Advertisement

Journal of Business Ethics

, Volume 55, Issue 4, pp 321–341 | Cite as

Effective Corporate Codes of Ethics: Perceptions of Code Users

  • Mark S. SchwartzEmail author
Article

Abstract

The study examines employee, managerial, and ethics officer perceptions regarding their companies’ codes of ethics. The study moves beyond examining the mere existence of a code of ethics to consider the role that code content and code process (i.e. creation, implementation, and administration) might play with respect to the effectiveness of codes in influencing behavior. Fifty-seven in-depth, semi-structured interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The factors viewed by respondents to be important with respect to code effectiveness include: provisions of examples; readability; tone; relevance; realism; senior management support; training; reinforcement; living up to standards; reporting requirement; anonymous phone line; communicating violations; and enforcement. The factors found to be potentially important include: justification for provisions; employee involvement; and sign-off requirements. Factors found not to be important include: objectives for the code; prior distribution; testing; and relating one’s performance review to compliance with the code.

Keywords

behavior codes content effectiveness ethics process 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Adams, J. S., Tashchian, A., Shore, T. H. 2001‘Codes of Ethics as Signals for Ethical Behavior’Journal of Business Ethics29199211Google Scholar
  2. Akaah, I. P., Riordan, E. A. 1989‘Judgments of Marketing Professionals About Ethical Issues in Marketing Research: A Replication and Extension’Journal of Marketing Research26112120Google Scholar
  3. Allen, J., Davis, D. 1993‘Assessing Some Determinant Effects of Ethical Consulting Behavior: The Case of Personal and Professional Values’The Journal of Business Ethics12449458Google Scholar
  4. Arndt, S. 1990‘Discussion of Ethics Needed’National Underwriter (Life,Health/Financial Services)93313Google Scholar
  5. Austin, R. W.: 1961, ‘Code of Conduct for Executives’, Harvard Business Review 53, (September/October).Google Scholar
  6. Badaracco, J. L.,Jr., Webb, A. P. 1995‘Business Ethics: A View From the Trenches’California Management Review37828Google Scholar
  7. Benson, G. C. S. 1989‘Codes of Ethics’The Journal of Business Ethics8305319Google Scholar
  8. Berenbeim, R. E.: 1988, ‘Ethics Codes and Educational Programs’, Security (October) 91–97.Google Scholar
  9. Berenbeim, R. E. 1999Global Corporate Ethics Practices: A Developing Consensus,The Conference BoardNew YorkGoogle Scholar
  10. Brandl, P., Maguire, M. 2002‘Codes of Ethics: A Primer on their Purpose, Development, and Use’The Journal for Quality and Participation25812Google Scholar
  11. Brass, D. J., Butterfield, K. D., Skaggs, B. C. 1998‘Relationships and Unethical Behavior: A Social Network Perspective’Academy of Management Review231431Google Scholar
  12. Brief, A. P., Dukerich, J. M., Brown, P. R., Brett, J. F. 1996‘What’s Wrong with the Treadway Commission Report? Experimental Analyses of the Effects of Personal Values and Codes of Conduct on Fraudulent Financial Reporting’Journal of Business Ethics15183198Google Scholar
  13. Byrne, E. F. 2002‘Business Ethics: A Helpful Hybrid In Search of Integrity’Journal of Business Ethics37121133Google Scholar
  14. Callan, V. J. 1992‘Predicting Ethical Values and Training Needs in Ethics’Journal of Business Ethics11761769Google Scholar
  15. Chatov, R. 1980‘What Corporate Ethics Statements Say’California Management Review222029Google Scholar
