Academic journal article Management Accounting Quarterly

Organizational Ethics: Measuring Performance on This Critical Dimension: How Do Accounting and Finance Professionals Perceive Their Employer's Ethical Values? Find out, and Benchmark Yourself with the Results from a Survey of IMA Members

Academic journal article Management Accounting Quarterly

Organizational Ethics: Measuring Performance on This Critical Dimension: How Do Accounting and Finance Professionals Perceive Their Employer's Ethical Values? Find out, and Benchmark Yourself with the Results from a Survey of IMA Members

Article excerpt

In the face of recent corporate scandals, ethical issues confronting accounting and finance professionals are receiving increased attention. This attention demands that top managers emphasize business ethics throughout their organizations. (1) But identifying the personal and corporate issues that impact ethical behavior in the workplace can be a challenge! In particular, the manner in which an accounting professional approaches an ethical dilemma at work can be influenced by his or her organization's overall position on ethics. (2)

While many professionals treat ethics as an individual issue, the whole picture involves a great deal more. Ethicality at the organizational level provides the context that can drive an individual's response to an ethical dilemma in the workplace. The term "organizational ethics" may be new to many accounting and finance professionals. Organizational ethics is often comprised of a company's general position on ethical conduct and social responsibility. It is indeed a context, but one that can be enhanced by compensating ethical behavior and reprimanding unethical behavior. (3) Employees and managers operating consistently within the ethical norms of a company can also build organizational ethics. (4)

MEASURING ORGANIZATIONAL ETHICS

Accounting and finance professionals are often considered experts in the measurement of corporate performance in many dimensions. Yet they may know less about the manner in which companies are evaluated from an ethical standpoint, and this should be remedied. Indeed, it is important for business professionals to periodically assess perceptions of the surrounding organizational ethical values because such beliefs can potentially influence employees' attitudes and ethical decision making. (5) We will illustrate the use of one valid and reliable scale available that can be used to measure an individual's perception of "corporate ethical values" (CEV). (6) The CEV scale (and others like it) can serve as a managerial assessment tool, providing information regarding the awareness and effectiveness of a company's ethics policies. The CEV measure consists of five statements about company ethics that are rated on an "agree-disagree" scale. The higher the CEV level, the more an individual perceives that a company actively supports business ethics (see Table 1).

Measures such as CEV can be useful to a company trying to assess its overall organizational ethics. Measuring CEV across different departments, organizations, professions, and industries can provide information relevant to company decision makers. (7) It can foster discussion about ethics in the organization that highlights differences by job category, level of experience, and level of involvement in decision making. In particular, individual and consolidated scores on the CEV scale could be discussed in ethics training, and consensus could be achieved regarding how to increase these scores in the future. The scale's individual items related to managerial action, employee punishments, and employee rewards could also be evaluated separately and discussed in training sessions to better understand the current state of company policy in these areas. Such feedback would likely be invaluable to corporate leaders who must make policy decisions with implications for business ethics. Furthermore, evaluating ethical values can provide managers with an overall idea of the company's apparent commitment to business ethics from an employee perspective, which could make possible the development and improvement of helpful formal ethical programs such as ethics codes and training. (8) To illustrate, we will apply this approach to the profession itself.

HOW ACCOUNTANTS PERCEIVE THEIR EMPLOYERS' ETHICAL VALUES

In a 2002 survey, we asked a sample of IMA members to rate their perception of the ethical values of their employer. We received 460 responses from a sample that is representative of the IMA regular membership. …

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