Ethical decision–making: a multidimensional construct

Poor ethical decision–making costs industry billions of dollars a year and damages the images of corporations. Thus, by answering the question ‘Why do individuals behave as they do when confronted with ethical issues?’ ethical theory can provide businesses with a means to create a more ethical climate and a more successful operation. This study tested the Ethical Decision–Making Model with accountability (Beu & Buckley 2001), which uses theory that suggests that ethical behavior is influenced by the individual, the issue, social relationships (accountability), and the organization in which the employee is embedded (Brass, Butterfield & Skaggs 1988; Frink & Klimoski 1998). The results showed that individuals’ thought processes (cognitive moral development), personalities (locus of control, hostility and aggression, Machiavellianism), and gender influence how they respond to ethical dilemmas, as well as the salience of the moral issue (moral intensity) and the environmental context (work/school).     

The impact of consumer decision‐making styles on consumer confusion in Mauritius: An empirical analysis

This article investigates the effects of consumer decision‐making styles on consumer confusion and harm. While consumer confusion has been well documented in the literature, this investigation attempts to bridge our understanding on its relationship with consumer decision‐making styles. Empirical data was collected from a field survey where 400 consumers selected at 20 supermarkets in Mauritius were asked to respond to a questionnaire measuring three variables under study: consumer confusion, consumer decision‐making styles, and situational factors. Findings from the MANOVA parametric test showed that there is a significant difference between consumer decision‐making styles and consumer confusion. Even when covariate situational factors were controlled through the parametric test MANCOVA, results still showed a significant difference between consumer decision‐making styles and consumer confusion. More specifically, ANCOVA tests showed that the findings were specifically significant for three types of confusion: product confusion, packaging confusion, and product complexity. The study tends to confirm that a consumer's style of decision making does impact on consumer confusion.     

Ethical theory in business ethics: A critical assessment

How is ethical theory used in contemporary teaching in business ethics? To answer this question, we undertook a survey of twenty-five of the leading business ethics texts. Our purpose was to examine the ways in which normative moral theory is introduced and applied to cases and issues. We focused especially on the authors' views of the conflicts and tensions posed by basic theoretical debates. How can these theories be made useful if fundamental tensions are acknowledged? Our analysis resulted in a typology, presented here, of the ways in which normative theory, and the difficulties within it, are handled in business ethics texts. We conclude that there is a serious lack of clarity about how to apply the theories to cases and a persistent unwillingness to grapple with tensions between theories of ethical reasoning. These deficiencies hamper teaching and ethical decision-making.     

Ethical decision-making in business: Behavioral issues and concerns

This article examines selected behavioral aspects of ethical decision making within a business context. Three categories of antecedents to ethical decision behaviors (individual differences, interpersonal variables, and organizational variables) are examined and propositions are offered. Moral development theory and expectancy theory are then explored as possible bases for a theory of ethical decision making. Finally, means of improving ethical decision making in firms are explored.Stephen B. Knouse is Professor of management at the University of Southwestern Louisiana. His research interests are in behavioral aspects of business ethics, employment selection, and impression management in organizations. His work has appeared in a number of journals includingJournal of Business Ethics, Personnel Psychology, andPersonnel.Robert A. Giacalone is Associate Professor of Management Systems at the E. Claiborne Robins School of Business, University of Richmond. His work has appeared inHuman Relations, Business and Society Review, Journal of Business Ethics, Group and Organization Studies, Journal of Social Psychology, as well as in a variety of other journals and books.     

The role of existentialism in ethical business decision‐making

This paper presents an integrated model of ethical decision‐making in business that incorporates teleological, deontological and existential theory. Existentialism has been curiously overlooked by many scholars in the field despite the fact that it is so fundamentally a theory of choice. We argue that it is possible to seek good organisational ends (teleology), through the use of right means (deontology), and enable the decision‐maker to do so authentically (existentialism). More specifically, we provide a framework that will enable the decision‐maker to integrate the various ethical schools of thought available to them and to apply this framework in the ethical decision‐making process. The model presented makes explicit the existential position of choice and takes into account other contextual moderating factors. Negative Option Marketing is used as a running application to illustrate the role of existentialism in the decision‐making process.     

