Integrate and apply contemporary Ethics & Governance issues in a business context CLO6:?Effectively communicate ethics and gover
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CLO1: Integrate and apply contemporary Ethics & Governance issues in a business context
CLO6: Effectively communicate ethics and governance concepts and arguments in a logical manner
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Getting trained and immersed in ethics and governance scholarly literature can be challenging, that students of this important subject need to understand, that to become future ethical business leaders and contributors. The purpose of this assignment is to build up your ability to bridge normative theories and scholarly readings.
From each of these readings, identify whether each uses Deontology, Teleology or Virtue ethics, or a combination to justify their approach. While it may seem like a challenging reading task, please remember, the use of these given readings makes your assignment easier.
Assignment 1 Readings
1
Drašček, M., Rejc Buhovac, A. and Mesner Andolšek, D., 2021. Moral Pragmatism as a Bridge between Duty, Utility, and Virtue in Managers’ Ethical Decision-Making. Journal of Business Ethics, 172(4), pp.803-819.
2
Batten, J.A., Loncarski, I., Szilagyi, P.G., 2018, When Kamay Met Hill: Organisational Ethics in Practice. Journal of Business Ethics, 147, pp. 779–792. ** For this reading, students are to focus on page 785 onwards (Stylised Models on Linkages Between Ethical Norms, Rules and Regulation).
These two readings give you significant opportunities to demonstrate your understanding of ethics theories. For both of these readings, identify and critically discuss at least two underpinning ethics theories, that inform the authors’ approaches.
For each of the theories you choose to discuss, find at least one more reading that helps supports your definition of the theory, e.g. readings that substantiate definitions of normative theories (Kantian, Deontology, Utilitarianism), or non-normative theories.
Avoid writing in dot-point form, construct your sentences in argumentative form. Practice this skill for Assignment 2 and 3 as well.
In your analysis, focus on aspects of the readings that demonstrate aspects of an underpinning ethics theory.
To assist, you may wish to consider:
Analytically, do you find one or more than one ethics perspective? If so, which are they and why?
- You could critically analyse the selected aspects or features of the paper against the ethics perspectives.
- Using appropriate in-text citations, you may indicate paragraphs of the papers that may sustain your justification, but you must not cut and paste verbatim, but learn to cite the paragraph and produce paraphrased analysis.
- Critically analyse the selected paragraph for normative or non-normative (including psychological) approach to study of ethics.
Vol.:(0123456789)1 3
Journal of Business Ethics (2021) 172:803–819 https://doi.org/10.1007/s10551-020-04489-2
O R I G I N A L PA P E R
Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical Decision‑Making
Matej Drašček1 · Adriana Rejc Buhovac2 · Dana Mesner Andolšek1
Received: 23 December 2019 / Accepted: 18 March 2020 / Published online: 28 March 2020 © Springer Nature B.V. 2020
Abstract The decline of empirical research on ethical decision-making based on ethical theories might imply a tacit consensus has been reached. However, the exclusion of virtue ethics, one of the three main normative ethical theories, from this stream of literature calls this potential consensus into question. This article investigates the role of all three normative ethical theo- ries—deontology, utilitarianism and virtue ethics—in ethical decision-making of corporate executives. It uses virtue ethics as a dependent variable thus studying the interconnectivity of all three normative ethical theories in specific circumstances. We find that managers use different ethical theories in different circumstances (business vs. private life, formal vs informal ethical leadership, etc.). A predictive model of ethical decision-making, however, cannot be established. We also find that only a limited number of variables influence the choice of ethical theory, which leans business ethics towards postmodern management paradigm. We suggest that moral pragmatism could provide the answer to ethical decision-making.
