Unethical Business Behavior Research Articles

Investigating the effect of psychological contract breach on counterproductive work behavior: The mediating role of organizational cynicism

BACKGROUND: The negative consequences of Counterproductive work behaviors (CWBs) include intentional malfeasance that damages an organization or its employees. These include decreased output, increased costs, decreased employee morale and discontent. When CWBs exist, the company’s reputation and employee turnover rates may suffer. OBJECTIVE: The purpose of this study is to increase the current understanding of PCB and CWBs, as well as the mediating function of OC in this relationship, among higher education employees. METHODS: Using IBM SPSS AMOS, the results of the survey were analyzed. RESULTS: PCB is positively correlated with CWB-O and CWB-I, suggesting that employee perspectives on PCB negatively influence their emotions and contribute to unethical business behavior. This study found that OC mediates the relationship between PCBs and CWBs and that uninformed organization behavior causes employees to be more discouraged and angrier and participate in CWB. CONCLUSIONS: Academic administrators must discover salary and benefit inadequacies to give incentives based on accurate performance reports, taking into consideration their bosses’ PC infractions. Therefore, institutions must promote loyalty and belonging to reduce PCB if it is poorly broken. Managers may lessen employee cynicism by stressing organizational support and listening to and rewarding employees.

Obchodné praktiky aplikované voči spotrebiteľom a ich právam na slovenskom trhu z pohľadu etiky

The paper focuses on the investigation of business practices in relation to consumers and their consumer rights in Slovakia, from the point of view of ethical standards compliance. The primary research method is inquiry through a questionnaire. The results point to the fact that Slovak consumers register significant shortcomings in the area of unfair business practices and often encounter unethical business behavior. Despite the fact that in Slovakia there are several options designed to protect consumer rights against the unfair behavior of traders, they are not used to a sufficient extent by consumers.

A Process-Oriented Framework of Competencies for Sustainability Entrepreneurship

Employee-owned businesses, benefit corporations, and other efforts in sustainability entrepreneurship are responding to prevalent challenges such as climate change, economic inequalities, and unethical business behavior. Universities, however, often fall short in sufficiently equipping students with competencies in sustainability entrepreneurship. One reason is that none of the existing frameworks links competencies to the actual processes of entrepreneurship, from discovery to consolidation. If graduates are to successfully start and run sustainability-oriented enterprises, the real-world entrepreneurship processes should provide the main orientation for training and learning. The present study proposes such a framework. We first conducted a qualitative literature review on competencies for entrepreneurs, sustainability professionals, social entrepreneurs, and sustainability entrepreneurs. We clustered the identified competencies according to conceptual similarities. On this basis, we describe sustainability entrepreneurship competencies along the entrepreneurial process model. The result is a process-oriented and literature-based framework of sustainability entrepreneurship competencies. It is intended to be used as a general vision for students, faculty, and entrepreneurs, as well as for the design of curricula, courses, and assessments.

Removing the Blinders: Increasing Students’ Awareness of Self-Perception Biases and Real-World Ethical Challenges Through an Educational Intervention

Business ethics educators strive to produce graduates who not only grasp the principles of ethical decision-making, but who can apply that business ethics education when faced with real-world challenges. However, this has proven especially difficult, as good intentions do not always translate into ethical awareness and action. Complementing a behavioral ethics approach with insights from social psychology, we developed an interventional class module with both online and in-class elements aimed at increasing students’ awareness of their own susceptibility to unconscious biases and, consequently, unethical behaviors. We deployed this intervention within a problem-based learning course (137 undergraduate students), in which students completed real-world projects for actual business clients. Our results suggest that although students appeared universally aware of the importance of ethical issues in business and generally espoused intentions to act ethically, those who received the intervention were significantly more likely to recognize their own susceptibility to perpetuating unethical business behavior and to identify ethical issues specific to their real-world projects. These results have important implications for behavioral ethics pedagogy and provide a de-biasing interventional approach for bridging classroom knowledge with real-world skills.

Tolerance for Cheating From the Classroom to the Boardroom: A Study of Underlying Personal and Cultural Drivers

Professors face increasingly diverse student bodies that exhibit divergent understandings and motivations to engage in academic dishonesty. Research suggests that collectivism/individualism is the cultural dimension underlying such differences. This study measures this dimension at the individual level using two constructs—agency-communion and self-construal—and their relationships to tolerance for academic cheating and unethical corporate behavior. Analyses show a positive relationship between tolerance for academic cheating and for unethical corporate behavior. Both measures of collectivism (interdependent self-construal and communion) exhibit positive relationships to tolerance for unethical business behavior, while interdependence is also positively related to tolerance for academic cheating.

