A Longitudinal Survey of Business School
Graduates' Assessments of Business Ethics
ABSTRACT. A longitudinal survey of business graduates
over a four-year period revealed stability over time in their
assessments of proposals to improve business ethics except
for significantly greater disapproval of government regula-
tion. A comparison of graduates and executivesindicate both
favor developing genereal ethical business principles, busi-
ness ethics courses, and codes of ethics, while disapproving
government regulation and participation by religious leaders
in ethical norms for business. The mean rankings by business
graduates over time of factors influencing ethical conduct
show significant declines in school-university training and
significant increases for religious training and industry prac-
tices. Graduates and executives rank family training as the
most important influence and school-university training as
least important. The authors conclude that a more careful
consideration be given to matching reform proposals and
influence factors, and to increasing the depth of change
efforts in individual business ethics.
Over the last decade, business ethics has received
increased attention by both the academic and busi-
ness communities as a way of addressing corporate
Peter Arlow is Associate Professor of Management at Youngstown
State University, Youngstown, Ohio 44555, U.S.A., where he
teaches MBA and undergraduate management courses. His
previous publications have appeared in the Academy of
Management Review, Business Horizons, Long-Range
Planning, and otherjournals.
Thomas A. Ulrich is Professor of Accounting at Loyola College in
Maryland. He received his doctorate from Michigan State
University and is a Certified Management Accountant as well
as a Chartered Financial Analyst. Dr. Ulrich has published
previously in the Journal of Accountancy, Management
Accounting, The Internal Auditor, Journal of Com-
mercial Bank Lending, Bankers Magazine,The Magazine
of Bank Administration, Journal of Small Business
Management and the AmericanJournal of SmallBusiness.
Journal of Business Ethics 7 (1988) 295--302.
© 1988 by Kluwer Academic Publishers.
PeterArlow
Thomas A. Ulrich
misbehavior that has not been prevented by market
forces and government regulation (Lewin, 1983).
Indicative of corporate misbehavior is a recent spate
of cases that have received national media atten-
tion on this issue, including insider trading, money
laundering by large banks, check-kifng, deceptive
practices by defense contractors, and a renewal of
overseas bribery. The academic and business com-
munities have attempted to address the problem of
business ethics.
The major thrust by the academic community,
particularly by business schools, has been the intro-
duction of business ethics' courses into the business
curriculum or integration of this subject into busi-
ness and society-type courses. A survey of AACSB
business schools indicated that over 70 percent of the
307 responding schools covered ethics and values in
their curriculum (Buchholz, 1979). One author has
indicated that "business ethics have become a new
growth industry in academia" (Lewin, 1983, p. 4).
The business community has also responded with
a wide range of proposals. Some of these proposals
are based on prescriptive statements, while others
stem from surveys of practitioners. For example,
written policies or codes of conduct, ethics' com-
mittees of the board of directors, management
development and training, disciplining violators,
leadership by top management, and use ofa "whisde-
blowing" mechanism are among a few of the pro-
posals made by various authors (Carroll, 1978;
Purcell, 1980; Saul, 1981; Weber, 1981).
Codes of conduct seem to be the most pervasive
response used by the corporate community as a way
to improve business ethics. In the last decade, vir-
tually every major corporation has introduced some
form of written ethics' code (Lewin, 1983). White
and Montgomery's (1980) survey of chief executive
officers in major corporations revealed that almost
296 PeterArlow and ThomasA. Ulrich
100 percent of the large firms, about 75 percent of
the medium-sized companies, and about 50 percent
of the smaller firms have a code of conduct. Written
codes of ethics are also used by nine out of ten state
governments (Hayes and Gleissner, 1980).
In summary, the academic community has re-
sponded to the problem of business ethics by increas-
ing business ethics instruction, and the business
community has responded in a variety of ways but
primarily by introducing codes of ethics. However,
very little has been done to assess the effectiveness of
any of these efforts. In the academic community, for
example, the little empirical research on assessment
has focused on whether business students' ethical
attitudes or values are favorably influenced by expo-
sure to business ethics in the undergraduate business
curriculum, but these results are mixed (Arlow and
Ulrich, 1980; Boyd, 1981-82; Martin, 1981--82;
Stevens, 1984). Other research in this area has
attempted to compare the ethical standards of busi-
ness students and business executives to ascertain if
the future genereation of managers might have
higher standards than current executives, and the
results have been negative (Arlow and Ulrich, 1980;
Miesing and Preble, 1985; Stephens, 1984).
A similar lack of emphasis on assessment exists in
the business community. For example, the use of
codes of ethics alone to reduce unethical behavior or
effect ethical behavior has only been discussed by
several writers (Bowman, 1981; Hays and Gleissner,
1981; Lewin, 1983). Enforcement is considered a key
•feature to assure that codes are effective (Bowman,
1981; Hays and Gleissner, 1981). Until more is
learned about the effectiveness of codes of conduct
as a way to improve business ethics, White and
Montgomery (1980) believe that codes will serve
only as "documentary window dressing" (13. 86).
On another corporate effort, specifically, corporate
policy, Ferrell and Weaver (1978) concluded from
their survey of marketing managers that "respond-
ents believe that the existence and enforcement of
corporate policy does not encourage more ethical
conduct than their existing personal beliefs. Actually,
it is perceived that the existence and enforcement of
corporate policy sanctions less ethical conduct than
