What Makes Us Be Good?

Towards A Framework Explaining Individual Ethical Behavior in Organizations

Laurie Pant

Sawyer School of Management

Suffolk University

(617) 573-8394

lpant@suffolk.edu

Suffolk University

8 Ashburton Place

Boston, MA 02108

(617) 573-8394

(617) 994-4260 fax

lpant@suffolk.edu

What Makes Us Be Good?

Towards A Framework Explaining Individual Ethical Behavior in Organizations

Abstract

Empirical accounting ethics research has begun investigating the effect of context on individual ethical behavior. Drawing on Maturana and Varella's model of knowing, this study adds to this effort by proposing a contextual framework of influence on the ethical decisions and behaviors individuals exhibit. Biological genetic evolution (DeWaal 1998, Wilson 1998), social tradition (Hofestde 1991, Giddens 1984), organizational culture (Trevino 1986, Hunt and Vitell 1986), personal past experiences (Trevino 1986, Victor and Cullen 1988, and Reiter and Flynn 1997), and the specific situation (Jones 1991) play interacting and recursive roles in the individual's construction of and response to reality. We attempt to introduce or extend the understanding of these influences for accounting ethics research, and based on this framework suggest several general propositions for future empirical research studies.

What Makes Us Be Good?

Towards A Framework Explaining Individual Ethical Behavior in Organizations

Behavior is contextual. What people would do in one era, in one country, in one organization, or in one family won't fly in another[1]. As firms continue to merge (e.g.., PricewaterhouseCoopers, and Ford and Volvo), the task of blending different work cultures includes dealing with distinctly different management control systems. These control systems can influence employee behavior in positive and negative ways (see texts on management accounting, for example, Horngren et al. 1994). In particular, the task of managing the ethical behavior of individuals in larger organizations (Weber 1995) and across different cultures (Cohen et al. 1993) becomes considerably more complex. Both practitioners and researchers can benefit from a more complete understanding of the factors affecting individual organizational ethical behavior. We attempt to contribute to this discussion by modeling influences on individual organizational ethical behavior drawing on current thinking in other disciplines.

Some studies have attempted to model contextual factors of individual ethical decision-making. These include one's personal history and perspective (Reiter and Flynn 1997), the organizational and professional environment (Trevino 1986 and Hunt and Vitell 1986, Victor and Cullen 1988), the larger culture (Hunt and Vitell 1986), and the specific ethical situation (Jones 1991). Hunt and Vitell (1986) and Reiter and Flynn (1997) include a recursive dimension to capture the feedback cycle of ethical behavior and context. This paper extends this work first, by linking the factors proposed in these works, by extending these in light of current research findings, and by introducing the evolutionary insights of sociobiology. The remainder of this paper begins with an introduction of three principles from sociobiology that provide an explanation of the ethical behavior and the co-evolving of elements of a moral system. Next our model proposing specific elements affecting individual ethical acts is presented, each element is discussed, and propositions for research are suggested, followed by our concluding discussion.

Principles from Sociobiology

Sociobiology provides organic systems as the emerging metaphor for thinking about organizational life. (Petzinger 1999, Johnson 1999, Wilson 1998). Organizations, as one of a class of systems, are webs of relationships (Capra 1996, Giddens 1984). Sociobiology, the study of the biological basis of social behavior or all kinds or organisms helps us better understand the characteristics of this web. Individual behavior is a response to a context of past and present factors in cooperative societies. Wilson (1998) illustrates the interaction of genes and environment.

For example, a musically gifted child, receiving encouragement from adults, may take up an instrument early and spend long hours practicing. His classmate, innately thrill-seeking, persistently impulsive and aggressive, is drawn to fast cars. The first child grows up to be a professional musician, the second (if he stays out of trouble) a successful racing-car driver. The hereditary differences in talent and personality between the classmates may be small, but their effects have been amplified by the diverging pathways into which they were guided by their differences. (p. 140)

