Causal Effects of Regulatory, Organizational and Personal Factors on Ethical Sensitivity

Prior researchers have studied individual components of a theoretical decision-making model. This paper presents the results of a more complete study of the model components and presents limited support of theory. The study examines the relative importance of regulatory, organizational, and personal constructs on an individual's ethical sensitivity. Auditors from the major international accounting firms, located in two southeastern cities, are surveyed. Structural equation modeling is used to allow for the simultaneous evaluation of the three constructs of interest. The results indicate that the regulatory and organizational constructs are negatively correlated with the personal experience construct. The three constructs are not significant causal factors on ethical sensitivity. This result may be due to the manner in which ethical sensitivity is typically measured or may indicate that the complexity of the ethical decision-making process is not fully captured in the theoretical models. Thus, the models suggested in the prior literature and the results presented in prior studies of the individual components may need to be reconsidered.     

Shaping Ethical Perceptions: An Empirical Assessment of the Influence of Business Education,Culture, and Demographic Factors

Recent events at Enron, K-Mart, Adelphia, and Tyson would seem to suggest that managers are still experiencing ethical lapses. These lapses are somewhat surprising and disappointing given the heightened focus on ethical considerations within business contexts during the past decade. This study is designed, therefore, to increase our understanding of the forces that shape ethical perceptions by considering the effects of business school education as well as a number of other individual-level factors (such as intra-national culture, area of specialization within business, and gender) that may exert an influence on ethical perceptions. We found significant effects for business education, self-reported intra-national culture, area of specialization within business, and gender for some and/or all areas of ethics examined (i.e., deceit, fraud, self-interest, influence dealing, and coercion). One of our most encouraging findings is that tolerance for unethical behavior appears to decrease with formal business education. Despite the prevalent stereotype that business students are only interested in the bottom line or that business schools transform idealistic freshman into self-serving business graduates, our results suggest otherwise. Given the heightened criticism of the ethicality of contemporary managerial behavior, it is heartening to note that, even as adults, individuals can be positively affected by integration of ethics training.     

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.     

‘The Impact of Corporate Ethical Values and Enforcement of Ethical Codes on the Perceived Importance of Ethics in Business: A Comparison of U.S. and Spanish Managers’

This two country study examines the effect of corporate ethical values and enforcement of a code of ethics on perceptions of the role of ethics in the overall success of the firm. Additionally, the impact of organizational commitment and of individual variables such as ethical idealism and relativism was examined. The rationale for examining the perceived importance of the role of ethics in this manner is to determine the extent to which the organization itself can influence employee perceptions regarding ethics and social responsibility. Results indicate that all of the variables tested, except relativism, impacted upon one’s perceptions of the importance of ethics and social responsibility. Perceptions of the importance of ethics and social responsibility also varied depending upon country of residence with the U.S. sample having somewhat higher perceptions concerning the importance of ethics and social responsibility than their counterparts in Spain. Furthermore, when comparing the two samples, the U.S. sample had significantly higher corporate ethical values, greater enforcement of ethical codes, less organizational commitment and both lower idealism and relativism.     

Ethical Decision Making in the Public Accounting Profession: An Extension of Ajzen’s Theory of Planned Behavior

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues.     

An Exploratory Comparison of Ethical Perceptions of Mexican and U.S. Marketers

This is a study of the effects of a number of background variables on ethical perceptions of Mexican and U.S. marketers. This research investigates how a marketer’s personal religiousness, relativism, and the ethical values influence in perceptions of the degree of ethical problems in hypothetical marketing scenarios. It also examines differences between Mexican and U.S. marketers on these variables. The results show significant differences in perception between the countries, and we discuss the implications of these differences for cross-cultural business activities. The authors wish to thank Rebecca McLaughlin for her help with data collection in Mexico     

Corporate Governance and Ethics: A Feminist Perspective

The mainstream literature on corporate governance is based on the premise of conflicts of interest in a competitive game played by variously defined stakeholders and thus builds explicitly and/or implicitly on masculinist ethical theories. This article argues that insights from feminist ethics, and in particular ethics of care, can provide a different, yet relevant, lens through which to study corporate governance. Based on feminist ethical theories, the article conceptualises a governance model that is different from the current normative orthodoxy.     

Antecedents and Consequences of Perceived Importance of Ethics in Marketing Situations: A Study of Thai Businesspeople

Building on an existing framework concerning ethical intention, this research explores how Thai business people perceive the importance of ethics in various scenarios. This study investigates the relative influences of personal characteristics and the organizational environment underlying the Thai business people’s ethical perception. Corporate ethical values and idealism are shown to positively influence a Thai manager’s perceptions about the importance of ethics. While their ability to perceive the existence of an ethical problem is negatively influenced by relativism, it is positively impacted by their existing perceptions about the importance of ethics. Results also suggest positive relationships between perceived importance of ethics and perceived ethical problems with ethical intention. These results extend research in understanding the relationship between the antecedents and consequences of perceived importance of ethics within an economically growing non-Western culture.     

