Organizational Ethics in Developing Countries: A Comparative Analysis

Relationships with one’s employees, co-workers, or superiors create ethical dilemmas. Employees’ judgments and ethical perceptions have been extensively studied in Western cultures, but not in developing countries. The purpose of this investigation is to examine employees’ self-reported work-related ethics and compare them to their perceptions of co-workers’ and top managements’ along various morally challenging situations in three developing countries’ organizations. Saudi Arabia, Kuwait, and Oman, known as the Gulf countries, were selected as the research setting – and provided the sampling frame – for this study. The results suggest that respondents perceived all ethically challenging situations as unethical and had significant differences among themselves regarding the ethical perceptions of self, as compared to perceptions of peers’, and top managements’. Discussion of the results and implications are provided.     

The Influence of Organizational and Code-Supporting Variables on the Effectiveness of a Code of Ethics

Prior findings on the effectiveness of the codeof ethics in promoting ethical behavior aremixed. Perhaps more is required to promoteethical behavior than the mere existence of thecode within the organization. The presentstudy proposes, first, that the extent to whichthe organization communicates, enforces andencourages reference to the code is importantto achieving the desired results. Second,organizational ethics variables (namely, topmanagement support for ethical behavior, theassociation between ethical behavior and careersuccess, and organizational ethical climate)can have a significant influence on ethicalbehavior of organizations over and above theimpact of the implementation and use of thecode. Both propositions are supported based onregression analyses of data from a survey of237 managers, the majority of whom hold middleand top level positions within organizations.     

The Positive Ethical Organization: Enacting a Living Code of Ethics and Ethical Organizational Identity

A vision of a living code of ethics is proposed to counter the emphasis on negative phenomena in the study of organizational ethics. The living code results from the harmonious interaction of authentic leadership, five key organizational processes (attraction–selection–attrition, socialization, reward systems, decision-making and organizational learning), and an ethical organizational culture (characterized by heightened levels of ethical awareness and a positive climate regarding ethics). The living code is the cognitive, affective, and behavioral manifestation of an ethical organizational identity. We draw on business ethics literature, positive organizational scholarship, and management literature to outline the elements of positive ethical organizations as those exemplary organizations consistently practicing the highest levels of organizational ethics. In a positive ethical organization, the right thing to do is the only thing to do. Amy Klemm Verbos is a Ph.D. candidate at the Sheldon B. Lubar School of Business, University of Wisconsin-Milwaukee, where she received a Chancellor’s Fellowship, Graduate Fellowship, Dissertation Fellowship, and C. Edward Weber Research Award. She co-authored ‚Positive Relationships in Action: Relational Mentoring and Mentoring Schemas in the Workplace’ in the forthcoming edited book, Positive Relationships at Work. Her work on positive organizing also has been presented at the Academy of Management Conference. Joseph A. Gerard is a Ph.D. student at the Sheldon B. Lubar School of Business at the University of Wisconsin-Milwaukee. He is a lecturer at the University of Wisconsin-Whitewater teaching organizational behavior, strategy, and accounting. He is a founding member of Ascent Organization Development LLC, which provides management consulting services to for-profit organizations in the areas of effectiveness and performance enhancement. Paul R. Forshey is a Ph.D. student in Organizations and Strategic Management at the Sheldon B. Lubar School of Business, University of Wisconsin-Milwaukee. His research interests include startup firms and firms in transition. Charles S. Harding is a Ph.D. student in Organizations and Strategic Management at the Sheldon B. Lubar School of Business at the University of Wisconsin-Milwaukee. Awarded a Chancellor’s Fellowship, his research interests include strategic decision-making and the role of value creation in strategy. Janice S. Miller is an Associate Professor at the Sheldon B. Lubar School of Business at the University of Wisconsin-Milwaukee where she has received the Business Advisory Council Award for Teaching Excellence. Her published work has appeared in Academy of Management Journal, Journal of Organizational Behavior, and Journal of Business Ethics among others. She received her Ph.D. in Human Resources Management from Arizona State University.     

A Code of Ethics for CorporateCode of Ethics

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration).     

