Journal of Business Ethics

, Volume 115, Issue 2, pp 271–290 | Cite as

How Ethical Behavior of Firms is Influenced by the Legal and Political Environments: A Bayesian Causal Map Analysis Based on Stages of Development



Even though potential impacts of political and legal environments of business on ethical behavior of firms (EBOF) have been conceptually recognized, not much evidence (i.e., empirical work) has been produced to clarify their role. In this paper, using Bayesian causal maps (BCMs) methodology, relationships between legal and political environments of business and EBOF are investigated. The unique design of our study allows us to analyze these relationships based on the stages of development in 92 countries around the world. The EBOF models structured through BCMs are used to explain how EBOF in a given country group are shaped by how managers perceive political, legislative, and protective environments of business in these countries. The results suggest that irregular payments and bribes are the most influential factors affecting managers’ perceptions of business ethics in relatively more advanced economies, whereas intellectual property protection is the most influential factor affecting managers’ perceptions of business ethics in less-advanced economies. The results also suggest that regardless of where the business is conducted in the world, judicial independence is the driving force behind managers’ perceptions of business ethics. In addition, the results of this study provide further support for scholars who argue that business ethics is likely to vary among countries based on their socio-economic factors. In addition to its managerial implications, the study provides directions for policy makers to improve the ethical conduct of businesses in their respective countries.


Bayesian causal map Ethical behavior of firms Judicial independence Bribery Intellectual property protection Country development stage 