The Effect of Organizational Culture and Ethical Orientation on Accountants' Ethical Judgments

This paper examines the relationship between organizational ethical culture in two large international CPA firms, auditors' personal values and the ethical orientation that those values dictate, and judgments in ethical dilemmas typical of those that accountants face. Using an experimental task consisting of multiple judgments designed to vary in "moral intensity" (Jones, 1991), and unique as well as tried-and-true approaches to variable measurements, this study examined the judgments of more than three hundred participants in our study. ANCOVA and path analysis results indicate that: (1) Ethical judgments in situations of high moral intensity are affected by personal values and by environmental variables, such as the professional code of conduct (direct and indirect effects) and previous ethics instruction (direct effect only). (2) Corporate ethical culture, and a relatively strong firm rules-orientation, affect auditors' idealism but not relativism, and therefore indirectly affect ethical judgments. Jones' (1991) moral intensity argument is supported: differences in the characteristics of specific judgment tasks apparently result in different decision processes.     

An Integrated Perspective on Foreign Ethical Divestment

Much of the existing literature on foreign ethical divestment has been developed in isolation and scattered across multiple disciplines. This article reviews the existing literature on foreign ethical divestment to extract emerging themes and outline new directions for future research. Our review uncovered that foreign ethical divestment decisions can be attributed to macro‐, firm‐, and individual‐level factors. We therefore develop an integrated model to link the dynamics of ethical foreign divestment. The study identified a number of unanswered questions and implications for future research. © 2016 Wiley Periodicals, Inc.     

The Applicability of a Contingent Factors Model to Accounting Ethics Research

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

Ethical Sensitivity in Management Decisions: Developing and Testing a Perceptual Measure Among Management and Professional Student Groups

An emerging literature in behavioral ethicsconceptualizes ethical perception or sensitivity as acritical part of the decision making process. Thisstudy appears to be the first to empirically test thisconcept in organization and management decisionmaking. A measure of ethical sensitivity is developedand tested in a decision making exercise. Subjectsfor the study are 156 students from programs inbusiness management, public administration, andengineering. The relationship of ethical sensitivityto decision outcome is assessed.     

The Effects of Commitment to Moral Self-improvement and Religiosity on Ethics of Business Students

Using survey methodology we examined the relationships between commitment to moral self-improvement (CMSI), religiosity, ethical problem recognition, and behavioral intentions in a sample of 242 business students. Results of the study suggest that CMSI predicts ethical problem recognition and behavioral intentions. Our findings also suggest that CMSI is positively related to religiosity. The study provides some evidence of CMSI being a mediator in the influence of religiosity on ethical problem recognition and behavioral intentions. Compared to religiosity, CMSI turned out to be a better predictor of perceived importance of ethics, ethical problem recognition, and ethical behavioral intentions. The results of the study have implications for increasing understanding of ethical decision-making, future studies of business ethics, and business ethics education.     

Ethical Ideology and Ethical Judgments in the Portuguese Accounting Profession

The purpose of the present study is to examine the attitudes of Portuguese chartered accountants with respect to questions of ethical nature that can arise in their professional activity. Respondents were asked to respond to the Ethics Position Questionnaire developed by Forsyth (Journal of Personality and Social Psychology 39(1), 175–184, 1980), in order to determine their idealism and relativism levels. Subsequently, they answered questions about five scenarios related to accounting practices, with the objective of measuring their ethical judgments. Based on the idealism and relativism levels of our respondents, they were classified into one of four groups, representing different ethical ideologies (absolutism, exceptionism, subjectivism, and situationism). The results indicated that age was the major determinant of relativism. Contrary to previous research, older respondents revealed themselves significantly more relativistic than younger ones. Gender seems to be the most important determinant of ethical judgments; against expectations, men evidenced significantly stricter judgments than women in two of the five scenarios. Findings also indicated that respondents’ ethical judgments did not differ significantly based on their ethical ideology, supporting the idea that ethical ideology is not an important determinant of ethical judgments.     

An Examination of Differences in Ethical Decision-Making Between Canadian Business Students and Accounting Professionals

This study investigates the differences in individuals' ethical decision making between Canadian university business students and accounting professionals. We examine the differences in three measures known to be important in the ethical decision-making process: ethical awareness, ethical orientation, and intention to perform questionable acts. We tested for differences in these three measures in eight different questionable actions among three groups: students starting business studies, those in their final year of university, and professional accountants.The measures of awareness capture the extent to which respondents felt that a particular action was unethical according to each of several ethical criteria. We found few differences between the two student groups on these measures, suggesting that their education had minimal effect on raising their awareness of the ethical issues in the vignettes. Indeed, overall, the graduating student's scores were marginally lower than those of the entry-level students. However, the professionals viewed some actions as significantly less ethical than did the graduating students.The measures of ethical orientation capture the weight respondents placed on each of the criteria above in their evaluation of the overall morality of an action. The differences between the three groups were generally small, and were a function of the vignette, consistent with Jones' (1991) model of issue-contingent ethical reasoning.The measures of intention capture the extent to which a respondent perceives that s/he would perform the action. There were significant differences between the groups in three of the eight vignettes, driven by a difference between the professionals and the other two student groups. The awareness measures were strong predictors of intention. We discuss the implications of these findings for professional training and future research.     

