How do business leaders make ethical decisions? Given the significant and wide-spread impact of business people’s decisions on multiple constituents, how they make decisions matters. Unethical decisions harm the decision makers themselves as well as others, whereas ethical decisions have the opposite effect. Based on data from a study on strategic decision making by 16 effective chief executive officers, I propose a model for ethical decision making in business in which reasoning and intuition interact through forming, recalling, and applying moral (...) principles necessary for long-term success in business. Following the CEOs in the study, I employ a relatively new theory, rational egoism, as the substantive content of the model and argue it to be consistent with the requirements of long-term business success. Besides explaining the processes of forming and applying principles, I briefly describe rational egoism and illustrate the model with a contemporary moral dilemma of downsizing. I conclude with implications for further research and ethical decision making in business. (shrink)

This article first addresses the question of “why” we teach business ethics. Our answer to “why” provides both a response to those who oppose business ethics courses and a direction for course content. We believe a solid, comprehensive course in business ethics should address not only moral philosophy, ethical dilemmas, and corporate social responsibility – the traditional pillars of the disciple – but also additional areas necessary to make sense of the goings-on in the business world and in the news. (...) These “new pillars,” that we advocate include moral psychology, organizational design and behavior, motivational theory, and a unit on how society, business, and law interact. This last unit builds upon the work of Francis P. McHugh (1988) who urged an integration of “disciplines related to business ethics.” Our seventh pillar would encompass an integration of law, socio-political theory, and policy to demonstrate how business helps construct its own regulatory framework. The concluding recommendation is for a comprehensive “Seven Pillars” of business ethics approach. (shrink)

Over the last decade, the increased use of work teams within organizations has been one of the most influential and far-reaching trends to shape the business world. At the same time, corporations have continued to struggle with increased unethical employee behavior. Very little research has been conducted that specifically examines the developmental aspects of employee ethical decision-making in a team environment. This study examines the impact of a team leader’s perceived integrity on his or her subordinates’ behavior. The results, which (...) came from a survey of 245 MBA students functioning for 2 years in a work team environment, indicate an interaction between leader integrity and team member ethical intentions. (shrink)

Ethical work climate, introduced by Bart Victor and John Cullen, plays a central role in the business ethics literature due to its influence on employee’s ethical decision-making. Yet, the often-used framework is limited as a descriptive and prescriptive model because it lacks a normative focus and does not allow for organizations guided by universal ethical principles. We revisit Victor and Cullen’s original conceptualization of ethical climate and propose a reformulation of the ethical criteria to be conceptually consistent with Kohlberg’s theory (...) of cognitive moral development and to accommodate principled climates. We also describe how the locus of analysis dimension can be simplified to allow for a more parsimonious and potentially more valid theory. In doing so, we eliminate redundancy noted in the original model and clarify normative preference among the ethical climate types. We discuss implications for research, teaching, and practice. (shrink)

There are two primary purposes of this manuscript: (i) to evaluate the western buyers’ ethical issue in the setting of eastern and western economies, and (ii) to assess the ethical values of the employers and the government in their business dealing in the background of Bangladesh. Analyzing the present minimum wage (MW) policy of the garment global supply chain industry in Bangladesh and the extent to which the policy functions are two of the other purposes of this study. This study (...) is the mixed approached of exploratory, descriptive, and phenomenological qualitative research. Each of the exploratory, descriptive, and phenomenological qualitative research goals has identified and described in a systematic way to get the best outcome of the purposes set in this manuscript. This study shows that rule utilitarian ethics are being followed by the Western buyers in their business dealings in Western territories. The philosophy of rule utilitarianism holds moral principles, and this principle tends to place greater emphasis on ethical interests rather than economic gains. Unfortunately, Western buyers do not follow the rule utilitarianism in their business dealing in eastern countries. Thus, this study shows western business leaders/buyers are not ethically correct. The act utilitarian ethics, on the other hand, are being followed by the eastern buyers in their business dealing. The philosophy of act utilitarianism holds immoral principles, and this principle tends to place greater emphasis on economic gains rather than ethical interest. This philosophy permit firm’s unethical behavior such as an exploitation of MW on the ground that this practice increases its incomes and maximizes the owner’s interest. The employers and buyers unethically gain profit, keeping the workers in a disadvantaged situation, which contradicts John Rawls’ Theory of Justice. Furthermore, the government has become an accomplice in exploiting and depriving the garment works of their entitlement and labor rights to appease the so-called investors. This study helps buyers, employers, government, and stakeholders to correct their unethical business deals. It also helps the policymakers to implement the MW policy for the betterment of garment global supply chain workers. (shrink)

