Ethical Evaluations, Intentions, And

8/11/2019 Ethical Evaluations, Intentions, And

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Ethica l Evaluat ions Intent ions and

Orientat ions o f Accoun tants : Evid ence

from a Cross -Cul tura l Examinat ion

SILVIA LOPE Z PALAU*

Society has high expectations concern ing accou nting professionals. Mo re than ever,

accountants need professionaI values and ethics that allow them to operate successfully and with

integrity in a chan ging world. This stud y is a fir st a ttemp t to un ders tand the ethica l evaluations,

intentions, and orientations o f accounting professionals a nd studen ts fro m Latin American

countries. Ano ther objective is to validate the multidimensional ethics scale us ed by Cohen et

al. [1998] in an intern ationa l setting. The results did not validate such a sca le but offer

interesting findin gs abou t the Latin American sample. In such a context, ethics appear to be a

collective concern g uide d by a different concept o f equity. The results indicate that the

respondents c onsider jus tice a superior value over w hat is considered correct, acceptable, or

good. JEL R42)

I n t r o d u c t i o n

Today, accountan ts wo rk in a world of change in whic h corporate collapse , business

fai lure , and environm ental disaster are on the increase [ International Federat ion of

Acco untants ( IFAC), 1992]. This scenar io makes education in, and un derstand ing of, e thical

considerat ions essentia l for them. M ore than ever , accountants need professional values and

ethics that a l low them to operate successfully and with integr i ty in a chan ging world. Society

has high expectat ions about acco unting professionals.

General ly, the deve lopm ent of global e thical s tandards that harmon ize the profession in

every par t of the world are view ed as a posi t ive step. Howev er , recognizin g the need is only

the f irst s tep toward the globalizat ion of e thical norms. Defining e thics is easier than

determ ining what an e thical behavior is . In an a t tempt to harmon ize the dif ferent concepts

of e thics, the IFAC [1996] dev eloped the Code of Ethics for Professional Accountants.

How ever , in the f irst paragraph of that docu ment, the IFAC admitted the dif f iculty of the

task:

IFAC b elieves that due to n ational dif ferences of culture , language, legal and socia l

systems, the task of prepar ing deta i led e thical requirements is pr imari ly that of the

mem ber bodies in each country concerned and they a lso have the responsib i l ity to

implem ent and enforce such requirements.

Culture is of ten c i ted as the mo st ser ious barrier obstructing the harm onizatio n process.

Culture is conside red to be a pow erful environm ental factor that could affect the accounting

*University of Texas-Pan American--U.S.A.

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system of a country, including the perception and use of accounting information by

individuals. Violet [1983] states, . . .accounting is an interactive socio- techn ical activity

involving both hum an and non hum an resources or techniques. As a result of this interaction,

accounting cannot be culture free. It is important to understand and take into account the

cultural diversity to achieve a real harm onizatio n. Coh en et al. [1992] argue that:

Internation al profess ional guidelines are often ethno centric; they reflect the ethical and

cultural standards of the de veloped countries whose organizations are mo st influential

in writing them, and therefore risk failing to address ethical dilemm as found prim arily

in dev eloping countries.

The real problem is not the cultural differences, i t is how to deal with them. Cohen et al.

[1993b] point out that the problem is that firms' top manag eme nt and the profession's

standards setters are unlik ely to be fully sensitive to internation al and cultural differen ces.

They believe that the first step to adequately control for such differences in an international

environ ment is to identify such differences: Auditing firms need more inform ation on the

nature an d extent of internation al ethical diversity... .

In the effort to harmon ize ethical concepts, the attitude that people h ave about cultural

differences is also important. Ronen [1986] argues that coming from differing cultural

groups, people g enerally presum e that what they do is appropriate, whereas m emb ers o f other

groups are irrational or unsophisticated, or both, in dealing with the same circumstances.

