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Ethics Perception: Does Teaching Make a Difference?

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Nhung T. Nguyen , M. Tom Basuray , William P. Smith , Donald Kopka & Donald N. McCulloh
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 Ethics Perception: Does Teaching
Make a Difference?
NHUNG T. NGUYEN
M. TOM BASURAY
WILLIAM P. SMITH
DONALD KOPKA
DONALD N. MCCULLOH
TOWSON UNIVERSITY
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TOWSON, MARYLAND
ABSTRACT. The present study exam-
ined student learning in business ethics,
particularly ethical judgment, using R.
E. Reidenbach and D. P. Robin’s (1990)
Multidimensional Ethics Scale (MES). The
authors asked 262 undergraduate students
to provide ethical judgment rating, first at
the beginning of the semester and again at
the end of the semester. Students judged 3
moral issues in the MES—labeled sales,
auto, and retail—using 3 ethics theories:
moral equity, relativism, and contractual-
ism. Ethics learning was only significant in
contractualism ethics for the auto scenario.
Further, ethics learning significantly pre-
dicted ethical behavioral intent, support-
ing A. Bandura’s (1986) social cognitive
theory. The authors provide theoretical and
practical implications based on the study’s
findings.
Keywords: business ethics, program assess-
ment, teaching
Copyright © 2008 Heldref Publications
66 Journal of Education for Business
A fter a wave of recent corporate
scandals and the successful
government prosecutions thereof, the
teaching of business ethics has recent-
ly gained a renewed emphasis among
management educators. In its revised
accreditation standards, the Associa-
tion to Advance Collegiate Schools of
Business International (AACSB) has
required business schools to address
business ethics in their undergraduate
and graduate curricula (Shinn, 2006).
Eschewing the argument that teach-
ing of business ethics is an oxymoron
(Drucker, 1981; Friedman, 1970; Sims,
1977), two significant but related issues
need to be addressed in any discussions
concerning the teaching of ethics: (a)
how ethics is to be taught and (b) what
outcomes are to be achieved. A review
of business ethics education literature
reveals that the teaching of business
ethics can be improved only when the
goal or outcome is allowed to deter-
mine the means of teaching (e.g., Sims
& Felton, 2006).
Although AACSB allows business
schools to design their own ethics cur-
ricula, it is important to establish guide-
lines as to what should be included
in an ethics curriculum. In an effort
to standardize ethics teaching in the
classroom, various goals for an ethics
training program have been identified.
For example, Sims and Felton (2006)
proposed four objectives of an ethics
curriculum: (a) raise ethical aware-
ness among students; (b) help students
understand their core values; (c) expand
students’ understanding of ethics; and
(d) help students understand that ethical
maturity is an ongoing process. Rais-
ing ethical awareness requires raising
students’ level of ethical sensitivity. In
a recent extensive review of behavioral
ethics literature, citing evidence in nurs-
ing, dentistry, accounting, marketing,
and education, Treviño, Weaver, and
Reynolds (2006) noted that training and
experience could enhance ethical sen-
sitivity. Whereas moral values are the
foundation on which principles of right
or wrong are formed, business educa-
tors have realized that teaching students
to uphold certain sets of values after
a course may not be successful (e.g.,
Churchill, 1982).
Following Sims and Felton’s (2006)
propositions, we think that the most
realistic goals of an ethics course should
be to raise students’ moral awareness
and expand their understanding of eth-
ics (e.g., various ethical dimensions and
their associated judgments, intentions,
and behaviors) through the exposure to
various ethics theories and discussion
of moral cases or dilemmas presented
in chapter text. Figure 1 presents our
research model, which is based on the
model of behavioral ethics outcomes
proposed by Treviño and colleagues in
their latest and comprehensive review

Moral issue characteristics
(sales, auto, retail)
Organizational characteristics
• Language
• Reward/punishment
• Ethical culture
• Ethical infrastructure
• Leadership
Individual characteristics Aspects of ethical behavior
Cognitive: awareness
• Moral awareness †
• Moral judgment Judgment
• Moral disengagement † moral development theory, is defined as
• Other cognitive biases Intention
Affective (e.g., guilt, shame) † the situation in terms of possible actions
Identity-based (e.g., gender, religion, Ethical/unethical
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self-concept) behavior
Organizational characteristics
• Language
• Reward/punishment
• Ethical culture
FIGURE 1. Synthesis of behavioral ethics model. Adapted from L. K.
