Cultures of Compliance

There has been a cultural turn in discussion and debates about the promise of corporate compliance efforts. These efforts are occurring quickly, without great confidence in their efficacy. Thus the interest in culture. This article explores what a culture of compliance means and why it is so hard to achieve. The dark side that enables non-compliance in organizations is powerful and often hidden from view, working via scripts that rationalize or normalize, denigrations of regulation, and celebrations of beliefs and attitudes that bring with them compliance dangers. The article addresses how both culture and compliance should be judged by those wishing for better corporate behavior

Governance factors affecting internal auditors' ethical decision making: an exploratory study

Purpose This paper explores the ethical decision making of internal auditors and the impact of corporate governance mechanisms thereon. It also explores whether ethical decision making is influenced by years of experience in internal auditing. Design/methodology/approach Sixty-six internal auditors were presented with five ethical dilemmas. For each scenario, a key element of corporate governance was manipulated to assess its impact on ethical decision making. These were audit committee support; management integrity regarding accounting policies; management integrity regarding pressure on internal audit; external auditor characteristics; and organisational code of conduct. Findings Participants were generally sensitive to ethical dilemmas but were not always confident that their peers would act ethically. A higher quality external audit function was positively associated with internal auditors’ ethical decision making. However, the strength of other governance mechanisms did not appear to influence ethical decision making. Finally, more experienced internal auditors adopted a more ethical stance in some cases. Research limitations/implications Our sample was self-selected and may not be representative of internal auditors in general. Our lack of significant results may be due to insufficient variability in our manipulations and/or an oversimplification of reality in our scenarios. Practical implications The study has implications for the internal audit profession with respect to training and the provision of support mechanisms to strengthen the ability of internal auditors to withstand pressure when dealing with ethical dilemmas. Originality/value This paper is the first to study whether the strength of other governance mechanisms influence internal auditors’ ethical decision making

Willingness to Comply with Corporate Law: An Interdisciplinary Teaching Method in Higher Education

Using an innovation training project, an interdisciplinary cross-sectional teaching strategy was developed to enhance students’ willingness to comply with the law. Thirty-five business, finance and accounting teachers examined the effects of ethical education on 484 university students’ willingness to comply with corporate law. Ethical education was based on building students’ ethical decisions on three court judgments in the new Spanish Corporate Governance Code. The ethical training was carried out by developing and applying social justice counter arguments. This perspective allowed students to imagine what decisions other person could have taken if they had managed the company ethically. The results suggest that ethics education in higher education can improve the willingness to comply the law. This methodology can be applied to interdisciplinary departments teaching ethics in business, finance and accounting

When People at Work Go Astray, What to Say and How to Say It: A Typology and Test of the Effect of Moral Feedback on Unethical Behavior

abstract: Unethical behavior is a phenomenon that is unavoidable in the workplace. Ethical transgressors, when caught, often receive feedback regarding their actions. Though such moral feedback—feedback that is in response to an ethical transgression—may be aimed at curtailing future unethical behavior, I seek to demonstrate that under certain conditions, moral feedback may promote subsequent unethical behavior. Specifically, I propose that moral intensity and affective tone are two primary dimensions of moral feedback that work together to affect ethical transgressor moral disengagement and future behavior. The notion of moral disengagement, which occurs when self-regulatory systems are deactivated, may account for situations whereby individuals perform unethical acts without associated guilt. Despite the burgeoning literature on this theme, research has yet to examine whether feedback from one individual can influence another individual’s moral disengagement. This is surprising considering the idea of moral disengagement stems from social cognitive theory which emphasizes the role that external factors have in affecting behavior. With my dissertation, I draw from research primarily in social psychology to explore how moral feedback affects transgressor moral disengagement. To do so, I develop a typology of moral feedback and test how each moral feedback type affects transgressor future behavior through moral disengagement.Dissertation/ThesisDoctoral Dissertation Business Administration 201

An assessment of the levels of ethical perception among public University student in Malaysia