respondents believe is appropriate" (p. 72).
Our study, then, is an attempt to gain insights
about the effectiveness of some of the proposals to
improve business ethics that have been undertaken
by the academic and business communities to fill
what we regard as a void in the effort to improve
business ethics. Another purpose is to ascertain the
importance of various factors that influence ethical
conduct as this area is closely related, and the results
may provide guidance for directing efforts aimed at
improvement.
A particular focus of our study is to determine the
changes that take place over time in the ethical
attitudes of business graduates concerning reform
proposals and influences on ethical conduct from
college career to four years later upon entry into
professional and managerial careers. This would also
serve as an indicator of how they assess business
ethics instruction over time as they moved from the
college environment across organizational boun-
daries. A secondary focus of the study was to com-
pare a practitioner sample of business executives
from an earlier time with the business graduate
sample to ascertain if differences existed in the two
groups' ethical orientations. This comparison was
made because it was an opportunity to compare two
groups that had completed identical questionnaires
and to assess the two viewpoints on business ethics.
The executives provided a benchmark for compara-
tive purposes. We believed this would provide useful
information, in spite of the potential problems asso-
ciated with making such a comparison from two
different time periods.
Method
Samp/es
The college sample consisted of 120 business seniors
enrolled in a business and society course at a four-
year AACSB-accredited business school. A business
ethics' questionnaire (Clark, 1966) was administered
(T1) to the entire sample of 120. A second admin-
istration (T2) of the questionnaire was conducted
four years later, after the students had entered the
job market. Alumni records provided the addresses
of 115 students, who were mailed the questionnaire,
and a letter asking their participation with an as-
surance of anonymity. One follow-up request was
made. Five questionnaires were returned as undeliv-
erable, thus reducing the sample to 110, and 73
usable questionnaires were returned for a response
 Graduates'Assessmentsof BusinessEthics
rate of 66.4 percent. Comparisons between T 1 and T 2
were made on the identical sample of 73 respondents
who completed the questionnaire at both time
periods.
The business executives sample consisted of 103
executives enrolled in an executive training program
at UCLA in 1965 (Clark, 1966). The executive
sample completed the same questionnaire as the
business graduates.
Measures
The ethical assessments were made based on a busi-
ness ethics' questionnaire developed by Clark (1966).
One subsection of the questionnaire asks respondent
ratings on five proposals to improve business ethics
such as the development of industry codes of con-
duct. These are rated on a four point scale from
approve to disapprove. The second subsection asks
respondents to rank six factors regarding their im-
portance in influencing ethical conduct in business
such as family training and industry practices from
one to six. These data were secured from the busi-
ness graduates in two time periods, T1 and T 2. The
business executives completed the same question-
naire at a single time period and were reported in
Clark (1966).
Background information. The business graduate sample
in T 2 w a s asked various questions covering back-
ground information such as present position, func-
tional area, organizational size, and so on. Similar
background information was secured by Clark
(1966).
Results
Background information
Businessgraduate sample. Tlle largest group of respon-
dents (about 44 percent) reported their primary
functional area as marketing followed by accounting
(about 32 percent) with a smaller representation in
the functional areas of finance, personnel, and pro-
duction. The majority of the sample was composed
of nonmanagerial, professional-technical employees
(n = 53) with the remainder in first-line supervision
297
(n = 15) and middle management (n = 5). Average
length of employment in the current position was
about 18 months. Almost 21 percent of the sample
was female. By category of firm, about 26 percent
worked for very small firms of 1-100 employees,
about 21 percent were from firms of over 100 to
1000 employees, and the remainder worked in larger-
sized firms of over 1000 employees. The sample was
about equally split between those working for a firm
with a written policy on ethics (n = 37) and without
a written policy on ethics (n = 35).
Clark executivesample. About 97 percent of the Clark
(1966) sample of 103 business executives were in
managerial positions - 43 percent top management,
38 percent middle management, and 14 percent
first-line supervisors. The remainder were in profes-
sional positions. Neither the functional area nor size
of firm was reported on the executives by Clark
(1966). About 75 percent of the executives were
college graduates with 20 percent holding advanced
degrees. The majority of the executives were be-
tween the ages of 40-49. All were males.
A comparison of the samples indicate that the
business graduate sample is younger, has a greater
number of professional-technical employees and
first-line supervisors, and has female representation.
These data also suggest that the business graduate
sample has a greater representation in the marketing
and accounting functions, probably work for smaller-
sized firms, and have less education, specifically,
advanced degrees.
Proposalsto improvebusinessethics
Table I compares the assessments of the business
graduate sample over two time periods, and the
Clark execuuve sample regarding the five proposals
to improve business ethics. The data comparisons are
based on the extent of approval-disapproval along a
four point scale, expressed as a percentage of the
sample selecting an alternative; the mean scores on a
proposal for each group; and, the rank of a proposal
within each sample subgroup.
Wnnenwe examined the longitudinal assessments
in Table I for the business graduates, we found a
statistically significant difference only for proposal
four. Business graduates express significantly greater
298 Peter Arlow and Thomas A. Ulrich

