Article Analysis

The Dissolution of Ethical Decision-Making in Organizations: A Comprehensive Review and Model

Ralph W. Jackson • Charles M. Wood •

James J. Zboja

Received: 16 March 2012 / Accepted: 16 August 2012 / Published online: 1 September 2012

� Springer Science+Business Media B.V. 2012

Abstract The purpose of this research is to present the

major factors that lead to ethical dissolution in an organi-

zation. Specifically, drawing from a wide spectrum of

sources, this study explores the impact of organizational,

individual, and contextual factors that converge to con-

tribute to ethical dissolution. Acknowledging that ethical

decisions are, in the final analysis, made by individuals,

this study presents a model of ethical dissolution that gives

insight into how a variety of elements coalesce to draw

individuals into decisions that result in the ethical undoing

of an otherwise healthy organization. ENRON, TYCO and

WorldCom did not happen in a vacuum. Nor can such

debacles be explained as simply one or two individuals

who were morally corrupt. The ethical breakdowns that

occurred in these companies happened over a period of

time, involved numerous individuals both inside and out-

side of the organization, and brought about the implosion

of viable companies. Seeking to extend the work of pre-

vious researchers, this study attempts to tie together a

disparate set of factors into a cohesive explanation of

ethical breakdowns in organizations.

Keywords Corporate ethics � Ethical breakdown � Ethical decision-making � Ethical development � Ethical dissolution � Organizational networks � Organizational leadership

Introduction

The examples of unethical and sometimes illegal corporate

behavior are by now both ubiquitous and legendary. While

in more recent times, examples such as ENRON, Tyco,

WorldCom, DynCorp, and Bernie Madoff have made

headlines and drawn attention to the subject, unethical

behavior is not strictly a contemporary phenomenon. In the

1980s, we were graphically shown the result of poor ethical

decision-making of upper management at Morton-Thiakol

and NASA as the space shuttle exploded on our televisions.

That disaster occurred in spite of efforts by a recently

deceased engineer who tried to stop the launch. That decade

also was witness to the Union Carbide disaster in Bhopal,

India. In the 1970s, we saw the decision-making behind the

Ford Pinto that resulted in deaths and injuries that could have

been avoided with a relatively minor investment. Suffice it

to say that unethical decisions have been part and parcel of

corporate life since corporations were first formed.

At the outset of any discussion of ethics, it is tempting to

take the position that ethics, in the final analysis, are the

purview of individuals. The argument is that it is not cor-

porations that are unethical but individuals, thus the dis-

cussion of ethics must focus on the individual rather than

the organization. We accede to the conclusion that ethical/

unethical decisions are made by individuals, but we would

point out that individuals do not operate in a vacuum. The

organizational culture and the context serve to shape or at

least influence the ethical decision-making process of the

individual. In addition, we are examining what brings

about bad ethical decision-making in individuals or groups

within organizations that had heretofore operated within

legal and ethical limits. Further, we suggest that the

breakdown in ethics is a process that takes place over time

and that occurs when certain elements are aligned.

R. W. Jackson (&) � C. M. Wood � J. J. Zboja Collins College of Business, University of Tulsa,

800 South Tucker Drive, Tulsa, OK 74104, USA

e-mail: [email protected]

123

J Bus Ethics (2013) 116:233–250

DOI 10.1007/s10551-012-1459-3

The purpose of this article is to examine the factors and

elements involved in the ethical meltdowns that seem so

common today. While one might reasonably ask whether

we need yet another article dealing with the ethical

implosions that dot the business landscape, there remains a

need to further examine the issue in hopes of developing a

theoretical grounding in ethical deterioration. Yadav

(2010) found a decline in the number of conceptual articles

published and argues that such articles play an important

role in scholarship. We would agree. While empiricism is

critical, it is equally necessary to, at times, step back and

coalesce the research into its logical connections. Absent

that, we simply have buckets of information that do not

relate well together and give only partial glimpses at

problems. So, we hope to not only review some of the

major work to date, but also to present a comprehensive

model of ethical dissolution that includes additional factors

that we think have an impact on ethical decision-making in

organizations. In addition, we present some propositions

that can guide future empirical study.

Factors in Ethical Dissolution

There are three major sets of factors that are related to the

dissolution of ethics in an organization. They are: Indi-

vidual Factors, Organizational Factors, and Contextual

Factors. By Individual Factors we mean those facets of the

person’s background that come together to form his or her

world view, value system and approach to living. Included

within Organizational Factors are the elements that impact

the operating environment of the organization. Contextual

Factors are the features of the situation that can exert

influence on the decision.

Our assumptions in this article are: ethical dissolution

takes place over time; the dissolution process involves a

group or groups of people within the organization; the

breach in ethics causes measurable harm to persons inside

and outside the organization; and that the harm caused is

sufficient enough to damage the reputation of the organi-

zation. We will consider the dissolution of ethical behavior

as occurring as the result of a set of decisions and actions

by individuals who are part of a group, and the group has

acted within the organization in a given context or set of

circumstances (Fig. 1).

Each of the following sections draws inspiration from

myriad theories in the literature. Taken in its entirety,

however, the model put forth by this research is inspired

through the integration of the Theory of Reasoned Action

(TRA) (Fishbein and Azjen 1975), and Milgram’s Agentic

Shift (1974). While not visually identical, our model adopts

many of the structural elements of the Theory of Reasoned

Action. First, our major categories of individual and

organizational factors serve relatively well as proxies for

the attitude and subjective norms elements of the TRA.

Unlike the TRA, however, we have also included

Individual Factors Organizational

Factors

Contextual Factors

Recognition of the Ethical Overtones of a Decision

Decision to Take an Unethical Action

Decision to Take an “Unethical” Action

Engaging in Unethical Activity

yes no

(feedback) (feedback)

Fig. 1 Basic model of ethical dissolution

234 R. W. Jackson et al.

123

contextual factors as a third major element in our model of

ethical dissolution. Second, following the TRA assumption

that humans are rational and can make systematic use of

available information, we have included the mediating

factors of ‘‘recognition of the ethical overtones of a deci-

sion’’ and ‘‘decision to take an unethical action’’ as proxies

for the intention step that precedes behavior in the TRA.

Finally, part of the TRA’s attitude component was an

individual’s evaluation of the outcome. We have accounted

for this factor with a feedback loop that recognizes that our

subsequent attitudes are affected by the consequences of

our actions. Ajzen (1991) added the variable perceived

behavioral control to his expanded version of the TRA

named the Theory of Planned Behavior. This factor

accounts for a lack of confidence or control that can keep

intentions from being realized as behavior. This element

serves as an appropriate segue to Milgram’s (1974) concept

of ‘‘agentic shift.’’ The underlying assumption of our

model is that the individual or group is making decisions

within the context of an organization. Specifically, when

operating within an organization, an individual can see

him/herself as somewhat of a pawn following orders.

Milgram (1974, p. 129) expressed it thusly, ‘‘when he (sic)

functions in an organizational mode, directions that come

from the higher level component are not assessed against

the internal standards of moral judgment.’’ While, we

contend that the individual still has a more heavily-

weighted impact in the decision-making process (as evi-

denced by our extensive treatment of the individual factor

in our model), this ‘‘erosion of agency’’ as Milgram termed

it, ultimately can result in an erosion of personal respon-

sibility (Card 2005).

Individual Factors

Certainly, ethical decision-making and the deterioration of

ethics within an organization is, in the final analysis, based

on the decisions and actions of individuals. Having said

that, Iyer (2006) suggests that while individuals make

decisions, corporations possess what he calls the ‘‘internal

corporate decision-making structure’’ (CID) which repre-

sents an established approach to making decisions within

the organization and which impacts individuals’ approach

to decision-making within that corporation. Rest et al.

(1986), on the other hand, posit that the ethical decision-

making process rests in the individual. They suggest that a

person who is ‘‘behaving morally’’ has performed at least

four psychological processes: (1) The person must know

the possible courses of action, whom are the affected

parties and the impact on each; (2) The person must be able

to determine which course is morally correct; (3) The

person must give priority to moral values over personal

interests; and (4) The person must have the strength and

skill to follow through. We propose that the process of

dissolution gains momentum when one or more of the

above processes breaks down. The confluence of a number

of individual factors provides the platform on which these

processes function. We will now consider several individ-

ual factors and their impact on the dissolution of ethical

decision-making.

Level of Moral Development

That the level of ethical or moral development plays an

important role in ethical decision-making has been well-

established by a number of researchers (e.g., Ferrell and

Gresham 1985; Trevino 1986; Bommer et al. 1987; Ferrell

et al. 1989; Jones and Ryan 1997). Important among the

earlier work on cognitive development was the work of

Piaget. Beginning in 1929, he published a series of books

and articles outlining the process of cognitive and of moral

development (1929, 1947, 1948, 1952, 1960). Piaget pro-

posed that people progress through four stages of ethical

development as they age. Each of these stages represents

not only the development of cognitive skills but also the

development of moral reasoning.

Perhaps the most popular model of cognitive moral

development (CMD) was proffered by Lawrence Kohlberg.

Kohlberg (1984) proposed that individuals go through six

stages of moral development, the progression of which has

been found to be positively correlated with age and edu-

cational level (Rest and Deemer 1986). These six stages

show a progression of the person’s moral development

from what he calls the ‘‘Premoral’’ level in which the

person’s decision-making is driven almost exclusively by

external rules and focuses on avoiding punishment. In the

third and fourth stages, which Kohlberg refers to as

‘‘Morality of Conventional Role Conformity,’’ the person

refers to standards outside the immediate family and turns

to a wider frame of reference. At this level, the person is

still using an external frame of reference but is doing so on

a more cognitively complex level. The final two stages in

what Kohlberg refers to as the ‘‘Morality of Self-Accepted

Moral Principles’’ represent the transition from an external

to an internal frame of reference. The person who reaches

stage six has developed to the point that his or her moral

compass is internal, and he or she generally makes ethical

determinations based on a well-developed, internal ethical

framework.