Ethical aspects of e‐business: the use of codes of conduct

This paper examines the establishment and enforcement of codes of conduct governing the use of Internet technology as a means of providing a basis of trust in the e‐business context. The discussion draws on the findings of a survey of 80 UK organisations, and considers the relationship between factors such as organisation size, type, use of IT, the length of time with an Internet connection and the use of a code of conduct, as well as the specific areas of Internet technology covered by codes of conduct. The paper also investigates the extent of disciplinary cases associated with the misuse of Internet technology, as well as the ownership and responsibility for implementing codes of conduct. The survey results suggest that the use of codes of conduct varies significantly from organisation to organisation, and that those who initiate such codes are not those seen as being responsible for implementing them. The results also indicate that a growing number of employees are disciplined for misuse of facilities offered by Internet technology.     

Ethical implications of business format franchising

Franchising in the business format sector accounted for approximately 35 percent of retail sales in the U.S. in 1991. Consequently, the franchising industry has a clear ethical responsibility to the public. At the same time, there exists an ethical obligation of the two major factors in the industry — the franchisor and the franchise — toward each other. Because the franchise agreement, which is the basis of the relationship, is originated by the franchisor, an asymmetrical distribution of power often exists, resulting in opportunistic behavior by the franchisor. In other cases, questionable or unethical practices by franchisees likewise result in conflict. This paper examines some of the basic areas of the franchise relationship which result in conflict, and discusses the situation analysis in business format franchising, which shows promise for reduction of conflict and unethical behavior for the future.Gordon Storholm is Associate Professor of Marketing at St. John's University, New York, N.Y. He is an active member of the Society of Franchising and has published several articles in the franchising field. He has contributed to this Journal and has several years' experience as a consultant in the Franchising and Marketing fields.Eberhard E. Scheuing is Professor of Marketing at St. John's University, New York, N.Y. He is Director of the Business Research Institute and has published several books and articles in the marketing field. He is widely recognized as a leading authority in the field of ethics in service quality.     

Ethical behavior in business: A hierarchical approach from the talmud

The Talmud, the compilation of Jewish oral law, is over 1500 years old and includes extensive discussions of business ethics. This paper presents four levels of ethical behavior in business gleaned from the words of the Talmud. At the lowest level, an individual is just barely inside the law; the highest level is the way of the pious. The author has attempted to relate the ethics in ancient business situations to business practices today. Hershey H. Friedman is Professor of Marketing at Fordham University. In 1983 he received the Community Appreciation Award. Most of his publications have appeared in Journal of Advertising Research, Journal of Marketing and Public Policy, Journal of Applied Psychology, Decision Sciences, Akron Business and Economic Review, Journal of Statistical Computation and Simulation, Journal of Communication, and the Journal of Social Psychology.     

Ethical reasoning in business‐to‐business negotiations: evidence from relationships in the chemical industry in Germany

This article explores managers’ ethical reasoning for behaviors in price negotiations using evidence from 15 in‐depth interviews conducted with sales and purchasing representatives in the chemical industry in Germany. Applying transaction cost economics, we find that negotiators in commoditized market‐like exchanges either refer to deontological norms such as not to lie, or they neglect a role for ethics, arguing that distributive negotiation is per se opportunistic. In contrast, exchanges of products with higher asset specificity lead to stronger informational integration which is supported with teleological justifications. Some negotiators use teleological justification to build business on trust rather than on economic safeguards as their firm norms would require. For negotiators, our results suggest considering institutional context and adjusting ethical reasoning to the negotiation situation. Firms need to recognize and find ways to address the potential conflicts of their internal norms with their frontline managers’ attempts to act in the firms’ best economic and ethical interests.     