Keywords Ethical decision-making · Managers · Moral pragmatism · Virtue ethics · Postmodernism
Introduction
Ethics, as a philosophical discipline, serves as a theoretical basis for the ethical decision-making of managers (Arjoon 2007; Hunt and Vitell 1986; Paul and Elder 2005; Treviño et al. 2006). However, less than 10% of all empirical studies on ethical decision-making use philosophical ethical theo- ries to understand the decision-making phenomenon (Craft 2013). Additionally, only a few have been done in recent years (see Amirshahi et al. 2016; Khalid et al. 2017; Paik et al. 2019; Vance et al. 2016; Wisler 2018). Indeed, there has been a major decrease in the overall number of published studies, particularly compared to 1993–1994, when 11 stud- ies on this topic were published (O’Fallon and Butterfield
2005). This decrease in research might indicate a tacit con- sensus on the extant empirical findings related to ethical decision-making.
However, there are a number of issues that make the lack of research—and the potential consensus—concern- ing. First, our literature review indicates that the majority (21) of empirical studies of ethical decision-making based on ethical theories investigated two main normative ethical theories, namely utilitarianism and deontology, with other studies including also other theories, e.g. Machiavellianism (e.g. Cyriac and Dharmaraj 1994; Hegarty and Sims 1978); theory of justice and rights (e.g. Kujala 2001; McDonald and Pak 1996; Premeaux 2004). In total, 19 different combina- tions of ethical theories have been researched, with some studies testing only one theory (e.g. Corey et al. 2014) and others testing up to nine different ethical theories simultane- ously (Wisler 2018) (Table 1 shows all the variations of test- ing theories). Second, the simultaneous testing of the basic three normative ethical theories has been limited only to testing of ethical reasoning with limited inclusion of factors (e.g. Khalid et al. 2017). In addition, from the perspective of research participants, only slightly more than a third of stud- ies included managers (largely from lower decision-making levels) to study ethical decision-making. Finally, the major- ity of studies were done in the USA, with around 25% done
* Matej Drašček [email protected]
Adriana Rejc Buhovac [email protected]
Dana Mesner Andolšek [email protected]
1 Faculty of Social Studies, University of Ljubljana, Kardeljeva ploščad 5, 1000 Ljubljana, Slovenia
2 Faculty of Economics, University of Ljubljana, Kardeljeva ploščad 17, 1000 Ljubljana, Slovenia
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in Latin America, Asia and Australia and less than 10% done in Western Europe, which suggests that the relative lack of diversity in study sites is additional limitation of previous research.
This article aims to determine whether the tacit consen- sus on the dominance of utilitarianism and deontology in managers’ ethical decision-making holds if virtue ethics is considered. Virtue ethics has been recently reintroduced in the field of business ethics (Fontrodona et al. 2013; Norman 2013; Whetstone 2001) and we lack the understanding of its influence on ethical decision-making when tested along with utilitarianism and deontology (e.g. Furler and Palmer 2010; Khalid et al. 2017; Yoon 2011). Our study investi- gates the phenomenon on C-suite managers and executives, which has received limited research coverage (Craft 2013), with the inclusion of vast and various personal and organi- sational factors influence (Campbell and Cowton 2015). Finally, the article aims to investigate the possible existence of ‘ethical ambidexterity’, which occurs when managers do not use grand ethical theory consistently, but base their ethical decisions on reasonable deliberation and choose the
one that resonates most in a given situation (Bazerman and Tenbrunsel 2011a, b; Lemoine et al. 2019; Shafer-Landau 2015; Simons 2002).
Theoretical Background
The Big Three: Utilitarianism, Deontology and Virtue Ethics
The arguments for the three main ethical theories—utilitari- anism, deontology and virtue ethics—originate from philos- ophers (e.g. Fieser and Lillegard 2002; Foot 1978; Louden 1984; Hursthouse 1999; MacIntyre 1981; Sher 2012) and are supported by mainstream bodies of knowledge (e.g. the Routledge Philosophy Dictionary and Stanford Encyclopae- dia of Philosophy; The Blackwell Guide to Ethical Theory), business ethicists (Arjoon 2007; Donaldson and Werhane 1993; Norman 2013; Whetstone 2001) and leadership theo- ries (Lemoine et al. 2019).