World Economic Forum


Bayesian causal map


Executive Opinion Survey


Global Competitiveness Index


Ethical behavior of firms


Intellectual property protection


Irregular payments and bribes


Judicial independence


Favoritism in decisions of government officials


Transparency of government policymaking


Strength of auditing and reporting standards


Efficacy of corporate boards


Strength of investor protection


Intellectual property rights


  1. Akaah, I. P. (1989). Differences in research ethics judgments between male and female marketing professionals. Journal of Business Ethics, 8, 375–381.CrossRefGoogle Scholar
  2. Aktas, E., Ulengin, F., & Onsel, S. (2005). A decision support system to improve the efficiency of resource allocation in health care management. Socio-Economic Planning Sciences, 41(2), 130–146.CrossRefGoogle Scholar
  3. Argandona, A. (2003). Private-to-private corruption. Journal of Business Ethics, 47, 253–267.CrossRefGoogle Scholar
  4. Argandona, A. (2005). Corruption and companies: The use of facilitating payments. Journal of Business Ethics, 60, 251–264.CrossRefGoogle Scholar
  5. Barnett, T., Bass, K., & Brown, G. (1994). Ethical ideology and ethical judgment regarding ethical issues in business. Journal of Business Ethics, 13, 469–480.CrossRefGoogle Scholar
  6. Batten, J., Hettihewa, S., & Mellor, R. (1999). Factors affecting ethical management: Comparing a developed and developing economy. Journal of Business Ethics, 19(1), 51–59.CrossRefGoogle Scholar
  7. Blundo, G., & Olivier de Sardan, J. P. (2006). Everyday corruption and the state. Citizens and public officials in Africa. London: Zed Books.Google Scholar
  8. Bommer, M., Gratto, C., Gravander, J., & Tuttle, M. (1987). A behavioral model of ethical and unethical decision making. Journal of Business Ethics, 6, 265–280.CrossRefGoogle Scholar
  9. Britz, J. J., & Lipinski, T. A. (2001). Indigenous knowledge: A moral reflection on current legal concepts of intellectual property. Libri, 51, 234–246.Google Scholar
  10. Burns, J. O., & Kiecker, P. (1995). Tax practitioner ethics: An empirical investigation of organizational consequences. Journal of the American Taxation Association, 17(2), 20–49.Google Scholar
  11. Chabal, P., & Daloz, J-P. (1999). Africa works: Disorder as political instrument. Indiana University Press.Google Scholar
  12. Cleek, M. A., & Leonard, S. L. (1998). Can corporate codes of ethics influence behavior. Journal of Business Ethics, 17, 619–630.Google Scholar
  13. Donoho, C. L., Polonsky, M. J., Herche, J., & Swenson, M. J. (1999). A cross cultural examination of the general theory of marketing ethics: Does it apply to the next generation of marketing managers? In S. Smith (Ed.), Proceedings of the Seventh Cross Cultural Research Conference, Cancun, Mexico.Google Scholar
  14. Dornoff, R. J., & Tankersley, C. B. (1975). Do retailers practice social responsibility? Journal of Retailing, 51(4), 33–42.Google Scholar
  15. Eden, C., & Ackermann, F. (1998). Making strategy. London: Sage Publications.Google Scholar
  16. Fenton, N., & Neil, M. (2000). Making decisions: Using Bayesian nets and MCDA. Knowledge-Based Systems, 14(7), 307–325.CrossRefGoogle Scholar
  17. Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework for understanding ethical decision making in marketing. Journal of Marketing, 49(Summer), 87–96.CrossRefGoogle Scholar
  18. Fleming, P., & Zyglidopoulos, S. C. (2008). The escalation of deception in organizations. Journal of Business Ethics, 81, 837–850.CrossRefGoogle Scholar
  19. Ford, R. C., & Richardson, W. D. (1994). Ethical decision making: A review of the empirical literature. Journal of Business Ethics, 13, 205–221.CrossRefGoogle Scholar
  20. Giacalone, R. A., & Jurkiewicz, C. L. (2003). Right from wrong: The influence of spirituality on percetions of unethical business activities. Journal of Business Ethics, 46, 85–97.CrossRefGoogle Scholar
  21. Gopinath, C. (2007). Recognizing and justifying private corruption. Journal of Business Ethics, 82, 747–754.CrossRefGoogle Scholar
  22. Hegarty, W. H., & Sims, H. P, Jr. (1978). Some determinants of unethical decision behavior: An experiment. Journal of Applied Psychology, 63(4), 451–457.CrossRefGoogle Scholar
  23. Hunt, S. D., & Vasquez-Parraga, A. (1993). Organizational consequences, marketing ethics and salesforce supervision. Journal of Marketing Research, 30(February), 78–90.CrossRefGoogle Scholar
  24. Hunt, S. D., & Vitell, S. M. (1986). A general theory of marketing ethics. Journal of Macromarketing, 6(Spring), 5–15.CrossRefGoogle Scholar