Treviño, G. R. Weaver, and S. J. Reynolds (2006). Topics examined in this
study are italicized.
of behavioral ethics literature (Treviño, linkage between moral issue character-
et al., 2006). In the present article we istics and aspects of ethical behavior
discuss the portion of the model exam- of awareness, judgment, intention, and
ined in this study as it is embedded in behavior. At least one study reported
a larger framework of ethical decision that a gain in students’ moral reasoning
making. For a detailed discussion of the resulted from in-class ethics exercises
most comprehensive framework of ethi- (Loe & Weeks, 2000).
cal decision making, consult Treviño et The purpose of the present study
al.’s review. was twofold. We sought to answer two
As shown in Figure 1, ethical behav- important questions: How much of an
ior is influenced by both individual improvement in ethical reasoning can
characteristics and contextual charac- be acquired in a Principles of Manage-
teristics, which include organizational ment course in which business ethics
and moral issue characteristics. Raising is introduced? How important is ethics
students’ moral awareness and there- learning in shaping ethical intentions?
by expanding their understanding of Treviño et al. (2006) called for more
ethics by introducing them to various research examining the link between
ethics theories discussed in a chapter ethical judgment and ethical action.
dedicated to business ethics is expect- The present study indirectly responds
ed to strengthen the linkage between to those authors’ call by examining the
individual characteristics (e.g., moral linkage between the potential gain in
awareness and judgment) and aspects ethical judgment through learning and
of ethical behavior (e.g., ethical aware- ethical intention, which subsequently
ness, judgment, intention, and behav- leads to ethical actions.
ior). Raising students’ moral awareness We note several definitions used in the
through the discussion of various ethi- present study. First, an ethical dilemma
cal dilemmas—such as sales, auto, and or a moral dilemma is defined as an
retail—is expected to operationalize the issue “where a person’s actions, if per-
formed freely, may harm or benefit oth-
ers” (Velaquez & Rostankowski, 1985,
as cited in Jones, 1991, p. 367). Implied
in this definition is the cognitive pro-
cess confronting the decision maker to
choose the alternative that is least harm-
ful or most beneficial to others. Second,
an ethical decision is defined as one that
is both “legal and morally acceptable
to the larger community,” whereas an
unethical decision is defined as one that
is both “illegal and morally unaccept-
able to the larger community” (Jones,
p. 367). Third, ethical reasoning, which
comes from Kohlberg’s (1969) cognitive
an individual’s ability to “(a) interpret
and consequences to oneself and oth-
ers; (b) judge which course of action is
morally right; (c) give priority to what
is morally right over other consider-
ations; and (d) follow through on the
intention to behave morally” (Treviño,
1992, p. 445). Implied in this definition
of ethical reasoning are the four related
concepts of ethical awareness, ethical
judgment, ethical intention, and ethi-
cal action. Ethical awareness is implied
in the process of interpreting the situ-
ation described in (a) above. Ethical
judgment is implied in the process of
evaluating alternatives described in (b);
ethical intention is implied in the pro-
cess of evaluating alternatives described
in (c); and ethical action is implied in
the process of evaluating alternatives
described in (d). In the present study,
the terms ethical and moral are used
interchangeably as commonly found in
prior behavioral ethics research (e.g.,
Jones; Treviño et al., 2006). In the para-
graphs that follow, we review current
literature on behavioral ethics and pres-
ent our hypotheses.
The vast majority of studies in ethi-
cal decision-making literature in gen-
eral and ethical reasoning in particular
are based on Kohlberg’s (1969) semi-
nal work on cognitive moral develop-
ment theory. According to this theory,
one moves through six possible stages
embedded within three levels of cog-
nitive development. Furthermore, the
process of moving through stages can-
not be reversed. Stages 1 and 2 put indi-
viduals at the preconventional level of
ethical judgment, wherein what is right
November/December 2008 67
 or wrong is based on the fear of punish-
ment or social exchange (e.g., if you
scratch my back, I will scratch yours).
Stages 3 and 4 place one at the conven-
tional level, in which ethical judgment is
based on peer pressure or rules of laws.
Stages 5 and 6—the postconventional
level or principled level—are the high-
est and ultimate levels of ethical reason-
ing or judgment wherein what is right
or wrong is determined by universally
held principles of justice. According to
an extensive review of Kohlberg’s work
and subsequent research, most adults’
ethical reasoning is at the conventional
level, and fewer than 20% of American
adults reach Stage 5 of the principled
level, whereas Stage 6 is practically
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nonexistent (Rest, Narvaez, Bebeau, &
Thoma, 1999).
