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Pepperdine University Graduate School of Education and Psychology
BUSINESS ETHICS: AN ANALYSIS OF A COMPANYS TRAINING PROGRAM INFLUENCE ON EMPLOYEE BEHAVIOR AND MORALE
A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Education in Organizational Leadership by Marlene Law Graham May, 2009 Thomas Penderghast, Ph.D. Dissertation Chairperson
UMI Number: 3355620
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Business Ethics Training This dissertation, written by Marlene Law Graham under the guidance of a Faculty Committee and approved by its members, has been submitted to and accepted by the Graduate Faculty in partial fulfillment of the requirements for the degree of DOCTOR OF EDUCATION January 7, 2009
____________________________________ Thomas Penderghast, Ph.D., Chairperson
____________________________________ June Schmieder-Ramirez, Ph.D., Member
____________________________________ Robert Peter Ciesla, Ed.D., Member
____________________________________ Eric R. Hamilton, Ph.D. Associate Dean
____________________________________ Margaret J. Weber, Ph.D. Dean
Business Ethics Training
Copyright by Marlene Law Graham (2009) All Rights Reserved
Business Ethics Training TABLE OF CONTENTS LIST OF TABLES............................................................................................................ vii LIST OF FIGURES ......................................................................................................... viii DEDICATION................................................................................................................... ix ACKNOWLEDGMENTS .................................................................................................. x VITA... ............................................................................................................................... xi ABSTRACT...................................................................................................................... xii Chapter One: The Problem ................................................................................................. 1 Introduction............................................................................................................. 1 Background of Problem .......................................................................................... 3 Purpose of the Study ............................................................................................... 5 Problem Statement .................................................................................................. 6 Research Hypotheses .............................................................................................. 6 Significance of this Research.................................................................................. 7 Assumptions of this Research................................................................................. 7 Clarification of Terms............................................................................................. 8 Chapter Two: Literature Review ...................................................................................... 10 Introduction........................................................................................................... 10 Ethical Culture ...................................................................................................... 10 Ethical Decision Making....................................................................................... 13 Implementation Strategies .................................................................................... 17 Organizational Ethic Systems. .............................................................................. 23 Training Programs ................................................................................................ 27 Cognitive Social Learning Theory........................................................................ 37 Aerospace Company Corporate Environment ...................................................... 41
Summary ............................................................................................................... 45 Chapter Three: Research Design And Methods................................................................ 47 Introduction........................................................................................................... 47 Problem Statement ................................................................................................ 47 Research Hypotheses ............................................................................................ 48 Research Design.................................................................................................... 48 Population ............................................................................................................. 49 Sample and Sampling Technique.......................................................................... 49 Survey Instrument................................................................................................. 50 Validity and Reliability......................................................................................... 54 Data Collection ..................................................................................................... 55 Protection of Human Subjects .............................................................................. 56 Data Process and Analysis .................................................................................... 56 Summary ............................................................................................................... 57 Chapter Four: Results ....................................................................................................... 59 Introduction........................................................................................................... 59 Demographic Characteristics ................................................................................ 59 Research Hypothesis One ..................................................................................... 62 Research Hypothesis Two..................................................................................... 69 Research Hypothesis Three................................................................................... 71 Research Hypothesis Four .................................................................................... 78 Participant Comments........................................................................................... 79 Summary ............................................................................................................... 80 Chapter Five: Discussion And Conclusions ....................................................................................81 Introduction........................................................................................................... 81 Summary of Research Results .............................................................................. 81 Practical Implications............................................................................................ 85
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Limitations of the Study........................................................................................ 89 Recommendations for Future Research ................................................................ 90 Conclusions........................................................................................................... 91 REFERENCES ................................................................................................................. 95 APPENDIX A: Panel Expert Feedback To Survey Instrument...................................... 100 APPENDIX B: Survey Instructions/Consent Agreement............................................... 102 APPENDIX C: Survey Instrument ................................................................................. 105
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LIST OF TABLES Page Table 1. Analysis Approach to Research Hypotheses and Survey Questions ...... 57 Table 2. Hypothesis Testing of Non-Management vs. Management Behavior Influences.......................................................................................................... 65 Table 3. Hypothesis Testing of Non-Management vs. Management Morale Influences.............................................................................................................. 69 Table 4. Hypothesis Testing of Employee Opinion on Frequency and Duration. 71 Table 5. Hypothesis Testing of Ethics Training Influence on Employee Behavior ............................................................................................................................... 74 Table 6. Hypothesis Testing of Ethics Training Influence on Employee Morale 77 Table 7. Hypothesis Testing of Employee Ranking of Ethical Decision Making Factors............................................................................................................... 78
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LIST OF FIGURES Page Figure 1. Social cognitive theory ......................................................................... 39 Figure 2. Frequency distribution of participants gender..................................... 60 Figure 3. Frequency distribution of participants age.......................................... 60 Figure 4. Frequency distribution of management and non-management participants............................................................................................................ 61 Figure 5. Frequency distribution of participants years of experience ................ 62 Figure 6. Measuring ethical decision making factors .......................................... 79
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DEDICATION This dissertation is dedicated to my mother and father, whom provided the love, selfless support, and encouragement throughout my life. I may never verbally express these sentiments often enough, but nonetheless hold them entirely.
ACKNOWLEDGMENTS There is an extensive list of individuals who had an indispensable impact on the successful completion of this academic achievement. Some bestowed unwavering support through constant words of encouragement, while others provided the chastising whenever I lost focus. I especially appreciate those who were constant foundations of wisdom and good sense that helped me to get through all the other significant undertakings coinciding with this scholarly journey. I would like to acknowledge the thoughtful direction and support of my dissertation committee: Dr. Thomas Penderghast (Chairperson), Dr. June SchmiederRamirez, and Dr. Robert Ciesla. You have all contributed to my meaningful and insightful academic journey over the past few years. Thank you to my panel of experts who spent their valuable time helping to validate my survey instrument. Thanks to my parents, brother, and sister for knowing I could do it, and telling me so. Most of all, thank you to my little sister who consistently reminds me of my talents and why I should never underutilize them. And finally, thank you to my husband Steven for his support of this endeavor and the challenging task of making me happy every day.
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VITA MARLENE LAW GRAHAM EDUCATION: Doctorate of Education in Organizational Leadership, Pepperdine University Master of Business Administration, Pepperdine University Certificate in Project Management, University of California, Irvine Bachelor of Science in Business Administration, University of California, Riverside PROFESSIONAL EXPERIENCE: THE BOEING COMPANY Senior Manager of Quality Integration Manager of Quality Engineering Executive Staff to Senior Executive Vice President Project Management Specialist Change Planning Specialist Methods Process Analyst 2008-Present 2005-2008 2004-2005 2001-2004 1999-2001 1997-1999 2003-2009 2000-2002 1999-2000 1993-1997
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ABSTRACT The purpose of this study is to analyze a business ethics training program in the corporate environment and determine the level of influence of a specific companys program on employee behavior and morale. The problem is the implementation of a business ethics training program by a company without measurement of its impact to its employees. In response to a decade of increasingly embarrassing ethics scandals, the company responded by establishing the Office of Internal Governance (OIG), an Ethics Line for employees to pose questions, ethics advisers in its business units and compliance education programs. The Office of Internal Governance was chartered in November 2003 to provide renewed and focused attention to the companys internal business practices. This study surveyed 150 current employees located at the Long Beach, CA facility. The participants were asked to respond to a validated survey questionnaire designed to answer four research hypotheses. A total of 100 or 66.7% employees responded to the survey. The four research hypotheses tested significance of differences regarding position in the company, opinion on the current frequency and duration of ethics training, influence from ethics training on employee ethical behavior and perceived morale at work, and whether there is/is not a significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training. An inferential statistical analysis was conducted utilizing t-tests, chi tests, and an F-test. Study findings indicate a there is not a statistically significant difference between management and non-management in regards to morale or behavioral influences. Study findings also revealed that the majority of respondents overwhelmingly hold the opinion that increased frequency of training sessions would not be appropriate and should not be
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increased in duration. The study also found that there is not strong evidence whether the current yearly ethics training sessions are sufficient to influence ethical behavior at work. However, study findings indicate that there is a minor statistical significance in regards to ethics training influence on morale. And finally, roughly half of the respondent comments pointed to improving the content of the annual ethics training with real life examples.
Chapter One: The Problem Introduction In the past decade, with corporate scandal after corporate scandal, there has been little if any meaningful reduction in the enterprise-wide risk of unethical behavior at U.S. companies, according to the Ethics Resource Center's (2007) National Business Ethics Survey. As a result of technological change, globalization of markets, the rise in regulation, and rapidly changing social conditions, organizations are facing new and complex moral dilemmas. These new challenges demand innovative alternatives (Garaventa, 1998, p. 536). The Ethics Resource Center (2007) survey also states that reports of misconduct are on the rise. High numbers of misconduct reports may suggest that ethics programs are not being instituted successfully, or at all. The measurable lack of progress in business ethics may be a signal for the need of company management to reassess their approach to that challenge. Ethical problems are inevitable at all levels of a business and this means that it's simply good sense for companies to take seriously the task of institutionalizing ethics in their organizations. Accordingly, an important segment of corporate America has begun relying on such tools as: statements of corporate values, codes of conduct, ethics workshops, hotlines, even corporate ethics offices and board level ethics committees (Ellet, 2003). In short, they are setting up corporate ethics programs. Formal ethics programs are relatively new to the world of American business. Ethical Research Center (2007) statistics show the number of programs that exist is rising, 38% of companies had them in 2007 and 25% had them in 2005. The growing number may suggest the usefulness of ethics programs is becoming evident to businesses.
Business Ethics Training Although corporations have recently addressed business ethics in various ways, the pressure for companies to do more is still vital. Dean (1992) notes that continuing examples of questionable behavior by individual employees and executives have given rise to critical questions of how corporate ethics efforts can be improved and address the underlying causes of misconduct, let alone the growing demands for proactive, socially responsible, and sustainable business practices. Unethical practices can have a negative effect on the investors supporting the company. According to Gibson (2003), history has shown that bad environmental and social practices have a negative effect on profits. Potential business partners are likely to be reluctant to invest in an organization that may be susceptible to public scandals and unable to return a profit. During the past decade, several large and profitable companies have failed as the result of illegal accounting practices and the public scandals that followed. Enron, MCI, and WorldCom are a few of the organizations that have been seriously impacted as a consequence of unethical business practices. Some of these cases not only have resulted in prison sentences, but also have damaged the economic stability of the company and depleted the financial assets of the stockholders and employees (Makower, 1994). Spurred on by Enron and other moral meltdowns in business, about 75% of US employers have implemented ethics training, an increase of 19% points from 2003, according to a 2007 survey of 3,452 employees taken by the Ethics Resource Center (2007). Yet there's not much change in the impact these programs are having, the survey concludes. What makes the difference, it finds, is how much ethics awareness and enforcement permeate corporate culture.
Business Ethics Training An ethics policy alone isnt the answer to effectively have an impact on the corporate culture. Many of the organizations plagued with public scandal had ethical codes of conduct in place, but executives still participated in unethical and illegal business practices. Top management provides the blueprint of what the corporate
culture should be (Ferrell, Fraedrich, & Ferrell, 2002, p. 129). In order for management to set an integrated ethical culture, training must take place. After management has been trained and set the example for employees, then all employees must be trained in the same values of the desired corporate culture. It would be inconsistent to demand ethical decisions that drive corporate success, then not give the employees the training to make those decisions. Training alone is not simply the solution; employees will need to possess the ability to apply the learned values in real life dilemmas and problems (Kavathatzopoulos, 2003). Successful ethics training will be seen in attitudes and behavior throughout the organization that reflect a positive change in support of the ethical standards of the organization. Employee perspectives on ethics in their organizations truly matter, and through employees much can be gained in understanding what an effective program actually does. Background of Problem Attention to ethics in business organizations has never been greater. Yet, much of the attention given to ethics in the workplace overlooks the results of the ethics training programs (Dolezalek, 2003). Scrutiny has mainly focused on whether a company has an ethics training program, with less focus on what impact these ethics training programs have on employees actions and morale. The problem is the implementation of a business
Business Ethics Training ethics training program by a company without measurement of its impact to its employees. To protect the anonymity of the subject company, a pseudonym of Aerospace
