Ethical Orientations of Managers in Malaysia

Author(s): J. L. Gupta and Mohamed Sulaiman

Source: Journal of Business Ethics, Vol. 15, No. 7 (Jul., 1996), pp. 735-748
Published by: Springer
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Ethical Orientations of
J. L. Gupta
Managers in Malaysia Mohamed Sulaiman

ABSTRACT. In view of the heightened societal iour that might harm or benefit
human beings.
attention to the ethical aspects of business behaviour, like 'moral',
Expressions, 'good', 'right', 'just',
there has been, in recent years, a great deal of dis 'honest' are considered more or less synonymous
cussion regarding individual and organisational factors with 'ethical'.
influencing managerial decision making. The main
In recent years, there has been a great deal of
focus of this paper is on understanding the attitudes
discussion in Malaysia (as elsewhere) on ethical
of managers toward ethical dimension of their choices
issues. The view is widely shared that while the
and judgments, as also the forces that pressurise,
them with or contribute to technological advancements and industrial
provide opportunities,
for ethical or unethical progress in many parts of the world have resulted
shaping their intentions,
actions. Findings reported here are based on a ques in higher levels of affluence and material well

tionnaire-survey of 381 managers from 41 commer being, the ethical and moral standards have
cial organisations in Malaysia. deteriorated (Zabid and Alsagoff, 1993). As is
evident from
the increasing frequency of reports
in the newspapers and other public communica
Introduction tion media concerning cases
of kickbacks, col
lusion, insider trading, corruption and fraudulent
'Ethics' has been defined as ". . . into use of funds individuals and organisations, a
enquiry by
the nature and background of morality, where more and critical interest is now
widespread
the term 'morality' is taken to mean morel being taken in value that lie behind
judgments
judgments, standards, and rules of conduct" organisational decisions, and particularly those
(Taylor, 1975). Ethics involves fundamental responsible for managing commercial enterprises
human relationships, and deals with 'what should seem to be under constant public scrutiny.
be done' questions with reference to the behav As a
consequence of their task
assignments,
all managers have to make decisions. And
Dr. f. L. Gupta is Professor atNational Institute of Bank through their objectives, intentions and actions
Management (NIBM), Pune, India. He has authored on matters related to technical, economic or
two books on management and has published several human resource or indi
factors, they directly
research articles on the subject of Leadership and Ethics. of a number
rectly affect the welfare of people
His teaching and research interests lie in the areas of in the society. They are
influencing the future,
Organisational Behaviour and Human Resource not only for their organisations but also for
Development. who work for consumers use
people them, who
Mohamed Sulaiman is Professor of Management at
their products, stockholders
who may have
University of Science Malaysia (USM), Penang. He has
invested their savings in the company, and for the
authored several research monographs and published
society as a whole. All these people should be
articles in reputed business journals. His teaching and
research interests lie in the areas of Corporate Policy and able to trust the managers' This
judgments.
and means that each manager has to become his or
Strategic Management, Organisation Design
Dr Mohamed is her own moral and
Marketing. Sulaiman currently the philosopher, apply moral
Dean of School ofManagement, USM. thinking and principles to the decisions he makes

Journal of Business Ethics 15: 735-748, 1996.

? 1996 Kluwer Academic Publishers. Printed in theNetherlands.

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 736 J. L. Gupta and M. Sulaiman

and actions he in his daily life as manager

takes interpretation of ethical decisions. In descriptive

(Buchholz, 1989). In other words, ethics has to ethics, studies are of nature,
empirical descriptive
be considered an inextricable part of ethical behaviour of individuals or
managerial concerning
decision process, and it is essential for managers groups. This research, in view of its exploratory
to maintain an and continuing and survey methodology to the third
operational belongs
concern for ethical integrity. category i.e. descriptive ethics.
In the extant management literature, ethical The data for the study were obtained through
concerns have been discussed from a number of a self-administered questionnaire given to 381

perspectives. Some writers have focused on the managers belonging to 41 organisations, 25 of

pressures of business environment and provide which were engaged in manufacturing activities,
advice for improving the ethical aspects of and the rest were banking and finance com
business behaviour (Purcell, 1975; Boling, 1978; panies. The sample was chosen on a 'purposive'
Cressy and Moore, 1983; McCoy, 1983). Others sampling basis from organisations operating at
?
have dealt with the teaching of ethics as part of four locations Pulau Penang, Prai, Kulim, and

management education (Hosmer, 1988; Bassiry, Kuala Lumpur. The method of generating data