Desiruiss eaux et al. [1999] arg ue that the cultural differences and the mo ral system s that

arise should be considered and lived in a positive sense. Cross-cultural research can help

the developm ent of the social sciences and also may offer a corrective to the tendency to

turn national prejudices into mod els that guide international behavior [Merkx, 1998]

Several researchers have found cross-national differences in ethical reasoning in a

business context. Most of the studies focus on making comparisons of the ethical

perceptions, codes, or training between people from Asia, Europe, and the U.S. [B ecker and

Fritsche, 1987; Lan glois and Schle gelm ilch, 1990; Dub insky et al., 1991; Bro dy et al., 1998;

Ho neyc utt et al., 1995; Singhapak di et al., 1994; Shenas, 1993; Wh ipple and Sword s, 1992;

White and Rhodeback, 1992; Lysonski and Gaidis, 1991; Kaufman, 1985]. Although the

cultural differences in ethics between Asians, Europeans, and U.S. citizens have been

examined, acad emic literature has practically ignored all Latin Am erican countries.

A review o f the li terature revealed no studies that exam ine the ethical perceptions of Latin

American business people in general nor accounting professionals in particular. This

exploratory study has two objectives. The first is an attempt to understand the ethical

evaluations, intentions, and orientations of accounting professionals and students from

different Latin A mer ican countries. The ethical evaluation is the respondent 's classification

of an action as ethical or unethical. The intention is the respondent 's willingness to perform

a determined action. The orientation provides an explanation for w hy respondents believe

a particular action is ethical or not.

The second objective is to validate the multidimensional ethics scale (MES) used by

Coh en et al. [ 1998] in an in ternational setting and admin ister it in the Spanish language . The

ME S intends to identify the rationale behind moral reasoning and the reason for the ethical

evalu ation of particu lar actions made by respon dents. Ho wev er, Cohen et al. [1993a, 1998]

concedes that the instrument was constructed from a U.S. sample and might not be

appropriate in other cultures. Cultural variables that may explain the ethical evaluation and


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LO PEZ PALAU: ETH ICAL EVALUATIONS 353

intention of the responde nts were not included in the scale . They poin t out, In other

countr ies, e thical decision mak ing m ay be so inf luenced by cu lture that the use o f an e thics

scale construc ted f rom a U.S. sam ple would be ir re levant to the potentia l subject [1993a] .

Coh en et a l . [1992] poin t out the c lose re la t ionship between ethics and culture by sta t ing,

There is ev iden ce that ethical diversity is related to cultural diversity.

This s tudy is organized as fol lows. The second section sta tes the e thics theoret ical

f ramework . The third and four th sect ions explain the research design and scale , and the f if th

and sixth sect ions present and d iscuss the results and re l iabil i ty issues. General conclusions

are presented in the seventh sect ion.

th ic s

Background

Ethics can be div ided into categories based on the focus to ma ke m oral judg men ts, such

as deontological (sometimes cal led nonconsequentia l theor ies) and te leological e thics

(som etimes cal led consequen tia l theor ies) . Deontological e thics a t tempt to determine only

wha t is correct but do not provide guides about how to l ive a happ y l ife . These are concern ed

with e thical pr inciples, rules, r ights , and duties that are essentia l universal laws wh ich act as

a majo r guide in the decision-m aking process [Barn6s and Lloyd-Jo nes, 1999] . Deo ntolog y

can be d escr ibed as e thics of duty.

By contrast , te leological e thics a t tempt to determine what is good for humans. Such

theories assum e that the r ight thing is der ived from the good. This po int o f view judg es the

r ightness of an act ion depending on the consequences. Two theories in this category are

egois m and uti l i tar ianism. Ego ism def ines the r ight behavior in terms of the consequences

to the individual . Uti l i tar ianism seeks to achieve the greatest goo d for the greatest num ber

of people .

U S and Latin American Points o f View About Ethics

Vog el [1992] argues that the U.S. is dist inctive by the way in w hich bu siness e thics are

def ined. He states three dif ferences. First , U.S. c i t izens tend to em phasize the role of the

individual as the m ost cr i tical source of e thical values. Secon d, business e thics tend to be

mu ch m ore legalis t ic and rule-or iented in the U.S. Finally, U.S. c i t izens are more l ikely to

consider their ow n ethical rules and standards to be universal ly applicable .