Kymlicka (2002) summarised the historical evolution of three main ethical theories. Virtue ethics was the first ethi- cal theory established by Aristotle (2000) in ancient Greece. Aquinas used it as the foundation for the ethics of the Cath- olic Church, which prevailed until the eighteenth century. Deontology, which was formally introduced by Kant (1788), is grounded in the divine command theory, which was part of the tradition of justifying ethics based on the existence of God. Utilitarianism, which was formally introduced at almost the same time as deontology by Bentham (1789), opposes the established tradition of connecting ethics with divinity and instead is based in empiricism.
The division of ethical theories into only utilitarianism and deontology started with the Anglo-Saxon school of phi- losophy, which classifies ethical theories based on two main types of moral reasoning: teleological, which judges moral- ity based on the consequences of the action, and deontologi- cal, which does not consider the consequences of an action (Schüller 1973). The basis of teleological ethics (utilitarian- ism and virtue ethics) is the Platonic and Aristotelian idea of good and happiness (Greek: eudaimonia), which is viewed as the ultimate goal of life, while deontological ethics is based on law, obligations and duties (Ricouer 1990). While some research on ethical decision-making has used this divi- sion (e.g. Galbraith and Stephenson 1993), virtue ethics has been largely omitted. This is particularly strange since the most prominent figure in teleological ethical theory, which includes utilitarianism as well, is Aristotle, who developed virtue ethics (Heidegger and Schüssler 1992).
One possible reason for this omission could be that utilitarianism and deontology have long been seen as the only legitimate ethical theories (Sher 2012). Virtue eth- ics was reintroduced to mainstream philosophy as another
Table 1 The underlying ethical theories in the empirical studies of ethical decision-making
Philosophical theory Number
Machiavellism 2 Deontology and utilitarianism 21 Rule and act utilitarianism; act and rule deontology; egoism 2 Personal values, professional values 1 Egoism, utilitarianism, Kant’s imperative, goaled rule 2 Relativism, justice, utilitarianism, deontology, hybrid
theory 1
Self-interest, theory of role conflict 1 Utilitarianism, Machiavellism 1 Self-interest, utilitarianism, categorical imperative, duties,
justice, neutralisation, religion and light of day 1
Contractualism, rules, conformism 1 Justice, deontology, relativism, utilitarianism, egoism 1 Rule and act utilitarianism, theory of justice, theory of
fairness 2
Utilitarianism, morality (duty), justice 1 Ethical sensitivity 1 Justice, utilitarianism, relativism and egoism 1 Deontology (formalism and idealism), social contract
theory 1
Linear and nonlinear thinking 1 Fatalism, virtue ethics, utilitarianism, deontology and
amorality 1
Economic egoism, reputation egoism, rule and act utilitari- anism, self-virtue, other’s virtue, rule and act deontology
1
Utilitarianism 1 Total 44
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normative, philosophical, ethical theory by Anscombe (1958) and reinforced its role as a basis for the other two by MacIntyre (1984). What separates virtue ethics from the other two theories, however, is the importance of virtues of decision makers itself. While utilitarianism considers virtues to be characteristics that result in good consequences and deontology considers them to be characteristics of someone who fulfils his duties, virtue ethics resists any definition of ethics that does not rely on virtues (e.g. justice) (Kawall 2009).
The confusion between the main ethical theories is even greater in other professional and management academic sources. The Stanford Encyclopaedia of Philosophy, for example, differentiates between 39 different types of ethics. However, there is a clear distinction between the main ethi- cal theories, on the one hand, and derived, professional, and political ethical theories, on the other hand. Derived ethical theories build upon main ethical theories but change their propositions. For example, the theory of rights is derived from Kant’s definition of duty as a categorical imperative (Forst 2012). Professional ethical theories are based on main ethical theories but are applied to a specific profession (medicine, law, journalism or business; Singer 1979). Politi- cal ethical theories are mostly the consequence of socio- cultural influences; for example, the feminist ethics of the 1970s was an answer to the rising importance of women in society (Dagger and Lefkowitz 2014).