1990). Considerable amount of literature con may tend to restrict the findings'
generalisability
cerning empirical investigations of ethical beliefs largely to
managers forming the sample.
of managers in the western countries has also However, given the exploratory character of the
been generated (Baumbart, 1968; Brenner and study coupled with its being on a sensitive
?
Molander, 1977; Krugman and Ferrell, 1981; subject, this sample frame was considered
Posner and Schmidt, 1984; Hunt et al, 1989). appropriate so as to be able to receive reason
However, not much empirical work has been able number of responses needed for a mean
on the ethical perceptions of Malaysian ingful analysis and derivations. The questionnaire
reported
managers. A attempt was made by items used for gathering data, and the approach
noteworthy
Zabid and Alsagoff (1993), who conducted a of analysis draw heavily on those
employed by
survey to examine the perceived ethical values Baumhart (1968), and Hunt (1989), in their
of Malaysian managers from different industrial studies of ethical beliefs of American managers.
organisations on the basis of their responses to Table I presents the profile of survey respondents,
hypothetical business situations. indicating their varied demographic and organ
This investigation is an attempt to arrive at an isational backgrounds. A large number of respon

empirical understanding of the nature of beliefs dents were men; women constituted only 17.7%
regarding specific moral issues pertaining to life of the total sample. They operated at different
in general; to
identify the factors that guide levels of organisational hierarchy with designa
and influence ethical (or unethical) managerial tions of General manager, Director, Senior
decisions, and the ways in which managers manager, Supervisor, Project engineer and
when faced with ethical dilemmas. It officer. In our analysis, they all have been
respond
also examines the impact of relevant demographic grouped into two categories: (1) Senior level
factors on managers' perceptions, their beliefs managers, and (2) Junior level managers.
about insider trading, and aspects of ethical
climate in organisations in general.
Findings and discussion

Ethics and business

Methodology
The expressed their views on the
respondents
The of ethics is classified into three areas: relevance of ethics in business transactions in
study
Normative, metaethics, and ethics general, and how
they perceived the contem
descriptive
(Goodpaster, 1985). Normative ethics refers to porary social ethos that may have a bearing on
the prescriptions and 'wrong', whereas their behaviour as members of society. Table II
of'right'
metaethics is concerned with the meaning and summarises their responses.

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 Ethics and Malaysian Managers 737

TABLE I Results show that a substantial majority of

Basic profile of 381 respondents favoured of sound ethical
respondents application
principles to business
practices, and believed that
Percentage it would be of advantage in the long run (items
1 and 2 in Table II). Regarding their responses
A. Designation /Position
to the
remaining issues, 41% managers felt that
Senior level managers
ethics and economics did not go together. About
(general managers, directors,
the same number of managers (39%) perceived
senior managers) 49
51 extensive pervasiveness of questionable behav
Junior level managers
iours in today's world where deviations from
(supervisors, officers)
ethical norms are taken as evidence of being
B. Age (years)
clever and
intelligent. Furthermore, in the
21-30 31.7
opinion of 52% respondents most of those people
31-40 52.7
who progressed in the world, do not conform
Above 40 15.6
34.6 years to the principles of morality and ethics.
Average age (years)
23-56 years The findings, in general, indicate a perceived
Range
decline in ethical standards all over, and are
C. Education
consistent with the results from other surveys
Secondary 29.9
Bachelor's 44.0 (see, Zabid and Alsagoff, 1993; Hurley, 1988;
degree
Posner and Schmidt, 1987).
4.6
Post-graduate
Professional courses 21.5

D. Business experience Insider information

Average number of years 10.55 years
Range 1-30 years
'Insider Information' is information that some
E. Experience in currentfirm one within an organisation has, but that is not
Average number of years 7.9 years available to those outside it. This includes not
Range 1-30 years trade but also the
only secrets, organisation
F. Type of business activity strategy and plans. The moral con
problems
Industrial manufacturing 76 nected with insider information concern the use
Banking and finance 24 that individuals may make of such information

