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Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Using Ethics Vignettes in Introductory Finance
Classes: Impact on Ethical Perceptions of
Undergraduate Business Students
Julie A.B. Cagle , Philip W. Glasgo & Vanessa M. Holmes
To cite this article: Julie A.B. Cagle , Philip W. Glasgo & Vanessa M. Holmes (2008) Using Ethics Vignettes in Introductory Finance Classes: Impact on Ethical Perceptions of Undergraduate Business Students, Journal of Education for Business, 84:2, 76-83, DOI: 10.3200/JOEB.84.2.76-83
To link to this article: http://dx.doi.org/10.3200/JOEB.84.2.76-83
Published online: 07 Aug 2010.
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ome schools have decided to require a formal business ethics courseintheircurricula,whereasothers have chosen to integrate ethics discus-sionsintomanycoursesinthebusiness coreandmajorfieldofstudy.Thelatter approach presents a dilemma for most finance faculty: They are expected to deal with the topic in a professional manner,andyetfewhaveformaltrain-inginhowtoteachsuchmaterial.Dean andBeggs’s(2006)interviewsoffaculty ataCatholicuniversityin1997revealed thatfacultydidnotfeelthattheyhadthe propertrainingtoteachethics.1
Hawley’s (1991) scathing criticism of shareholder wealth maximization (SWM)astheprimary(andoftensole) objective of the financial manager and corporationincludedasurveyofbusiness ethicsandsocialresponsibility(BE–SR) coverage in 22 corporate finance texts. AccordingtoHawley,BE–SRcoverage wasnonexistentinmostofthetextbooks andwas“treatedonlyinaverybriefand ineffectualmannerintherest”(p.711). Since then, many researchers, includ-ingAng (1993), have documented that professors, practitioners, and attorneys view SWM as consistent with ethical behavior. In fact, Wallace (2003) used an EconomicValueAdded and Market Value Added approach to demonstrate that SWM is a necessary condition for maintaininglong-runinvestmentinother
stakeholderrelations.Acasualexamina-tion of recently published finance text- booksrevealsthatthediscussionofeth-icsandsocialresponsibilityisnowmore common.Evans,Ferris,andThompson (1998) reported that finance educators believe that business ethics instruction shouldbeincludedinfinancecourses.
Althoughthesearesignsofimprove-ment, the questions remain as to how toeffectivelyteachbusinessethicsand how to overcome faculty resistance to ethics instruction. Dean and Beggs (2006) reported that business school faculty believe they can have little or no impact on students’ ethical behav-ior, but faculty reluctance may stem fromsomethingotherthanconcernwith effectiveness. According to Dean and Beggs,manyprofessorsfeeluncomfort-able in discussing ethical issues “for fear of judgment or moral proselytiz-ing” (p. 40). Because the interesting ethical issues deal with right versus right or wrong versus wrong, there is norightanswer,andthatcircumstance contradicts the view of instructor as expert. There is also pressure to cover traditionalcontentinadiscipline,espe-ciallyinacoursethatisaprerequisiteto anothercourseinthediscipline(Alsop, 2006).As a result, faculty may default and allow the material to teach itself as the students read textbook mate-rial. This is inconsistent with current educational theory that suggests stu-dents do not change behavior when
UsingEthicsVignettesinIntroductory
FinanceClasses:ImpactonEthical
PerceptionsofUndergraduate
BusinessStudents
JULIEA.B.CAGLE VANESSAM.HOLMES
PHILIPW.GLASGO PENNSTATE–WORTHINGTONSCRANTON
XAVIERUNIVERSITY DUNMORE,PENNSYLVANIA
CINCINNATI,OHIO
S
ABSTRACT. Anumberofethicalscan- dalsinthepastdecadehaveraisedaware-nessofethicalissuesinbusiness.J.M. D’Aquila,D.F.Bean,andE.G.Procario- Foley(2004)reportedthat97%ofbusi-nessleadersperceiveAmericanbusinesses asethical,versus24.5%ofstudents.G.R. Laczniak,M.W.Berkowitz,R.G.Brooker, andJ.P.Hale(1995)providedevidence thatbusinessleadersfeelunfairlymaligned andthattheiractualbehaviorispositive. Thus,adiscrepancyexistsbetweenstu-dents’andpractitioners’perceptionsof businessethics,andthisdiscrepancyisa concernbecausebusinessstudentsbecome practitionersongraduation.J.Merritt (2003)suggestedthatthejobofcleaning upcorporateAmericalieswithmanage-menteducation.Giventhatmanyscandals haveinvolvedfinancialimpropriety,finance facultyhavebeenatthecenterofthedebate aboutwhetherethicsshouldbeintegrated intothecurriculum,andifso,how.