Mismanagement of Sustainability: What Business Strategy Makes the Difference? Empirical Evidence from the USA

This paper examines whether and to what extent the overall business strategy influences the firm’s mismanagement of sustainability. Specifically, an empirical measure for the mismanagement of sustainability is developed by exploiting the newly available materiality guidelines for US firms to define industry-specific material sustainability issues. Using this measure, this paper shows that mismanagement of sustainability can represent unethical business behavior when firms intentionally perform better on immaterial issues than on material issues by diverting stakeholders’ attention from the firm’s low overall sustainability performance. This paper assumes that the right business strategy can prevent such unethical actions. Based on Miles and Snow’s (Organizational strategy, structure and process, McGraw-Hill, New York, 1978) organizational theory, this paper distinguishes between Prospector and Defender business strategies. By employing multiple firm-level panel regressions, the findings suggest that Prospector-type firms are more likely to mismanage sustainability issues compared to Defender-type firms intentionally. The results give implications for researchers, regulators and standard setters, auditors, sustainability practitioners, and scholars.

The Factors Influencing The Emergence of Unethical Business Behavior

International Journal of Contemporary Management » 2018 » Issue 17(3) » The Factors Influencing The Emergence of Unethical Business Behavior A A A

The Extension of Neutralization Theory to Business Ethics

Many times those who commit an unethical act are not people we perceive as being unethical people. So how can they do something bad? One explanation can be found in neutralization theory from the field of criminology. Neutralization theory, developed by Gresham Sykes and David Matza, and extended by Carl Klockars and William Minor, is a social learning model suggesting people learn deviant behavior much as they learn conventional behavior and develop specific techniques of neutralization. The current paper discusses each technique with examples of how each might be used to justify unethical business behavior, and provides ways an organization can inoculate itself against neutralizing attitudes.

The relationship between the Zimbardo Time Perspective Inventory and violations of business ethics in China: Unbalanced time perspective increases the acceptance of unethical business behavior

Scope of researchIn a sample of 316 Chinese MBA students, the influence of Time Perspective on two types of unethical behaviors was tested. We differentiated between rule-based and social-concern issues. Time Perspective was measured by using a Chinese version of the Zimbardo Time Perspective Inventory. Participants’ evaluation of the issues as ethical—or unethical—and their behavioral intention to violate business ethics were measured.HypothesesWe assumed that Past-Positive and Future will enhance ethical orientation, whereas Past-Negative, Present-Fatalistic and deviance from balanced time perspective (DBTP) will reduce ethical orientation (evaluation of unethical practices as ethical and high behavioral intention to apply unethical practices).ResultsFor evaluation of rule-based issues, Past-Positive, Present-Hedonistic and Future significantly influenced in the predicted direction, whereas no significant effects of time perspectives for social concern issues were observed. According to behavioral intention, only Present-Fatalistic reached significance for both types of ethical issues in the predicted direction. Further, it was shown in a mediation-model that the influence of DBTP on behavioral intention to show unethical practices is mediated by the evaluation as ethical/unethical in the case of rule-based issues (in the case of social concern, the factors reached no significance or only nearby significances, respectively). Chinese managers with a high deviation from a balanced time perspective showed reduced evaluation of unethical practices as unethical, and an enhanced behavioral intention to show unethical practices. Other potential variables of influence, such as age, gender, the size of company, and the degree of globalization were considered, and their influences were controlled.Conclusions and limitationsTime perspectives are of relevance for business ethics, but the relationship was only shown for rule-based issues. In the case of social concern, the relationship was only shown for Present-Fatalistic on behavioral intention.

Business Ethics Education and Global Age Cosmopolitanism (gac)

This article will propose a form of critical business ethics education that will generate Global Age Cosmopolitanism (gac), which is aimed mostly at the propagation of economic justice. Because business practices have the propensity to generate both positive and negative outcomes, a careful review of the social compromises that may underliegacis necessary. It is important to assert that, “thegacethic is a cosmopolitan perspective that presupposes civic universalism” (Rivera 2012). I will identify the key components of the proposed critical business ethics education and will indicate how these differ from standard business ethics education. I will also demonstrate how the proposed form of business ethics education is tied togac.It is the purpose of this article to consider how business ethics educators and curricula should incorporate proactive approaches to economic justice and strive to avoid the reactive nature of past business ethics literature, the primary goal of which has been to repair unethical business behavior.

Violence, Aggression, and Ethics: The Link Between Exposure to Human Violence and Unethical Behavior

Can exposure to media portrayals of human violence impact an individual’s ethical decision making at work? Ethical business failures can result in enormous financial losses to individuals, businesses, and society. We study how exposure to human violence—especially through media—can cause individuals to make less ethical decisions. We present three experiments, each showing a causal link between exposure to human violence and unethical business behavior, and show this relationship is mediated by an increase in individual hostility levels as a result of exposure to violence. Using observational data, we then provide evidence suggesting that this relationship extends beyond the context of our experiments, showing that companies headquartered in locations marked by greater human violence are more likely to fraudulently misstate their financial statements and exhibit more aggressive financial reporting. Combined, our results suggest that exposure to human violence has significant and real effects on an individual’s ethical decision making.

