An Evaluation of Hong Kong's Corporate Code of Ethics Initiative · 2013. 4. 24. · Title: An Evaluation of Hong Kong's Corporate Code of Ethics Initiative Created Date: 3/7/2002

ASIA PACIFIC JOURNAL OF MANAGEMENT, VOL. 17, 493-5 18 (2000)

An evaluation of Hong Kong’s corporate code of ethics initiative

ROBIN STANLEY SNELL’ AND NEIL C. HERNDON, JR.’

’ Department of Management. Ltngnan University, 8 Cade Peak Road, Tuen Mun, Hong Kong E-mad: [email protected]

’ Department of Management, Marketing~ and International Business, College of Business, Stephen E Austin State University, P.0. Box 9070, SFA Station, Nacogdoches.

TX 75962-9070, USA E-mail: [email protected]

A campaign by the Independent Commission Against Corruption, begun in 1994, led to over 1,600 Hong Kong companies and trade associations adopting codes of ethics by December 1996. This study analyzed motives for code adoption; code content; how codes were developed, supported and enforced; and code impact. Primary data was collected through cross-sectional and longitudinal surveys, semi-structured interviews, observation, and document analysis. Press cuttings and published statistics were also used. Main findings were that some best practice prescriptions for code adoption were not followed, but that codes nonetheless helped preserve ethical standards and an anti-corruption image. Directions are suggested for further research into cultural effects on business ethics policy, practice and effectiveness.

1. INTRODUCTION

As Hong Kong’s 1997 transition to sovereignty approached, reports of bribery in

cross-border trade with the Chinese mainland (Chew 1993; Dobson 1993; Torode

1994) rekindled fears of corruption returning to Hong Kong (Anonymous 1996;

Kraar 1995; Sinclair 1993; Schoenberger 1996). Many felt that the achievements of

the Independent Commission Against Corruption (ICAC) (McDonald 1994) were in jeopardy. In October 1993, Governor Chris Patten directed ICAC to launch an anti-

corruption in business campaign. ICAC and six chambers of commerce convened a

conference on business ethics in May 1994, urging business organizations to adopt codes of ethics. Twelve months later, the Hong Kong Ethics Development Centre

opened, housing many codes developed during the intervening year (Chan and Leung

1995), and joining ICAC’s Community Relations Department in advising companies on how to develop their own codes of conduct and improve ethics standards.

The purpose of this paper is to assess how effectively such codes were developed,

disseminated, and supported by Hong Kong companies during the extensive government-led campaign in the run-up to the July 1997 return to China.

CCC 0217-45611001040493-26

0 2000 BY JOHN WILEY 81 SONS (ASIA) LTD

494 R. S. SNBLL AND N. C. HEKNDON, JR.

2. CODES OF ETHICS AND THEIR EFFECTIVENESS

Corporate codes of ethics present formal company policies on appropriate ethical

behavior for employees (Ferrell and Fraedrich 1994: 170). Codes are often advocated

as means of influencing employee behavior, but both practitioners (Bennett 1988) and academics (DeGeorge 1990: 391; Kjonstad and Willmott 1995; Matthews 1987)

have questioned their effectiveness. Empirical studies of the effectiveness of corporate

codes of ethics have shown mixed results. Ferrell and Skinner (1988) found codes had a positive impact on ethical behavior, while Akaah and Riordan (1989) and Cleek

and Leonard (1998) found that they had no impact on ethical behavior and decision-

making, respectively. Below, we review various considerations raised and prescriptions

offered regarding code effectiveness in the business ethics literature.

INFLUENCES ON CODE EFFECTIVENESS

Informal corporate cultures

Organizational cultures predispose employees towards certain kinds of action and are

sources of rationalizations and justifications for such actions (Trite and Beyer 1993: 75). They include informal social control systems that prescribe and proscribe behavior

in relation to ethical issues (Sims 1998; Weaver et al. 1999). In Chinese societies,

which incline toward collectivism rather than individualism, group norms are especially

likely to influence ethical conduct (Lu et al. 1999). In some organizations, the informal corporate culture may condone unethical behavior and thus encourage it

(Ferrell and Weaver 1978). Employees who believe their organization has relatively few ethical problems tend to be less tolerant of unethical behavior than those who

believe their organization has many ethical problems (Akaah and Riordan 1989).

Given the influence of corporate culture on ethical decision-making (Nwatchukwu and Vitell 1997), statements in a code of ethics are empty unless they are integrated

into organizational norms, or become so (Farrell and Cobbin 1996; Weaver 1995).

Actions and mentality of top management

Senior managers are prominent role models for ethical (or unethical) behavior;

their management style and mentality embodies a moral outlook transmitted to subordinates (Murphy and Enderle 1995). They encourage ethical behavior if they

frequently communicate in both words and actions that unethical behavior will not

be tolerated (Trevino and McCabe 1994: 412). Executives who have relatively long time horizons, are ‘people orientated’, have people skills, are not numbers-obsessed

(Lincoln et al. 1982), and openly discuss ethical problems with others when they

arise in daily work (Nielsen 1990) tend to convey a more positive ethical influence (Hunt et al. 1984).

SONY

Highlight

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETHICS INlTIATlVE 495

The business environment of particular industries may influence the effectiveness of codes of ethics. Staw and Szwajkowski (1975) found that in less munificent

environments, organizations will exert more effort to obtain resources by engaging

in legally questionable activities. Highly competitive markets may encourage unethical behavior (Sethi and Sama 1998).

Local cultural values

Integrative social contracts theory (ISCT) holds that ‘hypernorms’ apply universally,

but leave space for different local norms (Donaldson 1993; Donaldson and

Dunfee 1994; Fritzsche, 1997: 43-47). ISCT also suggests rules to settle matters when local norms conflict. Global codes of ethics have been advocated (Payne et al.

1997, Smeltzer and Jennings 1998), but corporate cross-cultural implementation

requires concerted effort (DeGeorge 1993; Jackson 1997). Since the local cultural environment affects perceptions of and reasoning about ethical problems (Armstrong

1996; Fritzsche et al 1995; Husted et al. 1996; Schlegelmilch and Robertson 1995),

employees around the world may not be equally receptive to a single global code developed at HQ (Singhapakdi et al. 1995). Laczniak and Murphy (1993: 218-221)

recommend that ethics codes of transnational companies should have a core based on

universal values, plus a peripheral element tailored to local norms, but consistent

with core values. Cultural values may also influence code development. In the U.S., individualistic

values favor freedom from top-down organizational controls (Trite and Beyer 1993: 56-58); accordingly, Collins and O’Rourke (1993) suggest developing codes bottom-

up. In democratically oriented Sweden, some companies developed codes by consultation

throughout the entire company (Brytting 1997: 673, 680). In contrast, Hong Kong is characterized by high power distance (Wong and Birnbaum-More 1994), by ruler-

subject relationship patterns (Tu 1998: 125-126), and by filial piety (Redding 1990:

61-64). This legitimizes orders by the organizational head (Westwood and Chua

1992) and emphasizes subordinates’ duty to obey (Westwood and Chan 1992). It follows that as a matter of loyalty (Hansen 1994: 72) and proper conduct (Steidlmeier,

1997: 135), Chinese staff would respect written codes imposed top-down, even

though codes are not part of traditional Chinese management. Special care would be required in Hong Kong subsidiaries of foreign multinationals, however, to ensure

congruent interpretation of core code items.