G. Number of employees
for their personal gains while they are still
Below 250 26.7 members of that organisation. In order words,
250-500 16.2 those who act on inside information violate their
Above 500 57.1 fiduciary obligations to the organisations they
represent, and may thereby do harm to them.
H. Ethnic group
During the last few years, insider trading scandals
Malay 29.0
have been reported from many places where by
Chinese 59.7
Indian 8.1 sharing confidential information about forth
Others 3.1 coming mergers of large corporations, unethical
investors were able to buy and sell stocks before
I. Gender
the mergers were announced to the public
Male 82.3
(Business Week, 1985), and the greed for
Female 17.7
monetary gains often took precedence over
being
J. Marital status ethical.
Single 43.4 A hypothetical situation relating to the practice
Married 56.6
of 'insider trading' was presented to managers
for their opinion. Table III summarises their
responses. 52% managers expressed themselves in

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 738 f. L. Gupta and M. Sulaiman

TABLE II
Attitudes and opinions on ethical dimension of business

Agree Partly Undecided Partly Disagree Mean

agree
disagree responses*

1. Sound ethics is good business in

long the run 70.5 21.4 4.7 1.6 1.4 1.8

2. Everything is fair in business 5.8 14.2 13.2 19.33.8

47.5

3. Most people who get ahead in

the world lead clean, moral lives 7.4 20.3 19.7 23.8 3.47 29.0
4. The biggest difference between
most criminals and other people is
that criminals are stupid enough
to get caught 19.6 19.6 11.4 16.1 3.21
33.2

5. Many unethical practices are

common to executives
industry,
say, because ethics and economics

do not mix. Do you agree? 15.3 25.7 14.6 18.0 3.526.5

=
Figures are percentages (N 381).
* Mean the extent
responses of less than 3 shows of respondents' agreement with the given statement, and of
more than 3 their disagreement.

TABLE III
Imagine that you are a member of the Board of Directors of a large Company. At a Board meeting, you
learn of an impending merger with a small company which has had unprofitable year, and whose stock is
presently selling at a price so low that you are certain that it will rise when news of the merger becomes
public knowledge, what do you do?

Alternative Response (in percentage)

a. I would buy some shares for myself 39.3

b. Iwould tell my broker about the forthcoming merger 6.2
c. Iwould tell a good friend about the merger 6.2
d. Iwould do none of the above 48.3

N = 354.

favour of directly or indirectly scale, has been one of the more common issues
taking advantage
of inside information available to them, disre included in ethical surveys of managers. The

garding thus the ethical dimension of their practice of unfairly benefiting oneself in this
action. manner is perceived to be widely in
prevalent
business organisations. The findings of this study
revealed, however, that about 80% respondents
Padding one's expense account would not like to derive any undue benefit by
inflating their expense accounts, even if others in
The activity of padding up of expense accounts, their own organisations indulged in it or their
in the nature of embezzlement on a small superiors would not take any note of the same
being

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 Ethics and Malaysian Managers 739

(Table IV). This reflects a relatively high ethical TABLE V

stance of managers in Malaysia on this issue, and
is consistent with the of Zabid and Alternatives Responses
findings
(in percentage)
Alsagoff (1993), in this regard.
a. This is unethical 26.3
TABLE IV practice
An executive earning M$50,000/- a year has been b. A company should have a
padding his expense account by about M$1,000/ written policy about gifts 64.8
a year, what do you think?
c. No gift worth more than
M$100 should be offered or
Alternative Response
accepted 8.9
(in percentage)
N = 372.
a. Acceptable if other executives
in the Company do the same
7.8 practice regardless of the value of the gift is
thing
if the executive's unethical.
b. Acceptable
superior know about it and
says nothing 13.3
Generally accepted (unethical) business
c. Unacceptable regardless of
the circumstances 78.9 practices