The Impact of Guanxi on Ethical Perceptions: The Case of Taiwanese Salespeople

Purpose: Extant empirical work demonstrates that guanxi can foster favoritism or preferential treatment toward certain customers, which could lead to unethical business behavior. However, scholars have not investigated the potential effect of guanxi on ethical perceptions in a crucial extra-organizational context: the buyer–seller dyad. This article seeks to address the lacuna and examines the impact that guanxi has on Taiwanese salespeople's ethical perceptions. Methodology/approach: A survey of salespeople was used to test the proposed hypotheses. A sample consisting of Taiwanese salespeople from firms in the finance, insurance, information technology, direct selling, food and beverage, fashion, tourism, health care, and agriculture (all B2B) industries was used. Findings: Results indicate that expressive tie sales personnel tended to have lower ethical concern than their instrumental tie counterparts. Relative to instrumental tie sales personnel, mixed tie salespeople manifested less ethical concern in the scenario that was considered to be the most ethically nettlesome. Practical implications: Because guanxi affects sales personnel's ethical perceptions—thus indicating that they may compromise their organization for the good of their customer—it is important for companies to regulate guanxi building in terms of what can and cannot be done, with a range of flexibility and corresponding rewards and punishments. Ethical practices should be incorporated into salespeople's job responsibilities to encourage appropriate ethical decision making. Top management also needs to reinforce codes of ethics and demonstrate the importance of practicing ethical behavior. In addition, training programs should demonstrate how ethical conduct can be valuable for the salesperson, customer, and company even in the presence of guanxi. Clear guidance is important to both firms and salespeople. It could help salespeople become keenly alert about ethically problematic situations and make appropriate judgments about them. The end result could create an ethically healthier environment for business transactions and further avoid preference, fraud, and abuse.

Losing Control: A Test of Containment Theory and Ethical Decision Making

In a basic test of the general social control thesis, this article applies Reckless’ theory of containment to the problem of unethical business behavior. Control theories asserts that what needs to be explored is not why certain individuals engage in deviant acts, but rather what factors in society bring conformity when there are ample opportunities to offend. Containment theory asserts that deviance will occur when controls are weakened to the point of being insufficient to contain motivated behavior in the presence of an unethical opportunity. The theory accounts for the presence of both inner controls (internal to the individual) and outer controls (originating through one’s association with some group or culture), as well as factors that push or pull and individual toward deviant acts. Results indicate that factors of outer containment may be more important to controlling the development of unethical business behavior.

“What’s the Harm in Being Unethical? These Strangers are Rich Anyway!” Exploring Underlying Factors of Double Standards

Previous studies show evidence of double standards in terms of individuals being more tolerant of questionable consumer practices than of similar business practices. However, whether these double standards are necessarily due to the fact that one party is a business company while the other is a consumer was not addressed. The results of our two experimental studies, conducted among 277 (Study 1) and 264 (Study 2) participants from a Western European country by means of an anonymous self-administered online survey, demonstrate that the respondents were not only harsher in their judgments of unethical business (vs. consumer) behavior, but also harsher in their judgments of unethical behavior by prosperous (vs. non-prosperous) consumers and prosperous (vs. non-prosperous) business companies (Study 1). Further, they were also less tolerant of unethical behavior by consumers (vs. one’s best friend) and business companies with which they have a less than good (vs. a good) relationship (Study 2). These results indicate that double standards are due to differences in perceived wealth between subjects and in the individual’s relationship with subjects. These two factors imply that double standards are not strictly reserved to consumer–business relations, but might also be used in business–business and consumer–consumer relations. Further, these results indicate that companies need to be aware of the fact that good financial figures may backfire as they might lead individuals to be more critical of a company’s deceptive practices. Moreover, these findings point to the importance of businesses investing resources—and to keep investing resources—in developing a good relationship with stakeholders as these good relationships lead to stakeholders being less prone to make moral condemnations.

Unethical and Unwell: Decrements in Well-Being and Unethical Activity at Work

Previous research on unethical business behavior usually has focused on its impact from a financial or philosophical perspective. While such foci are important to our understanding of unethical behavior, we argue that another set of outcomes linked to individual well-being are critical as well. Using data from psychological, criminological, and epidemiological sources, we propose a model of unethical behavior and well-being. This model postulates that decrements in well-being result from stress or trauma stemming from being victimized by, engaging in, or witnessing unethical behavior, or even from being associated with individuals involved in such behavior.