Company will be utilized throughout this paper. The Aerospace Company should not be confused with The Aerospace Corporation, located in El Segundo, California. A company has to have an effective ethics program to ensure that all employees understand the values of the business and comply with policies and codes of conduct that create the ethical climate of the business (Ferrell et al., 2002). The Aerospace Company has implemented an ethics training program, yet there is limited research into whether the program was effective in impacting employee morale and behavior. Recent ethical scandals at the Aerospace Company in the early 2000s have been committed by a number of select company executives. These are leaders that all signed the companys Code of Ethics and communicated their commitment to the employees. Ferrell et al. (2002) state that full awareness of managements values can strengthen the organizational culture. The inverse of this statement would be that there could be a negative effect on the employees by being forced to attend ethics training while seeing management expound on values but commit ethical misconduct. George (2003) states that when leaders preach one thing and practice another, commitment is quickly lost and employees become doubly cynical. This becomes a critical factor in the undermining the positive impacts of an ethics training program on employee morale and behavior.
Business Ethics Training Purpose of the Study The purpose of this study is to analyze a business ethics training program in the corporate environment and determine the level of influence of a specific companys program on employee behavior and morale. In response to a decade of increasingly embarrassing ethics scandals, the
Aerospace Company responded by establishing the Office of Internal Governance (OIG), an Ethics Line for employees to pose questions, ethics advisers in its business units and compliance education programs. The Office of Internal Governance was chartered in November 2003 to provide renewed and focused attention to the Aerospace Companys internal business practices (The Aerospace Company, 2006). To support this objective, four key functions were aligned to OIG: Corporate Audit, Ethics and Business Conduct, Global Trade Controls and Compliance Integration. This project will concentrate on the Ethics Training Program within the Ethics and Business Conduct function of the OIG. The Ethics Training Program at the Aerospace Company has been operational without review of whether it has been effective in negating some of its recent scandals aftermath. Since instituting a formal ethics program in 2003, the company has focused on measuring process rather than outcome. Process measures are straight-forward and look at events and activities (Kirkpatrick & Kirkpatrick, 2006). They are necessary to ensure things happen as planned and provide feedback on the use of resources. Measuring the ethics process will not provide information of the impact to employee morale or how they will behave or act should they encounter a challenging issue. Therefore, there is a need for the Aerospace Company to focus on outcome
Business Ethics Training measures, which are predictors or leading indicators of the ethical culture in the organization and effectiveness of the ethics programs. Chapter Two will go into detail regarding the Aerospace Companys environment, historical perspective, training program details, and organizational framework. The proposed study will survey current employees from the Long Beach division for analysis. Problem Statement What relationship, if any, exists between a specific companys business ethics training program and the ethical culture of its employees? Research Hypotheses In order to answer the main question, an evaluation educational inquiry was employed to determine the effectiveness of the ethics program. In focusing on a summative evaluation, the following research hypotheses were developed: 1. There is/is no significant difference between management and nonmanagement employees with regards to behavior and morale influences. 2. There is/is no significant employee opinion on the current frequency and duration of ethics training. 3. There is/is no significant influence from ethics training on employee ethical behavior and perceived morale at work. 4. There is/is no significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training.
Business Ethics Training Significance of this Research This study evaluated whether the ethics training program the company has
instituted is resulting in positive influence to employee morale and behavior. A validated survey instrument was administered to employees who are located at the companys Long Beach division. The combination of the research findings, employee survey, and conclusions of this dissertation has real world application and significance to most organizations evaluating the effectiveness of their ethics training programs. This study was undertaken with the intended benefits of improved employee morale and behavior, heightened ethical culture awareness, and advancement in the ethics training programs to this corporation and other companies in the industry. Assumptions of this Research The major assumptions underlying this research study are first, that the methods of inferential and descriptive inquiry and quantitative case study design are sufficiently rigorous to lead the researcher to valuable understandings of the behaviors and morale triggers of a randomly select group of Aerospace workers; and second, that the employees truthfully responded to the survey questions. In other words, the reported behaviors and attitudes accurately describe what is felt by the participants. Another assumption is that the sample set selected is a consistent representation of the larger whole population. The second set of assumptions is specific to the study population. The Aerospace Company requires that 100% of its employee population participates in its ethics training program annually. It is therefore understood that every participant has been through the ethics training program that he/she is evaluating. The ethics program is conducted
Business Ethics Training entirely in English, thus it is assumed that the participant possess the necessary English reading skills to respond to the research survey questions. Clarification of Terms Business ethics training. Teaching employees about the application of everyday moral or ethical norms in business. Business ethics entails the application of general ethical principles to resolve moral issues, dilemmas and problems that arise in the business environment. Case studies. Actual or hypothetical ethical issues explored through various teaching mediums. Code of conduct. Refers to a listing of required behaviors, the violation of which would result in disciplinary action. In practice, used interchangeably with a Code of Ethics. Code of ethics. Conveys organizational values, a commitment to standards, and communicates a set of ideals. In practice, used interchangeably with the Code of Conduct. Compliance. Refers to an organizations ability to meet or exceed the guidelines that have been established by laws and regulations. Decision making tools. Include the processes recommended for reaching a conclusion. They provide learners with step-by-step methods of analyzing issues and reaching proper conclusions.
Ethical culture. Characterization of an organization with a set of shared attitudes, values, goals, and practices that embodies integrity.
Business Ethics Training Ethical dilemmas. Situations that require ethical judgment calls. Often, there is
more than one right answer and no win-win solution in which we get everything we want. Ethics videos. Films with ethics themes used to reinforce and instill the companys values and desired ethical culture. Management. The collective body of those who manage or direct an enterprise
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Chapter Two: Literature Review Introduction This chapter summarizes the literature in regards to the areas that are relevant to this study: ethical culture, ethical decision making, implementation strategies, organizational ethics systems, and training programs. The literature focuses on the issues, theories, and research related to determining the impact of an ethics training program on an aerospace companys employee. The rationale for this literature selection is to provide a basis of understanding of the impact of creating an ethical culture in organizations. A review of the social learning theory is evaluated for its application in the development of ethics knowledge in the workplace. Ethical decision making processes are reviewed to understand plausible reasons for employee actions. Multiple ethics change process models are scrutinized to assess the appropriateness of the Aerospace Companys selected implementation strategy. Organizational ethics systems and training programs are reviewed to gain a better understanding of the options available for the Aerospace Company. Finally, it concludes with a description of the Aerospace Companys corporate environment, and focuses on the historical perspective of training and organization of its employees. Ethical Culture Ethics poses questions about how we ought to act in relationships and how we should live with one another. Ethics asks us to consider whether our actions are right or wrong. It also asks us how those character traits that help humans flourish (such as integrity, honesty, faithfulness, and compassion) play out in everyday living. Ethical
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norms and principles have developed over time and across cultures as rational people of goodwill consider human relationships and how human beings act when they are at their best (Andre & Velasquez, 1998). Generally, leaders of organizations have the most visibility in the company, so it could be argued that their actions set the ethical norm for the company culture. In line with this statement, Fraedrich, Cherry, King & Guo (2005) believe that the culture and ethical climate of many firms today draw substantially from the character of their founders and top managers. Leading by example, company management can set the tone by committing to integrity and requiring ethical behavior from all employees. Newman (1997) maintains that good character is formed by living under conditions that demand good conduct (p. 23). Corporations can show a strong commitment to ethics by compelling the leaders of these organizations to act as the strongest advocates of corporate integrity. Leaders of such companies should be clear and vocal, forcefully charging everyone in the company to look at not only how profitable their actions are, but how ethical. Dessler (2000) believes that the supervisors actions have a lot to do with whether his or her employees act ethically. Leaders acting as role models ought to be cognizant that employees are watching their actions to determine acceptable norms. Cohen and Burns (2006) states that, People do what people see. The only way it can be integrated into a corporate culture is for it to be observed at the top (p. 1). Employees look to the leaders to set the tone for the corporate culture. The view from the top should stress that ethics is critically important for the health of the organization. If employees are directed to do something unethical for the company or even if they simply witness dishonesty by their superiors, this inevitably leads to a breakdown of the
Business Ethics Training organization. An emphasis on fair play and respect for the law is a quality leaders must promote in the aim of developing a corporate culture that rewards ethical behavior (Schmitt, 2002). In pursuing the primary goals of increasing profits and maximizing shareholder
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value, organizations often overlook the importance of working within an established set of ethical boundaries. Businesses must be held accountable for the direct benefits of customer loyalty and enhanced employee retention (Verschoor, 2003, p. 2). Although some organizations and employees act unethically to increase revenues, others recognize that the practice of sound ethical behavior can lead to greater financial success. The promotion of strong ethical beliefs and behavior is also used by companies such as WalMart in their marketing strategies (Verschoor, 2003). Developing an ethical culture through the leadership also means that measures should be in place to not only regard ethical behavior, but also to penalize unethical behavior. Dessler (2000) asserts that by corporations not addressing unethical behavior, ethical employees feel punished. This may lead to unwelcome behavior that becomes a function of its consequences. A corporation that is viewed as unjust by its employees risks creating an unethical culture. An unethical culture could have severe business financial consequences. Customers and business partners have begun to expect the companies they conduct business with to demonstrate a sense of social responsibility. Recent surveys have indicated that consumers rank a companys responsibility to society higher than the companys economic contribution. These surveys have shown that 76% of investors and analysts also believed that a companys shareholders incurred significant nonfinancial
Business Ethics Training risks. Therefore, effective ethics programs should not only focus on improving an organizations bottom line, but also mitigate the nonfinancial risks that have a direct
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impact on shareholder standings. The bottom line in any organization is that culture wins (Master, 2002). Ethical Decision Making Ethics refers to standards of behavior describes how people ought to act in the many situations, whether it be with friends, family, society, business, school, and so on. Many philosophers and ethicists have defined approaches that determine what standards of behavior can be considered ethical. Velasquez (1998) suggests five common sources of ethical standards: The utilitarian approach. Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affectedcustomers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the harm done. The rights approach. Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not merely as means to other
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ends. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others' rights. The fairness or justice approach. Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair. The common good approach. The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerableare requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas. The virtue approach. A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to
Business Ethics Training the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?" Another framework for explaining ethics is a Christian ethical theory that was principally developed in the 1960s by the Episcopal priest Joseph Fletcher. He argued that there were only three possible approaches to ethics: legalistic, antinomian and
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situational (Fletcher, 1997). All three have presence in Western morals, with legalism as the most common and enduring in current day. Legalistic ethics has a set of prefabricated moral rules or laws. Fletcher (1997) states that, Not just the spirit but the letter of the law reigns (p. 34). The principles of the law are not merely guidelines, but directives to be followed. Fletcher rejects legalistic ethics due to the complexity of life that inevitability causes exceptions and compromise to the approach. Antinomian ethics, is literally the opposite of legalism, it does not imply an ethical system at all. An antinomian enters decisions making as if each situation was unique and making moral decisions is based on the matter of spontaneity (Fletcher, 1997). Fletcher argues that the antinomianism approach to ethical decision making is unprincipled so is an unacceptable approach to ethics. Fletcher (1997) states that life runs into many difficulties when its complexities require additional laws. Fletchers resulting situational ethics theory is based on only one absolute law, which when applied properly, handles every situation. Utilizing Situational
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Ethics, a person enters into every decision-making situation fully armed with the ethical maxims of his community and its heritage, and he treats them with respect as illuminators of his problems. Just the same, he is prepared in any situation to compromise them or set them aside in the situation if love seems better served by doing so. According to Fletcher's (1997) Situational Ethics model, decision making should be based upon the circumstances of a particular situation, and not upon fixed laws. The only absolute is love. Love should be the motive behind every decision. As long as love is your intention, the end justifies the means. Justice is not in the letter of the law, it is in the distribution of love. Situational ethics is based on the golden rule "love your neighbor as yourself" and altruism which is putting others before yourself and showing agape towards everyone. Each of the approaches helps to determine what standards of behavior can be considered ethical. The approaches also give important information with which to determine what is ethical in a particular circumstance. Effective training and education efforts are often focused on helping employees understand ethical standards and their application to workplace decision (LeClair & Ferrell, 2000, p. 319). Although the approaches may have diverse interpretations, they most often lead to similar answers. Making good ethical decisions requires a trained sensitivity to ethical issues and an experienced method for exploring the ethical aspects of a decision and weighing the considerations that should impact our choice of a course of action. Having a method for ethical decision making is absolutely essential (Lunday & Barry, 2004). When practiced regularly, the method becomes so familiar that we work through it automatically without consulting the specific steps. The more novel and difficult the ethical choice we face, the
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more we need to rely on discussion and dialogue with others about the dilemma. Only by careful exploration of the problem, aided by the insights and different perspectives of others, can we make good ethical choices in such situations. Even back 2500 years, Socrates concluded that people can be taught to do right (Cohen & Burns, 2006). A common framework for ethical decision making can become a useful method for exploring ethical dilemmas and identifying ethical courses of action. Velasquez (1998) and numerous literature reference a five step method for making ethical decisions. The first step is to recognize an ethical issue, next is to get the facts, then evaluate alternative actions from various ethical perspectives, make a decision and test it, and finally to act and then reflect on the decision later. Having a common framework gives corporations the ability to ensure that ethical considerations are taken into account in a transparent and consistent way in carrying out its responsibilities. Implementation Strategies By many indications in this research, ethics and compliance are on the rise as a priority for organizations. What seems to matter most, however, is the lengths to which leaders intentionally make ethics a part of their daily conversations, supervisors emphasize ethics in working with their direct reports, and employees stress the importance of ethics with their peers. In the end, ethics is about relationships-and the outcomes that collective organizations envision as achievable. Ethics is as much an organizational as a personal issue (White & Lam, 2000). Organizations and individuals must take the responsibility to effect changes in their behavior in order for a successful implementation of an ethical culture.
Business Ethics Training Formal business ethics training, often mandatory, is now common in companies
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around the globe. Ethics training can also occur less formally through publicizing ethics policies and codes and encouraging all employees to carefully review ethics handbooks and related videos. Online assistance and ethics newsletters have also become common ethics training supplements. Research suggests that business ethics training can positively influence ethical behavior in the workplace (Ferrell et al., 2002). In the recently published, 2007 National Business Ethics Survey, the Ethics Resource Center found the following behaviors:

