Introduction To act ethically or unethically

To act ethically or unethically is the question that government contracting

employees face when administering government contracts. Government contracting

employees must uphold the highest standards of ethical integrity since their job requires

exercising judgment over public funds (U.S. Government Accountability Office [U.S.

GAO], 2009). The Office of Personnel Management (OPM, 1983) maintained that

government contracting employees may solicit, evaluate, negotiate, and award contracts

to any contractor, vendor, or supplier authorized to do business with government

contracting organizations. Federal contracting is an important component in the United

States’ success. Government contracting organizations are major participants in the

acquisition of goods and services from public and private entities.

The Congress enacted statutes and regulations that guide government contracting

policies and values. Schick (2011) suggested that recent increases in government

spending contribute to unethical behaviors by government contracting employees. The

Department of Justice (DOJ) entrusted financial resources to fighting occurrences of

contracting fraud (DOJ, Financial Fraud Enforcement Task Force, 2010). Unfortunately,

no consensus exists concerning why unethical behaviors by government contracting

employees occur and how to prevent the unethical behaviors. Costantino, Dotoli,

Falagario, and Sciancalepore (2012) posited that vaguely defined government contracting

regulations do not require enough transparency in the contracting process. Government

contracting organizations must define ethical standards when determining government

contracting guidance (Nackman, Rathbone, Myers, & Pannier, 2011).

Background of the Problem

In the past decade, the occurrences of unethical behaviors by some government

contracting employees administering government contracts have increased (Curry, 2010).

From 2005 to 2009, the U.S. GAO (2009) reported an increase in unethical behavior by

some government contracting employees when administering contracts. U.S. GAO (2009)

assessed that from 2005 to 2009, there was a reduction in government contracting

employees with knowledge of unethical behaviors such as a violation of conscience,

failure to honor, and disregard of policy. For example, government contracting employees

who take unauthorized gifts in exchange for unapproved contracts violate what the

government contracting arena represents.

It is highly unethical, improper, and immoral for the government contracting

employees to work outside the confines of the FAR regulations (Acquisition Central,

2014). As unethical behaviors by government contracting employees continue,

researchers have attempted to understand what led to unethical behaviors. Curry (2010)

and Mountain (2011) investigated unethical behaviors by government contracting

employees when administering government contracts. Government contracting

employees’ unethical behaviors generated an impression of widespread ethical violations

in government contracting organizations (Curry, 2010). In addition, the workplace culture

might influence government contracting employees’ unethical behavior (Mountain, 2011).

Individuals have unique values that guide them; however, when doing government

contracting business, ethical values must guide the individual.

Problem Statement

The extent of unethical behaviors by government contracting employees is

detrimental to government contracting organizations because unethical behavior threatens

the national defense and increases wasteful spending of taxpayer funds (Sikka & Lehman,

2015). The Office of the Inspector General (2013) reported cases of government

contracting employees accepting bribes totaling more than $540 million within 6-year

period. The general business problem was that the oversight by government contracting

managers has not controlled or limited unethical behaviors by government contracting

employees. The specific business problem was a lack of knowledge that government

contracting managers have to mitigate unethical behaviors of government contracting

employees who administer contracts.

Purpose Statement

The purpose of this qualitative case study was to provide an understanding of the

knowledge required by government contracting managers to mitigate unethical behaviors

of government contracting employees when administering contracts. The research of Bao,

Wang, Larsen, and Morgan (2013) formed the basis for this case study’s research and

understanding of the worth of management and leadership development in government

contracting. I conducted semistructured interviews with 21 government contracting

managers from the Defense Logistics Agency in the mid-Atlantic region who shared their

insights about the strategies needed to mitigate government contracting employees’

unethical behaviors when administering contracts. The completion of this study might

affect business practice by helping government contracting managers learn strategies to

reduce contracting employees’ unethical behaviors when administering contracts.

Findings from this study may contribute to positive social change by improving training

and ethical standards, which could lead to enhancing society’s trust in government

contracting organizations. In addition, benefits of this study may encourage socially

accountable and transparent federal contracting processes that might reduce fraud.

