The Methods Used to Implement an Ethical Code of Conduct and Employee Attitudes

In the process of implementing an ethical code of conduct, a business organization uses formal methods. Of these, training, courses and means of enforcement are common and are also suitable for self-regulation. The USA is encouraging business corporations to self regulate with the Federal Sentencing Guidelines (FSG). The Guidelines prescribe similar formal methods and specify that, unless such methods are used, the process of implementation will be considered ineffective, and the business will therefore not be considered to have complied with the guidelines. Business organizations invest enormous funds on formal methods. However, recent events indicate that these are not, by themselves, yielding the desired results. Our study, based on a sample of 812 employees and conducted in an Israeli subsidiary of a leading multinational High-Tech corporation headquartered in the US, indicates that, of the methods used in the process of implementation, one of the informal methods (namely, the social norms of the organization) is perceived by employees to have the most influence on their conduct. This result, when examined against employee tenure, remains relatively stable over the years, and stands in contradistinction to the formalistic approach embedded in the FSG. We indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes (namely, personal ethical commitment and employees' commitment to organizational values). Our results indicate that the informal methods (manager sets an example or social norms of the organization) are likely to yield greater commitment with respect to both employee attitudes than the formal method (training and courses on the subject of ethics). The personal control method (my own personal values) differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees' commitment to organizational values.     

The Relationship of Communication, Ethical Work Climate, and Trust to Commitment and Innovation

Recently, Hosmer (1994a) proposed a model linking right, just, and fair treatment of extended stakeholders with trust and innovation in organizations. The current study tests this model by using Victor and Cullen's (1988) ethical work climate instrument to measure the perceptions of the right, just, and fair treatment of employee stakeholders.In addition, this study extends Hosmer's model to include the effect of right, just, and fair treatment on employee communication, also believed to be an underlying dynamic of trust.More specifically, the current study used a survey of 111 managers to test (1) whether right, just, and fair treatment influences trust, both directly as well as indirectly via communication, and (2) whether trust influences perceptions of commitment and innovation. Strong support for the study's hypotheses and Hosmer's (1994a) model was found. Such findings support those who argue that moral management may be good management.     

Drama theory and its relation to game theory. Part 1: Dramatic resolution vs. Rational solution

Drama theory differs from game theory in that it does not regard actors' preferences and perceived opportunities as fixed, but as capable of being changed by the actors themselves under the pressure of pre-play negotiations. Thus characters in a drama undergo change and development. A manyperson, multiphase theory of dramatic transformation is presented, showing how thecore of a drama (in the sense of game theory) is transformed by the interaction between the characters into a strict, strong equilibrium to which they all aspire. The process of dramatic transformation is shown to be driven by actors' reactions to various paradoxes of rationality; it is proved that when all these paradoxes have been overcome, a full dramatic resolution has been reached, satisfying actors' emotional and moral demands, as well as the demands of rationality.     

A response to “On Measuring Ethical Judgments”

This article discusses the major criticisms posed in On Measuring Ethical Judgments concerning our ethics scale development work. We agree that the authors of the criticism do engage in what they accurately refer to as armchair theorizing. We point out the errors in their comments.Dr. R. Eric Reidenbach is Professor of Marketing at The University of Southern Mississippi. He is the coauthor of two books on business ethics and writes extensively on the subject of the measurement of ethical decision making.Dr. Donald P, Robin is Professor of Marketing and Professor of Business Ethics at The University of Southern Mississippi. He is coauthor of two books on business ethics, as well as numerous articles. Dr. Robin is also a frequent lecturer on the subject of business and marketing ethics.     

