Ethical Behavior and Regional Environments: The Effects of Culture, Values, and Trust

This article offers a theoretical framework and empirical analysis for explaining regional differences in the United States between culture, trust, and ethical behaviors in workplaces. Drawing on a branch of behavioral economics that uses “cultural cognition” to describe social factors influencing values and ethical decision making, we argue that an orientation toward a hierarchical or individualistic view of society erodes levels of generalized trust. A lack of generalized trust among citizens and workers is associated with employers’ illegal activity to impede union organizing activity, which we define as a violation of ethical standards. We tested our model at the US state level of analysis and found that trust mediates the relationship between social values of hierarchy and unfair labor practices. To conclude, we suggest connections between the theory and its implications for the impact of culture on a firm’s responses to workers’ exercise of their rights of collective action.