Nature of the Study

The inquiry used for this study was a qualitative case analysis. Qualitative

researchers collect, analyze, and interpret data based on participants’ characterization of

real-world events (Koro-Ljungberg & Bussing, 2013). In contrast, quantitative

researchers use statistical data and hypothesis to draw conclusions (Kozlowski, Chao,

Grand, Braun, & Kuljanin, 2013). As a mixed-method approach combines both

qualitative and quantitative data to reach conclusions, a mixed method approach did not

suit this study. A mixed method approach required including statistical data from a

quantitative study (Molina-Azorin, 2012). A primary aim of conducting this qualitative

case study was to communicate an understanding of the individual’s insights. The study

allowed me to focus on a particular case, incorporate rich description of the circumstance,

and provide heuristic by illuminating the reader’s understanding of the phenomenon

(Flotts & Diaz, 2012).

A qualitative researcher classifies the study based on the research design. Specific

research designs designated for qualitative studies include case study, narrative,

ethnography, grounded theory, and phenomenology (Tracy, 2013). The research question

determines the appropriate research design (Koro-Ljungberg & Bussing, 2013). A single

case study design comprised the nature of this study. Although single case and multicase

studies involve interviews, data management, and interpretations, a multicase approach

did not fit this study. A multicase study involves researching a collection of embedded

cases to find a suitable meaning (Stewart, 2012). According to Yin (2013), the case study

method enables qualitative researchers to retain the holistic and significant characteristics

of events such as individual life cycles. As a result, narrative, ethnography, grounded

theory, and phenomenological designs did not suit this study.

Narrative researchers seek to understand the life of an individual for the purpose

of relaying stories about the experiences of that individual (Suarez-Ortega, 2013). Using

narrative research for this study would not have been appropriate because the focus for

this study was on the understanding required by a group of midlevel managers in a

specific organization. The unit of analysis in ethnography is a culture sharing group

(Robinson, 2013); however, the goal for this study was not to study a culture sharing

group. In grounded theory, the qualitative researcher attempts to develop a theory based

on data from participants in the field (Hardman, 2013). Since grounded theory may be

inductive in nature because it involves building a theory from the bottom up (Bendassolli,

2014), it was not suited for this study. With a phenomenology type study, the goal is to

describe and show the merging and differing interrelations of a phenomenon on

participants in a research study (Fisher & Stenner, 2011). The goal for this study was not

to study several individuals commonly engaged in their experiences. Neither was there a

plan to describe participants’ personal experiences. The case study design provided a

means for me to focus on a single entity (Aslam, Georgiev, Mehta, & Kumar, 2012;

Finlay, 2012).

Research Question

A concise question was central to the research process. Arriving at a topic and

question that had social significance was challenging. Gerring (2011) argued that there is

no guide to creating a research question; each research question results in different

outcomes. Likewise, Watkins (2012) maintained that creating quality research questions

assists researchers in gaining and maintaining the interest of individuals. Therefore, in

order to understand the knowledge required by individual managing government

contracting employees administering contracts at a Defense Logistics Agency, I created

this research study to answer one precise question: what knowledge do government

contracting managers need to mitigate unethical behaviors of government contracting

employees when administering contracts?

Interview Questions

The research question served as the basis for creating the following semistructured

interview questions (see Appendix A) to guide the interview process; however, I asked

follow-up questions where appropriate.

1. What are the issues that you face as the manager of government contracting

employees regarding unethical behaviors?

2. What are the fundamentals that you as a manager use to assist government

contracting employees in understanding how to perform their duties ethically?

3. What are the elements of the organization’s philosophy that you as a manager

use to address government contracting employees’ unethical behaviors when

administering contracts?

4. What are the challenges confronting you as a manager in determining ethical

implementation of the organization’s philosophy?

5. What training and development methods do you use better guide employees to

act ethically?

6. How can training and development methods be improved and incorporated as

an integral part of government contract administration?

7. What benefits can result from employees’ ethical administration of

government contracts?

8. What further questions, comments, or information do you have that may be

beneficial to this study?

Conceptual Framework

Stakeholder theory, advanced by Freeman (1984), formed the conceptual basis for

this study. The concept of stakeholder theory should encourage business managers to

consider the principles of organizational and public ethics when determining business

compliance (Hasnas, 2013). Freeman (1984) devised concepts significant to stakeholder

theory that integrate ethical notions into corporate strategies. The conceptual framework

incorporated a review of the concepts associated with strategies that government contract

managers need to reduce government contracting employees’ unethical behaviors when

administering contracts. The conceptual framework can align strategic theories with the

idea of ethical/unethical behaviors by government contracting employees when

administering government contracts.