In other words, behavior stimulates subsequent behaviors. Maturana and Varela (1987) classify the determining principles of the behavior of living things including autopoiesis, structural coupling, and natural drift. The first, autopoiesis, is a process by which living beings are self-making systems, emerging, sustaining, and adapting to change. "The most striking feature of an autopoietic system is that it pulls itself up by its own bootstraps and becomes distinct from its environment through its own dynamics, in such a way that both things are inseparable" (p. 47). The second principle, structural coupling, explains how multiple living things (systems) adapt to change through the processes of interrelationships. Structural coupling reflects the "history of recurrent interactions leading to the structural congruence between two (or more) systems" (p 75). The process of these recurrent interactions and resultant congruence is a "natural drift". Living things do not adapt to a mutating environment; rather the two co-evolve. "There is no progress or optimization of the use of the environment, but only each entity's conservation of adaptation and autopoiesis" (p115). These three principles tell us we bring forth our world in constant interaction and communication with others. Effective action leads to effective actions. The world we see is not a given a certainty or the only one that could be. Rather, it is a world that we and others self-make thus creating our own history,

This theme of co-evolution of the parts of a system serves as the basis for our framework to make the influences on an individual's ethical behavior. The model we use to portray this behavior in an organization places an individual's specific action at the center of a web of interactions (see Figure 1). Using the assumptions of structural coupling and evolving natural drift, we attempt to further characterize the recursive influences affecting the choice of action (see Figure 2). These influences are categorized into first order factors of genetics, culture, situation, and individual. Three of these are further defined. Genetics influences the coordination of societies. We break culture into three components: country, organization and local context. The individual influences include one's past and personal characteristics. We do not perceive further subcategories for the specific situation. The recursive nature of the act and these influences is important. Each of these provides some context impacting an act, and in turn, are themselves subtly modified by that action. For manageability, one important component of the model not portrayed or discussed here is the interrelationship between each of the influences. We recognize a concern oversimplification in attempting to sort out these influences that intertwine in a braid-like web of systems that interact with both with an individual's behavior and with each other. We know of no way to solve this dilemma in our two dimensional model and within the limits of language. A discussion about the completeness of this model is raised in the final section of this paper.

-- Insert Figures 1 and 2 here --

Context

Human Beings live in space and time. In space we and our environment exhibit particular characteristics. This framework represents these as culture, personal characteristics, and specific situations. Time provides a continuum of past and future spaces. Past spaces are where the historical conditioning of genetics, society, and past experience coalesced in a path. Theories of path dependency tell us that history matters (Arthur 1996, Teece et al. 1997). Traditional ethics research either assumes individuals progress through Rest's (1996) four psychological stages of moral development: perception, judgment, intention, and behavior (Louwers 1997). The horizon for an individual's ethical choice is constrained by an individual's progression through these stages. For example, only if the individual is sensitive to the ethical implications in a situation (perception), can the subsequent stages of moral behavior unfold. Complexity theory (Chilvo and Millonas 1996, Arthur 1996) tells us that learning is local and based on recent trial-feedback-assessment loops. An individual's repertoire of past experience is an important component of what he/she can perceive. As yet, accounting ethics empirical research has given little attention to the influences on these four stages. The remaining discussion in this section addresses influences show in Figure 1 that are proposed in ethics research as well as other thinking about the motivations underlying individual behavior. The remainder of this section discusses each of these influences along with propositions for future research.

Genetics and Society

Human Beings are among the group of animals that live in communities. To survive, these communities need order. Charles Darwin's survival of the fittest, long thought to apply to individuals, is now interpreted as co-evolution -- the process by which collective entities adapt to survive. Capra (1996) describes this as "an ongoing dance that proceeds through a subtle interplay of competition and cooperation, creation and mutual adaption" (p. 227). The leading primates researcher, Franz DeWaal (1996) suggests that social cooperation takes two forms: kin selection and reciprocal altruism. Kin selection is the family's care of children and other members who would otherwise not survive. This helps ensure the family's reproduction. Reciprocal altruism captures helpful acts that require outlay or effort in the short run but which may lead to benefit or returns in the long run if these favors are returned. DeWaal uses primates' grooming as an illustration. Indirect reciprocity means the payoff may come from a third party. For example, a boater will stop to help stranger who has engine trouble partly reinforcing a code that in the future, should it be needed, someone else will offer the boater a hand.

DeWaal (1996) sees communities requiring three conditions to become moral: group value, mutual aid, and internal conflict. Group value in primates is the dependence for survival on the group's provision of food or defense. Since organizations are collections of people who come together for a shared purpose (Bernard, 1938), organizations can be moral. Mutual aid is the cooperation or reciprocal exchange within the group. Internal conflict is caused when individual members have different interests. These conflicts are resolved by individual's direct reciprocation of favors or reconciliation after fights. For the larger community, there is intervention through mediation and negotiation or indirect reciprocity for group members (e.g., the boater) and contributions to the quality of the general social environment (supporting altruistic organizations). DeWaal concludes this perspective resembles a social contract. These insights suggest the following propositions.

