible individuals. Noting that while there appears to be genuine concern with the most recent outbreak of ethical failings as well as widespread support for the concept of morally and ethically educated current and future managers, there is less agreement on the most efficient and effective means of realizing this goal. For perspective purposes, recent research findings and opinions of leaders in higher education and business on the issue of ethics and the curriculum are highlighted. This paper challenges business, government, and higher education to disengage the “cheap” talk and to engage in a collaborative effort to develop a required, team-taught, interdisciplinary business ethics course based on philosophical inquiry, organizational theory, and actual business situations. Course goals, content, leadership, and benefits to students, managers, and ethicists are identified and discussed. Perhaps the failure of America's higher education institutions in preparing ethically responsible future leaders of business and government reflects the inability to “teach” ethics under any format. Could the problem be, however, that the approaches, to date, have not sufficiently incorporated the talents and experiences of line managers in conjunction with the theoretical frameworks of moral philosophers? This relatively simple conceptual approach, though admittedly difficult to successfully implement, is offered as a means of closing the business ethics rhetoricreality gap.     

Leadership,Trustworthiness, and Ethical Stewardship

Leaders in today’s world face the challenge of earning the trust and commitment of organizational members if they expect to guide their companies to success in a highly competitive global context. In this article, we present empirical results indicating that when leadership behaviors are perceived as trustworthy through the observer’s mediating lens, trust increases and leaders are more likely to be viewed as ethical stewards who honor a higher level of duties. This article contributes to the growing body of literature about the importance of ethical stewardship in the trust relationship.     

Learning Atmosphere and Ethical Behavior,Does It Make Sense?

In the wake of corporate ethical scandals that have harmed millions of employees and investors, there has been an increase in the number of works written in the last decade, which aim to answer one apparently simple question: what causes unethical behavior, and what can we do, if anything, to prevent similar transgressions in the future? The extensive research around this question is the best proof of its real complexity as the challenge of disentangling the background of ethical behavior has obvious academic and practical interest. This study aims to take a further step toward that goal. Much research has noted the impact of multiple aspects of organizational contexts on individuals’ ethical behavior. However, studies that analyze the impact of organizational learning capability (OLC) on employees’ ethical behavior are few and far between. This was the first aim of this study. The second centered on gaining a deeper understanding of the relationship between OLC and ethical behavior by analyzing the mediating role of employability and organizational commitment. We tested our hypotheses through a structural equation methodology applied to a sample of 641 workers from 166 Spanish consultancy firms and found a positive, direct relationship between OLC and employability, OLC and organizational commitment, employability and organizational commitment, and organizational commitment and ethical behavior.     

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.     

Ethical Duties of Organizational Citizens: Obligations Owed by Highly Committed Employees

Individuals who demonstrate organizational citizenship behavior (OCB) contribute to their organization??s ability to create wealth, but they also owe their organizations a complex set of ethical duties. Although, the academic literature has begun to address the ethical duties owed by organizational leaders to organizational citizens, very little has been written about the duties owed by those who practice OCB to their organizations. In this article, we identify an array of ethical duties owed by those who engage in extra-role behavior and describe those duties in context with personality theory. We suggest that employees who understand the complex nature of OCB and the associated duties they owe to others are more likely to reach their potential and make greater contributions within their organizations.     

Do Complex Moral Reasoners Experience Greater Ethical Work Conflict?

Individuals who disagree that organizational interests legitimately supersede those of the wider society may experience conflict between their personal standards of ethics and those demanded by an employing organization, a conflict that is well documented. An additional question is whether or not individuals capable of complex moral reasoning experience greater conflict than those reasoning at a less developed level. This question was first positioned in a theoretical framework and then investigated using 115 survey responses from a student sample. Correlational analysis and hierarchical regression indicated that individuals scoring high on the Defining Issues Test measure of Kohlberg's stages of moral development experienced significantly greater workplace ethical conflict than low scorers. The finding that complex moral reasoners perceive greater conflict between their personal standards and typical organizational demands raises the issue of what reasoning orientation is rewarded in organizations. Individuals capable of complex moral reasoning may be likely to leave traditional organizations due to high conflict but more ‘ethically friendly’ organizations for complex reasoners seem unlikely unless these people occupy influential positions.     