The L atin Am erican view stresses other factors . First, culture and values are de pend ent

on each other . Second, each individual in the socie ty is submitted to the normative

conscience, which is co mm on patr imony, and i t equally affects groups o f dif ferent s izes of

the collect ive . Third, the e thics of one determined socie ty is not necessar i ly infer ior or

super ior to the e thics practiced in another s ocie ty w here the cultural , socia l, and po li t ical

traditions are different [Licciardo, 1999; Zamorano, 1999; Molina, 1999; Desiruisseaux,

1999].

In sum mary , Latin American s view ethics as par t of their own socia l and cultural

act ivit ies , while U.S. c i t izens view ethics as an individual concern. I t ma y be expected that ,

in general , Latin Am ericans take into account a greater num ber o f factors when ev aluating

the e thical implicat ions o f an act ion than do U .S. c i t izens.


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R e s e a r c h D e s i g n

Sample

This sam ple was draw n from the participants o f two international accounting con ferences

held in Puerto Rico last year. The respondents took the questionnaires from the reception

tables, whic h were strategically located. The sam ple should be consid ered conve nien t and

the respondents were self-selected. A total of 100 usable questionnaires were collected.

People from 15 Latin Ame rican countries were included in the sample. Puerto Ricans and

Venezu elans constituted about one-half of the total sample. The smaller samples w ere from

Honduras, Panama, and Uruguay, with one respondent from each. The other countries

represented in the sample wer e Argentina, Brazil , Chile, Colombia, C osta Rica, Dominican

Republic, Gu atemala, Nicaragua, Paraguay, and Peru.

Of the respondents, 62 percent were males with an average age o f 43 year s and 34 percent

wer e accountants, 24 percent were accounting professors, 22 percen t were auditors, and 20

percen t were students (mainly from Venezuela). The average professional experience was

approxim ately 19 years. Eighty percent of the respondents we re Catholic and mo re than 40

percen t had master's degrees while only 6 percent possessed doctoral degrees.

About half of the respondents defined themselves as bilingual. The main language

comb inations were Span ish/English and Portuguese/Spanish. O f the respondents, 6 percent

indicated their know ledge of a third language, mainly French or Portuguese. Only one

respond ent ind icated an Indian language (Guarani) as his first language. The ed ucation in

ethics for more than on e-half of the sam ple is equivalent to less than on e college course.

Research Instrument

This pr esen t study begins w ith the studies con ducte d by C ohen et al. [ 1992, 1993 a, 1996].

Their work fo cused on the following five mora l constructs drawn from the mo ral philosophy

literature: justice, relativism, utilitarianism, deontolo gy, and egoism. These moral constructs

are reflected in the MES, d eveloped by Reiden bach and Robin [1988, 1990, 1993] and used

in accou nting by Flo ry et ah [1992] and Coh en et al. [1993a, 1996]. Skip per and Hym an

[1993] state that this scale has be com e pop ular since its inceptio n and se ems destine d to

bec om e the de facto standard amon g business researchers.

Scenario s Used in the Study

Eight scenarios oriented toward general business w ere included in the questionnaire and

are presented in the App endix. Co hen et al. [1998] adapted these vignettes from earlier

studies by Burton et al. [1991], Dav is and Welto n [1991], and Co hen et at. [1996].

T h e S c a l e

onstructs and Variables

The MES, presented in Table A1 in the Appendix, provides direct measures of the

respondent 's ethical orientation on five mor al constructs, drawn fro m the mor al philosophy

literature by R eidenba ch and Robin [1988]. These constructs determ ine the right thing to

do using different approaches. Justice deals with the fair distribution of benefits and burdens

amo ng the ind ividuals of a society. It is closely related to the equ ity concept. Relativism

argues that the ethical rules are not universal. This mode of reasoning is based on the fact

that each society has its own rules o f conduct, ethics, and values linked with its own culture


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wh ich are not necessar i ly applicable to other cultures. Ego ism looks to m axim ize the welfare

of the individual . I t promo tes the individual s se lf- interest . Uti l i tar ianism weights the benef i ts

der ived from an act ion versus the cost incurred by socie ty. The goal is to max imize benef i ts

for the greatest num ber and simultane ously min imiz e the cost . Deon tolog y argues that ethics

are subject to the duties, obligations, or implied contracts that individuals have amo ng them

and with society. The scale (show n in Table 1) includes twelve i tem s, three each for the

just ice and re la t ivism constructs and two for each of the other constructs .