Talking about or communicating ethics as a priority Setting good examples of ethical conduct Keeping commitments Supporting others who follow organizational standards
Had a significant effect on:

Levels of observed misconduct Pressure to compromise ethical standards Reporting observed misconduct Satisfaction with response to reported misconduct The technique that leadership chooses to employ to display the aforementioned
behaviors is critical for the success of the implementation strategy. Doing ethics in organizations does require some courage (Nielsen, 1998, p. 599). It takes courage to overcome the powerful individual, organization traditions, and environmental obstacles,
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to build an ethical community. To appear sincere, corporations should realize that a key factor in the success of an ethics compliance program is employee perception of managements motivation for establishing the program. Asacker (2004) identifies trust building, esteem building, and climate building at the top list of managements focus for fostering an honest perception from employees. Employees must perceive that management is being forthright and honest in their intentions in building an ethical climate. The three factors most critical to the success of an ethics program are identified as consistency of policies and actions, the rewarding of ethical behavior, and executive leadership (Salopek, 1999). A unified structure reinforces the message that standards are neither arbitrary nor punitive, but actually flow from core corporate values (Martens & Day, 1999). It can be easier to measure the counts of ethical misconduct, but overlook the need to quantify the measurement of rewarding good behavior. It has been stated before, executive leadership is crucial in ensuring an ethics program succeeds. Employees need to have a sense that top management is trying to do the right thing (Batts, 1998). The implementation of an ethics program can also be harmful to an organization if employees perceive that the programs exist to protect top management (Salopek, 1999). Prior to expending precious resources on designing a business ethics training program, organizations should give great thought to a number of concerns. What are the objectives of the training program? Whom should the company train and what type of training should employees receive? Yet, one important question that may often be overlooked or insufficiently answered in the early planning stage is: Who will roll out the
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business ethics training program to our employees? Will the training be conducted by the ethics office, human resources/security personnel, managers, external consultants, etc? Such decisions are rarely unilateral because deploying different types of trainers to roll out a training program may well represent the optimal method for delivering business ethics training within organizations (Miller, 2003). Many advantages exist by making managers responsible for conducting business ethics training. Utilizing current managers on payroll is cost effective in program delivery. Another advantage is that managers in charge of implementing a business ethics program may lend increased credibility to both the rationale and the content of the training program. When managers are entrusted with program delivery, employees are more apt to relate well with the program. A subsequent advantage would be a widespread understanding among employees that management, in general, is concerned with business ethics. Another benefit to having managers conduct business ethics training is that managers will, most likely, be able to offer better explanations of the corporate standards and how they pertain to a given region, function, or operation (Miller, 2003). Employees of different types or levels may, in fact, benefit from different types of trainers: key company executives, top line managers, and the Board of Directors, for example, might best be trained by an external agent who would not be placed in the awkward position of training individuals to whom they report directly (Miller, 2003). There a number of potential disadvantages to making managers responsible for business ethics training. First, being trained by ones own manager can inhibit employee participation and discussion levels during a business ethics training session. The second disadvantage to managers conducting ethics training would be that managers, in general,
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are not professional trainers. Nor are they ethics professionals, prepared to deal with the wide range of ethical issues and questions that might arise during a training session (Hartman, 2004). If the company has identified and confirmed that managers are the most appropriate resource to conduct the business ethics training, the office of ethics should give great thought to the format of the training: both the course elements and the logistics of the training. When developing a business ethics program, it is crucial to plan and to design the course with the needs of the trainees and the trainers in mind (Ferrell et al., 2002). From the beginning, the training course must be designed with intended users in mind, which includes the trainer. There are five key areas related to designing a course that managers-trainers can deliver effectively (Miller, 2003). Method of delivery. Course materials should not be too hi-tech. An electronic format for program delivery may sound good on paper and in theory, but practical use may prove difficult, particularly for global application. Trainers guide. Trainers guides should be well structured and concise. Important points to cover should be spelt out for trainers as bullets, but great latitude should be accorded to managers with regard to actual delivery. Handy reference materials for trainers to use during the course will increase the trainers confidence. A check-list is recommended so managers will not forget to bring required materials to the training room and to perform necessary follow-up actions. Organization/structure of course and content. The objective of each component of the training should be clearly articulated to the trainer. Making certain that trainers understand the message to be conveyed will increase the likelihood that participants will
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receive the correct message. Uninitiated ethics trainers are apt to rely upon lecture-style instruction, which impedes the dialogue necessary for participants to engage actively in the session. Training sessions on business ethics should be interactive, permitting learning through discussion. Course content should not be theoretical, which would place the trainer in the position of posing as an ethics professional. Support from office of ethics. The office of ethics should make it as easy as possible for managers to solicit training assistance. No matter how comprehensive the trainers guide, managers are apt to have questions. During the planning phase and course development, the office of ethics should consider how it will administer and provide support services to managers. Feedback mechanism. Rolling out a training program is an excellent time to collect information related to an organizations overall ethics initiative. A number of potential problems can arise during a business ethics training session. Organizations can mitigate possible problems by ensuring that managers are prepared to face these issues. Dricscoll & Hoffman (2002) noted some of the problems most frequently encountered during business ethics training. Preconceptions about rationale of training. Employees may enter the training room with different preconceptions about what the company is trying to accomplish through the training session and about the subject matter presented. Employee attitudes may range from feelings that the company is attempting to change an employees moral beliefs to the company is selfishly trying to complete legal protection activities with the training.
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Ethics: the black, the white, and the gray. Participants may believe that questions related to business ethics should be black-and-white and that specific answers should be available for every business ethics question. The business ethics course should make it clear to both trainers and participants that ethics often resides in the gray area so not all ethics questions have exact answers that can be found in a code booklet or that a manager can easily dictate. Allegations of misconduct. During a business ethics training session, specific allegations of misconduct can arise. Trainers should be prepared for these situations and articulate that business ethics workshops are not the appropriate forum to raise and discuss sensitive matters. An announcement should be made that corporate ethics advisors are always available to field awkward questions that are not suitable for an open training session. Organizational Ethic Systems. In response to corporate scandals that have distressed shareholder confidence, Congress passed the Federal Organizational Sentencing Guidelines in 1991 (Burrows, 2006). Organizations were encouraged to prevent and detect criminal conduct through the facilitation of an effective compliance and ethics program. The desired result was an organization that encouraged ethical conduct and complied with all applicable laws. There are many different steps executives can take to develop and implement a comprehensive, long-term initiative in organizational ethics. Here are the measures recommended by the Ethics Resource Center (http://www.ethics.org), a private, not-forprofit corporation based in Washington, DC.
Business Ethics Training Assess organizational values and vulnerabilities to misconduct. Many
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organizations make the mistake of assigning a small group of staff (usually from the legal department) to write a code of ethics, without first making any attempt to find out what kinds of ethical issues employees really face in their day-to-day jobs. Not only does an inadequate upfront organizational assessment result in a weak and irrelevant code of ethics, it also means that management remains ignorant of the kinds of problems that cant be addressed in a code alone. Management simply cant afford not to know, for example, whether the organizations goal-setting practices, incentive and reward systems, and performance evaluations encourage ethical conduct or undermine it. It does little good to state in a code of ethics that quality and safety are paramount if in practice employees are constantly rewarded only for cutting costs. Making the effort to identify employee values can also provide the foundation for consensus on the organizations fundamental ethical principles. Create opportunities for management to discuss organizational values and risks. Data emerging from an organizational assessment will often call for developing clear standards of conduct, employee training, and changing management systems and practices. Management must reach consensus on the high-priority issues as well as action plans that must be formulated to tackle those issues head-on. If management does not develop a strong sense of ownership of the ethics program, employees will perceive it to be merely a temporary fad and not a long-term commitment. Develop and communicate clear standards of conduct. Once management understands the issues, a written code of ethics can be created or revised. This code should affirm a basic set of organizational values, principles or commitments, establish
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ground rules in areas where they are needed, provide illustrations and guidelines in some of the "gray" areas, and explain how employees can obtain further advice and counsel without fear of retribution. New-employee orientations should include a healthy dose of instruction in the organizations ethical standards and ethics-related case studies. In addition, ongoing discussions should be woven into managerial training courses. Refine management systems and practices to support the ethics program. This is at once the most difficult and the most important step, because it gets at the basic tools that managers use to manage: goal-setting (strategic, departmental, individual), incentive and reward systems, performance appraisals, and disciplinary practices. All of these practices need to be evaluated according to whether they serve to reinforce the ethics program. This isnt a single step, but an ongoing process of refinement and improvement. A successful ethics program cannot be measured by the number of employees who can certify having read the corporate code or attended training sessions. Ethics has to do with the organizations basic culture and operating values; the pride and satisfaction employees find in their work, the attention to quality and service, the degree to which suppliers and customers are treated fairly and honestly, all of which impinge upon the organizations overall reputation and success (Ferrell et al., 2002). Amendments to the Guidelines effective November 1, 2004 have strengthened and clarified the Guidelines expectations for corporations. Best practices summarized in the amended Guidelines provide a starting point for determining the essential elements of an effective ethics program, as well as the factors that organizations should consider when creating and implementing a program. The amended Guidelines outline seven essential elements that should be incorporated in the development and implementation of
Business Ethics Training an effective ethics program. Burrows (2006) summarizes the seven elements of an effective compliance and ethics program: 1. Establish standards and procedures to prevent and detect violations of law. 2. Multiple layers of management should be involved in the ethics program. 3. Avoid giving substantial authority to someone with a history of illegal or unethical behavior. 4. Communicate and train employees regarding the ethics program. 5. Create detection and reporting mechanisms for program violations and evaluate the effectiveness of those mechanisms. 6. Encourage and reward employees who comply with ethical guidance; discipline those who do not.
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7. Respond appropriately to substantiated misconduct to prevent future incidents. Burrows (2006) first element is the most basic, companies must establish standards and procedures to prevent and detect unethical conduct. Most companies will begin with a code of ethics. The second step prescribes that multiple layers of management exercise reasonable oversight of the ethics program and that there are designated individuals within an organization who are responsible for the day-to-day operation of the compliance and ethics program. The third element requires corporations to use reasonable efforts to avoid appointing management positions to those with prior significant misconduct. The fourth element recommends that training be appropriate to the size of corporation, risks appropriate to the organization, and the scope of responsibility of the individuals.
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The remaining three elements revolve around accountability. Corporations should ensure that that their compliance and ethics programs evolve over time in response to organizational dynamics and changes in the legal landscape (Burrows, 2006). Regardless of the time it takes the ethics program to evolve, the goals of the training program success must be clear (Carey, 1998). Ultimately, every employee has to deal with an ethical dilemma in the workplace. How employees react will reveal whether they have placed the interests of their colleagues and stockholders above their personal welfare. Employees who do nothing are just as harmful as those who act unethically. Ethics training programs can increase the chance that an individual will make the correct decision by using the tools and methods available to combat these issues (Curry, 2004). Training Programs The subject of ethics training is under much debate by scientists and managers. Some believe that you cant teach right and wrong. You can only help people with ideas about how to make critical decisions (Cohen & Burns, 2006). Through the criticism, some believe ethics training provides direction when there isnt an explicit rule (White, 2006). Given the option of no ethics training and some ethics training, it can be reasonably argued that any training can provide some knowledge on the subject to a person. A reasonable point of contention would be whether adults are capable of continually learning ethics later in life through formal training programs. Lawrence Kohlberg was one of the first people to look seriously at whether a person's ability to deal with ethical issues can develop in later life and whether education can affect that development. Kohlberg (1981) found that a person's ability to deal with
Business Ethics Training moral issues is not formed all at once. Just as there are stages of growth in physical development, the ability to think morally also develops in stages. Kolbergs (1981) Stages of Moral Development.
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Stage 1 Preconventional. Moral decisions are based on the consequences of the action Will I be punished Stage 2 Preconventional. Moral decisions are decided on the benefits derived from the action. Will I get what I want? In this stage, decisions are also made on the principle of reciprocity. Does the victim deserve it? Stage 3 Conventional. Moral decisions are determined by evaluating the action in terms of love and approval of family and friends. Will my family or friends get mad at me? Stage 4 Conventional. Moral decisions are based on the precepts of law and/or religion. Is it right according to the law? Stage 5 Postconventional. Moral decisions are based on fairness, justice, and truth. Oftentimes, civil law is superseded by a higher moral law as determined by conscience. Is there a higher good that can come from the action I do? The earliest level of moral development is that of the child, which Kohlberg called the preconventional level. The person at the preconventional level defines right and wrong in terms of what authority figures say is right or wrong or in terms of what results in rewards and punishments (Kohlberg, 1981). Any parent can verify this. Ask the four or five-year-old why stealing is wrong, and chances are that they'll respond: "Because daddy or mommy says it's wrong" or "Because you get spanked if you steal." Some people stay at this level all of their lives, continuing to define right and wrong in
Business Ethics Training terms of what authorities say or in terms of reaping rewards or avoiding unpleasant consequences. The second level of moral development is the level most adolescents reach.
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Kohlberg called this the conventional level. The adolescent at the conventional level has internalized the norms of those groups among whom he or she lives. For the adolescent, right and wrong are based on group loyalties: loyalties to one's family, loyalties to one's friends, or loyalty to one's nation (Kohlberg, 1981). If you ask adolescents at this level why something is wrong or why it is right, they will tend to answer in terms of what their families have taught her, what their friends think, or what Americans believe. Many people remain at this level, continuing to define right and wrong in terms of what society believes or what laws require. But if a person continues to develop morally, he or she will reach what Kohlberg labeled the postconventional level. The person at the postconventional level stops defining right and wrong in terms of group loyalties or norms (Kohlberg, 1981). Instead, the adult at this level develops moral principles that define right and wrong from a universal point of view. The moral principles of the postconventional person are principles that would appeal to any reasonable person because they take everyone's interest into account. If you ask a person at the postconventional level why something is right or wrong, she will appeal to what promotes or doesn't promote the universal ideals of justice or human rights or human welfare. Many factors can stimulate a person's growth through the three levels of moral development. One of the most crucial factors, Kohlberg found, is education. Kohlberg (1981) discovered that when his subjects took courses in ethics and these courses
Business Ethics Training challenged them to look at issues from a universal point of view, they tended to move
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upward through the levels. This finding is supported by Verschoor (2000), who believes in the importance of organizations teaching employees the vocabulary and language of ethical decision making. With the new words and concepts in hand, employees can really talk about ethics in a substantive way. The inference of Kohlbergs model for business ethics is that some employees are less sophisticated than others in terms of the considerations they bring to bear on business decisions with potential moral consequences. Kohlberg (1981) believes that employees at the low end of the cognitive moral development spectrum tend to make moral judgments as to what is right based primarily upon egoistic self-interest. Employees at higher levels of moral development take more factors into consideration in determining what is right factors such as potential impact on others, both inside and outside of their immediate corporate environment. The theory suggests that values, ethical sophistication and related ethical behavior of employees can advance over time with maturity, experience and education. Ethics training can play an important role in that moral maturation process. For business researchers, as well as those charged with designing corporate ethics initiatives, the critical question becomes whether measures of individual cognitive moral development are good predictors of ethical behavior in a business organization. Most experts do agree that an individuals cognitive moral development does indeed play a role in how his or her values and actions are shaped in the workplace (Ferrell et al., 2002). Business ethics decision-making within a company does not rely strictly on the moral development of individual employees. Research shows that individual choices
