Business Research Methodology For Ethical Intention

Discussion

Discuss about the Business Research Methodology for Ethical Intention.

Thesis statement-In this essay, the article related to organizational ethics, individual ethics and ethical intention in international decision making is critically analyzed.

The article explores how Ethical Intention (EI) is affected by individual ethics (IE) and organizational ethics (OE). The ethical intention (EI) in the decision making process of international business is studied and results of the study has demonstrated that EI is influenced by both IE and OE.  The findings of the study suggests that governance mechanism should be created in an organization to increase ethical congruence and thus managers of the organization will be more likely to make choices which are more ethical during the decision making process of the organization. Also the study shows that organizational ethics   influence younger managers more than older managers (Elango et al 2010).

The importance of corporate governance is of paramount importance for an organization. The organizations are directed and controlled by corporate governance and there is collaboration among the ethical norms of the organization and the responsibility of the organization towards stakeholders which helps in managerial decisions which are in alignment with ethics of the organization. The corporate governance of an organization helps in maintaining a positive ethical climate and organizational ethics and Individual ethics are studied simultaneously in the article. The study will demonstrate how ethical intention (EI) is affected by organizational and individual ethics and the findings of the research can be used to develop practices of business ethics in an organization to make the process of corporate governance (Dale and Latham 2015).

The theoretical overview of the article suggests that there should be an alignment and congruence between the value of an individual and organizational values which is called person-organizational fit. According to Casmir (2013), the values of an organization are of prime importance for the practice of ethical behavior within an organization. Business is a part of society and thus every organization owe to all its stakeholders by following an ethical work culture and by practicing corporate governance.  There is congruence between the ethical decision making and values within an organization. The cultural and organizational setting might influence individuals with similar values to make different choices of ethics while making decisions for an organization. The article suggests that organization culture, ethical practices and values are complex. According to Ciulla (2014), there are several factors that can affect ethical decision making in an organization like work climate, organizational climate, accountability practices of an organization. However, studying the ethical practices of an organization in terms of international context can be quite complex. The system of bribery is highly prevalent in the international market and thus managers often end up working unethically.  Also the standards of ethical behavior in the host and home country do not match which lead to unethical behavior from managers. However, according to Crane and Matten (2016), the managers who stay abroad may not be able to resolve ethical issues because they feel distanced from the resources of the organization. The article suggest that managers who work in an international setting are vested with autonomous rights and the corporate governance, law and regulation are not strict enough in a distant location or within the cultural boundary of  a different country(Trevino and Nelson 2016). The managers are also not scrutinized well by various stakeholders like the journalists; customers and investors and thus managers might deviate from ethical decision making. However, it can be argued that managers working in a distant location do not require constant monitoring for making decisions based on ethics. Individual ethics have a huge role to play here and if the internal values of the organization are in alignment with the values and culture of the organization, then managers do not need strict monitoring to make ethical decisions (Giacalone and Rosenfeld 2013).

Research model and Hypothesis-

The relationship between Individual Ethics (IE) and Organizational Ethics and how they affect the ethical behavior of respondents are studied in the article. The design of Valentine and Rittenburg is used as the research model of the article.  The organizational ethics (OE) and the respondent’s own Individual Ethics (IE) are hypothesized to have an impact on the dependant variable of Ethical Intention EI). The controlled variables that are used in the article are gender, level of management experience and age. Three hypothesis are tested in the article which are Hypothesis 1- Ethical Intentional (EI) and Individual ethics are related positively. Hypothesis 2 states that ethical intention (EI) will be related positively to the perception of employee of high level of OE. The Hypothesis 3 suggests that age of the employee moderates the relationship between employee’s perception of OE and ethical intention (EI). There are several findings that are demonstrated in the article like younger managers are subjected to higher risk-taking and manipulation which can lead to deviation from ethical behavior, but this is not often true. Age may not be a determining factor in ethical behavior as older managers may also practice unethical behavior. The sample subjects of the article are MBA graduate students of two major state Universities of the United States with 2 years of full time work experience. Stepwise hierarchical regression  model are used to analyze the article (Michaelson et al 2014).

Conclusion

The limitation of the research article is related to the nature of the design. The decision making of managers in practice can’t be surrogated by the executive MBA students with experience of work and international exposure.  The classroom setting of the respondents is very different from the actual foreign setting and culture of an organization. There can be social response bias which is demonstrated by students. There are other variables like size of an organization, type of industry and degree of internationalization which are not considered in the article because the sample size of the article is very small. It can be concluded that ethical choices are made by an individual based on their individual values and values of the organization. Organizational practices and policies and norms set by leaders also influence the ethical choices made by an individual. 

The topic for the literature search is the stakeholder theory under the broad topic of Corporate Social Responsibility (CSR). Few articles and books will be explored to find out the details of stakeholder theory. The stakeholder theory was introduced by freeman in the 1980s. This theory laid the foundation of the CSR, which is a very important activity of almost all the organizations.

Conclusion

To find out more about this theory and CSR, many scholarly articles must be reviewed. To get the scholarly articles most easily, Google Scholar is the best source. All the authentic articles along with their citations are available in Google Scholar. The student has reviewed some scholarly articles. He has chosen the journals, which are ranked 4*, 4 and 3 in the ABS Academic Journal Guide. These articles have focused mainly on the stakeholder theory and corporate social responsibility. The articles were searched by using the key word ‘Stakeholder Theory’, ‘Corporate Social Responsibility’, ‘Stakeholder values’ and ‘Corporate Governance’ along with some journal names. It helps in more precise searching. Many articles have come up in the search list, but only those articles were considered for review, which were published in the ABS listed, ranked 4*, 4 and 3. This indicates the acceptability and high quality of the articles. This also adds more authenticity in the literature review. The year of publication has been taken from 2012 to 2017. This is so due to the more recent and upgraded research papers can elaborate the topic more precisely and can also provide new dimensions to the study. Once the article comes up in the search list, it is checked if the article is open to all. All the articles mentioned in this paper are very recently published journal articles, which are available through various online and university libraries.