  16. Chonko, L. B., Hunt, S. D. 1985‘Ethics and Marketing Management: An Empirical Examination’Journal of Business Research13339359Google Scholar
  17. Clark, M. A., Leonard, S. L. 1998‘Can Corporate Codes of Ethics Influence Behavior?’Journal of Business Ethics17619630Google Scholar
  18. Clarkson, M. B. E., Deck, M. C. 1992Effective Codes of Ethics: A Stakeholder ApproachThe Clarkson Centre For Business EthicsToronto, OntarioGoogle Scholar
  19. CNN: 2002, June 9, ‘Text of President Bush’s Speech’, New York, http://www.cnn.com/2002/ALLPOLITICS/07/09/bush.transcript/.Google Scholar
  20. Cressey, D. R., Moore, C. A. 1983‘Managerial Values and Corporate Codes of Ethics’California Management Review255377Google Scholar
  21. Cresswell, J. W. 1994Research Design: Qualitative & Quantitative ApproachesSageThousand Oaks, CAGoogle Scholar
  22. Driscoll, D. M., Hoffman, W. M., Petry, E. S. 1995Ethical EdgeMasterMedia LimitedNew YorkGoogle Scholar
  23. Ethics Resource Center: 1990a, Creating a Workable Company Code of Ethics (Washington, D.C).Google Scholar
  24. Ethics Resource Center and The Behavior Research Center: 1990b, Ethics Policies and Programs in American Business: Report of a Landmark Survey of U. S. Corporations (Washington, D.C).Google Scholar
  25. Ethics Resource Center: 1994, Ethics in American Business: Policies, Programs and Perceptions (Washington, D.C).Google Scholar
  26. Farrell, B. J., Cobbin, D. M. 2000‘A Content Analysis of Codes of Ethics from Fifty-Seven National Accounting Organisations’Business Ethics: A European Review9180190Google Scholar
  27. Ferrell, O. C., Fraedrich, J., Ferrell, L. 2002Business Ethics: Ethical Decision Making and CasesHoughton Mifflin CompanyBoston, MAGoogle Scholar
  28. Farrell, B. J., Cobbin, D. M., Farrell, H. M. 2002‘Can Codes of Ethics Really Product Consistent Behaviours?’Journal of Managerial Psychology17468490Google Scholar
  29. Ferrell, O. C., Gresham, L. 1985‘A Contingency Framework for Understanding Ethical Decision Making in Marketing’Journal of Marketing498796Google Scholar
  30. Ferrell, O. C., Skinner, S. J. 1988‘Ethical Behavior and Bureaucratic Structure in Marketing Research Organizations’Journal of Marketing Research25103109FebruaryGoogle Scholar
  31. Ford, R. C., Gray, B., Landrum, R. 1982‘Do Organizational Codes of Conduct Really Affect Employees’ Behavior?’Management Review7153JuneGoogle Scholar
  32. Ford, R. C., Richardson, W. D. 1994‘Ethical Decision Making: A Review of the Empirical Literature’Journal of Business Ethics13205221Google Scholar
  33. Gellerman, S. W.: 1989, ‘Managing Ethics From the Top Down’, Sloan Management Review (Winter), 73–79.Google Scholar
  34. Gibbs, E. 2003‘Developing an Effective Code of Conduct’Financial Executive194041Google Scholar
  35. Grunfeld, R. S.: 2002, November 18, ‘Enforcing A Written Code of Ethics’, New York Law Journal, http://www.clm.com/pubs/pub-1129630_1.html.Google Scholar
  36. Harris, C. E. 1978‘Structuring a Workable Business Code of Ethics’University of Florida Law Review30310382Google Scholar
  37. Hegarty, W. H., Sims, H. P.,Jr. 1979‘Organizational Philosophy, Policies, and Objectives Related to Unethical Decision Behavior: A Laboratory Experiment’Journal of Applied Psychology64331338Google Scholar
  38. Hite, R. E., Bellizzi, J. A., Faser, C. 1988‘A Content Analysis of Ethical Policy Statement Regarding Marketing Activities’Journal of Business Ethics7771776Google Scholar
  39. Hosmer, L. T. 1991The Ethics of Management (2nd Ed.)Irwin IncBoston, MAGoogle Scholar
  40. Hunt, S. D., Chonko, L. B., Wilcox, J. B. 1984‘Ethical Problems of Marketing Researchers’Journal of Marketing Research21309324Google Scholar