Code content

Even where top-down moral governance is assumed, codes’ effectiveness may be enhanced if senior management consults with employees about code content.

496 R. S. SNELL AND N. C. HERNDON, JR.

This enables work-related moral problems to be addressed (The Business

Roundtable 1988). Codes have no constructive value if readers do not understand them (Stevens

1994). Yet, codes are characteristically difficult to read (Sanderson and Varner 1984).

Codes should be relevant to the ethical issues actually arising at work (Doig and Wilson 1998), but it is inappropriate to fill them with predetermined rules, for

these cannot regulate behavior where members’ tasks are complex and unpredictable

(Cassell et al. 1997: 1082). Payne et al. (1997: 1732) advise that codes should, instead, have a positive tone, and be based on ‘Theory Y’ assumptions. Thus, codes

may seek generally to guide and inspire individuals to make their own moral decisions

(Farrell and Farrell 1998), and encourage employees openly to discuss ethical dilemmas as they arise (Munro 1997: 104).

As mentioned above, consistency with regard to core organizational values is

important. This applies between business functions (Trevisan 1986) and across hierarchical levels, as well as between locations. While some employees may be more

hostile toward codes, no one should be exempt (Bennett 1988).

Anti-corruption is an important focus, but various sources argue that codes should also encourage wider social responsibility and good citizenship, by addressing

environmental protection, safety, community impact, and so on (Blodgett and

Carlson 1997: 1369; Cressey and Moore 1983; ICAC undated; Payne et al. 1997: 1730-1731).

Implementation of codes

Rewarding conformity to codes may be more effective than punishing nonconformity,

even if such rewards implicitly acknowledge the existence of unethical conduct within the organization (Purcell 1982; Trevifio and Youngblood 1990). Either way,

employees should not be disadvantaged by or penalized for adhering to a code. Codes

that are not systematically enforced or integrated into organizations have limited

impact (Donaldson 1992: 80; Ferrell and Pride 1981). Enforcement should include discipline commensurate with the degree of the ethical failure (Kaikati and Label

1980), and be equally applicable at all organizational levels. Codes should be clearly

and widely promoted (Cleek and Leonard 1998: 627) and formal training provided for employees at all levels (Laczniak and Murphy 1985; McDonald 1998; Raiborn

and Payne 1990).

SUMMARY OF FACTORS TENDING TO ENHANCE CODE EFFECTIVENESS

Table 1 summarizes prescriptions of ‘best practice’ in the literature on codes of

ethics. The effectiveness of Hong Kong’s mid 1990s codes of ethics initiative may

reflect the degree to which these factors were present or absent.

SONY

Highlight

AN EVALUATION OF HONG KONG’S COKPORATE CODE OF ETHICS INITIATIVE 497

Table 1 Factors tending to enhance the effectiveness of codes

Factors Key Elements

Informal corporate culture

Informal organization supports the code’s values Existing ethical problems are limited Co-workers are perceived to behave ethically

Actions and mentality of top management

External business environment

Regularly express and demonstrate intolerance of unethical behavior Long time horizons ‘Theory Y’ and people skills oriented Not exclusively concerned with ‘the numbers’ Inspire shared ethical dialogue and questioning

The industry supports the code’s values Business environment is reasonably munificent

Local cultural values

Consultation

Code content

Societal culture supports the code’s values Assumed duty to obey officral prescriptions

Consultation as needed to confer legitimacy and relevance

Reasonably readable Covers relevant potential problems and issues Offers clear guidance for personal judgements Encourages open discussion of ethical dilemmas Applicable at all seniority levels and in all roles Consistent regarding core values Covers anti-corruption and social responsibility

Implementation of codes

Linked to reward systems Enforced through disciplinary procedures Widely and clearly publicrsed Code content explained and reinforced by training

3. THE RESEARCH STUDY

RESEARCH QUESTIONS

Our research questions were as follows:

1. What impact did the mid-1990s codes of ethics campaign in Hong Kong have

on moral behavior, moral climate, and employees’ moral development?

2. How effective did the following items support or impair the adoption of codes of ethics: code development processes? Code content itself? Code-related

supporting arrangements? Corporate culture? Top management mentality? Broader cultural values? The business environment? Other elements particular to Hong

Kong?

3. What lessons can be drawn regarding the use of codes of ethics as means of assuring ethical business conduct?


RESEARCH DESIGN

We adopted a multi-method, naturalistic research design, combining various qualitative

and quantitative approaches, studying code adoption and code implementation, and the underlying reasoning. We arranged longitudinal assessment, but not a quasi-

experimental research design, which would have measured moral behavior and moral atmosphere before, during, and after code adoption. This was ruled out by the pace,

complexity, and uncontrollability of events, involving many organizations and actors,

by the sensitivity of the topic, and by the time required to gain research access.

METHODOLOGY

Initial questionnaire survey

In late 1995, survey questionnaires were mailed to managing directors in 3,326

Hong Kong companies listed in the ‘Directory of Business Code of Conduct’ (Hong

Kong Ethics Development Center 1995), the Hong Kong Stock Exchange, and the Federation of Hong Kong Industry Members’ Directory 1995, or referred by trade

or professional associations; 220 trade/professional associations were also surveyed.

Prepaid reply envelopes were provided. The survey investigated (a) whether the

organization had a code, (b) reasons for adoption or non-adoption, and (c) related ethics policies and arrangements. The companies were invited to provide copies of

their code, and to volunteer for further research. Just over 5% of the companies (153

code adopters, 18 non-adopters) and just over 14% of trade/professional associations (31 code adopters) replied. A total of 17 companies, all code adopting, volunteered

for further research. These lower than desirable response rates are explained by the reticence that companies often have to discuss sensitive topics such as ethics (Churchill

1995: 67O), and the difficulty of reaching company ethics officers, who were not

listed in directories. They are, at least in part, compensated by the multi-method

approach (Flick 1992: 194).

Focal companies

The 17 focal companies hosted semi-structured interviews and a longitudinal

questionnaire study. Reflecting the Hong Kong economy’s services orientation, six

were in property/real estate, two manufacturers, two in transport, two in import/

export, two in hospitality or catering, and one each in insurance, energy and

communication. They employed from 30 to over 11,000 employees. There were

nine subsidiaries or joint ventures of foreign-owned companies, reflecting Hong Kong’s international ethos, but most had less than 5% expatriate staff and none had

above 30%.

AN EVALUATION OF HONG KONG'S CORPORATE CODE OF ETI~ICS INITLUI~E 499

Semi-structured intemiews

Between June and September 1996, semi-structured, face to face or telephone interviews

were conducted with two managers from each focal company (just one in the 17th),

selected by the company’s code administrator as ‘ordinary’ but well informed. Most, with permission, were tape-recorded. Of the 33 interviewees, all bar one were Hong

Kong Chinese. Their median length of service was five years. In January 1999, an

additional informal interview was carried out with a code administrator in the 18th company. Most interviewees were departmental managers or their deputies, four

were in director or deputy director posts. Open-ended questions were asked about

(a) company moral climate or atmosphere, (b) code development, (c) arrangements

to support the code, (d) effects of code adoption on behavior, relationships and company image.

