Skip to main content
SpringerLink
Log in

Predictors of ethical decisions regarding insider trading

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This paper examines potential predictors of ethical decisions regarding insider trading. An interactionist perspective is taken, in which person variables, situational variables, and the interaction of these two sets of variables are viewed as influencing ethical decisions. The results of our study support such a perspective. Ethical decisions regarding insider trading appear to be a function of a complex set of interacting variables related to both the person and the situation. The implications of these findings are discussed.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Ashton, R. H. and Kramer, S. S.: 1980, ‘Students as Surrogates in Behavioral Accounting Research: Some Evidence’,Journal of Accounting Research 18, pp. 1–15.

    Google Scholar 

  • ‘Businesses are Signing Up for Ethics 101’: 1988,Business Week, Feb. 15, pp. 56–57.

  • ‘Companies Get Serious about Ethics’: 1986,U.S.A. Today, Dec. 9, pp. 1B–2B.

  • Douglas, N. S.: 1988, ‘Insider Trading: The Case Against the Victimless Crime Hypothesis’,Financial Review 23, pp. 127–142.

    Google Scholar 

  • DuBrin, A. J., Ireland, R. D. and Williams C.: 1989,Management and Organization (South-Western Publishing Co., Cincinnati, OH).

    Google Scholar 

  • Endler, N. S., and Magnusson, D.: 1976, ‘Toward an Interactional Psychology of Personality’,Psychological Bulletin 83, pp. 956–974.

    Google Scholar 

  • ‘Ethics Codes Spread Despite Skepticism’: 1988,The Wall Street Journal, July 15, p. 15.

  • ‘Former Analyst Wang Admits Guilt in Insider Trading Case’: 1988,Spokesman-Review, Sept. 8, p. B3.

  • Greyser, S. A. and Reece B.: 1971, ‘Businessmen Look Hard at Advertising’,Harvard Business Review 49, pp. 18–36.

    Google Scholar 

  • ‘Harvard's $30 Million Windfall For Ethics 101’: 1987,Business Week, April 13, p. 40.

  • Hegarty, W. H. and Sims, Jr. H. P.: 1978, ‘Some Determinants of Unethical Decision Behavior: An Experiment’,Journal of Applied Psychology 63, pp. 451–457.

    Google Scholar 

  • Hegarty, W. H. and Sims, Jr., H. P.: 1979, ‘Organizational Philosophy, Policies, and Objectives Related to Unethical Decision Behavior: A Laboratory Experiment’,Journal of Applied Psychology 64, pp. 331–338.

    Google Scholar 

  • Helmreich, R. L. and Spence, J. T.: 1978, ‘The Work and Family Orientation Questionnaire: An Objective Instrument to Assess Components of Achievement Motivation and Attitudes toward Family and Career’,JSAS Catalog of Selected Documents in Psychology 8, p. 35 (Ms. No. 1677).

    Google Scholar 

  • Kanner, B.: 1979, ‘Client Audits of Agencies Becoming More Common’,Advertising Age, p. 10.

  • Kirk, R. E.: 1968,Experimental Design: Procedures for the Behavioral Sciences (Brooks/Cole Publishing Co., Belmont, CA).

    Google Scholar 

  • Lewin, K.: 1951,Field Theory in Social Science (Harper and Row, NY).

    Google Scholar 

  • Magnusson, D. and Endler, N. S.: 1977, ‘Interactional Psychology: Present Status and Future Prospects’, In D. Magnusson and N. S. Endler (Eds.),Personality at the Cross-roads: Current Issues in International Psychology (Erlbaum, Hillsdale, NJ), pp. 3–35.

    Google Scholar 

  • Manne, H. G.: 1966,Insider Trading and the Stock-Market (Free Press, NY).

    Google Scholar 

  • Mayer, R. R.: 1970, ‘Managements' Responsibility for Purchasing Ethics’,Journal of Purchasing 6, pp. 13–20.