Business Ethics Training when facing ethical business dilemma reflect not only individual value judgments (cognitive moral development), but also ones understanding of acceptable patterns of behavior in a given corporate environment (Ferrell et al., 2002). Therefore, companies having their own values or ethical conscience (codified or not) are encouraged to
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promulgate those values (and the companys moral stance on ethical business dilemma in general) as an integral and important component of formal business ethics training (James, 2000). By making employees more overtly aware of the companys stance on moral values, a company can exert significant influence on business ethics decisionmaking throughout the organization. Reflecting this important phenomenon, LeClair & Ferrell (2000) contend that company sponsored ethics training initiatives with imbedded organizational reinforcement (e.g., review of the companys code of conduct) offer opportunities not only to build awareness of the companys moral values and commitment to integrity, but also to significantly influence the criteria which individual managers and other employees will subsequently use when evaluating business choices having moral ramifications. Research verifies that experience in resolving real moral conflicts accelerates progress in moral development (Ferrell et al., 2002). This argues for including discussions of real business ethical dilemma cases as a centerpiece of business ethics training. Discussions of ethical choice dilemma in real business situations provide a particularly effective vehicle for stimulating the critical and reflective thinking that is essential for moving forward toward the goal of moral development (Ferrell et al., 2002).
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A review of 41 world-class U.S.-based multinational corporations revealed twelve common features of an effective ethics and awareness training program (Ponemon, 1996). Taken together, ethics programs that incorporate many of the key features below seem to improve corporate culture and help to minimize the most common business ethics risks. Key features of successful training include: 1. Live Instruction 2. Small class sizes 3. Decision-based focus 4. Use of a professional trainer 5. Powerful senior executive message 6. Realistic case materials 7. Significant group interaction 8. At least four hours of training 9. Comprehensive rollout 10. Separate courses for compliance areas 11. Follow-up communications 12. New employee program In contrast, ten common mistakes in ethics programs have been identified (International Business Ethics Institute, 2008): 1. Lack of consensus on the objective for globalization. 2. Non-integration of international personnel with the development process. 3. Discounting the importance of promoting the program as a competitive advantage.
Business Ethics Training 4. Basing of company policies only on requirements that concern the domestic market. 5. Non-establishment of ethics officers or resources in international locations. 6. Appointment of headquarters staff to take up ethical positions. 7. Provision of training material only in the English language. 8. Use of the word ethics extensively throughout the program material. 9. Distribution of the corporate policy without representation as to how the policy is enforced. 10. Focus on the small number of cultural differences rather than on the knowledge aspect or vast cultural similarities. The same training session should not be given to all persons within a company.
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Martens and Day (1999) believe that not all employees will require training on all topics. The education should be specific to the job the attendees are asked to perform. Executive have different decisions to make than middle management, and both levels of management have different decisions to make than entry-level employees. Verschoor (2000) states that ethics training should be provided so that employees can talk about issues and concerns that matter to them. The Board of Directors, top management, middle management, supervisors, and line employees all need ethics training - but different types of amounts of ethics training. Training should start with the management leadership, but you should go on to different programs to install the corporate ethics culture into the entire range of employees. To be effective, ethics education should be concerned with understanding the organizations vulnerabilities and helping to make changes (Dolezalek, 2003).
Business Ethics Training Some experts debate whether ethics can or should be taught to adult learners. Research indicates that an individuals ability to learn is not impaired by the aging process (Knowles, 1990). Learning occurs throughout the lifespan by virtue of experience, and since experience is continuous, so too learning is continuous (Rogers, 1996). Psychologist James Rest (1982) supports the idea that ethics can be learned through continuing education for adults. Rest observed the following trends: 1. Dramatic changes occur in young adults in their 20s and 30s in terms of the basic problem-solving strategies they use to deal with ethical issues. 2. The changes are linked to fundamental changes in how a person perceives society and his or her role in society.
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3. The extent to which change occurs is associated with the number of years of formal education (college or professional school). 4. Deliberate educational attempts (formal curriculum to influence awareness of moral problems and to influence the reasoning or judgment process have been demonstrated to be effective. Ethics is primarily concerned with attempting to define what is good for the individual and for society (Trevino & Nelson, 2006). It also tries to establish the nature of obligations, or duties, that people owe themselves and each other. Another name for ethics is morality. Because both words suggest customary ways of behavior, they are somewhat misleading. It has to do with what should or should not be done. Ethical dilemmas can be faced by people at all levels within an organization. Companies suffer damage to their reputations when questions concerning ethical
Business Ethics Training behavior arise. This is one of the reasons formal codes of ethics, developed by many business organizations, and trade associations are popular today (Dean, 1992). Code of ethics is simply a compilation of the rules that are meant to govern the conduct of members of a particular organization or profession.
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Codes of ethics can be controversial documents. Some writers have suggested that codes of professional ethics are pointless and unnecessary. Many others believe that codes are useful and important, but disagree about why. McDonald (2000) attempts conciliation by stating some form of normative structure in the form of policy and codes do have an impact on ethical attitudes and possibly behavior (p. 174). Companies and trade associations expect their members to abide by such rules as a condition of their engaging in the profession. For those who disagree with the effectiveness of the codes of ethics, there are at least two noteworthy limitations. First, the written rules are sometimes so vague and general they prove to be of little value. Second, codes of ethics are neither a complete nor a completely reliable guide to ones moral obligations. Statements of ethics do not guarantee ethical behaviorsthey merely inform (Dean, 1992, p. 285). It is impossible for the drafters of such codes to anticipate all the moral dilemmas which may be encountered and impossible for them to draft rules to govern all behavior. Training measurement generally falls into two main categories, process and outcome. Ruthford (2006) suggests examples of process measures for an ethics program might include: 1. Number of employees attending ethics training 2. Percent of employees who have signed the company code of conduct
Business Ethics Training 3. Number of calls or contacts to the ethics help-line 4. Number of cases requiring investigation 5. Cycle time for answering caller's questions or closing an investigation on a case 6. The quality or completeness of the information in the ethics and compliance case database Ruthford (2006) explains that process measures are straight-forward and look at
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events and activities. They are necessary to ensure things happen as planned and provide feedback on the use of resources. Measuring the ethics process will not provide information of the impact to employee morale or how they will behave or act should they encounter a challenging issue. That's where the outcome measures come into play. Ponemon (1996) identifies some possibilities to consider: 1. The percentage of anonymous calls to the ethics helpline indicates, in part, how safe people feel about bringing issues forward. 2. The percentage of investigated cases that are found to be substantiated could indicate how issues are being handled by the employees or line management and the level of knowledge in the organization. 3. A dropping substantiation rate might infer that employees are unsure about issues or are reporting certain activities just to be safe. 4. A rising substantiation rate might indicate that employees and line management are dealing with the issues in the workplace and that the cases that get to the ethics help line are the cases that "should" be there.
Business Ethics Training Cognitive Social Learning Theory
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In Social Learning and Clinical Psychology (1954), Julian Rotter suggested that the effect of behavior has an impact on the motivation of people to engage in that behavior. People wish to avoid negative consequences, while desiring positive results or effects. If one expects a positive outcome from a behavior, or thinks there is a high probability of a positive outcome, then they will be more likely to engage in that behavior. The behavior is reinforced, with positive outcomes, leading a person to repeat the behavior. This social learning theory suggests that behavior is influenced by these environmental factors or stimuli, and not psychological factors alone. Albert Bandura (1976) expanded on the Rotter's idea, with a theory that incorporates aspects of behavioral and cognitive learning. Behavioral learning assumes that people's environment (surroundings) cause people to behave in certain ways. Cognitive learning presumes that psychological factors are important for influencing how one behaves. Social learning suggests a combination of environmental (social) and psychological factors influence behavior. Social learning theory outlines four requirements for people to learn and model behavior which include attention, retention (remembering what one observed), reproduction (ability to reproduce the behavior), and motivation (good reason) to want to adopt the behavior. Bandura (1976) wrote: Learning would be exceedingly laborious, not to mention hazardous, if people had to rely solely on the effects of their own actions to inform them what to do. Fortunately, most human behavior is learned observationally through modeling:
Business Ethics Training from observing others one forms an idea of how new behaviors are performed,
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and on later occasions this coded information serves as a guide for action. (p. 22) The social learning theory proposed by Albert Bandura has become perhaps the most influential theory of learning and development. While rooted in many of the basic concepts of traditional learning theory, Bandura believed that direct reinforcement could not account for all types of learning. Social cognitive theory provides a framework for understanding, predicting, and changing human behavior. The theory identifies human behavior as an interaction of personal factors, behavior, and the environment (Bandura, 1976). Figure 1 illustrates reciprocal determinism, the view that personal factors in the form of cognition, affect, and biological events, behavior, and environmental influences create interactions that result in a triadic reciprocality (Bandura, 1976). The first interaction, between the person and behavior, involves the influences of a persons thoughts and actions. The second interaction, between the person and the environment, involves human beliefs and cognitive competencies that are developed and modified by social influences and structures within the environment. The third interaction, between the environment and behavior, involves a persons behavior determining the aspects of their environment and in turn their behavior is modified by that environment.
Business Ethics Training Personal Factors
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Influences
Develops and Modifies
Behavior
Determines Modifies Environmental Factors
Figure 1. Social cognitive theory. From Social Learning Theory by A. Bandura, 1976, Upper Saddle River, NJ: Prentice Hall. Adapted with permission. Banduras theory added a social element, arguing that people can learn new information and behaviors by watching other people. He identified three basic models of observational learning: 1. A live model, which involves an actual individual demonstrating or acting out a behavior. 2. A verbal instructional model, which involves descriptions and explanations of a behavior. 3. A symbolic model, which involves real or fictional characters displaying behaviors in books, films, television programs, or online media (Bandura, 1976). Bandura noted that external, environmental reinforcement was not the only factor to influence learning and behavior. He described intrinsic reinforcement as a form of internal reward, such as pride, satisfaction, and a sense of accomplishment. This
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emphasis on internal thoughts and cognitions helps connect learning theories to cognitive developmental theories (Bandura, 1976). While many textbooks place social learning theory with behavioral theories, Bandura himself describes his approach as a social cognitive theory. While behaviorists believed that learning led to a permanent change in behavior, observational learning demonstrates that people can learn new information without demonstrating new behaviors (Evans, 1989). Not all observed behaviors are effectively learned. Factors involving both the model and the learner can play a role in whether social learning is successful. Certain requirements and steps must also be followed. Bandura (1976) states that the following steps are involved in the observational learning and modeling process: Attention. In order to learn, the person needs to be paying attention. Anything that detracts the persons attention is going to have a negative effect on observational learning. If the model is interesting or there is a novel aspect to the situation, the person is far more likely to dedicate their full attention to learning. Retention. The ability to store information is also an important part of the learning process. Retention can be affected by a number of factors, but the ability to pull up information later and act on it is vital to observational learning. Reproduction. Once the person has paid attention to the model and retained the information, it is time to actually perform the behavior just observed. Further practice of the learned behavior leads to improvement and skill advancement. Motivation. Finally, in order for observational learning to be successful, the person has to be motivated to imitate the behavior that has been modeled. Reinforcement
Business Ethics Training and punishment play an important role in motivation. While experiencing these motivators can be highly effective, so can observing other experience some type of reinforcement or punishment. Recent work by Bandura on social cognitive theory expands on his quest to understand human behavior using a model known as triadic reciprocal determinism,
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which suggests that behavior, the environment, and cognition and other personal factors, influence one another bi-directionally (Bandura, 2005). Bandura (2006) also stresses the importance of the social environment, stating that social systems are the product of human activity, and social systems in turn help to organize, guide, and regulate human affairs. Social factors also play an influential role in the development of cognitive models; for instance, prominent figures in the individuals life act as important sources of knowledge, and these figures contribute to the way the individual thinks about various matters (Bandura, 2002). Aerospace Company Corporate Environment According to The Aerospace Company website in 2007, the corporation is the worlds leader in its industry and the largest combined manufacturer of commercial jetliners and military aircraft. In terms of sales, the Aerospace Company is one of the largest U.S. exporters; it has customers in 90 countries. The company employs over 159,300 employees in 49 American states and 70 countries, with total company revenues of $66.4 billion in 2007. The Aerospace Company has a long tradition of aerospace leadership and innovation in all its business units. The company continues to expand its product line and services to meet emerging customer needs. The Aerospace Company initially
Business Ethics Training accomplished this growth through highly centralized, rigid organization structure. Robbins (2003) describes this organizational structure as mechanistic. The type of
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structure is generally described as highly bureaucratic, limited decision making by lowlevel members, and highly formalized. Through the years, the Aerospace Company has merged with other companies and has adopted alternate organizational structures to survive changing economic conditions and its revolving lifecycle. In the early 1990s the federal defense budget was cut in half. The change in available funds required most aerospace companies to downsize considerably (Saunders, 1990). During this time, The Aerospace Company had massive layoffs, the company was forced to begin decentralization in order to survive. In the early 2000s, recent events such as the terrorist attacks of 9/11/2001, increased customer demands for defense products. Another factor, intense global competitive pressures have necessitated that companies become more responsive to their customers needs while offering improved products and services. In response, the company switched to an innovative organizational strategy as defined by Robbins (2003). This approach is characterized as decentralized, containing cross-functional teams, and wider spans of control by low-level members. As The Aerospace Company has had to adjust its organizational structure accordingly to market and global security fluctuations, its employees have had to adjust to high performance expectations while trying to maintain ethical business practices. With higher participation in decision making, more employees of The Aerospace Company have authority to make agreements that may have substantial impact on the
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company. Top management provides the blueprint of what the corporate culture should be (Ferrell et al., 2002). This standard provides a connection of the ethical culture of the newly empowered Aerospace Company employees under the leadership of one former CEO. The former CEO is routinely blamed for creating the working culture that led to the recent outbreak of ethical improprieties at The Aerospace Company. James (2000) states that, One scandal can be blamed on a single failure, rogue employees, or even a company-wide lapse. Several such events, however, indicate that the problems are more systemic (p. 44). Taking a closer look at the scandals that occurred during his tenure as CEO, illustrates the breadth and depth of The Aerospace Companys unethical actions, under the leadership of the former CEO. Throughout its history, The Aerospace Company has always been a company that has faced ethical scandals. Though in recent years, it appears that Corporate America as a whole is facing an increase in large scale scandals. Ethics scandals such as the nowfamous examples of Enrons financial manipulation and Arthur Andersens obstruction of justice highlight these large scale violations. Asacker (2004) suggests that these companies had honest employees, but the employees were skilled at knowing precisely when and where to keep their mouths shut, remain honest, and to avoid confrontational situations. Master (2002) believes that there is an order-of-magnitude increase in attention and diligence to ethical, reputational, and compliance issues in the current horizon for corporations. The company has responded by establishing the Office of Internal