Analysis of code content

Two researchers content analyzed 41 company codes and a model code developed by

ICAC, which was widely available to assist in code development. Of the company codes, 15 came from focal companies and 26 were randomly selected from other

surveyed companies. Survey replies indicated that 19 of the 41 codes had been

‘tailored specifically to the Hong Kong office’ and 20 had been ‘borrowed from the ICAC model code’. The 41 companies comprised seven manufacturers, five from

banking and financial services, five from real estate, four from communications or

publishing, four from hospitality or catering, and 16 providers of various other services. They were thus a heterogeneous cross section of Hong Kong industry. The

researchers analyzed the codes independently (using the English version if available),

item by item, according to (a) content theme, (b) inferred company motivation, and (c) moral appeal. Levels of initial agreement for these three types of categorization

were 91%, 89% and 92%, respectively, for company codes. The percentage of line

space occupied by the various categories was calculated for each code. To assess content themes, the researchers began with 21 preordained thematic

categories drawn from previous research, adding another 11 as they arose, thus

ending up with 32 categories. To assess inferred company motivation, five categories emerged. These were: (a)

corporate self defence, emphasising protecting the company against loss, damage or

legal liability; (b) guiding and supporting the workforce, explaining how to meet the company’s moral expectations, especially in situations that are ambiguous,

embarrassing or uncomfortable; (c) professional standards of quality and responsibility,

stressing compliance and positive outcomes; (d) wider social responsibility, obligation toward the broader community; (e) serving customers, caring for their needs and

satisfaction.


For assessing moral appeal, the coding protocol derived from Kohlberg’s six-

stage model of moral reasoning (Kohlberg 1981, 1986; Kohlberg and Ryncarz 1990; Snarey 1985). This is summarized in Table 2. While the model is usually taken to

represent a theory of developmental sequence, here the focus was for analyzing moral

reasoning expressed in written documents. We defined the ‘moral appeal’ of a code item or part thereof, as the primary moral stage or stages in readers to which the

item was apparently aimed or directed.

Table 2 Coding rationale to assess company codes’ moral appeal

Moral stage Emphasis and tone

Threat of punishment. Dismissal, penalties, disciplinary or legal action.

Instrumentality. Reminder or implication that it is in one’s best interest to comply.

Meeting expectations. Stress on company reputation, loyalty, harmony, co-operation, not upsetting clients, etc. Presentation of rules as to what the company expects of dutiful employees.

4 Formal, rystemutic. Setting out the formal ‘ethics processing machinery.’ Code items are presented as a means of ensuring effectiveness, professionalism, stability, order and consistency.

5 Public-q&ted. Mentioning deeper moral principles, such as justice, welfare, care and service for the wider commumry, benefit to a variety of stakeholders.

6 f@en and reflerzue. Encouraging widespread moral conversation and questioning, inviting critical reflection on ethical issues as they arise, calling for questions of deeper principle co be raised at any time.

Longitudinal questionnaire survey

The contact person in each focal company provided a list of up to 50 managers

(topped up with supervisory or professional staff), from which an initial random selection of 25 was made, to whom longitudinal survey questionnaires were sent.

Where less than eight replies were received from a company, more random selections

were made. From mailings to 472 managers, 197 replies to the first round of

questionnaires were received from December 1995 to March 1996. For each company, the second round was mailed out 7-8 months after the first, with 112 replies

received between July and December 1996. The use of aliases permitted the

identification of 73 pairs of questionnaires from managers across 16 of the focal companies who replied to both rounds of the survey.

The questionnaire included five Likert scale items with nine rating points. The

items covered (a) honesty, (b) avoidance of harm, (c) accuracy of records, (d) taking responsibility, and (e) fair treatment of business partners. Also included was a 9-item

moral ethos questionnaire (MEQ) based on the Kohlberg stages, not measuring individual

moral reasoning, but yielding a profile of the relative strengths of the six stages within the organization’s moral atmosphere (see Snell et al. 1996, 1997). MEQ items

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETHICS INITIATIVE 501

present six sub-items corresponding to the moral stages for rank ordering according

to perceived match with typical organizational behavior.

The second round longitudinal questionnaire was identical to the first, except that an extra item asked respondents to indicate on a 7-point Likert scale the extent

to which they agreed or disagreed that moral conduct in their company had improved

in the previous seven month period.

The Cormption Perception Index

Published statistics were examined to establish the pattern of Hong Kong’s scores

on the Corruption Perception Index (CPI) and their overall position on the CPI

among a group of nations over the period 1980 to 1998 (Transparency International

1999a; Internet Center for Corruption Research 1999). The CPI is a ‘poll of polls’ presented as a standardized index of perceived corruption, with a score of 10 indicating

‘total integrity’ and 0 indicating the worst possible level of corruption (Transparency International 1999b, 1999c, 1999d).

4. MAIN FINDINGS

ADOPTION OF CODES

Year of adoption, and incidence

Figure 1 shows that there was a dramatic increase in code adoption in the mid-

1990s. Other sources corroborate this increase. In May 1994, only 20 out of 182 companies listed on the Hong Kong Stock Exchange had codes (ICAC 1994). Around

1,000 trade associations and companies had adopted codes by May 1995 (Hong

Kong Ethics Development Center 1995), a figure that reached 1,611 by the end of December 1996 (Hong Kong Ethics Development Centre 1997).

1990 and before

Fig. 1 Date of code adoption

unknown


Administration and dissemination

Responsibility for code administration remained at director level in 20% of the 153

companies, and was delegated to a single manager or officer below director level in 76% of the companies. The job function of the code administrator, identified by

83% of the companies, was most often human resources or personnel (34% of companies), general management (22%), administration or secretarial (18%), and

audit, finance or accounting (7%). Most companies (70%) indicated that they had

circulated their code to all staff, 5% circulated to senior staff only, 5% displayed the

code on notice boards only, and a further 4% included it in their staff handbook.

Support, enforcement and training

The initial questionnaire survey indicated that 49% of the companies had code-

related disciplinary procedures, 10% had an ethics committee, 6% had an ethics

counsellor or ombuds-person, and 20% had organized ethics training. Interviews suggested that ethics training tended not to be comprehensive, and did not involve

all levels of staff. Interviewees indicated, nonetheless, that ethics training activity

had increased from early 1996 (i.e. after the initial survey), typically presentations for new recruits by officers from the ICAC community relations department. Some

interviewees indicated that their companies had drawn attention to their code by

issuing reminder letters, or by publishing items on ethics in the company newsletters.

Reasons for code adoption

Figure 2 summarizes replies to Likert-scale questions in the initial survey, concerning why codes had been adopted (5 = strongly agree, 3 = neutral, I = strongly

disagree). Ratings suggested that code-adopting companies had not been reluctant

to adopt codes and had envisaged many potential advantages in having them. Table 3 summarizes the main reasons for code adoption, given in interviews, and in response

to an open-ended question preceding the Likert-scale items in the initial survey. Two

researchers independently content analyzed these open-ended replies, either matching them to the Likert scale items or creating new categories as appropriate, reaching

initial agreement on 87% of categorizations of company replies. The open-ended

replies indicated that the main reasons for adopting codes were in order to control employees’ ethical behavior, to provide legal protection to the company, and to

maintain company image and reputation.