Keywords: ethicsvignettes,students’ethi-calperceptions,teachingbusinessethics
Copyright©2008HeldrefPublications
lessonsarepassivebecausetheydonot connect the material with themselves (Dean&Beggs).
Thepurposeofthispaperistwofold. First,wereportonanexperimentcon-ducted by us to see if ethics vignettes provided in a popular introductory finance text (Ross, Westerfield, & Jor-dan,2004)anddiscussedinclasswould beaneffectivewaytoteachethics.2This
approach places instruction in finance ethicsatthesametimeasinstructionin finance principles, and that placement would associate the two in students’ minds.Askingstudentstodiscusstheir opinionsofethicaldilemmasisanactive pedagogical style requiring students to connect to themselves and is therefore more likely to be an effective means of ethics instruction. Discussion con-trastswithlecture,andDeanandBeggs (2006)describedthatcontrastasapas-sivepedagogythatstudentsareunlikely toconnecttothemselvesbecausethere is no reflection component. The peda-gogy of discussion of ethics vignettes may also overcome faculty reluctance to teach ethics.The vignettes are from atypicalprinciplesoffinancetext;thus, instructors do not have to find instruc-tionalmaterialsbeyondthetextalready usedforthecourse.3Thesevignettesare alsoshortandtakeuparelativelysmall amountofinstructionaltime.
Second, we examined whether expo-sure to the ethics vignettes affects stu-dents’ perceptions of business ethics. Exposuretobusinessethicsintheclass-room may give students a broader per-spectiveofbusinessethicsversusmedia coverage of ethics scandals and better preparethemfortheworkplace.Thepres-entstudyprovidesfurtherinsightintothe ethicalperceptionsofbusinessstudents. AsstatedbyD’Aquila,Bean,andProc- ario-Foley(2004),“Scantempiricalevi-dence exists on the ethical perceptions ofstudentsandthereisanobviousneed for this if we are to help maximize the potentialofourstudents”(p.163).
RELEVANTLITERATURE
EthicalPerceptionsofStudents Cole and Smith (1996) found that students were more accepting of ques-tionable behavior than were business
practitioners.Similarresultsarereport-ed by Warneryd and Westlund (1993) for students and financial managers in Sweden. A number of studies have noted differences in ethical percep-tionsacrossgroups.ParsaandLankford (1999) found that undergraduates act more ethically than master of business administration students. Differences in ethicalperceptionsbetweensexeswere noted byAlbaum and Peterson (2006) and Luthar, DiBattista, and Gautschi (1997). They reported that women showedmorefavorableattitudestoward ethicalbehaviorsthandidmen.Ahmed, Chung, and Eichenseher (2003) found differencesinethicalperceptionsofstu-dentsindifferentcountries.
Less research has examined percep-tionsofethicsofbusinesspractitioners. Cole and Smith (1996) found that stu-dents had more negative views of the state of business ethics than did busi-nesspractitioners.D’Aquilaetal.(2004) reportedalargegapforstudentsversus business leaders. They also noted that malestudentsmorestronglybelievethat thebusinesscommunityislesstroubled byethicalproblemsthanitwas10years ago. Yet, they found that female stu-dents more strongly believe that ethi-cal standards strengthen a company’s competitiveposition,whereasmalestu-dents more strongly believe it weakens the competitive position. Albaum and Peterson (2006) reported that female studentsarelessoptimisticaboutfuture improvements in business ethics than aremalestudents.AlbaumandPeterson noted that with the increasing propor-tionoffemalebusinessstudentsandthe demise of the glass ceiling, this result that female students are less optimistic thantheirmalecounterpartsaboutfuture improvementsinbusinessethicsis“dis-heartening” (p. 318).Although there is consistentevidenceassociatedwithsex affectingethicalstandards,examination oftheroleofsexinperceptionsofbusi-nessethicshasmetwithmixedresults.
TeachingBusinessEthics
Williams and Dewett (2005) recently reviewedtheliteratureonteachingbusi-nessethics.Theyconcludedthatthereis significant evidence that business ethics education is worthwhile. Research
indi-cates that students’ awareness of moral issues is developed (Weber & Glyptis, 2000); moral development is fostered (Penn & Collier, 1985); and students’ abilitytohandlecomplexethicaldecision makingisimproved(MacFarlane,2001). In a preface to articles dealing with business ethics in the curriculum, Moore (2004) noted that there seems tobeashifttowardintegratingbusiness ethicsintothedisciplinesversususinga stand-alone module in business ethics. Richards (1999) would approve of this trendashefoundthatintegratingalim- itedamountofethicstrainingintoasin-gle business course, despite having an immediatepositiveimpact,hasashort-livedeffect.Thus,arequiredfullethics courseorpervasiveintegrationofethics into the business curriculum is sug-gested.However,noemergingaccepted model shows the best pedagogy to use when integrating business ethics into the broader curriculum. Feldman and Thompson(1990)indicatedthatavari-etyofpedagogiesarebeingused,from lecturetocasestudytoguestspeakers. But, finance has been slower to tackle the issue of how to teach ethics in the disciplinecomparedwithotherbusiness disciplines(Hawley,1991).