The Defining Issues Test (DIT) was
developed by James Rest in 1986 to
measure cognitive moral development
level. The DIT has been validated and
widely used. Despite the popularity of
the DIT, as well as Kohlberg’s (1969)
work on cognitive moral development,
Kohlberg’s theory is not suitable for
teaching business ethics for at least two
reasons. First, the theory was built on
the assumption that ethical judgment
is an innate trait, not a skill that can be
acquired through education and train-
ing. Second, the theory has been sug-
gested to be more suitable for issues
that involve a macro level of morality
(e.g., societal-level moral issues) than
for those that involve a micro level of
morality (e.g., moral issues in daily
activities; Rest et al., 1999). If business
educators’ jobs are to prepare students
for future positions in businesses, an
emphasis on a micro level of morality
(e.g., how to recognize and evaluate eth-
ical dilemmas in daily activities) will be
more attainable in an ethics curriculum.
Reidenbach and Robin’s (1990) work
on ethical reasoning is more suitable for
ethics teaching. In contrast to Kohlberg
(1969), Reidenbach and Robin (1990,
1995) assumed that ethical judgment is
developed through education and train-
ing. This process approach to ethical
reasoning lends itself better to business
ethics teaching. Reidenbach and Robin
(1990) developed the Multidimensional
Ethics Scale (MES) to measure ethical
judgment. According to these scholars,
68 Journal of Education for Business
it was more prudent to view ethical
reasoning or judgment as a multidi-
mensional (rather than unidimensional)
construct. Their scale items were drawn
from five well-known moral philoso-
phies of justice, egoism, utilitarian-
ism, relativism, and deontology. They
found that the five moral philosophies
were better captured in three ethical
dimensions: broad-based moral equity,
relativism, and contractualism. Moral
equity, defined as individual percep-
tion of fairness and justice, as well as
what is right and wrong in the broad-
est sense, captures the principles of
fairness and moral propriety (LaFleur,
Reidenbach, Robin, & Forrest, 1996).
Relativism, defined as the perception of
what is right and wrong based on guide-
lines and parameters embedded in the
social and cultural system, rather than
individual considerations, captures the
deontological concept. Contractualism,
defined as individual perception of what
is right and wrong based on notions of
an implied contract that exists between
business and society, captures normative
philosophies (LaFleur et al.; Reiden-
bach & Robin, 1995).
There are two reasons why previ-
ous research reported mixed findings on
the effectiveness of ethics education on
students’ ethical reasoning. First, most
previous research examined the effec-
tiveness of business ethics education
without taking into consideration the
theoretical framework base on which
ethics is taught. For example, Martin
(1982) evaluated a business ethics course
by asking business and engineering stu-
dents to provide judgment ratings of
various ethical dilemmas about whether
the action described in each dilemma
was ethical or unethical in general with-
out referring to any ethical framework.
Later studies also suffer from the same
problem—no ethical framework (e.g.,
Gautschi & Jones, 1998; Ritter, 2006).
Second, most previous studies used
hypothetical moral dilemmas (Rest’s
DIT, 1986; Weber’s Moral Judgment
Interview, 1990a) as measures of change
in moral reasoning before and after eth-
ics training. The DIT and the interview
methodology used in Weber’s (1990a)
study may not adequately reflect one’s
true level of ethical judgment in solv-
ing work-related dilemmas, limiting the
generalizability of previous findings to
real work dilemmas (Dellaportas, Coo-
per, & Leung, 2006).
Hypothesis Development
There are at least two reasons that
examining the role of ethics theories in
ethical decision making is important.
First, empirical evidence shows that
people use rules derived from various
sources (e.g., families, friends, organi-
zations, moral philosophies) to evalu-
ate their decisions (e.g., Beu, Buckley,
& Harvey, 2003). Second, evidence
remains mixed as to whether different
philosophies lead to the same decision.
