Muel Kaptein

Business codes of multinational firms: What do they say?

Business codes are an oft-cited management instrument. But how common are codes among multinationals? And what is their content? In an unprecedented study, the codes of the largest corporations in the world have been collected and thoroughly analyzed. This paper presents the results of that study. Of the 200 largest companies in the world, 52.5% have a code. More than half f these codes describe company responsibilities regarding quality of products and services (67%), adherence to local laws and regulations (57%) and the protection of the natural environment (56%). Many codes make reference to principles governing stake-holder relations (e.g. transparency (55%), honesty (50%) and fairness (45%)), corporate core values (e.g. teamwork (43%)), appropriate conduct among employees (e.g. discrimination (44%) and intimidation (43%)) and treatment of company property by employees (e.g. conflict of interests (52%), corruption (46%) and fraud (45%)). Monitoring compliance with the code is addressed in 52% of the codes. Based on this content study, three types of codes are distinguished: the stakeholder statute (72%), the values statement (49%) and the code of conduct (46%). The results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes.

Toward Effective Stakeholder Dialogue

Acompany’s license to operate and grow is no longer seen exclusively in terms of maximizing profits. Embedding an organization in society—in a sustainable manner—has become a condition for continuity and growth. Sustainable development requires that a company’s performance be valued positively by the stakeholders, in financial, environmental, and social terms. 1 The financial bottom line moves aside for the triple bottom line, 2 in which profits are linked to environmental (planet) and social (people) value. To an increasing extent, both primary and secondary stakeholders are calling companies to account directly for their triple bottom line. “Civil society is demanding greater accountability and transparency from business” according to the World Resources Institute and the World Business Council for Sustainable Development. 3 The number of international NGOs registered by the Union of International Associations has more than doubled since 1985, and now amounts to 40,000. 4 However, the public’s impression of how companies deal with issues of sustainability does not always seem to be positive. Research by CSR Europe in 2000 revealed that half the European population believes that insufficient attention is paid to socially responsible business practice. A study by the Conference Board showed that half the U.S. population said that, when making recent purchases, they had taken the social performance of the company into consideration. 5 In most countries, the government

Twelve gordian knots when developing an organizational code of ethics

Following the example of the many organizations in the United States which have a code of ethics, an increasing interest on the part of companies, trade organizations, (semi-)governmental organizations and professions in the Netherlands to develop codes of ethics can be witnessed. We have been able to escort a variety of organizations in this process. The process that organizations must go through in order to attain a code involves a variety of difficult decisions. In this article we will, based on our experiences, describe twelve dilemmas which will have to be ‘solved’ during the development of such a code. When one or more of these dilemmas is ignored or an ungrounded choice is made, the effectiveness of the code will be negatively affected. Furthermore, the twelve dilemmas could be used as twelve dimensions to exemplify organizational codes of ethics. In this article we will also discuss a method to organize ethics within the organization. This will serve as a guide as to how, with respect to the dilemmas described, adequate considerations can be made. The article will be concluded with a description of our experiences at the Dutch Schiphol Airport. This case demonstrates how the aforementioned reasoning can be applied in practice.

Understanding unethical behavior by unraveling ethical culture

Unethical behavior in the workplace is a widespread phenomenon. In this article a model for the ethical culture of organizations that consists of eight dimensions is employed to explain unethical behavior. The sample was composed of 341 triads consisting of a manager and two direct reports. The results show that six dimensions of ethical culture were negatively related to observed unethical behavior: ethical role modeling of management, ethical role modeling of supervisors, capability to behave ethically, commitment to behave ethically, openness to discuss ethical issues, and reinforcement of ethical behavior. Two of the eight dimensions, clarity of ethical standards and visibility of (un)ethical behavior, were not significantly related to unethical behavior. This study demonstrates that multiple dimensions of ethical culture have to be taken into account to reduce unethical behavior. The study opens up avenues for future research about the significance of each dimension in specific settings, the dynamic relationship between these dimensions, and the instruments required to improve each dimension of ethical culture.

