How bad is your company? Measuring corporate wrongdoing beyond the magic of ESG metrics

Most attempts to measure corporate wrongdoing rely on data and indices sold by environmental, social, and governance (ESG) data providers. Developed for investors and market players, ESG data have been widely used in academia, but so far, little research has been conducted to assess and overcome the limitations of ESG indices. In this article, we take a first step in this direction and propose using an M-quantile regression approach to develop an index of corporate wrongdoing, understood as firms' involvement in controversies over universal human rights. We apply our proposed methodology to a novel and unique hand-collected dataset of 380 large publicly-listed firms from both advanced and emerging economies, covering the period 2003–2012. We discuss the importance of these indices for managers and practitioners.     

Whistleblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions,Actions, and Retaliation

Whistleblowing on organizational wrongdoing is becoming increasingly prevalent. What aspects of the person, the context, and the transgression relate to whistleblowing intentions and to actual whistleblowing on corporate wrongdoing? Which aspects relate to retaliation against whistleblowers? Can we draw conclusions about the whistleblowing process by assessing whistleblowing intentions? Meta-analytic examination of 193 correlations obtained from 26 samples (N = 18,781) reveals differences in the correlates of whistleblowing intentions and actions. Stronger relationships were found between personal, contextual, and wrongdoing characteristics and whistleblowing intent than with actual whistleblowing. Retaliation might best be predicted using contextual variables. Implications for research and practice are discussed.     

Ethical Codes of Conduct and Organizational Context: A Study of the Relationship Between Codes of Conduct, Employee Behavior and Organizational Values

Codes of ethics are being increasingly adopted in organizations worldwide, yet their effects on employee perceptions and behavior have not been thoroughly addressed. This study used a sample of 613 management accountants drawn from the United States to study the relationship between corporate and professional codes of ethics and employee attitudes and behaviors. The presence of corporate codes of ethics was associated with less perceived wrongdoing in organizations, but not with an increased propensity to report observed unethical behavior. Further, organizations that adopted formal codes of ethics exhibited value orientations that went beyond financial performance to include responsibility to the commonweal. In contrast to corporate codes of ethics, professional codes of ethical conduct had no influence on perceived wrongdoing in organization nor these codes affect the propensity to report observed unethical activities.     

Perceptions of Business Ethics in a Multicultural Community: The Case of Malaysia

Leaders and managers of today's multinational corporations face a plethora of problems and issues directly attributable to the fact that they are operating in an international context. With work-sites, plants and/or customers based in another country, or even several countries, representing a vast spectrum of cultural differences, international trade and offshore operations, coupled with increased globalisation in respect to political, social and economic realities, contribute to new dilemmas that these leaders must deal with. Not the least of these being a Code of Ethics and ethical decision making.This paper examines the differences in culture between a group of managers from the United States and similar group from Croatia using Hofstede's theory of International Cultures. The study explores how these cultural dimensions may help in our understanding of the differences in reported whistleblowing. The authors then postulate four hypotheses regarding various aspects of whistleblowing. These Hypotheses were than tested using a survey administered to a sample of U.S.A. and Croatian managers. Finally, the paper discusses the findings and practical implications for contemporary managers in the international arena.     

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.     

Culture and Whistleblowing An Empirical Study of Croatian and United States Managers Utilizing Hofstede's Cultural Dimensions

Leaders and managers of today's multinational corporations face a plethora of problems and issues directly attributable to the fact that they are operating in an international context. With work-sites, plants and/or customers based in another country, or even several countries, representing a vast spectrum of cultural differences, international trade and offshore operations, coupled with increased globalisation in respect to political, social and economic realities, contribute to new dilemmas that these leaders must deal with. Not the least of these being a Code of Ethics and ethical decision making.This paper examines the differences in culture between a group of managers from the United States and similar group from Croatia using Hofstede's theory of International Cultures. The study explores how these cultural dimensions may help in our understanding of the differences in reported whistleblowing. The authors then postulate four hypotheses regarding various aspects of whistleblowing. These Hypotheses were than tested using a survey administered to a sample of U.S.A. and Croatian managers. Finally, the paper discusses the findings and practical implications for contemporary managers in the international arena.     

An Analysis of Australian Final Year Accountancy Students' Ethical Attitudes

Ethical behaviour is a critical component of theaccountancy/auditing profession. This study examines ethicalattitudes of final year accountancy students in Australia.Students were surveyed as to whether they would accept a bribe todefraud a public institution (Taxation Office) or shareholders,cheat in an exam, and/or become whistleblowers in differingcircumstances. A high proportion of students appeared willing toaccept the bribe (25% Taxation Office and 20% shareholders). Thispercentage plummeted when the risk of being caught was introduced(9% Taxation Office and 6% shareholders). The difference betweenmale and female responses was significant. Males appeared fourtimes more likely than females to act unethically. 28% ofstudents appeared willing to cheat in an exam. Interestingly,the difference between male and female responses was lesssignificant. Again the risk of being caught drastically reducedthese figures (6%). Just greater than 50% of students appearedwilling to become whistleblowers for the frauds against theTaxation Office and shareholders, however, only 8% wouldwhistleblow on cheating in an examination. Finally theimplications for educators, attempting to provide effectiveethical education for trainee accountants/auditors, are considered.     