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Governance (OIG), an Ethics Line for employees to pose questions, ethics advisers in its business units and compliance education programs. The Office of Internal Governance was chartered in November 2003 to provide renewed and focused attention to The Aerospace Companys internal business practices. To support this objective, four key functions were aligned to OIG: Corporate Audit, Ethics and Business Conduct, Global Trade Controls and Compliance Integration. This project will concentrate on the Ethics Training Program within the Ethics and Business Conduct function of the OIG. The majority of recent Aerospace Company ethical scandals in the early 2000s have been committed by the companys executives. These are leaders that all signed the Code of Ethics and communicated their commitment to the employees. Ferrell et al. (2002) state that full awareness of managements values can strengthen the organizational culture. The inverse of this statement would be that there could be a negative effect on the employees by being forced to attend ethics training while seeing management expound on values but commit ethical misconduct. George (2003) states that when leaders preach one thing and practice another, commitment is quickly lost and employees become doubly cynical. This becomes a critical factor in the effectiveness of an ethics training program. The Aerospace Companys ethics training program is deployed throughout the year, but the core of the training is a half day commitment to watching a video with the company executives speaking on company values and ethics. Duska (1998) notes, People forced to participate in these programs often resent having to spend their time on ethics issues because they believe they already know whats right and
Business Ethics Training whats wrong. They think they dont need an ethics training session to tell them that cheating a customer is wrong. (p. 44)
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This cynicism is source of why the current company ethics training is ineffective. The cynicism is mainly attributable to the inconsistency of executive communication of values. The Aerospace Company OIG currently delegates the responsibility of training design and deployment to the four core business units to execute. The Ethics Vice Presidents of the four business units do not collaborate on their training deployment. The result is four different messages being flowed down to the company, which is supposed to function as a whole. Managers and employees who typically transfer around the company frequently are left with conflicting ethical culture teachings. As the message gets muddled, the potential to influence public perception of the company as an ethical company get diminished (Alger & Burnette-Lemon, 2006). Employee feedback from yearly ethics training sessions and workplace surveys identify that this lack of alignment and communication of diverging company values equates to lack of trust in management. According to George (2003) in Authentic Leadership, Without a consistently practiced set of values, employees will not trust the company or believe in its purpose. Leaders may spend a decade in building that trust and lose it all in a single act (p. 65). The sequence of executive ethical scandals and inconsistent ethics training program is the center of concern for why this papers research is needed. Summary This chapter presented a literature review of several areas addressing issues related to business ethics training. Understanding what constitutes an ethical culture,
Business Ethics Training different approaches to how ethical decisions are made, successful implementation strategies, best practices in organizational ethics systems, and common features of
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effective training programs brings can enable the Aerospace Company to deploy training to positively influence employee ethical behavior. A review of the social learning theory revealed that the effect of training can be managed through focus on the interaction of personal factors, behavior, and the environment.
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Chapter Three: Research Design and Methods Introduction This study analyzed a business ethics training program at an aerospace company to determine the level of influence of the companys program on employee behavior and morale. Since establishing the ethics training program at the Aerospace Company in 2003, the company has focused on measuring process rather than outcome. This research focused on outcome measures, which are predictors or leading indicators of the ethical culture in the organization and effectiveness of the ethics programs. This research focused on the Long Beach, CA division of the Aerospace Company. This division employs approximately 5,000 employees. The research design and methods are outlined in this chapter. First, the problem statement and research hypotheses are restated. Second, the research design is reviewed and variables are identified and described. Third, the population/sample/analysis unit is defined and described. Fourth, an overview of the procedures of the study is presented. Fifth, the characteristic that is measured by the study is reviewed. Sixth, the instrument for the study is identified and described as well as the validity and reliability of the instrument. Problem Statement What relationship, if any, exists between a specific companys business ethics training program and the ethical culture of its employees?
Business Ethics Training Research Hypotheses In order to answer the main question, an evaluation educational inquiry was employed to determine the effectiveness of the ethics program. In focusing on a summative evaluation, the following research hypotheses were developed: 1. There is/is no significant difference between management and nonmanagement employees with regards to behavior and morale influences. 2. There is/is no significant employee opinion on the current frequency and duration of ethics training. 3. There is/is no significant influence from ethics training on employee ethical behavior and perceived morale at work. 4. There is/is no significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training. Research Design An inferential, descriptive research design was employed to describe the
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influences of the ethics training program. Inferential statistics allows for patterns in the data to be modeled in a way that accounts for randomness and uncertainty in the observations, and then used to draw inferences about the process or population being studied (Creswell, 2003). The purpose of descriptive research is to describe systematically the facts and characteristics of a given population or area of interest, factually and accurately (Issac and Michael, 1995, p. 32). An inferential, descriptive study, utilizing the technique of a survey, was determined to be the most appropriate for describing, analyzing, and understanding the complex realities of the Aerospace Company participants.
Business Ethics Training Data for this study was collected via a questionnaire. A survey instrument was
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designed to gather data from 150 current employees of the Aerospace Company that are located at the Long Beach, CA facility. The decision to use this research instrument was based upon guidance of the Institutional Review Board (IRB), a comprehensive review of the literature, and recommendations from the dissertation committee. The Aerospace Company has been made aware of the study with the understanding that its anonymity will be protected with the usage of the aforementioned pseudonym. Population The population for this study includes all current employees located in the Long Beach facility of the Aerospace Company. This represents approximately 5,000 current employees that are classified as salary, union, part-time, and contract hires. According to the Aerospace Companys confidential human resource records (2008), the companys work force primarily consists of white males, with approximately 15% of the population classified as management. The average age of the workforce at the Long Beach facility is in the mid fifties. The Long Beach facility primarily consists of manufactured military aircraft, support services, design and program management of other military programs. Sample and Sampling Technique A desired sample consisted of 150 employees who are currently employed at the Aerospace Company in Long Beach, CA was established. Systematic random sampling was used to select participants for this study. A sample of the population was randomly selected to ensure that there is no bias in the selection of the participants. To determine how many participants to survey, a decision was based on the selection of a 0.05 level of significance (Patten, 2005). As a result, for a population (N) of
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5000, a recommended sample size of (n) 100 was selected. To address the possibility of a low return rate, it was determined that a larger sample size of (n) 150 would aid in achieving a statistically significant response rate. Participants were selected from an alphabetically listed population in fixed intervals. The participants were selected in proportion to the percent of the population the sample should represent. The interval of 33 was determined by taking the population of 5000 and dividing by number desired in the sample, which was determined to be 150. Survey Instrument A cross-sectional survey was designed with the intent to provide data about the influence of ethics training on a specific aerospace company. The goal of the survey was to provide a valuable method of collecting a wide range of information from a large number of respondents through structured and standardized questions. Guiding principles of survey design dictate they be systematic, representative, objective, and quantifiable (Issac & Michael, 1995). The choice of a survey for data collection was due to its advantages of efficient collection of information from a large number of respondents, statistical techniques that can be used to determine validity, reliability, and statistical significance and because surveys are flexible in the sense that a wide range of information can be collected (Fowler, 2002). The survey that was used is divided into six sections and consists of 27 questions. One section requests demographic information. Two sections contain questions to answers on a five-point Likert scale. One of these Likert scale sections has responses ranging from very much influenced to no influence with the middle response of moderate influence. The other section has responses ranging from agree strongly to
Business Ethics Training disagree strongly with the middle response of neither agree nor disagree. One section has responses on an ordinal level with a rank order scale. Another section has questions that are answered positively with yes or negatively with no. The last
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section is an open-ended question asking for additional comments or suggestions on how to improve the ethics training program. The survey instrument is a six-section questionnaire that was administered online through a survey website. The online based survey was encrypted for the participants protection and no personally or organizationally identifiable information was asked to ensure anonymity. The first section, demographic information was designed to collect data on the following four variables: 1. Gender female/male. 2. Age - participants current age. 3. Position participant designated as non-management or management. 4. Service length participants years of employment with the company. Section two of the instrument was designed to quantify whether employees believe the frequency and duration of ethics training influences behavior at work. This section is comprised of four questions that are answered positively with a yes and negatively with a no. These questions are designed to provide data for the following four variables: 1. Frequency: increased training sessions would be beneficial. 2. Duration: the length of the training sessions is appropriate.
Business Ethics Training 3. Frequency: training sessions held once a year are sufficient to influence ethical behavior at work. 4. Duration: training sessions should increase from 2 hours to 4 hours. Section three of the instrument was designed to measure the self-purported influence of ethics training on the participants behavioral actions. This section is
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comprised of eight questions that are answered on a five-part Likert scale, with a range of Very Much Influenced (5) to No Influence (1). These questions are designed to provide data for the following eight variables: 1. Refrain from conflict of interest activities 2. Refrain from abusing my position of power 3. Avoid insider trading 4. Follow all restrictions on use and protection of company-sensitive information 5. Engage in fair dealing (act in good faith and deal fairly) 6. Appropriately use company assets 7. Follow all company policies and procedures 8. Promptly report any unethical conduct The fourth section measured the extent to which the participant believes ethics training has influenced their morale at work. This section is comprised of nine questions that are answered on a five-part Likert scale, with a range of Strongly Agree (5) to Strongly Disagree (1). These questions are designed to provide data for the following nine variables: 1. Satisfaction with career growth potential 2. Fair treatment as an employee
Business Ethics Training 3. Trust and respect of leadership 4. Working relationship with my supervisor 5. Balance of work and family life 6. Enjoyment of the work I do 7. Motivation to do the best I can 8. Pride in working for this company 9. Good working relationship with my peers The fifth section, entitled measuring ethical decision making factors, asked the participant to rank motivating factors that influence ethical decision making at work.
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Each item is ranked uniquely and in order of significance, with 5 being the highest and 1 being the lowest: 1. Fear of legal repercussions 2. Values learned from ethics training 3. Consistency with the companys ethical culture 4. Personal values 5. Observation of peer actions Finally, the sixth section was an open-ended question, soliciting any additional comments or suggestions on how to improve the ethics training program. Many methods and considerations were evaluated to ensure optimal response rate to the survey and usefulness of responses. The techniques included sending out the survey electronically with a link to the survey instrument, a reminder to complete the survey 2 weeks later, and a cover letter that emphasized the time economical and ease of completing the survey. Also, the cover letter to the survey was designed to send a
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positive message that the participants anonymous opinions are valued, with the intent to lead to honest, more useful responses. Validity and Reliability Content validity is established when the items measure the content they were intended to measure. A team of panel experts was formed to review and comment on the survey instrument to measure its ability to draw meaningful and useful inferences. Panel experts were selected based on their relevant experience, education, and overall qualifications in relation to the dissertation topic. The panel included: (a) a certified clinical psychologist that is a doctoral student and professor who is experienced in dispensing ethics lessons to her collegiate students; (b) the Aerospace Companys Ethics Advisor; and (c) an Aerospace Company employee with over 30 years experience, a doctoral degree and administers training on a wide range of subjects on a regular basis across the Aerospace Company. The panels of experts were sent an email describing the study purpose with a link to the online Survey instructions (Appendix B) which explains how to complete the questionnaire, followed by the actual survey instrument (Appendix C). The email also included directions to the panel of experts to review and comment on the content validity of the instrument and whether the survey instructions were easy to understand and follow. Feedback from the panel experts were requested within 2 weeks from the time the email was sent. A follow-up email was sent to ensure receipt of the initial email request and to answer any process questions. The panel experts were asked to evaluate whether the questions were clear in sentence structure and appropriate in relation to the purpose of the study. Questions were also evaluated on their appropriateness and match in
Business Ethics Training answering the specific research questions they were intended to satisfy. Survey
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completion times and ease of online survey screens were also measurement requirements requested. Panel expert feedback and recommendations for the survey instrument are provided in Appendix A. Creswell (2003) defines reliability as the consistency of item responses in the measurements over time. Reliability can also be defined by the success of different participants interpreting and answering the same questions consistently. A standard online survey ensures that every participant will be presented with the same questions and in the same order as other participants. Because the online survey is standardized, the instrument is relatively free from several types of errors and ensured reliability. The validity of this instrument was further established through a pilot study. A group of 8 participants from the established population were selected to further validate and establish reliability of the survey instrument. This study utilized internal consistency for reliability due to the appropriateness of measurement for research where there is a range of possible responses to each item. Internal consistency is the extent to which tests or procedures assess the same characteristic, skill or quality (Creswell, 2003). It is a measure of the precision between the observers or of the measuring instruments used in a study. This test of validity was helpful in interpreting data and predicting the value of scores and the limits of the relationship among variables. Data Collection The data collection plan was comprised of sending a survey to a random sample of 150 participants for analysis utilizing quantitative measures. The participants were sent an invitation through electronic mail with a link to the survey instructions and
Business Ethics Training instrument hosted on a website. The survey instructions detailed the objective of the study, population of the research, and how the results will be used. A request to participants to complete the survey within 2 weeks of receipt was also stated in the instructions. Protection of Human Subjects
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Consideration for the protection of human subjects was addressed in accordance with University guidelines. The Institutional Review Board (IRB) determined that the study meets the requirements for exemption under the federal regulations #45CFR46 that govern the protections of human subjects and was granted full approval to proceed. In line with IRB rules, participants of the survey were informed that their responses would in no way affect their performance, future opportunity, or career with the company. To communicate the anonymity of the participant responses, a preface to the online survey screen detailed the goal of the survey, anonymity guarantee, and an opportunity to requests copies of the survey results if they desire. Data Process and Analysis The main question guiding the research is: What relationship, if any, exists between a specific companys business ethics training program and the ethical culture of its employees? In order to answer the main question, an evaluation educational inquiry was employed to determine the effectiveness of the ethics program. The data was processed online through SurveyMonkey and downloaded into Microsoft Excel and SPSS Statistics (Statistical Package for the Social Sciences) software for analysis. Graphical presentation of the results were reported through tables, bar and pie charts generated using Microsoft Excel. Statistical charts depicting survey
Business Ethics Training results were also created using SPSS Statistics. A 0.05 level of significance was selected to measure the results from the survey instrument shown in Appendix C.
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Appropriate analysis methods were selected and applied to individual research questions and their source survey questions. Corresponding analysis approaches to research questions and survey questions are summarized in Table 1. Table 1 Analysis Approach to Research Hypotheses and Survey Questions Research Hypothesis 1. There is/is no significant difference between management and nonmanagement employees with regards to behavior and morale influences. 2. There is/is no significant employee opinion on the current frequency and duration of ethics training. 3. There is/is no significant influence from ethics training on employee ethical behavior and perceived morale at work. 4. There is/is no significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training. Survey Question Questions 3, 9-25 Questions 3, 5-8, 26 Analysis t-test x2 test