Propositions: Reciprocal altruism is practiced in organizations.

Both mutual aid and group resolutions of internal conflict are practiced in organizations

Human societies have developed in the presence of language. Language not only adds to our ability to communicate, it allows for reflection. Maturana (1998) calls this language reflection process the coordination of coordination. Humans not only coordinate with other systems in structural coupling, we also coordinate our understanding of the process by linguistic trophallaxis. Trophallaxis is the biological process of continuity and correlation that takes place between organisms through their interchange of food or secretions. Humans work out the mutual coupling of our lives through action and through language thus intensifying our ability to adapt. Societies are the local communities with specific cultures and traditions in which we bring forth our history. This explanation suggests the following research proposition.

Propositions: Different traditions lead to different organizational ethical behavior.

Giddens (1984) uses structuration theory to makes explicit the roles and relationships of agents and structures in the ways social institutions are organized, resisted, transformed and embodied. Social institutions are the codes and rules, the blueprints underlying social action. They both influence and are influenced by social actions across time and space. Social actions follow the “rules of engagement” and each repetition of the action both reinforces and subtly alters the rules. For example, the budget process repeated in several areas of an organization over several periods informs how individuals should proceed. And each budget iteration both socializes participants to the rules and slightly alters the rules to account for different individuals and context.

Dirsmith et al, (1997) and Macintosh (1995) have applied structuration theory to management control systems. Macintosh (1995) examines ethical behavior using structuration theory to suggest that local management's managers' effort to manipulate profits is merely an inevitable and predictable response to headquarter pressures in a typical organizational structure. This structure is dominated by a power struggle between two agents. Headquarters uses the language of budgets and the sanctions of performance evaluation to impose profit targets. Local managers respond in an effort to maintain a level of independence by manipulating performance. The behavior of both players just "goes with the territory". Further, both Dirsmith et al. (1997) and Giddens (1984) describe situations that illustrate that trying to fight the system actually causes it to succeed. This would imply that individuals are powerless to fight and raises some interesting research propositions.

Propositions: The control system affect individual ethical behavior.

The control system effect is the dominant influence on ethical behavior.

Individuals respond differently to control system pressures regarding ethical issues.

Culture

Culture is one of the distinguishing characteristics of societies. The community stamps "collective mental programs" on its members influencing participants' values and culture. Values, the tendency to prefer particular states over others, are often non-rational. Culture consists of the historical and traditional patterns of thinking, feeling, and reacting that affect achievements and reflect values (Hofstede 1991, 1980, Hofstede and Bond, 1988)[2]. This section examines the effect of a culture's mental programs at three levels of society: country culture, organizational culture, and professional/ peer group culture.

Country Culture

In studies of country culture academic researchers typically build on Hofstede's (1980, 1991) 50 country 116,000 IBM subject study of work-related values and subsequently extended to include more Asian participants by Hofstede and Bond (1988) to a total of 72 countries. The five work-related values include Individualism-Collectivism, Power Distance, Uncertainty Avoidance, Masculinity and Confucian Dynamism (or short run-long run). Table 1 provides definitions for each of these. Three of these variables have been used in studies of North Americans' and Asians' project commitment (Harrison et al. 1999, Salter and Sharp 1998). Harrison et al. (1999) in a study of U.S. and Chinese nationals based on Individualism-Collectivism and Confucian Dynamism found that while both groups demonstrated an increase in willingness to continue an unprofitable project in the presence of agency effects, Chinese subjects were less inclined than were the U.S. subjects. Salter and Sharp (1998) used Individualism-Collectivism and Uncertainty Avoidance as a basis for distinguishing between U.S. and Canadian subjects and Hong Kong and Singapore counterparts. Findings in this study suggest that, consistent with theory, Asians were more willing to take risks but were unaffected by agency manipulations such as private information. The authors discuss the possibility that the presence of self-interest in agents may be modified by the Individualism-Collectivism. This is an important question for future studies of internal control system factors.

