Business Ethics

A prevailing conceptualization of values in organizations regards values as preferable modes of conduct or end-states of existence. Accordingly, values are pursued through prescriptions, actions of implementation and evaluation, based on the presumption that values inform actions. Thus, holding the ‘right’ values leads to desired practice. However, this is a problematic stance, suppressing the fact that correlation between value and action is highly questioned. The article claims that proliferation of values in organizations is more plausible and influential turning the process (...) around, utilizing the ideas of sensemaking, tacit knowledge and virtue in a critical reflection-upon-action model, engaging organizational members as co-researchers of their own value constructions in context. (shrink)

This article critically examines Porter and Kramer’s shared value concept to identify its boundaries and limits as a framework for understanding the role of philanthropy and CSR relative to the role of business in society. Cases of implementation and alternative perspectives on innovation reveal that, despite its appeal and uptake in corporate and philanthropic circles, shared value merely advances the conventional rhetoric that what is good for business is good for society. The shared value approach narrows what counts as social (...) value and avoids the friction between business and society. The consequence is that the approach is problematic as a framework for addressing sustainability and development, and an insufficient basis for decision-making about philanthropy and CSR. (shrink)

Levinas did not present any new ethical theories; he did not even give any normative recommendations. But his phenomenological investigations help us to understand how the idea of ethics emerges and how we try to cope with it. The purpose of this paper is to suggest some implications from a reading of Levinas on how ethical challenges are handled within a management perspective. The paper claims that management, both in theory and in practice, is necessarily egocentric and thus ethically biased. (...) Therefore, ethics, defined as the idea that it is possible to do otherwise than pursue one's own interest, must have its source outside the scope of management. Levinas identifies this source as the call for responsibility from the Other, beyond the reach of managerial control. He also suggests how this idea of ethics is put into practice, especially in economic life: the existence of money makes it both possible and necessary to compare unique and incomparable others. Management tools may be used in the service of always more justice, as it also may be used for the opposite purpose. Instead of trying to draw a normative conclusion from Levinas, we may distinguish between two ways of experiencing reality: one through language and knowledge, covering both descriptive and normative knowledge, including ‘business ethics’, and the other through the particular events of encounters, from where this knowledge is continuously questioned through the call for responsibility, and thereby may provide possibilities for continuous improvements towards always more justice. (shrink)

Levinas did not present any new ethical theories; he did not even give any normative recommendations. But his phenomenological investigations help us to understand how the idea of ethics emerges and how we try to cope with it. The purpose of this paper is to suggest some implications from a reading of Levinas on how ethical challenges are handled within a management perspective. The paper claims that management, both in theory and in practice, is necessarily egocentric and thus ethically biased. (...) Therefore, ethics, defined as the idea that it is possible to do otherwise than pursue one's own interest, must have its source outside the scope of management. Levinas identifies this source as the call for responsibility from the Other, beyond the reach of managerial control. He also suggests how this idea of ethics is put into practice, especially in economic life: the existence of money makes it both possible and necessary to compare unique and incomparable others. Management tools may be used in the service of always more justice, as it also may be used for the opposite purpose. Instead of trying to draw a normative conclusion from Levinas, we may distinguish between two ways of experiencing reality: one through language and knowledge, covering both descriptive and normative knowledge, including business ethics, and the other through the particular events of encounters, from where this knowledge is continuously questioned through the call for responsibility, and thereby may provide possibilities for continuous improvements towards always more justice. (shrink)

Little attention has been given by researchers in organizational behavior to the study of public managers' values and how these values affect their managerial behavior. Therefore, the major objective of this study was to identify the personal value systems and value profiles of public managers, and to systematically examine and discuss the relationship between personal values and related organizational behavior including decision making. The significance of the findings for public policy is briefly discussed, and the need for future research is (...) indicated. (shrink)

Charles Taylor is one of the most prolific and wide-ranging philosophers in the English-speaking world today. He writes with authority in the fields of moral theory, political philosophy, theories of language, the history of western thought, epistemology and hermeneutics. Currently an Emeritus Professor of Philosophy at McGill University, he has enjoyed a distinguished academic career which includes being Chichele Professor of Social and Political Theory at Oxford University. He has also been active and influential in the politics of his native (...) Quebec, arguing passionately for recognition of Quebec as a distinct society, but against the province’s secession from Canada. For many years he has been a member of the New Democratic Party. The American philosopher Richard Rorty described him as ‘among the dozen most important philosophers writing today’ and one of North America’s ‘most thoughtful politicians’. He is interviewed here by Ruth Abbey. (shrink)