N = 360. were asked to state whether

Respondents any
such practices prevailed in their organisations
which they considered unethical, and if so, to
Practice describe one such practice that they would most
regarding gifts
like to see eliminated. one hundred and
Only
The common practice of giving and receiving sixteen usable responses were received. 17%

gifts to and from those with whom managers respondents said they did not perceive any such
do business may or may not be ethical. unethical practices being followed in their
regularly
If a person does not give favoured treatment to organisations as amatter of course while an
equal
those from whom he or she accepts gifts, and is number of them that there were a few
agreed
not prejudiced fail to give, no such cases. About under 'do not
against those who 25% responded
actual conflict of interest is created. However, in know' answer-category.
A
significant number,
situations where the independence of a person's however, perceived the presence of many trans

judgment is affected by the fact of a gift changing actions of questionable nature that were consid
hands, it may been seen to be in the nature of a ered normally accepted business behaviours
bribe. A gift of high value (or too
frequently (TableVI).
given gifts of even smaller
values) are likely to Regarding the one unethical practice they
have potential for encouraging unethical behav would most like to see eliminated, the highest
iours. Managers in the were (25%) was accorded to offering/
participating study frequency
asked to their opinion on this issue. receiving expensive in cash or kind, in
give gifts,
Responses are shown in Table V. exchange for securing or favours.
granting
A large majority of respondents (65%) opined Purchase departments in manufacturing organi
that a formal written organisation was sations were mentioned for possible
policy repeatedly
needed to guide the managerial action in this involvement in unfair practices with regard to
regard. About 9% of them thought that accepting handling of quotations/bids, and for arranging
or
offering fits of more than one hundred kickbacks. Gifts may be made sometimes in the

Malaysian dollars would be unethical. 26.3% form of 'paid for vacations', cash through 'red
managers however expressed the view that this packets', or even in the form of expensive

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 740 f. L. Gupta and M. Sulaiman

TABLE VI neurial and competitive orientation seems to be

Views on unethical practices ethical climates where some
producing managers
In every industry there are some generally accepted that they are expected to do
might perceive
business In your are there
practices. industry, any
anything to further their organisations' interests,
such practices which you regard as unethical? of ethical in
regardless implications. Competition
the economy is expected to produce efficiency
a. No 17.2
in the market and benefit the general consumer
b. Yes, a few 16.8
at large, but the temptations to violate the stan
c. Yes, many 40.6

d. I don't know 25.4 dards of honesty and fair competition for one's

personal benefit or that of one's own organisa

Note: are percentage of the sample. tion can also be there. Pressure on achieving
Figures
N= 116. targets could lead people into questionable
behaviours. And as the business moves more
towards profit maximisation orientation, there
dinners and entertainments. To quote a
costly be cases where the end could be seen to
senior level may
respondent manager:
justify the means. Such practices tend to under
mine the competition, and may not be ethically
It is an accepted norm in the oriental culture to
justifiable. About 71% managers expressed their
offer gifts to one's associates in appreciation for
services rendered. this has now agreement with the view that the business world
However, practice
into a stage where in order to get has become more competitive than ever before,
degenerated
and to be to even survive in the prevailing
legitimate things done, one may feel compelled to able
offer gifts. environment, many managers may find it neces
sary to some practices (Table
adopt questionable
Besides gifts, other perceptions related to the VII).
unfair practices of making false declarations of

imported items to evade 'duty', favouritism in

based on ethnic consider Unethical action and personal vs
employee promotions
ations, throwing up of chemicals and pollutants organisational gain
indiscriminately, expense account padding to
evade income-tax, 'window-dressing'
in
pub
As is clear from the findings contained inTable
lished financial statements, incorrect data given VIII, managers perceived their
superiors differ
to government agencies, luring away experienced entiating between ethical behaviours resulting in
staff from competitors' organisations, and using personal gains to employees, and those leading to
company time for personal business. the improved bottom line of the organisation.
The current emphasis on greater entrepre 83% respondents agreed with the view that if any

TABLE VII
Attitudes and opinions on ethical dimension of business

Agree Partly Undecided Partly Disagree Mean

agree
disagree responses

1. Competition today is stiffer than ever.

As a result many in business find
themselves forced to resort to
practices which are considered shady,
but appear necessary to survive. 35.5 35.5 13.7 2.17
7.97.6

are
Figures percentages.