TeachingEthicsinFinance
Wenowturntoresearchmorefocused on the finance discipline. Evans et al. (1998)surveyedmorethan500finance faculty members about their knowl-edgeofethicaltransgressionsandtheir attitudes toward ethics training in the businesscurriculum.Morethan25%of therespondentsclaimedtobeawareof ethicallapsesbytheircolleagues.Also, 75% of the respondents believed that business ethics should be included in the curriculum, and 65% believed that adiscussionofethicalissuesshouldbe includedinmostfinanceclasses.
Articlesdiscussinghowtoteachfinan-cialethicsarestilluncommon.Boatright (1998) contended that “the field of financialethicsisbarelyformed”(p.1). Anethicistbyprofession,heofferedan organizingframeworkforstructuringan entire course or an ethics module in a course. He offered considerable advice onwhattoincludebutlittleabouthow toteachthematerial.
Hess and Norman (2004) provided a series of vignettes that an instructor coulduseforclassroomdiscussioninan investments course. Cagle and Baucus (2006)providedevidencethatstudents’ values were strengthened by the case studiesofethicsscandals.Cagle(2005) did not find that students’ values were affectedbycasestudiesofethicalcom- paniestoemulate,butstudents’percep-tions of business ethics were favorably affected. These authors have suggested thatcynicismregardingthestateofbusi-ness ethics can be eroded by the case-study method by helping students to understandthatsuccessinbusinessdoes notrequireunethicaldecisionsorbehav-ior.4 However, the evidence is mixed abouttheextenttowhichthecase-study methodimprovesstudents’ethicalstan-dards.Further,manyprofessorsmaynot havethetimetodevotetousingcasesin theirclassrooms,theymaynotfeelcom-fortable using the case method, or the case-studymethodmaynotbeappropri-ateforthelevelofthestudent.
In the present study, we investigated a less intensive approach to including financial ethics in introductory finance courses that may be more appealing to faculty.We conducted an experiment to determine if class discussions of short ethicsproblemsandanecdotes—orethics vignettes—containedinapopularunder-graduatefinancetextbookwouldchange students’ethicalattitudesortheirpercep-tionsofethicalstandardsinthebusiness world. In addition to providing insights into the effectiveness of ethics-vignette discussionsaspedagogy,thepresentstudy providesinsightintostudents’ethicalper-ceptions.Knowledgeoftheseperceptions is necessary to leverage any pedagogy to make the most of students’ ethical potential.AsindicatedbyD’Aquilaetal. (2004),“Studentsarethesourceofnew entrants to the business world and the foundation for ethical structures being builtinorganizations”(p.155).
METHOD
We collectively taught five sections of the required undergraduate finance class at a private university during the springsemesterof2005,usingtheRoss etal.(2004)textbook.Onesectionwas an honors section, and two contained
nontraditional(nightandweekend)stu- dents.Theuniversitycorerequiresmul-tiplecoursesintheologyandphilosophy. The students, mostly sophomores and juniors,wouldhavetakenapproximately four such courses before entering the finance class but were unlikely to have takenapopularsenior-levelphilosophy class,BusinessEthics.Initially,approxi-mately 130 students were enrolled, but because of attrition, we used only 115 completedresponses.
Priortothebeginningofthesemester, we examined the textbook and identi-fied 28 problems, notes, or boxes that haddirectorindirectethicscontentand agreedtodiscuss12oftheseinclass.One oftheprofessorsrequiredthestudentsto bringawrittenparagraphabouttheeth-ics issue to class. All three professors leddiscussionsoftheethicsvignettesin classes.A paraphrased sampling of the vignettesappearsintheAppendix.
Beforethefirstitemwasdiscussedin class, a survey of ethical attitudes was administeredtoeachstudent.Weadapt-edthesurveyfromFroelichandKottke (1991)andColeandSmith(1995),and it was previously used by Cagle and Baucus (2006) and Cagle (2005) to examine the efficacy of the case-study approach to teaching ethics in finance. Inthepresentstudy,studentsweretold thattheirnameswereneededtomatch beginningandendingattitudes(because some students dropped the course) but that their instructor would never know their individual responses. They were also promised that at the end of the semester,theresultsandpurposeofthe surveywouldbediscussedwiththem.