  41. Jordan, K. S.: 1995, ‘Designing and Implementing a Corporate Code of Conduct in the Context of an ‘Effective’ Compliance Program’, In Corporate Counsel’s Guide to Business Ethics Policies (Business Laws, Chesterland, Ohio), 301–314.Google Scholar
  42. Kapstein, M. 2004‘Business Codes of Multinational Firms: What Do They Say?’Journal of Business Ethics501331Google Scholar
  43. Kitson, A. 1996‘Taking the Pulse: Ethics and the British Cooperative Bank’The Journal of Business Ethics1510211031Google Scholar
  44. KPMG: (2000): Ethics Survey: Mangaging for Ethical Practice (Toronto, Ontario).Google Scholar
  45. Lane, M. R.: 1991, ‘Improving American Business Ethics in Three Steps,’ CPA Journal (February), 30–34.Google Scholar
  46. Laczniak, G. R., Inderrieden, E. J. 1987‘The Influence of Stated Organizational Concern Upon Ethical Decision Making’Journal of Business Ethics6297307Google Scholar
  47. Lefebvre, M., Singh, J. B. 1992‘The Content and Focus of Canadian Corporate Codes of Ethics’Journal of Business Ethics11799808Google Scholar
  48. L’Etang, J. 1992‘A Kantian Approach to Codes of Ethics’The Journal of Business Ethics11737744Google Scholar
  49. Liedtka, J. M. 1992‘Exploring Ethical Issues Using Personal Interviews’Business Ethics Quarterly2161181Google Scholar
  50. Mathews, C. M. 1987‘Codes of Ethics: Organizational Behavior and Misbehavior’Frederick, W. F. eds. Research in Corporate Social Performance and PolicyJAI PressGreenwich, CT107130Vol-9Google Scholar
  51. McAdams, R. H. 1997‘The Origin, Development, and Regulation of Norms’Michigan Law Review96338433Google Scholar
  52. McCabe, D. L., Trevino, L. K., Butterfield, K. D 1996‘The Influence of Collegiate and Corporate Codes of Conduct on Ethics-Related Behavior in the Workplace’Business Ethics Quarterly6461476Google Scholar
  53. Messmer, M. 2003‘Does Your Company Have a Code of Ethics?’Strategic Finance841314Google Scholar
  54. Miceli, M. P., Near, J. P. 1988‘Individual and Situational Correlates of Whistleblowing’Personnel Psychology41267281Google Scholar
  55. Miceli, M. P., Near, J. P., Schwenk, C. R. 1991‘Who Blows the Whistle and Why?’Industrial and Labor Relations Review45113130Google Scholar
  56. Molander, E. A. 1987‘A Paradigm for Design, Promulgation and Enforcement of Ethical Codes’Journal of Business Ethics6619631Google Scholar
  57. Montoya, I. D., Richard, A. J. 1994‘A Comparative Study of Codes of Ethics in Health Care Facilities and Energy Companies’Journal of Business Ethics13713717Google Scholar
  58. Murphy, P. E. 1988‘Implementing Business Ethics’Journal of Business Ethics7907915Google Scholar
  59. Murphy, P. E.: 1989, ‘Creating Ethical Corporate Structures’, Sloan Management Review (Winter), 81–87.Google Scholar
  60. Murphy, P. E. 1995‘Corporate Ethics Statements: Current Status and Future Prospects’The Journal of Business Ethics14727740Google Scholar
  61. Murphy, P. R., Smith, J. E., Daley, J. M. 1992‘Executive Attitudes, Organizational Size and Ethical Issues: Perspectives on a Service Industry’The Journal of Business Ethics111119Google Scholar
  62. Nijhof, A., Cludts, S., Fisscher, O., Laan, A. 2003‘Measuring the Implementation of Codes of Conduct. An Assessment Method Based on a Process Approach of the Responsible Organisation’Journal of Business Ethics456578Google Scholar
  63. Paine, L. S.: 1994, ‘Managing for Organizational Integrity’, Harvard Business Review (March/April), 106–117.Google Scholar
  64. Perry, S. R. 2002‘Method and Principle in Legal Theory’The Yale Law Journal1111757813Google Scholar
  65. Pierce, M. A., Henry, J. W. 1996‘Computer Ethics: The Role of Personal, Informal, and Formal Codes’Journal of Business Ethics15425437Google Scholar