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 Ethics and Malaysian Managers 741

TABLE VIII

Agree Partly Undecided Partly Disagree

agree disagree

If a manager in my company is discovered to have

engaged in unethical behaviour that results

primarily in personal gain (rather than corporate
gain) he will be promptly reprimanded
58.0
(N=367) 21.8 9.5 2.77.9

If a manager in my company is discovered to have

engaged in unethical behaviour that results

primarily in corporate gain (rather than personal
gain) he will be promptly reprimanded
29.3
(N=355) 22.1 20.6 16.1 11.9

are
Figures percentages.

manager derived a personal benefit by resorting towards organisational goals. In such situations of
to unfair means, he or she would be promptly ethical dilemmas managers may experience con

reprimanded, whereas in case of a similar action siderable tension in discriminating 'right' from
in some corporate or 'ethical' from and then
resulting gain, only 51% of 'wrong' 'unethical',
them thought it would lead to any punishment in translating into action what they considered
the senior level func there are to be career
by their superiors. Thus, 'right'. Often, likely
tionaries are perceived by many as indifferent to implications of certain choices which might
the ethical aspects of the ways and means used further complicate the process of managerial

by lower level managers for achieving organisa decision making.

tional Besides pressures of Managers were asked to describe the job
objectives. job
demands, and influence of individual value situation which was for them a cause of deepest

systems, opportunity for action is also suggested ethical or moral concern during their business
to be one of the determinants of ethical or career. Out 182 managers
of who responded
unethical (Ferrell and Gresham,
behaviour 1985). looked somewhat evasive or vague in their

Zey Ferrell and Ferrell (1982) have expressed the replies. Approximately 52% mentioned about the
view that the absence of punishment an value-conflict they faced when expensive
provides
to individuals for in uneth gifts/commission/extra money were demanded
opportunity engaging
ical actions. The findings of this study seem to from or offered to them for granting undue
reinforce this view to a considerable extent, and favours, while 10% of them talked regarding
some as to why certain 'conflict of interest' situations where family
provide explanations
activities are perceived to have become gener members, friends, or close relatives were involved

ally accepted unethical practices in organisations. in dealings with their organisations. Others
described situations where they felt undue
pressure from superiors in their decision-choices
Ethical dilemma on various matters including performance
appraisal reports, wrongful termination of an
ethical issues can be and such employee and marketing a without
Many complex, product
that open up multiple alternatives for action. This indicating its harmful effects or weaknesses. The
true in business where the statements of managers are
would be particularly following typical of
individual might often find himself forced to the descriptions given regarding their dilemmas
choose among personal values and his loyalties and concerns:

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 742 J. L. Gupta and M. Sulaiman

On discovering unethical behaviour of a colleague, TABLE IX

who is a friend also, the decision whether to report
the matter to higher level management or not, When you are confronted with an Rank
posed a dilemma. ethical dilemma inperforming your
Approving 'samples' that do not satisfy the job, whom do you usually consult?
standard quality requirements, because rejecting
them would cause substantial down-time to 1. Boss
(superior) 1 (2.144)
employer, and great loss to suppliers of the con 2. Colleagues (other people at my level) 2 (3.160)
cerned item. 3. No one (work it out myself) 3 (3.659)
Having to deal with undue pressure/interference 4. Spouse 4 (3.731)
from influential persons in the course of my work, 5. Friend (at work) 5 (3.868)
objective evaluation cannot sometimes be under 6. Friend
(outside work) 6 (4.231)
taken due to such pressure. 7. Legal staff 7 (4.341)
Having my superior s family member as one of 8. Religious and spiritual persons 8 (6.343)
the vendors quoting for a job.
Having to defend company's policies where I Note: Figures are weighted
in brackets averages of all
myself am in doubt about those being fair and respondents rankings of each item (1, 2, 3, 4, 5, 6,
correct. 7 and 8) with most = 1 and least
important impor
=
tant 8.

Counsel for ethical dilemma The when

respondents' perceptions, analysed
according to ethnic groups and gender differ

Availability of some persons within the organi ences, revealed that Chinese managers assigned
sation itself or outside, with whom one may rank to as to Malay
higher 'spouse' compared
consult his or her ethical dilemmas is managers, and the
latter, showed a
regarding higher pref
erence at
likely to be of help in resolving such conflicts for consulting 'friend work' than the
and getting rid of stressful emotions. 'Levels of former. At the sametime, female respondents
moral reasoning and judgment are likely to be considered 'spouse' the most important of all

higher when managers get together and discuss persons to consult (See Table X). This can
ethical issues than when those choices have to possibly be explained as a consequence of 'gender
be made in solitude' (Nichols et al., 1982). socialisation' processes existing in the Malaysian