Though there are criticisms of his model (see Kohlberg

et al. 1983), in general there is widespread support for a stage

theory of Kohlberg’s conception of Cognitive Moral

Development (CMD). Applying Kohlberg’s model, there is

a good case to be made that if a person’s CMD is truncated at

the fourth level, Authority-Maintaining Morality, that

A Comprehensive Review and Model 235

123

person does not possess a well-defined internal moral

compass and must rely on information external to him or

herself to determine the morality or ethicality of a decision/

action. Such a person sublimates his or her moral choice to

another, and depends on the ethical grounding of the other.

The presence of many such individuals, coupled with one or

a few bad seeds, could certainly erode the ethical environ-

ment. On the other hand, the person who has developed to

stage six, Morality of Individual Principles of Conscience,

will make moral/ethical decisions predicated on a well-

developed, internalized standard. That does not mean that

such an individual will not receive input from others in

making an ethical decision, but that the person will evaluate

such input through his or her own ethical filters. In addition,

it is not being proposed that a person at stage six of devel-

opment will always make the ‘‘right’’ ethical choice. That

person might employ an internalized standard not in line

with that of society, or he or she might misapply a societal

standard in arriving at a decision. The contextual aspect of

the moral reasoning of managers in a business setting was

explored by Trevino (1986). She proposed, based on cultural

anthropology, that managers tend to use a lower level of

moral reasoning for business decisions than they do for the

other domains of life (e.g., family). This divergence in

contextual moral reasoning coincides with Wolin’s (1960)

interpretation of Machiavelli’s two levels of morality: public

and private; when the two clash, Machiavelli would suggest

the most practical solution. This contextual aspect adds

complexity to the following proposition, however, the gen-

eral argument stands.

Proposition 1 Organizations with a leadership com-

prised of multiple individuals who have truncated cognitive

moral development are at greater risk of ethical

dissolution.

Formal Education in Ethics

A number of studies have found a strong, positive con-

nection between formal education in ethics and subsequent

ethical behavior (Bebeau and Brabeck 1987; Rest 1984,

1986; Ferrell and Gresham 1985; Hosmer 1988; Harris

2010; Bay and Greenberg 2001; Clarkeburn et al. 2003).

Goolsby and Hunt (1992) state that Cognitive Moral

Development education programs give students a funda-

mental understanding necessary for dealing with ethically

troublesome situations. However, some have found a ten-

uous connection in formal ethics training/education and

ethical behavior (Martin 1981–1982; Arlow and Ulrich

1985). One possible explanation for this tenuous relation-

ship may lie partly in how we educate students. For

instance, Petrof et al. (1982) found that business education

fosters an egocentric rather than a society-centric set of

values. More recently, Brown et al. (2010) found business

students to be more self-interested than students in other

fields. Moreover, the same study cited finance students as

the least empathetic and most narcissistic, and tend to carry

these character traits into the business world. Hollon and

Ulrich (1979) suggested that the emphasis on analytical

methods in business may be at the expense of training in

moral deliberation. Covey (1989) suggests that business

school faculty members who emphasize profits without

regard to consequences actually reinforce unethical

behavior. Baxter and Rarick (1987) interject that the

fragmentation of education in universities does not foster

moral sensitivity and growth, but rather our education

system fosters narrowness of perception and parochialism,

which leads to ethical insensitivity. Increasingly, it seems,

we hear the call for re-thinking business education so as to

increase the awareness of the ethical implications of busi-

ness decisions (Gentile 2009; Holland 2009). Initiatives

such as those put on by the Aspen Institute Business and

Society Program and GivingVoiceToValues.org not only

highlight the need for more in-depth ethics education but

also provide effective approaches for imparting ethics.

Education plays a role in an individual’s ethical devel-

opment. First, in terms of curricular issues, some suggest

that we need more emphasis on critical thinking skills and

analytical skills related to examining an issue from a wider

and richer background rather than simply focusing on

technical skills (Winter et al. 1983). Second, faculty

members not only impart information/knowledge but also

serve as role models, and those who are seen by students as

purveyors of integrity and honesty do a superior job of

imparting ethics than to those who dogmatically preach

their ethical ideals (Siegel 1973).

Proposition 2 The better educated in ethics the organi-

zation’s leadership team is, the less likely it will be for

ethical dissolution to occur.

Current Ethical Value System (CEVS)

That one’s ethical value system is dynamic and evolu-

tionary is a well-accepted premise (Piaget 1948; Rest 1979;

Gibbs and Widaman 1982; Kohlberg 1984; Goolsby and

Hunt 1992; Thoma and Rest 1999; Fritzsche and Oz 2007).

An individual’s current ethical value system (CEVS) is the

framework that guides the person’s ethical choices and

behavior. It consists of the approaches or theories

employed in ethical decision-making as well as the cen-

trality of ethics in the person’s mindset. The CEVS is the

product of socialization, and includes components of past

or earlier viewpoints, a current set of ideas and ideals, and

is somewhat forward looking insofar as the ‘‘self’’ contains

elements of projected future selves.

236 R. W. Jackson et al.

123

The person’s CEVS affects his or her approach to ethical

decision-making. Whether one subscribes primarily to the

Deontological School or to the Teleological School of

thought shapes the way in which the person evaluates a

given situation (Hunt and Vitell 1986; Ferrell et al. 1989).

That is, the ethical school of thought employed by the

person provides the criteria for making a decision. The

deontological approach holds that the ethicality of a given

decision is predicated on whether the action is ‘‘right.’’ The

popular cliché that characterizes the deontological

approach is, ‘‘It doesn’t matter whether you win or lose, it’s

how you play the game.’’ The teleological approach rep-

resents a diametrically opposed worldview. Using the tel-

eological approach, a person is only concerned about the

results of an action. An action is ‘‘good’’ if it helps achieve

the desired results. The means to achieve a satisfactory

result are irrelevant in terms of the ethicality issue. The

popular cliché that characterizes the teleological approach

is, ‘‘The ends justify the means.’’ An ethical theory gen-

erally categorized as part of the Teleological School is

Machiavellianism. Dissolution of ethical decision-making

can occur when individuals espouse an extreme and/or

misguided version of Machiavellianism, widening the gap

between private and public ethical norms when, in their

mind, the circumstances warrant. That is, they would deny

the relevance of ethics in their decision-making process;

however, ‘‘Machiavelli would not have supported a general

maxim that the end justifies the means. He simply believed

that our morality was dangerously dogmatic, impractical

and irresponsible’’ (Harris 2010, p. 134).

The rightness of a given decision is predicated on which

ethical theory one employs. For instance, for the person

who employs Ethical Egoism (a Teleological Theory), the

rightness of a decision is based on whether it furthers the

good of the individual. So, if the Ethical Egoist believes it

is in his or her personal best interest to lie to a customer,

then he or she deems that to be the right course of action. A

person who subscribes to the Kantian Approach to ethics

(in the Deontological School), will likely reject lying as

unacceptable because it would imply that doing so should

be the universal standard.

While a person’s CEVS in general provides the basis for

ethical decisions, in some cases, the person engages in

fragmentation—that is, separating different elements of

one’s life so as to be able to emotionally live with taking

action that produces harm (Opotow 1990). When this

happens, it allows the person to ‘‘live with him/herself.’’

Fragmentation means that the person might separate his or

her religious life from everyday ethical decisions because

of the tenets of the religion and his perceived necessity of

engaging in behavior that is in conflict. So, the person has

his or her ‘‘faith self’’ and his or her ‘‘professional self.’’

The ability and willingness to do this is part and parcel of

the person’s gestalt. Similarly, Stevens et al. (2012)

explained the process of moral disengagement (Bandura

1999) in the positive relationship between psychopathy and

unethical decision-making. This fragmentation, if wide-

spread in an organization, can help to create an amoral or

even immoral business environment where everyday

human morals do not apply; certainly adding to the dis-

solution of ethical decision-making.

Proposition 3 The collective CEVS of the leadership of

an organization has a direct impact on whether that

organization falls prey to ethical dissolution.

Degree of Ethical Sensitivity

Ethical sensitivity is the degree to which the person or

group is aware of the ethical implications of an issue, the

centrality of ethics in the person’s decision-making, and the

likelihood of taking those ethical implications into con-

sideration when making decisions. Clarkeburn (2002,

p. 450) explains ethical sensitivity thusly, ‘‘in measuring

ethical sensitivity we need to insure that we measure the

identification of ethical issues, not the ability to recognize

or prefer ethical facts among other facts, etc.’’ Hunt and

Vitell (1986, p. 781) state, ‘‘When placed in a decision-

making situation having an ethical component, some peo-

ple never recognize that there is an ethical issue involved at

all.’’ They surmise that ethical sensitivity is a personal

characteristic that enables people to recognize the existence

of an ethical issue, and this is a precursor to the ethical

decision-making process. Bebeau et al. (1985) in their

study of dental students found that: (1) ethical sensitivity

and cognitive moral development could, but need not, be

correlated with each other; and (2) ethical sensitivity can

be learned through the socialization process. Clarkeburn

(2002) points out that a person can be skilled in interpreting

the ethical issues in a situation but unskilled at working out

a balanced view of a moral solution and vice versa.

The decision-maker’s degree of ethical sensitivity is key

to our model, since it plays a vital role in whether an

individual recognizes the ethical component of a given

decision. Sparks and Hunt (1998) suggest that recognition

of an ethical issue is one major factor, but it is only the

starting point of ethical sensitivity, and is not sufficient to

encompass the concept. A person’s degree of involvement

and motivation to consider ethical issues are also compo-

nents. Their findings also found ethical sensitivity to be

positively related to empathy and, perhaps most important,

that it can be learned. Therefore, we can conclude from

their study that ethical sensitivity is affected by socializa-

tion, which would suggest that exposure to the need to

bring ethical values to bear on decisions is something that

can be taught, or at least bolstered through a training

A Comprehensive Review and Model 237

123

process. Interestingly, however, their results also found

ethical sensitivity to be negatively related to formal train-

ing in ethics. The implications of this finding point to the

importance of the everyday operating environment, above

and beyond training programs. That is, informal mentor-

ships and leadership by example may be better suited than

formal training programs to set the ethical tone in

organizations.

Also related to the concept of ethical sensitivity is the

concept of the universe of moral concern—the group or

groups of people for whom an individual feels a moral/

ethical responsibility (Knight 2000–2002). Susan Opotow

(1990) examined the concept of ethical inclusion/exclu-

sion, which is related to the universe of moral concern.

