The Effects of Contextual and Wrongdoing Attributes on Organizational Employees’ Whistleblowing Intentions Following Fraud

Recent financial fraud legislation such as the Dodd–Frank Act and the Sarbanes–Oxley Act (U.S. House of Representatives, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, [H.R. 4173], 2010; U.S. House of Representatives, The Sarbanes–Oxley Act of 2002, Public Law 107-204 [H.R. 3763], 2002) relies heavily on whistleblowers for enforcement, and offers protection and incentives for whistleblowers. However, little is known about many aspects of the whistleblowing decision, especially the effects of contextual and wrongdoing attributes on organizational members’ willingness to report fraud. We extend the ethics literature by experimentally investigating how the nature of the wrongdoing and the awareness of those surrounding the whistleblower can influence whistleblowing. As predicted, we find that employees are less likely to report: (1) financial statement fraud than theft; (2) immaterial than material financial statement fraud; (3) when the wrongdoer is aware that the potential whistleblower has knowledge of the fraud; and (4) when others in addition to the wrongdoer are not aware of the fraud. Our findings extend whistleblowing research in several ways. For instance, prior research provides little evidence concerning the effects of fraud type, wrongdoer awareness, and others’ awareness on whistleblowing intentions. We also provide evidence that whistleblowing settings represent an exception to the well-accepted theory of diffusion of responsibility. Our participants are professionals who represent the likely pool of potential whistleblowers in organizations.     

Effects of Personal Values on Auditor’s Ethical Decisions: A Comparison of Pakistani and Turkish Professional Auditors

The aim of this study is to investigate the effects of personal values on auditor’s ethical decision-making in two countries, namely, Pakistan and Turkey. This study is the first that empirically addresses the role of values in the ethical decision-making processes of Pakistani and Turkish Professional auditors. This study surveys a random sample of these countries' professional certified auditors to assess their value preferences and reactions to an ethical dilemma. This study measures practicing auditors' value preferences by using the Rokeach value survey (RVS), and a case study is used to measure the reactions to an ethical dilemma involving client pressure for aggressive financial reporting. This study did not find statistically significant difference between the mean values of moral intensity in these two countries. On the other hand, we found statistically significant differences between the terminal and instrumental values of the auditors in the countries studied. This study suggests that perceptions of moral intensity influenced both ethical judgments and behavioral intensions.     

Effects of Earnings Forecasts and Heightened Professional Skepticism on the Outcomes of Client–Auditor Negotiation

Dismissal is a major issue for distributive justice at work, because it normally has a drastic impact on an employee’s livelihood, self-esteem and future career. This article examines distributive justice under the US’s employment-at-will (EAW) system and New Zealand’s just-cause dismissal system, focusing on the three main categories of dismissal, namely misconduct, poor performance and redundancy. Under EAW, employees have limited protection from dismissal and remedies are restricted to just a few so-called exceptions. Comparatively, New Zealand’s just-cause system delivers much more just outcomes, both in terms of remedies and punishments. Despite a few shortcomings, it should be considered as a reasonable reference for policy changes in the US.     

Do Ethics Matter? Tax Compliance and Morality

In this article we argue that puzzle of tax compliance can be explained, at least in part, by recognizing the typically neglected role of ethics in individual behavior; that is, individuals do not always behave as the selfish, rational, self-interested individuals portrayed in the standard neoclassical paradigm, but rather are often motivated by many other factors that have as their main foundation some aspects of “ethics.” We argue that it is not possible to understand fully an individual’s compliance decisions without considering in some form these ethical dimensions. Specifically, we argue here that there is much direct and indirect evidence that ethics differ across individuals and that these differences matter in significant ways for their compliance decisions. We then put this in the larger context of the inability of the standard neoclassical paradigm to explain compliance of at least some individuals, and we suggest several possible avenues by which theory can be expanded to incorporate ethics. We conclude by arguing that a full house of compliance strategies is needed to combat tax evasion, strategies that include the traditional “enforcement” paradigm suggested by and consistent with neoclassical theory, a less traditional “service” paradigm that recognizes the important role of a “kinder and gentler” tax administration in encouraging compliance, and, importantly, a new “trust” paradigm that is built on the foundation of ethics, in which the tax administration must recognize that it can erode the ethics of taxpayers by its own decisions.     

Ethical Reputation of Financial Institutions: Do Board Characteristics Matter?

This paper examines the association between board characteristics and the ethical reputation of financial institutions. Given the pivotal governance role of the board of directors and the value-relevance of ethical corporate behavior, we postulate a positive relationship between ethical reputation and board features that foster more effective monitoring and oversight. Using a sample of large financial institutions from 13 different countries, we run several alternative panel regressions of ethical reputation on board characteristics and firm-specific controls. Our results demonstrate that the ethical reputation of financial institutions is positively associated with board size, gender diversity, and CEO duality, while being negatively related to the busyness of the board members and a composite index reflecting poor monitoring. Nevertheless, inconsistent with our hypothesis, we also document that financial institutions with less frequent board meetings have better ethical reputation. Overall, our empirical findings suggest that stronger board oversight may promote ethical behavior in the financial industry.     