In the context of ethical decision-making normative models and processes, ethical theories are mostly divided into deontology (or universalism) and utilitarianism (or relativism) (Ferrell and Gresham 1985; Forsty 1980; Hunt and Vitell 1986). This division has been adopted in most empirical research on ethical decision-making based on ethi- cal theories (Craft 2013); since the first study in this stream of research (see Hegarty and Sims 1978), almost half of all related studies have included this dual view. This dualism is also present in quantitative (Craft 2013; Ford and Richard- son 1994; Loe et al. 2000; O’Fallon and Butterfield 2005) and qualitative (Lehnert et al. 2016) meta-reviews of ethi- cal decision-making based on ethical theories. On the other hand, virtue ethics has also been mostly studied in leadership theory (e.g. Bauman 2018; Neubert et al. 2009; Cameron 2011; Whetstone 2001; Knight and O’Leary 2006), values studies (Moore 2008; Murphy 1999; Chun 2005; Chan and Ananthram 2019), personality traits studies (Riggio et al. 2010; Walsh et al. 2016) and applied to selected professions (Oakley and Cocking 2001), such as medical profession (Jor- dan and Meara 1990; Pellegrino 2002; Brody 1988; Barlow et al. 2018). Also, virtue ethics has yet to be researched in comparison with the other two main ethical theories in the domain of managers’ ethical decision-making.
Anyhow, even without inclusion of major normative eth- ical theory, these meta-reviews conclude that deontology
(universalism) positively and utilitarianism (relativism) negatively effects ethical decisions (Craft 2013; O’Fallon and Butterfield 2005). However, this is paradoxical for two reasons. First, by definition, the use of utilitarianism, one of the main ethical theories, cannot lead to unethical decisions because that would mean that the ethical theory is unethical. Second, unlike utilitarianism, deontology does not see con- sequences or results of ethical decision as a part of ethics, and so the conclusions of research cannot be based on the same end results (i.e. ethical decisions).
Thus, the basic problem remains: if a tacit consensus has been reached regarding empirical research on the outcomes of ethical decision-making, but consensus regarding the division of the main ethical theories has not, how could the outcomes of prior research be valid? Indeed, there are, as previous mentioned, 19 different divisions of ethical theories in empirical research, so there could not be a tacit consensus. Additionally, utilitarianism is viewed in ethical decision- making research to lead to unethical decisions and deontol- ogy is viewed to lead to ethical decisions, but virtue ethics is not even included in the meta-reviews research.
Moral Pragmatism as the Bridge Between Theory and Practice in Decision‑Making
Moral pluralism is independent from meta-ethical views (Mason 2018). As a theory, it offers an explanation of the existence of complex super-eminent structure of ethical values. It means that each value has its own basis and that values cannot be derived from only one super-value (for example from justice or fairness) (Becker 1992). However, the philosophical concept of moral pluralism should not be confused with moral relativism, which claims that moral actions are judged in relation to, for example, culture, values and society (Hinman 2012).
On the other hand, moral pluralism goes hand-in-hand with the postmodernist theory of organisational studies, which emphasises a fragmented view of the people in an organisation (Alvesson and Deetz 2006). This theory is a step away from the modernist perspective of people as wholes, which emphasises masculinity, reason, vision and control. In contrast, postmodernism claims that each person is complex and that people are inadvertently part of the web of sex, age, sexuality, power and other factors, all of which have moral weight (Cooper and Burrell 2015).
The concept of narrative fallacy provides the same expla- nation about perceptive as people as whole as postmodern- ism, but it focuses upon models based in social studies. It claims that such models cannot be developed, but attempts are still made because of humans’ tendency to look at a sequence of events or facts and explain them through forced logical connections (Taleb 2008). Explanations connect facts, creating a story that makes it easier for humans to
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remember. However, a problem arises when this is miscon- strued as an understanding of actual facts or modus operandi of phenomena, similar to predictive models, which are both not valid (Taleb 2007).
