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Business Ethics and the Development of Intellectual Capital

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Abstract

This paper documents that business ethics has positive impacts upon the development of intellectual capital. Knowledge has become the most important asset of modern businesses, and this study argues that business ethics is associated with the development of intangible knowledge resources—intellectual capital. Businesses with ethical values at the core reinforce ethical conducts and successfully build trust with their various stakeholders, leading to the formation of an ethical and trustworthy corporate culture and a positive corporate environment. Thus, in this reasoning, an ethical approach to business can encourage open communication, problems solving, knowledge sharing and creativity among employees to increase organisational capital; enhance interactions and relationships with suppliers, customers and other stakeholders to increase social capital; attract and retain good talent to increase human capital. Questionnaire survey is adopted as the research method with businesses in the electronic and information technology industries in Taiwan as sample. The results suggest that business ethics is associated with increased intellectual capital. Thus, this study demonstrates that the development of intellectual capital is in line with strengthened ethics. It contributes to the literature through combining research on business ethics with intellectual capital theories and extends the extant intellectual capital literature.

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Authors and Affiliations

  1. Department of Asia–Pacific Industrial and Business Management, National University of Kaohsiung, No. 700, Kaohsiung University Road, Nan-Tzu District, Kaohsiung 811, Taiwan

    Hwan-Yann Su

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Correspondence to Hwan-Yann Su.

Appendix: Construct Measures

Appendix: Construct Measures

Social Capital (adopted as is from Youndt et al. (2004); alpha = 0.874)

  1. 1.

    Our employees are skilled at collaborating with each other to diagnose and solve problems.

  2. 2.

    Our employees share information and learn from one another.

  3. 3.

    Our employees interact and exchange ideas with people from different areas of the company.

  4. 4.

    Our employees partner with customers, suppliers, alliance partners, etc., to develop solutions.

  5. 5.

    Our employees apply knowledge from one area of the company to problems and opportunities that arise in another.

Organisational Capital (adopted as is from Youndt et al. (2004); alpha = 0.768)

  1. 1.

    Our organisation uses patents and licences as a way to store knowledge.

  2. 2.

    Much of our organisation’s knowledge is contained in manuals, databases, etc.

  3. 3.

    Our organisation’s culture (stories, rituals) contains valuable ideas, ways of doing business, etc.

  4. 4.

    Our organisation embeds much of its knowledge and information in structures, systems and processes.

Human Capital (adopted as is from Youndt et al. (2004); alpha = 0.872)

  1. 1.

    Our employees are highly skilled.

  2. 2.

    Our employees are widely considered the best in our industry

  3. 3.

    Our employees are creative and bright.

  4. 4.

    Our employees are experts in their particular jobs and functions.

  5. 5.

    Our employees develop new ideas and knowledge.

Business ethics (adopted as is from Hunt et al.’s (1989) scale for corporate ethical values; alpha = 0.765)

  1. 1.

    Managers in my company often engage in behaviours that I consider to be unethical (reverse item).

  2. 2.

    In order to succeed in my company, it is often necessary to compromise one’s ethics (reverse item).

  3. 3.

    Top management in my company has let it be known, in no uncertain terms, that unethical behaviours will not be tolerated.

  4. 4.

    If a manager in my company is discovered to have engaged in unethical behaviour that results primarily in personal gain (rather than corporate gain), he or she will be promptly reprimanded.

  5. 5.

    If a manager in my company is discovered to have engaged in unethical behaviour that results primarily in corporate gain (rather than personal gain), he or she will be promptly reprimanded.

Dynamism (adopted as is from Jansen et al. (2006); alpha = 0.749)

  1. 1.

    Environmental changes in our local market are intense.

  2. 2.

    Our clients regularly ask for new products and services.

  3. 3.

    In our local market, changes are taking place continuously.

  4. 4.

    In a year, nothing has changed in our market (reversed item).

  5. 5.

    In our market, the volumes of products and services to be delivered change fast and often.

Competition intensity (adopted as is from Jansen et al. (2006); alpha = 0.900)

  1. 1.

    Competition in our local market is intense.

  2. 2.

    Our organisational unit has relatively strong competitors.

  3. 3.

    Competition in our local market is extremely high.

  4. 4.

    Price competition is a hallmark of our local market.

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Su, HY. Business Ethics and the Development of Intellectual Capital. J Bus Ethics 119, 87–98 (2014). https://doi.org/10.1007/s10551-013-1623-4

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