Openness in arriving at decisions gives those with society, which shaped their behavioural responses
an interest in a particular decision, the chance in such situation.
to make their views known, and opens to

argument the basis on which the decision is

finally taken. This, in turn, may enable the Factors influencing ethical choices
decision-maker to learn from experience and to

improve his or her powers or judgment. In the extent literature, there is an increasing
were asked to rank order their concern for the impact of social factors, and the
Managers
choices of persons (including themselves), they concepts of 'moral atmosphere' and 'just com
would consult when confronted with an munity' have been introduced to consider the
usually
ethical dilemma. The presented
findings in social context of ethical behaviour (Higgens et
Table IX show that usually, managers would like al, 1984). Hunt and Vitell (1986) mention four
to obtain the views of their superiors while different categories of background factors for the
on ethical
problems before consulting, ethical decision making process: (1) cultural
deciding
their or
(if needed thereafter) group colleagues environment, (2) industry environment, (3)
their own principles or norms in this Organisational Environment, and (4) Personal
applying
lower importance to In other model of
regard. They assigned much Experiences. descriptive
or Ferrell
the counsel of their spouses, friends, legal staff marketing ethics, and Gresham (1985),
religious and spiritual persons. have grouped these factors into three: individual

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 Ethics and Malaysian Managers 743

TABLE X
When you are confronted with an ethical dilemma in performing your job, who do you usually consult?

SI. No. Rank assigned by managers

Chinese Malay Male Female

1. Boss (superior) 1 2
2. Colleagues (other people at my level) 2 3
3. No one (work it out myself) 6 4
4. Spouse 4 1
5. Friend (at work) 3 5
6. Friend (outside work) 5 6
7. Legal staff 7 7
8. Religious and spiritual persons 8

factors, organisational factors, and social/cultural Individual and the organisation

environment.

To understand managers' perceptions, they Organisation set for certain goals to

themselves
were asked to rank 5 factors different be achieved their members, who are
representing through
categories according to the degree of influence expected to work towards those goals, subordi
these extended on their decisions. Responses nating their own personal if necessary.
objectives,
presented in Table XI indicate that managers In the contemporary globalised business envi
attributed their ethicalness (or otherwise) mainly ronment, it appears that acting out one's
to their ? a
'own code of behaviour' their values, individual parts well and still retaining free and

experience/conscience. 'Behaviour of one's clear conscience is becoming difficult. As the

was listed next in importance followed show, about 58% managers felt that their
superior' findings
by the 'formal company policy', and the impact organisations' expectations often induced them
of ethical cliriiate of the industry. The 'behaviour to behave against the dictates of the principles
of one's equal in the organisation' was which like to follow
perceived they would otherwise (Table
to be the least important factor influencing XII). Although the
respondents from the major
decision-choices. These findings are largely ethnic groups (Chinese and Malay managers)
consistent with other studies (Zabid and Alsagoff, expressed identical views, the degree of agree
1993; Brenner and Molander, 1977). ment in case of Chinese managers was higher
than Malay managers (Table XIII).

TABLE XI

The following factors are suggested to influence a person's ethical decisions. Rank
Please rank them 1 to 5, in order of importance to you. Give rank 1 for
the most important and 5 for the least important.

1. An individual's
personnel code of behaviour 1 (2.102)
2. The of a person's superior in the company
Behaviour 2 (2.781)
3. Formal Company policy 3 (2.014)
4. Ethical climate of the industry 4 (3.425)
5. The behaviour of a person's equals in the company 5 (3.779)

Note: Figures in brackets are weighted averages of respondents ranking of each item (1, 2, 3, 4 and 5).

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 744 f. L. Gupta and M. Sulaiman

TABLE XII

Agree Partly Undecided Partly Disagree

agree disagree

In order to succeed in business organisations, it is

often necessary to compromise one's ethics 25.9 32.3 10.8 18.5
12.4

Note: are percentages =

Figures (N 378).