Ethical inclusion/exclusion is the process of either includ-

ing or excluding certain individuals within one’s universe

of moral concern. She proposes that the process of moral

inclusion/exclusion is borne out of moral flexibility, which

she points out can be both good and bad. Moral exclusion is

a process that requires a decided lack of empathy—a

characteristic that is positively related to ethical sensitivity.

Bandura (1990) also discusses the process of ethical

exclusion. People attempt to obscure personal responsi-

bility by diffusing responsibility—sharing the culpability

through various mechanisms. Under conditions of dis-

placed responsibility, people view their actions as spring-

ing from the dictates of authorities rather than from their

own personal responsibility, quite similar to Milgram’s

aforementioned agentic shift. They also disregard or

downplay consequences of their actions, and will blame

and/or dehumanize the victim of their actions.

Ultimately, the recognition of an ethical issue is the first

step in making ethical decisions. If this step in the process is

skipped, many unethical choices may be made within an

organization with virtually no awareness of their commission.

Proposition 4 The relative absence of ethical sensitivity

in the decision-making of organizational leadership will

tend to lead to ethical dissolution in the organization.

Self-Concept

That self-concept is a major driver in human behavior has

long been well established. According to Pride and Ferrell

(2009, pp. 194–195), ‘‘self-concept (sometimes called self-

image) is a person’s view or perception of himself or

herself. Individuals develop and alter their self-concepts

based on an interaction of psychological and social

dimensions.’’ Marcus and Narius (1986) expand on this by

stating that there is not a single self or a stand alone

authentic self. They propose that self, rather than having

stasis, is constantly in a state of flux affected by the context

or situation. Being able to adapt is necessary to continue

one’s identity over time. Dunning (2007a) supports this

view and posits the concept that much of individual

behavior seeks for consistency of self-image or what he

calls belief harmonization, described as a process of

arranging and revising one’s needs, beliefs, and personal

preferences into a cohesive cognitive network that miti-

gates against cognitive dissonance. Carver and Scheier

(1998) posit that the operant phase of self-regulation refers

to any sort of action that seeks to reduce (or, in the case of

negative standards, increase) discrepancies between a

perceived aspect of self and some perceived external

standard. Kruger et al. (2007) refer to that standard as

sacrosanct beliefs and posit these are the core set of beliefs

about oneself that an individual will seek to support.

Dunning (2007a) presents three elements that are part of

this process of regulating behavior related to self-concept.

They are: self signaling—making choices and taking

actions to support the self concept; endowment effect—the

tendency to assign more importance to an object once a

person owns it; and affirmation effect—taking an action to

validate his or her self-image. Dunning (2007b) proposes

that the strength of the self-image has an impact on the

actions one takes to support that self-image. If one has a

strong self-image, his/her actions will be in accordance

with that, but if one has a weak self-image, one is likely to

manufacture actions that support the self-image one hopes

to validate. Jackson et al. (2006) provide a generally rep-

resentative description of the four elements: Perceived

Self—who the person views himself to be; Looking-Glass

Self—who the person thinks others view him; Real Self—

who the person actually is; and Ideal Self—who the person

would like to be. Of these four, the first three have to do

with where the person is at a given point in time. The

fourth element, the Ideal Self is related to where a person

hopes to be, and thus is really a future self.

Self concept theory is related to the concept of narcis-

sism. Narcissism has been described as ‘‘a disturbance of

the self that arises from usually pervasive and significant

parental failings to provide a loving, accepting and secure

context for development’’ (Godkin and Allcorn 2011,

p. 560). The clinical definition of narcissism refers to ‘‘a

pervasive pattern of grandiosity (in fantasy or behavior),

need for admiration, and lack of empathy’’ (First and

Tasman 2004, p. 1258). While a healthy amount of nar-

cissism is expected, almost essential, in our business

leaders, extreme narcissism has been linked to unethical

behavior (Amernic and Craig 2010). Specifically, the

extreme narcissist will behave unethically to achieve the

spoils of their business performance such as profit or rep-

utation (Chen 2010). However, in so doing, they exhibit a

false self, since their narcissism requires the admiration of

their peers that comes with the perception of high ethical

and moral standards and behavior.

238 R. W. Jackson et al.

123

In discussing self-image, we generally focus on ele-

ments related to a positive self-image, yet there is an aspect

of self-image that is concerned with avoiding a negative

self-image. Quinlan et al. (2006) examined self-concept

theory in light of the theory of planned behavior. They

found that individuals actively engage in behavior that

relates to some future self. The process involves an

assessment of how much one values a potential/future self

and what is the likelihood that the person might achieve

that potential self. That process might result in a person’s

taking a negative action if it is perceived as leading to a

projected negative image. That is, if the person believes

that he or she will actually become a person who manifests

some negative self (i.e., is destined to manifest a ‘‘bad

self’’) then the person will actually engage in negative

(unethical) behavior—in effect, the person is caught up in a

self-fulfilling prophecy.

Markus and Narius (1986) predicted that higher expec-

tations of a negative (feared) self induce avoidance moti-

vation, thereby reducing the motivation to engage in

current risk activity. However, the findings of their study

revealed that those who thought they would develop the

characteristics of a binge drinker were more likely to

engage in the heavy drinking behavior. They suggest that

self-concept provides interpretive frameworks for making

sense of past behavior; provides a context for understand-

ing current behavior; and help the person adapt to his or her

environment.

Proposition 5 The individual self-concept of the mem-

bers of the leadership team of an organization affect each

individual’s approach to ethical decision-making, which in

turn, affects decision-making by the group. If a sufficient

number of employees view themselves as ‘‘players’’ who

are adept at successfully skirting the rules, the organiza-

tion will tend to slide toward ethical dissolution.

Self-Efficacy Mechanisms

Self-efficacy refers to the individual’s personal sense of

empowerment to the extent to which he or she can take

actions that affect outcomes relative to his or her goals.

Trevino (1986) proposed that persons high on ego strength

(the self-regulating skills of the person) are expected to

resist impulses and follow their own convictions. They are

expected to be more consistent in the moral cognition/

moral action relationship. She also posited that those with

an internal locus of control will exhibit more consistency

between moral judgment and moral action than those

whose locus is external.

Self-control is one element of self-efficacy. By self-

control, we mean the capacity of the person to make

decisions about and regulate his or her own behavior by

relying on internal mechanisms rather than relying on

external control. Muraven et al. (1998) found that when a

situation demands two consecutive acts of self-control,

performance on the second act is frequently impaired. This

is found even if quite different spheres of self-control are

involved. The implication is that widely different forms of

self-control draw on a common internal but limited

resource (they call this ‘‘self-control strength’’). According

to Muraven and Baumeister (2000) self-control operates

like a muscle or strength—controlling one’s own behavior

requires the expenditure of some inner, limited resource

that is depleted afterward. Further, they propose that

simultaneous attempts at self-control suffer relative to

individual attempts. Because self-control strength is typi-

cally regained more slowly than it is used, continuous self-

control efforts suffer over time. They also suggest that self-

control strength can, like a muscle, improve with repeated

practice and rest. Our generally overworked culture, where

individuals wear lack of sleep and working long hours like

a badge of honor, can certainly share in the blame for the

dissolution of ethics.

Seligman (1975) presented the Theory of Learned

Helplessness. According to Seligman, a person learns from

exposure to an uncontrollable situation that outcomes are

not generally contingent on his or her own actions. Expo-

sure to uncontrollable punishments (such as uncontrollable

stresses) or even unsuccessful efforts to alter one’s mood

might result in the learning of non-contingency between

actions and the outcome, so that people learn to not exert

self-control. For a person engaged in learned helplessness,

his or her locus of control has shifted in some measure to

the external. In effect, when one engages in learned help-

lessness, his or her personal self-efficacy decreases. Taken

together, these outcomes could lead to a weakened internal

moral compass.

Jones and Ryan (1997) introduce the impact of Moral

Approbation—the desire for moral approval from oneself

or others. Individuals are moral actors within organizations

whose ethicality is affected by others in the organization.

Their argument is grounded in three observations: (1) the

vast majority of adults are at Levels 3 or 4 of Kohlberg’s

(1971) moral development scheme; (2) human beings are

limited in their capacity to process information and there-

fore rely heavily on decision-making heuristics to simplify

the process; and (3) organizations can be ‘‘designed’’ for

ethical behavior through organizational goals, communi-

cated values, and adopted structures and strategies. It

seems reasonable that if a person seeks social approval

from a group or organization which upholds a high ethical

standard, then he or she will likewise uphold that standard

and vice versa.

Individuals who have been successful in the past will

tend to continue in the behavior which brought them

A Comprehensive Review and Model 239

123

success—success is reinforcing. This certainly applies

when it comes to ethical dissolution. Speaking of the effect

of success and/or failure, Dunning (2007a) suggests that

past successes lead people to positively reassess their

feelings of competence, while failures lead people to

negatively reassess their feelings of competence and like-

lihood of future success. He refers to this as ‘‘belief har-

monization.’’ Assuming success was achieved ethically,

this success will increase self-efficacy in a healthy manner

and decrease the likelihood of ethical dissolution in the

organization.

Proposition 6 An organization with a leadership team

with a high level of self-efficacy is less likely to fall prey to

ethical dissolution brought on by groupthink than will

organizations with employees with relatively low levels of

self-efficacy.

Short- Versus Long-Term Orientation

Whether an individual or an organization utilizes a short-

or long-term approach to decision-making has a major

impact on the decisions made. Bommer et al. (1987) argue

that where short-term goals for profit and performance

predominate, making the ethical choice might be important

so long as it does not interfere with the primary goal of

short-term profit. Organizations taking the long-term view

tend to make decisions which, while often being relatively

costly in the near term, will yield payoffs in the long term

that more than compensate for short-term losses. Individ-

uals who take the long-term view buy into the concept of

delayed gratification, and believe that sacrifices now will

pay dividends later. Bearden et al. (2006) suggest that a

long-term orientation affects individual ethical decision-

making because unethical behavior violates traditional

values and can have a negative impact on future relation-

ships. Nevins et al. (2007) proposed that work ethic and

conservatism are antecedents of a long-term orientation

(LTO). How people deal with time horizons is one of the

most salient values they develop. Some opt for more

immediate satisfaction while others are into delayed grat-

ification. According to Nevins and her co-authors, a long-

term orientation (LTO) is the most widely cited framework

for how people value time. In their research they found that

time-orientation is connected to ethical value systems.