Justice: The root of american business ideology and ethics

Although there are many conceptions of Justice, these different perceptions can provide many interesting insights into a business person's ethical standards as well as that person's decision-making processes. Using the Bishops' Pastoral Letter on the U.S. Economy as the basis for asking questions about justice, twenty-four business executives were interviewed about their conception of justice. An analysis of these interviews reveals that this group of businesspeople operated under very different conceptions of Justice at the Macroenvironmental and Microenvironmental levels. This result has some interesting implications not only for those scholars concerned with business ethics but for everyone who has a stake in business education.Men are called good, chiefly on account of their Justice. Cicero, 56 B.C. Ideology is applied philosophy. Lodge, 1986 Richard McGowan, S. J. is an Assistant Professor of Operations and Strategic Management at Boston College. His research focus involves examining both the rationale behind business and public policy decisions as well as determining the effectiveness of these policy measures. Some of his recent publications include Deciphering the Japanese Import Quota, Policy Studies Journal (1988) and Public Policy Measures and Cigarette Sales: An ARIMA Intervention Analysis Study JAI Social Issues Management Volume (1989).     

Teaching Business Ethics with Computer-based Multimedia? A Cautionary Analysis

Still shots, videos, music, and movie clips can be helpful in bringing some excitement to the study of business ethics. For several years, Professor McAdams has been using The Great Gatsby as a text for discussing American commercial values. That discussion serves as an introduction to a larger examination of contemporary business ethics. Recently, Professor Duclos and her students converted that socratic exploration of Gatsby's contemporary relevance to a PC-based, multimedia show employing the efficient and manageable PowerPoint software presentation package. Computer-based multimedia added flavor to the presentation, but developing this lengthy lesson required hundreds of hours, substantial hardware/software and a high tolerance for frustration.     

From Adam Smith to the American Catholic bishops: Debating visions of economic life

Considerable controversy was stirred by the contrast between the specific approaches to public policy contained in the first draft of the Catholic bishops' letter on the U.S. economy and the policies favored by the Reagan administration. However, a much more basic contrast actually existed between the bishops' underlying vision of economic life and contemporary capitalism. The pastoral challenges a separation between moral criteria and economic activity that is deeply embedded in modernity itself. Indeed, the splitting off of economic life from its moral-religious matrix is seen by the bishops' critics as a positive, defining feature of democratic capitalism. The critics see the separate economic and moral-religious spheres related by due balance; the bishops, while acknowledging an autonomy to economic life, emphasize that its fundamental choices remain moral. The bishops (and, for different reasons, their critics) have preferred to minimize the contrast between the letter's vision and the contemporary economy. They avoid any clearcut judgment on the economic system by stressing pragmatism and reforms; but implicitly they are granting a strictly conditioned acceptance of reformist capitalism, the condition being the system's openness to questioning and change. Peter Steinfels is Editor of Commonweal Magazine and he is the author of The Neoconservatives (Simon and Schuster, 1979).     

Professionalism: Foundation for business ethics

Professionalism includes the essential contents of other key notions within the field of business ethics. As a term involving the notion of vocation it may be understood as containing a religious content, since vocation refers to a man's most intimate personal decisions, destiny and providence. Professionalism also connotes respect for law and so includes a reference to commercial law as a guide to right conduct. Professionalsim thus lifts the requirements of law to the level of personal commitment.Like an honest act, professionalism may not be easy to define, but you will know it when you see it. As for professionalism's practitioners, like the practitioners of honesty, their art is learned not by seeking definitions of what they do, but by practicing professionalism. Only if this practice becomes an obsession with the Business Aristocracy can we expect professionalism to seize the soul of lesser businessmen and suffuse the entire business community. Thomas E. Schaefer, Ph. D., is Professor of Business Administration at the University of Texas, Permian Basin. He was formerly Head of the Department of Business Administration, University of Alaska, and Dean of Business Administration, Sacred Heart University, Puerto Rico. He has received a Private Sector Award of Pres. Reagan for Extraordinary Contributions to Small Business. His most important publications are: The Process of Management: What Supervisors Do (O.C. Press, 1982); Leadership Through Followership, Business Horizons (September/October, 1982) and many others.Paper presented at the 16th Conference on Value Inquiry, entitled: Ethics and the Market Place: An Exercise in Bridge-Building or On the Slopes of the Inteface.     