-- Insert Table 1 here --

Some cross-cultural ethics studies (Ponemon and Gabhart 1993, Etherington and Schulting 1995, Schultz et al. 1993, Cohen et al. 1995a and 1995b) have been conducted. Ponemon and Gabhart (1993) using the DIT to compare Canadian and US auditors across two firms and all ranks found Canadians had higher scores than their US counterparts. Etherington and Schulting (1995) found Canadian management accountants' DIT scores were consistent with that of Canadian CPA's in the Ponemon and Gabhart (1993) study. Using Hofstede's (1980) definition of culture differences, Canadian and US citizens score very similarly on the five work-related values and would not be classified as a cross-cultural study. However, the common findings raise interesting questions about factors influencing differential DIT scores. Schultz et al. (1993) tested the effect of country (France, Norway, and the US), organizational prosperity and type of situation on the willingness to report questionable acts. The authors found situation specific and country differences. Based on hypotheses about Individualism-Collectivism and Power Distance, Cohen et al. (1995a) report on a survey of Japanese, Latin American, and US auditors from one multinational accounting firm. US subjects rate the "ethicalness" of a series of actions differently, but generally apply the same moral constructs (e.g., justice, relativism, egoism, utilitarianism, and deontology) to different scenarios. Using the same subjects, Cohen et al. (1995b) found strongest differences in the perceptions of ethicalness for the Latin - US comparisons, countries that differed most on the Individualism and Power Distance dimensions. The findings of all these studies suggest that multinational companies may need to adjust local control systems to achieve more consistent reliability across divisions. For future studies Cohen et al. (1993) present a framework for identifying potential ethical problems in multinational accounting firms. These findings provide another starting place for testing the impacts of Hofstede's five work-related cultural variables on control systems.

Propositions: Country culture affects the impact of the control system on individual

ethical behavior.

The effect of self-interest on individual ethical behavior differs across country culture.

The effect of self-interest on individual ethical behavior is greater in cultures with high individualist scores than in cultures with high collectivist scores.

The effect of self-interest on individual ethical behavior is greater in cultures with high masculinity scores than in cultures with high scores on femininity.

Organizational Culture

An organization's ethical culture refers to members' shared perceptions about the system's practices and procedures (Schneider 1975). Researchers have recognized that organizational climate impacts individual's ethical behavior (Higgans et. al 1984, Kohlberg 1984). Trevino (1986) argues that behavior is influenced by its social context. Building on theories of cultural impact on individual behavior, she proposes four facets of this influence. Normative structure captures the collective norms; referent others are those individuals who significantly influence individuals; obedience to authority reflects the larger culture's level of power distance; and responsibility for consequences is the organization's promotion or diffusion of individual responsibility. Hunt and Vitell (1986) develop a framework for ethics that includes a work-related context of professional, industry, and organizational environment. All three environmental influences consist of informal norms, formal codes, and code enforcement. While their notion of individual decision processing is supported by philosophical and psychological theory, support for environmental influences is based on several empirical studies documenting the impact of organizational culture on managers' (Brenner and Molander 1977, Ferrell and Weaver 1978) and salespersons' (Dubinsky et al. 1980) ethical decisions. Both Hunt and Vitel (1986) and Trevino (1986) raised propositions for their theories.

Victor and Cullen (1988) develop, operationalize, and test their framework for organizational work climates combining ethical (Fritzche and Becker 1984) and psychological (Kohlberg 1984) theories with locus of analysis and other socio-cultural theories of organization. Locus of analysis captures the impact of referent groups on individual decisions/behaviors. The authors developed and administered an Ethical Climate Questionnaire (ECQ) first to MBAs (Victor and Cullen 1987) and then to over 800 subjects if four companies (Victor and Cullen 1988). A principle components factor analysis of results yielded five factors of organizational climate. These factors include Caring (a concern for the well-being of all company members), law and code (whether any laws are broken), rules (are the company's policies and procedures being followed), instrumentality (furthering individual or company self-interest), and independence (it is important to abide by one's personal ethical beliefs).

Propositions: Organizational culture affects the impact of the control system on individual ethical behavior.

Caring, law and code, rules, and independence-oriented organizational cultures will reduce the likelihood of individual unethical behavior.

Organizational cultures characterized by instrumentality will increase the likelihood of individual unethical behavior.

The effect of caring and independence-oriented organizational cultures on individual ethical behavior will be greater than law and order or rule-oriented organizational cultures.