The relationship between ethical ideology and job stress appears to be complex. This study is based on a model presented by Forsyth (Journal of Personality and Social Psychology 39:175, 1980), showing two dimensions (idealism and relativism) that play an important role in ethical evaluation and behavior. Based on a survey of 561 employees of hotel industry in India, ethical ideologies were found to be negatively associated with job stress. The data were analyzed using Pearson correlations and multiple regressions. The result (...) showed that relativism is negatively correlated with job stress. Further, it has been established that idealism and relativism interacted in such a way that there is a negative relationship between idealism and job stress when relativism is low and positive relationship when relativism is high. The findings imply that ethical ideology adversely influences the job stress in the organization. (shrink)

The current linkages between ethical theory and management behavior are investigated in the wake of the much-publicized convictions of Enron executives. The vignettes used in this investigation represent ethical dilemmas in the areas of coercion and control, conflict of interest, physical environment, and personal integrity. Since 2003, and after the successful prosecution of Enron executives, the link between ethical philosophy and management behavior has shifted somewhat dramatically. There has been a significant change in the rational basis for managerial decision making. (...) In 2003, even after the Enron scandal was publicized, practitioners still relied heavily on both act and rule utilitarian ethical philosophies when making business decisions. Currently, the majority of respondents are likely to select ethically appropriate actions based on either rule utilitarian or rights rationales. It appears that ethical behavior is now more in line with ethical rhetoric, which may positively impact the ethical climate of business decision making. Apparently, business scandals of the past did not really impact actual ethical behavior much, but the high-profile prosecutions, convictions, and jail sentences may have impressed on managers that now is the time to incorporate ethics into business decisions. (shrink)

This study investigates the relationship among ethical philosophy, thinking style, and managerial ethical decision-making. Based on the premise that business ethics is a function of culture and time, we attempt to explore two important questions as to whether the national differences in managerial ethical philosophies remain over time and whether the relationship between thinking style and ethical decision-making is consistent across different national contexts. We conducted a survey on Korean managers’ ethical decision-making and thinking style and made a cross-cultural, cross-temporal (...) comparison with the results presented by previous studies that surveyed Korean and US managers with the same questionnaire at different points in time. Our analysis revealed that Korean managers have become more reliant on rule utilitarianism for ethical decision-making over the last two decades, which is dominantly used by US managers, corroborating our convergence hypothesis built on social contracts theory. However, as opposed to previous research, we found that managers with a balanced linear and nonlinear thinking style do not necessarily make more ethical decisions compared to those with a predominantly linear or nonlinear thinking style. This study contributes to international business ethics literature by presenting a theoretical framework that may explain the convergence of ethical philosophies employed by managers in different national contexts over time, and that the relationship between thinking style and managerial ethical decision-making may not be universal, but contingent on contextual factors. (shrink)

Empowerment and teamwork are buzzwords of progressive human resource practices. Along with these new job design methods come reduced hierarchical control mechanisms. In light of recent ethical scandals, there is considerable concern regarding the effectiveness of the control systems of these more recent work designs. This study compared the willingness of participants to report unethical behavior when presented with work scenarios in which the perpetrator was in the relative position of team member, peer, or subordinate and in cohesive or non-cohesive (...) conditions of relational closeness. After accounting for the covariates, both main effects and interaction effects were found, indicating that reporting behavior was influenced by relative position and relational closeness. (shrink)