T AB L E

Constructs o f the Multidimensional Eth ics Scale

Mora l Const ruc ts I tems

Justice

Rela t iv ism

Ego i sm

Util i tar ianism

De on to logy

Just/unjust

Fair/unfair

Morally r ight/morally wron g

Acceptable/unacceptable for my family

Cultural ly acceptable/unacceptable

Tradit ionally acceptable/unacceptable

Self-promo ting/detr imen tal for the actor

Personally sa t isfactory/unsatisfactory for the actor

Produce s the greatest/ least ut i l ity

Minimize/maximize benefits while maxim izing/minim izingharm

Violates/does not viola te an unw rit ten contract

Viola tes /does not v io la te an u nspoken prom ise

Modifications

In this s tudy, the original scale was mo dif ied in two ways. First , som e of the end points

of the scale were ch anged to create co ntrary poles. For example , the study uses morally

r ight /mora l ly wrong ins tead o f mora l ly r igh t /n ot mora l ly r ight as used by Cohen e t a l.

[1998] . Second, instead of using a seven-point Liker t scale , a f iv e-centimeter l ine with two

poles is presented in wh ich the sub ject puts a mark acco rding to his desired response. A

physical mea sure taken with a ruler is used as a percentage. In this way, a nonm etr ic ordinal

var iable is t ransformed to a contin uous metr ic variable . Th e proced ure a l lows for captur ing

the intensi ty o f the subject s response.

dditional Questions

Following the work of Cohen et a l . [1998] in addit ion to the MES, one quest ion is

included to assess an overal l e thical evaluation, with the endpo ints of e thical /unethical . Tw o


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questions are included to measure the intention. The first question asks for the probability

that the respondent will act in a specified way. However, it may be possible that respondents

overstate their ethical intentions because o f the halo effect. To examine and control for social

desirability, the second question asks for the probability that the subject s peers will act in

a specified way. This present study adds an open question, asking why the respondent made

the previous ethical evaluation to gain knowledge of other possible factors that affect a

subject s ethical evaluation beyond the five factors already identified and studied. Fina lly,

demographic questions are included.

Resu l t s

thical valuation by Scenario

Table 2 presents a comparison of the means and standard deviations obtained from each

scenario by this present study and from Cohen et al. [1998]. The sample of Cohen et al. was

composed of undergraduate students from universities in the northeaste rn U.S. Due to the use

of different scales in the studies, the absolute number cannot be compared. Instead, the

comparison is made in relative terms.

TABLE 2

Resu l t s o f Respon dent s Eth ica l Eva lua t io n by Scenar io

In Cohen et al. [1998]

In the Present Study

Standard Relative Standard Relative

Scenarios Mean Deviation Position* Mean Deviation Position*

1) Early shipment of goods 4.87 1.65 5 .131 .199 1

2) Bank loan to a friend 5.03 1.64 4 .205 .272 3

3) Personal gift 5.20 1.66 3 .162 .225 2

4) Bad debt adjustment 5.26 1.50 2 .249 .316 4

5) Lay off a younger but

more competent hire 4.26 1.73 6 .378 .357 8

6) Product safety: continue to

sell an untested product 5.67 1.52 1 .265 .289 5

7) Foreign bribe:

authorization of payment 4.20 1.68 7 .287 .310 7

8) Copying software: lending

software to copy 4.03 1.89 8 .283 .320 6

Notes:

* Scenarios were rated from 1 (perceived as less ethical by the respondents) to 8 (perceived as more ethical),

making the results comparable. The sample size for Cohen et al. was 645, and a seven-pointscale was used. A higher

score indicates he respondentperceived the action o be less ethical. The sample size for the present studywas 100.

A higher score indicates the respondentperceived the action o be more ethical. The seventh scenario was modified

to omitreferences to the nationalityof the actors.


