Accountants preparing information are in a position to manipulate the view of economic reality presented in such information to interested parties. These manipulations can be regarded as morally reprehensible because they are not fair to users, they involve in an unjust exercise of power, and they tend to weaken the authority of accounting regulators. This paper develops a model for detecting earnings manipulators using financial statements’ ratios in a sample of Spanish listed companies. Our results provide evidence that accounting data (...) can be extremely useful in detecting manipulators. This approach can be used by a large category of users of accounting information among which we can cite stock exchange supervisors or investing professionals. (shrink)

SMEs are the driving force of economies. However, they face challenges that affect their long-term survival, such as developing ethical business environments. Business ethicsrelated research is underdeveloped in SMEs, thus limiting our understanding of business ethics in SMEs. The purpose of this qualitative study was to investigate how business ethics is conceptualised in SMEs, using the Delphi Technique. In SMEs, business ethics is viewed as doing the right thing, having integrity, being transparent, trustworthy, and behaving responsibly towards internal and external (...) parties. The contribution of this article is that business ethics is perceived as upholding quality, being transparent and trustworthy. (shrink)

Although it is an increasingly popular assumption that leader mindfulness may positively affect leader behaviors and, in turn, employee outcomes, to date, little empirical evidence supports this view. Against this backdrop, the present research seeks to develop and test a serial mediation model of leader mindfulness. Specifically, we propose that leader mindfulness enhances employee performance and that this relationship is explained by increased leader procedural justice enactment and, subsequently, reduced employees’ emotional exhaustion. We conducted three studies to test this model. (...) Study 1 involved employees from a wide range of organizations in the USA. Study 2 used a sample of leaders and employees from China and measured our model variables at three different points in time. Both studies provide consistent support for our hypotheses. Finally, Study 3 involved a laboratory experiment in which 62 senior executives were assigned to either a mindfulness induction or to a control condition. Again, results revealed a significant and positive link between leader mindfulness and leader procedural justice enactment. In sum, these findings expand our understanding of mindfulness to the domain of leadership, a key area of organizational research. Moreover, they complement prior studies by showing that mindfulness dynamics go beyond intrapersonal effects but also influence the attitudes and behaviors of others. We discuss our findings in light of their contributions to the mindfulness, ethics, and leadership literatures and point out implications for practice. (shrink)

The discussion about the relationship between tone at the top and financial reporting practices has been primarily focused on the oversight role played by the board of directors and other structural elements of corporate governance. Another relevant determinant of tone at the top is the corporate narrative language, since it is a fundamental way in which the chief executive officer enacts leadership. In this study, we empirically explore the association between financial reporting aggressiveness and five thematic indicators capturing different traits (...) of ethical leadership from 535 annual letters to shareholders. We find that aggressive financial reporting is positively associated with CEO letters using a language which is resolute, complex, and not engaging. Our empirical findings highlight the importance of examining discretionary corporate narratives for the auditing process and the role of tone at the top in influencing accounting practices. (shrink)

Qualitative studies are an important component of business ethics research. This large amount of research covers a wide array of factors and influences on ethical decision making published between 2004 and 2014. Following the methodology of past critical reviews, this work provides a synopsis of the diverse array of qualitative studies in ethical decision making within the business ethics literature. We highlight the distinct and investigative nature of qualitative research, synthesize and summarize findings, and suggest opportunities for future research. We (...) conclude with a recommendation for developing qualitative studies in business ethics and a call for an increased openness when considering this valuable and underrepresented strategy of inquiry. (shrink)

In this research, we argue that managers have various strategies for handling complex ethical problems and that these strategies are formed according to the logic of appropriateness. First, we will show through a qualitative empirical study the different strategies that are used for handling ethical problems. Five types of strategies are identified in this study: mediating, principled, isolation, teaching and bystanding. Secondly, we will investigate the types of ethical approaches which managers reveal when handling ethical problems. Thirdly, we will discuss (...) which strategies seem to contribute to the overall ethicality of organisations. To conclude, we suggest that the decisions and actions of managers like the middle managers in this study are influenced by their interpretation of what is appropriate behaviour in the particular situation. (shrink)