Referent Others - Community

The third element of culture we propose as influencing ethical behavior is community. One's professional association (Frankel 1989, Gaa, 1994), unions, the local office (Schneider 1983, Weber 1995, Wimbush et al. 1997) and peers (Dubinsky and Lokin 1989, Zey-Ferrell and Ferrell 1982, Zey-Ferrell et al.1979) can significantly influence ethical decision making. For example, Weber (1995) found that organizational climate was influenced by department type. Using the ECQ, he found technical core departments reflect an instrumental climate type, buffer departments exhibit a caring climate, and boundary spanning departments demonstrate independence (principle reasoning) and law and order climate types. Victor and Cullen (1988) found age and tenure related to climate of caring and independent reasoning.

Propositions: Individuals with organizational and/or professional reference groups that emphasize high standards of ethical behavior are less likely to engage in unethical behavior.

Older Individuals and those with longer tenure in their organizations are less likely to engage in unethical behavior.

Situation

Jones (1991) is essentially the first to propose that the nature of the act will affect individual ethical behavior. Trevino's (1986) person-situation interactions focus on job and organizational context. Trevino and Youngblood (1990) model and test the impact of vicarious rewards and punishments and outcome expectencies. Dubinsky and Loken (1989) and Ferrell and Gresham (1985)Hunt and Vitel (1986) include a teleological (outcome) element as a determinant of ethical intention/behavior.

Issue contingency is framed in terms of moral intensity, or "the issue-related moral imperative in a situation" (Jones 1991, p372). Components of moral intensity are the magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity, and concentration of effect. He (1991) argues that these components may well have interactive effects. Moreover, an increase in a component will increase the moral intensity. In turn, moral intensity impacts individuals at each stage of Rest's (1986) four determinants of moral behavior: perception, reasoning, intention, and action.

Morris and McDonald (1994) found perception of a problem related to moral intensity components of social consensus and magnitude of consequences. Weber (1995) found the magnitude of consequences and the nature of harm related to moral reasoning. Jones and Huber (1992) found social consensus related to intentions. ?? (conference paper) examining the influence of moral reasoning on intention in the presence of demographics, personality variables, and moral intensity for Taiwanese students. The authors found no impact for personality variables, but that social consensus and magnitude of consequences did affect intentions.

Propositions: The moral intensity of an ethical act affect the likelihood an individual will commit the act.

Individual Personal Characteristics

By far, the majority of accounting empirical research assumes a rational model of ethical decision making grounded in Rest's (1994) four psychological stages of perception, reasoning, intention, and behavior. Once one perceives an action as having an ethical dimension, he/she applies a moral framework to evaluate the action and then moves to the state of intention (decides or knows the action appropriate to the moral evaluation) and finally to action. The most popular research instrument, the DIT measures the second stage, applying a moral framework to evaluate the action. The DIT uses Kohlberg's six level model of ethical development frequently reduced to 3 levels. Individuals at the preconventional level make decisions out of fear of punishment and self-interest. Those at the conventional level of moral development are motivated by the desire to be a good person and society's rules and laws to keep order. The postconventional reasoners evaluate actions based on internal guiding values based on principles even when these contradict social rules and laws. Kohlberg (1984) argues individuals progress sequentially through these stages. The most commonly reported DIT value to capture an individual's current stage/level is the P-score. However, Rest (1995) and Fisher and Sweeney (1996) indicate that the P-score is sensitive to the political ideological characteristic of the instrument unrelated to assessing subjects' moral judgment. Fisher (1996) does not find the suggested alternative, the N-score to be completely ideologically free either. So the instrument while consistent is biased by non-rational characteristics.

Several of those proposing models to explain individual behavior recognize non-rational elements. Trevino (1986) argued that ego strength, field dependence, and locus of control will influence an individual's choice of ethical actions. Reiter and Flynn (1998) use a model of moral imagination to hypothesize that ethical actions are influenced by character, attitudes and beliefs, personal history and environmental factors. Rest (1996) offers explanations for individual failure at each of the four psychological stages determining moral behavior. Moral sensitivity requires empathy and being able to construct cause-consequence chains of events. Moral judgment requires a mature or sophisticated ability to judge actions. Lower stages on Kohlberg's (1984) range of moral development are relatively simplistic. Moral motivation fails when the motivation to put moral values above other values fails. Rest offers a rather long discussion of why people fail to act.