Real Wages,Business Cycles and New Production Patterns

In contrast with most conventional business cycle models, empirical data show no clear correlation between real wage movements and output and employment. This paper presents a model, largely based on concepts presented by Joseph Schumpeter,in which economic growth and the business cycle are triggered by endogenous real shocks to technology. It suggests that the speed and magnitude by which technological shocks spread throughout the economy determine whether the resulting changes in real wages will be pro-or counter-cyclical.     

Board-management relations in small firms: The paradox of simultaneous independence and interdependence

The author introduces constructs based on neo-classical and socio-economic assumptions, and argues that board-management relations should be characterized by both independence and interdependence. Interdependence is especially important in small firms. The article presents a model of directorates from research about directorates based on agency theory assumptions. This model is supplemented with constructs from the theory of contractual relations. Whilst traditional literature tends to focus upon independence from an agency theory perspective, this article argues that it is necessary to use more than one dimension of attributes regarding the board-management relations in order to understand the board's contribution to company performance, and that trust and solidarity is especially important in small firms. Board-management relations described by simultaneous independence and interdependence are proposed to give the highest contribution to company performance. The theoretical propositions are exemplified and supported by results of a field survey of directorates in small firms.     

What is business ethics? A reply to peter drucker

In his What is Business Ethics? Peter Drucker accuses business ethics of singling out business unfairly for special ethical treatment, of subordinating ethical to political concerns, and of being, not ethics at all, but ethical chic. We contend that Drucker's denunciation of business ethics rests upon a fundamental misunderstanding of the field. This article is a response to his charges and an effort to clarify the nature, scope and purpose of business ethics.     

Business ethics and commercial morality: Report of the Royal Commission into Commercial Activities

This section is focused on some areas of concern which were identified in The Report of the Royal Commission into Commercial Activities of Government and Other Matters (1990–1992). In the Report a number of situations were examined in which some individuals acted without recourse to any ethical guidelines. Most of the people mentioned in the Report held responsible positions in either Government or the private sector, and all were very well known in the community. The Report of the Royal Commission made a number of findings of serious impropriety on the part of several individuals, although there was comparatively little evidence of illegal or corrupt conduct. This section shows what happened to a governmental system in an Australian state when a number of Ministers and their advisors placed their personal or party advantage over their constitutional obligation to act in the community's interests.Those who cannot remember the past are condemned to repeat it.George Santayana (1863–1952)Michael Small is a Senior L1ecturer in the Curtin Business School, Western Australia. Earlier positions have included appointments with the Commonwealth Attorney-General's Department and more recently as Senior Lecturer in the Australian Police Staff College.     

Kosten und Streitwert in Verfahren wegen unlauteren Wettbewerbs aus verbraucherpolitischer Sicht

Zusammenfassung Der Beitrag berichtet über die Ergebnisse einer rechtstatsächlichen Untersuchung über Streitwert und Kosten in Verfahren wegen unlauteren Wettbewerbs, die vom Max-Planck-Institut für ausländisches und internationales Wettbewerbsrecht, München, durchgeführt wurde. Bei der Bestandsaufnahme von Streitwerten in Verfahren wegen unlauteren Wettbewerbs in über 3000 einschlägigen Fällen bestätigte sich der allgemein vorherrschende Eindruck, daß die Streitwerte in Wettbewerbssachen im Vergleich zu den «normalen» Zivilverfahren außerordentlich hoch sind. Für die gem. 13 Abs. 1 a UWK klagebefugten Verbrauchervereine folgt daraus, daß die Kostenbelastung bei einem Unterliegen im Prozeß schon bei durchschnittlicher Streitwerthöhe zu einem ernsten Problem werden kann. Die Einstellung der Gerichte zur Gewährung der Streitwertbegünstigung gem. § 23 a UWG ist uneinheitlich; von einigen Gerichten wird in dieser Hinsicht eine sehr restriktive Auffassung vertreten. Eine Auswertung der im Verlauf der Untersuchung bekanntgewordenen Fälle, in denen der Verbraucherschutzverein in Berlin von der ihm gewährten Streitwertbegünstigung wegen Unterliegens in der Sache Gebrauch machen mußte, hat ergeben, daß die Belastung der gewerblichen Wirtschaft weder nach ihrem Umfang noch den sachlichen Umständen ihrer Realisierung nach als unbillig oder gar unzumutbar angesehen werden kann.