Because research has repeatedly shown that individuals perceive them- selvestobemoreethicalthantheaver-response would be. Students indicated their degree of agreement on a 6-point Likert-typescalerangingfrom1(strong agreement) to 6 (strong disagreement), with 10 statements involving ethical issues.Ahighernumberwouldindicate a more ethical response. As suggested byWilliams and Dewett (2005), moral development is a precursor in
deter-mining whether an individual will act ethically.
Onthebasisofpriorresearchindicat-ingthatethicsinstructioncaninfluence students’ethicalperceptions,wedevel-opedthefollowinghypothesis:
Hypothesis1(H1 ):Discussionofeth-ics vignettes will positively affect stu-dents’ ethical perceptions, making the studentslesswillingtotolerateunethi-calorquestionablebehavior.
We also predicted that female stu- dentswouldbelessacceptingofques-tionable behavior given prior research, although that prediction was not the focus of this study. We also examined the effect of ethics instruction on stu-dents’ perceptions of business ethics. Wehypothesizedthatthebroaderexpo-suretobusinessethicsintheclassroom wouldfavorablyaffectstudents’percep-tionsofbusinessethics.
H2: Discussion of ethics vignettes will positively affect students’ percep-tionsofbusinessethics.
Given the mixed evidence for gen-der’s effect on perceptions of business ethicsfromtheaforementionedstudies, female students. Respondents were a meanageof23years(SD=5.32years), witharangeof18–48years.Meanval-uesandstandarddeviationsforwhatthe students believed the ethical response to be and how they believed the typi-cal businessperson would respond are shown for each of the 10 statements and for the overall average of the 10 statements.Ameanvalueof1.0would indicate the highest possible agree-mentwiththestatement(i.e.,theaction described in the statement would be totallyethical),andameanvalueof6.0 wouldindicatethehighestpossibledis-agreement with the statement (i.e., the actiondescribedinthestatementwould betotallyunethical).
For 8 of the 10 statements and for the overall average response, the mean valuefortheperceivedethicalresponse
was more than 1 point higher than the perceivedbusinesspersonresponse.This differencewasalsotruefortheoverall average of the 10 statements. Each of thesedifferencesinmeanswassignifi-cant at a .0001 level.These results are consistentwithpriorstudies.Thus,stu-dents do not perceive the typical busi-nessperson as behaving in what they believeisanethicalmanner.
Brenner and Molander’s (1977) examinationofethicalattitudesof Har-vard Business Review readers suggests that respondents have become more cynical about the ethical conduct of their peers over time. Cole and Smith (1996) reported that for both student andbusinessrespondentsthereisadis-paritybetweenwhatisethicalandwhat the typical businessperson would do, indicative of cynicism in both students and practitioners. Luthar et al. (1997) suggested that newspaper headlines about insider trading on Wall Street, financial and personal scandals involv-ingpublic figures, and questionable legal and ethical practices in organiza-tionsspurredthisincreaseincynicism. Ifbusinessstudentsarenotexposedto
business ethics in the classroom, the media may be the only source of their perceptionsandexpectations.However, theremaybeanupsidetomediacover-age of scandals. Elias (2004) reported thatstudentsperceivedcorporatesocial responsibilitytobemoreimportantfor profitability and long-term success of the firm and less important for short-term success after media publicity of corporatescandals.
Although the aforementioned research has indicated differences in perceptions by age, little evidence of this was found in the present means tests, and that lack is consistent with the prior studies of finance students.5 Women’sresponsesforethicalpercep- tionswerehigherineverycase,show-ing significant statistical differences frommenin7of10scenariosandthe averageofthe10scenarios(seeTable 2).Theseresultsarelargelyconsistent withpriorresearch,whichhasindicat-edthatwomenshowedmorefavorable attitudes toward ethical behaviors than did men. In terms of perceptions of business ethics, there was modest evidence of a gender effect.Although
womens’ responses indicate that they were more cynical about ethics in the typical businessperson than were men for all 10 scenarios, these differences weresignificantforonly3scenarios.
IMPACTOFETHICS-VIGNETTE DISCUSSIONS
A summary of student responses before and after the classroom discus-sionsispresentedinTable3.Although themeanvaluesforstudents’perceived ethical response were higher for 9 of the10statementsandtheaverageofthe 10statementsafterdiscussionofethical issues in class, none of the differences were statistically significant. Thus, we cannotacceptH1 ,thatdiscussionofeth-icsvignettespositivelyaffectsstudents’ ethical perceptions. These results are consistent with Cagle (2005), Feldman and Thompson (1990), and Cole and Smith (1995), who reported no impact ofethicseducationonstudents’ethical standards.TheresultsdifferfromCagle andBaucus’s(2006)results,whichindi-cated a shift in ethical standards for students who do case studies of ethics scandals. This differencemay suggest thatdiscussionofethicsvignettesisnot asufficientlyactiveorconnecting-with-selfpedagogytoaffectstudents’ethical standards(Dean&Beggs,2006).