  25. Hunt, S. D., & Vitell, S. M. (1993). The general theory of marketing ethics: A retrospective and revision. In N. C. Smith & J. A. Quelch (Eds.), Ethics in marketing (pp. 775–784). Homewood, IL: Irwin.Google Scholar
  26. Hunt, S. D., & Vitell, S. M. (2006). The general theory of marketing ethics: A revision and three questions. Journal of Macromarketing, 26(2), 143–153.CrossRefGoogle Scholar
  27. Jensen, F. (2002). Bayesian networks and decision graphs. New York: Springer.Google Scholar
  28. Jing, R., & Graham, J. L. (2008). Values versus regulations: How culture plays its role. Journal of Business Ethics, 80, 791–806.CrossRefGoogle Scholar
  29. Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16(2), 366–395.Google Scholar
  30. Kameri-Mbote, P. (2005). Towards greater access to justice in environmental disputes in Kenya: Opportunities for intervention. International Environmental Law Research Center.Google Scholar
  31. Kemmerer, B., & Shenoy, P. (2007). Bayesian causal maps as decision aids in venture capital decision making: Methods and applications.
  32. Lam, K-C., & Shi, G. (2008). Factors affecting ethical attitudes in mainland China and Hong Kong. Journal of Business Ethics, 77, 463–479.Google Scholar
  33. Lere, J. C., & Gaumnitz, B. R. (2003). The impact of codes of ethics on decision making: Some insights from information economics. Journal of Business Ethics, 48, 365–379.CrossRefGoogle Scholar
  34. Loe, T. W., Ferrell, L., & Mansfield, P. (2000). A review of empirical studies assessing ethical decision making in business. Journal of Business Ethics, 25, 185–204.CrossRefGoogle Scholar
  35. Luo, Y. (2004). An organizational perspective of corruption. Management and Organization Review, 1(1), 119–154.CrossRefGoogle Scholar
  36. Mayo, M. A., & Marks, L. J. (1990). An empirical investigation of a general theory of marketing ethics. Journal of the Academy of Marketing Science, 18(Spring), 163–172.CrossRefGoogle Scholar
  37. McCabe, A. C., Ingram, R., & Dato-on, M. C. (2006). The business of ethics and gender. Journal of Business Ethics, 64, 101–116.CrossRefGoogle Scholar
  38. McKinney, J. A., & Moore, C. W. (2008). International bribery: Does a written code of ethics make a difference in perceptions of business professionals. Journal of Business Ethics, 79, 103–111.CrossRefGoogle Scholar
  39. Menguc, B. (1998). Organizational consequences, marketing ethics, and salesforce supervision: Further empirical evidence. Journal of Business Ethics, 17(4), 333–352.CrossRefGoogle Scholar
  40. Mishra, S., Kemmerer, B., & Shenoy P. (2001). Managing venture capital investment decisions: A knowledge-based approach. Working Paper, School of Business, University of Kansas.Google Scholar
  41. Mitchell, T. R., Daniels, D., Hopper, H., George-Falvy, J., & Ferris, G. R. (1996). Perceived correlates of illegal behavior in organizations. Journal of Business Ethics, 15, 439–455.CrossRefGoogle Scholar
  42. Nadkarni, S., & Shenoy, P. (2001). A Bayesian network approach to making inferences in causal maps. European Journal of Operational Research, 128, 479–498.CrossRefGoogle Scholar
  43. Nadkarni, S., & Shenoy, P. (2004). A causal mapping approach to constructing Bayesian networks. Decision Support Systems, 38(2), 259–281.CrossRefGoogle Scholar
  44. Nicholson, A., Twardy, C. R., Korb, K. B., & Hope, L. R. (2008). Decision support for clinical cardiovascular risk assessment. In O. Pourret, P. Naim, & B. Marcot (Eds.), Bayesian networks: A practical guide to applications bayesian networks (pp. 33–52). Cornwall: Wiley.Google Scholar
  45. Nill, A., & Schibrowsky, J. A. (2007). Research on marketing ethics: A systematic review of literature. Journal of Macromarketing, 27(3), 256–273.CrossRefGoogle Scholar
  46. O’Fallan, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996–2003. Journal of Business Ethics, 59, 375–413.CrossRefGoogle Scholar
  47. Onsel-Sahin, S., Ülengin, F., & Ülengin, B. (2006). A Bayesian causal map for a dynamic inflation analysis: The case of Turkey. European Journal of Operational Research, 175(2), 1268–1284.CrossRefGoogle Scholar
  48. Oz, E. (2001). Organizational commintment and ethical behavior: An empirical study of information system professionals. Journal of Business Ethics, 34(2), 137–142.CrossRefGoogle Scholar
  49. Pitta, D. A., Fung, H. G., & Isberg, S. (1999). Ethical issues across cultures managing the differing perspectives of China and the USA. Journal of Consumer Marketing, 16(3), 240–256.CrossRefGoogle Scholar