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETHICS INITIATIVE so3

Maintain ethlcal standards

Legal protection

Image or reputation

Better service

Protection to staff

Quality of working life

Expected by government agency

Changes in Hong Kong

Expected by head office

Fashionable

Fig. 2 Rated reasons for code adoption

Table 3 Given and perceived reasons for codes

Reasons for adoption 56 of o/c open-ended mentions in

company replies interviews (N = 80) (N = 64)

Raising awareness, explaining expectations, moral guidance

To maintain the image or reputation of the company

Regulating, controlling, ethical compliance by employees

To protect the company against unlawful action by staff

To improve the quality of working life for staff

To ensure fair dealings with suppliers or subcontractors

Generally maintain ethical standards in the company

To protect staff against unfair pressures or demands

To provide a better service to clients or customers

Expected by government/ICAC/regulatory body co have one

Expected by head office to have one

To reflect changes in Hong Kong’s circumstances

It is fashionable to have a code of ethics

Other reason

Total

20

18

14

12

5

5

5

4

4

4

3

2

1

3

100

42

3

28

13

6

0

2

0

0

0

0

0

3

100


How codes were developed

One interviewee reported:

‘An officer from the district office of the ICAC community relations department

contacted my boss, the human resources director, saying that they were urging all listed companies to adopt codes of conduct. The ICAC officer knew my boss

well, as they had previously jointly organized social activities for our employees.

She came to meet me three times in order to help draft our code of conduct, and we also had some telephone conversations about it. My boss was at the first

meeting, and delegated the job of drafting the code to me, though I had to get

his final approval, and that of our chairman and managing director. The ICAC

officer brought a copy of the model code, and suggested that we base our code on it. I wrote a number of changes on a copy of the model code and gave them

to her for amendments. In the end, we changed quite a few things and added some others, in order to suit our company’s circumstances and organizational

structure. After I had agreed a final draft with the ICAC representative, whose

office did all the secretarial work, she gave me a soft copy of our code. Our company must be rather unusual, because our chairman and managing director

agreed that the items on social responsibility were very important and should

be included. He even said that they should not come so near the end, as they

were in the model code, so we changed the order.

The company featured above indicated in the initial survey that it had ‘borrowed

from the ICAC model code without significant changes’, as did 50% of initial survey respondents and more than half the focal companies. Inspection of a sample of

borrowed codes (see below) suggested that companies took cues from the model code, but borrowed selectively by paraphrasing, deleting and adapting rather than

direct copying. In the initial survey, a further 9% of companies indicated that they

had ‘borrowed from the parent HQ outside Hong Kong’ and only 28% indicated

that their code had been ‘tailored specifically to the Hong Kong office.’ Unlike the case quoted above, most interviewees, although middle managers,

had neither been involved in nor consulted about the development of the code. Many

appeared not to know how it had actually been developed. In seven focal companies there was no known involvement below director level in the code development. In

a further six focal companies, involvement was confined to directors and the human resources department. Wider involvement was indicated in only four companies.

Code development appeared to be an opaque process with codes essentially imposed

from the top down.

AN EVALUATION OF HONG KONG’S CORPOKATE CODE OF ETHICS INITIATIVE 505

CONTENT OF CODES

Content themes covered

Table 4 lists the 12 themes given most coverage in company codes, in order of

median proportion of code space occupied. The top 12 themes were the same whether

codes were ‘tailored’ or ‘borrowed’, and their rank order was highly correlated (Spearman’s Y = 0.785, P < 0.01, N = 12; Kendall’s J b = 0.595, P < 0.01, N = 12). As

suggested in the far right-hand column of Table 4, however, company codes tended

to have their own idiosyncratic emphases.

Company codes, whether ‘borrowed’ or ‘tailored,’ focused more sharply on corruption prevention than did the ICAC model code. For example, the median

coverage of bribery, extortion and kickbacks was 36% compared with the model

code’s 17%. Companies often quoted the government ordinance on giving and receiving advantages and dwelt upon various ways (e.g. bribery, theft, fraud) in which employees

might break laws, distort official roles, and exploit company resources for private

benefit at the expense of others, including the company. Correspondingly, company codes tended to neglect social responsibility, with median coverage of 0% for

discrimination/harassment (included in six codes), duties to the community (five),

employee safety (five), ‘green’ issues (four), labour relations (four) and product/service

safety (three). Each of these social responsibility themes occupied at least 2% of space in the ICAC model code.

Table 4 Main themes in the ICAC model code and in company codes of conduct

Themes Median % Inclusion in % of ICAC Highest % space in how many model code space in a

company codes? space company codes (N = 41) code

Extortion, kickbacks or bribery

Conflict of interest

Breach of code/agreement/contract

Disclosure or use of insider information

Gambling with business associates

Moonlighting

Accuracy of records

Misuse of corporate assets

Due Process in enforcing/updating code

General purpose of the code

Channels for complaints

Proper treatment of customers

36 40

15 36

6 36

5 37

5 28

4 34

4 32

3 28

1 24

0 18

0 16

0 10

17

13

2

67

56

37

32

13

21

37

12

16

31

11

16


Interviewees were invited to comment on their code’s theme coverage. Nearly half, 48%, mentioned particular themes that had been useful inclusions. Among these,

bribery was mentioned by 33% of respondents, but themes other than the 12 listed

in Table 4 were mentioned by only 9%. Only 15% identified themes that they believed had been inappropriately omitted. Interviewees thus generally appeared to

regard the theme coverage and emphasis of their company’s code as reasonably

complete and appropriate.

Inferred company motivation

Median space oriented to corporate self defence was 46% among borrowed codes and 54% among tailored codes. As shown in Table 5, company codes tended to emphasize

guiding the workforce next, but neglected serving customers and wider social

responsibility. Table 5 shows that compared with company codes, the ICAC model code was oriented less toward corporate self-defence and more toward professional

standards of quality, and was less neglectful of customers and social responsibility.

These differences in inferred moral motivation between company codes and ICAC model code were confirmed by a x2 test (x2 = 25.1, d.f. = 3, p ,< 0.0001).

Table 5 Company moral motivations manifest in code items

Moral motivation

Corporate self-defence

Guiding & supporting the workforce

Professional standards of quality

Wider social responsibility

Serving customers

Median % No. of codes % of space Highest of code expressing it in ICAC 9% of any

space (N = 41) model code code

48 41 32 101)

25 38 20 91

13 36 38 66

0 5 6 14

0 4 4 27

Visual comparison of Table 5 with Table 3 (above) suggests that except for revealing

an emphasis on corporate self defence, code content analysis was broadly consistent with replies in the interviews and to the open-ended question in the initial survey

regarding reasons for code adoption. Visual comparison of Table 5 with Figure 2

suggests the code content analysis was also inconsistent with initial survey replies to two Likert scale items on reasons for code adoption, i.e. ‘better service’ and ‘quality

of working life.’ It is possible that company replies to these Likert scale items were

influenced by social desirability response bias.