Specifically, they assert that individuals with a strong work

ethic, who prize planning and tradition, and who were

characterized by conservatism tend to possess higher levels

of ethical values. Alternately, organizations with an inor-

dinate number of individuals with a short-term orientation

would seemingly be more vulnerable to ethical dissolution.

Proposition 7 Organizations whose leadership team

generally employs a long-term orientation are less likely to

fall prey to ethical dissolution than those whose orientation

is short term.

Risk-Taking Propensity

One element of ethical dissolution that has not received

much attention in the ethics literature is the issue of the risk-

taking propensity (conversely, risk aversion) of a person

involved in ethical decision-making. Given that unethical

decisions carry some risk, it is curious that this has not been

more fully examined. The research on risk-taking propensity

has uncovered some interesting and sometimes conflicting

findings. For instance, Fritzsche and Becker (1983) found

that managers appeared to respond in a more ethical manner

as the dilemma they faced became more risky. Similarly,

among the findings of Smith et al. (1999) was the fact that

MBA students appeared to make more ethical decisions

when the dilemma they faced became increasingly risky.

However, Quinlan et al. (2006) found that risk-taking was

ameliorated by self-image, and can serve to facilitate either

ethical or unethical behavior related to the self-image of the

individual. What they suggest is that the connection between

ethical behavior and risk-taking is not a simple one. It is

impacted by the current self-image of a person as well as the

projected self-image (what they expect they will be at some

future time). If the risky decision validates a self-image of

being a ‘‘daring’’ person and is not checked by an image of

being a ‘‘good’’ person, then there may well be a greater

tendency to engage in unethical behavior. An additional

factor that warrants discussion here is the corporate psy-

chopath. Defined by Boddy (2005) as a psychopath who

works and operates in the organization. In their comparison

of excessive narcissism to psychopathy, Andrews and Fur-

niss (2009) refer to unethical business leaders as superfi-

cially charming, grandiose, deceitful, remorseless, void of

empathy and, most relevant to the discussion here, irre-

sponsible and impulsive (implying a high degree of risk-

taking). Despite the complexity of the issue and its inherent

mixed findings, we contend that an excessive number of

risk-taking employees could contribute to ethical

dissolution.

Proposition 8 Organizations with leaders who are risk-

takers will be more likely to experience ethical dissolution

than those organizations whose leadership team is rela-

tively more risk averse.

Organizational Factors

One of the primary elements of the organization is its

culture. Culture is comprised of three separate, but inex-

tricably-related components: Societal Culture; Industry

240 R. W. Jackson et al.

123

Culture; and Organizational Culture. As mentioned previ-

ously, culture as viewed here is not a monolith. While the

culture of the organization is critical, it does not arise in a

vacuum. It is derived from the societal culture as well as

the culture of the industry in which it operates. In addition,

while the culture of the organization affects each individual

member of the organization, individual members of the

organization collectively have an impact on that organi-

zation’s culture. And, not to put too fine a point on it, the

individual who is working outside of his or her native

culture is simultaneously affected by the home country

culture as well as his or her host country culture.

Societal Culture

It is almost axiomatic that societal standards shape the

ethical standards of both individuals and organizations

operating within that society (Brenner and Molander 1977;

Schweitzer and Gibson 2008; Jordan 2009). Victor and

Cullen (1988) describe social norms as one of the ante-

cedents of the ethical climate in a corporation, and suggest

that organizational cultures reflect the myths and rules of

the society in which they operate. Ferrell and Gresham

(1985) include the Social and Cultural Environment as the

initial input to the ethical decision-making process in that

social and cultural environment helps determine whether a

given issue is an ethical or moral problem.

Rest et al. (1986) point out that societal standards evolve

over time and in such a way that what is considered the

standard in one society will not necessarily be accepted in

another society. Kathleen Getz (1991) points out that not

only are international codes of conduct different they are

not equivalent. She suggests that multinational enterprises

are morally bound to recognize the differences in codes of

conduct around the globe. Dunfee et al. (1999) propose that

ethical conduct flows from a social contract based on an

amalgam of an understood, societal ethical standard that

guides the norms of action of one person toward another.

Proposition 9 Societal culture impacts both the culture

of the industry and the culture of the organization and its

employees. A societal culture that accepts less than ethical

behavior will either directly or indirectly contribute to

ethical dissolution in the organization.

Industry Culture

While industries generally consist of independent organi-

zations, these organizations interact in such a way that they

form a pattern of behavior and set of operating norms.

Industry culture and practices have an impact on the cor-

poration’s ethics as well as on the ethics of individuals

(Brenner and Molander 1977). Hunt and Vitell (1986)

include in their model the elements: Cultural Environment;

Industry Environment; and Organizational Environment.

These elements along with Personal Experience provide

the basis for the person’s perceiving an ethical problem;

recognizing consequences of it; and determining alterna-

tive solutions to that problem. Naturally, it follows that an

organization’s level of ethical decision- making would be

related to not only the overall ethical climate of society but

also the industry in which it operates.

Proposition 10 An industry whose culture does not

encourage ethical behavior will contribute to the ethical

dissolution in organizations comprising that industry.

Organizational Culture

It is widely accepted that organizational culture shapes the

ethical climate within an organization. Hunt et al. (1989) as

well as Ferrell et al. (1989) suggest that corporate values

that are a part of the corporate culture are ubiquitous within

the firm and have an impact on the corporate commitment

of employees. Trevino (1986) suggests that the ethical

culture provides a social context in which ethical decisions

are made and this context either supports ethical behavior

or mitigates against it. Mascarenhas (1995) points out that

the culture of the organization establishes an ethical

framework and creates an ethical setting in which decisions

are made.

Gorman et al. (2008) concluded that individuals have

greater recall for normative social information than for

non-normative information. The importance and hence

compliance with social norms has evolutionary roots and is

‘‘hard-wired’’ into the human psyche. Thus, individuals

will seek out information on proper behavior in a given

setting. Organizational culture provides a large part of that

information. Andreoli and Lefkowitz (2009) argue that an

organization’s ethical climate is as critical in shaping

behavior of those in the corporation as is a corporate code

of ethics. Victor and Cullen (1988) point out that the eth-

ical climate in an organization arises from the history of the

organization and of the individuals who are part of the

organization. The climate is enhanced by the homogeneity-

producing processes of selection, socialization, and attri-

tion of those who comprise the organization. Lynn and

Oldenquist (1986) state that the corporate ethical culture

plays a role in the social cohesion of individuals within the

organization.

Paine (1994) argues that ethics is an essential element in

management. The efficacy of an ethics program is directly

related to management involvement and commitment. The

problem, however, is that many managers in seeking to

establish an ethical standard in the corporation have

developed a compliance mentality. That is, rather than

A Comprehensive Review and Model 241

123

seeing good ethics as a pervasive part of the organization,

many managers see it as something that has to be done to

satisfy certain outside entities, and as a result establish an

ethics program based on putting checks in the right boxes.

Organizations that do not have a well-defined, heavily

engrained strong standard of ethics are, in effect, leading

their people to engage in unethical behavior. Elci and

Alpkan (2009) pick up on this theme by pointing out the

critical role of upper management in creating an ethical

climate, and they suggest that the ethical climate has an

impact on employee satisfaction.

The presence of flawed leaders can greatly undermine

the ethical climate of an organization. For instance, Godkin

and Allcorn (2011, p. 560) propose that ‘‘organizational

identity shifts in response to destructive narcissistic exer-

cise of power’’ and that ‘‘unethical behavior becomes

institutionalized’’ as a result. Likewise, Boddy et al. (2010)

propose that corporate psychopaths negatively impact

organizations internally as well as externally. Perhaps some

solace can be taken in the finding that ‘‘followers do seem

to distinguish between authentic and inauthentic displays

of ethical leadership’’ and that less authentic leadership (in

this case in the form of Machiavellian leaders) has been

found to make leadership less impactful for subordinates

(Hartog and Belschak 2012, p. 45). In other words, when

subordinates sense that a leader is inauthentic, they are less

likely to use that leader as a role model for their behavior.

Victor and Cullen (1988) developed a model of ethical

climate types and suggested that there are three types of

ethical climate: (1) Individual—the employee is the refer-

ent for ethical decision-making; (2) Local/Organiza-

tional—ethical decisions rests in the organizational

standard; and (3) Cosmopolitan—these boundary spanners

refer to the external marketplace of ideas. Several authors

argue that the ethical values promoted within an organi-

zation have a direct impact on employee morale, commit-

ment, and ethical decision-making by employees (Ferrell

and Skinner 1988; Hunt et al. 1989; Baucus and Beck-

Dudley 2005).

Proposition 11 An organization whose culture accepts

less than ethical behavior on the part of its management

team will be more subject to ethical dissolution than those

organizations that value a high standard of ethics.

Approach to Decision-Making

Another aspect of corporate culture that has an impact on

ethical decision-making within an organization has to do

with the value placed on making decisions quickly. There

is empirical support for the notion that speedy decisions are

related to strong performance, especially in a volatile

competitive environment (Bourgeois and Eisenhardt 1988;

Eisenhardt 1989; Judge and Miller 1991; Hough and Og-

ilvie 2005). While these studies factor in issues like the

context and personality characteristics of decision makers

in organizations, they link the speed of decision-making to

the effectiveness of decision-makers. While this, in and of

itself, does not have any real impact on ethics, the speedier

the decision, the less time there is for considering the

implications and possible unintended consequences of a

given course of action. Thus, awareness of the ethical

overtones of a decision may simply not be given time to

come into focus. Mintzberg (1978, p. 948), although not

addressing the issue of ethics per se, does suggest that the

emphasis on speedy decisions may result in harmful deci-

sions, ‘‘the aggressive, proactive strategy maker—the hero

of the literature on entrepreneurship—can under some

conditions, do more harm than the hesitant, reactive one.’’

Perhaps not coincidentally, it has been argued that the

corporate psychopath has often been promoted quickly to

leadership based at least in part on his/her ‘‘cool deci-

siveness’’ (Boddy 2011, p. 257).