The goals of this research were to (1) explore the direct effects of and interactions between magnitude of consequences and various types of proximity - social, psychological, and physical - on the ethical decision-making process and (2) investigate the influence of empathy on the ethical decision-making process. A carpal tunnel syndrome vignette and questionnaire were administered to a sample of human resource management professionals to test the hypothesized relationships. Significant relationships were found for the main effects between magnitude of consequences (...) and principle-based evaluation, cognitive empathy and principle-based evaluation, and empathy and moral intention. Physical proximity moderated the relationships between magnitude of consequences and utilitarian evaluation as well as magnitude of consequences and moral intention. Cognitive empathy moderated the relationships between magnitude of consequences and principle-based evaluation and physical proximity and utilitarian evaluation. Affective empathy marginally moderated the relationship between physical proximity and principle-based evaluation. Future research directions, management implications, and strengths and weaknesses of the research are discussed. (shrink)

Anthropomorphism is the attribution of human features to non-human subjects. Anthropomorphized organizations acquire in the minds of their members a unique identity, which becomes capable of guiding members’ motivations, with important managerial implications. Ashforth et al. offered a theoretical model of anthropomorphism in organizations, including “top-down” and “bottom-up” processes of organizational anthropomorphism as antecedents, and sensemaking and the sense of social connection of the organization as outcomes. Using SEM, this study operationalizes Ashforth et al.’s model using a two-trait scale of (...) organizational virtue derived from Chun, including measures of CSR and OCB as antecedents, and organizational justice and affective commitment as outcomes. The model is tested on survey data from seven UK managed service organizations in the hotels, logistics and legal sectors. As secondary contribution, moderation analysis is undertaken by industry, offering further insight into the evaluation of organizational anthropomorphism. Firstly, we note that high evaluations of Empathy influence evaluations of Courage through a halo effect. Secondly, we note that heuristic evaluation of the firm’s CSR practice also influences perceptions of Empathy and Courage. The paper also includes a discussion of the critique of organizational virtues by virtue ethicists in an effort to advance the dialogue between the two traditions. (shrink)

Substantial research demonstrates that ethical leaders improve a broad range of outcomes for their employees, but considerably less attention has been devoted to the performance and success of the leaders themselves. The present study explores the extent to which being ethical relates to leaders’ performance and promotability. We address this question by examining ethical leadership from the two ethical perspectives most common in Western traditions—i.e., the “right” and the “good”—and whether one might be more closely associated than the other with (...) performance and promotability evaluations. Results from 117 employee-supervisor-manager triads show that supervisors with a deontological outlook are more likely to be seen as ethical leaders and that utilitarian leaders are more likely to earn higher performance evaluations. We discuss the implications of these findings for research on ethical leadership. (shrink)

The aim of this article is to define and delineate an ethical mindset. In deploying an interpretive mixed-methods analysis of the Australian services sector, data were collected through an online survey on 223 respondents followed by focus group interviews involving 20 participants. The analysis reveals evidence of ethical mindsets in Australian business context, the components of which are identified as being aesthetic judgment, spirituality, optimism, harmony and balance, contentment, truth telling, individual responsibility and professionalism. While the findings are limited to (...) the Australian context, it illuminates the value of mindsets to business ethics in a way that has theoretical rigour and practical relevance. Research has so far only considered business ethics within other mindsets (e.g. global mindset). This article provides a foundation for further application and development of mindset theory. (shrink)