Rosenthal and Buchholz (2007) attempted to resolve this postmodernist approach and the normative fallacy in busi- ness ethics through pragmatism and moral pluralism. This is in accordance with England (1967), who claimed that the first approach to managerial decision-making must be pragmatism, after which the ethical theories of deontology and utilitarianism, for example, can be applied, but again leaving out virtue ethics. However, moral pragmatism raises two questions: can managers employ more than one ethical theory simultaneously during decision-making, and does business ethics as a discipline need grand ethical theories and predictive models to further establish itself as a legiti- mate scientific discipline?
Donaldson and Werhane (1993) state that determining the dominance of an ethical theory is not necessary for further development of business ethics. Other notable authors with a similar outlook include Boatright (1993), who states that differences in theories should not lead to an endless search for the ‘best’ theory, and Beauchamp and Bowie (1993), who believe that philosophy should help society find reason- able and systematic approaches to moral problems, but not mechanical solutions or steps for decision-making regarding these problems.
The act of making decisions based on multiple moral frameworks is called a ‘metaphysical music chair’ (Callicott 1990; Weston 1991). Many philosophers have started to state that moral principles should be separated from philosophi- cal foundations (Wenz 1993). As a result, they have tried to develop one moral theory that could embrace a variety of moral principles, but at the same time claiming that ethics cannot be reduced to or derived from only one normative ethical framework. (Rosenthal and Buchholz 2007). How- ever, empirical research has yet to prove the validity of this theory.
Hypothesis Development
The major gap stems from the omission of virtue ethics as dependent variable in the empirical research of ethical decision-making based on ethical theories (Arjoon 2000; Crossan et al. 2013; Whetstone 2001; Yoon 2011). While one could argue that virtue ethics has been included in research, e.g. as part of deontology (Premeaux 2004) or the personality traits (e.g. Allen and Davis 1993; Crossan et al. 2013), the use of virtue ethics as independent variable raises theoretical and empirical considerations. From the theoreti- cal perspective, the inclusion of virtue ethics as personality traits misuses the proxy of personality traits or character as
virtue ethics (Walker 1989; Mitchell 2015). Thus, virtue eth- ics should not be treated as personality traits, which happens often in the implications of the virtue theory in the research of ethical decision-making, where personality is involved (Solomon 2003). From the empirical perspective, the use of personality traits as independent variable, both in empirical (e.g. Groves et al. 2007; Mencl and May 2009) and theoreti- cal research (Hunt and Vitell 1986), stems for the above- mentioned misunderstanding of personality traits as part of virtue ethics, thus leading to wrong conclusions. Using vir- tue ethics as independent variable implies that virtue ethics is not a normative ethical theory, at pair with utilitarianism and deontology and also leads to wrong conclusions about which ethical theory is being used by decision makers.
Another major gap in ethical decision-making research is related to the fact that most empirical studies studied a limited number of independent variables (on average 4–6 variables), with the most studied variables being nine (McDonald and Pak 1996) and some only with one (e.g. sex (Galbraith and Stephenson 1993), profession (Cohen et al. 1993) and age (Brady and Wheeler 1996). The included independent variables have also mostly been proxies them- selves (Campbell and Cowton 2015), e.g. personality traits (e.g. Hadjicharalambous and Shi 2015; Brady and Wheeler 1996), ethical culture (e.g. Verbeke et al. 1996), intentions (Cohen et al. 1993) etc., they were not measurable per se, but compounded from other variables to form a new one (e.g. ethical culture).