---

The present article deals with the results of a study on litigation value and the costs of unfair competition litigation. In German procedural law, litigation value is the sum representing the value of the plaintiff's interests involved in the case, or — if it is not a personal interest, but, as is the case with claims made by consumer associations, rather a general one — the public interest involved in the claim as expressed in monetary value. This value determines the magnitude of the costs (court costs and lawyer fees) that the losing party has to pay.According to the prevailing opinion, litigation value in unfair competition litigation is usually very high, compared with normal litigation in civil cases. By gathering the data of more than 3000 cases, the study was able to verify this impression. For consumer associations, which, according to § 13 sec. 1 a UWG, have the right to act as a plaintiff in cases of special interest for consumers, this means that the costs of losing a case, even one of average importance, can be ruinous. Courts have, however, the possibility to split up the litigation value, that is, fix a low sum as litigation value regarding the poor party (which in this case would be the consumer association), while the normal value remains valid for the other party. The main effect of the splitting-up is that the poor party, if the case should be lost, only has to pay both court costs and lawyer's fees according to the low value, while the other party, even if he won the case, has to pay the difference. As the study reveals, this regulation meets with varying degrees of approval from the courts' side; some courts seem to be fairly restrictive in handling it. Due to this, consumer associations cannot know beforehand if they will be granted the benefit of value-splitting, and thus have to refrain from any further procedural activities if they do not feel able to take the full risk — this effect, of course, from the consumer's point of view, is a very unfavourable one. On the other hand, it is argued that the obligation to bear part of the costs will place an unfair burden on the innocent winner. However, an enumeration of those cases in which one important consumer association, the Verbraucherschutzverein in Berlin, had to take advantage of the above mentioned litigation value assessment, shows that the effect for the opponent has not been as damaging as could have been expected.

     

Approval voting in scientific and engineering societies

Approval voting is a system in which members can vote for as many candidates as they like in multicandidate elections. In 1987 and 1988, four scientific and engineering societies, collectively comprising some 350,000 members, used this election reform for the first time. Their reasons for adoption varied but centered around efforts to elect consensus candidates. Approval voting has indeed elected so-called Condorcet candidates, who can defeat all other candidates in pairwise contests. Moreover, these winners generally enjoy support among different classes of voters, so they are not merely lowest common denominators, as some analysts had feared. In at least one instance, approval voting would have led to a different winner from plurality voting (in which voters can vote for exactly one candidate); arguably, this winner would have been the better social choice because he had wider support than his closest opponent. On another occasion, approval voting led to ideological voting—in which the voting patterns reflected an underlying ordering of the candidates—but voting in most societies tends to be nonideological. Overall, the recent experimentation with approval voting has shown that it not only may make a difference but also elects broadly acceptable candidates.     

Administrative procedures for the control of marketing practices - theoretical rationale and perspectives

The paper purports to analyze some features of administrative control of marketing practices with the help of concepts drawn from modern legal-theoretical debate. As a background a general overview of the traditional justifications for the creation of an administrative control system is presented. These justifications underline the insufficiency of other agencies of control, such as individual consumers, competitors, consumer organizations, public prosecutors, and self-regulatory bodies.The development of administrative control measures has obvious connections with modern legal-theoretical concepts like reflexive law and proceduralization. The theory of reflexive law highlights the fact that effective control presupposes a sufficient consideration of the autonomy of social systems. This leads to emphasizing a flexible negotiation approach of control authorities in order to increase efficiency by creating some degree of internal acceptance of the measures.Legal pluralism again sees the State disintegrating in a constellation of more or less autonomous governments with their own goals and interests. In such a disintegrated State an active consumer authority can, under certain preconditions, create new legal institutions in the consumer law field and thereby contribute to the development not only of consumer law but of general private law as well.