The literature review contains a discussion of stakeholder theory addressing three

concepts. Regarding the first concept of the stakeholder theory, I discussed the

shareholders’ value and the association with business success. The second concept of the

stakeholder theory consisted of threats to stakeholder values. The third concept of the

stakeholder theory comprised strategies for bridging the gap to ensuring business success,

moral integrity, corporate ethics, and positive social change. The stakeholder and the link

to ethics and integrity affect (a) individuals’ right to liberty, opportunity, and freedom, and

(b) stakeholders’ influence on governing principles that correlate with ethics. The

embodiment of the organization and people over self is altruistic. Government contracting

employees must consider their actions and the impact on society and the public trust.

Resnik (2011) posited that organization leaders cite the need for public trust in promoting

organizational values and code of ethics. Government contracting organizations can use

stakeholder theory to administer government contracts in modern business practices.

Definition of Terms

The following terms and definitions appear throughout this study:

Acquisition: Acquisition procedures prescribed in relevant subsections of the FAR

relate to the purchase of goods and services (Acquisition Central, 2014).

Bribery: Bribery is manipulating an action for personal gain by offering goods or

services to an individual doing official government duties (U.S. Department of Labor

[DOL], 2014a).

Conflict of interest in government contracting: Government contracting employee

presents dissonance when he/she does not provide impartial service when administering a

contract (Acquisition Central, 2014).

Contract: A contract is an agreement that specifies business transactions between

qualified private organizations and the government (Small Business Administration

[SBA], 2014).

Contracting ethics: Ethics is the continuation of the integrity of government

contracting and assuring fair treatment to all approved government suppliers/contractors

when administering government contracts (Acquisition Central, 2014).

Core competency: Core competency provides that an organization excels in a

specified area of business and contributes sustainability to maintain a competitive

advantage (Yang & VanLandingham, 2012).

Corporate governance: Corporate governances are rules and regulations that

regulate the rights and responsibilities of stakeholders by controlling all aspects of the

organization (Usunier, Furrer, & Furrer-Perrinjaquet, 2011).

Defense competition: Competition is the ability of an organization to improve

performance while reducing cost (Wydler, Chang, & Schultz, 2013).

Federal Acquisition Regulations (FAR): The FAR outlines procurement policies

and procedures used in government contracting (Acquisition Central, 2014).

Federal government outsourcing: Government contracting organizations

outsource services previously performed by government agencies to private companies

for the purpose of efficiency, cost cutting, politics, and competition (SBA, 2014).

Government contracting: Government contracting requires government

contracting organizations to obtain goods and services from private companies (General

Services Administration [GSA], 2005). GSA (2005) assessed that government contracting

includes identification of goods and service, source selection, contract award, and

contract administration.

Government contracting employee: Government contracting employees are

business leaders working for the benefit of government entities, customers, and

community (OPM, 1983). The FAR authorizes government contracting employees to

enter into, administer, or terminate contracts (Acquisition Central, 2014).

Gratuity: Gratuity is acceptance of gifts, favors, entertainment, loans, or anything

of monetary value in exchange for favors from contracts (Acquisition Central, 2014).

Subpart 3.1 of the FAR clarifies standards of conduct, policies, and procedures for

avoiding personal conflicts of interest (Acquisition Central, 2014).

Opportunism: Opportunism is pursuing a person’s self-interest by way of deceit

and betrayal (Maser & Thompson, 2013).

Trust: Trust is the desire to take a chance to the extent of having clear objectives

and assurance in the words and actions of others (Trapp, 2011).

Assumptions, Limitations, and Delimitations

Qualitative research comprises a variety of techniques, ideas, methods, themes,

limitations, and assumptions (Jovanovic, 2011). A qualitative researcher should be aware

or his or her assumptions in order to mitigate bias (Hibbert, Sillince, Diefenbach, &

Cunliffe, 2014). This section lists the assumptions, limitations, and delimitations of this

study.

Assumptions

My assumptions for this study included the following: (a) deficiencies existed

regarding government contracting employees administering government contracts at the

chosen establishment; (b) I understood and clearly presented the responses made by

participants; (c) participants described their personal lived experiences of the phenomena

studied. I used a qualitative single case study to understand the lived experiences of

participants regarding what government contracting managers need to mitigate unethical

behaviors by government contracting employees while doing their jobs.