TABLE XIII
In order to succeed in business organisations, it is often necessary to compromise one's ethics

Ethnic group N Mean SDt t

Prob
value

2Tse S?
96Malay lit
2.896 ?
1.518
>-939 ?-0535

Several studies have provided evidence formal policies, guidelines and mechanisms to

regarding the relationship between ethical per control questionable behavioural deviations (such
ceptions and organisational factors, such as, as code of ethics, etc.), and at the same time,
position of the
respondent in the organisational top management pressure for improved bottom

hierarchy, type of business activity, and size of the line performance also may, perhaps, be greater

organisation, (see for example, Kam-Hon Lee there than in larger organisations. Table XV
1981; Mehta and Kau, 1984; I. P. Akaah and presents the findings regarding the influence of
E. A. Riordan, 1989). Results summarised in type of business activity and organisational rank
Table XIV show that a
larger number of of the respondents. Junior level managers seemed
managers from relatively small size organisations to be under greater pressure for indulging in
the need to compromise their ethical unethical activity as compared to those holding
perceived
principles, as compared to those working in higher ranks in manufacturing organisations. In

companies employing 500 or more persons case of Banking and finance companies, however,
(Table XV). This may possibly be so because this difference turned out to be insignificant.
many small size organisations may not have

TABLE XIV
Cross tabulation: Size of the firm by in order to succeed in business organisations, it is often necessary to
one's ethics
compromise

No. of employees Agree Neutral Disagree

in the firm

2-249 66.7% 5.2% 28.1%

250-499 67.8% 3.4% 28.8%
500-999 50.9% 17.5% 31.6%
1000 or above 52.7% 13.3% 34.0%

Total 58.6% 10.2% 31.2% 100%

Chi = Df = 6; = 0.0339.
Square 13.6444; Sig.

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 Ethics and Malaysian Managers 745

TABLE XV
In order to succeed in business it is often necessary to one's ethics
organisations, compromise

Organisation rank N Mean t SDvalue tProb

Responses of managers in manufacturing organisations

Senior level managers 2.374167 1.457
2.465 0.0142
Junior level managers 2.492181 1.436

Responses of managers in banking andfinance companies

Senior level managers 46 3.196 1.528
0.199 0.8424
Junior level managers 3.125 40 1.652

Code of ethics TABLE XVI

Is there a formal, written code of ethics in your
A code of ethics is a set of specific statements
actions considered ethical as well as Yes No Don't
indicating
statements are know
unethical. Such developed by the
realistic application of general ethical standards =
Company? (N 356) 68.8 20.5 10.7
to business situations and environment. Each =
Industry? (N 310) 42.3 23.9 33.9
person's values are unique, and his or her con
Professional association?
ceptions of doing 'right' may from others. differ =
(N 272) 47.8 15.4 36.8
As such, managers in organisations may require
consensus regarding practices, and guidelines by are
Figures percentages.
which to judge whether a possible action would
be ethically 'right'.
In view of the heightened societal attention to (Table XVIII). Findings are generally consistent
business ethics in recent years, introducing formal with other studies (Longenecker et al., 1989;
Ethics Codes to provide a framework for rewards Vitell and Festervand, 1987).
and punishments has been a popular measure in
many organisations. Any significant empirical
evidence of their effectiveness, however, is Conclusion and implications
lacking. A code to be effective needs to be
enforced by appropriate sanctions (Ferrell and This study to explore
attempted the Malaysian
Skinner, 1988). When asked whether their managers' personal beliefs, orientations and
company, industry, and Professional Association intentions regarding the ethical dimension of
had any formal written code of Ethics, 68.8%, their decision behaviours, as also the organisa
42.3% and 47.8% respondents respectively replied tional and societal factors that influence their
in the affirmative (Table XVI). Relatively large choices in this regard. The findings, in the main,
percentage of responses under 'do not know' revealed that managers though would like to
category could be taken as indicator of the low affirm their faith in the relevance of ethical
degree of seriousness in its implementation. behaviours for long term success in their business
A large majority of respondents opined that endeavours, practical realities in the contem

organisational ethicalness could be enhanced if porary business scenario sometimes required

Ethics Codes were enforced and con them to make often felt
properly compromises. They
sistently (Table XVII). The view, though is constrained to make unethical adjustments for a
widely shared
by respondents in all age-groups, variety of reasons, such as, stiffer competition,
those above 40 years of age seemed to have organisational and societal climate, behaviours of
expressed their approval somewhat more strongly superiors, friends and colleagues; and lack of

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746 J. L. Gupta and M. Sulaiman