Re-evaluating the Realist Conception of War as a Business Metaphor

The state of war is a popular metaphor employed by many business writers seeking to explain the imperatives of strategic decision-making. It is a metaphor which draws on a realist characterisation of war as a Hobbesian state of nature devoid of a moral dimension. However, the work of Walzer (1977) has demonstrated that rules of war, established over generations and across cultural divides, play a significant role in the conduct of warfare. Through identifying and analysing rules of war in parallel with ethical dilemmas in business life, such as whistleblowing, it is possible to develop a more sophisticated understanding of the war metaphor in place of simplified, state of nature realism. This alternative version of the war metaphor is a useful means of introducing students to Aristotlean virtues as well as challenging their preconceptions about the nature of business activity.     

Ethics Training and Businesspersons’ Perceptions of Organizational Ethics

Ethics training is commonly cited as a primary method for increasing employees ethical decision making and conduct. However, little is known about how the presence of ethics training can enhance other components of an organization's ethical environment such as employees perception of company ethical values. Using a national sample of 313 business professionals employed in the United States, the relationship between ethics training and perceived organizational ethics was explored. The results of the analysis provide significant statistical support for the notion that businesspersons employed in organizations that have formalized ethics training programs have more positive perceptions of their companies ethical context than do individuals employed in organizations that do not. The analysis also indicated that job satisfaction was related to employees attitudes about their ethical context. The managerial implications of the results are outlined, along with the limitations of the study and recommendations for future research.     

Business Ethics Index: USA 2006

This study continues the systematic measurement of consumers’ sentiments toward business ethical practices first measured in 2004. The Business Ethics Index (BEI) comprises the four measurements representing the dimensions of “personal–vicarious” and “past–future”. A professional telephone interviewing company was hired to collect five consecutive waves of 1045 telephone interviews in an omnibus procedure. The collection of the five waves represented a sampling process which enables the creation of confidence intervals for this, and subsequent, measurements of the BEI. The overall BEI fell to 102.6 (from a revized 108.7 in 2004). The drop was attributed to a fall in consumer expectations of the future ethical behavior of business. John Tsalikis is an Associate Professor of Marketing at Florida International University. His articles have appeared in the Journal of the Academy of Marketing Science, Journal of Business Ethics, and Psychology in Marketing. Bruce Seaton is an Associate Professor of Marketing at Florida International University. His research interests include the role of national stereotyping in consumer choice and the application of experimental methods to investigate models of business ethics. His articles have appeared in the Journal of Advertising, Journal of Business Research, and Journal of Global Marketing.     

Insights on the go: Leveraging business podcasts to enhance organizational performance

Managers need to stay connected to current trends and gather new insights to maximize organizational performance, but many struggle to find the time to read enough to remain informed. Business podcasts—digital episodic series covering a variety of business topics in an easy-to-consume audio format—are a relatively new tool that can help solve this dilemma. Business podcasts that offer unique perspectives on salient topics can teach managers valuable techniques for dealing with common business issues and keep them up-to-date on the latest business news. In this article, we introduce 10 popular business podcasts and discuss the insights for improving organizational performance offered in exemplary episodes of each series. Episode content ranges from detailed profile interviews of top executives and their day-to-day activities to the impact of national and global events on specific industries or businesses.     

Business Ethics – Deontologically Revisited

In this paper we look at business ethics from a deontological perspective. We address the theory of ethical decision-making and deontological ethics for business executives and explore the concept of “moral duty” as transcending mere gain and profit maximization. Two real-world cases that focus on accounting fraud as the ethical conception. Through these cases, we show that while accounting fraud – from a consequentialist perspective – may appear to provide a quick solution to a pressing problem, longer term effects of fraud and misconduct make ethical implications more apparent. Widely used compensation schemes also may have the tendency to fuel unethical behavior. We argue that an ethical reinvigoration of the business world can only be accomplished by encouraging the business realm to impose upon itself some measure of self-regulating along the lines of deontological ethics. Principles of deontology should guide executive decision-making particularly when executives are tempted to operate outside of codified legislation or are bound to act under judicial-free conditions. Carmelita Troy is an Assistant Professor of Accounting in the Graduate School of Business and Public Policy at the Naval Postgraduate School, Monterey, California. Micewski, Edwin R., Dr., Brigadier General, is social philosopher and Director of the Institute for Human and Social Science of the Austrian National Defence Academy, Vienna. Member of the Science Commission of the Austrian Ministry of Defence and Visiting Professor at the Department of National Security Affairs of the Naval Postgraduate School in Monterey, California. Research and teaching areas: Social and cultural philosophy, military ethics, (military) professionalism and leadership, postmodernism and war. Recent publication: (Ethics and international Politics (2001); Civil- Military Aspects of Military Ethics (2003/2005); Terror and Terrorism- History of Ideas and Philosophical-Ethical Reflections (2005); Asymmetry and Western Society - Culture-critical Reflections(2006).     

The International Business Ethics Index: Japan

The Business Ethics Index (BEI) was expanded in Japan. The overall BEI for Japan stands at 99.1 – slightly on the negative side. The component BEI patterns were similar to those in the U.S. In an open-ended question about their ethical experiences as consumers, the Japanese were concerned about customer service and good management practices. John Tsalikis is an Associate Professor of Marketing at Florida International University. His articles have appeared in the Journal of the Academy of Marketing Science, Journal of Business Ethics, and Psychology in Marketing. Bruce Seaton is an Associate Professor of Marketing at Florida International University. His research interests include the role of national stereotyping in consumer choice and the application of experimental methods to investigate models of business ethics. His articles have appeared in the Journal of Advertising, Journal of Business Research, and Journal of Global Marketing.