Limitations

The first limitation was that focus on a single case study of one organization might

limit generalization of the study to every government contracting organizations.

The second limitation was regarding participants’ knowledge of government contracting.

Although participants were be in Pay Grades GS-11 to GS-13, there was no way to learn

how acquainted the participants were with the subject matter. OPM (1983) required

participants to receive specified training; however, each person’s views of the information

may have been different. The final limitation regarded concern for a lack of individuals

willing to participate in this study.

Delimitations

An optimal sampling would consist of government contracting employees from all

government contracting organizations. Government contracting employees in Pay Grades

GS-11 to GS-13 working at the Defense Logistics Agency in the mid-Atlantic area

comprised this study. This delimitation was necessary as the focus of this study was in

determining management knowledge needed to reduce contracting employees’ unethical

behaviors when administering contracts. For applied reasons, interviewing the entire

government contracting population fell outside the scope of this study. Cleary, Horsfall,

and Hayter (2014) posited that 20 individuals might represent an appropriate sample size

in qualitative studies. Although Walden University requires a minimum of 20 interviews,

I continued to interview individuals until the process reached saturation.

Twenty-one individuals participated in the study.

Significance of the Study

The intent of this study was to consider participants’ insights regarding

management knowledge needed to reduce unethical behaviors by government contracting

employees when administering contracts. Schick (2011) focused on increased

government spending as the basis for government contracting employees’ unethical

behaviors. Curry (2010) concentrated on ethical principles and the impact of government

contracting employees’ unethical conducts when administering contracts. Both Curry

(2010) and Schick (2011) focused on different causes for the unethical behaviors;

however, the results of government contracting employees’ unethical conducts when

administering contracts interconnected.

Contribution to Business Practice

The result of this qualitative case study might help the government contracting

managers in developing strategies to reduce government contracting employees’ unethical

behaviors when administering contracts. An essential problem is an increase in unethical

behaviors by government contracting employees when administering contracts at the

Defense Logistics Agency. Additionally, the U.S. GAO (2009) noted a decrease in

employees willing to reveal unethical behaviors.

Implications for Social Change

The results of this research study may have a positive effect on the issue of ethics

when administering government contracts and provide a standard for government

contracting managers to determine ethical guidelines, procedures, and training for

government contracting employees. Positive social change in government contracting is

possible. Change becomes possible when society, policy makers, acquisitions, and

contracting workforces understand transparency in the government contracting process

(Stanger, 2012). This study may contribute to social change by producing ideas that could

reverse financial losses that occur through government contracting employees’ unethical

behaviors. Government contracting managers’ understanding of how to reduce

government contracting employees’ unethical behave may reduce future occurrences.

Benefits of this study may encourage socially accountable and transparent federal

contracting processes that might reduce fraud. Findings and recommendations from this

study may contribute to positive social change by improving training and ethical

standards, which could lead to enhancing society’s trust in government contracting

organizations.

A Review of the Professional and Academic Literature

A literature review provides the basis for research and gives conditions for the

development of the research question (Dunne, 2011). Wiles, Crow, and Pain (2011) used a

literature review to explore aspects of the research question. Shuck (2011) indicated that a

researcher creates new knowledge from the literature review. Gubernick (2013) used a

literature review to assess determinants of team success and the impact on quality

improvement in health care. Lopatto and Pelegano (2013) used a literature review to

measure how rating scales affected patient-reported outcomes. Banerjee and Morley

(2013) posited that knowledge produced in academia is based on legitimacy shown

through professional literature and peer-reviewed publications. Examination of the

literature will follow with a thematic analysis based on the research question.

The main resources for the literature review were journals and peer-reviewed

articles available through the Walden University library. The following databases

provided content for the literature review: Sage Premier, Business Source Complete,

ScienceDirect, Academic Search Complete, and Thoreau. Content searches consisted of

keywords (acquisition, competence, conflict of interest, contracting, corporate

governance, ethics, government contracting, outsourcing, procurement, qualitative

research, and trust) as noted in the definition of terms. Results of the searches yielded

more than 400 articles for review. However, the articles actually incorporated in the

literature review totaled 288 references. Two hundred sixty-three references are dated

2011 to 2015. There are 258 total peer-reviewed references of which 248 were published

within the last 5 years. Ninety-six percent of peer-reviewed references are from sources

within the last 5 years. I included references prior to 2011 for historical purposes. The

focus of the articles covered business ethics, government contracting, and government

contracting compliance and regulations.

