Essay

Codes of Ethics as Signals for Ethical Behavior*

Janet S. Adams Armen Tashchian Ted H. Shore

ABSTRACT. This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self ) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems were impacted by the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code. KEY WORDS: codes of ethics, ethics climate, ethics ratings, perceptions of ethical behavior, role set ratings

companies reporting ethics codes (Fulmer, 1969). By 1992 the proportion had increased to 93 percent of U.S. firms surveyed (Center for Business Ethics, 1992) and 83 percent of firms in North America and Europe (Berenbain, 1992).

Thus, the norm for large U.S. firms in the 1990s is to have a written code of ethics or conduct. Data on codes in small companies are not readily available, and since small businesses employ 53 percent of those working in private businesses in the U.S. (SBA, 1997), a significant proportion of U.S. employees may work in organizations without written codes of ethics. Smaller organizational size is associated with less formalization in organizational procedures, including the adoption of a formal ethics code.

Concerns with organizational codes of ethics have intensified in the 1990s. However, such documents are not new organizational artifacts. For example, the J.C. Penney Company “Penney Idea” dates from 1913, and Johnson & Johnson’s corporate ethics statement...