Questions 5-8
x2 test
Questions 9-25
t-test
Question 26
F-test
Summary This chapter presented the research design for the study, describing the methodologies that were used in terms of research design, population and sample, survey instrument, validity and reliability, data collection, data process, and data analysis. This
Business Ethics Training research design is consistent with the studys objectives as stated in Chapter I and reinforced by the literature review in Chapter II. Results of the study analysis are discussed in Chapter IV. Conclusions from the study are presented in Chapter V.
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Chapter Four: Results Introduction This chapter presents the findings from the validated survey used to collect data for the purpose of this study. The purpose of this study was to analyze a business ethics training program in the corporate environment and determine the level of influence of a specific companys program on employee behavior and morale. A random sample of 150 participants was sent an electronic mail invitation with a link to an online survey. A response rate of 66.7% was attained through the receipt of 100 participant replies. Of these, some participants did not answer all the survey questions, which caused variation in sample size, as noted in certain item tables and graphs. The following tables and graphs in this chapter utilize descriptive and inferential statistics to illustrate the results of the survey instrument. Demographic Characteristics Demographic characteristics (gender, age, position in company, years of employment) were collected from those who participated in the Business Ethics Training Survey. All of the survey participants were employees who are currently employed at the Aerospace Company in Long Beach, CA. The response rate totaled 66.67%, derived from 100 participants returning the survey out of the initial 150 surveys sent. Figure 2 illustrates the participants gender, in which a majority of the 100 survey participants is 62% male, compared to 38% females, which is higher than the Aerospace Companys Long Beach, CA total population breakout of roughly 65% male and 35% female.
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Female, 38%
Male, 62%
Figure 2. Frequency distribution of participants gender In regard to the employees age, Figure 3 depicts the distribution of the survey participants ages. A total of 97 or 97% responded to the question on age, 3 or 3% decided to skip the question. There were 23 or 24% employees that were within the age range of 20 to 30 years. Employees between 31 to 40 years of age equated to 16 or 16% of the responses. Employees who age was between 41 to 50 years equaled 41 or 42%. Employees who were 51 years of age and older equated to 17 or 18%. Most of the employees were between the ages of 41 and 50. Employees in the survey reported ages ranging from 21 to 70 years with a mean age for all participants of 41 years.
Percentage of Participant's
50% 40% 30% 20% 10% 0% 20-30 31-40 41-50 50+ 24% 16% 18%
42%
Participant's Age
Figure 3. Frequency distribution of participants age
Business Ethics Training In regard to position, Figure 4 shows that 15 or 15% survey participants, were classified as management; with management defined by the employees Human Resource (HR) code. The majority of survey participants, 83 or 85%, were nonmanagement. A small percentage, 2 or 2% of the survey participants decided to omit their position in the company.
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Management *, 15%
Non-Management, 85%
Figure 4. Frequency distribution of management and non-management participants The participants years of experience with the company varied considerably. Figure 5 illustrates the frequency distribution of 99 survey participants, 1 employee chose to withhold their response regarding years of experience. Employees who had between 0 and 5 years of experience equaled 30 or 30% of the participant responses. Employees who had between 6 and 10 years of experience equaled 11 or 11%. Employees who had between 11 and 15 years of experience equaled 8 or 8%. Employees who had between 16 and 20 years of experience equaled 27 or 27%. Employees who had between 21 and 25 years of experience equaled 19 or 19%. Employees who had 26 and greater years of experience equaled 4 or 4%. Most of the survey participants had between 0 and 5 years
Business Ethics Training of experience. The years of experience ranges from 0.5 to 35 years, with a mean for all employees surveyed of 14 years.
40%
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Percentage of Participant's
30% 30% 27%
20% 11% 10% 8%
19%
4% 0% 0-5 6-10 11-15 16-20 21-25 26+
Years of Experience
Figure 5. Frequency distribution of participants years of experience.
Research Hypothesis One Research hypothesis one is as follows: There is/is no significant difference between management and non-management employees with regards to behavior and morale influences. To test this hypothesis, the resultant data from the survey instrument was subjected to a two-tail t test and p value significance test. All analyses were performed by SPSS statistical software with the level of significance set at 0.05. Results of the hypothesis testing of non-management versus management were tested with two sets of hypotheses dealing with behavior influences and morale influences. The results are summarized in Tables 2 and 3. The eight specific hypotheses testing behavior influences are as follows: 1. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the
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company has had to refrain from conflict of interest activities. Question 9 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.625, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 2. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to abuse ones power of position. Question 10 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.392, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 3. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to avoid insider trading. Question 11 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.253, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 4. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to follow all restrictions on use of information. Question 12 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.228, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant.
Business Ethics Training 5. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to engage in fair dealing. Question 13 in the survey was
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used to test the hypothesis. The two-tailed p-value equaled 0.208, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 6. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to appropriately use company assets. Question 14 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.023, resulting in rejecting the null hypothesis. By conventional criteria, this difference is considered statistically significant. 7. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to comply with all applicable rules. Question 15 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.045, resulting in rejecting the null hypothesis. By conventional criteria, this difference is considered statistically significant. 8. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to promptly report any unethical conduct. Question 16 in the survey was used to test the hypothesis. The two-tailed p-value equaled
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0.57, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. The differences between non-management versus management behavior were not statistically significant at the p < 0.05 level or better in six of the eight questions regarding behavior influences. Only two questions had p-values lower than 0.05, which equated to a level of significance of difference between non-management and management. These two questions where p < 0.05 included: appropriately use company assets and comply with all applicable rules. Table 2 Hypothesis Testing of Non-Management vs. Management Behavior Influences Behavior Influences Refrain from conflict of interest activities Abuse my power of position Avoid insider trading Position Non-Management Management Non-Management Management Non-Management Management n 85 15 84 15 84 15 85 15 85 15 85 15 85 15 85 15 mean std dev 3.04 2.87 2.37 2.67 2.64 2.20 3.28 2.87 3.27 2.87 3.19 2.47 3.27 2.67 3.12 2.93 1.180 1.552 1.200 1.496 1.359 1.424 1.140 1.552 1.073 1.407 1.086 1.302 1.016 1.291 1.138 1.486 t p
.489 .625 .858 .392 1.14 .253 1.21 .228 1.26 .208 2.29 .023 2.02 .045 .568 .572
Follow all restrictions on use Non-Management of information Management Engage in fair dealing Appropriately use company assets Comply with all applicable rules Non-Management Management Non-Management Management Non-Management Management
Promptly report any unethical Non-Management conduct Management
Business Ethics Training The nine specific hypotheses testing morale influences are as follows: 1. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the
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company has had to satisfaction with career growth potential. Question 17 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.314, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 2. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to fair treatment as an employee. Question 18 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.026, resulting in rejecting the null hypothesis. By conventional criteria, this difference is considered statistically significant. 3. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to trust and respect of leadership. Question 19 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.468, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 4. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to working relationship with ones supervisor. Question 20 in the survey was used to test the hypothesis. The two-tailed p-value equaled
Business Ethics Training 0.210, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 5. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had to balance of work and family life. Question 21 in the
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survey was used to test the hypothesis. The two-tailed p-value equaled 0.121, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 6. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had on enjoyment of the work that one does. Question 22 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.455, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 7. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had on motivation to do the best one can. Question 23 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.013, resulting in rejecting the null hypothesis. By conventional criteria, this difference is considered statistically significant. 8. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had on pride in working for this company. Question 24 in the
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survey was used to test the hypothesis. The two-tailed p-value equaled 0.026, resulting in rejecting the null hypothesis. By conventional criteria, this difference is considered statistically significant. 9. There is/is no significant difference between non-management and management employees with regards to the influence ethics training at the company has had on good working relationship with ones peers. Question 25 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.495, resulting in accepting the null hypothesis. By conventional criteria, this difference is considered not statistically significant. In regards to morale influences, the differences between non-management versus management were not statistically significant at the p < 0.05 level or better in six of the nine targeted questions. Only three questions had p-values lower than the 0.05, which equated to a level of significance in measuring the difference between non-management and management. These three questions where p < 0.05 included: fair treatment as an employee, motivation to do the best I can and pride in working for this company.
Business Ethics Training Table 3 Hypothesis Testing of Non-Management vs. Management Morale Influences Morale Influences Satisfaction with career growth potential Fair treatment as an employee Trust and respect of leadership Position Non-Management Management Non-Management Management Non-Management Management N 85 15 85 15 85 15 85 15 85 15 85 15 85 15 84 15 84 15 mean std dev 2.73 2.47 3.41 2.80 3.08 2.87 3.09 2.73 2.76 2.33 2.80 2.60 3.12 2.40 3.50 2.87 3.20 3.00 .905 .990 .917 1.207 .978 1.302 .983 1.223 .959 1.113 .923 1.121 1.005 1.121 .951 1.246 1.039 1.069 t p
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1.01 2.26 .727 1.25 1.56 .748 2.51 2.24 .683
.314 .026 .468 .210 .121 .455 .013 .026 .495
Working relationship with Non-Management my supervisor Management Balance of work and family life Enjoyment of the work I do Non-Management Management Non-Management Management
Motivation to do the best I Non-Management can Management Pride in working for this company Non-Management Management
Good working relationship Non-Management with my peers Management
Research Hypothesis Two Research hypothesis two is as follows: There is / is no significant employee opinion on the current frequency and duration of ethics training. Table 4 displays the distribution of participants responses to four survey questions selected to measure the employees opinion on the current frequency and duration of ethics training. The four specific hypotheses are as follows:
Business Ethics Training 1. There is/is no significant employee opinion regarding whether or not
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increasing training sessions would be beneficial for ethics training. Question five in the survey was used to test the hypothesis. The computed value of x2 was 21.16 with a p-value of 0.000, resulting in the rejection of the null hypothesis. By conventional criteria, the opinion is statistically significant. 2. There is/is no significant employee opinion regarding whether or not the length of ethics training is appropriate. Question six in the survey was used to test the hypothesis. The computed value of x2 was 16.32 with a p-value of 0.001, resulting in the rejection of the null hypothesis. By conventional criteria, the opinion is statistically significant. 3. There is/is no significant employee opinion regarding whether or not increasing training sessions would be beneficial for ethics training. Question seven in the survey was used to test the hypothesis. The computed value of x2 was 1.960 with a p-value of 0.161, resulting in the acceptance of the null hypothesis. By conventional criteria, the opinion is not statistically significant. 4. There is/is no significant employee opinion regarding whether or not increasing training sessions would be beneficial for ethics training. Question eight in the survey was used to test the hypothesis. The computed value of x2 was 49.50 with a p-value of 0.000, resulting in the rejection of the null hypothesis. By conventional criteria, the opinion is statistically significant. The difference between all employees in answering yes or no in regards to ethics training frequency were statistically significant at the p < 0.05 level or better for question
Business Ethics Training five in the survey, but not for question seven. In regards to employee opinion on the
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duration of ethics training, the difference between all employees answering yes or no was statistically significant at the p < 0.05 level or better for both question six and eight in the survey. Table 4 Hypothesis Testing of Employee Opinion on Frequency and Duration Frequency and Duration Increased training sessions would be beneficial The length of training is appropriate Training sessions held once a year are sufficient to influence ethical behavior at work Training sessions should increase from 2hrs to 4hrs N YES 27 NO 73 YES 69 NO 29 YES 57 NO 43 YES 14 NO 85 x2 21.16 16.32 1.960 p .000 .001 .161
49.50
.000
Research Hypothesis Three Research hypothesis three is as follows: There is/is no significant influence from ethics training on employee ethical behavior and perceived morale at work. Eight survey questions, answered on a 5 point Likert scale, with a range of Very Much Influenced (5) to No Influence (1), were utilized to answer measure the self-purported influence of ethics training on the participants behavioral actions. Results of the hypothesis testing of ethics training influence on employees were split and summarized in two tables, behavior influences in Table 5 and morale influences in Table 6. The eight specific hypotheses testing behavior influences are as follows:
Business Ethics Training 1. There is/is no significant influence from ethics training on employee ethical behavior with regards to refraining from conflict of interest activities. Question 9 in the survey was used to test the hypothesis. The two-tailed pvalue equaled 0.936, resulting in the acceptance of the null hypothesis. By
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conventional criteria, this difference is considered not statistically significant. 2. There is/is no significant influence from ethics training on employee ethical behavior with regards to abusing ones power of position. Question 10 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.000, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 3. There is/is no significant influence from ethics training on employee ethical behavior with regards to avoiding insider trading. Question 11 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.003, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 4. There is/is no significant influence from ethics training on employee ethical behavior with regards to following all restrictions on use of information. Question 12 in the survey was used to test the hypothesis. The two-tailed pvalue equaled 0.072, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not quite statistically significant. 5. There is/is no significant influence from ethics training on employee ethical behavior with regards to engaging in fair dealing. Question 13 in the survey
Business Ethics Training was used to test the hypothesis. The two-tailed p-value equaled 0.066, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not quite statistically significant. 6. There is/is no significant influence from ethics training on employee ethical
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behavior with regards to appropriately using company assets. Question 14 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.486, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 7. There is/is no significant influence from ethics training on employee ethical behavior with regards to complying with all applicable rules. Question 15 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.098, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 8. There is/is no significant influence from ethics training on employee ethical behavior with regards to promptly reporting any unethical conduct. Question 16 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.451, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. The results to measure ethics training influence on behavior were not statistically significant at the p < 0.05 level or better in six of the eight questions regarding behavior influences. Only two questions had p-values lower than the 0.05, which equated to a level of significance. These two questions where p < 0.05 included: abuse my power of position and avoid insider trading. The outcome of only two questions with
Business Ethics Training statistically significant results is the acceptance of null hypothesis three with respect to ethics training influence on employee behavior. It should be noted that three of the hypotheses that were found not significant would have been significant if the level of significance was at 0.10. Table 5 Hypothesis Testing of Ethics Training Influence on Employee Behavior Employee Behavior Refrain from conflict of interest activities Abuse my power of position Avoid insider trading Follow all restrictions on use of information Engage in fair dealing Appropriately use company assets Comply with all applicable rules Promptly report any unethical conduct n 100 99 99 100 100 100 100 100 mean std dev 3.01 2.41 2.58 3.22 3.21 3.08 3.18 3.09 1.23 1.24 1.37 1.21 1.13 1.14 1.07 1.19 t .081 4.71 3.04 1.81 1.85 .700 1.67 .756 p .936 .000 .003 .072 .066 .486 .098 .451
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The nine specific hypotheses testing morale influences are as follows: 1. There is/is no significant influence from ethics training on employee ethical morale with regards to satisfaction with career growth potential. Question 17
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in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.001, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 2. There is/is no significant influence from ethics training on employee ethical morale with regards to fair treatment as an employee. Question 18 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.001, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 3. There is/is no significant influence from ethics training on employee ethical morale with regards to trust and respect of leadership. Question 19 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.625, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 4. There is/is no significant influence from ethics training on employee ethical morale with regards to working relationship with my supervisor. Question 20 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.695, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 5. There is/is no significant influence from ethics training on employee ethical morale with regards to balance of work and family life. Question 21 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.003, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant.