Reflecting on Business Ethics in Relation to Government Contracting

Unethical occurrences may adversely affect public administration organizations

(Beeri, Dayan, & Vigoda-Gadot, 2013). When determining the most ethical contracting

decision when administering government contracts, government contracting employees

may encounter duplicity. Making the best assessment may be a matter of personal choice

or business decision (Bergman, Rentsch, Small, Davenport, & Bergman, 2012). If there

are legal or regulatory statutes involved, the decision is not always clear. When a

government contracting employee makes an ethical decision contrary to government

contracting guidelines, the employee may receive punitive action. As assessed by Cribb

(2011), the moral burden of negotiating pressures between normal expectations and

personal beliefs is daunting. As such, government contracting employees’ ethical

decisions when administering government contracts may involve conflicting issues of

determining what is morally right. When considering business ethics, organizations can

ensure that ethical judgments constitute a regard for history (Greaney et al., 2012).

Historical, ethical business decisions have changed the dynamics and structure of

information in business ethics (Fyke & Buzzanell, 2013). Although the government

contracting employees may encounter unethical instances when administering

government contracts, following the government contracting guidelines may assist

government contracting employees to make ethical decisions.

There should be no ethical boundaries in government contracting business; ethics

should be the principal factor considered. If government contracting organizations do not

impose regulations and guidelines on their employees, government contracting employees

might make ethical decisions based on their judgment (Halpern & Snider, 2012). The

intrinsic nature of some human beings to be unethical makes government contracting

employees’ unethical behaviors disturbing. Government contracting employees may

believe that if they are not caught being unethical, they are not guilty of unethical actions

when administering government contracts. If the government contracting employees

continue to act dishonestly when administering government contracts, the behaviors may

continue to influence society’s attitudes towards government contracting organizations

(Curry, 2010).

The government procurement system underwent a major overhaul in the late

1980s (Cox, 2011). In 1988, Operation I11-wind detailed extensive unethical exchanges

between government contracting employees and suppliers (Cox, 2011). Although the

Congress enacted additional regulations to prevent similar unethical exchanges when

administering government contracts, government contracting employees continue to

behave dishonestly. Government contracting is a strategic tool to bring diverse groups

and cultures together, but ethics is essential to the development of government

contracting. Ethics in government contracting can be as simple as doing what is right.

It is not useful for any employee to give unfair advantages to an unauthorized

supplier/vendor when determining who receives government contracts (Clark, 2011).

Understanding the role of private companies in government contracting may be beneficial

to understanding how ethics affects government contracting policy. During the past few

decades, government contracting has become more prevalent (Jiahuan, 2013). Different

sectors of society including the political arena have affected government contracting

business.

Persons who affect political change should understand how those changes affect

individuals and society. Political proponents have influenced government contracting

policy (Bromberg, 2014). Due to their connections with particular political parties,

private companies may receive a government contract award (Jiahuan, 2013). A

politicization of the government contracting process resulted from military wasteful

spending while outsourcing to private companies in Pakistan (Zaidi, Mayhew, Cleland, &

Green, 2012). Since government contracting organizations use private companies to do

government contracting business, ethical guidelines are necessary (Bumgarner &

Newswander, 2012). Ethical expectations exist regarding competency in government

contracting with due regard for public values (Bumgarner & Newswander, 2012). Since

political influence can affect the execution of organizational regulations, organizations

should move towards further oversight regarding political influence in government

contracting (Bromberg, 2014). Acceptable oversight should hold the contractor

accountable for ethically fulfilling terms of the government contract; inadequate oversight

may lead to unfulfilled contract terms. Although politics may affect the administration of

government contracts, positive ethical attitudes regarding government contracting might

demonstration a balance between government contracting organizations’ values and

society’s expectations. Government contracting organizations and employees may need

further reforms; as such, the process of accountability while administering government

contracts became stringent after 2008 (Jiahuan, 2013).

