1994 Ethics in American Business Survey

December 31, 1999
Document

Ethics in American Business

In 1994, the Ethics Resource Center (ERC) conducted its landmark National Business Ethics Survey (NBES). Questionnaires were distributed to a sample of employees and managers from a variety of industries to examine their attitudes toward ethical issues and programs in their own companies.

The survey measured attitudes, knowledge and beliefs in key areas such as pressures to engage in misconduct , the actual observation of misconduct and reporting of misconduct observed.

This survey was the first of its kind to examine business ethics comprehensively at the national level. It established benchmarks that have been used in subsequent studies of corporate business ethics.

Objectives

The objectives of the NBES were to:

  • Determine the effects of ethics programs on employee attitudes and behavior.
  • Provide information to help companies implement effective ethics programs.
  • Contribute to the ongoing debate about effective means for strengthening business ethics.
  • Identify the major ethical issues facing employees today.

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Methodology

In December 1993, the ERC contracted with NFO Research, Inc. of Greenwich, CT to survey U.S. workers on their attitudes toward and knowledge of ethics and ethics programs within their companies. Survey questionnaires were distributed by NFO to 7,600 households in late 1993. A total of 4,544 surveys were returned, representing a 60 percent response rate. The survey included 48 multiple choice and multiple response questions. The ERC was solely responsible for the analysis and interpretation of the survey data.

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Findings

The survey data and its analysis are organized into five chapters:

  • Chapter One: Overall Findings
  • Chapter Two: Effect of Ethics Programs
  • Chapter Three: Differences by Level of Responsibility
  • Chapter Four: Differences by Function
  • Chapter Five: Differences by Industry

Chapter One: Overall Findings

Corporate ethics programs are increasing in number and scope at a time when employees are doubtful about whether or not ethics is rewarded in the marketplace and are also skeptical about the ethical commitment and behavior of their fellow employees.

Employees generally found ethics programs valuable in guiding their decision making and conduct but, nonethless, preferred to follow the chain of command and turn to their direct supervisor for advice about ethics issues.

Nearly one-third of employees reported that they sometimes feel pressured to engage in misconduct to achieve business objectives. Also, almost one-third of employees observed misconduct at work, but fewer than half reported it to their companies. The majority of those who did report misconduct were not satisfied with their companies' response.

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Chapter Two: Effect of Ethics Programs

Respondents were categorized in two groups: those who worked for companies without any ethics initiatives (i.e., no code of conduct, no ethics training and no ethics office) and those from companies with comprehensive ethics programs (i.e., code of conduct, ethics training and ethics offices).

Striking differences could be seen in the responses from each group. Corporate ethic programs have a positive impact on employees' behavior and their opinions about the ethics of fellow employees, the management of their companies and even themselves. Ethics initiatives increase employee awareness of misconduct, employee willingness to report misconduct and the level of satisfaction with the outcome of their reporting.

Respondents with a comprehensive ethics program constituted 20 percent of the survey population. Those with no program elements constituted 25 percent of the survey population. Those with only a code of conduct constituted 13 percent of the survey population.

Data from those with only a code of conduct often showed significant differences from the other two groupings and are, therefore, included only when they are of interest. A code of conduct as the sole component of an ethics initiative has a negative effect - it increases awareness of misconduct without providing the means to deal with it.

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Chapter 3: Differences by Level of Responsibility

Respondents were compared by level of responsibility within their corporate hierarchy (such as senior managers as opposed to hourly workers). Generally, respondents at high levels in the organization held more positive views on ethics than respondents in lower levels of the hierarchy. The survey found the amount of reported pressure to engage in misconduct increases as one moves down in the organization. The more optimistic outlook about business ethics a respondent has, the less s/he will encounter misconduct on the job.

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Chapter 4: Differences by Job Function

Data was organized into seven key functional areas of job responsibility. Generally, employees in manufacturing functions within companies were the most pessimistic about ethics in American business. Product, customer service and quality control employees had negative views on ethics, too.

By contrast, employees in administration, human resources and public relations positions had the most positive outlooks about business ethics. In addition, employees in technical positions seemed to face the most pressure to commit misconduct.

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Chapter 5: Differences by Industry

Data results were divided into eight groups based on the industry of the employing corporation. Employees from construction, manufacturing, transportation, communications and public utilities industry groups were more skeptical than others about business ethics. However, employees from the finance and insurance industry groups had the most positive views of ethics in American business as well as ethics within their own companies.

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Reproduction and Licensing

Reproduction of this information in any form whatsoever is strictly prohibited without the written permission of the Ethics Resource Center (ERC).

Organizations or individuals interested in administering any part of the survey questionnaire are strictly prohibited from doing so without a written licensing agreement with the ERC.

I would like to reproduce or license a portion of the 1994 National Business Ethics Survey.

 Pressure to Commit Misconduct

Do you ever feel pressured by management to compromise your company's standards of ethical business conduct to meet business objectives?

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Observed Misconduct at Work

In the past year, have you witnessed misconduct that you thought violated the law or company policy?

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Reports of Misconduct

Did you report your observation of misconduct to your company?

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Satisfaction with Company's Response

How satisfied were you with your company's response to your reported misconduct?

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