Moral appgadl

Cognitive socio-moral development theory holds that the moral content of material pitched at the moral stage attained by readers is comprehensible, material pitched

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETEIICS INITIATIVE 507

one stage higher is still morally comprehensible but is developmentally challenging,

while material two stages higher may result in moral confusion and rejection (Weber and Green 1991). We would add that material pitched lower than the developmental

stage reached by code readers may be rejected as patronizing or unnecessarily legalistic,

and may in some cases be difficult to understand on the grounds of legalistic jargon. Table 6 shows that 48% of the ICAC model code appealed to stage 4 and 36%

to stage 3. In comparison, the median stage appeal to stage 4 among company codes

was much lower (17%) and to stage 3 much higher (61%). Some space in the model code (8%) addressed stage 5, while most company codes did not do so at all.

Although many companies derived code items from the ICAC model code, they

tended not to adopt the same pattern of moral stage appeal. There was little difference between the 19 tailor made codes and the ICAC-derived codes in terms of stage

emphasis, with median code space appealing to stage 3 at 63% among the former

and 62% among the latter.

Table 6 Target moral stage appeal of codes

Moral stage Company code space targeting

particular stages (Median 5%)

No. of codes appealing to

particular stages (N = 41)

9% of ICAC model code targeting

particular stages

Stage 1 10 37 7

Stage 2 0 13 1

Stage 3 61 41 36

Stage 4 17 41 48

Stage S 0 4 8

Stage 6 0 0 0

Two considerations are important when interpreting findings about moral appeal.

The first is the likely moral development stages of the readers who were subject to

its contents. Most adults reach moral stages 3 or 4 (Hersh et al. 1979), and it may be reasonable to assume that that was the case among staff in the 41 companies. If

so, then most readers would have comprehended the moral reasoning of the model

code and most company codes, and would not have felt patronized by them. The second consideration is whether codes were part of a deliberate strategy to develop

readers’ moral reasoning. Among companies, this is unlikely, given the lack of emphasis on ethics training, but it may have been one of the intentions of the

community relations department of the ICAC. Accordingly the stage 5 aspects of the

model code would have challenged most readers, whereas in general the company

codes are unlikely to have been developmentally challenging to their readers.


OVERALL IMPACT

Interviewees perceptions of code impact

Two researchers discussed each recorded interviewee response and agreed each

categorization of perceived impact as ‘significant or direct’, ‘moderate’, ‘slight or

indirect’ or ‘none’. All interviewees’ mentions of impact were favorable, except one (‘a relationship might be ruined if one staff reports the improper behavior of another

to the boss’). As shown in Table 7, the greatest impact was perceived to have been

on employees’ behavior, where most perceived at least moderate impact (69%). Many

(82%) mentioned at least a slight or indirect impact on company image but most felt there had been no impact on relationships.

Table 7 Perceived code impact (% mentions)

Perceived Impact Employees’ Company behavior image

Relationships with business

associates

Staff relationships

Significant or direct 39 15 12 3

Moderate 30 12 0 3

Slight or indirect 18 55 30 18

No impact 12 18 58 76

Total (N = 33) 99 100 100 100

Perceived changes in moral conduct and moral atmosphere

Figure 3 compares matched mean ratings of five aspects of moral conduct by 73 managers on the first and second rounds of the longitudinal survey. Inspection

suggests little change. Five paired t tests (N = 73, d.f. = 72) checked if changes

in perceived honesty, avoidance of harm, accuracy, responsibility and fair treatment

were significant. The results were, respectively: t = -0.19, P = 0.85; t = -0.25,

P = 0.80; t = -0.39, P = 0.70; t = -1.16, P = 0.25; t = +0.28, P = 0.78,

indicating no significant changes. Longitudinal questionnaire responses indicated no

consistent pattern of change in moral conduct in any of the focal companies. Superficially, interviewees’ perceptions that codes positively affected employees’

behavior gave a contrary picture. A possible explanation may be that interviewees

believed that conduct would have got worse in the run-up to the 1997 transition of sovereignty, had it not been for the codes. Another explanation is that codes required

more transparency, and that staff, feeling that their actions were under closer scrutiny,

made sure to be seen not to do wrong. One interviewee reported:


9

8

7

6

5

4

3

2

1

Honesty Avoid damage to society or environment

Accuracy Responsibility

Fig. 3 Changes in perceived moral conduct

‘At festival times such as Chinese New Year staff may receive items up to HK$

500 in value or hi see courtesy gifts up to HK$lOO in cash. Every time gifts

above these amounts are offered, staff must complete a form asking permission

from the human resources director. After the code was distributed, we were amazed how many forms were submitted; nearly all were unnecessary, since the

gifts were mostly well below these amounts, but I think staff were playing safe.’

Figure 4 compares aggregate MEQ profiles of moral atmosphere from the two rounds of the longitudinal survey. The MEQ requires respondents to rank order stages, so

non-parametric statistics were used to test whether the changes had been significant.

Results of six two-tailed Wilcoxon matched pairs signed ranks tests for stages 1-6

respectively, were: 2 = +1.17, P = 0.24; 2 = +0.29, P = 0.77; 2 = -0.64,~ = 0.95; Z = -1.58, P = 0.11; Z = -2.41, P = 0.02; Z = -1.16, P = 0.25. Thus,

there had been significant change (P < 0.05) in the relative strength of stage 5, but

no other significant changes. There were significant increases in the balance of ‘lower’ relative to ‘higher’ moral stages in one local and three foreign-owned companies,

reflected in interview comments that codes made staff cautious and anxious to do the right thing, to avoid punishment.


Stage 1 Stage 2 Stage 3 Srage 4 Stage 5 Stage 6

Fig. 4 Change in moral ethos

Follow-up Survey Perceptions of Code lmpuct

Table 8 summarizes perceptions from the second round survey, of whether moral

conduct had improved over seven months. Only 39% agreed that there had been improvement, whereas 42% neither agreed nor disagreed and 20% disagreed. This

balance of opinion supports the analysis presented above that codes were perceived

to have had positive impact by inducing a greater sense of surveillance, thus perhaps

helping to prevent a decline in moral conduct, but that actual standards of moral conduct had not improved.

Table 8 Whether perceived conduct improved

% of Respondents (N = 106)

Strongly agree 2

Agree 14

Slightly agree 23

Neither agree nor disagree 42

Slightly disagree 9

Disagree 8

Strongly disagree 3

Chunges in Hong Kong’s CPI scores und position

The continuous line in Figure 5 charts CPI ‘poll of polls’ scores for Hong Kong from

1980-85 to 1998. Built-in smoothing of index scores, which attribute polls taken

in a previous three-year period to a particular year (Transparency International 1999d),

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETlIICS INITIATIVE 511

means that the drop from 1995 to 1996 may reflect events before most company

codes were introduced in 1995. Improvements in Hong Kong’s CPI scores in 1997 and 1998 therefore suggest that the introduction of codes of conduct in the mid

1990s may have had longer-term positive impact on Hong Kong’s level of perceived corruption. The dotted line in Figure 5 shows that in 1998, Hong Kong ranked

16th among 85 nations and cultural areas, its highest over the entire period, ahead

of the U.S. in equal 17th position.

Index

8

7.6

7.2

6.8

6.4

6

1980-1985 198X-1992 1995 1996 1997 1998

Fig. 5 Hong Kong’s corruption perception index scores and rankings

6. CONCLUSIONS

CODE ADOPTION AND IMPLEMENTATlON

Most companies responded to the campaign, authoring codes with little internal

consultation but with ICAC support. The codes emphasized corporate self-defence

and behavioral prescription and control, rather than employee empowerment. Staff appeared to accept this as a natural, legitimate managerial prerogative, possibly

because of cultural assumptions of high power distance, and found code content relevant and comprehensive.