The influence of culture on ethical perception held by business students in a New Zealand university

The demand for principled and transparent corporate moral judgement and ethical decision making in the workplace makes it necessary for business students as future managers to understand the expectations of ethical workplace conduct. Corporate scandals mean that there is enhanced interest in ensuring that ethical content is included in curricula in universities. In this study, we re‐visit the question of whether culture has an influence on ethical perceptions of workplace scenarios, using students enrolled in a College of Business in a New Zealand (NZ) university as respondents. Consistent with current research, this study demonstrated mixed results. However, we also found evidence to suggest some identifiable patterns in the data across cultural groups. Overall, Chinese and Other respondents were more likely than NZ European to consider the scenarios as ethical. On the other hand, Chinese respondents were significantly less likely to report that their peers would carry out ethically questionable actions.     

Correction to: Developing Ethical Confidence: The Impact of Action-Oriented Ethics Instruction in an Accounting Curriculum

After the USSR collapsed, the Russian economy underwent serious changes from being plan-based to a market economy. These changes, together with political instability, created a business environment where no attention was paid to ethics. Russian managers have little experience operating in a market economy, which created many misunderstandings with foreign partners, especially regarding ethical issues of doing business. This study examined the factors influencing the ethical judgments of Russian employees to understand how they perceive ethical issues and make ethical or unethical decisions at work. The Ferrell and Gresham (J Mark 49:87–96, 1985) framework was employed in this study to understand the process of making ethical decision by an individual. Transparency was proposed as a moderator of the relationship between opportunity factors and employees’ ethical judgments. Findings of this study show that Russian employees tend to be more tolerant towards ethically questionable behaviors at a workplace. Moreover, the results also demonstrate that transparency moderates the influence of opportunity to behave unethically on ethical judgments.     

A Model of Ethical Decision Making: The Integration of Process and Content

We develop a model of ethical decision making that integrates the decision-making process and the content variables considered by individuals facing ethical dilemmas. The process described in the model is drawn from Janis and Mann’s [1977, Decision Making: A Psychological Analysis of Conflict Choice and Commitment (The Free Press, New York)] work describing the decision process in an environment of conflict, choice and commitment. The model is enhanced by the inclusion of content variables derived from the ethics literature. The resulting integrated model aids in understanding the complexity of the decision process used by individuals facing ethical dilemmas and suggests variable interactions that could be field-tested. A better understanding of the process will help managers develop policies that enhance the likelihood of ethical behavior in their organizations. Roselie McDevitt Sc.D. is Assistant Professor of Accounting at␣the Charles F. Dolan School of Business at Fairfield University in Fairfield, Connecticut. Dr. McDevitt teaches financial and managerial accounting. Her Primary areas of research are accounting education and accounting ethics. Catherine Giapponi is an Assistant Professor of Management at the Charles F. Dolan School of Business at Fairfield University in Fairfield, Connecticut. Dr. Giapponi teaches courses in management, organizational behavior, and strategy. Her primary areas of research are corporate governance and business ethics. Cheryl Tromley, Ph.D., is a Professor of Management at␣Fairfield University where she has taught management, organizational behavior, organizational communication, organizational␣culture, organization development, and diversity for 19 years. She has co-authored two editions of the text ``Developing Managerial Skills in Organizational Behavior'␣as well authored or co-authored a significant number of professional articles and presentations related to management and management education.     

Towards an ethical dimension of decision making in organizations

There is a growing need to increase our understanding of ethical decision making in U.S. based organizations. The authors examine the complexity of creating uniform ethical standards even when the meaning of ethical behavior is being debated. The nature of these controversies are considered, and three important dimensions for ethical decision making are discussed: leaders with integrity and a strong sense of social responsibility, organization cultures that foster dialogue and dissent, and organizations that are willing to reflect on and learn from their actions. Leaders with integrity demonstrate consistency between vision and action that promotes trust, regularly concern themselves with developing moral standards, and are proactive agents of change in an increasingly complex world. Organizational cultures that support dialogue suspend judgments and increase their capacity to think together towards new levels of understanding. Ethical concepts evolve in these organizational cultures, and actions are informed and responsible. Organizations that reflect on their actions engage in double loop learning so that the time taken to reflect on the past and present leads to a more judicious and ethical future. In essence, the authors point to organizational guidelines for ethical decision making that lead to an increase in members' capacity to think and act ethically. Jonathan Z. Gottlieb is a consultant to organizations and a Ph.D. Candidate in Organizational Psychology. His interests include organization redesign, leadership and team development, ethics, and role definition for organization development practitioners. Jyotsna Sanzgiri is Dean of Organizational Psychology Programs at the California School of Professional Psychology — Alameda. She received her Ph.D. in business Administration and her M.B.A. Her interests include organizational theory and core values across cultures, and the historical underpinnings of organization development and behavior.     