Ethical decision making: An investigation of services marketing professionals

This study investigates the relative influences of professional values and selected demographic variables on the ethical perceptions of services marketing professionals. The relationship between ethical perceptions and ethical judgments of service marketers is also examined. The data were obtained from a mail survey of the American Marketing Association's professional members of service industries. The survey results indicate a positive relationship between a service professional's professional values and his/her perceptions of ethical problems. The results also suggest that ethical judgments of a service professional can be partially explained by his/her perceptions of ethical problems. Implications of the research findings were discussed. Anusorn Singhapakdi is Associate Professor of Marketing at Old Dominion University. His research has been primarily in the areas of marketing/business ethics. He published in various journals such as Journal of the Academy of Marketing Science, Journal of Business Ethics, Journal of Macromarketing, Journal of Personal Selling & Sales Management, and Journal of Public Policy & Marketing. He has presented papers at various professional conferences including the American Marketing Association and the Academy of Marketing Science.C. P. Rao is Eminent Scholar and William B. Spong Chair in Marketing and International Business at Old Dominion University. He has also served on the Marketing faculty at the University of Arkansas and at the Indian Institute of management. He participated in the ICAME program at Stanford University. Dr. Rao was awarded the C.P.M. (Certified Purchasing Manager) by the National Association of Purchasing Manager. Dr. Rao is a frequent contributor to many leading journals and has received the Distinguished Faculty Research Award in the College of Business Administration at the University of Arkansas three times. Scott J. Vitell is Associate Professor and Phil B. Hardin Chair of Marketing at the University of Mississippi. His work has appeared in the Journal of the Academy of Marketing Science, Journal of Business Ethics, Journal of Business Research, Journal of Macromarketing, Journal of Personal Selling & Sales Management, and Research in Marketing as well as various other journals and proceedings.     

Ethical decision making: A review of the empirical literature

The authors review the empirical literature in order to assess which variables are postulated as influencing ethical beliefs and decision making. The variables are divided into those unique to the individual decision maker and those considered situational in nature. Variables related to an individual decision maker examined in this review are nationality, religion, sex, age, education, employment, and personality. Situation specific variables examined in this review are referent groups, rewards and sanctions, codes of conduct, type of ethical conflict, organization effects, industry, and business competitiveness. The review identifies the variables that have been empirically tested in an effort to uncover what is known and what we need to know about the variables that are hypothesized as determinants of ethical decision behavior.Robert C. Ford is a professor of management at the University of Alabama at Birmingham. He has authored or coauthored two texts and a number of published articles in a variety of journals including theAcademy of Management Journal, Journal of Management, Journal of Applied Psychology, California Management Review, andBusiness Horizons. He is the incoming President of the Southern Management Association and has served the Academy of Management as Chairs of the Management History Division, the Management Education and Development Division, and Placement Director.Woodrow D. Richardson is an assistant professor at the University of Alabama at Birmingham. He has published inHealth Care Management Review, Simulation & Gaming, andSmall Business Controlling. He teaches courses in Business & Society and Business Policy, and he was the recipient of the University Excellence in Teaching Award in 1989.     

Capital structure decision making: A model for family business

Most theoretical and empirical studies of capital structure focus on public corporations. Only a limited number of studies on capital structure have been conducted on small-to-medium size enterprises (SMEs), and this deficiency is particularly evident in investigations into factors that influence funding decisions of family business owners.Theory indicates that there is a complex array of factors that influence SME owner-managers' financing decisions. Recent family business literature suggests that these processes are influenced by firm owners' attitudes toward the utility of debt as a form of funding as moderated by external environmental conditions (e.g., financial and market considerations).A number of other factors have been shown to influence financing decisions including culture; entrepreneurial characteristics; entrepreneurs' prior experiences in capital structure; business goals; business life-cycle issues; preferred ownership structures; views regarding control, debt–equity ratios, and short- vs. long-term debt; age and size of the firm; sources of funding for growth; attitudes toward debt financing; issues relating to independence and control; and perceived risk and attitudes toward personal risk.Although these factors have been identified, until now there does not appear to have been any attempts to develop empirically-based models that show relationships between these factors and family business owners' financing decisions. Utilizing theories derived from divergent disciplines, this study develops an empirically tested structural equation model of financing antecedents of family businesses. Participants of our study involved a random sample of 5000 business owners who were mailed a 250-item Australian Family and Private Business questionnaire developed specifically for this investigation.Notably, our findings reveal that firm size, family control, business planning, and business objectives are significantly associated with debt. Small family businesses and owners who do not have formal planning processes in place tend to rely on family loans as a source of finance. However, family businesses in the service industry (e.g., retailers and wholesalers) are less likely to use family loans as are those owners who are planning to achieve growth through new products or process development. Use of capital and retained profits is likely for family businesses planning to achieve growth through an increase in sales but less is likely for family businesses in the manufacturing sector and lifestyle firms. In addition, debt and family loans are negatively related to capital and retained profits. Equity is a consideration for owners of large businesses, young firms, and owners who plan to achieve growth through increasing profit margins. However, equity is less likely to be a consideration for older family business owners and owners who have a preference for retaining family control.Our findings suggest that the interplay between multiple social, family, and financial factors is complex. In addition, our findings indicate the importance of utilizing theories that also help to explain behavioral factors (e.g., owners' needs to be in control) that affect financial structure decision-making processes. Practitioners and researchers should consider the dynamic interplay among business characteristics (e.g., size or industry), behavioral aspects of business financing (e.g., business objectives), and financial factors (e.g., gearing levels) when working with and researching family enterprises.     