Moreover, most studies have investigated the reasons for unethical behaviour/decision-making (Campbell and Cowton 2015). Research has yet to show which variables are corre- lated with ethical decisions based on ethical theories (McDe- vitt et al. 2007). This is supported by “positive psychology” approach in organisational studies research, which empha- sizes the need for more research of “positive” phenomena (Peterson and Seligman 2004). To determine which ethical theory and variables lead to ethical decisions, it is neces- sary to understand the causes of managers’ choice of ethi- cal theory when engaging in ethical decision-making. This stream of research would avoid the natural fallacy (Kohlberg 1971; Moore 1903)—also called is-ought problem, where an ought is established from an is—from which some studies have suffered. Even though there is a vast amount of research on the variables in ethical decision-making, limited research has been done on the multiple personal and organisational variables that affect ethical decision-making (Lehnert et al. 2015). Based on this, our first hypothesis is as follows:
Hypothesis 1 A predictive model of managers’ choice of ethical theory in ethical decision-making can be established.
Some believe that managers use one grand ethical theory that aligns with the modern theory of organisations, while
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others believe in moral pragmatism or “ethical ambidexter- ity”, claiming that there is no one grand theory and instead highlighting the mutual interdependence between theories based on various variables (Rosenthal and Buchholz 2007; Treviño and Nelson 2007) that dictate the use of pragma- tism in ethical decision-making. Theory of ethical decision- making (Arnold et al. 2010; Rosenthal and Buchholz 2007) has already elaborated upon whether managers consistently use different ethical theories or tend towards pragmatism (England 1967; Fraedrich and Ferrell 1992). According to the leadership theory, pragmatic managers are best when it comes to problem-solving (Bedell-Avers et al. 2008). Due to the fundamental differences between normative ethical theories, it can be expected that managers will use the same ethical theories in all their decisions, which is in accordance with Kohlberg’s theory of moral development (Kohlberg 1971). But even Kohlberg (1971) argues that adults live most of their time on the third or the fourth level of moral development and only occasionally reach the fifth or the sixth level. This might indicate a low level of consistency in moral reasoning of managers. Furthermore, one might con- clude that moral agents are prone to using ethical theories which suit them best momentarily. In this case, a pragmatic view is the cause of ethical confusion of managers. If man- agers do use different theories in different circumstances, regardless of internal (i.e. personal, biological) or external (i.e. societal, organisational) factors, they are ethically ambi- dextrous. Extant leadership and management literature rarely examine whether they consistently use one moral philosophy (Lemoine et al. 2019). In normative moral reasoning theory, however, two opposing views are held about consistent use of ethical theories in different circumstances (Hooker and Little 2000).
Moral particularists believe that one absolute principle cannot be applied to every moral circumstance, meaning the moral agent should choose reasonably the most suitable ethical theory in different circumstances (Dancy 2004). On the other hand, the moral generalists believe that absolute moral principles are the backbone of ethical theory and the consistent use of ethical theory, no matter the circumstances, is the moral person’s imperative (Raz 2006). Based on this, our second hypothesis is as follows:
Hypothesis 2 Managers consistently use one ethical theory in all circumstances.
Research Design and Data
To test the hypotheses, managerial ethical decision-making scenarios in six different circumstances were chosen (see Appendix 1): private/family life, business environment, gen- eral ethical dilemma, refusal to do unethical acts, ethical
leadership of colleagues, and informal ethical leadership in ethical decision-making. The scenarios were developed and pilot tested in in-depth interviews with nine C-suite manag- ers (see Appendix 2 for sample characteristics) who were carefully selected to ensure diversity in terms of tenure, industry, age and sex.
The scenarios are short, concise and unambiguous (Bed- nar and Westphal 2006). They allow for many options, as the purpose of the research is to find out what ethical theory managers use rather than developing a solution to ethical dilemmas (Bazerman and Tenbrunsel 2011a, b). All solutions are ethically correct and not ethically disputable, unlike previous research, where the main focus has been to study the variables that lead to unethical behaviour. Con- sequently, the ‘socially desirable answers’ effect (Randall and Fernandes 1991) was eliminated. Finally, each solution represents only one normative ethical theory: deontology (duty, obligations, universal laws, golden rule), utilitarian- ism (results, consequences, added value, benefits, costs), and virtue ethics (character, values, golden mean, practice).