---

Theoretische Begründung und Perspektiven für administrative Verfahren der Kontrolle von Marketingpraktiken

Zusammenfassung Der Autor analysiert einige Kennzeichen von administrativer Kontrolle von Marketingpraktiken und zieht dazu Konzepte der neueren rechstheoretischen Diskussion heran. Er prÄsentiert zunÄchst als Hintergrund einen überblick über die traditionellen Rechtfertigungen für ein administratives Kontroll-system. Diese Rechtfertigungen betonen die UnzulÄnglichkeit anderer Kontrollinstanzen, wie z. B. einzelne Konsumenten, Wettbewerber, Verbraucherorganisationen, öffentliche Anklage oder Instanzen der Selbstkontrolle.Die Entwicklung von Ma\nahmen der administrativen Kontrolle hat offenkundig Bezüge zu modernen rechtstheoretischen Konzepten wie reflexives Recht und Prozeduralisierung. Die Theorie des reflexiven Rechts betont als Voraussetzung für effektive Kontrolle, da\ die Autonomie sozialer Systeme ausreichend respektiert wird. Dies führt zur Notwendigkeit flexibler Verhandlungen zwischen Kontrollinstanzen, damit über ein hinreichendes Ma\ an interner Akzeptanz der Mittel, deren Effizienz gesteigert werden kann.Rechtlicher Pluralismus wiederum sieht den Staat zerfallen in eine Konstellation mehr oder weniger autonomer Teilregierungen mit jeweils eigenen Zielen und Interessen. In einem so aufgespaltenen Staat kann eine aktive Verbraucherbehörde unter bestimmten Bedingungen neue rechtliche Institutionen im Bereich des Verbraucherrechts schaffen und dadurch zur Entwicklung nicht nur des Verbraucherrechts, sondern des gesamten Privatrechtes beitragen.

---

---

The paper was presented at the Third International Conference on Consumer Law in Canela, Brazil, March 1992.     

Entscheidungsbedingte Kaufkraftverluste: Formen,Umfang und verbraucherpolitische Relevanz

Zusammenfassung Entscheidungsbedingte Kaufkraftverluste treten dann auf, wenn Verbraucher wegen beschränkter Markttransparenz Kaufentscheidungen treffen, die zu finanziellen Einbußen fürhren. Am Beispiel von drei verbraucherinformationspolitischen Maßnahmen werden Formen und Umfang entscheidungsbedingter Kaufkraftverluste herausgearbeitet. Vielleicht gelingt es, mit Hilfe dieser Kaufkraftverluste erste Auswahlkriterien und erste Ansätze einer Erfolgskontrolle im Rahmen der Verbraucherpolitik aufzuzeigen. Vielleicht gelingt es aber auch, dem Verbraucher den potentiellen finanziellen Schaden uninformierten Kaufentscheidungsverhaltens vor Augen zu führen, in der Hoffnung, daß er nun eher dazu motiviert ist, sich nicht nur bei extensiven Kaufentscheidungsprozessen informationsaktiver zu verhalten.

---

Monetary losses caused by uninformed purchase decisions: About their implications for consumer policy and various ways of calculating them

Frequently, the uninformed consumer makes buying decisions which differ from the decisions of the information seeker. Often, this takes the form of products with a higher price but not corresponding improvement of quality being chosen, or products with a lower quality but no corresponding reduction in price. In both cases, the uninformed consumer suffers a monetary loss (a loss in money income, Morris & Bronson, 1970).In this paper, three ways of calculating such a monetary loss are presented. Two of these are taken from the literature (Granger & Billson, 1972; Russo, 1977) and concern the calculation of real losses which result from the choice of unnecessarily expensive products, owing to difficulties in calculating and comparing unit prices, when stores do not make these extremely manifest. The third calculation concerns a more hypothetical entity, the potential loss that can be incurred by choosing the most expensive brand in a product class rather than the cheapest of those brands which have been rated as very good by the German product-testing agency Stiftung Warentest. In turns out that these potential losses are oftentimes very large. The author is of the opinion that the relative size of these losses can be used for selecting those classes of products where the need for consumer actions, above all for information about prices and qualities, is particulary urgent. Furthermore, the efficiency of such actions can be measured in terms of changes in the size of the losses. The consumers themselves might also be induced towards more extensive pre-purchase search, were they made aware of the size of these potential losses.