The first article, ‘Stakeholder Theory, Value and Firm Performance’, was written by Jeffrey S. Harrison and Andrew C. Wicks and published in Business Ethics Quarterly, in the year 2013. The journal is rated 4 in the ABS list. The authors addressed the complexity of stakeholder values and new methods of measuring it. Another article has been taken from the Journal of Management, ranked 4* in the ABS list. In this article, the authors, Herman Aguinis and Ante Glavas (2012), have explored 102 books and book chapters and 588 journal articles to demonstrate the multidisciplinary and multilevel theoretical framework for integrating the CSR actions and connection with stakeholder values. The other major articles are from the Journal of Business Ethics, Journal of Management Studies and International Journal of Management Reviews, ranked, 3, 4, and 3 respectively in the ABS list. The third article by Brown and Forster (2013) focuses on the moral prioritization of CSR and stakeholder theory. The other two articles also focused on different aspects of these theories. Siebels and zu Knyphausen?Aufseß (2012) mentioned in their article about the role and place of the stakeholder theory and corporate governance in case of family business. This is a valuable concept in the business. George, McGahan and Prabhu (2012) have addressed the issue of inclusive growth through the above mentioned theories.

Learning Log

Through the literature search and reviews, many aspects of the stakeholder theory were highlighted and its relation with the CSR has been explored. Different authors had different views on these topics, and those were reviewed by the student. It has been found that, these two are ethically related. However, if CSR needs to be maintained, the stakeholders value is reduced to some extent.

H0: The organization is not profitable as the average profit per employee is less than the industry average profit.

H1: The organization is profitable as the average profit per employee is more than the industry standard.

P-value is the probability value of a statistical model, indicating the significance of the statistical model. This is calculated and interpreted to see if the null hypothesis is to be accepted or rejected. The critical p-value is held at 0.05 (say α). If the obtained p-value is greater than the critical value of 0.05, the model is statistically significant and null hypothesis is accepted. The opposite happens in case of p-value being less than the critical value.

In this example, p-value under normal distribution is 0.405, which is greater than the critical p-value of 0.05. Thus, the statistical model is significant. It indicates to accept the null hypothesis.

It is mentioned that there is no statistically significant difference between profit per employee (x) of the company and average industry profit (mean of x). But the problem of testing was based upon the assumption of the difference between the company average and industry average.

H0: x < mean(x) [The organization is not profitable as the average profit per employee is less than the industry average profit]

H1: x > mean(x) [The organization is profitable as the average profit per employee is more than the industry standard]

We are required to find out p ≤ x when {x-mean(x)} = 0

Since there is no difference between x and mean(x) and that makes x = mean(x) then the hypothesis testing would not function or the interpretation would not be appropriate. In this situation probability would be zero that signifies impossible event.

In case of test result giving the p-value as 0.032 at significance level of 0.01, then it could be said that, the p-value is less than the critical value of 0.05. Hence, at 5% level of significance, the statistical model is insignificant. However, the model is significant at 1% level of significance. Therefore, at 5% level of significance, the null hypothesis is accepted but, at 1% level of significance, the null hypothesis is rejected. 

If H0 i.e. null hypothesis is rejected even if it was true, then an error occurs. This is known as Type I error. The type I error occurs when the null hypothesis is rejected, even if it is true.

The assumptions are that the data are normally distributed, the simple random sampling is used, large sample size is chosen and the data is homogenous.

References

Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of management, 38(4), pp.932-968.

Brown, J.A. and Forster, W.R., 2013. CSR and stakeholder theory: A tale of Adam Smith. Journal of business ethics, 112(2), pp.301-312.

Casmir, F.L. ed., 2013. Ethics in intercultural and international communication. Routledge.

Ciulla, J.B. ed., 2014. Ethics, the heart of leadership. ABC-CLIO.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Dale, K. and Latham, Y., 2015. Ethics and entangled embodiment: Bodies–materialities–organization. Organization, 22(2), pp.166-182.

Elango, B., Paul, K., Kundu, S.K. and Paudel, S.K., 2010. Organizational ethics, individual ethics, and ethical intentions in international decision-making. Journal of Business Ethics, 97(4), pp.543-561.

George, G., McGahan, A.M. and Prabhu, J., 2012. Innovation for inclusive growth: Towards a theoretical framework and a research agenda. Journal of management studies, 49(4), pp.661-683. 

Giacalone, R.A. and Rosenfeld, P. eds., 2013. Impression management in the organization. Psychology Press.

Harrison, J.S. and Wicks, A.C., 2013. Stakeholder theory, value, and firm performance. Business ethics quarterly, 23(1), pp.97-124.

Michaelson, C., Pratt, M.G., Grant, A.M. and Dunn, C.P., 2014. Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics, 121(1), pp.77-90.

Siebels, J.F. and zu Knyphausen?Aufseß, D., 2012. A review of theory in family business research: The implications for corporate governance. International Journal of Management Reviews, 14(3), pp.280-304.

Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it right. John Wiley & Sons.