Business Ethics Training 6. There is/is no significant influence from ethics training on employee ethical morale with regards to enjoyment of the work one does. Question 22 in the
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survey was used to test the hypothesis. The two-tailed p-value equaled 0.017, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 7. There is/is no significant influence from ethics training on employee ethical morale with regards to motivation to do the best one can. Question 23 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.923, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. 8. There is/is no significant influence from ethics training on employee ethical morale with regards to pride in working for this company. Question 24 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.000, resulting in the rejection of the null hypothesis. By conventional criteria, this difference is considered statistically significant. 9. There is/is no significant influence from ethics training on employee ethical morale with regards to good working relationship with ones peers. Question 25 in the survey was used to test the hypothesis. The two-tailed p-value equaled 0.107, resulting in the acceptance of the null hypothesis. By conventional criteria, this difference is considered not statistically significant. In regards to ethics training influence on morale, the results were statistically significant at the p < 0.05 level or better for the five of the nine targeted questions. These five questions where p < 0.05 included: satisfaction with career growth potential, fair
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treatment as an employee, balance of work and family life, enjoyment of the work I do and pride in working for this company. Hypothesis three in regards to ethics training influence on employee morale was to some extent supported with five of the nine questions resulting in a significant influence. Table 6 Hypothesis Testing of Ethics Training Influence on Employee Morale Employee Morale Satisfaction with career growth potential Fair treatment as an employee Trust and respect of leadership Working relationship with my supervisor Balance of work and family life Enjoyment of the work I do Motivation to do the best I can Pride in working for this company Good working relationship with my peers n 100 100 100 100 100 100 100 99 99 mean std dev 2.69 3.32 30.05 3.04 2.70 2.77 3.01 3.40 3.17 .918 .984 1.02 1.02 .990 .952 1.04 1.01 1.04 t 3.37 3.25 .490 .392 3.03 2.41 .096 3.94 1.62 p .001 .001 .625 .695 .003 .017 .923 .000 .107
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Research Hypothesis Four Research hypothesis four is as follows: There is/is no significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training. Participants were asked to rank a list of five motivating factors that influence their ethical decision making at work. Items were to be ranked uniquely and in order of significance, with 5 being the highest and 1 being the lowest. An F-test was conducted and its resulting value was compared to an F distribution table to determine whether to accept or reject the hypothesis. According to the NIST/SEMATECH (2006) F distribution table, an upper critical value of 2.463 is given for a degree of freedom (df) between 4 and a degree of freedom 2 (df2) within 92 at a = 0.05. Utilizing the values in Table 7, the studys calculated F value is 5.6447. The studys F-test results of 5.6477 2.463 distribution table value, equating to significant results and rejecting the null hypothesis. There is a significant difference in employee ranking of ethical decision making factors at work as a result of the ethics training. Table 7 Hypothesis Testing of Employee Ranking of Ethical Decision Making Factors N 97 dfbetween 4 df2within 92 F distribution 2.463 F value 5.6647
0.05
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Respondents ranked the following five factors: fear of legal repercussions, values learned from ethics training, consistency with the companys ethical culture, personal values, and observation of peer actions. Employees ranked observation of peer actions highest in order compared to the other factors. The lowest ranked factor was personal values, by a large margin. A distribution of the order of significance ranking is illustrated in Figure 6.
g
27% 18% 20% 24% 24% 15% 16% 19% 20% 22% 19% 8% 27% 13% 30%
g
9% 15% 53% 28%
18% 2% 13% 15%
21%
27%
Fear of legal repercussions
Values learned Consistency with from ethics training the companys ethical culture
Series1 1st
Personal Values
Observation of Peer Actions
Order of Significance Ranking (Highest to Lowest)
Series2 2nd
Series3 3rd
Series4 4th
Series5 5th
Figure 6. Measuring ethical decision making factors. Participant Comments Section 6, Question 27 in the survey asked participants to provide any additional comments or suggestions as to how to improve the ethics training program. The 24 participants answered the question in general clusters of responses, which included: duration/frequency, training method, content and personal beliefs. In regard to duration, one-third of the participants recommended that ethics training be conducted in shorter durations and dispersed throughout the year. In combination with shorter training sessions, participants suggested that ethics trainings be
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conducted online the web. Roughly half of the answers pointed to improving the content of the annual ethics training. Respondents stated that ethics training would be more effective if the content included more relevant real life examples compared to regulatory information that doesnt always apply to all employees. One-quarter of the participants comments asserted the belief that business ethics can not be taught, that ethics are derived from personal belief systems developed early in life. The participants comments in aggregate provided additional topics of discussion in the next chapter for conclusions and recommendations. Summary Chapter Four presented the results of the eight research questions in a study of a business ethics training program in the corporate environment to determine the level of influence of a specific companys program on employee behavior and morale. Chapter Five will conclude the paper with the summary of the research results, practical implications, limitations of the study, recommendations for future research, and a discussion of the conclusions.
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Chapter Five: Discussion and Conclusions Introduction This chapter will begin by providing a summary of the research results. Practical implications are then discussed to understand the value of the study results. Limitations of the study are explored to understand possible alteration to results and influence to conclusions. Finally, the chapter closes with reflections on lessons learned and recommendations for future research. Summary of Research Results The results of the study conducted pertaining to the influence of business ethics training on employee behavior and morale leads to the following findings: A random sample of 150 participants was sent an electronic mail invitation with a link to an online survey. A response rate of 66.7% was attained through the receipt of 100 participant replies. Demographic characteristics (gender, age, position in company, and years of employment) were collected in section one of the survey instrument. The following summarizes the results: 52% of the respondents were male, compared to 48% females; the majority (42%) of employee respondents are between the ages of 41 to 50 years; 15% of the survey participants were classified as management, compared to 85% as non-management; and the participants years of experience with the company varied considerably, with a slightly higher percentage (30%) of respondents with 0 to 5 years of experience. The differences between non-management versus management behavior were not statistically significant at the p < 0.05 level or better in six of the eight questions
Business Ethics Training regarding behavior influences. These two questions where p < 0.05 included: appropriately use company assets with a p-value of .023 and comply with all applicable rules, with a p-value of .045. In regards to morale influences, the differences between non-management versus management were not statistically significant at the p < 0.05 level or better in six of the nine targeted questions. These three questions where p < 0.05 included: fair treatment as an employee with a p-value of .026, motivation to do the best I can with a p-value of .013, and Pride in working for this company with a p-value of .026. The majority of the participants 73% answered negatively (no), in respect to the
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opinion that increased training sessions would be beneficial. The remaining 27% of the employees answered positively (yes), that increased training sessions would be beneficial. The majority of the participants 70% answered positively (yes), in respect to the opinion that the length of the training sessions is appropriate. The remaining 30% of the employees answered negatively (no), that the length of the current training sessions is appropriate. A majority 57% answered positively (yes), that training sessions held once a year are sufficient to influence ethical behavior at work. The remaining 43% of employees answered negatively (no), that training sessions held once a year are sufficient to influence ethical behavior at work. The majority 86% of employees answered negatively (no), with the opinion that training sessions should increase from 2 hours to 4 hours. The remaining 14% of
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respondents answered positively (yes), that training sessions should increase from 2 hours to 4 hours. The difference between all employees in answering yes or no in regards to ethics training frequency were statistically significant at the p < 0.05 level or better for one question, but not on the other. The fractional aggregate of questions with chi-square probability of p < 0.05 resulted in rejecting the hypothesis, which stated that there is a significant employee opinion on the current frequency of ethics training. In regards to employee opinion on the duration of ethics training, the difference between all employees answering yes or no was statistically significant at the p < 0.05 level or better for both questions. The chi-square probability of p < 0.05 resulted in rejecting the null hypothesis, which stated that there is no significant employee opinion on the current duration of ethics training. The results to measure ethics training influence on behavior were not statistically significant at the p < 0.05 level or better in six of the eight questions regarding behavior influences. Only two questions had p-values lower than the 0.05, which equated to a level of significance. These two questions where p < 0.05 included: abuse my power of position with a p-value of .000 and avoid insider trading with a p-value of .003. The outcome of only two questions with statistically significant results is to accept the null hypothesis three with respect to ethics training influence on employee behavior. In regards to ethics training influence on morale, the results were statistically significant at the p < 0.05 level or better for the five of the nine targeted questions. These five questions where p < 0.05 included: satisfaction with career growth
Business Ethics Training potential with a p-value of .003, fair treatment as an employee with a p-value of .003, balance of work and family life with a p-value of .003, enjoyment of the
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work I do with a p-value of .003 and pride in working for this company with a pvalue of .003. Hypothesis three in regards to ethics training influence on employee morale was supported with five of the nine questions showing a level of significance. There is a difference in employee ranking of ethical decision making factors at work as a result of the ethics training. The studys F-test results of 5.6477 2.463 distribution table value, equating to significance results and accepting hypothesis four. Respondents ranked five factors: fear of legal repercussions, values learned from ethics training, consistency with the companys ethical culture, personal values, observation of peer actions. Employees ranked observation of peer actions highest in order compared to the other factors. The lowest ranked factor was personal values, by a large margin. Twenty-four participants provided additional comments/suggestions on how to improve the ethics training program. The respondents answered the question in general clusters of responses, which included: duration/frequency, training method, content and personal beliefs. In regard to duration, one-third of the participants recommended that ethics training be conducted in shorter durations and dispersed throughout the year. In combination with shorter training sessions, participants suggested that ethics trainings be conducted online the web. Roughly half of the answers pointed to improving the content of the annual ethics training. Respondents stated that ethics training would be more effective if the content included more relevant real life examples compared to regulatory information that doesnt always
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apply to all employees. One-quarter of the participants comments asserted the belief that business ethics can not be taught, that ethics are derived from personal belief systems developed early in life. Practical Implications The main objective of this study was to analyze a business ethics training program in the corporate environment and determine the level of influence of a specific companys program on employee behavior and morale. Drawing from the research done in the literature review and the results of the study, a number of practical implications can be made. These practical implications are summarized in the list below with the supporting derivation following: 1. Ethics training does not have a significant influence on most measurements of behavioral and morale indicators. 2. The Aerospace Companys ethics training programs level of influence could be improved from adopting the findings from the research and results of this study. 3. Considerations for training program design should include: self-directed study, relating training to personal experience, focusing on needed skills, and capable of immediate application. 4. Meaningful measurements of training success such as outcome measures should be considered. 5. Companies should consider employees moral development to determine consequences of ethical decision making.
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6. Employees do care about the ethical culture of its company and it benefits the corporation to make it better. 7. Ethics training influence measurements are not stratified significantly between most of the demographic indicators examined. Based on the research in this study, it appears that ethics training does not have a significant influence on most measurements of behavioral and morale indicators. This is supported by the rejection of research hypothesis three; ethics training does not have a significant influence on employee behavior and morale. Of the 17 questions used to test research hypothesis three, only 7 indicated a significant influence. As this study focused on a specific companys ethics training program, an implication would be that other companies could review the Aerospace Companys program and make adjustments to their programs to have a higher influence on employee behavior and morale. The Aerospace Companys ethics training programs level of influence could be improved from adopting the findings from the research and results of this study. Employees of the company would benefit in behavior and morale by being positively influenced by a program designed and conducted in the recommended structure. The level of influence is dependent on the structure and content of the program. In testing research hypothesis two, participants of the survey responded overwhelmingly that training sessions should be reduced in duration and that the frequency should be increased. Most notably, it appears that if the program was redesigned to be delivered throughout the year in shorter segments and online, more employees would be amenable to the messages being conveyed. This implication was also substantiated by open comments from the participants, such as, smaller meetings will make the ethics message
Business Ethics Training more personal to me. A result of this suggestion would be better application of the training material to the employees job. LeClaire and Ferrel (2000) discussed issues important in developing effective methods of ethics instruction pointing to the consideration of the adult learner and the
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work of Malcolm Knowles. They suggested the following considerations when designing training programs: self-directed study, relating training to personal experience, focusing on needed skills, and capable of immediate application. Based on the results of this study, it appears that these noted considerations are relevant to what employees feel as beneficial implementations to training. Employees at the Aerospace Company desire training through self-directed methods such as online programs and programs with experiences that are relevant to their jobs and skill set. There are still skepticisms as to whether business ethics training can effectively influence ethical behavior. Alsop (2003) states that in the wake of all the corporate scandals business schools have no choice but to try. This study attempted to find more meaningful measurements in gauging an ethics training program, specifically in regards to influences to behavior and morale. Companies may be able to answer the question on whether their training programs are effective by changing their metrics used to measure their ethics programs. In line with collecting participation data in the ethics training program, companies should focus on outcome measures, which are predictors or leading indicators of the ethical culture in the organization and effectiveness of the ethics programs. Another implication from the literature review is the concentration on employees moral development to determine consequences of ethical decision making. To the degree
Business Ethics Training that one accepts Kohlbergs theory, a reasonable operational goal of corporate ethics training initiatives is to help employees move out on the cognitive moral development spectrum (Kohlberg, 1981). Actions include taking more other oriented factors into
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consideration in determining what is right. That progression should, in turn, enhance the ethical business behavior of affected employees by stimulating them to go well beyond self interest when making business decisions that have moral implications. Many of the respondent comments stated that ethics training may be critical for some, as making some ethical decisions may not be intuitive for everyone. For that reason, companies may benefit by providing training that focuses on relevant job situations that help employees understand that their decisions should always take in consideration of doing what is right instead of doing only what will avoid unpleasant consequences. Another implication from the literature review is that employees do care about the ethical culture of its company and it benefits the corporation to make it better. Customers and the public have begun to expect the companies they conduct business with a duty to demonstrate a sense of social responsibility. As important as creating an ethical culture, a corporations public relations managers should be actively involved in the implementation and public advertisement of the ethics compliance plan. Such an approach would not only aid in determining the publics view of the organization, but would also help employees in understanding the social responsibilities that the company has toward its internal and external shareholders and the public. This is supported by the study results from question 24 regarding pride in working for this company. A high number of participants responded that they agree that this factor influences their morale at work. This could give rise to the notion that employees do care about the ethical
Business Ethics Training culture at their companies and corporations should build pride in working for them through their ethics training programs.