Company codes tended not to meet the campaign’s criteria for ‘fully-developed’

codes (ICAC 1994: 3), which would have entailed including items on quality, product

safety, occupational safety, equal opportunity, green issues and community service. In


focusing narrowly on corruption-prevention but neglecting broader social responsibility,

they appear to reflect community norms in Hong Kong. Public support for anti-

bribery legislation has been sustained by extensive community education and public broadcasting by the ICAC (McDonald 1994), but there has been no similar groundswell

of public support for other areas of business ethics, such as equal opportunity (Ng 1986) or environmental protection (Bar-On and Ng 1994).

Most codes were reasonably readable and uncluttered by legalistic jargon, but

by emphasising stage 3 rather than stage 4 conventional moral reasoning, they are less likely to have stimulated moral development than ICAC’s own model code.

The campaign had a higher profile in the media than in companies themselves.

Most code-adopting companies circulated their code to all staff, many developed

related disciplinary procedures, and some arranged ethics training, although mostly not as comprehensive as the company exemplars featuring in the Hong Kong Ethics

Development Center’s (1995-8) newsletters. Staff were reported as aware their company

had a code of ethics, and anxious to be seen not to violate it.

CONTEXTUAL FACTORS

Baseline levels of moral conduct (see Figure 3) and the baseline pattern of moral

atmosphere (Figure 4) in the focal companies suggest that corporate culture was not characterized by misconduct or preconventional morality at the time of code adoption.

Thus, there appear to have been no obstacles to the operation of codes of conduct

posed by company culture. However, reports of moral inspiration from or moral dialogue with top management were conspicuous by their absence from interviewees’

reports. Top management followed ICAC, gave ethics just enough attention for

codes to be noticed, but did not themselves act as moral leaders. Factors other than company ethics policy, such as widespread public support

and acclamation for the ICAC (McDonald 1994), and continued economic growth

up to mid 1997 may have served as major factors fostering the maintenance of Hong Kong’s image as a place for ethical business.

OVERALL EFFECTIVENESS

In 17 focal companies, interviewees felt that codes had favorably influenced behavior, largely due to clearer expectations and greater transparency. An isolated questionnaire

item suggested conduct had improved, but longitudinal analysis of questionnaire

ratings revealed no change in conduct and even suggested some decline in moral atmosphere. Codes may have helped sustain acceptable moral behavior by inducing

a greater sense of surveillance, but did not advance moral development. During

1996-98, through transition of sovereignty to China, Hong Kong consolidated its

favorable position on the CPI. The overall evidence suggests that ethical standards


were maintained at generally high levels through the transition of sovereignty, despite best practice recommendations on code adoption and implementation not being

fully implemented (compare Tables 1 and 9).

Table 9 Evident pattern of causal and contextual factors

Factors Positive (+) ot Negative (-1 Elements

Corporate cultures + Staff agreed with code items + Few hints of prior corruption + Co-workers were rated as reasonably ethical + ‘Preconventional’ morality was not predominant

Top management ? actions and mentality -

- -

Unknown actual intolerance of unethical behavior Espousal of ‘Theory Y’, enactment of ‘Theory X’ Remained preoccupied with ‘the numbers’ No sign of inspired ethical dialogue

Business environment

Broader cultural values

Consultation

Code content itself

Implementation of the codes

+ +

-

Industry associations adopted codes The economy prospered up to the 1997 transition Political uncertainty encouraged short-termism

Public appreciation of ICAC’s role & contribution Obedience to official prescriptions

Little sign of consultation for relevance

Reasonably readable Items seen as relevant by staff Appeared to apply to all employees Collaboration with ICAC encouraged consistency Developmentally unchallenging Oriented to corporate self-defence More oriented to control than open discussion Little coverage of social responsibility issues

Some linkage to disciplinary procedures Some publicity in companies and in the media No apparent linkage to reward systems Little effort to reinforce by training

FURTHER QUESTIONS

Possible explanations for best practice recommendations not being followed may

reside in local cultural factors. Regarding neglect of social responsibility, Redding (1990: 194) notes that Chinese morality ‘is based on what serves the welfare of a

specially circumscribed set of people’ and has a ‘lack of concern with societal good.’ Downplaying of ethical dialogue or open discussion may reflect what Redding (1990:

130) terms ‘aloofness and social distancing within the hierarchy.’ Codes’ emphasis on

corporate self-defence, the tendency to rely on free training by ICAC, and the apparent

lack of rewards for ethical behavior may all reflect cultural valuing of ‘frugality’

(Redding 1990: 7 1). Further cross-cultural comparative research, perhaps replicating

514 R. S. SNELL AND N. C. HERNDON, JR

this study, could identify how local cultural factors affect company ethics policies

and practices, and how ethical corporate cultures are developed, communicated, and

maintained. Since this study was conducted during a time of prosperity it might also

be interesting, as the work of Staw and Szwajkowski (1975) suggests, to replicate the

study in Hong Kong during a period of economic downturn to see what effect this

may have on company ethics policies.

LIMITATIONS

Besides the low response rates to the initial survey and to the invitation for further

research, there are at least two limitations of this study that future research might

address. One is that the statistics used are associative, not causal. Casual models

using items from empirically validated scales would help to further inform academics

and managers by connecting the effects of codes causally to employee behavior. The

second is that we were not able to study companies that were not adopting codes of

ethics. Future research should examine these organizations to understand what barriers

exist to code adoption and compare such corporate contexts to those in code-adopting

organizations.

ACKNOWLEDGMENTS

We thank the Research Grants Council, Hong Kong, for financial support via grant

no. 9040120 and Hong Kong Ethics Development Center for background information.

We also thank Ms. Almaz M-K Chak and Ms. Jess W-H Chu for conducting interviews,

questionnaire surveys, content analysis of written codes and related statistical analyses.

REFERENCES

Akaah, I.P. and Riordan, E.A. 1989. Judgments of marketing professionals about ethical issues in marketing research: a replication and extension. Jowna/ of Marketing Research,

26(l): 112-120. Anonymous 1996. High anxiety in Hong Kong. Business Asia, 28(7): l-3. Armstrong, R.W. 1996. The relationship between culture and perception of ethical

problems in international marketing. Journal of Business Ethics, 15(11): 1199-1208. Bar-On, A-A. and Ng, H-S. 1994. Dreams and reality: case study in urban grassroots

environmental protection in Hong Kong’s Philistine society. Hong Kong Jownal of Social work, 28(l): 52-61.

Bennett, A. 1988. Ethics codes spread despite skepticism. Wall Street Jownal, July 15: 15. Blodgett, M.S. and Carlson, P.J. 1997. Corporate ethics codes: a practical application of

liability prevention. Journal of Business Ethics, 16(12/13): 1363-1369. Brytting, T. 1997. Moral support structures in private industry - the Swedish case.Jol*mal

of Business Ethics, 16(7): 663-697.

AN EVALUATION OF HONG KONG’S CORPORATE CODE OF ETHICS INI’I’IATIVE 515

Cassell, C., Johnson, P. and Smith, K. 1997. Opening the black box; corporate codes of ethics in their organizational context. Jozlrnal of Business Ethics, 16(10): 1077-1093.