Proposition 12 A decision-making approach that values

quick decision-making which does not allow adequate time

for consideration of ethical implications of actions will be

more likely to lead to ethical dissolution than a decision-

making approach that allows time for examination of the

ethical implications of a decision.

Organizational Structure

The way an organization is structured has an impact on the

ethicality of the decisions made by members of the orga-

nization (Victor and Cullen 1988; Baucus and Beck-Dud-

ley 2005). In the words of Stephens and Lewin (1992, p. 2),

‘‘Perhaps unethical choices in organizations are often made

not because of human evil or unethicality, but because

ethical decision-making is cognitively complex and

strongly affected by organizational design.’’ When we

speak of organizational structure, we are talking of the

arrangement of individuals and groups as well as the

assignment of tasks, and the patterns of communication.

The structure of the organization can impact its level of

coordination and quality of communication (Blau and Scott

1962).

Robertson and Anderson (1993) suggest that organiza-

tional design features impact ethical behavior. In their

study of sales forces, they conclude that more bureau-

cratically-controlled salespeople advocated more ethical

behavior than those subject to less direct supervision, and

that salespeople who perceived a more competitive envi-

ronment advocated engaging in less ethical behavior.

Weber (1995) examined how the organization of tasks and

function affected the dynamics of ethical decision-making

242 R. W. Jackson et al.

123

within an organization. Within organizations, departments

have a separate set of tasks and functions, each department

has its own frame of reference and its own ethical standards

or guidelines that shape ethical decision-making.

Proposition 13 Organizational structure impacts the

communication and coordination dynamics within the

organization and therefore plays a role in the ethical dis-

solution in the organization.

Organizational Networks

The behavior of individuals within an organization is

directly and indirectly affected by the presence of others.

Coleman (1990) suggests that the presence of others alters

not only behavior but also performance. For instance, the

phenomenon of ‘‘choking under pressure’’ often occurs in

the presence of a ‘‘friendly’’ or ‘‘supportive’’ audience

(Strauss 1998; Butler and Baumeister 1998; Dohmen

2008). Blau and Scott (1962) suggest that networks, whe-

ther they are internal or external to the organization,

establish patterns of behavior, which, in turn, impact

individuals as they assimilate into a network.

Internal networks play a pivotal role in disseminating

the ethical culture throughout the organization. The power

of the internal network to disseminate culture and induce

compliance rests in the desire for social approval (Jones

and Ryan 1997). Brass et al. (1998) suggest that cliques

(social networks) formed in the organization have an

impact on ethical behavior. Cliques are a product of the

process of fragmentation that occurs as an organization

gradually gets larger. As the size of the network increases,

the possibility of fragmentation (individuals forming sub-

groups) increases. Cliques or social networks tend to be

formed with people who are similar, but as the size of an

organization increases, the fragmentation into cliques may

decrease the homogeneity of behavior across groups and

attitudes about ethical standards within the overall orga-

nization. The cement that holds cliques together is social

approval and strong cliques also may have more power (in

terms of numbers and united positions) and therefore may

be able to act unethically with little fear of retribution.

A characteristic of business today is the emphasis on

forming long-lasting relationships with suppliers as well as

distributors. These external networks represent another

important, albeit informal, component of the ethical cli-

mate. Steve Minett (2002) emphasizes the importance of

trust as a critical component in establishing and main-

taining a network of suppliers and distributors. Gundlach

and Murphy (1993) point out that as the relationship

between two organizations evolves from a transaction-

based to a relationship-based model, contract law princi-

ples (conforming to a set of stipulations) play a less

important role while ethical principles (trust; equity;

responsibility; commitment) take a more important role.

Donaldson and Dunfee (1994) address the ethical basis of

an external network and propose a normative theory of

ethics in business they refer to as Integrative Social Con-

tracts Theory (ISCT).

Dunfee et al. (1999) extend the earlier work of Don-

aldson and Dunfee (1994) by discussing the relationship of

social norms or hypernorms in the formation of social

contracts. By ‘‘hypernorms’’ they mean the absolute bed-

rock principles that are so fundamental to human existence

because they reflect a convergence of religious, philo-

sophical, and cultural beliefs. They posit that a business is

legitimated by the cooperation and consent of society,

therefore society should have some input into the norms by

which corporations operate and interact.

External networks impact the ethical decision-making

framework because they provide a basis for making deci-

sions about the allocation of costs and benefits for each

party to the contract, and this allocation reflects the values

of the network. Implicit in these contracts is some system

of justice and fairness, so an individual organization that is

only concerned about maximizing its own good not only

puts itself in a precarious position in terms of future con-

tracts, it imperils the fabric of the external network which

has more far-reaching implications. Steve Minett (2002)

includes in his model of trust, the element of ‘‘value res-

onance’’ which he explains is the need to find network

partners whose value systems (ethical culture) aligns with

those of the firm seeking to establish a relationship.

Proposition 14 Internal and external networks of an

organization have an impact on whether an organization

falls prey to ethical dissolution because those networks

impact the dynamics of exchange both within and between

organizations.

Contextual Factors

It is well accepted that situational or contextual factors

directly impact whether a person will engage in unethical

behavior (Ferrell and Gresham 1985; Trevino 1986; Ferrell

et al. 1989; Hunt and Vitell 1993; Fisher and Lovell 2006).

We would posit that the contextual factors affects ethical

decision-making by impacting three elements in the pro-

cess. First, the context affects whether a person or group

actually recognizes the ethical element in the decision;

additionally, the context will impact the decision itself; and

finally, the context or situation affects whether, after hav-

ing made a decision to take an unethical course, the person

or group actually carries through with the decision. Among

the factors impacting ethical dissolution are: the perception

A Comprehensive Review and Model 243

123

on the part of employees that they are facing a highly

competitive marketplace; the perception that rewards or

gains associated with a given course of action will be

compared with the costs associated with that course of

action; and the nature of the ethical issue itself.

Perception of Market as Highly Competitive

Competitiveness both outside and inside the organization

affects the ethical behavior of that organization. In a highly

competitive atmosphere, the possibility of unethical behav-

ior increases (Trevino 1986). ENRON was a classic example

of a highly aggressive and openly-competitive setting. While

this resulted in highly productive people in terms of revenue

generated, it also set the stage for ethical abuses. In the

absence of a strong ethical climate, cutting corners becomes

simply a way to remain competitive within the organization.

Turning to external competitiveness, Robertson and

Anderson (1993) found that salespeople who perceived a

more competitive marketplace had a greater tendency to

advocate unethical behavior. Expressions such as ‘‘it’s just

business’’ are often used as a means of discounting ethical

decision-making in a hyper-competitive situation.

Proposition 15 The perception that the individual faces a

highly competitive marketplace and/or faces a high level of

internal competition will tend to foster ethical dissolution.

Perceived Opportunity for Gain

One element in judging the ethicality of a decision has to

with the individual’s assessment of the opportunity for gain

offset by the likelihood of punishment that exists in a

particular course of action. Ferrell and Gresham (1985)

proposed that opportunity has an impact on ethical deci-

sion- making. The higher the perceived opportunity for

gain (rewards minus perceived costs) on the part of the

individual, the more unethical behavior is encouraged.

Zey-Ferrell and Ferrell (1982) suggest that opportunity

results from a favorable set of conditions that limit barriers

or provide rewards. They also suggest that opportunity, as

established by the presence of rewards and/or the absence

of punishment, is a better predictor of behavior than indi-

vidual beliefs. The opportunity of considerable financial

rewards afforded by large financial organizations, ampli-

fied by increasingly volatile corporate environments, has

by cited as a key source of attraction for psychopaths

drawn to the financial industry (Boddy 2011). Among the

findings of Smith et al. (1999) was the fact that MBA

students tended to make ethical decisions based upon the

consequences of the decision rather than upon any set of

rules they may follow. Quinlan et al. (2006) proposed that

decisions about a particular course of action are made in

the context of perceived available alternatives. Higgins

(2002) proposed that the outcome value of a decision

contributes to a person’s well-being and thus influences

behavior. Kahneman and Tversky (1979) point out that the

extent to which a person values a given alternative will

affect how he or she will evaluate the worthwhileness of

taking a particular course of action.

Proposition 16 The extent to which the person or group

believes that there is high opportunity for a valued reward

and a fairly low probability of suffering a loss is the extent

to which that organization falls prey to ethical dissolution.

The Nature of the Ethical Issue

The nature of the ethical issue has a direct impact on the

assessment of the ethicality of a particular course of action

(Ferrell and Weaver 1978; Fritzsche and Becker 1983).

Jones (1991) introduced the concept of ‘‘moral intensity.’’

Moral issues, to be recognized, must have saliency—the

extent to which it stands out from the background; must

also have vividness—the issue is emotionally interesting,

concrete, imagery provoking, and proximate in a sensory,

temporal or spatial way. Hunt and Vitell (1993) point out

that norms of ethical behavior applied in a given context

often arise from organizations, professions, and industries.

Brass et al. (1998) point out that the characteristics of the

particular issue under consideration have an impact on

whether or not the issue is deemed to have ethical over-

tones. The four characteristics they highlight are:

• Magnitude of consequences—what will be the impact of a particular course of action?

• Social consensus—the extent to which there is agree- ment on the ethics of an action.

• Probability of effect—the likelihood of possible nega- tive consequences.

• Proximity—how closely connected the actors are to the results.

The above points to a sort of ethical relativism in that,

even those who may not be overly concerned with making

ethical decisions, also have limits on just how unethical

they will allow their decisions to be.

Proposition 17 Ethical dissolution will be more likely

when decisions or actions are not perceived to have a large

impact on others and/or when the ‘‘others’’ are considered

relatively unimportant by the decision-making group.

The Proposed Model of Ethical Dissolution

The proposed model of ethical dissolution includes three

sets of factors: Organizational; Individual; and Contextual.

244 R. W. Jackson et al.

123

Within each of these sets of factors are elements that come

together to impact the corporate ethical situation. The

factors should be viewed as a confluence that has an impact

on the individuals or groups making an ethical decision or

series of ethical decisions. So, for instance, cultural factors

as well as some individual factors have a simultaneous

impact on the likelihood that a person or group within the

organization even recognizes that an ethical issue exists. A

person or group may be unaware of the ethical overtones of

an issue, but that does not mean that such overtones are

absent. The person and/or the group may simply be una-

ware of the ethical overtones and implications of a given

decision. They may decide to take an action that would,

upon closer inspection and/or a heightened level of ethical

sensitivity, be considered unethical.