The population of managers under investigation (Slove- nian managers) was identified as 48,513 based on official statistical data (Republic of Slovenia Statistical Office). The target sample was 200 respondents with the aim to get the approximate same ratio of micro, SME and large organisa- tions’ respondents in the sample. Being aware of the fact that response rate in business ethics’ research is low (Bab- bie 1986), the survey was sent to around 2000 managers. In the first round, we used help of two associations, the Man- agers’ Association of Slovenia and the Institute of Internal Auditors Slovenia. The first one was aiming at small and medium-sized organisations, while the other targeted large organisations (by Slovenian law, internal audit is obligatory in large organisations). Because the response rate did not yield desired results, the second round of personal contacts via LinkedIn was used to get the target sample. In total, 166 managers completed the survey. The sample was compared regarding the average characteristics of all Slovenian com- panies, with the identification of the following deviations: the overrepresentation of financial sector as well as manag- ers of large organisations, which was intentional by design. Regarding the size of the sample, it is in line with previous research on business ethics, which included approximately 200 respondents, with a minimum standard of 100 (Bailey 1982). Table 2 shows the sample characteristics.
Results
Hypothesis 1
The frequency of each ethical theory chosen in each circum- stance is shown in Table 3. Virtue ethics was mostly chosen
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in circumstances related to private and business life, leader- ship and informal leadership, while deontology was chosen
in the general ethical dilemma and in the situation involving refusal to do an unethical act.
As managers could only chose from previously defined answers, and thus there was no logical sequence or order, Pearson’s chi-squared test was used. Also, a logistic regres- sion was established for each circumstance. The results are shown in Table 4.
The analyses of each circumstance achieved the follow- ing results:
Personal/Private Life
With regards to decision-making in the private lives of man- agers, no variable was statistically relevant. When build- ing the logistic model, the model was established with only the variable of education. Even though the model had been improved throughout the whole process of variable elimina- tion, the final model, which included only one independent variable, did not achieve statistical significance (p = 0.094).
Business environment
With regards to decision-making in business, managers’ age was established as a statistically significant variable (p = 0.048). In the final logistic model, only one independent variable—managers’ age—was identified as being statisti- cally significant.
General Ethical Dilemma
With regards to decision-making in general ethical dilem- mas, the variables of managers’ sex (p = 0.015), age (p < 0.001), education (p = 0.047), industry (p = 0.039) and ownership (p = 0,041) were established as statistically sig- nificant. In the final logistic model, models were built with three independent variables (age, sex and ownership), which were also statistically significant (p < 0.001). F-tests showed that each independent variable in the model was statistically significant and influenced the managers’ choice of ethi- cal theory. Once the model was established, second-order interactions of other independent variables were introduced. The results …
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ORIGINAL PAPER
When Kamay Met Hill: Organisational Ethics in Practice
Jonathan A. Batten1 • Igor Lončarski2 • Peter G. Szilagyi3,4
Received: 30 November 2015 / Accepted: 3 January 2017 / Published online: 27 January 2017
� Springer Science+Business Media Dordrecht 2017
Abstract The Kamay and Hill insider trading conviction
in Australia highlights many of the issues and problems
involved in the prevention, detection and prosecution of
insider trading. The case uniquely highlights how ethical
behaviour is instilled at home, in school and in society, and
the need for ethical responsibility at the personal and
organisational level to complement legal rules and
enforcement. We use the Kamay and Hill case to explore
the reasons behind the failure of the traditional top-down
approach to insider trading prevention, where institutional
ethical codes of conduct largely reflect and rely upon
national rules, norms, and regulation. We propose a bot-
tom-up approach to ensure that individual and organisa-
tional behaviour is ethical, where emphasis is not on
compliance but on a set of core ethical values that allow
individual and corporate expression. It is our strong belief
that compliance cannot replace ethics.
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