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Abstract
Even though formalization of ethical principles is a must in today’s business, research and evidence in the Slovak conditions remain scarce. Yet, creating an ethical business climate and especially the formalization of ethics through codes of ethics incorporated in corporate standards is a particularly interesting phenomenon in the conditions of transit economies due to the significant role of multinationals in this process. Therefore, the purpose of this study was to examine main factors influencing the extent of ethical codes in 225 subsidiaries of multinational companies operating in Slovakia. The conducted questionnaire study containing items focused on area and extent of ethical code, number of employees, economic performance, regional and industrial scope, ownership structure, and nationality of executive director was used as a tool for data collection. Factor analysis was processed to identify the interdependencies between observed variables and to find the latent variables. Further, the Kruskal–Wallis test was applied to identify the differences among the variables along with the Bonferroni correction test, which specified the items between which the significant difference occurred. The following findings emerged. First, companies with lower extent of ethical code use general phrases. When they want to specialize on any ethics problems, extent must be wider. Second, companies with a lower number of employees do not need extensive ethical code due to clear rules with which they are familiar in a direct way by owners. In multinational companies, the communication of ethical rules is realized via ethical codes with specific purposes because the direct way is impossible. Third, companies with foreign ownership used different managerial approaches, and therefore ethical codes differ in extent and content.
Highlights
The importance of constructing the positive organizational climate was highlighted decades ago
Our study focused on the identification of factors that influence the extent of the ethical code in the multinationals operating in Slovakia
Data adjustment was made after multiple testing to obtain reliable Cronbach’s alpha (Brown 2002); the data were reduced to 9 analyzed variables
Summary
The importance of constructing the positive organizational climate was highlighted decades ago. Back in the 1970s, Schneider (1975) defined climate in an organization as perceptions of organizational practices and procedures shared among members. Even though there are diverse types of climates in the workplace, the one related to the established normative systems of organization was considered ethical climate (Martin and Cullen 2006), which reflects the organizational procedures, polices, and practices with moral consequences. The idea of ethical climate was developed by Victor and Cullen (1988), who added that it identifies the normative systems that guide organizational decision-making and the systematic responses to ethical dilemmas. Authors defined ethical climate as the prevailing perceptions of typical organizational practices and procedures with ethical content.
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