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LO PEZ PALAU: ETHIC AL EVALUA TIONS 357

The f irst scenar io was evaluated as the most unethical act ion, fol low ed by the third. The

action descr ibed in both re la tes to the trust between par t ies. In contrast , the scenar ios in

Cohe n et a l . [ 1998] evaluated as most unethical were the sixth then the four th. The act ion in

both m anipulates the inform ation offered to the general public . This ma y su ggest that Latin

Am ericans give special value to the trust and loyalty in re la t ionships w hile U.S. c i t izens

value the app ropria teness and availabili ty o f public information.

In both studies, the scenar ios evaluated as less unethical were the f if th, seventh, and

eighth, but in a dif ferent order . The act ion descr ibed in the f if th supports the senior i ty

concep t present in mo st powe r hierarchies in Latin Am erica which, in ma ny instances, is

included in the labor laws of such countr ies. The lower mean score obtained suggests a

change in Latin American business man age me nt and maybe in labor regulat ions. The other

two scenar ios deal with act ions very co mm on in Latin America n countries. This may su ggest

a kind o f acceptance o f such act ions due to the f requen cy of their occurrence.

Interest ingly, in both samples, the foreign br ibe scenario was evaluated as secon d less

unethical . The o r iginal vignette used in the other study specif ical ly men tion ed that the actor

and the co mp any are f ro m the U.S. I t describes the act ion as a standard procedure in the

foreign country. In the prese nt study, the reference to nationali t ies is om itted. The results

obtained in both studies support the perception that it is not corrupt to pay mo ney under the

table in a foreign country when cond ucting business, wh en even in the hom e country i t

could be c lassif ied in such a w ay. I t might be interest ing to com pare the results using such

a scenar io, evaluating the sam e action but f rom the view point of the one that receives the

mon ey. Is i t possible that i t is corrupt to receive mon ey under the table while paying i t is not?

Factor nalysis and Reliability Issues

The Five Factor Solution

Follow ing the meth odo log y used by C ohen et a l. [1998] , an exploratory factor analysis

with var ima x o r thog onal rota t ion, constra ining the analysis to f ive factors, was condu cted

to exa mine the stabil i ty and re levance o f the factors across d if ferent contexts. A re l iabil i ty

analysis was perfor med by calculat ing a lpha scores. The exp ected result of this procedure

to validate the scale is that the same five factors eme rge across all eight scenarios. How ever,

the results reveal a different structure.

The re l iabil i ty analysis perform ed on the i tems co mpris ing each o f the f ive factors reveals

a reasonable re l iabil i ty in four of them, with a lpha scores exceeding the .60 minimum

required for an exploratory study. How ever , the a lpha scores for the ut i l i tar ianism factors

were u nacceptab ly low in a l l cases, even for the exploratory nature o f this s tudy, ranging

from .06 to.60 in the best of cases. This may suggest measu reme nt or validi ty prob lems with

the ut i l i tarianism i tems. Guided by the parsim ony pr inciple , a new analysis co mprisin g the

solution to four factors was per form ed withou t the ut i l i tarianism var iables.

The Four Factor Solution

In this solution, four factors em erged, but n ot the fo ur predicted. In a l l cases, they had

eigenvalu es of mo re than 1, and they exp lained between 78 and 90 percen t of the var iance.

Table A 2 in the Ap pen dix shows the results obtained, indicat ing the factor in which each

var iable is included and the total var iance exp lained by them in each scenar io. The results


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did not validate the ME S in an international se tt ing but so mew hat impro ved the previous

solution and offered interest ing f indings about the sample .

The Justice oncept

The just ice-re la t ive factor ( justice var iables plus the var iable o f acceptable/unacceptable

to my family) emerged in more than ha lf the cases. People evaluate the just ice of an act ion

primari ly in the family context . However , in other s i tuat ions, the fam ily context was not

considered. This suggests that just ice is mainly a collect ive but int imate phen om en on instead

of an individual concern. An important f inding is that the factor that includ es the just ice

var iables a lways is the factor explaining more var iance (a lways m ore th an 25 percent) . This

indicates that just ice is the most imp ortant considerat ion of the responde nts e thical

reasoning.

The Egoism oncept

The e goism factor emerged across a ll e ight scenar ios, but in m ost instances, i t is the factor

that less var iance explained (about 15 percent) . However , the e gois m co ncept appears to be

a con siderat ion in the e thical evaluation of the samp le , while the ut i l i tarian dim ension did

not . To some extent, this result contradicts the collect ive-or iented character is t ic of Latin

Americans. Also, i t is interest ing that the ut il i tar ian dimensio n, which to som e extent im plies

the cost-benef i t reasoning, did not emerge in a sample com pose d of accou nting professionals.