Our model contains two boxes that are labeled ‘‘Deci-

sion to Take Unethical Action’’ with the box on the right

having quotation marks around the word unethical. The

reason for this is to illustrate the fact that, while we would

argue that many times an individual or group will make an

unethical decision knowing full well that they are taking an

unethical course, there are times when a person or group

makes an unethical decision without being aware that they

are breaching ethics. That is, they fail to recognize that

they are taking an unethical course at the time they make

the decision. The fact that they do not recognize the

decision is unethical does not change the fact that they

have set upon an unethical course. So, we include two

boxes to highlight the fact that sometimes a person or

group embarks upon an unethical course without being

aware of it at the time. There are other times, however,

when a person or group makes an unethical decision

knowing full well that they are doing so.

Argyris (1982) points out that individuals often sub-

consciously operate under two different models—one they

verbally present to the outer world, and one that they

actually use to guide their behavior. The former are those

theories that Argyris (1982, p. 11) describes thusly, ‘‘…the values and skills that they espouse, the ones of which they

are conscious and aware. I call these espoused theories of

action.’’ He points out that people assume that these are

what guides their decisions and behavior. However, he

suggests that what actually guides behavior are what he

terms ‘‘theories in use.’’ These theories in use or enacted

theories operate on a subconscious level and form the basis

of decisions. One might argue that these guide the ‘‘gut-

level’’ reaction to a situation. Argyris argues that while the

espoused theories and enacted theories are often in concert,

they are also sometimes at odds, and the person is often not

even aware of the fact that his or her actions are at odds

with his or her espoused theories until after the decision is

made or an action is taken. In other words, the person only

becomes aware of the disconnect between the espoused and

enacted ethics when he or she takes the time to examine the

decision, or if some unintended consequence arises as a

result of a particular course of action that highlights the

disconnect between espoused and enacted ethics. This sit-

uation serves to provide an example of ethical dissolution

as a potentially unintended consequence of everyday

activity.

The other box that does not have the word unethical in

quotation marks, refers to the fact that a person or group

might, even when aware of the ethical implications or

overtones of a decision, decide to take an unethical course

of action. Such a decision might arise from a sense that the

person or group is in the position to control the results and

any negative fallout (self-efficacy). Another factor might

be the short-term orientation of the person. If one is making

the decision only considering the short-term implications,

the reality of long-term consequences will be dismissed or

at least discounted to the point that they do not actually

factor into the decision. Self-concept also will enter into

such a decision. The person (or group) who sees himself as

a ‘‘deal maker’’ may be willing to engage in unethical

actions if it is perceived that taking the ethical route does

not support the ‘‘deal.’’ The person (or group) may see

himself or herself as a ‘‘lone wolf’’ who is not fettered by

the standards of some group and is really answerable only

to him/herself (or group). In addition, the propensity

toward risk-taking plays a part in unethical decisions. It

may well be that the propensity toward risk-taking will

manifest itself in the individual’s decisions or actions by

legitimate means when possible, or by illegitimate means

when not. However, if the person who is a risk-taker is in a

setting where risk-taking is constrained, he or she may seek

illegitimate outlets for that risk-taking propensity. So, a

corporation that discourages risk-taking by members of the

organization may actually be setting up a situation whereby

the individuals in the organization are inadvertently

encouraged to engage in unethical behavior. That is, risk-

taking propensity seeks an outlet. If the internal organiza-

tional culture is highly competitive and the person per-

ceives a high gain potential coupled with a low risk of

getting caught/punished, the individual will be more likely

to engage in unethical behavior. Suffice it to say, that the

decision to engage in unethical behavior results from a

confluence of factors that occur in a context that actually

encourages such unethical behavior (Fig. 2).

Consistent with the Theory of Reasoned Action, the

model highlights the distinction between the decision to

take an unethical course of action and the action itself.

According to Dubinsky and Loken (1989) the most

immediate determiner of performance/action is the inten-

tion formed by the person. A person (or group) may decide

to follow an unethical course. However, there are factors

that might intervene in such a way as to result in not taking

A Comprehensive Review and Model 245

123

an unethical course of action. For example, the calculus

related to the ‘‘opportunity’’ for gain and/or the likelihood

of getting caught might change in the intervening period

between the decision and the action itself. Self-concept

may also come into play in that the person might see him or

herself as being a ‘‘deal maker,’’ while at the same time he

or she might also have a family (self-image as provider and

protector). In such a case, the specter of being caught

becomes more pronounced as the person is preparing to

take the unethical action. In addition, the person might be a

risk-taker, but experiences a crisis in an unrelated area at

the time he or she decides to pursue an unethical course of

action and this forces the person to postpone or even

abandon the unethical course of action. Based on research

cited earlier, such situations may change the likelihood of

engaging in risky behavior.

Discussion and Future Research

Given the amount of money and the number of individuals in

a position to negatively affect the ethical underpinnings of

corporations, it is perhaps surprising that we do not see more

ethical breakdowns than we do. However, the magnitude of

the ethical breakdowns that we have seen in recent times

speaks to the need to better understand this phenomenon. At

the outset of examining the topic, we must admit that

identifying a corporate failure as ethical dissolution is

somewhat difficult. For instance, the recent loss of two bil-

lion plus dollars by J.P. Morgan/Chase is certainly a cor-

porate failure, but was it a case of ethical dissolution or just

really bad business judgment? So, the concept of ethical

dissolution is somewhat illusory. At the same time, there are

sufficient examples of corporate malfeasance that do con-

stitute ethical dissolution. For example, the recent news

about WalMart’s seeming violation of the Foreign Corrupt

Practices Act in Mexico illustrates the challenge of main-

taining an ethical culture as a corporation expands into new

regions. News reports would indicate that this took place

over a period of time; involved managers high up in the

organization; and seems not to have been taken as seriously

by headquarters as should have been the case.

Much good work has been done in the area of business

ethics and this has led to an increased understanding of

ethical decision-making. At the same time, in examining

ethical dynamics in organizations, we often come away

with more questions than answers. In addition, given the

complexity of the topic, it is necessary that we deconstruct

the process of decision-making with ethical overtones so

that we may gain a better understanding of those elements

affecting the outcome of that decision-making. However,

such an approach, while necessary, invariably leads to a

rather fragmented view of ethical decision-making in

organizations. It is therefore worthwhile to occasionally try

to recombine the work that has been done into a cohesive

examination such as we have presented here.

•Level of Moral Development (CMD)

•Formal Education In Ethics

•Current Ethical Value System (CEVS)

•Degree of Ethical Sensitivity

•Self-Concept •Development of Self Efficacy Mechanisms

•Short-Term vs. Long- Term Orientation

•Risk-Taking Propensity

Individual Factors •Culture

o Societal o Industry o Organizational

•Organizational Structure

•Approach to Decision-Making

•Organizational Network o Internal Network o External Network

Organizational Factors

•Perception of Market as Highly Competitive

•Perceived Opportunity for Gain

•Nature of the Ethical Issue

Contextual Factors

Recognition of the Ethical Overtones of a Decision

Decision to Take an Unethical Action

Decision to Take an “Unethical” Action

Engaging in Unethical Activity

yes no

(feedback) (feedback)

Fig. 2 Model of ethical dissolution

246 R. W. Jackson et al.

123

The dilemma facing researchers investigating issues of

corporate ethics is that of examining a phenomenon

involving individual decision-making while taking into

account the impact of that decision-making taking place in

the context of a corporate setting. This begs the question of

what is the appropriate unit of analysis—the individual or

the organization? The answer would seem to be ‘‘both.’’ An

underlying assumption of this study is that ethical disso-

lution, like ethical development, is a process that takes

place over time and is affected by a variety of factors.

Perhaps one could argue that companies which are con-

sistently ethical in how they do business have some com-

monalities, while each instance where ethical dissolution

occurs is unique. Having said that, there are some com-

monalities that are instructive and add to our understanding

of the phenomenon. Drawing from past research, the pur-

pose of this study is to present a model of ethical disso-

lution that draws the major factors impacting the process of

ethical dissolution into sharp relief.

The model we present considers three major factors

affecting the process of ethical deterioration in organiza-

tions. The major factors are categorized as follows: Indi-

vidual factors; Organizational Factors; and Contextual

Factors. Within each of these are a variety of elements that

coalesce in such a way as to bring about ethical dissolution.

This model draws on past research and so helps make sense

of the process of ethical dissolution and highlights the need

for further research.

Regarding individual factors, ethical development, eth-

ical education, and personality characteristics would seem

to play a major role in ethical decision-making. Further

research is needed into the whether those who have been

central players in ethical breakdowns were as ethically

developed as managers who did not get involved in such

incidents. Are they a product of earlier business schools’

lack of emphasis on ethical training? Are they the product

of the ‘‘Greed is Good’’ mentality? Did these individuals

reach the third level (Stages 5 & 6) of ethical development

as presented by Kohlberg or was their development trun-

cated at the second level? How does subsequent ethical

education impact those who reached different stages of

ethical development in the Kohlberg model? Finally, why

did these particular individuals fall prey to unethical

decision-making while countless other managers who were

exposed to the similar influences did not? These questions

require in-depth research that goes beyond the traditional

survey.

As we consider the individual personality characteristics

of corporate leaders, it would be instructive to understand

how different personality types respond to ethical dilem-

mas. Are some personality types more susceptible to bad

ethical decisions than others? While we cannot directly

change the personality of individuals in leadership

positions, if we understand the role personality plays, we

may be able to address potential problems before they

occur. So, comparing personality types and the specific

personality characteristics suggested in our model will go a

long way toward understanding those individual factors

that lead to ethical dissolution.