disapproval of government regulation after gradua-
tion than in college, which probably reflects adoption
of a prevailing business attitude by the graduates.
Beyond this statistical difference, the business gradu-
ates over the two time periods tend to express the
most approval for the proposals involving introduc-
tion o f business ethics courses, developing some
widely accepted principles of business ethics, and
codes o f conduct. The least approval is expressed for
the proposals involving participation by religious
leaders in developing ethical norms for business and
for government regulation. In general, their assess-
ments are stable over time.
W h e n the business graduates and business execu-
fives are compared, both the mean scores and the
rankings of each of the five proposals are very
similar, especially when the comparison is made for
time period T 2. They, then, have similar views con-
cerning ways to improve business ethics.
Factors influencing ethical conduct
Table II gives the rankings of factors influencing
ethical conduct in business by both the business
graduates at T 1 and T2, and the Clark executives.
Each factor is ranked, a mean ranking is given, and
the percentages of respondents ranking a factor from
one to six are given for each sample.
Significant differences occurred within the busi-
ness graduate sample between T I and T2 for school
and university training (rank declines), religious

TABLE I
Opinions on proposals for the improvement of business ethics: business graduates (N = 73) and business executives (N = 103)

Percent approving and disapproving

Rank by
Somewhat Somewhat Mean sample
Approve approve disapprove Disapprove score group
Proposal (1) (2) (3) (4)

1. Develop some widely accepted 61.6 30.1 4.1 4.1 1.51 1

general principles of business 49.3 42.5 5.5 2.7 1.62 2
ethics. 77.9 16.8 2.1 3.2 1.31 1
2. Introduce courses in business 57.5 37.0 1.4 4.1 1.52 2
ethics in business schools. 61.6 28.8 9.6 0.0 1.48 1
60.0 33.7 2.1 4.2 1.51 2
3. Introduce industry codes of 46.6 34.2 15.1 4.1 1.77 3
ethical practices. 54.8 28.8 12.3 4.1 1.66 3
63.9 24.7 5.2 6.2 1.54 3
4. Legislate stronger governmental 4.1 34.2 43.8 17.8 2.75 4
regulation of business.* 6.8 9.6 30.1 53.4 3.30 5
2.1 8.2 14.4 75.3 3.63 5
5. Encourage a more active 5.5 26.0 37.0 31.5 2.95 5
participation of religious leaders 9.6 15.1 34.2 41.1 3.07 4
in developing general ethical 14.1 27.2 20.7 38.0 2.83 4
norms for business.