The four th scenar io (bad debt adjustmen t) was the only one in which e goism eme rged as

the secon d most im portant factor. I t is the only on e specif ical ly re la ted to an accountin g

topic. In this case , the results suggest that what is considered go od was mo re im portant than

what is consid ered correct .

The Deontology oncept

As expected, the deon tology factor emerged in a ll cases as being the sec ond or third mo st

important . The deontological dimen sion could be seen as the legal f ramew ork whic h def ines

the contractual obligations of individuals and inst i tut ions in the society. In general , this may

be interpreted as: in order to make their e thical judgments, the respondents give more

importance to wha t is correct over to wh at is good.

The Relativism oncept

The re la t ivism con cept emerg ed in a ll scenar ios, but i t includes the fam ily var iable in only

one instance. This may be interpreted as: the respondents jud ge the act ions o f other people

depen ding on the kind o f re la t ionships that exist between them. T his ma y ref lect the general

idea that Latin Am ericans give dif ferent t reatment to outsiders than to insiders. Moreover ,

this might ref lect a kind of f lexibil i ty in the cultural values but more absolute and r igid

family values.

This result has imp ortant implicat ions for the accoun ting professio n and for business

peop le in general . Latin Ame ricans m ight be more w il l ing to accept the fact that in other

nations, the ac counting pr inciples and practices are dif ferent ra ther than ch ange their ow n

accoun ting pr inciples and practices. May be effor t should be fo cused on d evelop ing easier

procedu res to reach equ ivalence ra ther than co ntinually trying to reach universal pr inciples,

practices, or codes.

The sixth scenar io (product safety) is the only one for wh ich the re la t ivism factor emerg ed

as expected. I t is the only scenar io where a person s safety or li fe ma y be exposed. T he result


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suggests that in such a case , insiders and outsiders are con sidered equal . Th is points to a

universal respect for hum an l ife .

Open Question Input

The respo nses to the ope n quest ion were gro uped into f ive categories. The result suggests

that the samp le considered, f irs t , what is correct and the exist ing legal f ram ew ork to evaluate

the act ion, showing a deontological dimension. Second in importance are the possible

negative consequences of the act ion. This result is par t icular ly interest ing because the

uti l i tar ianism factor did not em erge in the study. This suggests a dif ferent poin t of view of

the dime nsio n and could be a possible explanation for the low rel iabil ity and absence o f the

uti l i tar ianism factor. T he third considerat ion is the acceptabil i ty o f the act ion, show ing a

rela t ivism dim ension . Justice , in a broader sense , is the four th considerat ion. The last one,

signif icantly lower than the others, was personal welfare . This wo uld be in dicat ive o f the

collect ivistic or ienta t ion o f the sample .

Measures o f Intention and Social Desirability Issues

The respon dents intentions in each scenar io fol lowed the same pattern o f e thical

evaluation. The less e thical a s i tuat ion is evaluated to be , the lower the prob abil i ty that the

respo nden t would u nder take such an act ion. In a l l scenar ios, the results o f the paired t-test

pe r formed w i th the two in tent ion measures were h ighly s ignif icant , and in the expec ted

direct ion, the respond ent s intention is low er than the respon dent s peers . Thes e results

con firm the need to control for socia l desirabil ity bias w hen m easurin g behavioral intentions

in business e thic research.

onc lu s ions

This study contr ibutes to the ME S dev elop men t by test ing i t with sub jects f rom Latin

America . In general , the results do n ot val idate i t in a non-U.S, se t ting. The ma in f ind ing of

this s tudy was that a four-factor s tructure em erged instead o f f ive . This s tructure ref lects the

absence o f the ut i li tar ian dime nsion, dif ferences in the re la t ivism and just ice con cept , but no

differences in the deontolog ical and egoism dim ensions. The results add ev idence to e thics

l i tera ture about the re la t ionship between ethical diversi ty and cultural d iversity.