The Gordian Knot of Ethics: Understanding Leadership Effectiveness and Ethical Behavior

Recent ethical misconduct in American business has resulted in volumes of written commentary, various legislative responses, as well as litigation by those identified as victims. While legislators, judges, juries, and the Securities and Exchange Commission (SEC) pursue an increasing number of cases, there is little attention devoted to understanding what drives executives and other leaders to behave in ways that violate the ethical and legal standards of business in the United States. This understanding is a prerequisite to selecting leaders and designing interventions that prevent future misconduct. Understanding leadership’s nature and functioning is one key to understanding the ethical behavior of an organization as a system and of the people who lead the organization. Two models or frameworks provide the foundation for this paper. The first is a model of leadership competencies. This model identifies five key areas of competence related to overall, long-term leadership success. The second model targets leadership effectiveness. This model has three components – motivational patterns, decision criteria, and competencies. Using the Leadership Effectiveness Model to frame the discussion, the authors describe the nature and importance of the models, with particular focus on motivational patterns. Research suggests these patterns often account for 40–60% of overall leadership effectiveness. This article defines motivational patterns and describes key patterns that may impact ethical behavior of leaders. The article concludes with a discussion of how to use data on motivational patterns in leadership selection, development, and evaluation processes. Carl L. Harshman, Ph.D. is president of Harshman & Associates, Inc., an organizational and leadership development firm and founder of the Institute for Work Attitude and Motivation, an organization performance and research institute. He researches and writes in the areas of individual and organization performance, team development, and leadership and ethics. He can be contacted at carl@harshman.com. Ellen Harshman, Ph.D., J.D. is dean of the John Cook School of Business at Saint Louis University and associate professor in management. Her research interests include leadership, individual and organizational ethics, and issues in employment law. She can be reached at harshman@slu.edu.     

A Global Code of Business Ethics

The international economy is changing at a rapid rate. The alteration and reduction of both geographical and political borders, coupled with the growing interdependence of socially, politically, economically, and legally diverse countries, have caused multinational corporate entities to revise various policies. These revisions include revisions in marketing strategies, strategic alliances, product and service strategies and, perhaps most importantly as it affects all strategies, a MNC's approach to ethical systems. The truly global company must come to grips with the legal and moral atmosphere in which it operates. The concept of moral rights, those transcending legal or political rights, drives us to review four international codes of conduct and to attempt to develop one international uniform code that might be applicable to any business, in any country or culture.     

Leaders,Values, and Organizational Climate: Examining Leadership Strategies for Establishing an Organizational Climate Regarding Ethics

This paper examines the critical role that organizational leaders play in establishing a values based climate. We discuss seven mechanisms by which leaders convey the importance of ethical values to members, and establish the expectations regarding ethical conduct that become engrained in the organizations climate. We also suggest that leaders at different organizational levels rely on different mechanisms to transmit values and expectations. These mechanisms then influence members practices and expectations, further increase the salience of ethical values and result in the shared perceptions that form the organizations climate. The paper is organized in three parts. Part onebegins with a brief discussion of climates regarding ethics and the critical role of values. Part two provides discussion on the mechanisms by which leaders and members transmit values and create climates related to ethics. Part three provides a discussion of these concepts with implications for theory, research, and practice.     

Moral and Amoral Conceptions of Trust, with an Application in Organizational Ethics

Across the management, social science, and business ethics literatures, and in much of the philosophy literature, trust is characterized as a disposition to act given epistemic states—beliefs and/or expectations about others and about the risks involved. This characterization of trust is best thought of as epistemological because epistemic states distinguish trust from other dispositions. The epistemological characterization of trust is the amoral one referred to in the title of this paper, and we argue that this characterization is conceptually inadequate. We outline and defend an alternative conception of trust as a moral phenomenon: when A trusts B to do something, A invites B to acknowledge and accept an obligation; when B accepts the invitation, B takes on an obligation; in that way trust creates an obligation. We conclude with an application, drawing out the difference between the epistemological conception of trust and our own in the context of Ghoshal et al.’s (Sloan Management Review 40:9–20, 1995, Academy of Management Learning & Education 4:75–91, 2005) critique of transaction cost theories of the firm.     

Role Conflict,Mindfulness, and Organizational Ethics in an Education-Based Healthcare Institution

Role conflict occurs when a job possesses inconsistent expectations incongruent with individual beliefs, a situation that precipitates considerable frustration and other negative work outcomes. Increasing interest in processes that reduce role conflict is, therefore, witnessed. With the help of information collected from a large sample of individuals employed at an education-based healthcare institution, this study identified several factors that might decrease role conflict, namely mindfulness and organizational ethics. In particular, the results indicated that mindfulness was associated with decreased role conflict, and that perceived ethical values and a shared ethics code were associated with decreased role conflict and increased mindfulness. Despite the study’s limitations, these findings imply that companies might better manage role conflict through the development of mindfulness and organizational ethics.     