Recent business headlines, particularly those related to the collapsed energy-trading giant, Enron and its auditor, Arthur Andersen raise concerns about accountants' ethical reasoning. We propose, and provide evidence from 90 new auditors from Big-Five accounting firms, that a selection-socialization effect exists in the accounting profession that results in hiring accountants with disproportionately higher levels of the Sensing/Thinking cognitive style. This finding is important and relevant because we also find that the ST cognitive style is associated with relatively low levels of (...) ethical reasoning, regardless of gender. This finding implies a need for emphasis on the ethical training of accountants. The results also suggest that accounting firms should consider recruiting accountants with cognitive styles associated with relatively higher levels of ethical reasoning. (shrink)

While many scholars agree that the ‘‘separation thesis’’ (Freeman in Bus Ethics Quart 4(4):409–421, 1994)—that business issues and ethical issues can be neatly compartmentalized—is harmful to business ethics scholarship and practice, they also conclude that eliminating it is either inadvisable because of the usefulness of the positive/ normative distinction, or actually impossible. Based on an exploration of the fact/value dichotomy and the pragmatist and virtue theoretic responses to it, we develop an approach to eliminating the separation thesis that integrates ‘‘business’’ (...) with ‘‘ethics’’ while still permitting a positive/ normative distinction, which we call ‘‘ethics from observation.’’. (shrink)

While there is general agreement on the need to teach ethics in the MBA classroom, there are great difficulties in completely integrating such material within the confines of an actual MBA program. This paper attempts to address these difficulties by focusing on the teaching of such issues in one particular class — MBA macroeconomics.Ethical dilemmas often arise due to failures of the market place or due to inappropriate assumptions regarding the market model. Thus, specific suggestions are offered in regard to (...) the integration of ethical issues into the traditional macroeconomic curriculum. Suggestions are even offered as how to scale back the basic macro material so that the additional material may be accommodated. (shrink)

The role of the business leader is key to develop the culture of an enterprise. To exemplify its importance in the national and globalcontext, the Muslim author from Indonesia points with admiration to Konosuke Matsushita, founder of Matsushita Electric Corporation, who already in the 1930s set up the seven ethical principles for healthy business growth, which also are commended by the Islamic imperative. Due to the current dynamic business environment, Muslims find themselves confronted with serious dilemmas and need guidance from (...) a clearly developed Islamic business ethics. For this purpose the author offers, first, the essentials of such an ethics: the utmost importance of all sort of productive work and the distribution of wealth in society; the vocation of trade; the fundamental principles of freedom and justice for business conduct; the prescription of certain manners such as leniency, service-motive, and consciousness of Allah; and mutual consultation. He, then, presents his personal view on leadership in business. It involves three basic ingredients: an inspiring vision of high and achievable standards; a value system based on the principles of freedom and justice and promoting fairness, business integrity, and efficiency; and courage to face tough decisions while putting one’s complete trust in Allah. (shrink)

The role of the business leader is key to develop the culture of an enterprise. To exemplify its importance in the national and globalcontext, the Muslim author from Indonesia points with admiration to Konosuke Matsushita, founder of Matsushita Electric Corporation, who already in the 1930s set up the seven ethical principles for healthy business growth, which also are commended by the Islamic imperative. Due to the current dynamic business environment, Muslims find themselves confronted with serious dilemmas and need guidance from (...) a clearly developed Islamic business ethics. For this purpose the author offers, first, the essentials of such an ethics: the utmost importance of all sort of productive work and the distribution of wealth in society; the vocation of trade; the fundamental principles of freedom and justice for business conduct; the prescription of certain manners such as leniency, service-motive, and consciousness of Allah; and mutual consultation. He, then, presents his personal view on leadership in business. It involves three basic ingredients: an inspiring vision of high and achievable standards; a value system based on the principles of freedom and justice and promoting fairness, business integrity, and efficiency; and courage to face tough decisions while putting one’s complete trust in Allah. (shrink)

A retrospect into ethos, this study examines the impact of individualism, collectivism, ethical idealism and interpersonal trust on negotiators' attitudes toward questionable negotiation tactics in Greece. A thousand survey questionnaires were administered to Greek employees, of which 327 usable responses were collected. Our findings empirically corroborated a classification of three groups of negotiation tactics, namely, pretense, deception and lies. Individualism–collectivism and ethical idealism were found to be related, and interpersonal trust was found to be unrelated, to attitudes toward questionable negotiation (...) tactics. Emphasizing the non‐US and non‐Western European nature of the empirical data collected, the originality of this research further stems from the development of a comprehensive research framework about questionable negotiation tactics in Greece. (shrink)