Note. Scale values for approval-disapproval given in parentheses. Lower mean scores reflect greater approval of proposal.
Percentages are by sample category: T~ and T2 for business graduates, and Clark executives in that order.
* Significant differences between opinions of business graduates in T~ and T2 using a paired t-test; P < 0.001, two-tailed
probability.
 Graduates'Assessments of Business Ethics 299

training (rank increases), and practices in industry
(rank increases).
Further examination of Table II reveals several
interesting findings concerning the areas of signif-
icant difference and a comparison of the samples.
After graduation, business school graduates feel that
school and university training becomes less impor-
tant in influencing ethical conduct. While in school,
41 percent selected this factor among their top three
choices, but only about 18 percent do so after gradua-
tion. Both business school graduates and the Clark
executives rank this factor the lowest of the six
factors, and the percentages of those ranking this
factor from one to six are almost identical.
Religious training becomes more important after
graduation but its ranking is still low in fifth posi,
tion. Executives rank this factor m u c h higher than
the student group probably reflecting the differences
in values toward religion as a function of the time
period difference in the measurements.
Industry practices are given a higher rating in
influencing ethical conduct by business students
after graduation which may be the result of the
impact of organizational socialization processes.
About 60 percent of the graduates ranked this factor
among their top three choices. Industry practices
were ranked lower by the Clark executive sample,
possibly reflecting the relative weight of religion
versus industry practices as graduates and executives
interchange the rankings on these two factors.
The three remaining factors are ranked the same
by the executive group and the business school

TABLE II
The ranking of factors influencing ethical conduct in business; business students (N = 73) and business executives (N = 103)

Percent of respondents ranking

Mean rank
Factor (group rank) 1 2 3 4 5 6

1. Family training 2.32 (1) 50.7 11.0 11.0 13.7 11.0 2.7
2.65 (1) 40.3 9.7 13.9 19.4 13.9 2.8
1.97 (1) 58 16 6 11 8 1
2. Conduct of superiors 3.07 (3) 16.4 24.7 23.3 12.3 17.8 5.5
2.82 (2) 18.3 33.8 12.7 19.7 14.1 1.4
2.82 (2) 22 19 28 18 12 1
3. Conduct of peers 2.92 (2) 12.3 28.8 26.0 21.9 9.6 1.4
3.34 (4) 11.3 16.9 26.8 25.4 11.3 8.5
4.00 (4) 1 17 22 19 22 19
4. School and university training* 3.97 (5) 5.5 15.1 20.5 15.1 23.3 20.5
4.61 (6) 0 7.0 11.3 22.5 32.4 26.8
4.51 (6) 0 11 11 21 30 27
5. Religious training* 4.85 (6) 1.4 12.3 6.8 9.6 19.2 50.7
4.28 (5) 5.6 21.1 12.7 4.2 12.7 43.7
3.71 (3) 9 25 17 9 16 24
6. Practices in industry* 3.86 (4) 13.7 8.2 12.3 28.8 17.8 19.2
3.26 (3) 25.0 12.5 22.2 8.3 15.3 16.7
4.04 (5) 10 11 16 22 12 29