However,thediscussionshadastrong impact on students’ perceptions of the responsethatthetypicalbusinessperson would give. On 9 of the 10 statements and the average of the statements, the differences were significant at the .01 level. This leads us to acceptH2, that students’ perceptions of business eth-ics is favorably influenced by discus-sion of ethics vignettes. These results areconsistentwithCagleandBaucus’s (2006) and Cagle’s (2005) results, which reported that students’ percep-tions of the ethics of businesspeople werefavorablyinfluencedbycasestud-ies.Becauseofthepreviouslydiscussed concernwiththegapinstudents’versus practitioners’ perceptions of business ethics, these results indicate it is pos-sibletoerodesuchcynicismwithclass discussion of ethics vignettes and case studies. Although changing students’ views of the ethics of the typical busi-nessperson is not a learning objective
TABLE1.Students’EthicalStandardsandPerceptionsofHowBusiness peopleMeetThoseStandards
Ethicalresponse Businesspeople
Variable M SD M SD
1.Itisokayforasupervisortoaskanemployeeto 5.11 1.12 4.20* 1.31 supportsomeoneelse’sincorrectviewpoint.
2.Itissometimesnecessaryforacompanyto 5.38 0.95 4.06* 1.39 engageinshadypracticesbecausethecompetition
isdoingso.
3.Anemployeeshouldoverlooksomeoneelse’s 5.06 1.12 3.84* 1.46 wrongdoingifitisinthebestinterestofacompany.
4.Asupervisorshouldnotcarehowresultsare 5.24 1.03 3.90* 1.44 achievedaslongasthedesiredoutcomeoccurs.
5.Thereisnothingwrongwithasupervisorasking 5.68 0.91 4.91* 1.25 anemployeetofalsifyadocument.
6.Profitsshouldbegivenpriorityoverproduct 5.47 0.96 4.42* 1.41 safety.
7.Anemployeemayneedtolietoacustomer/client 5.12 1.13 3.76* 1.44 toprotectthecompany.
8.Anemployeemayneedtolietoacoworkerto 5.02 1.08 3.81* 1.38 protectthecompany.
9.Anemployeemayneedtolietoa 5.27 1.03 4.25* 1.39 supervisor/managertoprotectthecompany.
10.Anemployeemayneedtolietoanother 4.82 1.32 3.43* 1.60 company’srepresentativetoprotectthecompany.
Average 5.22 0.83 4.06* 0.98
*p<.0001.
thatisashighinpriorityasshiftingstu-dents’ownethicalstandards,itisstillan importantendeavor.Withoutclassroom exposure to draw on, students’ expec-tations of their own behavior in the business world will be formed largely by the media. The picture of business ethicspaintedbythemediaisunlikely torepresentactualpractice.
Because demographics such as age and gender have been associated with ethical perceptions in prior stud-ies, we examined the impact of the ethics-vignette discussions by control-ling for these variables. Table 4 pro-vides the cross-sectional results for students’ ethical responses. There was modestevidenceofgenderdifferences, with women indicating higher statisti-cal disagreement with the statements in 3 of the 10 scenarios and the aver-age of the 10 responses. Age still did
nothaveasignificantimpactonethical perceptions.The postcase variable was positive in all cases, but statistical sig-nificancewasfoundonlyforScenario3. Again,theresultswereconsistentwith the aforementioned studies that failed tofindanimpactofethicseducationon students’ethicalstandards.
Theethics-vignettediscussionshada positiveimpactonstudents’perceptions of the response that the typical busi-nessperson would give. These results are reported in Table 5. For 9 of the 10 statements and the average of the statements,thedifferencesweresignifi-cantatthe.05level.Theseresultswere consistentwiththeaforementioneddif-ferencesinmeansandpriorresearchon theeffectofethicseducationonfinance students. However, the results differed inregardtothegendereffect.Thegen-dervariablewasstatisticallysignificant
in6ofthe10scenariosandtheaverage ofthe10scenarios,andthecoefficient was negative. Although students’ per-ceptionsofethicsinthebusinessworld improved after the discussion of the ethicsvignettes,theyimprovedlessfor female students. This result contrast-ed with Cagle and Baucus (2006) and Cagle (2005), who have found either that there is no gender effect or that thegendereffectispositiveforwomen wheninstructorsusecasestudiesasthe instructionalmethod.