---

---

Udo Beier ist Professor für Wirtschaftslehre des Haushalts und Verbraucherpolitik an der Universität Hamburg, Fachbereich Erziehungswissenschaft, Von-Melle-Park 8, D-2000 Hamburg 13.     

A framework for thinking about Group Decision Support Systems (GDSS)

Strategic problem solving in organizations is a social process that disturbs established social relationships. Maintaining a negotiated social order is crucial to political feasibility and to emotional commitment from the participants in relation to a solution package. However, Group Decision Support Systems that attend overly to managing social order risk group think through bounded vision. This may be avoided if emotional commitment is also encouraged through participants experiencing the problem situation from multiple perspectives and in relation to alternative solution strategies. Commitment depends upon both means/ends rationality and procedural rationality. This acknowledges the balance in providing support to a group with respect to the negotiation of social order, with the more traditional group decision support for socially negotiating order out of the problem situation. This article argues that effective Group Decision Support Systems must attend to both aspects of creating order. OR modelling methods and the support that can be provided by modern micro-computers offer a new way forward—models can be toys that a group can play with together, enabling them to create knowledge as well as use it.     

Ethics in organizations: A framework for theory and research

In a climate of increasing interest and activity within the field of business ethics, as yet there exists no coherent conceptual framework for organizational theory and research. From a review of current thinking and previous writings a framework of concepts is suggested to help set an agenda for empirical research. The elements of this are, first, a taxonomy of ethical domains: the foci of organizations' and their agents' ethical concerns and conduct. Second, it is considered how ethical functioning might be analysed in terms of causal relationships between expressive forms, voluntary action and instituted forms. Third is discussed ethical process, the means by which ethical awareness is aroused. Fourth and last, the paper examines how normative evaluations might apply to the ethical condition of organizations and their agents, meaning change or stability in reputation and integrity. At each stage of the argument possible objectives for research are developed.Professor Nigel Nicholson is Chairman of the Organisational Behaviour Group and Director of the Centre for Organisational Research at London Business School. Previously, he led investigations into Individual and Organisational Change at Sheffield University's Social & Applied Psychology Unit, and has also held visiting appointments at American, Canadian and German universities. He has published 8 books and over 65 articles on a wide range of topics, and been honoured with an award from the Academy of Management for his contribution to theory.     

Does Greater Amount of Information Always Bolster Attitudinal Resistance?

Previous research suggests that attitudinal resistance to information that challenges a prior evaluation increases with the amount of information underlying the prior evaluation. We revisit this proposition in a context in which a set of important claims about a target brand are presented either alone—a lower amount of isolated information—or along with other favorable, but less important claims—a higher amount of embedded information. Results from two experiments show that when the challenge occurs immediately after the initial evaluation, a greater amount of embedded initial information does produce greater attitudinal resistance. However, when the challenge occurs after a delay, a lesser amount of isolated information produces greater attitudinal resistance. The findings qualify previous assumptions about the role of prior information in attitudinal resistance, and support a constructive view of judgment revision and attitudinal resistance.     

Can Ethical Organizational Character Be Stimulated and Enabled?: “Upbuilding” Dialog As Crisis Management Method

Crisis management can be simultaneously a content specific problem solving process and an opportunity for stimulating and enabling an organizations ethical tradition. Crisis can be an opportunity for ethical organizational development. Kierkegaardian upbuilding dialog method builds from within the internal ethical tradition of an organization to respond to crises while simultaneously adapting and protecting the organizations tradition. The crisis itself may not be a directly ethical crisis, but the method of responding to the crisis is built upon the ethical foundations of an organizations tradition. A limitation of this method is that it may be less applicable to organizations with questionably ethical traditions. The concept of upbuilding dialog is derived from Kierkegaard, but here is applied to organizational crisis management. The method is illustrated and discussed in the context of a wrongful death crisis of the Dana- Farber Cancer Institute, a nonprofit organization, and an economic survival crisis at Ben and Jerrys, a business organization.