Increasingly, the private sector is playing a greater role in supporting peace building efforts in conflict and post-conflict areas by providing critical expertise, know-how, and capital. However, reports of the corrupt practices of both governments and businesses have plagued international peace building efforts, deepening the distrust of stricken communities. Businesses are perceived as being selfish and indifferent to the impact their operations may have on the social and political development of local communities. Additionally, the corruption of local governments has been (...) cited as interfering with the creation of stability in conflict areas. Within this framework, multinational Public-Private Partnerships can exert two forms of influence: they can either exacerbate these problems, or they can become part of the solution. Without a relationship of trust among local businesses, government, and the private sector, peace building efforts will at best be mixed, and could possibly perpetuate violence in fragile states. Public and private interests are better served when Public-Private Partnerships are based upon collaboration and assist in establishing principles of good governance in conflict areas. This in turn can help build trust and regain the credibility of both sectors among local communities, which are essential in making Public— Private Partnerships more effective. (shrink)

Archetypal psychology suggests the possibility of a leadership archetype representing the unconscious preferences of human beings as a species about the appropriate relationships between leaders and followers. Mythological analysis compared God’s leadership in the Abraham myth with modern visionary, ethical and situational leadership to find similarities reflecting continuities in human thinking about leadership over as long as 3600 years. God’s leadership behavior is very modern except that God is generally more relationship oriented. The leadership archetype that emerges is of a (...) leader that develops his/her follower by reliably maintaining a vision, behaving according to firm ethical values even when it weakens the leader’s authority, accepting suffering when the follower is unreliable, and always forgiving even when the follower behaves with hubris in an attempt to overthrow the leader. If God’s leadership principles were mandatory in management, many dysfunctional leaders would be disqualified and many of the negative consequences of poor leadership might be averted. (shrink)

Academic literature addressing the topic of business ethics has paid little attention to cross-cultural studies of business ethics. Uncertainty exists concerning the effect of culture on ethical beliefs. The purpose of this research is to compare the ethical beliefs of managers operating in South Africa and Australia. Responses of 52 managers to a series of ethical scenarios were sought. Results indicate that despite differences in socio-cultural and political factors there are no statistically significant differences between the two groups regarding their (...) own ethical beliefs. Results thus support the view that culture has little or no impact on ethical beliefs. (shrink)

Sales professionals have been frequent targets of ethical criticism. This paper reports on a survey on ethics of sales professionals in South Africa. The results revealed salespeoples views on controversial sales practices that involve direct monetary consequences; on practices that adversely affect customers, employers and competitors; and on sales peoples sensitization of ethical issues. Stealing from a competitor at a trade show was viewed as the most unethical of the scenarios, while phone sabotage and lying to a customer were held (...) to be the next most unethical scenarios. Analysis of the results lead to a discussion of the implications for sales management. Ethical perceptions were affected by financial considerations. Marketing and Sales Managers will have to review their approach to training in sales ethics as well as how sales professionals implement the market driven approach. (shrink)

This article reviews the history of marketing thought in relation to social responsibility and business ethics. The main objective of the article is to show that business can be profitable and socially responsible at the same time by practising the societal marketing concept. More specifically, it presents the development of a marketing philosophy, discusses the influence of consumerism on the marketing concept and deals with ethics and social responsibility in marketing. It is argued that organisations who adopt the societal marketing (...) concept will be the ones most likely to make long-run profits as well as be beneficial to society as a whole. (shrink)

Building on prior research in Confucianism and business, the current study examines the effects of Confucianism on consumer trust of government involvement with products and company brands. Based on three major ideas of Confucianism – meritocracy, loyalty to superior, and separation of responsibilities – it is expected that consumers under the influence of Confucianism would perceive products from government-involved enterprises to have more desirable attributes and show preference for their company brands. Findings from an empirical study in the Chinese automobile (...) market support the hypotheses. The results suggest that small firms doing business in China would especially benefit from some association with the government. These results also provide managerial implications for enterprises in other countries with a Confucian cultural background. (shrink)

A mutual fund family incubates a fund when it creates a privately subsidized fund not available to the general investing public. It destroys unsuccessful incubator funds. The few successful funds will report higher incubation returns than the market return in advertisements intended to attract money from individual investors. This practice is currently allowed by the SEC. The evidence is that incubation returns are not a good predictor of subsequent fund performance and likely serve to mislead unsuspecting investors.