Organizational factors provide the forum for decision-

making, hence play a major role in ethical dissolution. We

assume that the societal culture plays a major role in the

ethical decision-making of an organization. However,

when societal culture is at odds with an industry’s culture

and/or an organization’s culture, how much of a role does

societal culture really play? Does this clash of cultures lead

to the fragmentation that seems to be present when ethical

failures occur? The importance of organizational structure

is well understood, but what is the impact of a hierarchical

structure versus a flat structure on ethical deterioration? Is

one type of organizational structure inherently more likely

to lead to ethical deterioration than the other? Another

question has to do with the dynamics of internal and

external networks and how they affect ethical decision-

making. Our review of the research suggests that the

composition of the internal networks plays a big role in

whether a coalition to engage in unethical behavior actually

develops and how ‘‘effective’’ such a coalition is when it

does form. However, the dynamics of how those coalitions

form is not well understood, and bears further examination.

Certainly, there are instances when a particular unethical

action involves an external network. Understanding how

those networks come together will go a long way toward

our being able to provide warning signs of an impending

ethical dissolution.

Finally, contextual factors play a critical role in ethical

dissolution. While there has been some excellent research

that examines the risk/reward aspect of ethical decision-

making, more work needs to be done. For instance, how

does that risk/reward calculus change with the entry of

multiple people into a conspiracy? In addition, how does

the delay in implementing an unethical decision affect the

risk/reward evaluation? An additional contextual factor is

related to the length of time between the decision to pursue

an unethical course of action and the implementation of

such an action. Does the length of the delay between the

decision to pursue an unethical course and the implemen-

tation of that decision play a role in whether the plan

actually is carried out? Does the delay have an impact on

the ethical sensitivity of the individuals involved? In other

words, does a delay allow for a re-examination of the

decision and the possible recognition of the unintended

consequences associated with following through with the

decision? Does the delay allow those involved to consider

the magnitude of the effect of the decision on those not

party to it?

A Comprehensive Review and Model 247

123

Ethical dissolution in organizations is a process. How-

ever, it is a process that can be understood. In gaining a

more in-depth understanding of such incidents, we are in

the position to perhaps prevent some of those in the future.

The debacle with Lehman Brothers did not have to happen.

Arthur Anderson’s implosion was not a foregone conclu-

sion. As we look back on such events, we are in the

position to understand, at least in part, what went wrong.

We must begin with setting aside the easy answers of

greed, hubris, and immorality. While these all played a

part, events such as these may have been predicted and

headed off had we a deeper understanding of the dynamics

of their occurrence. We offer our model as part of this

effort.

References

Ajzen, I. (1991). The theory of planned behavior. Organizational

Behavior and Human Decision Processes, 50, 179–211.

Amernic, J. H., & Craig, R. J. (2010). Accounting as a facilitator of

extreme narcissism. Journal of Business Ethics, 96, 79–93.

Andreoli, N., & Lefkowitz, J. (2009). Individual and organizational

antecedents of misconduct in organizations. Journal of Business

Ethics, 85, 309–332.

Andrews, H., & Furniss, P. (2009). A successful leader or a

psychopathic individual? Management Services, 53(4), 22–24.

Argyris, C. (1982). The executive mind and double-loop learning.

Organizational Dynamics, 11, 5–22.

Arlow, P., & Ulrich, T. A. (1985). Business ethics and business school

graduates: A longitudinal study. Akron Business Review, 16,

13–17.

Bandura, A. (1990). Selective activation and disengagement of moral

control. Journal of Social Issues, 46, 27–46.

Bandura, A. (1999). Moral disengagement in the perpetration of

inhumanities. Personality and Social Psychology Review, 3,

193–209.

Baucus, M. S., & Beck-Dudley, C. L. (2005). Designing ethical

organizations: Avoiding the long-term negative effects of

rewards and punishments. Journal of Business Ethics, 56,

355–370.

Baxter, G. D., & Rarick, C. A. (1987). Education and the moral

developments of managers: Kohlberg’s stages of moral devel-

opment and integrative education’. Journal of Business Ethics, 6,

243–248.

Bay, D. D., & Greenberg, R. R. (2001). The relationship of the DIT

and behavior: A replication. Issues in Accounting Education, 16,

367–380.

Bearden, W. O., Money, R. B., & Nevins, J. L. (2006). A measure of

long-term orientation: Development and validation. Journal of

the Academy of Marketing Science, 34, 456–467.

Bebeau, M. J., & Brabeck, M. M. (1987). Integrating care and justice

issues in professional moral education: A gender perspective.

Journal of Moral Education, 16, 189–203.

Bebeau, M. J., Rest, J. R., & Yamoor, C. M. (1985). Measuring dental

students’ ethical sensitivity. Journal of Dental Education, 49,

225–235.

Blau, P. M., & Scott, W. R. (1962). Formal organizations: A

comparative approach. San Francisco: Chandler Publishing

Company.

Boddy, C. R. (2005). The implications of corporate psychopaths for

business and society: An initial examination and a call to arms.

Australasian Journal of Business and Behavioural Sciences, 1,

30–40.

Boddy, C. R. (2011). The corporate psychopaths theory of the global

financial crisis. Journal of Business Ethics, 102, 255–259.

Boddy, C. R., Ladyshewsky, R., & Galvin, P. (2010). Leaders without

ethics in global business: Corporate psychopaths. Journal of

Public Affairs, 10, 121–138.

Bommer, M., Gratto, C., Gravander, J., & Tuttle, M. (1987). A

behavioral model of ethical and unethical decision making.

Journal of Business Ethics, 6, 265–280.

Bourgeois, L. J., III, & Eisenhardt, K. M. (1988). Strategy decision

processes in high velocity environments: Four cases in the

microcomputer industry. Management Science, 34, 816–835.

Brass, D. J., Butterfield, K. D., & Skaggs, B. E. (1998). Relationships

and unethical behavior: A social network perspective. Academy

of Management Review, 23, 14–31.

Brenner, S. N., & Molander, E. A. (1977). Is the ethics of business

changing? Harvard Business Review, 55, 57–71.

Brown, T., Sautter, J., Littvay, L., Sautter, A., & Bearnes, B. (2010).

Ethics and personality: Empathy and narcissism as moderators of

ethical decision making in business students. Journal of Educa-

tion for Business, 85, 203–208.

Butler, J. F., & Baumeister, R. F. (1998). The trouble with friendly

faces skilled performance with a supportive audience. Journal of

Personality and Social Psychology, 75, 1213–1230.

Card, R. F. (2005). Individual responsibility within organizational

contexts. Journal of Business Ethics, 62, 397–405.

Carver, C. S., & Scheier, M. F. (1998). On the self-regulation of

behavior. New York: Cambridge University Press.

Chen, S. (2010). The role of ethical leadership versus institutional

constraints: A simulation study of financial misreporting by

CEOs. Journal of Business Ethics, 93, 33–52.

Clarkeburn, H. M. (2002). Q test for ethical sensitivity in science.

Journal of Moral Education, 31, 439–453.

Clarkeburn, H. M., Downie, J. R., Gray, C., & Matthew, R. G. S.

(2003). Measuring ethical development in life sciences students:

A study using Perry’s development model. Studies in Higher

Education, 28, 443–456.

Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA:

The Belknap Press of Harvard University.

Covey, S. R. (1989). The seven habits of highly effective people. New

York: Simon and Schuster.

Dohmen, T. J. (2008). Do professionals choke under pressure?

Journal of Economic Behavior & Organization, 65, 636–653.

Donaldson, T., & Dunfee, T. W. (1994). Toward a unified conception

of business ethics: Integrative social contracts theory. Academy

of Management Review, 19, 252–284.

Dubinsky, A. J., & Loken, B. (1989). Analyzing ethical decision

making in marketing. Journal of Business Research, 19(2),

83–107.

Dunfee, T. W., Smith, N. C., & Ross, W. T. (1999). Social contracts

and marketing. Journal of Marketing, 63, 14–32.

Dunning, D. (2007a). Self-image motives and consumer behavior:

How sacrosanct self-beliefs sway preferences in the marketplace.

Journal of Consumer Psychology, 17(4), 237–249.

Dunning, D. (2007b). Self-image motives: Further thoughts and

reflections. Journal of Consumer Psychology, 17(4), 258–260.

Eisenhardt, K. M. (1989). Making fast strategic decisions in high-

velocity environments. Academy of Management Journal, 32(3),

543–576.

Elci, M., & Alpkan, L. (2009). The impact of perceived organiza-

tional ethical climate on work satisfaction. Journal of Business

Ethics, 84(3), 297–311.

248 R. W. Jackson et al.

123

Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework

for understanding ethical decision making in marketing. Journal

of Marketing, 49, 87–96.

Ferrell, O. C., Gresham, L. G., & Fraedrich, J. (1989). A synthesis of

ethical decision models for marketing. Journal of Macro-

Marketing, 9(2), 55–64.

Ferrell, O. C., & Skinner, S. J. (1988). Ethical behavior and

bureaucratic structure in marketing research organizations.

Journal of Marketing Research, 25, 103–110.

Ferrell, O. C., & Weaver, K. M. (1978). Ethical beliefs of marketing

managers. Journal of Marketing, 42, 69–73.

First, M., & Tasman, A. (2004). DSM-IV-TR. West Sussex: Wiley.

Fishbein, M., & Azjen, I. (1975). Belief, attitude, intention, and

behavior: An introduction to theory and research. Reading, MA:

Addison-Wesley.

Fisher, C., & Lovell, A. (2006). Business ethics and values:

Individual, corporate and international perspective’ (2nd ed.).

Harlow, England: Prentice Hall.

Fritzsche, D. J., & Becker, H. (1983). Ethical behavior of marketing

managers’. Journal of Business Ethics, 2, 291–299.

Fritzsche, D. J., & Oz, E. (2007). Personal values’ influence on the

ethical dimension of decision making. Journal of Business

Ethics, 75, 335–343.

Gentile, M. C. (2009). Business schools: A failing grade on ethics’.

Bloomberg: Bloomberg Business Week.

Getz, K. A. (1991). International codes of conduct: An analysis of

ethical reasoning. Journal of Business Ethics, 9, 567–577.

Gibbs, J. C., & Widaman, K. F. (1982). Social intelligence:

Measuring the development of sociomoral reflection. Englewood

Cliffs, NJ: Prentice-Hall.

Godkin, L., & Allcorn, S. (2011). Organizational resistance to

destructive narcissistic behavior. Journal of Business Ethics,

104, 559–570.