Chan, S. and Leung, S. 1995. The code of conduct in Hong Kong business companies - a survey study of current practice. Working paper, Hong Kong Polytechnic University, Dept. of Accountancy, Hong Kong.

Chew, A. 1993. Bribes tack on 5% to cost of doing business in China. South China Morning Post, August 2 1.

Churchill, G.A. 1995. Marketing Reseadrch: Methodological Foundations. Sixth edition. Fort Worth, Texas: The Dryden Press.

Cleek, M.A. and Leonard, S.L. 1998. Can corporate codes of ethics influence behavior? Journal of Business Ethics, 17(9): 619-630.

Collins, D. and O’Rourke, T. 1993. Ethical Dilemmas in Business. Cincinnati, Ohio: South Western.

Cressey, D. and Moore, C. 1983. Managerial values and corporate codes of ethics. California Management Review, 25(4): 53-77.

DeGeorge, R.T. 1990. Business Ethics. Third edition. New York: Macmillan. DeGeorge, R.T. 1993. Developing ethical standards for international business: what roles for

business and government? In PM. Minus (ed) The Ethics of Bzsiness in a Global Economy, pp. 79-95. Norwell, Massachusetts: Kluwer.

Dobson, C. 1993. HK business reveals the price of graft. Sunday Morning Post, July 25: 3. Doig, A. and Wilson, J. 1998. The effectiveness of codes of conduct. Business Ethics: A

European Review, 7(3): 140-149. Donaldson, J. 1992. Bzlsiness Ethics: A European Casebook. London: Academic Press. Donaldson, T. 1993. When in Rome, do...what? International business and cultural

relativism. In P.M. Minus (ed) The Ethics of Business in a Global Economy, pp. 67-78. Norwell, Massachusetts: Kluwer.

Donaldson, T. and Dunfee, T.W. 1994. Towards a unified conception of business ethics: integrative social contracts theory. Academy of Management Review, 19(2): 252-284.

Farrell, B.J. and Cobbin, D.M. 1996. ‘Mainstreaming’ ethics in Australian enterprises. Journal of Management Development, 15(l): 37-50.

Farrell, H. and Farrell, B.J. 1998. The language of business codes of ethics: implications of knowledge and power. Journal of Business Ethics, 17(6): 587-601.

Ferrell, O.C. and Fraedrich, J. 1994. Bzlsiness Ethics. Second edition. Boston, Massachusetts: Houghton Mifflin.

Ferrell, 0.C and Pride, W.M. 1981. Management must practise, support, and enforce usable, operational ethical policies. Marketing News (Marketing Management Section), 1: 11.

Ferrell, O.C. and Skinner, S.J. 1988. Ethical behavior and bureaucratic structure in marketing research organizations. Journal of Marketing Research, 25(l): 103-109.

Ferrell, 0.C and Weaver, K.M. 1978. Ethical beliefs of marketing managers. Journal of Marketing, 42( 3): 69-7 3.

Flick, U. 1992. Triangulation revisited: strategy of validation of alternative? Jozlrnal for the Theory of Social Bebauior, 22(2): 175-198.

Fritzsche, D. 1997. Business Ethics: A Global and Managerial Perspective. New York: McGraw- Hill.

Fritzsche, D., Huo, Y.P., Sugai, S., Tsai, S. D-H., Kim, C.S. and Becker, H. 1995. Exploring the ethical behavior of managers: a comparative study of four countries. Asia Pacific

Journal of Management, 12(2): 37-61. Hansen, C. 1994. Classical Chinese ethics. In P. Singer (ed) A Companion to Ethics,

pp. 69-8 1. Cambridge, Mass: Blackwell, Hersh, R.H., Paolitto, D.P and Reimer, J. 1979. Promoting Moral Growth: From Piaget to

Kohlberg. Second edition. New York: Longman.


Hong Kong Ethics Development Centre 1995. Directory of Business Code of Conduct. Issued at the opening ceremony, Hong Kong Convention Center, May 2.

Hong Kong Ethics Development Centre 1995-8. Ethics in Practice, Issues l-9. Website http: llwww.icac.org.hkledciedcO~e.htm.

Hong Kong Ethics Development Centre 1997. Information by telephone, February 1997. Hunt, SD., Chonko, L.B. and Wilcox J.B. 1984. Ethical problems of marketing researchers.

Journal of Marketing Research, 21(3): 309-324.

Husted, B.W., Dozier, J.B., McMahon, J.T. and Kattan, M.W. 1996. The impact of cross- national carriers of business ethics on attitudes about questionable practices and forms of moral reasoning. Journal of International Business Studies, 27(2): 391-411.

Independent Commission Against Corruption, undated. Corporate Code of Conduct. ICAC, Community Relations Department, Hong Kong.

Independent Commission Against Corruption 1994. Statement on conclusions/recommendations of the conference on business ethics, May 4, Hong Kong.

Internet Center for Corruption Research 1999. Older Indices of the Corruption Perceptions Index. Internet website http:llwww.gwdg.del-uwvwl. Giittingen University.

Jackson, K.T. 1997. Globalizing corporate ethics programs: perils and prospects. Journal of

Business Ethics, 16(12-13): 1227-1235. Kaikati, J.G. and Label, W.A. 1980. American bribery legislation: an obstacle to

international marketing. Journal of Marketing, Q(4): 38-43. Kjonstad, B. and Willmott, H. 1995. Business ethics: restrictive or empowering? Journal of

Business Ethics, 14(6): 445-464.

Kohlberg, L. 19Sl. Essays on Moral Development, Volume One: The Philosophy of Moral Development. San Francisco, CA: Harper and Row.

Kohlberg, L. 1986. A current statement on some theoretical issues. In S. Modgil and C. Modgil (eds) Lawrence Kohlberg: Consensus and Controversy, pp. 485-546. Philadelphia, PA: Falmer Press.

Kohlberg, L. and Ryncarz, R.A. 1990. Beyond justice reasoning: moral development and consideration of a seventh stage. In C.N. Alexander and E.J. Langer (eds) Higher Stages

of Human Development, pp. 191-207. Oxford, UK: Oxford University Press. Kraar, L. 1995. Death of Hong Kong. Fortune, June 26, 41-52. Laczniak, G.R. and Murphy, P.E. 1985. Incorporating marketing ethics into the

organization. In G.R. Laczniak and P.E. Murphy (eds) Marketing Ethics: Guidelines for

Managers, pp. 97-105. Lexington, Massachusetts: D. C. Heath and Company. Laczniak, G.R. and Murphy, P.E. 1993. Ethical Marketing Decisions. Needham Heights,

Massachusetts: Allyn & Bacon. Lincoln, D.J., Pressley, M.M. and Little, T. 1982. Ethical beliefs and personal values of top

level executives. Journal of Business Research, 10: 4, 475-487.

Lu, L-C., Rose, G.M., and Blodgett, J.G. 1999. The effects of cultural dimensions on ethical decision making in marketing: an exploratory study. Journal of Business Ethics, 18(l): 91-105.

Matthews, M.C. 1987. Codes of ethics: organizational behavior and misbehavior. In W.C. Frederick and L.E. Preston (eds) Research in Corporate Social Performance and Policy, pp. 107-130. Greenwich, Connecticut: JAI Press.