This component involves ego strength, perseverance, backbone, toughness, strength of conviction, and courage. A person may be morally sensitive, may make good moral judgments, and may place high priority on moral values, but if the person wilts under pressure, is easily distracted or discouraged, is a wimp and weak-willed, then moral failure occurs… (24)

Some empirical studies have supported the findings of individual variation. Trevino and Youngblood (1990) found locus of control a factor. ??? (#75 conference paper) in a study of relativism, machiavellianism, locus of control found machiavellianism significantly related to ethical behavior. Fisher and Ott (1996) find higher DIT scores for those subjects with intuitive cognitive styles (on the Myers-Briggs Type Indicator test) over those with sensing cognitive styles.

Propositions: An individual's personal characteristics affect the likelihood an individual will commit the act.

Individuals demonstrating external locus of control will be more likely to commit unethical acts.

Individuals demonstrating machiavellianism will be more likely to commit unethical acts.

Ego strength and field dependence affect the likelihood an individual will commit the act.

Individual's Past History

All living beings are built with "blind spots"; we do not know what we do not know. These blind spots are challenged when we encounter new experiences such as living in another culture, or trying to understand another department or functional area's world view. This larger perspective allows us to see new concepts and observe new elements of relationships not previously available to us. However, without those new experiences, we are limited. Our history appears the only possible history. And that history matters (Arthur, 1996).

Some elements of personal characteristics are heavily influenced by past history. Wisdom seems partly a function of age (?? ,Kohlberg 1986). Individuals who have lived in two cultures seek with a "meta" unavailable to those who have known only one culture. Those who lived through America's depression exhibit the personal conservative financial values of thrift and fear of credit while supporting the liberal political tradition of social welfare.

Propositions: Multinational work experience affects the likelihood an individual will commit the act.

Conclusion

We have proposed a contextual framework for individual ethical behavior in organizations. Building on the sociobiological arguments that humans co-evolve with others within their environment, we summarize recent literature that discusses this process of evolving, and literature specifying the co-evolving elements. Sociobiology argues the self-making acts of living things. We categorize the factors that affect an individual act at the level of society, country culture, organizational culture, and subculture referent others such as professional, departmental, or peer group others. Additionally, the literature on the characteristic of the particular action and the specific actor are reviewed. This study builds on previous theories of individual behavior in accounting and other business research by attempting to link these in a more comprehensive framework, including insights from other domains, and offering related propositions for future research agendas.

This framework extends previous work by tying together the contextual elements these studies, adding insights from sociobiology and sociology, and giving emphasis to the recursive co-evolving nature of behavior in context. There are several issues remaining. First, the accuracy of the model proposed here is both a theoretical and an empirical question. Although we are confident we have captured useful new insights, all of the factors here may not remain in future improved models, and omitted factors may be added. In any case, the interactions of elements will need to be specified.

One issue is concerns our claim for adding a dynamic character to the model. Several previous models included a feedback loop (Ferrell and Gresham 1985, Hunt and Vitel 1986, Reiter and Flynn 1996), most are sequential and uni-directional. We model the relationships as a multi-directional web. However, our propositions only address a one-way effect of the dynamic elements. Specifically examining the recursive nature of co-evolving ethical behavior will be an important research contribution.

Ideally, a collaborative approach to examining the propositions and other insights raised here about context could be of considerable help in coping with the complexity of current and future management control of ethical behavior. Accounting academics would benefit from the insights of researchers from different disciplines in considering the specific factors affecting individual ethical behavior. Dialogue with and ethnographic studies of managers in organizations would add insights and texture as researchers attempt to fill in the tapestry explaining ethical behavior in organizational context. There is much work to be done.

REFERENCES

Arthur, B. 1996. Increasing Returns and Path Dependence in the Economy. The University of Michigan Press.

Ajzen, I. 1991. The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50:179-211.

Bernard, C.1938. The Functions of an Executive. Harvard University Press.

Brenner, S., and E. Molander. 1977. Is the ethics of business changing? Harvard Business Review. 55: 57-71.

Capra, F. 1996. The Web of Life. Anchor Books.

Chialvo, D. and M. Millonas. 1996. How Swarms Build Cognitive Maps. Working Paper, The Santa Fe Institute.