Ifwomenhavealessfavorableview of ethics in the business world, this difference may translate into a differ-ent expectation regarding the female students’ future behavior in the work-place relative to men. This possibility has implications for the way in which instructors teach ethics.6 Women may
havedifferentlearningstyles.Giordano
TABLE2.Students’EthicalStandardsandPerceptionsofHowBusinesspeopleMeetThoseStandards,byGender
Ethicalresponse Typicalbusinesspersonresponse
Female Male Female Male
Variable M SD M SD M SD M SD
1.Itisokayforasupervisortoaskan 5.34 0.85 4.88*** 1.25 4.13 1.30 4.24 1.33 employeetosupportsomeone
else’sincorrectviewpoint.
2.Itissometimesnecessaryfora 5.58 0.68 5.23*** 1.10 4.02 1.37 4.08 1.43 companytoengageinshady
practicesbecausethecompetition isdoingso.
3.Anemployeeshouldoverlook 5.33 0.82 4.85*** 1.28 3.61 1.48 3.99* 1.44 someoneelse’swrongdoing
ifitisinthebestinterestofa company.
4.Asupervisorshouldnotcarehow 5.41 0.79 5.12** 1.17 3.73 1.45 4.04 1.41 resultsareachievedaslong
asthedesiredoutcomeoccurs.
5.Thereisnothingwrongwitha 5.79 0.72 5.58* 1.03 4.82 1.24 4.98 1.25 supervisoraskinganemployeeto
falsifyadocument.
6.Profitsshouldbegivenpriorityover 5.65 0.71 5.33*** 1.11 4.34 1.42 4.45 1.41 productsafety.
7.Anemployeemayneedtolietoa 5.25 0.88 5.02 1.28 3.55 1.37 3.876 1.48 customer/clienttoprotectacompany.
8.Anemployeemayneedtoliea 5.13 0.94 4.94 1.17 3.37 1.32 3.96** 1.41 coworkertoprotectacompany.
9.Anemployeemayneedtolieto 5.37 0.88 5.20 1.13 3.98 1.45 4.42** 1.33 asupervisor/managertoprotect
acompany.
10.Anemployeemayneedtolieto 4.98 1.15 4.69* 1.44 3.34 1.56 3.50 1.61 anothercompany’srepresentativeto
protectthecompany.
Average 5.39 0.61 5.08*** 0.94 3.91 1.13 4.15 1.10
*p<.10.**p<.05.***p<.01.
TABLE3.Student’sEthicalStandardsandPerceptionsofHowBusinesspeopleMeetThoseStandards,Beforeand AfterClassroomDiscussionofVignettes
Ethicalresponse Typicalbusinesspersonresponse
Before After Before After
Variable M SD M SD M SD M SD
1.Itisokayforasupervisortoask 5.05 1.21 5.19 1.00 4.11 1.32 4.30 1.29 anemployeetosupportsomeoneelse’s
incorrectviewpoint.
2.Itissometimesnecessaryfora 5.35 1.00 5.43 0.89 3.81 1.36 4.37*** 1.38 companytoengageinshady
practicesbecausethecompetition isdoingso.
3.Anemployeeshouldoverlook 4.99 1.16 5.15 1.07 3.52 1.42 4.24*** 1.42 someoneelse’swrongdoingifit
isinthebestinterestofacompany.
4.Asupervisorshouldnotcarehow 5.21 1.10 5.28 0.93 3.60 1.37 4.26*** 1.43 resultsareachievedaslongas
thedesiredoutcomeoccurs.
5.Thereisnothingwrongwith 5.72 0.87 5.61 0.96 4.76 1.23 5.10** 1.32 asupervisoraskinganemployee
tofalsifyadocument.
6.Profitsshouldbegiven 5.45 0.96 5.50 0.96 4.18 1.44 4.71*** 1.32 priorityoverproductsafety.
7.Anemployeemayneedtolieto 5.11 1.22 5.13 1.00 3.50 1.31 4.07*** 1.54 acustomer/clienttoprotectacompany.
8.Anemployeemayneedtolietoa 4.98 1.14 5.08 1.00 3.54 1.30 4.14*** 1.42 coworkertoprotectacompany.
9.Anemployeemayneedtolietoa 5.26 1.09 5.28 0.96 4.02 1.38 4.53*** 1.34 supervisor/managertoprotecta
company.
10.Anemployeemayneedtolieto 4.76 1.43 4.89 1.17 3.08 1.45 3.85*** 1.68 anothercompany’srepresentative
toprotectacompany.
Average 5.19 0.87 5.25 0.76 3.81 1.00 4.36*** 1.17
**p<.05.***p<.01.
TABLE4.Cross-SectionalRegressionResults:EthicalResponse
ModelF Adjusted
Responsetoscenario Intercept Gender Age Postcase statistic R2
1.Itisokayforasupervisortoaskanemployeeto 4.47*** .44* .02 .15 4.12** .041 supportsomeoneelse’sincorrectviewpoint.