Note. Figures are shown by sample group in order: T 1and T 2 for business graduates, and business executives. A lower mean rank
indicates greater importance. Executive percents rounded.
* Significant differences between T~ and T 2 o n ranking in business graduate sample using a paired t-test, P ~< 0.01, two-tailed
probabilities.
300 PeterArlow and ThomasA. Ulrich
graduate sample. When we examine the percentage
of respondents choosing these three factors among
their top three choices and the mean rankings,
executives assign a lower rating to the conduct of
peers, and a higher rating to family training. Also,
when business graduates are in college, peer conduct
is more important than after graduation, which we
might expect. This shift for the graduates and the
one on industry practices are in the expected direc-
tion before-after-graduation, and these provide
evidence of the study's internal validity.
A very important finding of this study is that
business graduates believe that family training is the
priority factor in ethical conduct. This seems to
confirm what has been suggested by Miller and
Miller (1976), and by Baumhart (1968) in the high-
lights of his findings when he said:
Mthough formal education makes a person more sensi-
tive and articulate about ethical issues, it influences his
business decisions much less than does the personal
conviction that he should act ethically,which is typically
developed before adolescence, chiefly through parental
influences (pp. 4-5).
We also compared the results for the business
graduate sample's ranking of factors that influence
ethical conduct with those of another group of
executives in Baumhart's (1968) study, and a number
of similarities were found, although the categories
are not identical.
The rankings in that study and the present study
are:
Baumhartstudy Presentstudy
1. Personal code of 1. Family training
behavior
2. Behavior of superiors 2. Conduct of superiors
3. Formal company 3. Practices in industry
policy
4. Industry ethical 4. Conduct of peers
climate
5. Behavior of peers 5. Religious training
6. School and
university training
This comparison and that with the Clark execu-
tives suggest a strong consistency concerning the
priority attached to factors that influence ethical
conduct in that the five factors in the Baumhart
study closely parallel the first four factors in this
study. These findings may be used as a guide to tailor
and enhance efforts designed to improve ethical
conduct in business by addressing the major in-
fluences that impact on ethical conduct.
Finally, the data in Tables I and II for the business
graduate sample were further analyzed to determine
the impact of written policies, organizational size,
academic major, sex, and career fields, but no mean-
ingful effect nor conclusions could be reached based
on this examination.
Discussion-conclusion
The results of our study indicate that business gradu-
ates assessments of proposals to improve business
ethics remain stable over time except for a signif-
icantly higher disapproval of government regulation.
This latter result may be attributed to business
graduates' adopting a common business viewpoint.
When business graduates and business executives
are compared, their assessments of the proposals are
very similar. Both of the sample groups clearly favor
the development of general principles of business
ethics, the introduction of business ethics courses,
and industry codes to improve business ethics. Mso,
both groups are not in favor of government regula-
tion or participation by religious leaders as a way to
improve business ethics.
There is less stability over time in the business
graduate sample's ranking of the six factors that
influence ethical conduct. While family training and
the conduct of superiors rank as the top influences,
the other factors change over time. Practices in
industry become significantly more important. This
we would anticipate as part of organizational sociali-
zation and is generally consistent with prior research
about the influence of industry climate on ethical
business practices (Baumhart, 1968; Brenner and
Molander, 1977). Religious training also significantly
increases in importance over time. We cannot ac-
count for this change.
There is a significant decline in school and uni-
versity training from over the two time periods,
making it the least important of the six factors. We
will discuss the implications of this result following
an examination of the business executives.
The business graduates and business executives
have similar rankings regarding factors influencing
ethical conduct except that executives place a greater
 Graduates'Assessments of Business Ethics
emphasis on religious training and a lesser influence
on industry practices. This, perhaps, can be attri-
buted to the difference in the time period of the
measurement.
It is worth noting that while both endorse busi-
ness ethics courses as a way to improve business
ethics, school and university training is ranked by
each as the least important of six factors in influenc-
ing ethical conduct. In the business graduate sample,
this is striking because the mean approval score for
employing business ethics courses increased slightly
over time, while school and university training
declined in importance as a factor influencing ethical
conduct during the same time periods. There are
a number of plausible explanations which may
account for this finding, but we bdieve that it
evidences the complexity in the attempts to improve
business ethics. First, it may indicate that business
ethics instruction may be one of the most practicable
and feasible ways of improving business ethics
among the possible alternatives. Perhaps, at a mini-
mal level, its main salutary effect may be to sensitize
business students to ethical issues. Second, while
school and university training is perceived as the
least effective way to influence ethical conduct, it
is an area that can be most easily controlled and
managed, in comparison with the other factors.
Third, students may differentiate between the effec-
tiveness of specialized business ethics instruction in
business schools versus general school and university
training.
We feel that it is important to draw attention to
the importance attached to family training in our
study as the principal factor influencing ethical
conduct. There seems to be little doubt that this
influence is a critical factor in the formation of a
personal code of behavior, and it is the most difficult
to change or control. What impact the various
efforts by the academic and business communities to
improve business ethics have in this area are purely
speculative, but they are probably minimal. This
factor may account for the apparent intransigence in
improving attitudes about business ethics. It suggests
that improving business ethics may require greater
depth in the individual change effort than evidenced
in currendy discussed proposals, or that exposure to
business ethics must occur earlier in one's education.
In summary, the results of our study suggest that
the various proposals to improve ethics and the
301
factors that influence ethical conduct form a rather
complex relationship, and that reform proposals
need to more carefully address the major influences
on ethical conduct. We believe more attention in
empirical research needs to focus on assessing the
effectiveness of these proposals, so that more empha-
sis can be placed on methods that are likely to be
most productive in changing the current state of
business ethics. This should also include a more
serious consideration of proposals that increase the
depth of the change effort in individual business
ethics, and of addressing the major influences on
ethical conduct. Unless this is done, efforts by the
academic and corporate communities to improve
ethical business behavior seem no more than proble-
matical.
In conclusion, we wish to note that the differences
in the backgrounds of the two groups of respondents
and the two different time periods may be limita-
tions in the study, although we have tried to address
these issues.
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Department of Management,
Youngstown State University,
Youngstown, OH 44555,
U.S.A.