  50. Prasad, J. N., & Rao C. P. (1982). Foreign payoffs and international business ethics: Revisited. Southern Marketing Association Proceedings (pp. 260–264).Google Scholar
  51. Roberston, D. C. (2009). Corporate social responsibility and different stages of economic development: Singapore Turkey, and Ethiopia. Journal of Business Ethics, 88, 617–633.CrossRefGoogle Scholar
  52. Roberston, D. C., & Rymon, T. (2001). Purchasing agents deceptive behavior: A randomized response technique study. Business Ethics Quarterly, 11(3), 585–599.Google Scholar
  53. Sala-i-Martin, X., Bilbao-Osorio, B., Blanke, J., Hanouz, M. D., Geiger, T. (2011). The Global Competitiveness Index 2011–2012: Setting the foundations for strong productivity. Global Competitiveness Report, 2011–2012.Google Scholar
  54. Sala-i-Martin, X., Blanke, J., Hanouz, M. D., Geiger, T., & Mia, I. (2010). The Global Competitiveness Index 2010–2011: Looking beyond the global economic crisis. Global Competitiveness Report, 2010–2011.Google Scholar
  55. Sikoyo, G. M., Nyukuri, E., & Wakhungu, J. W. (2006). Intellectual property protection in Africa. African Centre for Technology Studies (ACTS), Ecopolicy Series; 16.Google Scholar
  56. Sims, R. L., & Gegez, A. E. (2004). Attitudes towards business ethics: A five nation comparative study. Journal of Business Ethics, 50, 253–265.CrossRefGoogle Scholar
  57. Singhapakdi, A., & Vitell, S. J. (1990). Marketing ethics: Factors influencing perceptions of ethical problems and alternatives. Journal of Macromarketing, 10(Spring), 4–18.CrossRefGoogle Scholar
  58. Singhapakdi, A., & Vitell, S. J. (1991). Research note: Selected factors influencing marketers. Deontological Norms’, Journal of the Academy of Marketing Science, 19(Winter), 37–42.CrossRefGoogle Scholar
  59. Soutar, G., McNeil, M. M., & Molster, C. (1994). The impact of the work environment on ethical decision making: Some australian evidence. Journal of Business Ethics, 13, 327–339.CrossRefGoogle Scholar
  60. Srnka, K. J. (2004). Culture’s role in marketers’ ethical decision making: A integrated theoretical framework. Academy of Marketing Science Review, 2004(1), 1–32.Google Scholar
  61. Stajkovic, A. D., & Luthans, F. (1997). Business ethics across cultures: A social coginitive model. Journal of World Business, 32(1), 17–34.CrossRefGoogle Scholar
  62. Stead, W. E., Worrell, D. L., & Stead, J. G. (1990). An integrative model for understanding and managing ethical behavior in business organizations. Journal of Business Ethics, 9, 233–242.CrossRefGoogle Scholar
  63. Tranparency International. (2010). Corruption perceptions index.
  64. Trevino, L. K. (1986). Ethical decision making in organizations: A person-situation interactionist model. Academy of Management Review, 11(3), 601–617.Google Scholar
  65. Tsalikis, J., & Fritzsche, D. J. (1989). Business ethics: A literature review with a focus on marketing ethics. Journal of Business Ethics, 8, 695–743.CrossRefGoogle Scholar
  66. Ülengin, F., Kabak, O., Onsel, S., Ulengin, B., & Aktaş, E. (2010). A problem-structuring model for analyzing transportation–environment relations. European Journal of Operational Research, 200(3), 844–859.CrossRefGoogle Scholar
  67. Velasquez, M. (2010). Corruption and bribery. In G. G. Brenkert & T. L. Beauchamp (Eds.), The Oxford handbook of business ethics. New York: Oxford University Press.Google Scholar
  68. Vitell, S. J. (1986). Marketing ethics: Conceptual and empirical foundations of a positive theory of decision making in marketing situations having ethical content. Unpublished dissertation, Texas Tech University.Google Scholar
  69. Vitell, S. J., Singhapakdi, A., & Thomas, J. (2001). Consumer ethics: An application and empirical testing of the Hunt–Vitell theory of ethics. Journal of Consumer Marketing, 18(2), 153–178.CrossRefGoogle Scholar
  70. Winter, S. J., Stylianou, A. C., & Giacalone, R. A. (2004). Individual differences in the acceptability of unethical information technology practices: The case of Machiavellianism and ethical ideology. Journal of Business Ethics, 54, 279–301.CrossRefGoogle Scholar
  71. Wyld, D. C., & Jones, C. A. (1997). The importance of context: The ethical work climate construct and models of ethical decision making—an agenda for research. Journal of Business Ethics, 16, 465–472.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  1. 1.Faculty of Business AdministrationBilkent UniversityBilkent, AnkaraTurkey
  2. 2.Dogus University, Engineering FacultyAcibadem, IstanbulTurkey

Personalised recommendations