TABLE XVII

Agree Partly Undecided Partly Disagree

agree disagree

1. Enforcing ethical code would raise the ethical

=
level of business behaviour (N 360) 58.6 30.0 7.5 2.5 1.4

are percentages.
Figures

TABLE XVIII
Cross tabulation: Respondents' age by 'Enforcing ethical code would raise the ethical level of
business behaviour'

Age groups Agree Neutral Disagree

1 2 3

21-30 1 86.9% 11.2% 1.9%

31-40 2 86.8% 7.4% 5.8%
Above 40 3 96.4% 1.8% 1.8%

Total 88.3% 7.7% 4.0% 100%

Chi = Df = = 0.0867.
Square 8.1353; 4; Sig.

effective guiding mechanism in the face of ment expressing organisation values would then

complex ethical problems. be translated into a specific code of conduct to

Such attitudes and behavioural responses be adequately communicated and strictly
clearly indicate that
greater efforts would be enforced. For such a culture to come into exis
needed to institutionalise ethics into organisa tence and become effective in influencing and
tions' decision making structures by putting it enhancing ethical environment in organisations,
into their policy making processes and work the most important factor would be the values,
practices. Recent
writings on management have the words and deeds of senior/top executives

emphasized the need for an organisational ori who act as the role models for other members.
entation toward values; and success of excellent Asthe findings of this study revealed, managers
is largely attributed to their value perceived their personal codes of behaviour as the
organisations
led management that guides managerial
culture most important influence on their decisions, i.e.,
(Peters and Waterman, 1982; Pascale they are more by their own conscience,
practices guided
and Athos, 1981; Deal and Kennedy, 1982; which decides the morality of their actions and
Denison, 1990). It is suggested that creating a urges them to behave in a certain manner. In
culture around core moral values the course of their from
unitary cohesive growing up early
is the solution to enhancing ethical behaviour. childhood to adulthood, they generally inter
It would be the responsibility of the top man nalise different patterns of moral reasoning, and

agement to create
organisation culture based on acquire certain values and beliefs about desirable
what is just' and 'right'. These ethical values and and states underlying attitudinal and behavioural
norms would need to be incorporated in the processes. to Kohlberg (1981), some
According
planning process of management, and must people almost always make moral decisions based

clearly form part of the 'mission' on how the outcomes will affect particular some
organisations'
statements; as also of performance measurement person or persons while others may consider the
and control systems. The part of mission state effect of their actions on groups that they belong

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 Ethics and Malaysian Managers 747

to, such as family or their work-groups. Still case studies can be used as tools for providing
others look beyond their immediate reference illustrative material. Biographies and auto
to consider the interest of society at large biographies of great persons, plays and short
points
or even humanity as a whole. Ethics in organi stories written by great writers can also be used

sations, therefore, cannot be left to each to enrich the discussion at ethics training
solely
person's 'individual code of conduct'. It must be seminars. It has been widely experienced that
taken as an organisational as well as individual literature can offer rather specific moral reasoning
about moral dilemmas in commercial organisa
responsibility.
Ethics can be one way of helping tions. The use of 'classic' short stories as
training
managers define their philosophy and find the discussion material can particularly offer a per
common denominators that may offer a mean method for managers to
sonally compelling
and consistent to resolving enhance their ethical sensitivity (McAdams and
ingful approach
ethical issues through the process of self-reflec Koppensteiner, 1992; Smith, 1992).
In order to enhance the ethicalness of both,
tion. Through systematic training and education,
it should be possible to influence and develop the and participants, efforts are needed
organisations
'personal code' or 'conscience' of managers in to stimulate greater awareness of the importance
the sense that an individual can always learn or of moral considerations in business practices by
accept new norms for governing his or her putting business ethics formally on the agenda
behaviour (Baumhart, 1968). As a part of of the training systems of the industrial organi
socialisation process, it would be sations in Malaysia.
organisational
appropriate to discuss in management develop
ment programmes the basic theories and princi

ples of ethical analysis derived from normative Acknowledgments

These theories may not provide
philosophy.
direct answers for specific situations, but can be Authors the financial
gratefully acknowledge
in the of the
helpful discerning implications support provided by the University of Science
alternative courses of actions that are available. for this study.
Malaysia
The objective in ethics training would not be to

develop any special set of standards but to create

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