Exposure to Ethics Education and the Perception of Linkage between Organizational Ethical Behavior and Business Outcomes

This study focused on the effects of individual characteristics and exposure to ethics education on perceptions of the linkage between organizational ethical practices and business outcomes. Using a stratified sampling approach, 817 students were randomly selected from a population of approximately 1310 business students in an AACSB accredited college of business. Three hundred and twenty eight of the subjects were freshmen, 380 were seniors, and 109 were working managers and professionals enrolled in a night-time MBA program. Overall, the respondents included 438 male students and 379 female students. Exposure to ethics in the curriculum had a significant impact on student perceptions of what should be the ideal linkages between organizational ethical practices and business outcomes. Gender based differences were found with female students having a higher expectation regarding what should be the “ethics practices and business outcomes” link. Exposure to ethics in the curriculum had a positive moderating influence on the gender-based effects on perceptions of ideal ethical climate. The interaction effect showed that exposure to ethical education may have a positive impact on males and allow them to catch up with females in their ethical sensitivities concerning the ideal linkage between organizational ethical behavior and business outcomes. Further, consistent with the literature, the study found that gender differences in ethical attitudes regarding the ideal ethical climate, while significant for undergraduates, appeared to narrow considerably for the working professionals who were part-time MBA students. Harsh Luthar is an Associate Professor of Management at Bryant University. He received his Ph.D. from Virginia Polytechnic University, Pamplin College of Business, in the Department of Management. His research interests include international differences and cross-cultural issues impacting global human resource practices, ethical attitudes of students, and the nature of spiritual leadership. Ranjan Karri is an Assistant Professor of Management at Bryant University. He received his Ph.D. in strategic management from Washington State University. His research interests include corporate and business strategies, enterpreneurship, ethical leadership and corporate governance.     

A Proposed Infrastructural Model for the Establishment of Organizational Ethical Systems

We define ethical system infrastructure as being composed of three major factors – means, motivation, and opportunity. Means are defined as organizational rules, policies, and procedures. Motivation focuses upon the values and the interests being pursued by the position occupant and the organizational value system, while opportunity is discussed in terms of the environment in which the dilemma occurs, proposing that position in the hierarchy presents its own unique set of ethical dilemmas. Ethical breeches are discussed in terms of the interactional processes among means, motivation, and opportunity. Finally, a sequential process is suggested to use the infrastructural components to institutionalize organizational ethics training and subsequent behavior.     

Impacts of peers’ unethical behavior on employees’ ethical intention: Moderated mediation by Machiavellian orientation

Research suggests a direct negative relationship between peers’ unethical behavior and employees’ ethical intention. But several possible mechanisms might explain this relationship in more detail. For example, Machiavellianism is a personality trait characterized by interpersonal manipulation and the use of unethical means to achieve certain self‐interested ends, whether useful or pleasant. This article adopts an Aristotelian understanding of philia, related to three goods on which human relationships rest: useful, pleasant, and honest. We propose that Machiavellianism, a self‐interested, pragmatic personality orientation, might explicate the relationship between peers’ unethical behavior and ethical intention. The results of a structural equation model applied to a sample of 436 banking employees in Spain reveals that Machiavellianism partially mediates the relationship between peers’ unethical behavior and employees’ ethical intention. We also find that with a greater level of peers’ unethical behavior, the negative effect of Machiavellianism on ethical intention increases, and that when peers’ unethical behavior is nonexistent, the negative effect of Machiavellianism on ethical intention disappears. These findings advance current literature by revealing that unethical peers can indirectly influence ethical intention, through shaping Machiavellianism. Our study is also the first to show that pairing high Machiavellians with ethical peers can help to cancel out the negative influence of Machiavellianism on ethical intention.     

Are Students Really Less Ethical Than Business Practitioners?

Past research provides evidence of lower ethical standards amongst the student population when compared to business practitioners, using business-based survey instruments. This study examines the adequacy of this conventional research tool by assessing the influence of scenario context (university or business setting) on ethical intentions using data from 243 commerce tertiary students.Students tended to respond more ethically to issues set in a university context than to equivalent issues in a business setting. The tolerance level for unethical behaviour in both contexts was also found to decline with full-time work experience and age. However, full-time work experience appears to be the major variable influencing ethical ratings set in a business context, whereas age was found to predict the ethical judgements of students in the university scenarios. The overall pattern of responses indicates that ethical standards vary according to scenario context.The study illustrates the importance of considering respondents' exposure to the settings concerned when conducting ethical studies using scenario-based instruments. Respondents should have adequate knowledge and exposure to the type of setting they are asked to evaluate. Results of this study argue for caution in the interpretation of past findings involving student samples responding to ethical issues in business settings.