salience and code of ethics savannah presentation
TRANSCRIPT
The Role of Salience and Group Identity in the Effectiveness of Codes of Ethics
Fraud and Forensic Accounting Education ConferenceSavannah, GAMay 17, 2012
Brett Hunkins
Todd Thomas
DeVos Graduate School of Management at Northwood University
Origin of the Idea
Anecdotal classroom observations
Varied experiences
Need for multi-disciplinary study
Codes of Ethics Research
Codes per se
Individual beliefs of those bound by code
Organizational factors
Codes of Ethics Per Se
Critical considerations (Schwartz, 2002; Orlitzky, 2003; Vershoor, 1998)
Code content
Process of code creation
Implementation plan
Administration plan
Code content (Schwartz, 2004)
Examples
Tone
Length
Relevance
Realis(m)
Process of Code Creation
Employee involvement and engagement
Implementation Plan
Support of senior management
Training
Reinforcement
Administration Plan
Company abides by the code
Violations are reported
Anonymous phone lines
Violations are communicated
Enforcement is consistent
Codes of Ethics Research
Codes per se
Individual beliefs of those bound by code
Organizational factors
Individual beliefs
Individual Engagement
Variable interpretation across organization (Hall, Bowen, Ferris, Royle and Fitzgibbons (2007
Subjective experience and felt accountability may stifle codes’ efforts to address individuals uniformly
Individual Engagement (cont’d)
Variation of identification and accountability can help explain different responses to uniform context (Frink and Kilmoski, 1998)
Individual Engagement (concluded)
Behavior is best understood by looking at aspects that directly affect subjectiveinterpretation and experience of personal responsibility (Hall, 2007)
Group Norms
Codes attempt to specify organizational norms, though…
Individuals’ moderation of behavior and feeling of accountability influenced by identity and belonging. (e.g. Charness, Rigotti and Rustichini, 2007; Terry 1996).
Organizational Context
Ethical context is defined by relationship of:
Corporate ethical values
Organizational commitment (individual to organization)
Person-Organization fit (employee owns company values and prefers to help the firm)
Individual Beliefs (summarized)
The more congruence between individual self-identity and behaviors exhibited by the organization, the greater commitment and likelihood to behave in alignment with the norms of that organization.
Codes of Ethics Research
Codes per se
Individual beliefs of those bound by code
Organizational factors
Organizational factors
Ethical Climate
Variability of ethical values and behaviors across departments (Victor and Cullen, 1988; Meglino, Ravlin, Adkins, 1989)
Variability Across Departments
Departmental task and stakeholder relationships (Weber, 1995)
Organizational structure (e.g. Mintzberg, 1983)
Managerial style (e.g. Morgan, 1986)
Corporate strategy (e.g. Nystrom, 1990)
Relevance of individual –organizational match?
Individual – Department/Division Match?
Social identity theory related to self concept, i.e. personal and social identity (Tajfel and Turner, 1985)
Organizational identity is a unique type of social identity (Ashforth and Mael, 1996)
Members identify with what they perceive the organization represents (Kreiner and Ashforth, 2004)
Individual – Department/Division Match? (concluded)
Identity salience influences role performance (Stryker, 1987)
Individuals choose behavior through relative salience in a conflict of group expectations (Verbos, Gerard, Forshey, Harding, Miller, 2007)
Behavior guided by most salient identity (Haslam, Postmes, Ellemer, 2003)
And So . . . .
Would Codes of Ethics be strengthened by addition of function-specific codes?
If so, would a more salient code further engrain ethics into the organization’s DNA?
And if so, would a more salient code develop a greater sense of identity because of a more immediate obligation?
And if so, how might Code-related training be modified?
Empirical design
Organizational surveys
Individual surveys
Organizational Surveys
Finance-specific codes (SOX)
Overall codes
Function-specific codes (but not Finance)
Which employees bound by either?
Organizational SurveysYES NO
Our organization has a code of ethics for all employees
Our organization has a separate, specific code of ethics for Senior Finance Executives
If Yes, please briefly describe the levels of the finance function covered by that specific code:
Our organization has a separate, specific code of ethics for functions other than Finance
If Yes, please briefly describe which functions, and the levels of the function covered by that specific code:
Our organization trains employees on the corporate code alone
If a separate code exists for functional areas, our organization trains employees on the function-specific code
Organizations Surveyed
Publicly held
Private (but SOX-like)
Private
Not-for-profit
Preliminary Results
No non-finance functional codes
No finance-specific codes for non-public entities
Private (but SOX-based) entities lack finance-specific code
Next Steps
Continually expanding organizational surveys
Develop employee survey
Evaluate results
Publish
Questions?
THANKS!!
Brett Hunkins ([email protected]; 989.837.4486)
Todd Thomas ([email protected]; 989.837.4272)