Marxism, Business Ethics, and Corporate Social Responsibility

Originally delivered at a conference of Marxist philosophers in China, this article examines some links, and some tensions, between business ethics and the traditional concerns of Marxism. After discussing the emergence of business ethics as an academic discipline, it explores and attempts to answer two Marxist objections that might be brought against the enterprise of business ethics. The first is that business ethics is impossible because capitalism itself tends to produce greedy, overreaching, and unethical business behavior. The second is that business ethics is irrelevant because focusing on the moral or immoral conduct of individual firms or businesspeople distracts one’s attention from the systemic vices of capitalism. I argue, to the contrary, that, far from being impossible, business requires and indeed presupposes ethics and that for those who share Marx’s hope for a better society, nothing could be more relevant than engaging the debate over corporate social responsibility. In line with this, the article concludes by sketching some considerations favoring corporations’ adopting a broader view of their social and moral responsibilities, one that encompasses more than the pursuit of profit.

Ethical Perceptions of Business Students: Differences Between East Asia and the USA and Among “Confucian” Cultures

This paper reports the results of a survey of 842 undergraduate business students in four nations – the United States of America (the USA), the Peoples’ Republic of China (the PRC), Japan, and the Republic of Korea (the ROK). This survey asked students to respond to four scenarios with potentially unethical business behavior and a string of questions related to the importance of ethics in business strategy and in personal behaviors. Based on arguments related to differences in recent historical experiences, the authors suggest that student responses may be as different within the East Asian (Confucian) environment as they are between this environment as a whole and the USA. Survey results indicate a greater perception of ethical problems and more importance placed on ethics per se in business practices, as well as less of an emphasis on social harmony (a key distinguishing characteristic of Confucian values identified in prior research) on the part of USA students. At the same time, substantial national differences in response are also witnessed within the set of East Asian students. A priori expectations as to the manner in which these East Asian responses should vary based on differences in recent historical experiences are partially, but not fully, supported. The authors argue that the key value of the reported research rests on a demonstration that national differences within a common cultural (e.g., East Asian or Confucian) area can be as great as differences across cultural (East vs. West) areas and that practitioners of global business must fine-tune their expectations as to acceptable business and personal actions to accommodate specific national historical experiences to be effective.

The Role of Equity in Employment Noncompetition Cases

In light of the headline examples of employee poaching and mass defection, the article studies the consequences in litigation between competitors when the sales employees of both businesses are bound by restrictive covenants with the same terms and conditions. Specifically, it will address the availability of equitable defenses to bar a business from challenging the validity of restrictive covenants and, if successful, radically change the law concerning the enforcement of these covenants in the United States. By tracing the history of the canons of equity over three centuries of jurisprudence, the article explores their applicability in the post-Enron era to thwart unethical business behavior which seeks to exploit a competitor's primary resource— its sales employees. The analysis leavens highly controversial enforceability issues with current debates in ethics, economics, empirical studies, and legal theory. The article concludes by offering guidance in the convergence of law and equity in a way that pragmatically incorporates modern ideas about the role of ethics, the value of human capital, and the economic and social advancement of society.

The wealth effects of unethical business behavior

This study examines the shareholder wealth effects of specific unethical conduct involving bribery, illegal payments, employee discrimination, environmental pollution, and insider trading based on announcements in theWall Street Journal. It is hypothesized that the high costs of such reported acts would result in a negative shareholder wealth effect because of increases in monitoring costs and risks to stakeholders of the firm. The results show that the significantly negative abnormal returns were not short-term, but were persistent and cumulative for approximately one month following the announcement of unethical business conduct. Therefore, contrary to some earlier studies, unethical business behavior, as defined in this study, is not compatible with the goal of shareholder wealth maximization.

Managed Competition and School Choice

Health care and education are key agenda items for most business firms, the former because of firms' efforts to control escalating costs and the latter because of the adverse impact of low quality education on worker productivity. There are currently proposals that offer market-directed solutions to these critical problems. In health care, there is growing support at both the federal and state levels for managed competition. In education, legislation has been enacted in some states and cities that introduces competition by extending parental choice to school selection. I will evaluate the extent to which these market-directed proposals are compatible with ethical principles. Since health care and education have been criticized for their inefficiency and inequity, the ethical principles selected for this evaluation are utilitarianism and distributive justice; utilitarianism because of its link to efficiency and effectiveness, and distributive justice because of its close ties to fairness and equity. At first blush, the above statements may seem strange to some readers. After all, it is commonly asserted that markets themselves are the main source of unethical business behavior, the type of behavior that has been widely publicized in the scandals surrounding Michael Milken, Salomon Brothers and E.F. Hutton. Since markets promote seeking self-interest, to some it is a series of inevitable small steps from self interest to greed to fraud and injustice. Moreover, not-for-profit institutions, which have long played a dominant role in the provision of health care and education, are typically perceived as operating outside or at the fringe of the market economy. In fact, it has been argued that