Enriching the Organizational Context of Chronic Illness Experience Through an Ethics of Care Perspective

The standard economic and ethical case in defense of sweatshops employs the standard of the “welfare of their workers and potential workers” to argue that sweatshop regulations harm the very people they intend to help. Scholars have recently contended that once the benefits and costs are balanced, regulations do, in fact, raise worker welfare. This paper describes the short and long-run tradeoffs associated with sweatshop regulation and then examines how reasonable constructions of measures of “worker welfare” would evaluate these tradeoffs finding that the standard economic and ethical case against sweatshop regulations is well supported.     

Organizational Ethics: Perceptions of Employees by Gender

As more women enter the work force and assume management positions in corporations, increasing attention is being given to employment diversity. In addition, studies suggest that females have more propensity for ethics than males. However, these results may be debatable and limited data are available to substantiate these claims or assess gender differences among employees. Ethics codes can aid in supporting policies and enhancing corporate diversity. To assist one company in the development of an ethics code, a survey of 4005 employees in one U.S. corporation was conducted to ascertain their opinions of the ethical environment of the company. The survey used the Ethics Environment Questionnaire (EEQ), consisting of twenty items on a 5-point Likert-type scale; reliability on Cronbach's alpha was 0.94. Response rate was 50%, with the sample paralleling the population in proportion of males and females. Respondents reported a profile of 3.18 out of the high of 5.0, but with several significant differences between the male and female employees, including differences on education and position. Males were more in agreement than females that the firm had an ethical environment. On some items, however, males and females were in strong agreement. Comparisons to prior studies were drawn, including suggestions for ways corporations could use an ethics survey to tailor in-service training, enhance diversity in the work force, and support the development of an ethics code.     

A reexamination of the Internal Auditors' Code of Ethics

This study empirically examined the views of Certified Internal Auditors (CIAs) concerning the role of Code of Ethics for members of the Institute of Internal Auditors. It is a continuation of an earlier study which examined the usefulness of the Code to CIAs. Among the questions asked were what is the primary reason for the Code of Ethics, how useful is it, have you used it, should more enforcement actions be taken against members who violate the Code, and what are the legal and moral responsibilities of the CIA to report serious ethical violations, e.g., environmental pollution, to outsiders when top management and the board of directors are aware of the matter but are not doing anything to correct it. The results indicate strong support for the Code, its enforcement, and use as an instrument to encourage the internal flow of ethical behavior by embers and others.Philip H. Siegel is currently the Fiesta Mart Professor of Accounting at the University of Houston-Downtown. Formerly the Coopers & Lybrand Professor at San Francisco State University, Dr. Siegel received his Ph.D. in 1985. He holds CPA certification in Florida.John O'Shaughnessy is Associate Professor at San Francisco State University. Currently the Director of the Internal Audit Program at SFSU, Dr. O'Shaughnessy received his Ph.D. in 1990. He holds CPA and CIA certification.John T. Rigsby is Associate Professor at Mississippi State University. Author of numerous papers published in leading academic journals, Dr. Rigsby received his Ph.D. in 1986. He holds CPA certification.     

The Impact of Ethics Code Familiarity on Manager Behavior

Codes of ethics exist in many, if not the majority, of all large U.S. companies today. But how the impact of these written codes affect managerial attitudes and behavior is still not clearly documented or explained. This study takes a step in that direction by proposing that attention should shift from the codes themselves as the sources of ethical behavior to the persons whose behavior is the focus of these codes. In particular, this study investigates the role of code familiarity as a factor impacting the influence of an ethics code on manager behavior. Data collected from 286 executives from companies in the direct selling industry are used to test hypotheses (1) that the perceived usefulness of ethics codes is positively related to the degree of familiarity with the code, and (2) that ethical climate as assessed by managers is positively related to the code's perceived usefulness. Both hypotheses are supported, and their implications and further research directions are discussed.     

Code of Ethics: A Stratified Vehicle for Compliance

When a business owner approaches a bank for a loan for their business they might hope that a well-established bureaucratic procedure would ensure that their application was processed with stipulated rules and impersonal criteria. They might expect that two bank officials, evaluating the same proposal for a loan, would reach the same decision. However, research shows that both quantifiable data and “gut feelings” are used in the decision. In this research, analysis of interviews with senior managers, and both individual and focus group interviews with bank loan officers, reveals that there are no set criteria or stipulated rules. The interviews demonstrate how and why nonquantifiable data is used, and why different bank officials can reach different conclusions on the same loan proposal. While these bank loan officers do not appear to be discriminatory against female business owners, the lending criteria and process allows significant room for discrimination. It appears questionable whether bank lending is seen as an ethical and fair process.