  66. Pitt, H. L., Groskaufmanis, K. A. 1990‘Minimizing Corporate Civil and Criminal Liability: A Second Look at Corporate Codes of Conduct’The Georgetown Law Journal7815591654Google Scholar
  67. Raiborn, C. A., Payne, D. 1990‘Corporate Codes of Conduct: A Collective Conscience and Continuum’Journal of Business Ethics9879889Google Scholar
  68. Randall, D. M., Gibson, A. M. 1990‘Methodology in Business Ethics Research: A Review and Critical Assessment’The Journal of Business Ethics9457471Google Scholar
  69. Rich, A. J., C. S. Smith and P. H. Mihalek: 1990, ‘Are Corporate Codes of Conduct Effective?’ Management Accountant September, 34–35.Google Scholar
  70. Robertson, D. C., Schlegelmilch, B. B. 1993‘Corporate Institutionalization of Ethics in the United States and Great Britain’Journal of Business Ethics12301312Google Scholar
  71. Sanderson, G. R. and I. I. Varner: 1984, ‘What’s Wrong With Corporate Codes of Conduct?’ Management Accounting (July), 28–31.Google Scholar
  72. Sims, R. L., Keenan, J. P. 1998‘Predictors of External Whistleblowing: Organizational and Intrapersonal Variables’Journal of Business Ethics17411421Google Scholar
  73. Singhapakdi, A. and S. J. Vitell: 1990, ‘Marketing Ethics: Factors Influencing Perceptions of Ethical Problems and Alternatives’, Journal of Macromarketing (Spring), 4–18.Google Scholar
  74. Somers, M. J. 2001‘Ethical Codes of Conduct and Organizational Context: A Study of the Relationship Between Codes of Conduct, Empoyee Behavior and Organizational Values’Journal of Business Ethics30185195Google Scholar
  75. Stevens, B.: 1992, ‘Corporate Ethical Codes: A Study in Competing Values’, Doctoral Dissertation, Wayne State University.Google Scholar
  76. Stevens, B. 1994‘An Analysis of Corporate Ethical Code Studies: Where Do We Go From Here?’The Journal of Business Ethics136369Google Scholar
  77. Sweeney, R. B. and H. L. Siers: 1990, ‘Survey: Ethics in America’, Management Accounting (June), 34–40.Google Scholar
  78. Townley, P.: 1992, Spring, ‘Business Ethics...An Oxymoron?’, Canadian Business Review (Spring), 35–37.Google Scholar
  79. Trevino, L. 1986‘Ethical Decision Making in Organizations: A Person-Situation Interactionist Model’Academy of Management Review11601617Google Scholar
  80. Trevino, L. 1992‘The Social Effects of Punishment in Organizations: A Justice Perspective’The Academy of Management Review17647Google Scholar
  81. Trevino, L., Nelson, K. A. 1995Managing Business EthicsWileyNew YorkGoogle Scholar
  82. Trevino, L., Weaver, G. R., Gibson, D. G., Toffler, B. L. 1999‘Managing Ethics and Legal Compliance: What Works and What Hurts’California Management Review41131151Google Scholar
  83. United States Sentencing Commission. (1991). Federal Sentencing Guidelines for Organizations, http://www.ussc.gov/2002guid/tabconchapt8.htm.Google Scholar
  84. Weaver, G. R. 1993‘Corporate Codes of Ethics: Purpose, Process and Content Issues’Business and Society324458Google Scholar
  85. Weeks, W. A., Nantel, J. 1992‘Corporate Codes of Ethics and Sales Force Behavior: A Case Study’The Journal of Business Ethics11753760Google Scholar
  86. White, B. J., Montgomery, B. R. 1980‘Corporate Codes of Conduct’California Management Review238087(Winter)Google Scholar
  87. WorldCom: 2003, ‘Report of Investigation by the Special Investigative Committee of the Board of Directors’, (June 9) Google Scholar
  88. Wotruba, T. R., Chonko, L. B., Loe, T.W. 2001‘The Impact of Ethics Code Familiarity on Manager Behavior’Journal of Business Ethics335969Google Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.Schulich School of BusinessYork UniversityTorontoCanada

Personalised recommendations