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A last implication from this study is that ethics training influence measurements are not stratified significantly between most of the demographic indicators examined. Gender, management designation, age, years of employment did not provide significant levels of difference. In understanding this, it could be interpreted that companies do not need to take these demographic factors into consideration when developing ethics training programs. Limitations of the Study Limitations of any study can shape the results and influence conclusions. There were two primary potential limitations of this study, which included: (a) the demographic make up of the sample, and (b) the timing of this study. This study is limited to an examination of a single aerospace companys ethics training program, with a specific target of its Long Beach, CA location. The utilization of a specific site of one company generates results that do not necessarily represent the influence of ethics training values of all divisions of Aerospace Company employees in the world, or even in California. The data analyzed in this study was limited to information requested to current employees through a survey validated by a panel of experts. Although the participants were selected randomly from an alphabetically listed population in fixed intervals, the resulting employees may not accurately reflect the opinions of the population the sample should represent. Data for this study was collected during a limited time frame and may have had different results if replicated at another time period. Shortly after the conclusion of the
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survey response collection time frame, the Long Beach manufacturing site issued layoff notices to 3% of its 5000 employees. This workplace environment shift could cause variances in employee opinion of the influences of ethics training on behavior and morale. Recommendations for Future Research Recommendations were derived from personal experience, the literature review, and the findings in this study. As reviewed, empirical research is needed for comparing the relative effectiveness of the proposed inductive approach for business ethics training with the effectiveness of more traditional training methods. Other potential research opportunities and challenges are highlighted and described, including prospective research initiatives for more closely examining alternative measures, format and content of prospective business ethics training initiatives. Recommendations for future research include: 1. A study should be conducted in the future to see if there are any changes in the various areas of business ethics training investigated in the present study. 2. A study should be conducted to expand the scope of the Aerospace Companys business ethics training to include other business sites to compare responses across the corporation. 3. A study should go beyond the specific areas of inquiry into business ethics training found in this study, for example, to explore the dynamics of the training construction from the companys training developers.
Business Ethics Training 4. A study should be conducted that collects responses from the same
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population post significant reduction in force to explore any differences in results due to layoffs. 5. A study should be conducted on an ethics training program where the main source of training is online based. 6. A study should be conducted to review recent surveys that poll a wide span of industries, company sizes, and business models concerning the presence of written ethics standards, ethics training, and the mechanisms for reporting unethical behavior. 7. A study should be conducted to examine differences in the ethics training programs of companies in the U.S. compared to those in other nations. Conclusions In recent years, a proliferation of well-publicized corporate scandals in which ethics and integrity has been clearly compromised in highly visible, wide-ranging business decisions. This has tarnished the reputation of the corporate world in general. As a result, projecting an image of integrity has become a more important concern for many corporations. To portray such an image, corporations are actively seeking new methods for both enhancing and publicizing ethics in their dealings with internal and external stakeholders, including customers, suppliers, partners, investors and others. To accomplish this, farsighted companies committed to ethics are appointing ethics officers, developing or refining codes of conduct, issuing ethics directives to all employees, and launching training programs to help ensure that a commitment to ethical conduct is taken
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seriously at all levels in their companies. Unfortunately, all these intentions for a sound ethics program does not always equate to effective training. The purpose of this study was to analyze a business ethics training program in the corporate environment and determine the level of influence of a specific companys program on employee behavior and morale. Research results from the literature review indicated that corporations must adopt an approach to ethics training and compliance that is applicable at all levels of the company to ensure a vertical top down approach in achieving a high level of ethics and compliance plan awareness. The need for strong upper management involvement was outlined in a study published by the National Business Ethics Center in 2007, which found that misconduct decreased when upper management promoted high standards of ethical conduct (Ethics Resource Center, 2007). Given that the majority of unethical behavior that has crippled big organizations has occurred in upper management positions, ethical compliance programs should adopt a vertical top down approach in implementing an ethical culture. Lower level management and employees are bound to take ethical compliance seriously if top level management does so. To operate effectively in this dynamic environment, business leaders today need to think and react with more overt awareness of the moral issues surrounding everyday business decisions. Not only can the training program and participants reap benefits by having managers conduct training, but perhaps the company and the manager-trainers, themselves, can benefit as well. Through training, companies can ensure that their managers are well informed about business ethics and their company ethics initiatives. Companies may also find that their managers develop a heightened sensitivity to ethics
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issues, which may lead to increased responsibility for fostering more responsible business practices at the departmental level (Hartman, 2004). Furthermore, training may not eliminate unethical behavior but it can help reduce it and equip employees who choose to follow ethical paths with decision making tools to use in compromising situations when other employees choose to behave unethically. The training process will also provide manager-trainers with an invaluable opportunity to gain insight into their employees concerns about business ethics. Managers will, therefore, be better prepared to implement strategies and solutions for alleviating these concerns. A final benefit would be increased communication on business ethics issues. Having managers openly discuss business ethics issues with employees is an effective way to demonstrate that an organizations culture is open to such discussions and that managers have an open-door policy with regard to business ethics. As the study results noted, employees are more apt to modify their behavior and morale if ethics is an everyday focus rather than a lengthy yearly session. Finally, there are many pro-active measures that companies can take to ensure that they hire employees with integrity. Some companies have even adopted a valuesbased hiring system to ensure that only those who share their values are given offers to join. Behavioral due diligence at the point of hire can spare much difficulty later on. Equally, a company can never completely ensure personal integrity of its employees. As the survey results and comments noted, by the time people enter their professional careers, their personal ethics have been largely shaped. However, their ethics can be reinforced by the corporate culture or, conversely, strained and ultimately shattered by a corporate culture that respects no limits. What a company can do is attempt to institute
Business Ethics Training uniformly high ethical standards among all managers and employees. Corporations no longer can put their ethical culture development behind financial performance, as this study found, ethics matter.
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Newman, G. (1997, May). The big business of business ethics. Across the Board, 34(5), 23-29. Nielsen, R. (1998). Can ethical character be stimulated and enabled? An action-learning approach to teaching and learning organizational ethics. Business Ethics Quarterly, 8(3), 581-604. NIST/SEMATECH. (2006). E-handbook of statistical methods. Retrieved October 12, 2008, from http://www.itl.nist.gov/div898/handbook Patten, M. (2005). Proposing empirical research. Los Angeles: Pyrczak Publishing. Ponemon, L. (1996). Key features of an effective ethics training program. Management Accounting, 78(4), 66. Rest, J. (1982, February). A psychologist looks at the teaching of ethics. Hastings Center Report, 12, 29-36. Robbins, S. (2003). Organizational Behavior. Upper Saddle River, NJ: Prentice-Hall. Rogers, A. (1996). Teaching adults (2nd ed). Buckingham, Great Britain: Open University Press. Rotter, J. (1954). Social Learning and Clinical Psychology. New Jersey: Prentice-Hall. Ruthford, C. (2006). Why measure ethical effectiveness. Ethics Resource Center. Retrieved December 19, 2006, from http://www.ethics.org Salopek, J. (1999, July). Ethics: Whys and wherefores. Training & Development, 53(7), 10. Saunders, N. (1990, October). Defense spending in the 1990s the effect of deeper cuts. Monthly Labor Review, 113(10). Schmitt, R. (2002, November 4). Companies add ethics training: Will it work? Wall Street Journal, p. B. 1. Trevino, L., & Nelson, K. (2006). Managing business ethics: Straight talk about how to do it right. Hoboken, NJ: John Wiley & Sons, Inc. Velasquez, M. (1998, Winter). A framework for thinking ethically. Issues in Ethics, 1(2). Verschoor, C. (2000). To talk about ethics, we must train on ethics. Strategic Finance, 81(10), 24-26.
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Verschoor, C. (2003). 10 steps to an effective ethics and compliance program. Strategic Finance, 85(6), 2-4. White, E. (2006, June 12). What Would You Do? Ethics Courses Get Context. Wall Street Journal, p. B. 3. White, L., & Lam, L. (2000). A proposed infrastructural model for the establishment of organizational ethical systems. Journal of Business Ethics, 28(1), 35-42.
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APPENDIX A Panel Expert Feedback to Survey Instrument Section 1: Personal Information: Suggest range for age, like 18 - 24 Add a question about Education: HS, some college, under grad, adv education
Section 2: Measuring Training Frequency and Duration Influences: Add a question about Instructor taught? Individual Training? On-line? Questions 5-8 are sort of confusing. Group the length and frequency like this:
Length: The length of the training sessions are appropriate. The training sessions are too long. The training sessions are too short. Frequency: Training sessions held once a year are sufficient to influence ethical behavior at work. Training sessions should be held less than once a year. Training sessions should be held more often than once a year. Section 3: Measuring Behavior Influences Reword Question 9 to this: Refrain from abusing my position of power Reword Question 12 to this: Follow all restrictions on use and protection of company-sensitive information I don't know what "engage in fair dealing" means Revise Question 15 to this "follow all company policies and procedures"? Add a question such as: Consult appropriate Company policies/procedures Add a question such as: Seek advice from subject matter experts, e.g., management
Section 4: Measuring Morale Influences Add to list: Peer accountability
Section 5: Measuring Ethical Decision making factors Add to list: Managers modeling ethical decision making
Business Ethics Training Suggest rewording Question 26 to:
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Please rank these motivating factors that influence your ethical decision-making at work. Rate each item uniquely and in order of significance, with 5 being the highest and 1 being the lowest.
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APPENDIX B Survey Instructions/Consent Agreement Dear Survey Participant: My name is Marlene Law Graham, I am a Doctoral student in Organizational Leadership at Pepperdine University, Graduate School of Education and Psychology, and am currently in the process of recruiting individuals for my study entitled, Business Ethics: An Analysis Of A Companys Training Program Influence On Employee Behavior And Morale. The professor supervising my work is Dr. Tom Penderghast. The objective of the study is to determine: What influence, if any, does a specific companys business ethics training have on the ethical culture of its employees? I am inviting individuals from the organization comprised of non-management and management personnel to participate in my study. Please understand that your participation in my study is strictly voluntary. The following is a description of what your study participation entails, the terms for participating in the study, and a discussion of your rights as a study participant. Please read this information carefully before deciding whether or not you wish to participate. If you should decide to participate in the study, you will be asked to respond to a survey with answers that are to the best of your knowledge". Your responses should reflect your opinion, not answers you may think others would want stated. It should take approximately 10 minutes to complete the survey. Please complete the survey alone in a single setting.
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The web based survey that will be utilized, will be encrypted for your protection and no personally or organizationally identifiable information is asked for in the survey. Data will not be available on any online system except through the password protected service offered by Survey Monkey (www.surveymonkey.com) or on personal computers as all data will be expunged after CD backups are created. CDs will be stored in 2 separate places. Only the author will have access to this data. The only foreseeable risk associated with participation in this study is the imposition on the participants time. The participant will not directly benefit from their study participation. Participation in this survey is voluntary and job status will not be affected by refusal to participate or to withdraw from the study. If you should decide to participate and find you are not interested in completing the survey in its entirety, you have the right to discontinue at any point without being questioned about your decision. You also do not have to answer any of the questions on the survey that you prefer not to answer--just leave such items blank. After 2 weeks, a reminder note will be sent to you to complete the survey. Since this note will go out to everyone, I apologize ahead of time for sending you these reminders if you have complied with the deadline. If the findings of the study are presented to professional audiences or published, no information that identifies you personally will be released. If you have any questions regarding the information that I have provided above, please do not hesitate to contact me at the address and phone number provided below. If you have questions about your rights as a research participant, contact: Dr. Stephanie Woo Chair, Graduate and Professional Schools Institutional Review Board
Business Ethics Training Pepperdine University Graduate School of Education & Psychology (310) 506-8555 swoo@pepperdine.edu
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By selecting agree on this electronic survey instrument, you are consenting to participate in the study. Thank you for taking the time to read this information, and I hope you decide to complete the survey. You are welcome to a brief summary of the study findings in about 1 year. If you decide you are interested in receiving the summary, please provide your email address on the last page of the survey. If you would like documentation linking your participation in the research (i.e. would like to sign an informed consent form), please contact the researcher.
Sincerely, Marlene Law Graham Doctoral Candidate Pepperdine University marlenelawgraham@yahoo.com (562) 225-2934 Dr. Thomas Penderghast Faculty Supervisor Pepperdine University tpenderg@pepperdine.edu
I have read and understand the consent agreement. I give my consent and will participate in the survey. Agree Disagree
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APPENDIX C Survey Instrument Section 1: Personal Information Directions: Please answer the following questions about yourself and opinions on ethics training at your company by selecting the appropriate choice or answering the following survey items.
1. Gender 2. Age 3. What is your position in the organization? *Management is defined by your HR job code 4. How long have you been employed with the company?
Female
Male
_____ (in years) Non-Management Management* _____ (in years)
Section 2: Measuring Training Frequency and Duration Influences Indicate the extent to which you believe the frequency and duration of ethics training influences your behavior at work. Yes 5. Increased training sessions would be beneficial. 6. The length of the training sessions is appropriate. 7. Training sessions held once a year are sufficient to influence ethical behavior at work. 8. Training sessions should increase from 2 hrs to 4 hrs. No
Business Ethics Training Section 3: Measuring Behavior Influences
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Indicate the extent to which you believe ethics training influenced each of the following measures in your behavior at work. Selecting the number 5 indicates a significant strong influence, selecting a 4 indicates a high influence, selecting a 3 indicates a moderate influence, selecting a 2 indicates some influence, while selecting a 1 means no influence. There is no right or wrong answer.
Ethics training at my company has influenced me to: Very much Influenced 5 4 9. Refrain from conflict of interest activities 10. Refrain from abusing my position of power 11. Avoid insider trading 12. Follow all restrictions on use and protection of company-sensitive information 13. Engage in fair dealing (Act in good faith and deal fairly) 14. Appropriately use company assets 15. Follow all company policies and procedures 16. Promptly report any unethical conduct No Influence 1
Section 4: Measuring Morale Influences Indicate the extent to which you believe ethics training has influenced each of the following measures of your morale at work. Selecting the number 5 indicates that you
Business Ethics Training strongly agree, selecting a 4 indicates that you agree, selecting a 3 means that you
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neither agree nor disagree, selecting a 2 indicates that you disagree, while selecting a 1 indicates that you strongly disagree. There are no right or wrong answers.
Ethics training at my company has influenced my morale at work regarding: Strongly Agree 5 4 17. Satisfaction with career growth potential 18. Fair treatment as an employee 19. Trust and respect of leadership 20. Working relationship with my supervisor 21. Balance of work and family life 22. Enjoyment of the work I do 23. Motivation to do the best I can 24. Pride in working for this company 25. Good working relationship with my peers Strongly Disagree 2 1
Section 5: Measuring Ethical Decision making factors 26. Please rank these motivating factors that influence your ethical decision making at work. Rank each item uniquely and in order of significance, with 5 being the highest and 1 being the lowest. __ Fear of legal repercussions __ Values learned from ethics training
Business Ethics Training __ Consistency with the companys ethical culture __ Personal Values __ Observation of Peer Actions
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Section 6: Additional Comments 27. Please provide any additional comments or suggestions as to how to improve the ethics training program.

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Pepperdine University Graduate School of Education and Psychology

UMI Number: 3355620

____________________________________ Thomas Penderghast, Ph.D., Chairperson

____________________________________ June Schmieder-Ramirez, Ph.D., Member

____________________________________ Robert Peter Ciesla, Ed.D., Member

____________________________________ Eric R. Hamilton, Ph.D. Associate Dean

____________________________________ Margaret J. Weber, Ph.D. Dean

Business Ethics Training

Copyright by Marlene Law Graham (2009) All Rights Reserved

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Had a significant effect on:

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Develops and Modifies

Determines Modifies Environmental Factors

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Figure 3. Frequency distribution of participants age

30% 30% 27%

20% 11% 10% 8%

4% 0% 0-5 6-10 11-15 16-20 21-25 26+

Figure 5. Frequency distribution of participants years of experience.

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Promptly report any unethical Non-Management conduct Management

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1.01 2.26 .727 1.25 1.56 .748 2.51 2.24 .683

.314 .026 .468 .210 .121 .455 .013 .026 .495

Good working relationship Non-Management with my peers Management

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18% 2% 13% 15%

Fear of legal repercussions

_ (in years) Non-Management Management* _ (in years)