Ethics is indeed crucial because we will not survive the 21st century with the 20th century ethics. With the onset of globalization, many hands guide the controls and many decisions move those hands whose core values play an instrumental role in creating a stable and peaceful future for the world (Institute of Global Ethics, 1999).Denhardt (1999) suggests that ethics should be concerned with providing normative guidance, standards for behavior and goals for policy and practice at all levels.Colleges and universities are custodians of knowledge. Because possession of knowledge is the source of power, understood here as the ability to influence decisions in contemporary society, these institutions are also the gateway to power, significantly affecting the quality of economic and social life throughout the world. Thus, insofar as colleges and universities create and disseminate knowledge within a particular society,they are institutions with moral responsibilities to maintain the well being of that society (Wilcox and Ebbs, 1992). Ethics is not merely another subject or discipline taught at a university for the University is a community of scholars from a variety of disciplines who come together [uni-verto = turn into one because they are ultimately concerned with the common good of society, not merely the good of individuals (Curtin University, 2001). Today that concern extends to the ethical dilemmas currently faced by the global community.Thus, ethics should play a central role in a university and not merely a cosmetic role (i.e. as a set of rules to disciplinary misconduct). Education and training is the primary communications vehicle that a university can utilize to promote and instill core values so that students are able to recognize and respond to ethical dilemmas in personal, professional and global life. Globalization, liberalization and higher mobility made possible through Information and Communication Technology (ICT) revolution and the Internet amplify the role that the university play in producing individuals who can and will search within themselves to ensure that the power and responsibility bestowed upon them are factored into ethics i.e., Justice, Responsible Care and Respect for Persons.Students on today’s campuses encounter a variety of complex situations for which they are often ill prepared by experience or individual development. The relationship between students’ attitudes and values and the environment that supports or challenges them stands as a dynamic dialectic of confirmation and rejection that affects the ethical positions and choices of both the individual and the institution.Ethics can be defined as the rules and principles that define right and wrong conduct (Davis & Frederick, 1990). Whether an individual acts ethically or unethically is a result of complex interaction between the individual stage of moral development and several moderating variables including individual characteristics, organization structured design, organizational culture and the intensity of the ethical issues

A Multi-Method Approach to Identifying Norms and Normative Expectations within a Corporate Hierarchy: Evidence from the Financial Services Industry

This paper presents the results of a field study at a large financial services firm that combines multiple methods, including two economic experiments, to measure ethical norms and their behavioral correlates. Standard survey questions eliciting ethical evaluations of actions in on-the-job ethical dilemmas are transformed into a series of incentivized coordination games in the first experiment. We use the results of this experiment to identify the actual ethical norms for financial adviser behavior held by key personnel – financial advisers and their corporate leaders – in three settings: a clash of incentives between serving the client and earning commissions, a dilemma about fiduciary responsibility to a client, and a dilemma about whistle-blowing on a peer. We also measure the beliefs of financial advisers about the ethical expectations of their corporate leaders and the beliefs of corporate leaders about financial adviser norms. In addition, we ask financial advisers about their personal normative opinions, matching a common methodology in the literature. We find, first, systematic agreements in the normative evaluations across the corporate hierarchy that are consistent with ex ante expectations, but second, we also find some measurable differences between the normative expectations of corporate leaders about on-the-job behavior and the actual norms shared among financial advisers. When there is a normative mismatch across the hierarchy we are able to distinguish miscommunication from ethical disagreement between leaders and employees. Our subjects also report their job satisfaction and take part in a second incentivized experiment in which it is costly to report private information honestly. A last finding is that a mismatch between advisers’ personal ethical opinions and corporate norms – especially those of peers – strongly correlates with job dissatisfaction, and less strongly but significantly with the willingness to be dishonest.field experiment, financial services, corporate leader, financial adviser, ethics, norms, coordination game

