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Characterizing Ethical Cases: A Cross-Cultural Investigation of Individual Differences, Organisational Climate, and Leadership on Ethical Decision-Making

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Abstract

The primary purpose of this study was to explore the unique impact of individual differences (e.g. gender, managerial experience), social culture, ethical leadership, and ethical climate on the manner in which individuals analyse and interpret an organisational scenario. Furthermore, we sought to explore whether the manner in which a scenario is initially interpreted by respondents (i.e. as a legal issue, ethical issue, and/or ethical dilemma) influenced subsequent recognition of the relevant stakeholders involved and the identification of intra- and extra-organisational variables significant to the scenario depicted. Data for this study were anonymously collected from professional samples in Russia (Moscow region) and in New Zealand. Findings show a strong effect of social culture (i.e. working in New Zealand or working in Russia) on the manner in which respondents characterised the scenario, on the experience of ethical climate and ethical leadership in their organisations, and on the ability to identify intra- and extra-organisational variables responsible for the situation presented in the scenario, above and beyond other individual and contextual factors.

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Author information

Authors and Affiliations

  1. Department of Psychology, University of Canterbury, Christchurch, New Zealand

    J. R. C. Kuntz

  2. Department of Philosophy, University of Edinburgh, Edinburgh, UK

    J. R. Kuntz

  3. Department of Management, Angelo State University, San Angelo, TX, USA

    Detelin Elenkov

  4. School of Economics and Finance, Saint Petersburg State University, Saint Petersburg, Russia

    Anna Nabirukhina

Authors
  1. J. R. C. Kuntz
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  2. J. R. Kuntz
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  3. Detelin Elenkov
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  4. Anna Nabirukhina
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Correspondence to J. R. C. Kuntz.

Appendix: Scenario for New Zealand Sample

Appendix: Scenario for New Zealand Sample

Larry James works as clerk for Finance Dynamics, a medium-size accounting firm operating in a large metropolitan area in New Zealand.

Finance Dynamics has been expanding its client portfolio and several of its accountants are actively pursuing new clients. Six weeks into Larry’s contract, Jim Carson, an accountant at the firm, walks into Larry’s office and requests a $200 check. The money, according to Jim, is to reimburse for expenses he incurred entertaining a prospect client the night before. Jim produces restaurant and lounge receipts for that amount.

Later that day, Larry overhears Jim discussing the wedding proposal to his fiancée, which had taken place at a high-end restaurant the night before. Larry realises that the expenses were related to this personal meeting, rather than to a commercial contact.

Larry decides to share this information with a senior accountant in Jim’s team, Clara Reid. Clara dismisses Larry’s concern, stating that her team has been under a lot of pressure to expand the client portfolio, and that the accountants need to be given some slack. Clara suggests that the matter should not be discussed any further.

Dissatisfied with the outcome of this meeting, Larry decides to discuss the issue with a senior accountant from another team, John Sutton. John tells Larry that this is none of his concern, and that Larry should not make a big fuss over small amounts of money. He also argues that taking this matter further can seriously compromise employee morale, especially when competition for business expansion and survival is top priority.

Larry experiences internal conflict. On the one hand, he fears that taking the matter further will cost him his job. Moreover, the company holds a strong public image of sound ethical standards, and has clear policies and procedures in place to ensure these standards are upheld. Maybe a small amount of money put into employee R&R is indeed harmless. On the other hand, Larry suspects that this may become common practice among some groups of employees, and that in the long-run it may bring about serious repercussions for corporate finances, reputation, and staff relations.

Decision In the end, Larry feels uneasy about the expenditure practices and decides to disclose the information to Finance Dynamics’ Board of Directors.

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Kuntz, J.R.C., Kuntz, J.R., Elenkov, D. et al. Characterizing Ethical Cases: A Cross-Cultural Investigation of Individual Differences, Organisational Climate, and Leadership on Ethical Decision-Making. J Bus Ethics 113, 317–331 (2013). https://doi.org/10.1007/s10551-012-1306-6

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  • DOI: https://doi.org/10.1007/s10551-012-1306-6

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