In this paper, we offer a conceptualization of leadership as contemplative. Drawing on MacIntyre’s perspective on virtue ethics and Levinas’ and Gilligan’s work on the ethics of responsibility and care, we propose contemplative leadership as virtuous activity; reflexive, engaged, relational, and embodied practice that requires knowledge from within context and practical wisdom. More than simply offering another way to conceptualize the ethics of leadership, this research contributes to understanding the ethics of leadership in practice. Empirically, we analyze the narratives of (...) those in positions of formal authority and other organizational members in churches. We illustrate contemplative leadership as driven by a good purpose, derived from the unique organizational and broader societal context in which leadership occurs, and grounded in an ethical concern for the other. Contemplative leadership accounts for the complexity of experience and is discerned in mundane and everyday practices. We conclude with the implications for leadership theory, practice, and education. (shrink)

As business ethics is grappling with criticisms of its relevance for ethical practice, it may find perspective and direction in various conceptions of ethos. While ‘ethics’ is rooted in ‘ethos’, a term with a long and rich history of interdisciplinary research, conceptions of ethos are so far scarcely discussed in business ethics. The purpose of this conceptual article is to explore the potential of a pivot towards business ethics as an ethos-driven practice, drawing on John Dewey’s work. First, it introduces (...) four conceptions of ethos from interdisciplinary research and explores their varied resonance in business ethics. Second, it offers a unified conception of ethos that builds on John Dewey’s approach to economics, moral life and ethics, particularly on his understanding of habits and forms of valuation. It is then argued that understanding ethos in terms of ‘valued modes of embedded, embodied and associational conduct’ encourages business ethics to engage in the intelligent, practical and meaningful reconstruction of evolving business practices. The article concludes that an ‘ ethotical turn’ for business ethics would not only invigorate practical, corporeal and environmental perspectives but also open the field to interdisciplinary insights and ideas. (shrink)

Organizational culture and employee conduct in financial institutions are coming under increasing scrutiny by regulators who seek to identify the underlying sources of unethical behavior. The literature on ethics in the workplace has often emphasized the importance of the alignment of systems and processes with organizational values and the role of the leader in creating an ethical culture. Less is known about how individual employees experience the ethical decision-making process, especially in complex and high-risk business environments where there are discrepancies (...) between an organization’s formal ethical standards and its informal practices. This article combines ethical decision-making models with key concepts from organization and adult learning theories to develop a deeper and more nuanced view of how individuals in financial institutions deal with ethical issues that arise in their daily work. Eight practical ideas are formulated to help financial institutions narrow the gap between formal ethical standards and actual practices and develop a culture that promotes ethical behavior: challenging authority, creating opportunities for discourse, valuing positive emotion, making time for reflection, rewarding ethical behavior, strengthening escalation processes, eliciting feedback, and establishing a learning culture. (shrink)

Accountants preparing information are in a position to manipulate the view of economic reality presented in such information to interested parties. These manipulations can be regarded as morally reprehensible because they are not fair to users, they involve in an unjust exercise of power, and they tend to weaken the authority of accounting regulators. This paper develops a model for detecting earnings manipulators using financial statements’ ratios in a sample of Spanish listed companies. Our results provide evidence that accounting data (...) can be extremely useful in detecting manipulators. This approach can be used by a large category of users of accounting information among which we can cite stock exchange supervisors or investing professionals. (shrink)

Although fair trade has grown exponentially in the U.S. in recent years, we do not have a clear understanding of why small U.S. firms choose to participate in it. To answer this question, we use a qualitative case study approach and grounded theory analysis to explore the motivations of 35 small fair trade businesses. We find that shared values and the desire to help others, often triggered by a critical incident, lead social entrepreneurs to found and sustain fair trade businesses. (...) The relationship between shared values and engagement in fair trade and the relationship between altruism and engagement in fair trade are strengthened by four motivating factors: direct relationships with producers, support for social causes, the desire for the preservation of craftsmanship, and the desire to share aesthetic products. These links are strengthened by four facilitating factors : the acquisition of business knowledge, family member involvement in the firm, assistance from faith communities, and assistance from the fair trade community. Additional analysis reveals three types of fair trade social entrepreneurs: “ethics first” entrepreneurs, primarily motivated by human rights and social justice concerns; “faith first” fair traders, motivated primarily by their religious faith; and “business first” businesspeople, motivated by what they perceive to be an opportunity to build a successful business while simultaneously doing “good” and helping others. (shrink)