Abstract
This research illustrates dangers inherent in the gap created when organizations decouple ethics program adoption from implementation. Using a sample of 182 professionals in the pharmaceutical and financial services industries, we examine the relationship between structural decoupling of formal ethics programs and individual-level perceptions and behavior. Findings strongly support the hypothesized relationships between decoupling and organizational members’ legitimacy perceptions of the ethics program, psychological contract breach, organizational cynicism, and unethical behavior.
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http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=all. Accessed May 31, 2012.
The number of questions to which our respondents answered in the affirmative is as follows: 0–40 respondents; 1–26 respondents; 2–33 respondents; 3–36 respondents; 4–29 respondents; 5–124 respondents. The results of this paper incorporate the responses of those participants who answer yes to more than half of the questions (3 or higher). As a sensitivity test, we ran the analysis using those subjects answering affirmatively to four (the median) of the five questions. The results are quantitatively and qualitatively consistent with our current analysis.
Specifically, we use principal components with Varimax rotation as our extraction method. This method assumes that all variance is common, so that there are no assumed relationships among factors.
Soper (2012), http://www.danielsoper.com/statcalc3.
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Acknowledgments
The authors would like to thank the following: the anonymous reviewers and editor at JBE for their insightful reviews; Cynthia Clark and the Harold S. Geneen Institute of Corporate Governance at Bentley University for their support; the Consortium for Sustainable Business Development at Penn State Great Valley for their support; Scott R. Boss at Bentley University for his valuable research assistance; and the members of Fulton 214 (Rich DeJordy, Erica Foldy, Danna Greenberg, Jenny Rudolph, Steven Taylor, Pacey Foster, and Peter Rivard) for their feedback on the manuscript.
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Appendix
Appendix
Ethics Program Decoupling, Formative Second Order
Three dimensions: ethics training activities, ethics program monitoring, and ethics program compliance. Each is a latent, first order construct.
Ethics Training Activities
Item adapted from Weaver et al. (1999a). Item was developed based on possible frequency of ethics training (Weekly, Monthly, Quarterly, Semi-Annually, Annually, Only one time for each new hire, Never).
- Training:
-
Please select the category that most accurately describes the frequency that ethics training occurs in your company
Ethics Program Monitoring
Items adapted from Weaver et al. (1999a). Itemswere measured on a five-point scale (1 = “Strongly Agree,” 5 = “Strongly Disagree”).
- Monitor1:
-
Assessment of a person’s ethics is a formal part of performance appraisals.
- Monitor2:
-
People are formally evaluated on the ethics of their behavior.
- Monitor3:
-
Managers/supervisors are asked to formally assess the ethical performance of their subordinates.
Ethics Program Compliance
Items adapted from Weaver et al. (1999a) and Treviño and Weaver (2001). Itemswere measured on a five-point scale (1 = “Strongly Agree,” 5 = “Strongly Disagree”).
- Compliance1:
-
Employees violating ethics expectations are disciplined.
- Compliance2:
-
Employees failing to abide by policies will be disciplined.
- Compliance3:
-
People not conforming to ethical standards are disciplined.
- Compliance4:
-
Even minor violations of ethical expectations get an employee disciplined.
Internal Ethics Program Legitimacy, Latent
Items adapted from Foreman and Whetten (2002) and MacLean and Behnam (2010). Items were measured on a five-point scale (1 = “Strongly Disagree,” 5 = “Strongly Agree”).
- Legitimacy1:
-
My company’s ethics policies and practices guide me in my decision-making at work.
- Legitimacy2:
-
My company’s ethics policies and practices help me do my job more effectively.
- Legitimacy3:
-
Our ethics program is a valuable organizational resource.
- Legitimacy4:
-
Our ethics program adds to the effectiveness of our organization.
- Legitimacy5:
-
Our ethics program is appropriate to our industry.
- Legitimacy6:
-
Our customers, regulators, investors, and other outsiders deem our ethics program acceptable.
- Legitimacy7:
-
My company’s ethics policies and practices support the employees in their day-to-day work.
Observed Unethical Behavior, Latent
Items adapted from Treviño and Weaver (2001). Items reflected the frequency that participants observed the following types of behavior (Never, Rarely, Occasionally, Frequently, Very Frequently)
- Behavior1:
-
Taking longer than necessary to do a job
- Behavior2:
-
Misuse of on-the-job time
- Behavior3:
-
Concealing errors
- Behavior4:
-
Falsifying time/quality/quantity reports
- Behavior5:
-
Calling in sick just to take a day off
- Behavior6:
-
Lying to supervisors
- Behavior7:
-
Stealing from the company
- Behavior8:
-
Dragging out work to get overtime
Psychological Contract Breach, Formative Second Order
Items adapted from Chrobot-Mason (2003) and Robinson (1996). Three dimensions: the extent to which participants’ employers made the following promises in exchange for their contributions to the organization, the importance of each promise, and whether each promise was fulfilled. Each dimension is formative first order. Items were measured on a five-point scale for each dimension (1 = “To a great extent”/“Very important to me”/“Very well fulfilled,” 5 = “To little or no extent”/“Not at all important to me”/“Not at all fulfilled”).
- Made1/Importance1/Fufilled1:
-
High pay based on performance
- Made2/Importance2/Fufilled2:
-
Long-term job security
- Made3/Importance3/Fufilled3:
-
Career development
- Made4/Importance4/Fufilled4:
-
Sufficient power/responsibility
- Made5/Importance5/Fufilled5:
-
Support with personal problems
Cynicism, Latent
Items adapted from Bedeian (2007). Items were measured on a five-point scale (1 = “Strongly Disagree,” 5 = “Strongly Agree”).
- Cynicism1:
-
I wonder about the real purpose behind company decisions
- Cynicism2:
-
I have misgivings whether my company is forthright regarding its actions
- Cynicism3:
-
I suspect my company is deliberately evasive in things it says
- Cynicism4:
-
I marvel at the disparity between reality and my company’s claims
- Cynicism5:
-
I’ve questioned whether company officials are really interested in addressing the problems facing the company
- Cynicism6:
-
I’ve suspected that the company’s public statements reflect more spin than reality
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MacLean, T., Litzky, B.E. & Holderness, D.K. When Organizations Don’t Walk Their Talk: A Cross-Level Examination of How Decoupling Formal Ethics Programs Affects Organizational Members. J Bus Ethics 128, 351–368 (2015). https://doi.org/10.1007/s10551-014-2103-1
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DOI: https://doi.org/10.1007/s10551-014-2103-1