This empirical study explores aspects of how companies that are positively recognized by their workforce as “Best Companies to Work For” convey the underlying principles of their “trustworthy” culture. The study examines the normative ethical frameworks and affective language utilized in the ethics statements. Although multiple studies have considered normative ethical frameworks in individual ethical decision making, few have considered normative ethical frameworks in organization ethics statements. In addition, this study expands the analysis to include the ethic of care. Of (...) the “Best Companies to Work for” in this study, 93 had accessible online ethics statements. Findings indicated 70 % of the ethics statements utilized combinations of three types of normative ethics studied, while 30 % used a single framework. In statements with combined frameworks, the deontological framework had the highest frequency, while the ethic of care was present in 33 % of statements and the teleological framework had the lowest frequency. In ethics statements with a singular framework, the framework rankings were consistent with findings for combined frameworks. Using the Dictionary of Affect in Language, there were statistically significant differences on pleasantness between statements that mentioned ethic of care and those that did not. This study sheds light on how these trustworthy companies communicate by publishing their ethics statements and by using a multidimensional approach in their ethics statements that has greater pleasantness when an ethic of care is utilized. (shrink)

A values-centered leadership model comprised of leader stakeholder and economic values, follower values congruence, and responsible leadership outcomes was tested using data from 122 organizational leaders and 458 of their direct reports. Alleviating same-source bias concerns in leadership survey research, follower ratings of leadership style and follower ratings of values congruence and responsible leadership outcomes were collected from separate sources via the split-sample methodology. Results of structural equation modeling analyses demonstrated that leader stakeholder values predicted transformational leadership, whereas leader economic (...) values were associated with transactional leadership. Follower values congruence was strongly associated with transformational leadership, unrelated to transactional leadership, and partially mediated the relationships between transformational leadership and both follower organizational citizenship behaviors and follower beliefs in the stakeholder view of corporate social responsibility. Implications for responsible leadership and transformational leadership theory, practice, and future research are discussed. (shrink)

This study presents the results of an empirical analysis of the relationship between managerial thinking style and ethical decision-making. Data from 200 managers across multiple organizations and industries demonstrated that managers predominantly adopt a utilitarian perspective when forming ethical intent across a series of business ethics vignettes. Consistent with expectations, managers utilizing a balanced linear/nonlinear thinking style demonstrated a greater overall willingness to provide ethical decisions across ethics vignettes compared to managers with a predominantly linear thinking style. However, results comparing (...) the ethical decision-making of balanced thinking managers and nonlinear thinking managers were generally inconsistent across the ethics vignettes. Unexpectedly, managers utilizing a balanced linear/nonlinear thinking style were least likely to adopt an act utilitarian rationale for ethical decision-making across the vignettes, suggesting that balanced thinkers may be more likely to produce ethical decisions by considering a wider range of alternatives and ruling out those that are justified solely on the basis of their outcomes. Implications are discussed for future research and practice related to management education and development, and ethical decision-making theory. (shrink)

Several leadership and ethics scholars suggest that the transformational leadership process is predicated on a divergent set of ethical values compared to transactional leadership. Theoretical accounts declare that deontological ethics should be associated with transformational leadership while transactional leadership is likely related to teleological ethics. However, very little empirical research supports these claims. Furthermore, despite calls for increasing attention as to how leaders influence their followers’ perceptions of the importance of ethics and corporate social responsibility (CSR) for organizational effectiveness, no (...) empirical study to date has assessed the comparative impact of transformational and transactional leadership styles on follower CSR attitudes. Data from 122 organizational leaders and 458 of their followers indicated that leader deontological ethical values (altruism, universal rights, Kantian principles, etc.) were strongly associated with follower ratings of transformational leadership, while leader teleological ethical values (utilitarianism) were related to follower ratings of transactional leadership. As predicted, only transformational leadership was associated with follower beliefs in the stakeholder view of CSR. Implications for the study and practice of ethical leadership, future research directions, and management education are discussed. (shrink)

