Demographic variables

Ethical and unethical conduct is the product of a complex combination of influences. At the center of the model is the individual decision maker. He or she has a unique combination of personality characteristics, values and moral principles, leaning toward or away from ethical behavior. In a review of empirical studies, researchers classified the variables that predict ethical attitudes and behavior as individual beliefs originating from: nationality, religion, gender, age, education, working experience; and situational factors that influence ethical belief and decision-making such as referent groups, rewards and sanctions, code of conduct, type of ethical conflict, organization effect, industry, and business competitiveness. Generally, these two categories can also be subdivided into three categories: personal/demographic, cultural, or economic factors (Ford & Richardson, 1994).

2.3.1 Gender

Gender differences in ethical perception and decision-making are consistent with a masculine success-orientation (males are more concerned with materials and success) and a female relationship-orientation (females are most interested in relationships and assisting people) (Franke, Crown & Spake 1997). Thorne (1999) investigated the association between demographic variables and the moral development of Canadian accounting students and compares it with American accounting students. The result was similar to U.S based findings and the moral development of the sample of Canadian accounting students is associated with both years of education and gender, with no significant association with age or audit experience.

Regarding the perception of ethical issues by male and female, Derry (1989) finds there is no significant difference between males and females in the moral reasoning of managers when involving work-related conflicts. However, Betz et al. (1989) found men are more likely to engage in actions regarded as unethical. Some studies have supported the findings that women take more ethical positions than men (Luthar, et al., 1997; Sims et al., 1996; Weeks et al., 1999).

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Conversely McCuddy & Peery (1996) as well as McDonald & Kan (1997) found no significant correlation exists between ethical perception and gender.

In an empirical study of ethical judgment on selected accounting issues, Stanga & Turpen (1991) found no gender differences in ethical judgments. However, much of the existing research implies that female accountants and female accounting students tend to be more ethical than their male counterparts (Ameen, et al. 1996; Lampe & Finn, 1992; Shaub, 1994). Shaub’s (1994) found that there are no significant correlations between age and the levels of ethical reasoning in his subjects of auditors. Nevertheless, females were found to have higher ethical reasoning scores and female accounting students are less tolerant of unethical academic behaviors than their male counterpart.

Although the findings in the literature are mixed, the predominance of experiential evidence suggests that there are gender differences in ethical perceptions and attitudes (Franke, et al., 1997;

Weeks, et al., 1999; Whipple and Swords, 1992). Sims et al. (1996) found that males were more likely to pirate software. Okleshen & Hoyt (1996) compared the ethical perception and decision-making of business students in the United States and New Zealand. They found that females are less tolerant of situations involving ethical dilemmas than their male counterparts. Luthar, DiBattista, & Gautschi (1997) examined ethical attitudes and perceptions of business students and found that female students exhibit more favorable attitude towards ethical behaviors than males.

2.3.2 Education background

Development of this sensitivity is important because ethical conflicts can occur “when accountants perceive that their duties toward one group are inconsistent with their duties and responsibilities toward some other group or their own self-interests” (Mintz 2007, 34). Shaub, Finn and Munter (1993) suggest that ethics education could improve ethical sensitivity by focusing on recognition skills.

Kohlberg (1981) theorizes that people who better understand complex and nuanced issues will display more sophisticated levels of moral reasoning. Grounded in this view, researchers

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frequently hypothesize positive relationships between education and ethical judgment.

Empirically, the evidence does not appear to support this view. Many studies fail to find a link between education and ethical judgments (Swaidan et al., 2003), while others report negative relationships (Chiu, 2003). Although these empirical results might seem contrary to Kohlberg's theory, they may actually support it. Higher levels of education might encourage people to more fully consider alternate perspectives or extenuating circumstances rather than judging complex ethical issues in narrow absolute terms. If so, a negative relationship between education and strictness of ethical judgments could be explained under Kohlberg

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2.3.3 Working experience

As with other antecedents, contradictory empirical evidence exists among studies of work experience and ethical judgments. Chiu (2003) reports that work experience lessens the strictness of ethical judgments, while Kidwell et al. (1987) and Weeks et al. (1999) find that work experience leads to stricter ethical judgments. Some studies find the variables to be unrelated (e.g., Barnett and Valentine, 2004; Schepers, 2003). According to Hunt and Vitell (2007), socialization to workplace norms at least indirectly affect ethical judgments. If so, the more time spent in a job strengthens socialization outcomes. Unlike education, which may improve one's ability to apply ethical standards, workplace socialization may actually raise the ethical standards themselves. As such, more work experience could produce stricter ethical judgments.

2.3.4 Age

The literature suggests that age is a factor in determining ethical perception and decision-making. Johnson et al. (1986) found the older managers tend to place higher importance on trust and honor and allocate less importance to money and advancement, compared to younger executives. Arlow (1991) substantiated an inverse relationship between age and individual Machiavellian orientation. Nyaw & Ng (1994) found that older respondents were less tolerant of unethical behavior than younger ones. And also, in an investigation of expatriate and local managers in Hong Kong, McDonald & Kan (1997) found older employees are less likely to express agreement to an unethical action than younger employees. However, Borkowski & Ugras

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(1992) suggest that college freshmen and juniors were more justice-oriented (fairness and equality) than MBAs, who tended to be more utilitarian when faced with ethical dilemmas.

Additionally, based on self-reporting, Sims et al. (1996) found older students pirate software more frequently than younger students. Ruegger & King (1992) suggest that age is a determining factor in ethical decision-making and found age has correlated to good ethical attitudes. It is not certain whether it is age or practical experience associated with age in work place that causes individuals to change their ethical positions

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Chapter 3: METHODOLOGY