Ethical decision‐making in Islamic financial institutions in light of Maqasid Al‐Sharia: A conceptual framework

This article develops a conceptual framework for ethical decision‐making in Islamic financial institution based on the Islamic methodological approaches on ethics. While making use of the similarities between the scientific method and the Islamic jurisprudence method, a framework is developed by means of argumentation and reasoning to integrate Sharia doctrines with the “plan, do, check and act” (PDCA) cycle as a managerial tool. Using Al‐Raysuni's analysis of Al‐Shatibi's work on maqasid al‐sharia, this article develops a framework to assess the ethical aspects of Islamic financial operations, which is then applied to hypothetical cases. This approach can help overcome the methodological deficiencies in measuring ethical performance in Islamic finance by focusing on the process of ethical decision‐making that leads to the outcomes of organizational behavior beyond legality of contracts. The framework outlines the conditions under which an activity that is considered legal and permissible contractually could lead to outcomes that can make it ethical or unethical.     

Ethical consumer decision‐making: The role of need for cognition and affective responses

Most of the academic research in the field of consumer ethics has focused on the cognitive antecedents and processes of unethical consumer behavior. However, the specific roles of discrete emotions such as fear have not yet been investigated thoroughly. This research examines the role of the need for cognition (NFC), the three affective responses—fear, power, and excitement—and perceived issue importance on moral intensity, ethical perceptions, and ethical intentions for four types of unethical consumer behaviors. A sample of consumers from the two cities of Alexandria and Cairo, Egypt (n = 346) participated in the survey. Most research hypotheses were supported. NFC, issue importance, and affect variables were all predictors of moral intensity, ethical perceptions, and ethical intentions in four different consumer ethics scenarios. The specific predictors varied from one consumer ethics scenario to another, however.     

Cross-cultural business ethics: Ethical beliefs difference between blacks and whites

This study investigates the differences in ethical beliefs between blacks and whites in the United States. Two hundred and thirty four white students and two hundred and fifty five black students were presented with two scenarios and given the Reidenbach-Robin instrument measuring their ethical reactions to the scenarios.Contrary to previous research, the results indicate that the two groups, which belong to different subcultures, have similar ethical beliefs.John Tsalikis, Ph.D., is Assistant Professor of Marketing at Virginia State University. His doctorate is from the University of Mississippi. His research interests include international marketing and causal modeling.Osita Nwachukwu, Ph.D., received his doctorate from the University of Mississippi. Currently he is Assistant Professor of Management at Western Illinois University. His interests include organizational behavior and international business ethics.     

Ethical perceptions of Hong Kong Chinese business managers

This paper investigates ethical perceptions among Hong Kong Chinese managers of themselves and peers according to age, location of education and employment (local vs. multinational), based upon responses to thirteen potentially unethical situations.The major conclusions of the study are: (1) there is little consistency among perceptions of ethical situations; (2) Hong Kong managers perceive their peers as more unethical than themselves; (3) ethical perceptions in some situations are affected by age and to a lesser extent, place of education; and (4) significant interactions were found between age and the nature of employer, as well as between the place of education and the nature of employer.To conclude, the management implications of these findings are discussed.Miss McDonald has for the past five years been Assistant Professor of Marketing and Human Resource Management on the South East Asian postgraduate business programmes of the University of East Asia, Macau. Her commercial experience is in the fields of Advertising, Personnel Consultancy, and Industrial Relations.Dr. Zepp teaches Statistics and Operations Research at the University of East Asia. He was a lecturer at the Ohio State University (USA), where he received his doctorate. He spent 8 years in Africa, teaching at the University of Maiduguri (Nigeria), and the National University of Lesotho. He was an American Fulbright Professor at the Universite d'Abidjan (Ivory Coast), and a statistical consultant to the government of Haiti.     

