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| Author: | Stevens, J.M. (et al.) |
| Title: | Symbolic or substantive document? The influence of ethics codes on financial executives' decisions |
| Journal: | Strategic Management Journal
2005 : FEB, VOL 26:2, p. 181-195 |
| Index terms: | Executives Financial management Decision making Corporate governance Business ethics Ethics |
| Language: | eng |
| Abstract: | With the recent spate of scandals, there have been calls for various governance mechanisms incl. ethics codes to guide executive (hereafter as: exec/s.) decision-making. However, the extent to which ethics codes are actually used by execs. ... is unknown. This paper develops hypotheses by combining stakeholder (here as: s-hldr/s.) management theory and the theory of planned behaviour, and tests them with a survey of 302 senior financial execs. (e.g. CFOs, VPs of Finance). It is found that financial execs. are more likely to integrate their company's ethics code into their strategic decision processes (a) if they perceive pressure from market s-hldrs. to do so (that is suppliers, customers, shareholders etc.), (b) if they believe the use of ethics codes creates an internal ethical culture and promotes a positive external image for their firms, and (c) if the code is integrated into daily activities through ethics code training programs. The effect of market s-hldr. pressure is further enhanced when execs. also believe that the code will promote a positive external image. Of particular note, it is not found that pressure from non-market stakeholders. |
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