Journal of Business Ethics

, Volume 48, Issue 4, pp 365–379 | Cite as

The Impact of Codes of Ethics on Decision Making: Some Insights from Information Economics

  • John C. Lere
  • Bruce R. Gaumnitz
Article

Abstract

Although it is suggested that an important role for codes of ethics is to influence decision making, the little research into the impact of codes of ethics on decisions finds little impact. Insights from information economics help to explain this.

If an individual will select (forego) the action that a code of ethics indicates to be ethical (unethical) in the absence of a code, then expressing that position in a code of ethics will have no impact on the action chosen. Even if the individual will select (forego) the action that a code of ethics indicates to be unethical (ethical) in the absence of a code, the presence of a statement in the code of ethics must cause the individual's beliefs to change enough so that he or she changes actions. This can be a fairly high obstacle.

Enforcement provisions can increase the likelihood that an individual will select (forego) the action that a code of ethics indicates to be ethical (unethical). There are limits, however, as to how effective enforcement provisions can be.

Therefore, although there may be other important goals for a code of ethics, having an impact on decision making is one that is often difficult to achieve.

business ethics codes of ethics ethical issues ethics and decision making information economics professional ethics 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. American Institute of Certified Public Accountants, Tax Executive Committee: 1991, Statements on Responsibilities in Tax Practice.Google Scholar
  2. APICS: 2000, 2000 CPIM Registration Bulletin.Google Scholar
  3. Blodgett, M. S. and P. J. Carlson: 1997, 'Corporate Ethics Codes: A Practical Application of Liability Prevention', Journal of Business Ethics 16(12-13), 1363-1369.Google Scholar
  4. Cleek, M. A. and S. L. Leonard: 1998, 'Can Corporate Codes of Ethics Influence Behavior?', Journal of Business Ethics 17(6), 619-630.Google Scholar
  5. Collins, D.: 2000, 'The Quest to Improve the Human Condition: The First 1500 Articles Published in Journal of Business Ethics', Journal of Business Ethics 26(1), 1-73.Google Scholar
  6. Demski, J. S. and G. A. Feltham: 1976, Cost Determination: A Conceptual Approach (Iowa State University Press, Ames, IA).Google Scholar
  7. Frankel, M. S.: 1989, 'Professional Codes: Why, How, and with What Impact?', Journal of Business Ethics 8(2 and 3), 109-115.Google Scholar
  8. Gaumnitz, B. R. and J. C. Lere: 2002, 'Contents of Codes of Ethics of Professional Business Organizations in the United States', Journal of Business Ethics 35(1), 35-49.Google Scholar
  9. Hume, E. C., E. R. Larkins and G. Iyer: 1999, 'On Compliance with Ethical Standards in Tax Return Preparation', Journal of Business Ethics 18(2), 229-238.Google Scholar
  10. Institute of Management Accountants: 1983, 'Standards of Ethical Conduct for Management Accountants', Statement on Management Accounting No. 1C (Institute of Management Accountants, Montvale, NJ).Google Scholar
  11. Kaptein, M. and J. Wempe: 1998, 'Twelve Gordian Knots When Developing an Organizational Code of Ethics', Journal of Business Ethics 17(8), 853-869.Google Scholar
  12. Kitson, A.: 1996, 'Taking the Pulse: Ethics and the British Cooperative Bank', Journal of Business Ethics 16(9), 1021-1031.Google Scholar
  13. Molander, E. A.: 1987, 'A Paradigm for Design, Promulgation, and Enforcement of Ethical Codes', Journal of Business Ethics 6(8), 619-631.Google Scholar
  14. Moyes, G. D. and K. Park: 1997. 'Chief Financial Officers' Perceptions Concerning the IMA's Standards of Ethical Conduct', Journal of Business Ethics 16(2), 189-194.Google Scholar
  15. Schwartz, M.: 2001, 'The Nature and Relationship between Corporate Codes of Ethics and Behavior', Journal of Business Ethics 32(3), 247-262.Google Scholar
  16. Stead, W. E., D. L. Worrell, and J. G. Stead: 1990, 'An Integrative Model for Understanding and Managing Ethical Behavior in Business Organizations', Journal of Business Ethics 9(3), 223-242.Google Scholar
  17. Stevens, B.: 1994, 'An Analysis of Corporate Ethical Code Studies: “Where Do We Go from Here?”', Journal of Business Ethics 13(1), 63-70.Google Scholar

Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • John C. Lere
    • 1
  • Bruce R. Gaumnitz
    • 1
  1. 1.Department of AccountingSt. CloudU.S.A

Personalised recommendations