Individuals often lie for psychological rewards, absent economic rewards. We conducted a laboratory experiment, using a modified dictator game, to identify conditions that entice individuals to lie solely for psychological rewards. We argue that such lies can provide a ready means for individuals to manage others’ impression of them. We investigated the effect of social distance and knowledge of circumstances on the frequency of lying. We found that lying occurs more frequently when social distance is near and that the effect (...) is exacerbated when information is asymmetric. Our theoretical development suggests that, under these conditions, individuals’ need to manage others’ impression is magnified. We discuss the implications of our findings. (shrink)

In the process of implementing an ethical code of conduct, a business organization uses formal methods. Of these, training, courses and means of enforcement are common and are also suitable for self-regulation. The USA is encouraging business corporations to self regulate with the Federal Sentencing Guidelines (FSG). The Guidelines prescribe similar formal methods and specify that, unless such methods are used, the process of implementation will be considered ineffective, and the business will therefore not be considered to have complied with (...) the guidelines. Business organizations invest enormous funds on formal methods. However, recent events indicate that these are not, by themselves, yielding the desired results. Our study, based on a sample of 812 employees and conducted in an Israeli subsidiary of a leading multinational High-Tech corporation headquartered in the US, indicates that, of the methods used in the process of implementation, one of the informal methods (namely, the social norms of the organization) is perceived by employees to have the most influence on their conduct. This result, when examined against employee tenure, remains relatively stable over the years, and stands in contradistinction to the formalistic approach embedded in the FSG. We indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes (namely, personal ethical commitment and employees'' commitment to organizational values). Our results indicate that the informal methods (manager sets an example or social norms of the organization) are likely to yield greater commitment with respect to both employee attitudes than the formal method (training and courses on the subject of ethics). The personal control method (my own personal values) differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees'' commitment to organizational values. (shrink)

Socially Responsible Investment indices play a major role in the stock markets. A connection between doing good and doing well in business is implied. Leading indices, such as the Domini Social Index and others, exemplify the movement toward investing in socially responsible corporations. However, the question remains: Does the ratings-based methodology for assessing corporate social responsibility provide an incentive to firms excluded from SRI indices to invest in CSR? Not in its current format. The ratings-based methodology employed by SRI indices (...) in their selection processes excludes many corporations by creating limited-membership lists. This received ratings-based structure is yet to offer an incentive for most of the excluded corporations to invest in improving their levels of CSR. We, therefore, ask under what circumstances a ratings-based method for assessing CSR could provide an incentive to firms excluded from SRI indices to invest in CSR. In this article, we attempt to offer a theoretical reply to this question. We show that when all firms are publicly ranked according to SRI index parameters, such indices can indeed create a market incentive for increased investment by firms in improving their performance in the area of social responsibility. We further show that this incentive tapers off as the amount of investment required exceeds a certain point or if the amount of payback on that investment fails to reach a certain threshold. (shrink)

As in other professions, such as law and medicine, accounting has a Code of Professional Conduct (Code) that members are expected to abide by. In today''s legalistic society, however, the question of what is the right thing to do, is often confused with what is legal? In many instances, this may present a conflict between adhering to the Code and doing what some may perceive as proper ethical behavior. This paper examines (1) the reasoning process that CPAs use in resolving (...) ethical issues related to confidentiality; and, (2) whether or not there is a perceived conflict in adhering to the Code and the moral values of some CPAs. The results indicate that although most CPAs sampled resolve ethical issues in accordance with the Code, such decisions do not always reflect their belief of what is morally right. Although the results are useful in understanding how some CPAs reason in making moral choices involving confidentiality decisions, care should be exercised in drawing further inferences from this study due to the limited sample size. (shrink)

My name is Doug Adam. I am a convicted felon. I turned myself in, in mid-1987, to a U.S. attorney in New York, pleading guilty to felony charges of tax fraud and fraud on a mutual fund. It leftme scared to death, millions of dollars in debt, with no job, and at the age of37 back living with my parents while I awaited sentencing. What began then was a painful process of self discovery. After thriving on competition and perfection all (...) my life, how could I admit I wasn't perfect? Perfection wasn't even close. I was a felon. (shrink)