2.Itissometimesnecessaryforacompanytoengagein 5.04*** .32* .01 .05 2.53 .021 shadypracticesbecausethecompetitionisdoingso.
3.Anemployeeshouldoverlooksomeoneelse’s 4.58*** .44** .01 .14* 3.49* .033 wrongdoingifitisinthebestinterestofacompany.
4.Asupervisorshouldnotcarehowresultsare 4.58*** .20 .02 .06 2.23 .017 achievedaslongasthedesiredoutcomeoccurs.
5.Thereisnothingwrongwithasupervisorasking 5.46*** .17 .01 –.13 1.29 .004 anemployeetofalsifyadocument.
6.Profitsshouldbegivenpriorityoverproductsafety. 4.71*** .24 .03 .05 3.51*** .047 7.Anemployeemayneedtolietoacustomer/client 4.89*** .24 .01 .02 0.93 –.001 toprotectacompany.
8.Anemployeemayneedtolietoacoworkerto 4.72*** .16 .01 .12 0.85 –.002 protectacompany.
9.Anemployeemayneedtolietoasupervisor/manager 5.13*** .17 .00 .04 0.55 –.006 toprotectacompany.
10.Anemployeemayneedtolietoanothercompany’s 4.57*** .32 .00 .13 1.27 .004 representativetoprotectacompany.
Average 4.82*** .27* .01 .06 2.83* .025
*p<.10.**p<.05.***p<.01.
andRochford(2005)foundthatwomen displayedagreaterneedforvisualtext than did males, although these results differed from other findings that indi-cated that women had stronger audi-tory preferences. Alternatively, prior research indicated that women viewed themselves as more ethical than men. If women view the business world as predominately male, this may explain whywomen’scynicismiserodedbythe discussionofethicsvignettestoalesser degreethanthemen’scynicism.Further research is needed to explore effective pedagogy for teaching business ethics andhowthisisaffectedbygender.
Because the instructors would natu-rally differ in their discussion methods, therewasastrongpossibilitythatstudent responseswoulddifferbyinstructor.We examined this possibility in a second regressionmodel,butitturnedouttobe anunwarrantedconcern;thus,theresults arenotreportedhere.Therewerenosub-stantivedifferencesacrossinstructors.
Conclusion
The results of the present study do not indicate that discussion of ethics vignettes is an effective pedagogical strategy for teaching business ethics in
termsofchangingstudents’ethicalstan-dards.However,thisapproachdidchange students’perceptionsofbusinessethics. AssuggestedbyD’Aquilaetal.(2004), this approach can affect the business world, because students are the source ofnewentrantsandfoundationsforethi-calstructures.Forprofessorsconsidering introducingethicaldiscussionsintotheir coursematerial,itshouldbeencouraging toknowthatdiscussingethicsvignettesin classcanimprovestudents’impressions of the ethical standards of the typical businessperson.Although students’ per-ceptionsofethicsinthebusinessworld improvedafterthediscussions,theydid so less for female students.Thus, more research is needed to not only assess effectiveness of alternative pedagogies for teaching business ethics but also to understand(a)whyperceptionsofbusi-nessethicsdifferacrossgendersand(b) theimplicationsforteaching.
NOTES
1. The other two recurring themes were the tensionbetweentheneedtocovertechnicalmate-rialinthediscipline,ethics,andlackofagreement amongfacultythatethicswasanimportanttopic tocoverineachfunctionalarea.
2.Essentials of Corporate Finance is a brief versionofFundamentalsofCorporateFinance.
3. BaetzandSharp(2004)reportedonthepoor availabilityofmaterialsforbusinessfacultywho werenewtoteachingbusinessethics.
4. Cagle’s findings contrasted with those of Kumar, Borycki, Nonis, & Yauger (1991), who found that after a 4-month period, students exposedtotheuseofthestrategic-decisionframe-work gave less consideration to ethical issues involved in decision making than other students notexposedtotheframework.
5. Becauseofthelackofdifferenceinrespons-esbyage,theseresultsarenotreportedherebut areavailablefromtheauthors.Onlyforscenario 6didtheethicalresponsestatisticallydifferwhen studentsweredividedbymedianage,witholder studentsindicatingahigherdegreeofagreement withthisstatement.Nostatisticaldifferenceswere indicatedforperceptionsofbusinessethics.
6. KujalaandPietilainen(2004)suggestedthat thetypicalmeasurementsofmoraldecisionmak-ingfocusmoreonmasculinitiesthanfemininities, suggesting that these measurements leave the femininedecision-makingdimensioninvisible.