This s tudy suggests that the constructs or the var iables used to measure them are not

universal ly applicable. In the Latin A meric an context , e thics appear to be a mo re collect ive

concern ra ther than individual and gu ided by a dif ferent concep t of equity. In sum mary, the

respon dents consid er just ice a super ior value over what is con sidered correct, acceptable , or

good.

I t is to be e xpected that dif ferent perceptions wil l ar ise in mult icu ltural environm ents as

in today s businesses. Und erstandin g these dif ferences in a f ram ewo rk of respect is the f irs t

s tep toward improving the qua l ity o f comm unica t ion among col leagues, whic h wi l l, in turn ,

a l low them to w ork effect ively, shar ing com mo n goals .

The M ES ma y be a g ood research tool to determ ine such dif ferences, but this s tudy reveals

the need to im prov e in order to be o f wider applicat ion. The scale should be adap ted to the

cultural or igins of the respondents. R ef inem ent in the ut i l i tar ianism, d eontolog y, and just ice

i tems is needed to better capture the construct dimens ion in the Latin Am erican context . The

ut i l i ta r ian ism i tems might be improved by making spec i f ic re fe rence to the nega t ive


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360 IAER: AU GUS T 2001 VOL. 7 NO. 3

conseq uences of the action. The de ontolog y factor emerg ed as a secondary factor instead of

the pr imary concern expressed in the open ques t ion . I t might be im proved by u s ing i tems tha t

refer to the exist in g legal and regula tory f ramew ork instead of to an u nwrit ten contract or

promise . Final ly, the just ice i tems shou ld capture a broader view of just ice .

In addit ion, a s ingle Cronbach's a lpha was calcula ted separate ly for each scenario, using

the com plete mult idim ensio nal scale . The a lpha coeff ic ients range f rom .78 to .91. An

increasing/decreasing pat tern across scenar ios was detected. This m ay suggest that the scale

needs som e modif icat ion s in the instruct ions and maybe in i ts extension. Also, a l ternat ive

administra t ion method s should be considered.

The results of this s tudy should be interpreted by taking into account the l imita t ions

discussed, par t icular ly the samp le size and i ts non rand om nature . No a t tempt to compare

nationali t ies was made in this s tudy due to the small sample size by country. Instead, a

general analysis was made. However , fur ther research is highly desirable to identify

differen ces in ethical evaluations by nationalities. This study was a step in that direction.

A P P E N D I X

The Eight Scenar ios

1 Early Shipment of Goods

A man ager real izes that the projected quar terly sa les f igures wil l not be met. Thus, the

manager wil l not receive a bonus. However , there is a customer order which, i f shipped

before the cus tom er needs i t, wil l ensure the quar ter ly bonus but w il l have no effect on the

annual sa les f igures. Action: The m anager ships the order this quar ter to ensure earning the

quarterly sales bonus.

2 Ban k Loan to a Friend

A prom ising star t-up com pan y applies for a bank loan. The credit man ager a t the bank is

a f r iend of and f requent ly goes spor t ing w i th the comp any 's owner . Because o f this new

com pany's shor t credit history, i t does not m eet the bank's norm al len ding cr i ter ia . A ction:

The c redi t manager recom mend s ex tending the loan.

3 Personal Gift

A salesman, the fa ther of two small chi ldren, has been prom oted to a job in whic h he has

to travel away fro m ho me for the f irm on a regular basis . B ecause these tr ips are f requent and

incon venien t to his family l i fe , he is contemplat in g charging so me sm all personal ex penses

while t raveling for the comp any. He heard this is a com mo n pract ice in the company . Action:

The sa lesman charges the com pan y 50 for family gifts .

4 Bad Debt Adjustment

The chi ef executive off icer of a com pan y requests that the control ler reduce the est imate

for bad debts in order to increase reported income, arguing that this is a com m on pract ice in

the industry when t imes are hard. Histor ical ly, the company has made very conservative

al lowances for doubtful accounts, even in bad years. The off icer 's request wo uld m ake i t one

of the least conservative in the industry. Action: T he con trol ler mak es the adjustment.