Does Being Social Matter? Effects of Enabled Commenting on Credibility and Brand Attitude in Social Media

Public relations practitioners are actively building relationships with bloggers to obtain high-credibility brand mentions and reviews. Practitioners may request bloggers limit comments to maintain control over messages and constrain dissonant perspectives; however, the impact of limiting social features of blogs is unknown. Utilizing source credibility and warranting theory, this article examines the relationship between enabled comments on blogs and brand attitudes, with the moderating variables of credibility and expertise, from both a public relations and consumer behavior perspective. Using an online experiment (N = 527) we found that socialness increases perceptions of blogger expertise, brand attitudes, and purchase intention, but not credibility.     

Modeling the Effects of Sponsorship-Linked Marketing: When Does Memory Matter?

The current study examined the mediating and moderating roles of sponsorship-linked marketing on the relationships among cognitive, affective, and behavioral sponsor evaluations. A panel of National Association for Stock Car Auto Racing (NASCAR) fans (N = 249) participated in an online survey, and the survey included multi-item scales including sponsor-brand recognition, consumer perceptions of property-based articulation, sponsorship-themed advertising, sponsorship-themed promotion, sponsor attitude, and purchase intention. Visit to sponsors' exhibits experience was incorporated as a moderator. This study provides empirical support for the full mediating role of sponsorship-linked marketing efforts in leveraging high levels of sponsor brand recognition into more desirable brand outcomes.     

The Effects of Current Income Attributes on Nonprofessional Investors’ Say-on-Pay Judgments: Does Fairness Still Matter?

The say-on-pay (SOP) regulation in the Dodd-Frank Act (Public L. no. 111–203, H.R. 4173 2010) requires publicly-traded U.S. firms to hold a nonbinding, advisory shareholder vote on executive compensation. Advocates claim that SOP voting gives shareholders a mechanism to hold managers and boards more accountable. Critics contend that SOP votes may simplistically reflect shareholders’ reactions to the overall value of CEO compensation or the firm’s net income. However, based on prior research, we contend that market participants’ SOP votes are likely to consider current income attributes. For example, the market punishes firms that do not meet or beat benchmarks such as analyst earnings expectations, and that shareholders scrutinize the quality of the income sources of firms that consistently meet/beat analyst expectations. We thus expect that more shareholders will provide ‘agree’ SOP votes for a firm that consistently meets/beats analyst forecasts and does so when net income does not include (rather than includes) nonrecurring gains. Further, we consider whether perceptions about the fairness of CEO compensation play a mediating role in the relationship between the interaction of these two current income attributes and SOP votes. Results from an experiment using evening MBA students as participants indicates that the two current income attributes significantly interact with respect to the percentage of agree SOP votes, and that compensation fairness perceptions fully mediate this relationship. Further, the mediating effect of compensation fairness perceptions is robust to including CEO-level and other determinants found in prior research. We conclude with a discussion of our findings and their implications for public policy and research.     

Do Interruptions Pay off? Effects of Interruptive Ads on Consumers' Willingness to Pay

We present the results of a study designed to measure the impact of interruptive advertising on consumers' willingness to pay for products bearing the advertiser's brand. Subjects participating in a controlled experiment were exposed to ads that diverted their attention from a computer game they were testing. We measured subjects' willingness to pay for a good associated with the advertised brand. We found that the ads significantly lowered the willingness to pay for goods associated with the advertising brand. We do not find conclusive evidence that providing some level of user control over the appearance of ads mitigates the negative impact of ad interruption. Our results contribute to the research on the economic impact of advertising, and introduce a method of measuring actual (as opposed to self-reported) willingness to pay in experimental marketing research.     

Size, value and liquidity. Do They Really Matter on an Emerging Stock Market?

The paper extends the evidence on factors determining stock prices on emerging markets by focusing on the most advanced stock market in Central and Eastern Europe, the Polish market. Besides market, size and value factors, we investigate whether liquidity is a priced risk factor, addressing the hypothesis of its particular relevance in emerging markets. Our results support existing evidence for developed markets regarding market, size, and value factors. Contrary to the expectation that liquidity is a priced factor on emerging markets, we do not find evidence supporting this hypothesis. Analyzing specific market characteristics, we consider possible explanations behind these findings.     

A Study of Why Anomic Employees Harm Co-workers: Do Uncompassionate Feelings Matter?