Graduate students as surrogates for managers in experiments on business decision making

Most laboratory research in business has used graduate or undergraduate business students as subjects. These subjects have been assumed to be suitable surrogates for business managers and, therefore, the experimental results should be applicable to real businesses. This experiment compared the decision making of line managers no lower than second level with that of students with no managerial experience. The level of educational achievement was held constant between the two groups. There were no significant differences between these two groups in making production scheduling decisions.     

Ethical ideology and ethical judgment regarding ethical issues in business

Differences in ethical ideology are thought to influence individuals' reasoning about moral issues (Forsyth and Nye, 1990; Forsyth, 1992). To date, relatively little research has addressed this proposition in terms of business-related ethical issues. In the present study, four groups, representing four distinct ethical ideologies, were created based on the two dimensions of the Ethical Position Questionnaire (idealism and relativism), as posited by Forsyth (1980). The ethical judgments of individuals regarding several business-related issues varied, depending upon their ethical ideology.Tim Barnett is Assistant Professor of Management at Louisiana Tech University. He has published in such journals asPersonnel Psychology, theJournal of Business Research, andHuman Relations. His research interests include ethical decision making and ethical issues in HRM.Ken Bass is Assistant Professor of Management at East Carolina State University. He has articles published in several journals, including theJournal of Personal Selling and Sales Management. His research interests include ethical decision making, ethical strategy, and methodology.Gene Brown is Associate Professor Marketing at Louisiana Tech University. He is published in such journals as theJournal of Retailing, the Journal of the Academy of Marketing Science, theJournal of Business Research, Psychology and Marketing, and Industrial Marketing Management. His main interests include personal selling, retailing, ethics, and methodology.     

Ethical or practical: An empirical study of students' choices in simulated business scenarios

Graduate and undergraduate students were asked to evaluate the ethicality and practicality of the lead character in several case scenarios. Students' responses indicated they believed practicality was more important than ethicality. The majority of students were able to determine the correct ethicality of the cases presented to them. The authors conclude that more research is needed in the antecedents of a student's value system.Dr. White is U.C. Foundation Professor of Management at the University of Tennessee at Chattanooga where he has been a faculty member since 1981. Dr White has published in the areas of general management, operations management, and personnel. Dr White holds the Ph. D. Degree in Management.Mr. Dooley is a candidate for the doctoral degree in management and holds an MBA degree.     

Bribery and extortion in international business: Ethical perceptions of Greeks compared to Americans

This study investigates the differences in he way bribery and extortion is perceived by two different cultures — American and Greek. Two hundred and forty American business students and two hundred and four Greek business students were presented with three scenarios describing a businessman offering a bribe to a government official and three scenarios describing a businessman being forced to pay a bribe to an official in order to do business. The Reidenbach-Robin instrument was used to measure the ethical reactions of the two samples to these scenarios. Results indicate that ethical reactions to bribery and extortion vary by (a) the nationality of the person offering the bribe, and (b) the country where the bribe is offered. In addition, Greeks perceived some of the scenarios as being less unethical than did Americans.John Tsalikis is an Associate Professor of Marketing at Florida International University. His research interests include marketing ethics, international marketing, and direct marketing. His articles have appeared in theJournal of the Academy of Marketing Science, Journal of Business Ethics, Psychology and Marketing, and theJournal of International Consumer Marketing.Michael S. LaTour is an Associate Professor of Marketing at Auburn University. His research interests include marketing ethics, and emotional responses to advertising. His articles have appeared in theJournal of Business Ethics, Psychology and Marketing, Journal of Health Care Marketing, and theJournal of Advertising.The authors contributed equally to this article.