In government contracting, both the government contracting employees and the

suppliers have rights and obligations to conduct government contracting business

ethically. Corporate executives, suppliers, vendors, as well as the government contracting

employees should exercise restraint and be morally responsible when doing government

contracting business (Lohier, 2011). Payton and Kennedy (2013) argued that government

contracting requires transparency, equity, and ethics. Government contracting

organizations should improve their ethical climate (Singh, 2011). Gonzalez-Hermosillo

and Hesse (2011) posited that an organization’s economic climate is dependent on current

financial market trends. Sudden changes in financial market conditions may produce

financial crises (Gonzalez-Hermosillo & Hesse, 2011).

In 2008, the United States experienced one of the worst economic crises in recent

history (Tozzo, 2013). Although, the 2008 financial crisis appeared minor on a global

scale, the instability of the financial market affected most U.S. companies (Tozzo, 2013).

The FAR outlined requirements regarding private entities desiring to do business with

government contracting organizations (Acquisition Central, 2014).

The words contractor, supplier, and vendor are interchangeable throughout this

study. As stated in FAR Part 9, Subpart 9.1, an authorized contractor, vendor, or supplier

must have sufficient financial resources to perform the tasks as required in government

contracting (Acquisition Central, 2014). The contractor or supplier must have a

satisfactory performance record, a satisfactory record of integrity, and business ethics

(Acquisition Central, 2014). All authorized suppliers/vendors must have equal

opportunities to compete for government contracts (GSA, 2005).

Business ethics can change based on society’s perceptions of fairness, justice, and

impartiality (Tota & Shehu, 2012). Ethical values in business are in constant transition

(Tota & Shehu, 2012). Due to reports of extensive corporate scandals, society has lost

faith in business integrity (Baker & Comer, 2012). Tota and Shehu (2012) noted that

society’s views change more quickly than changes can occur in an organization. Society

is skeptical of organizations and their employees behaving ethically (Baker & Comer,

2012).

Leonidou, Kvasova, Leonidou, and Chari (2013) assessed that perceived unethical

behavior can diminish consumer/society’s trust. The ethical reputation of the organization

and its members enhances consumer/society’s trust (Leonidou et al., 2013). Robertson,

Blevins, and Duffy (2013) posited that business ethics is at the forefront of organizational

strategy and corporate governance. Business ethics leads to positive corporate governance

and helps an organization’s competitive advantage (Robertson et al., 2013). Unethical

factors can affect an employee, whether doing business with a private company or

government contracting entity. Knowing the organization’s ethical requirements may help

the employee to do his or her job.

Business ethics arise from the needs of different stakeholders to provide standards

by which to evaluate the ethicality of the organization (Rhodes & Wray-Bliss, 2013).

Stakeholders’ trust in an organization is not automatic; the need to provide organizational

ethics becomes apparent when stakeholders have input into the construct of

organizational values (Mihai & Alina, 2013). Mihai and Alina (2013) posited that

stakeholders who demonstrate too much faith in the organization become vulnerable.

Brown (2013) posited that stakeholders place trust in one person or group, therefore,

leaving themselves vulnerable to ethical violations. Unethical behaviors in business can

affect government contracting stakeholders.

Stakeholder Theory

Although stakeholder theory is crucial to understanding different aspects of

organizations, limited knowledge exists regarding the value of stakeholder theory and its

measurement (Harrison & Wicks, 2013). In this study, stakeholder theory highlighted the

relationships among ethics, shareholders, and government contracting. Lorne and Dilling

(2012) posited that difficulties can exist between the concept of shareholder value and

stakeholder value. Hayibor (2012) noted that stakeholders might preserve their interest by

acting against the company. The atmosphere of government contracting is conducive to

instance of unethical behaviors when administering government contracts (Costantino et

al., 2012). From 2000 through 2009, Schick (2011) noted increases in government

contracting spending. Vague government contracting regulations reduce transparency in

the government contracting process (Costantino et al., 2012).

Organizations may deter fraud through personal and organizational regulations

(Richman & Richman, 2011). Government contracting organizations may discourage

unethical behaviors through ensuring ethical compliance with government contracting

regulations. Ethical compliance within government contracting must focus on the broader

area of stakeholder management and social responsibility (Ayuso, Rodriguez,

GarciaCastro, & Arino, 2012). Government contracting employees may have their

agendas; however, compliance with government contracting policies may be useful to the

employees’ ethical performance.