McDonald, G.M. 1994. Value modification strategies on a national scale: the activities of the Independent Commission Against Corruption in Hong Kong. In W.M. Hoffman, J.B. Kamm, R.E. Frederick & ES. Petry (eds) Emerging Global Business Ethics, pp. 14-35. Westport, Conn: Quorum Books.

McDonald, G.M. 1998. Stimulating an ethical climate in organizations. Organizations & People: Successful Development, 5(l): 25 31.

Munro, I. 1997. Codes of ethics: some uses and abuses. In P.W.F. Davies (ed) Current Zssues in Business Ethics, pp. 97-106. London: Routledge.


Murphy, P.E. and Enderle, G. 1995. Managerial ethical leadership: examples do matter. Business Ethics Qzlarterly, 5(l): 117-128.

Ng, S-H. 1986. Perception of sex discrimination in employment and the ‘class’ context: the case of Hong Kong female workers. British Journal of Sociology, 37(3): 307-334.

Nielsen, R.P. 1990. Dialogic leadership as ethics action (praxis) method. Journal of Business

Ethics, 9(10): 765-783.

Nwatchukwu, S.L.S. and Vitell, S.J. 1997. The influence of corporate culture on management ethical judgements. Journal of Business Ethics, 16(8): 757-776.

Payne, D., Raiborn, C. and Askvik, J. 1997. A global code of business ethics. Journal of Business Ethics, 16(16): 1727-1735.

Purcell, T.V. 1982. The ethics of corporate governance. Review of Social Economy, 40(3):

360-370. Raiborn, C.A. and Payne, D. 1990. Corporate codes of conduct: a collective conscience and

continuum. Journal of Business Ethics, 9(11): 879-889. Redding, S.G. 1990, The Spirit of Chinese Capitalism. New York: de Gruyter. Sanderson, G. and Varner, I. 1984. What’s wrong with corporate codes of conduct?

Management Accounting, 66(l): 28-3 1 & 35. Schlegelmilch, B.B. and Robertson, D.C. 1995. The influence of country and industry on

ethical perceptions of senior executives in the U.S. and Europe. Journal of International

Business Studies, 26(4): 859-883. Schoenberger, K. 1996. Hong Kong’s secret weapon. Fortune 134(10): 141-142. Sethi, S.P. and Sama, L.M. 1998. Ethical behavior as a strategic choice by large corporations:

the interactive effect of marketplace competition, industry structure and firm resources. Business Ethics Quarterly, 8(l): 85-104.

Sims, R.L. 1998. When formal ethics policies differ from informal expectations: a test of managers’ attitudes. Leadership 6 Organization Development Journal, 19(7):386-391.

Sinclair, K. 1993. Black days when graft was king. South China Morning Post, November 5. Singhapakdi, A., Rallapalli, K.C., Rao, C.P, and Vitell, S.J. 1995. Personal and professional

values underlying ethical decisions: a comparison of American and Thai marketers. International Marketing Review, 12(4): 65-76.

Smeltzer, L.R. and Jennings, M.M. 1998. Why an international code of business would be good for business. Journal of Business Ethics, 17(l): 57-66.

Snarey, J.R. 1985. Cross-cultural universality of social-moral development: a critical review of Kohlberghian research. Psychological Bulletin, 97(2): 202-232.

Snell, R.S., Chak, A.M-K. and Taylor, K.F. 1996. The impact of moral ethos on how ethical dilemmas are experienced and resolved in six Hong Kong companies. Management Research News, 19(9): 71-90.

Snell, R.S., Taylor, K.T., and Chak, A.M-K. 1997. Ethical dilemmas and ethical reasoning: a study in Hong Kong. Human Resource Management Journal, 7(3): 19-30.

Staw, B.M. and Szwajkowski, E. 1975. The scarcity-munificence component of organizational environments and the commission of illegal acts. Administrative Science Quarterly, 20(3): 345-354.

Steidlmeier, P. 1997. Business ethics and politics in China. Business Ethics Quarterly, 7(3):

131-143. Stevens, B. 1994. An analysis of corporate ethical code studies: where do we go from here?

Journal of Business Ethics, 13(l): 63-69. The Business Roundtable 1988 Corporate Ethics: A Prime Business Asset. A Report on Policy

and Practice in Company Conduct, New York: The Business Roundtable. Torode, G. 1994. Reports of corruption hit record. South China Morning Post, January 18:

l-2. Transparency International 1999a. The Transparency International 1998 Corruption

Perceptions Index. Website http://www.transparency.de/documents/cpi/index.html.


Transparency International 1999b. Frequently asked questions and answers on the TI 1998 Corruption Perceptions Index. Website http://www.transparency.de/documents/cpi/cpi- faq.html#methodology.

Transparency International 1999~. 1998 Corruption Perceptions Index: framework document. Website http://www.transparency.de/documents/cpi/framework.html

Transparency International 1999d. Corruption Perception Index sources. Website http:// www.transparency.de/documents/cpi/cpi-sources.html.

Treviiio, L.K. and McCabe, D. 1994. Meta-learning about business ethics: building honourable business school communities. Jownal of Business Ethics, 13(6): 405-416.

Trevifio, L.K. and Youngblood, %A. 1990. Bad apples in bad barrels: a causal analysis of ethical decision-making behavior. Journal of Applied Psychology, 75(4): 378-385.

Trevisan, R.E. 1986. Developing a statement of ethics: a case study. Journal of Purchasing and Materials Management, 22(3): 8-14.

Trite, H.M. and Beyer, J.M. 1993. The Cdtures of Work Organizations. Englewood Cliffs, New Jersey: Prentice-Hall, Inc.

Tu, W-M. 1998. Probing the ‘three bonds’ and ‘five relationships’ in Confucian humanism. In W.H. Slote and G.A. DeVos (eds) Confucianism and the Family, pp. 121-136. Albany, NY: State University of New York Press.

Weaver, G.R. 1995. Does ethics code design matter? Effects of ethics code rationales and sanctions on recipients’ justice perceptions and content recall. Journal of Business Ethics, 14(5): 367-385.

Weaver, G.R., Trevino, L.K., and Cochran, P.L. 1999. Corporate ethics practices in the mid- 1990s: an empirical study of the ‘Fortune’ 1000. Journal of Business Ethics, 18(3): 283-294.

Weber, J. and Green, S. 1991. Principled moral reasoning: is it a viable approach to promote ethical integrity? Jownal of Business Ethics, lO(5): 325-333.

Westwood, R. I. and Chan, A. 1992. Headship and leadership. In R.I. Westwood (ed) Organizational Behavior: Southeast Asian Perspectives, pp. 118-143. Hong Kong: Longman.

Westwood, R. I. and Chua, B.L. 1992. Power, politics, and influence. In R.I. Westwood (ed) Organizational Behavior: Sozltheast Asian Perspectives, pp. 144-172. Hong Kong: Longman Group, Ltd.

Wong, G.Y.Y. and Birnbaum-More, P.H. 1994. Culture, context and structure: a test on Hong Kong banks. Organization Studies, 15(l): 99-123.

Documents

An Evaluation of Hong Kong's Corporate Code of Ethics Initiative · 2013. 4. 24. · Title: An Evaluation of Hong Kong's Corporate Code of Ethics Initiative Created Date: 3/7/2002