Goolsby, J. R., & Hunt, S. D. (1992). Cognitive and moral

development and marketing. Journal of Marketing, 56, 55–68.

Gorman, R. O., Wilson, D. S. & Miller, R. R. (2008). An evolved

cognitive bias for social norms. Evolution and Human Behavior,

29, 71–78.

Gundlach, G. T., & Murphy, P. E. (1993). Ethical and legal

foundations of relational marketing exchanges. Journal of

Marketing, 57, 35–46.

Harris, P. (2010). Machiavelli and the global compass: Ends and

means in ethics and leadership. Journal of Business Ethics, 93,

131–138.

Hartog, D. N. D., & Belschak, F. D. (2012). Work engagement and

Machiavellianism in the ethical leadership process. Journal of

Business Ethics, 107, 35–47.

Higgins, E. T. (2002). How self-regulation creates distinct values: The

case of promotion and prevention decision making. Journal of

Consumer Psychology, 12(3), 177–191.

Holland, K. (2009). Is it time to retrain b-school? The New York

Times. March 15, BU1.

Hollon, C. J., & Ulrich, T. A. (1979). Personal business ethics:

Managers vs. managers-to-be. Southern Business Review, 5,

17–22.

Hosmer, L. T. (1988). Adding ethics to business curriculum. Business

Horizons, 31, 9–15.

Hough, J. R., & Ogilvie, D. T. (2005). An empirical test of cognitive

style and strategic decision cutcomes. Journal of Management

Studies, 42, 417–448.

Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics.

Journal of Macromarketing, 6, 5–16.

Hunt, S. D., & Vitell, S. (1993). The general theory of marketing

ethics: A retrospective and revision. In N. C. Smith & J.

A. Quelch (Eds.), Ethics in marketing. Homewood, IL: Irwin.

Hunt, S. D., Wood, V. R., & Chonko, L. B. (1989). Corporate ethical

values and organizational commitment in marketing. Journal of

Marketing, 53(July), 79–90.

Iyer, A. (2006). The missing dynamic: Corporations, individuals and

contracts. Journal of Business Ethics, 67, 393–406.

Jackson, R. W., Hisrich, R. D., & Newell, S. J. (2006). Professional

selling and sales management. Cleveland, OH: North Coast

Publishers Inc.

Jones, T. M. (1991). Ethical decision making by Individuals in

organizations: An issue-contingent model. Academy of Manage-

ment Review, 26(2), 366–395.

Jones, T. M., & Ryan, L. V. (1997). The link between ethical

judgment and action in organization approach. Organization

Science, 8(6), 663–680.

Jordan, J. (2009). A social cognition framework for examining moral

awareness In managers and academics. Journal of Business

Ethics, 84(2), 237–258.

Judge, W. Q., & Miller, A. (1991). Antecedents and outcomes of

decision speed in different environmental contexts. Academy of

Management Journal, 34, 449–463.

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of

decision under risk. Econometrica, 47, 263–291.

Knight, H. (2000–2002). The ethical decision making of businesses

involved in the Holocaust. Lectures delivered at the University of

Tulsa, Tulsa, OK, USA.

Kohlberg, L. (1971). From is to ought: How to commit the naturalistic

fallacy and get away with it in the study of moral development.

In T. Mischel (Ed.), Cognitive development and epistemology.

New York: Academic Press.

Kohlberg, L. (1984). The psychology of moral development. San

Francisco: Harper and Row Publishers.

Kohlberg, L., Levine, C., & Hewer, A. (1983). Moral stages: A

current formulation and a response to critics. Basel, NY: Karger.

Kruger, J., Galak, J., & Burrus, J. (2007). When consumers’ self-

image motives fail. Journal of Consumer Psychology, 17(4),

250–253.

Lynn, M., & Oldenquist, A. (1986). Egoistic and non-egoistic motives

in social dilemmas. American Psychologist, 41(5), 529–534.

Markus, H., & Narius, P. (1986). Possible selves. American Psychol-

ogist, 41(9), 954–969.

Martin, T. R. (1981–1982). Do courses in ethics improve the ethical

judgment of students? Business and Society Review, 20/21,

17–26.

Mascarenhas, O. A. J. (1995). Exonerating unethical marketing

executive behaviors: A diagnostic framework. Journal of

Marketing, 59, 43–57.

Milgram, S. (1974). Obedience to authority. New York: Harper and

Row.

Minett, S. (2002). B2B marketing: A radically different approach for

business-to-business marketers. London: Pearson Education

Limited.

Mintzberg, H. (1978). Patterns in strategy formation. Management

Science, 24(9), 934–948.

Muraven, M., & Baumeister, R. F. (2000). Self-regulation and

depletion of limited resources: Does self-control resemble a

muscle? Psychological Bulletin, 126, 247–259.

Muraven, M., Tice, D. M., & Baumeister, R. F. (1998). Self-control as

a limited resource: Regulatory depletion patterns. Journal of

Personality and Social Psychology, 74, 774–789.

Nevins, J. L., Bearden, W. O., & Money, B. (2007). Ethical values and

long-term orientation. Journal of Business Ethics, 71, 261–274.

Opotow, S. (1990). Moral exclusion and injustice: An introduction.

Journal of Social Issues, 46(1), 1–20.

Paine, L. S. (1994). Managing for organizational integrity. Harvard

Business Review, 72(2), 106–117.

A Comprehensive Review and Model 249

123

Petrof, J. V., Sayegh, E. E., & Vlahopoulos, P. I. (1982). The

influence of the school and business on the values of its students.

Journal of the Academy of Marketing Science, 10, 500–513.

Piaget, J. (1929). The child’s conception of the world. London:

Routledge and Kegan Paul.

Piaget, J. (1947). The psychology of intelligence. London: Routledge

and Kegan Paul.

Piaget, J. (1948). The moral judgment of the child. Glencoe, IL: Free

Press.

Piaget, J. (1952). The origins of intelligence in children. New York:

International Universities Press.

Piaget, J. (1960). The general problems of the psychobiological

development of the child. In J. M. Tanner & B. Inhelder (Eds.),

Discussions on child development: Proceedings of the world

health organization study group on the psychobiological devel-

opment of the child (Vol. 4). New York: International Univer-

sities Press.

Pride, W. M., & Ferrell, O. C. (2009). Foundations of marketing.

Boston: Houghton Mifflin Company.

Quinlan, S. L., Jaccard, J., & Blanton, H. (2006). A decision theoretic

and prototype conceptualization of possible selves: Implications

for the prediction of risk Behavior. Journal of Personality, 74(2),

599–630.

Rest, J. R. (1979). Development in judging moral issues. Minneapolis,

MN: University of Minnesota Press.

Rest, J. R. (1984). The major components of morality. In W.

M. Kurtines & J. L. Gerwitz (Eds.), Morality, moral behavior,

and moral development. New York: John Wiley and Sons.

Rest, J. R. (1986). Programs and interventions. In J. R. Rest (Ed.),

Moral development: Advances in research and theory. New

York: Praeger.

Rest, J. R., Bebeau, M., & Volker, J. (1986). An overview of the

psychology of morality. In J. R. Rest (Ed.), Moral development:

Advances in research and theory. New York: Praeger.

Rest, J. R., & Deemer, D. (1986). Life experiences and developmental

pathways. In J. R. Rest (Ed.), Moral development: Advances in

research and theory. New York: Praeger.

Robertson, D. C., & Anderson, E. (1993). Control system and task

environment effects of ethical judgment: An exploratory study of

industrial salespeople. Organization Science, 4(4), 617–644.

Schweitzer, M. E., & Gibson, D. E. (2008). Fairness, feelings, and

ethical decision-making: Consequences of violating community

standards of fairness. Journal of Business Ethics, 77(3),

287–301.

Seligman, M. E. P. (1975). Helpless: On depression, development and

death. San Francisco: W. H. Freeman.

Siegel, J. (1973). Machiavellianism, MBAs and manager’s leadership

correlated and socialization effects. Academy of Management

Journal, 16, 404–411.

Smith, D. E., Skalnik, J. R., & Skalnik, P. C. (1999). Ethical behavior

of marketing managers and MBA students: A comparative

study’. Teaching Business Ethics, 3, 323–337.

Sparks, J. R., & Hunt, S. D. (1998). Marketing research ethical

sensitivity: Conceptualization, measurement and exploratory

investigation. Journal of Marketing, 62, 92–109.

Stephens, C. U., & Lewin, A. Y. (1992). A cross-level model of the

determinants of ethical choice in organizations. In D. Ludwig &

K. Paul (Eds.), Contemporary issues in the business environ-

ment. Wales: Edwin Mellen Press.

Stevens, G. W., Deuling, J. K., & Armenakis, A. A. (2012).

Successful psychopaths: Are they unethical decision-makers

and why? Journal of Business Ethics, 105, 139–149.

Strauss, B. (1998). Choking under pressure: When positive public

expectancies lead to suboptimal performance. Paper presented at

the international congress of applied psychology, August 9–14,

San Francisco, CA, USA.

Thoma, S. J., & Rest, J. R. (1999). The relationship between moral

decision making and patterns of consolidation and transition in

moral judgment development. Developmental Psychology, 35(2),

323–334.

Trevino, L. K. (1986). Ethical decision making in organizations: A

person-situation interactionist model. Academy of Management

Review, 11(3), 601–617.

Victor, B., & Cullen, J. B. (1988). The organizational bases of ethical

work climates. Administrative Science Quarterly, 33, 101–125.

Weber, J. (1995). Influences upon organizational ethical subclimates:

A multi-departmental analysis of a single firm. Organization

Science, 6(5), 509–523.

Winter, D. G., McClelland, D. C., & Steward, A. J. (1983). A new

case for the liberal arts. San Francisco: Jossey-Bass.

Wolin, S. (1960). Politics and vision. Boston: Little, Brown, & Co.

Yadav, M. S. (2010). The decline of conceptual articles and

implications for knowledge development. Journal of Marketing,

74, 1–19.

Zey-Ferrell, M., & Ferrell, O. C. (1982). Role-set configuration and

opportunity as predictors of unethical behavior in organizations.

Human Relations, 3(7), 587–604.

250 R. W. Jackson et al.

123

Copyright of Journal of Business Ethics is the property of Springer Science & Business Media B.V. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.