Proponents of stakeholder theory encourage associating moralities of corporate

and social ethics with corporate ethical compliance (Renouard, 2011). Renouard (2011)

indicated that Freeman’s stakeholder theory allow formation of philosophies to guide an

organization’s ethics. Freeman’s theory provides stakeholders with alternative viewpoints

to explore the link with ethics and business (Kaufman & Englander, 2011). Fulmer and

Gelfand (2012) considered trust in companies and the impact on stakeholders or society.

Bansal and DesJardine (2014) posited corporate social responsibility affect stakeholders.

Corporate social responsibility incorporates ethics and morality within an organization

(Bansal & DesJardine, 2014). To maintain society’s trust, organizations can develop

standards and morality with all stakeholders (Shadnam, 2014). Organizational ethics is a

matter of compliance with applicable laws (Segal, 2012).

Opponents of stakeholder theory assessed that managers use the benefits of

stakeholder theory to influence resources for the benefit of the organization (Eskerod &

Huemann, 2013). Eskerod and Huemann (2013) posited that stakeholder theory is

manipulative and deficient in ethical approaches to stakeholders and is therefore

considered unimportant to the organization. Armenakis, Brown, and Mehta (2011) posited

that ethical obligations comprise an organization’s social change. Society criticizes and

abhors organizations that cannot demonstrate positive influences

(Armenakis et al., 2011).

Government contracting employees tasked with upholding public interests must

offer to society and all stakeholders both honesty and trustworthiness (Amirkhanyan,

Kim, & Lambright, 2012). Stakeholder value should resonate throughout the

organization. The stakeholder theory consists of the ethical and managerial branches.

Although both branches focus on preservation of the organization, the ethical branch

considers all stakeholders while the managerial branch emphasizes power (Deegan,

2007). An organization’s alignment and the stakeholders’ strategies may affect society’s

trust. Organizational success might consist of ethics and moral characteristics of all

stakeholders (Ayuso et al., 2012). It is not enough to think internally; stakeholder strategy

must think globally (Ni, Qian, & Crilly, 2014).

Companies might encourage their employees to fulfill their responsibilities to

society (Ni et al., 2014). Maintaining the stakeholder and the public’s trust is vital to an

organization’s success. Companies can deliberate the stakeholder’s needs when

considering organizational responsibilities (Yang, 2012). Aligning accountability in

contracting relationships might help in keeping the public trust (Witesman & Fernandez,

2013). Businesses can plan ethics and transparency guidelines to assist employees in

enforcing business and community values when safeguarding the public trust (Keeler,

2013). Deontological ethics safeguard organizational veracity by cautioning individuals

to avoid transgressions that violate the public trust (Adams & Balfour, 2010). Society

looks to public sector employees to act ethically and trustworthily (Svara, 2014).

Government contracting employees must strive to ensure compliance with organizational

values and applicable laws. In order to have a clear understanding of what ensures

fairness and impartiality when administering government contracts, organizations develop

detailed requirements and guidelines to assist employees in doing their jobs.

Corporate Governance

The government contracting arena established principles to assist government

contracting employees to fulfill their duties for the benefit of the stakeholders. In

response to the collapse of WORLDCOM, ENRON, and other large corporations,

Congress enacted the Sarbanes-Oxley Act (SOX) of 2002. SOX protects stakeholders

from fraudulent practices in the business industry (Hossain, Mitra, Rezaee, & Sarath,

2011). Corporate governance emerged from collaboration between investors, managers,

and employees (O’Kelly &Wheeler, 2012). Collaboration ensured respect and

appreciation of each stakeholder’s contribution (O’Kelly &Wheeler, 2012). In the focus

on corporate governance, each member is responsible for ensuring that ethical standards

are a focal point of the collaboration (Bota-Avram, 2013).

The organization should establish a strategic foundation to be successful; the

strategic framework embodies values, policies, and goals (Lai Fong, Azizan, & Samad,

2011). Corporate governance reflects the company’s efforts to address legitimate

responsibilities, therefore building a foundation of ethical business processes (Gupta,

The Congress enacted statutes and regulations that guide government contracting

policies and values. Schick (2011) suggested that recent increases in government

spending contribute to unethical behaviors by government contracting employees. The

Department of Justice (DOJ) entrusted financial resources to fighting occurrences of

contracting fraud (DOJ, Financial Fraud Enforcement Task Force, 2010). Unfortunately,