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LOP EZ PALAU: ETHICAL EVALUATIONS 361

5) Lay O ff a Younger but More Competent Hire

A firm has been h ard hi t by recessionary t imes an d the par tners real ize that they mu st scale

back. An analysis of productivi ty suggests that the person m ost l ikely to be terminated is a

long-t im e emplo yee with a history of absenteeism due to i l lness in the family. Action: The

par tner in charge lays o ff a you nge r but very c om peten t recent hire.

6) Prod uct Safety: Continue to Sell an Untested Product

A sa leswoman has jus t been promo ted to produc t manager . Her f i rs t r e spons ib i l i ty is for

a new, high ly successful small ki tchen appliance. She wil l be paid in par t based on sa les of

this product . On review ing inform ation about her ne w produ ct , she discovers that there is

insuff ic ient product test ing to meet new federal Product safe ty guidelines. However , a l l

test ing so far indicates no l ikel ihood of any safe ty problem . Action: She author izes the sa les

force to con tinue prom otin g and se l l ing the product .

7) Foreign Bribe . Authorization o f Paym ent

A m anager of a com pany eager to do mo re bus iness abroad has been reques ted to make

an und isclosed cash pay me nt to a ma nager o f a local distr ibutor in a fore ign country. The

pay men t is requested as a goodw ill gesture that wil l a l low the comp any to introduce the

prod uct in that fore ign country. This pract ice is considered a norm al business procedu re in

tha t count ry and no laws prohib i t such a paym ent the re. Ac t ion: Th e man ager ve rba lly

author izes the paym ent.

8) Copying Software. Lending Software to Copy

The ow ner o f a local small business, wh ich is currently in f inancia l dif f iculty, approaches

a longtim e fr iend to borro w and c opy a propr ie tary database sof tware package, wh ich wil l

be of great value in generat ing future business. The sof tware package re ta i ls for $500.

Action: Th e f r iend loans the sof tware package.

T A B L E A

T h e M u l t id im e n s ion a l E t h i cs S c a le

Just

Fair

Morally r ight

Acceptable for my fami ly

Cultura l ly acceptable

Tradit ionally acceptable

Self-prom oting for the actor

Personally sa t isfactory for the actor

Produ ces the greatest ut i l ity

Minimize benefits while m aximizing harm

Violates an unw rit ten contract

Viola tes an un spoken promise

Unjus t

Unfair

Mora l ly wrong

Unacceptable for my fami ly

Cultura l ly unacceptable

Tradit ionally unacceptable

Detr imental for the actor

Personally unsat isfactory for the actor

Produc es the least ut i l i ty

Maximize benefits while minimizing harm

Does no t viola te an unwrit ten contract

Does not v io la te an unspoke n promise


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IAER: AU GU ST 2001, VOL. 7, NO. 3

T A B L E A 2

O r d e r e d

Factors a s

T h e y E m e r g e d

i n F a c t o r A n a l y s i s

( F o u r - F a c t o r S o l u t i o n )

Factors and Variables

Scenarios

1 2 3 4 5 6 7 8

Jus t i ce

Just/unjust 1

Fair /unfai r 1

Mo ra l ly r igh t /mora l ly wron g 1

R e l a t i v i s m

Acceptab le /unacceptab le

t o my f a mi l y

Cul tural ly acceptab le /unaccep table 2

Tradi t iona l ly acceptab le /unacceptab le 2

E g o i s m

Sel f -promot ing/de t r imenta l

for the actor 4

Personal ly sa t is factory/unsat is factory

for the actor 4

D e o n t o l o g y

Violates /does not viola te an

unwr i t t en cont rac t 3

Viola tes /does not viola te an

unspok en promise 3

Perce ntag e o f Varian ce Exp lained 77.83

1 1 1 1 1 1 1

1 1 1 1 1 1 1

1 1 1 1 1 1 1

1 1 1 2 1 1

3 3 4 2 2 3 3

3 3 4 2 2 3 3

4 4 2 4 4 4 4

4 4 2 4 4 4 4

2 2 3 3 3 2 2

2 2 3 3 3 2 2

80.50 80.26 89.57 87.95 87.75 87.59 87.86

Notes: Factors are rated from 1 (explains greater variance) o 4 (explains least variance).

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Ethical Evaluations, Intentions, And