Although anomic feelings have been found to lead employees to unethical performance, little is known about why this relationship is possible. The aim of this study is to test a compassion-based explanation of why anomic employees harm co-workers by displaying interpersonal deviance. The prediction is made that once sociological anomie (from the Greek, an-: absence, and -nomos: law) enters organizations in the form of employees’ private feelings of anomie—i.e., “anomia”—, this anomia will individually move staff to be uncompassionate in the workplace. Three uncompassionate feelings toward co-workers are then hypothesized to mediate the relationship between anomia and interpersonal deviance: (i) negative judgments about others, (ii) over-identification, and (iii) isolation. Data were collected from 280 employees at ten hotels in the Canary Islands (Spain). The results indicated that (a) anomia was significantly and positively linked to uncompassionate feelings and interpersonal deviance, (b) but only negative judgments about others mediated the anomia effects on interpersonal deviance. Findings suggest to managers that by spreading ethical standards that discourage negative judgments about others in the workplace, they can neutralize the mechanisms leading anomia to interpersonal deviance.     

Do Consumption Goals Matter? The Effects of Online Loyalty Programs in the Satisfaction‐Loyalty Relation

This study investigates the effects of online loyalty programs in the customer satisfaction‐loyalty relationship. It is proposed that loyalty programs may induce loyalty toward programs (program loyalty), which may then influence loyalty toward stores (store loyalty). According to the results of a two‐wave survey, consumption goals matter in the effects of program loyalty on online store loyalty. For consumers with hedonic goals, hedonic program loyalty (e.g., free gifts) has a significant effect on online loyalty. For consumers with utilitarian goals, however, utilitarian program loyalty (e.g., coupons) has a significant influence on online loyalty. Theoretical and managerial implications are also discussed.     

Do Perceptions of Ethical Conduct Matter During Organizational Change? Ethical Leadership and Employee Involvement

Ethical leadership matters in the context of organizational change due to the need for followers to trust the integrity of their leaders. Yet, there have been no studies investigating ethical leadership and organizational change. To fill this gap, we introduce a model of the moderating role of involvement in change. Organizational change and involvement in change are proposed as context-level moderators in the relationships of ethical leadership and work-related attitudes and performance. We employ a sample of 199 supervisor–subordinate pairs from a wide variety of organizations. Results support a three-way interaction (ethical leadership, organizational change, and involvement in change) for performance and OCBs. Our results have important implications for organizational change since ethical leadership appears to complement follower involvement when change is happening.     

The Bright and Dark Sides of Religiosity Among University Students: Do Gender, College Major, and Income Matter?

We develop a theoretical model involving religiosity [intrinsic (I), extrinsic-social (E _s), and extrinsic-personal (E _p), Time 1], Machiavellianism (Time 2), and propensity to engage in unethical behavior (Time 2) to investigate direct and indirect paths. We collected two-wave panel data from 359 students who had some work experiences. For the whole sample, intrinsic religiosity (I) indirectly curbed unethical intentions through the absence of Machiavellianism, the bright side of religiosity. Both extrinsic-social (E _s) and extrinsic-personal (E _p) directly, while extrinsic-social (E _s) indirectly, exacerbated unethical intentions, the dark side of religiosity. Multiple-group analyses across gender, college major, and income showed that the bright side existed directly for low-income students, but indirectly for males and females, business majors, and low-income students. Our novel finding showed that E _p undermined unethical intentions indirectly for females. For the dark side, E _s incited unethical intentions directly for males, business students, and low-income individuals, but indirectly for females, psychology majors, and low-income people. The Machiavellianism–unethical intentions relationship was the strongest for high-income participants. Religiosity had the highest number of significant paths for low-income individuals and the strongest dark side for males and high-income students, but the highest bright outcome for females. Our novel, original findings foster theory development and testing, add new vocabulary to the conversation of religiosity and unethical intentions, and improve practice.     

Exploring the Antecedents of Brand Loyalty and Electronic Word of Mouth in Social-Media-Based Brand Communities: Do Gender Differences Matter?

ABSTRACT

Recently, social media have emerged as key marketing communication channels. In this context, consumers are increasingly gathering in online communities which have been identified as social-media-based brand communities (SMBBCs). However, notwithstanding scholars' attention towards SMBBCs, the role of consumers' gender in developing brand loyalty intention (BLI) has been scarcely explored by literature. Moreover, scant attention has been given to the analysis of whether gender is related to different propensities towards brand recommendation—identified as a proactive behavior towards a positive electronic word of-mouth diffusion (E-WOM)—in the social media context. Hence, this research aims to explore the antecedents of BLI and E-WOM by focusing on consumers' gender differences. A structural equation model has been created based on 250 surveys collected among SMBBCs of an American sportswear brand. The results showed that male consumers' BLI is influenced by engagement in SMBBCs. Instead, brand trust was the main antecedent of females' BLI.     

Innovation and Exporting: Does Quality Matter?

We study the effect of innovation on a firm’s propensity to export, developing a simple model where heterogeneous firms operate in a monopolistically competitive market and set their prices as a markup above the marginal cost. The key proposition of our model is that firms that invest in better quality products are more likely to export. We test it using Italian firms’ data. Econometric results suggest that innovation, defined as quality upgrading, has a significant effect on the firms’ propensity to export; and, for those who are already exporting, innovation—defined as new products—has a significant effect on a firm’s turnover.