    Google Scholar 

  • Murray, T. J.: 1987, ‘Can Business Schools Teach Ethics?’,Business Month, April, pp. 24–26.

  • ‘New Arrests on Wall Street’: 1987,Newsweek, Feb. 23, pp. 48–50.

  • Randall, D. M.: 1989, ‘Taking Stock: Can the Theory of Reasoned Action Explain Unethical Conduct?’,Journal of Business Ethics 8, pp. 873–882.

    Google Scholar 

  • Remus, W.: 1986, ‘Graduate Students as Surrogates For Managers in Experiments on Business Decision Making’,Journal of Business Research 14, pp. 19–25.

    Google Scholar 

  • Rotter, J.: 1966, ‘Generalized Expectancies for Internal Versus External Control of Reinforcement’,Psychological Monographs 80 (1, Whole No. 609).

  • Schneider, B.: 1983, ‘Interactional Psychology and Organizational Behavior’, In B. M. Staw and L. L. Cummings (Eds.),Research in Organizational Behavior (JAI Press, Greenwich, CT), Vol. 5, pp. 1–31.

    Google Scholar 

  • Spence, J. T. (Ed.): 1983,Achievement and Achievement Motives (W. H. Freeman and Co., San Francisco, CA).

    Google Scholar 

  • Spence, J. T. and Helmreich, R. L.: 1978,Masculinity and Femininity: Their Psychological Dimensions, Correlates, and Antecedents (University of Texas Press, Austin, TX).

    Google Scholar 

  • Staw, B. M. and Szwajkowski, E. W.: 1975, ‘The Scarcity-Munificence Component of Organizational Environments and the Commission of Illegal Acts’,Administrative Science Quarterly 20, pp. 345–354.

    Google Scholar 

  • Terborg, J. R.: 1981, ‘Interactional Psychology and Research on Human Behavior in Organizations’,Academy of Management Review 6, pp. 569–576.

    Google Scholar 

  • ‘The Epidemic of Insider Trading’: 1985,Business Week, April 29, pp. 78–92.

  • Trevino, L. K.: 1986, ‘Ethical Decision Making in Organizations: A Person-Situation Interactionist Model’,Academy of Management Review 11, pp. 601–617.

    Google Scholar 

  • Victor, B. and Cullen, J. B.: 1988, ‘The Organizational Bases of Ethical Work Climates’,Administrative Science Quarterly 33, pp. 101–125.

    Google Scholar 

  • ‘What's Wrong’: 1987,Times, May 25, pp. 14–17.

  • Zey-Ferrell, M. and Ferrell, O. C.: 1982, ‘Role-Set Configuration and Opportunity as Predictors of Unethical Behavior in Organizations’,Human Relations 35, pp. 587–604.

    Google Scholar 

  • Zey-Ferrell, M., Weaver, K. M., and Ferrell, O. C.: 1979, ‘Predicting Unethical Behavior among Marketing Practitioners’,Human Relations 32, pp. 557–561.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management and Marketing, School of Business Administration, University of Mississippi, 38677, Mississippi, USA

    David E. Terpstra, Mario G. C. Reyes & Donald W. Bokor

Authors
  1. David E. Terpstra
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Mario G. C. Reyes
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Donald W. Bokor
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

David E. Terpstra is Hearin-Hess Professor of Management at the University of Mississippi. A frequent contributor to management and psychological journals, his current research interests involve business ethics, sexual harassment, and human resource management issues.

Mario G. C. Reyes is an Assistant Professor of Finance at the University of Idaho. His research and publications have been primarily in the areas of market efficiency, portfolio management, and financial econometrics. He has participated in the Authur Anderson & Co. Conference on Teaching Business Ethics.

Donald W. Bokor's research interests are in the domain of organizational structure and development with implications on human behavior and strategic management.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Terpstra, D.E., Reyes, M.G.C. & Bokor, D.W. Predictors of ethical decisions regarding insider trading. J Bus Ethics 10, 699–710 (1991). https://doi.org/10.1007/BF00705876

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00705876

Keywords

Search

Navigation