This article examines the relation between policies concerning Corporate Social Responsibility (CSR) and philosophical moral theories. The objective is to determine which moral theories form the basis for CSR policies. Are they based on ethical egoism, libertarianism, utilitarianism or some kind of common-sense morality? In order to address this issue, I conducted an empirical investigation examining the relation between moral theories and CSR policies, in companies engaged in CSR. Based on the empirical data I collected, I start by suggesting some (...) normative arguments used by the respondents. Secondly, I suggest that these moral arguments implicitly rely on some specific moral principles, which I characterise. Thirdly, on the basis of these moral principles, I suggest the moral theories upon which the CSR policies are built. Previous empirical studies examining the relation between philosophical moral theories and the ethical content of business activities have mainly concentrated on the ethical decision-making of managers. Some of the most prominent investigations in that regard propose that managers mainly act in accordance with utilitarian moral theory (Fritzsche, D. J. and H. Becker: 1984 , Academy of Management Journal 27 (1), 166–175; Premeaux, S. and W. Mony: 1993 , Journal of Business Ethics 12 , 349–357; Premeaux, S.: 2004 , Journal of Business Ethics 52 , 269–278). I conclude that CSR policies are not based on utilitarian thinking, but instead, on some kind of common-sense morality. The ethical foundation of companies engaged in CSR, thus, does not mirror the ethical foundation of managers. (shrink)

This article examines the relation between policies concerning Corporate Social Responsibility and philosophical moral theories. The objective is to determine which moral theories form the basis for CSR policies. Are they based on ethical egoism, libertarianism, utilitarianism or some kind of common-sense morality? In order to address this issue, I conducted an empirical investigation examining the relation between moral theories and CSR policies, in companies engaged in CSR. Based on the empirical data I collected, I start by suggesting some normative (...) arguments used by the respondents. Secondly, I suggest that these moral arguments implicitly rely on some specific moral principles, which I characterise. Thirdly, on the basis of these moral principles, I suggest the moral theories upon which the CSR policies are built. Previous empirical studies examining the relation between philosophical moral theories and the ethical content of business activities have mainly concentrated on the ethical decision-making of managers. Some of the most prominent investigations in that regard propose that managers mainly act in accordance with utilitarian moral theory, 166–175; Premeaux, S. and W. Mony: 1993, Journal of Business Ethics12, 349–357; Premeaux, S.: 2004, Journal of Business Ethics52, 269–278). I conclude that CSR policies are not based on utilitarian thinking, but instead, on some kind of common-sense morality. The ethical foundation of companies engaged in CSR, thus, does not mirror the ethical foundation of managers. (shrink)

Using samples from the U.S. and Puerto Rico, we examine cross-cultural differences in cultural value dimensions, and relate these to act and rule utilitarian orientations, and ethical decision making of business professionals. Although these places share the same legal environment, culturally they are distinct. In addition to tests of between-group differences, a model in which utilitarian orientation mediates the influence of cultural values on ethical decisions was evaluated at the individual level of analysis. Results indicated national culture differences on three (...) cultural values, but no between-group differences on utilitarian orientations and ethical decisions. Significant indirect effects were found; act utilitarian orientation mediated the effects of two values activity orientation and universalism on ethical decision making. Implications for international management practices and business ethics are discussed. (shrink)

The decline of empirical research on ethical decision-making based on ethical theories might imply a tacit consensus has been reached. However, the exclusion of virtue ethics, one of the three main normative ethical theories, from this stream of literature calls this potential consensus into question. This article investigates the role of all three normative ethical theories—deontology, utilitarianism and virtue ethics—in ethical decision-making of corporate executives. It uses virtue ethics as a dependent variable thus studying the interconnectivity of all three normative (...) ethical theories in specific circumstances. We find that managers use different ethical theories in different circumstances (business vs. private life, formal vs informal ethical leadership, etc.). A predictive model of ethical decision-making, however, cannot be established. We also find that only a limited number of variables influence the choice of ethical theory, which leans business ethics towards postmodern management paradigm. We suggest that moral pragmatism could provide the answer to ethical decision-making. (shrink)