The Effect of Context on Moral Intensity of Ethical Issues: Revising Jones's Issue-Contingent Model

Jones's (1991) issue-contingent model of ethical decision making posits that six dimensions of moral intensity influence decision makers' recognition of an issue as a moral problem and subsequent behavior. He notes that "organizational settings present special challenges to moral agents" (1991, p. 390) and that organizational factors affect "moral decision making and behavior at two points: establishing moral intent and engaging in moral behavior" (1991, p. 391). This model, however, minimizes both the impact of organizational setting and organizational factors on these experiences of ethical issues. In this theory, context is modeled as affecting the moral intent and behavior of the actor rather than directly affecting the issue's moral intensity. Here we look specifically at the effect of context on the moral intensity of ethical issues through a phenomenological study. Our results indicate that in certain environments, context may be critical in affecting the moral intensity of ethical issues. Thus, researchers should consider it more fully when assessing these issues' moral intensity.     

Marketing ethics and education: Some empirical findings

This study explores possible links between educational background and ethics among marketing professionals. Data from two surveys of members of the American Marketing Association suggest that marketing professionals with master's degrees and higher are similar to their less educated counterparts in both their ethical standards and their intended ethical behaviors. Marketers with business degrees, however, have lower ethical standards than do graduates of non-business programs, though they report behavior as ethical as that of their non-business educated peers. Business schools may be producing cynics likely to accept marginal behaviors of colleagues though not likely to engage in such behaviors themselves.Sharyne Merritt is Professor of Marketing at California State Polytechnic University, Pomona, and a consultant in the areas of marketing and survey research. She has a Ph. D. in Political Science and was a Visiting Scholar at UCLA's Graduate School of Management. She has lectured and published widely in the fields of marketing and social issues.     

Ethical Decision Making in Fair Trade Companies

This paper reports on a study of ethical decision-making in a fair trade company. This can be seen to be a crucial arena for investigation since fair trade firms not only have a specific ethical mission in terms of helping growers out of poverty, but they tend to be perceived as (and are often marketed on the basis of) having an "ethical" image. Eschewing a straightforward test of extant ethical decision models, we adopt Thompson's proposal for a more contextualist understanding rooted in ethnographic data. Our findings suggest that the fair trade mission of the firm is experienced as an over-riding ethical claim, which is often invoked to justify potentially ethically questionable decisions. Moreover, decision precedents emerge which can mean that the decision process is bypassed or hurried through. Finally we provide evidence that the significance of these precedents, and indeed, even moral intensity itself, could be actively shaped and constructed by organization members to support different, even shifting, conceptions of what is a morally acceptable decision for a fair trade company to make.     

Matching Ethical Work Climate to In-role and Extra-role Behaviors in a Collectivist Work Setting

This paper studies the relationship between organizational ethical climate and the forms of organizational citizenship behavior (OCB), including in-role and extra-role behaviors, and examines the mediating effect of employee loyalty. A sample of employees from a traditional Hong Kong-based company was used as a study group. The purpose of this study was to examine the causes and implications of how various ethical work climates affect employee performance. Based on a model proposed by Victor and Cullen, ethical climate is arranged from lower levels to higher levels. The results suggest that lower levels of ethical climate (instrumentality and independence), characterizing a weak relational contract between employee and employer, are associated with negative extra-role behavior. In contrast, higher levels of ethical climate (caring and law-and-code), symbolic of a strong relational contract at work, are associated with positive extra-role behavior. Moreover, normative commitment mediated a positive relationship between caring and identification with the company, whereas attitudinal loyalty mediated the negative relationship between independence and altruism. Implications for future research and practice are discussed. Dr. Alicia Leung is an Associate Professor of Management at the Hong Kong Baptist University. She received her Ph.D. degree in Management Learning from the University of Lancaster, U.K. She is active in researching and writing materials about Asian organizations and management issues. Her research interests include gender issues and feminist methodology, business ethics, corporate governance, and strategic management in the Asian context.