Developing a Measure of Unethical Behavior in the Workplace: A Stakeholder Perspective

To date, only one empirically tested measure of the observed frequency of unethical behavior in the workplace exists. This widely used measure focuses on intraorganizational cheating and thus covers only a limited part of the much broader spectrum of unethical behaviors in the workplace. Given the importance of a valid measure, this article uses stakeholder theory as a conceptual basis to develop a broader and multidimensional measure of unethical behavior in eight consecutive steps. Exploratory factor analysis generates five subscales comprising 37 items of unethical behavior primarily related to financiers, customers, employees, suppliers, and society. Confirmatory factor analysis demonstrates that a five-factor model has a superior fit to a one-factor model. The subscales display good internal reliability. Preliminary evidence of nomological and criterion-related validity is also provided.

A study of the impact of three leadership styles on integrity violations committed by police officers

Purpose – The purpose of this paper is to explore the connection between three aspects of leadership – role modeling, strictness, and openness – and nine types of integrity violations within the Dutch police force.Design/methodology/approach – In this paper data were collected by means of a questionnaire from five regional police organizations in The Netherlands (2,130 questionnaires to regular police officers, response rate 51 percent). Respondents were requested to describe their direct supervisors leadership qualities and the frequency of integrity violations in their unit. Multivariate analysis techniques were employed to test the relation between the three leadership styles and the nine types of integrity violations.Findings – The paper finds that role modeling, strictness, and openness of leaders influence the behavior of police officers, but the impact of the variables on the different types of integrity violations varies. Role modeling is especially significant in limiting unethical conduct in th...

Spiraling Down into Corruption: A Dynamic Analysis of the Social Identity Processes that Cause Corruption in Organizations to Grow

To date, theory and research on corruption in organizations have primarily focused on its static antecedents. This article focuses on the spread and growth of corruption in organizations. For this purpose, three downward organizational spirals are formulated: the spiral of divergent norms, the spiral of pressure, and the spiral of opportunity. Social Identity Theory is used to explain the mechanisms of each of these spirals. Our dynamic perspective contributes to a greater understanding of the development of corruption in organizations and opens up promising avenues for future research.

Measuring corporate integrity: a survey‐based approach

Purpose – Aims to illustrate how management can examine corporate integrity.Design/methodology/approach – The results of a survey of the US workforce are used to illustrate how integrity can be measured. Questionnaires were sent to 3,075 pre‐qualified working adults with a response rate of 78 percent.Findings – Of the respondents, 76 percent reported being aware of a violation of the law or of company standards by a colleague or manager in the past 12 months. Many organizations are also sending employees the wrong message when it comes to conducting themselves in an ethical manner.Research limitations/implications – The research could be extended to other countries. Additionally, it would be a big step forward if research could lead to plausible findings about the relationship between organizational climate and unethical behavior.Practical implications – Management should consider the option of monitoring integrity periodically by means of a questionnaire, attending not only to the frequency of unethical ...

The Diamond of Managerial Integrity

Integrity is of as much importance to the manager as it is to the organization and its stakeholders. Therefore, crucial questions are: What distinguishes the manager with integrity? What is typical of the manager of integrity? Is it possible to name generally applicable criteria? On the basis of extensive international empirical research, an in-depth examination of literature and numerous interviews and workshops with managers and employees, this article presents the Diamond of Managerial Integrity. The diamond consists of two layers: on the one hand, the manager is a person of integrity and on the other hand, he stimulates the development of employee integrity. The manager of integrity is Authentic, Reliable and Constructive. The manager of integrity also has a Gentle Hand, a Protective Hand and a Strong Hand towards employees. In this article, each of the six qualities is developed into three elements. The diamond can be employed to assess and enhance the integrity of a manager.

Integrity management of police organizations

This article presents a conceptual framework for reviewing the integrity of police organizations, provides a general basis for developing specific activities and gives an overview of possible strategies and activities. Integrity management has to safeguard the conditions in the organization that enable police officers to find a responsible balance between three fundamental types of conflicting interests: the entangled hands dilemma; the many hands dilemma; and the dirty hands dilemma. We develop seven organizational qualities that encourage a prudent balance. An integrity audit can help in measuring these qualities. By examining the organization from this perspective, it is possible to work on improving the organization’s integrity.