Cohen, J., L. Pant and D. Sharp, 1993. Culture based ethical conflicts confronting multinational accounting firms. Accounting Horizons, 7:1-13.

Cohen, J., L. Pant, and D. Sharp. 1995a. An international comparison of moral constructs underlying auditors' ethical judgments. Research on Accounting Ethics. (1) 97-126.

Cohen, J., L. Pant, and D. Sharp. 1995b. An exploratory examination of international differences in auditors' ethical perceptions. Behavioral Research in Accounting. (7): 37-64.

DeWaal, F. 1996. Good Natured: The Origins of Right and Wrong in Humans and Other Animals. Harvard University Press.

Dirsmith, M., J. Heian, and M. Covaleski. 1997. Structure and agency in an institutionalized setting: The application and social transformation of control in the big six. Accounting, Organizations and Society. 22: 1-27.

Dubinsky, A. and B. Loken .1989. Analyzing ethical decision making in marketing. Journal of Business Research. (19): 83-107.

Dubinsky, A., J. Alan, and W. Rudelius. 1980. Ethical beliefs: How students compare with industrial salespeople. Marketing in the 80's -- Changes and Challenges, ed R Bagozzi, et al. American Marketing Association. 73-76.

Etherington, L. and L. Schulting. 1995. Ethical development of accountants: The case of Canadian certified management accountants. Research on Accounting Ethics (1): 235-251.

Ferrell, O. and L. Gresham. 1985. A contingency framework for understanding ethical decision making in marketing. Journal of Marketing. (49): 87-96.

Ferrell, O. and K. Weaver. 1978. Ethical beliefs of marketing managers. Journal of Marketing. (July) 69-73.

Fisher D 1996. An examination of the validity of a new measure of moral judgment. Working paper.

Fisher, D. and J. Sweeney. 1996. The relationship between political attitudes and moral judgments: Examining the validity of the Defining Issues Test. Journal of Business Ethics.

Fisher, D. and R. Ott. 1996. A study of the relationship between accounting studnets' moral reasoning and cognitive styles. Research on Accounting Ethics. (2) 51-72.

Frankel, M. 1989. Professional codes: Why, how, and with what impact. Journal of Business Ethics. (7): 605-615.

Fritzche, D. and H. Becker. 1984. Linking management behavior to ethical philosophy. Academy of Management Journal. (27): 166-175.

Gaa, J. 1996. Ethics research and research ethics. Behavioral Research in Accounting 8 (supplement): 12-24.

Giddens A. 1984. The Constitution of Society: Outline of the Theory of Structuration. Policy Press.

Harrison, P., C. Chow, A. Wu, and A. Harrell. 1999. A cross-cultural investigaation of managers' project evaluation decisions. Behavioral Research in Accounting. (11): 143-160.

Higgans, A., C. Power, and L. Kohlberg. 1984. The relationship of moral atmosphere to judgments of responsibility. Morality, Moral Behavior, and Moral Development. Eds. W. Kurtines and L Gewirtz, 76-104.

Hofstede, G. 1991. Cultures and Organizations: Software of the Mind. McGraw-Hill.

Hofstede, G. 1980. Culture;s Consequences. Sage Publications.

Hofstede, G. and M. Bond. 1988. The Confucius Connection: From cultural roots to economic growth. Organizational Dynamics. 5-21.

Horngren, C., G. Foster, S. Datar. 1994. Cost Accounting: A Managerial Emphasis Eighth Ed. Prentice Hall.

Hunt, S.D., and S. Vitell, 1986. A general theory of marketing ethics, Journal of Marketing Ethics. (Spring): 5-16.

Johnson, T. 1998. Reflections of a recovering management accountant. Speech to the Society for Organizational Learning, January.

Jones, T. and V. Huber. 1992. Issue contingency in ethical decision making. International Association for Business and Society Proccedings. 156-166.

Jones, T. 1991. Ethical decision-making by individuals in organizations: An issue-contingent model. Academy of Management Review (April): 366-395.

Kohlberg, L. 1984. Essays on Moral Development. Volume 2: The Psychology of Moral Development. San Francisco, Harper and Row.

Louwers, T., L. Ponemon, and R. Radtke. 1997. Examining Accountants' Ethical Behavior: A Review and Implications for Future Research. In Behavioral Accounting Research, edited by V. Arnold and S. Sutton. Sarasota, FL: American Accounting Association.