JulieA.B.Cagle isaprofessoroffinancespecial- izinginregulatedfinancialinstitutionsandthepeda-gogiesofcorporatefinanceandbusinessethics.
PhilipW.Glasgohasbeenafinanceprofessor formorethan30years.Hespecializesincorpo-rate finance, financial institutions, and pensions andretirementplanningissues.
Vanessa M. Holmes’s primary teaching areas are corporate finance and money and banking, whereas her research interests involve behavioral financeandassetpricing.Hercorporatebackground includes public accounting, investment banking, andinternationalfinance.
Correspondence concerning this article should be addressed to JulieA. B. Cagle, 3800Victory Parkway,Cincinnati,OH45207,USA.
E-mail:cagle@xavier.edu TABLE5.Cross-SectionalRegressionResults:TypicalBusinesspersonResponse
ModelF Adjusted
Responsetoscenario Intercept Gender Age Postcase statistic R2
1.Itisokayforasupervisortoaskanemployeeto 3.85*** –.14* .02 .16 0.63 –.005 supportsomeoneelse’sincorrectviewpoint.
2.Itissometimesnecessaryforacompanytoengagein 3.27*** –.11* .03 .56*** 3.74** .037 shadypracticesbecausethecompetitionisdoingso.
3.Anemployeeshouldoverlooksomeoneelse’s 3.02*** –.47** .03* .71*** 3.49*** .033 wrongdoingifitisinthebestinterestofacompany.
4.Asupervisorshouldnotcarehowresultsare 3.12*** –.34* .03 .71*** 6.15*** .067 achievedaslongasthedesiredoutcomeoccurs.
5.Thereisnothingwrongwithasupervisorasking 4.63*** –.19 .01 .36** 1.94 .013 anemployeetofalsifyadocument.
6.Profitsshouldbegivenpriorityoverproductsafety. 3.69*** –.19 .03 .54*** 3.50** .034 7.Anemployeemayneedtolietoacustomer/client 3.49*** –.32 .01 .507*** 3.11** .029 toprotectacompany.
8.Anemployeemayneedtolietoacoworker 3.57*** –.39** .01 .594*** 4.79*** .063 toprotectacompany.
9.Anemployeemayneedtolietoasupervisor/manager 4.29*** –.47** .00 .51*** 4.48*** .046 toprotectacompany.
10.Anemployeemayneedtolietoanothercompany’s 3.05*** –.13 .01 .79*** 4.73*** .050 representativetoprotectacompany.
Average 3.60*** –.27* .02 .54*** 5.70*** .025
*p<.10.**p<.05.***p<.01.
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APPENDIX
SamplesofParaphrasedEthicsVignettesFromS.A.Ross,R.W.Westerfield,andB.D.Jordan(2004)
Vignettes in the Text
1.p.18,1.10 Canourgoalofmaximizingthevalueofstockconflictwithothergoals,suchasavoidingunethicalorillegalbehavior? 2.p.42,2.11 InthewakeoftheWorldComscandal,Mr.Sullivanwaschargedwithfraud.Doyouthinkthisshouldbeconsidered fraud?Why?Whywasthisunethical?
3.p.320,10.8 “Playingthestockmarketislikegamblingandhasnosocialvalue.”Evaluatethisstatement.
4.p.355,11.9 In recent years it has been common for companies to experience significant stock price changes in reaction to announcementsoflayoffs.Criticsarguethatsucheventsencouragecompaniestofirelongtimeemployees.Doyou agreeordisagree?
5.p.420,13.7 Some firms have filed for bankruptcy because of actual or likely litigation losses. Is this a proper use of the bankruptcyprocess?
6.p.420,13.8 Sometimesfirmsusethethreatofbankruptcytoforcecreditorstorenegotiateterms.Isthisanethicaltactic? 7.p.420,13.9 ContinentalAirlinesfiledforbankruptcy,atleastinpart,toreducelaborcosts.Whetherthiswasethicalwashotly debated.Givebothsidesoftheargument.
8.p.502,16.8 Isitethicalforlargefirmstounilaterallylengthentheirpayablesperiods,particularlywhendealingwithsmallersuppliers?
Vignettes in the Instructor’s Manual
1.p.134 Anethicsboxdiscussesrent-to-owncontractsandtaxrefundloans.Becauseoftheirstructure,theseloansdonothave todiscloseinformationoninterestrates,buttheratescanbeveryhigh.
2.p.203 AnethicsnoteonstockpricemanipulationviapostingfakepressreleasesontheInternet. 3.p.243 Anethicsnoteinvolvingfinancialincentivestorelocatecompanies.
4.p.315 Anethicsnoteinvolvinginsidertrading.
5.p.490 Anethicsnoteonexaggeratingassetsavailabletobackshort-termloans.