Ethical leadership as an enabler of organizational culture change

We are emerging from a decade plagued with headlines of crises that tell the narrative of the cost of organizational culture. Evolving before our eyes, the world is acutely focused on the actions of individual leaders and the organizational cultures that have cultivated low-trust and high-fear environments, dysfunctional and failing organizational cultures. Drawing from research in organizational theory, moral philosophy, psychology and sociology, the study focuses on organizational cultures, the role of leadership in enabling healthy cultures. This exploratory, qualitative study utilizing the grounded theory approach addressed the question of how organizations are establishing and reinforcing acceptable ethical leadership behaviors and principles and the factors critical in the role of leadership as an enabler of ethical cultures. The research explores how these leadership behaviors are manifested, and what is the impact and potential consequences these leadership behaviors have on creating healthy organizational cultures. The framework for this exploratory study was to research the questions and assess the phenomena from multiple perspectives. A process of data triangulation was performed, including an evaluation of multiple forms of primary and secondary sources. An analysis of the convergence and disparities of the data patterns resulted in the emergence of the key factors informing the grounded theory. The study points to the importance of leaders as visible and reflective models of organizational culture, especially at the middle layer of the organization. The study points to some emergent themes and effective practices that organizations can utilize to build and frame their ethical leadership development programs and initiatives. These themes include that rules and policies alone, do not provide a sustainable framework for mitigating leadership behavior. Other themes include social learning tools as channels for reinforcement and peer support of ethical decision making practices, evaluation of multiple perspectives of a situation, framing guidance with a tone set through the middle layer of an organization, and implementing diverse activities with a cadence of frequent contact over time. Implications and recommendations for leadership development in the areas of organizational development and business ethics are outlined. Suggestions for future study include organizational reputation management, phenomena of sensationalism and global transparency

Truth or Consequences—Academic Physicians’ Perspective in the Management of Commercially-influenced Conflicts of Interest

Since the 1990s, academic physicians have been subjected to increased requirements for disclosure in their roles as educators and researchers and for conflict of interest (COI) resolution in their financial relationships with pharmaceutical, medical device, and biotech companies, collectively referred to as industry. The requirements are the result of the convergence of federal regulations, accreditation guidelines, professional and industry codes of ethics and conduct, and institutional policies. The disclosure and COI resolution requirements are managed and resolved by a review of forms and compliance with relevant guidance documents and policies. In the context of this environmental oversight, the purpose of the qualitative study was to explore physicians’ perspectives of how they manage and resolve conflicts of interest in their academic roles of teaching, research, and patient care. Minimal evidence-based research exists in the literature from the physician’s viewpoint. The grounded theory study examined the research question by using an issue-contingent, ethical decision-making theoretical framework from the management literature. The data were collected using a general interview guide that consisted of three sections – general questions regarding purpose and demographics, discussion of three case scenarios (teaching, research, and clinical practice), and finally, general concluding questions to assess the environment that is indicative of the context of the study. The theory emerged from the interview data as a refined theory representing a four-step ethical decision-making process with emphasis on the characteristics of physicians as moral agents. The study’s findings further indicated that bias is a significant concern. The study identified reasons physicians enter into financial relationships with industry, the risks and benefits associated with those relationships, methods for avoiding bias, and the need for healthy academic-industry collaborative research

Truth or Consequences—Academic Physicians’ Perspective in the Management of Commercially-influenced Conflicts of Interest

Since the 1990s, academic physicians have been subjected to increased requirements for disclosure in their roles as educators and researchers and for conflict of interest (COI) resolution in their financial relationships with pharmaceutical, medical device, and biotech companies, collectively referred to as industry. The requirements are the result of the convergence of federal regulations, accreditation guidelines, professional and industry codes of ethics and conduct, and institutional policies. The disclosure and COI resolution requirements are managed and resolved by a review of forms and compliance with relevant guidance documents and policies. In the context of this environmental oversight, the purpose of the qualitative study was to explore physicians’ perspectives of how they manage and resolve conflicts of interest in their academic roles of teaching, research, and patient care. Minimal evidence-based research exists in the literature from the physician’s viewpoint. The grounded theory study examined the research question by using an issue-contingent, ethical decision-making theoretical framework from the management literature. The data were collected using a general interview guide that consisted of three sections – general questions regarding purpose and demographics, discussion of three case scenarios (teaching, research, and clinical practice), and finally, general concluding questions to assess the environment that is indicative of the context of the study. The theory emerged from the interview data as a refined theory representing a four-step ethical decision-making process with emphasis on the characteristics of physicians as moral agents. The study’s findings further indicated that bias is a significant concern. The study identified reasons physicians enter into financial relationships with industry, the risks and benefits associated with those relationships, methods for avoiding bias, and the need for healthy academic-industry collaborative research