Macintosh, N. 1995. The ethics of profit manipulation: A dialectic of control analysis, Critical Perspectives on Accounting 6:289-315.

Maturana, H. and Varela, F. 1987. The Tree of Knowledge: The Biological Roots of Human Understanding. Shambhala.

Morris, S. and R. McDonald. 19?? The role of moral intensity in moral judgments: An empirical investigation. Journal of Business Ethics.

Petzinger, T. 1999. The New Pioneers. Doubleday.

Ponemon, L and D. Gabhart, 1993. Ethical Reasoning in Accounting and Auditing, Research Monograph Number 21, CGA-Canada Research Foundation.

Reiter, S. and L. Flynn, 1997. Moral imagination and accounting ethics, Working Paper, Binghamton University.

Rest, J. 1986. Moral Development: Advances in Research and Theory. Praeger

Rest, J. and D. Narvaez. 1994. Moral Development in the Professions: Psychology and Applied Ethics. Lawrence Earlbaum and Associates.

Salter, S. and D. Sharp. 1998. Escalation of commitment: A test of a multitheoretic approach. American Accounting Association National Meeting, New Orleans.

Schneider, B. 1983. Work climates: An interactionist perspective. Environmental Psychology: Directions and Perspectives. Eds. N. Feimer and E. Geller, Prager.

Schneider, B. 1975. Organizational climate: An essay. Personnel Psychology. (28): 447-479.

Schultz, J., D. Johnson, D. Morris, and S. Dyrnes. 1993. An investigation of the reporting of questionable acts in an international setting. Journal of Accounting Research. (19) 482-501.

Victor, B, and J. Cullen. 1988. The organizational bases of ethical work climates. Administrative Science Quarterly, 33: 101-125.

Teece, D., G. Pisano, and A. Schuen. 1997. Dynamic Capabilities and Strategic Management, Strategic Management Journal, 18:509-33.

Trevino, L. and S. Youngblood. 1990. Bad apples in bad barrels: A causal analysis of ethical decision-making behavior. Journal of Applied Psychology. 75: 378-385.

Trevino, L.K., 1986. Ethical decision-making in organizations: a person-situation interactionist model. Academy of Management Review (July): 601-617.

Weber, J. 1995. Influences upon organizational ethical subclimates: A multipdepartmental analysis of a single firm, Organization Science, 6: 509-523.

Wilson, E. 1998. Consiliance. Harvarad University Press.

Wimbush, J. J. Shepard, and S. Markham. 1997. An empirical examination of the relationship between ethical climate and ethical behavior from multiple levels of analysis. Journal of Business Ethics 16: 1705-1716.

Zey-Ferrell, M. M. Weaver, and O. Ferrell. 1979. Predicting unethical behavior among marketing practitioners. Human Relations. 557-569.

Zey-Ferrell, M. and O. Ferrell. 1982. Role-set configuration and opportunities as predictors or unethical behavior in organizations. Human Relations. 587-604.

Figure 2

Web of Context and Ethical Actions

FIGURE 1

FRAMEWORK OF ETHICAL BEHAVIOR

Oval: Genetic History

Past Experience

Society

Personal

Oval: Culture Characteristics

Oval: Situation

Community Organization Group

Table 1

Hofstede's Work-Related Culture Values

Cultural Value	Definition
Individualism-Collectivism	Reflects the individual's perception of the role of self in relation to the group. Where individuals are expected to take charge of themselves, the society is more individualistic. Where individuals are supported throughout life by cohesive groups, values are more collective.
Power Distance	Represents the gap in power between a superior and a subordinate. In high power distance cultures subordinates and their bosses have a greater expectation that subordinates should unquestioningly follow directives.
Uncertainty Avoidance	Measures the culture members' tolerance for ambiguity in the face of the unknown. Questions cover anxiety levels, need for security, and dependence on experts.
Masculinity-Feminism	Captures the preference of both sexes for achievement over nurturing. Cultures scoring high on masculinity are more achievement oriented.
Confucian Dynamism (Short run-Long run)	Describes a society's value of long term objectives achieved by such behaviors as perseverance, thrift, and subordination for a purpose. Where the orientation is short run, the society exhibits immediate reciprocation of favors and gifts, "face" or show, and quick results.

FOOTNOTES