For example, some argue that despite
differences in moral rules and theoreti-
cal orientations toward particular dilem-
mas, conscientious applications may
yield similar conclusions about what is
right or wrong (DeGeorge, 2006). Oth-
ers showed that different rules produced
different evaluations of alternatives in
decision making. For example, LaFleur
et al. (1996) found that ethical judgment
varied with different rules being applied
in evaluating two hypothetical advertis-
ing scenarios among a sample of adver-
tising professionals. Reynolds (2006)
found that people using a utilitarian
approach (emphasis on the outcome of
an action) in decision making were more
sensitive to moral dilemmas than those
using a formalist approach (emphasis
on the means of an action). On the basis
of this discussion, if ethics teaching is
believed to lead to student learning, it is
important to identify which ethics theo-
ry will lead to the most consistent ethi-
cal judgment and subsequent intention
across moral dilemmas. In the present
study, we define student learning as the
improvement in students’ knowledge,
skill, and ability (KSA) to (a) recognize
an ethical dilemma; (b) identify ethical
alternatives; (c) evaluate ethical alterna-
tives; and (d) select the best or most
ethical alternative.
As discussed previously in this study,
prior research has found the effect of
ethics education on student learning to
be mixed. However, in the present study,
we believe that ethics education, when
designed and delivered properly, as was
done in this study, will have a posi-
tive impact on students’ moral reasoning.
 Desplaces, Melchar, Beauvais, and Bosco
(2007) conducted a survey of student
moral reasoning at three colleges in the
Northeast United States. Those authors
found that students who recalled having
faculty discuss ethics in their courses
also had a higher level of moral reason-
ing than their peers who did not recall
such teaching practices in their business
courses (Desplaces et al.). To extrapo-
late on their findings, it is reasonable to
expect that faculty discussion of ethics
theories—that is, moral equity, relativ-
ism, and contractualism—will enhance
students’ moral reasoning.
Moral equity captures the principles
of fairness and equitability (LaFleur et
al., 1996). For example, terminating
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workers on the basis of their perfor-
mance would be viewed as ethical on
the basis of moral equity ethics. The
practice of firing the bottom 10% of a
workforce to continuously raise the bar
is not uncommon in some Fortune 500
companies, and it exemplifies this moral
equity view of ethics.
Continuing with this example, and
considering relativism, firing workers
on the basis of performance would be
unethical in some cultures if the weak-
est performers happened to be elderly
men because they are respected in some
cultures. Contractualism is consistent
with the concept of corporate social
responsibility. Several ethics scholars
have called for a paradigm shift from
organization worldview to human-cen-
tered view in business ethics educa-
tion (e.g., Giacalone & Thompson,
2006). This shift shows an emphasis
on well-being rather than just financial
outcomes in teaching business ethics,
suggesting a need to examine the impact
of social responsibility on subsequent
ethical motivation and behavior. Social
responsibility, defined as “the obliga-
tion of decision makers to take actions
which protect and improve the welfare
of society as a whole along with their
own interests” (Davis & Blomstrom,
1975, p. 39), is consequently consistent
with the notion of equality espoused
in the justice view of ethics (Payne
& Joyner, 2006; Rawls, 1971). Refer-
ring to the firing example, terminating
workers on the basis of gender, regard-
less of performance, would be unethical
because it would violate the principle
of equal opportunity espoused in jus-
tice ethics. Whereas an emphasis on
well-being is consistent with concepts
of social responsibility, an emphasis on
financial outcomes is more relevant to
utilitarian ethics.
According to social cognition theo-
ries (e.g., Bandura, 1986), one goes
through a series of social cognition pro-
cesses to form one’s identity. Through
social learning processes (e.g., class-
room lectures and discussions as well
as behavioral modeling) students will be
able to develop their moral identity and
motivation. On the basis of this discus-
sion, we hypothesize as follows:
Hypothesis 1: Students will demonstrate
more ethical judgment that is related
to moral equity at the end of the
semester after being exposed to ethics
training than they do at the beginning
of the semester.
Hypothesis 2: Students will demonstrate
more ethical judgment that is related
to relativism at the end of the semes-
ter after being exposed to ethics train-
ing than they do at the beginning of
the semester.
Hypothesis 3: Students will demonstrate
more ethical judgment that is related
to contractualism at the end of the
semester after being exposed to ethics
training than they do at the beginning
of the semester.
Rest et al. (1999) defined ethical or
moral intention as “degree of commit-
ment to taking the moral course of action,
valuing moral values over other values,
and taking personal responsibility for
moral outcomes” (p. 101). In a recent
extensive review of behavioral ethics,
Treviño et al. (2006), citing previous
empirical evidence in sociopathy, sur-
mised that moral intention or moral moti-
vation “often appears disconnected from
explicit moral reasoning processes” (p.
960). This indicates that students might
learn how to make a sound ethical judg-
ment, but that they may not subsequently
have any intention to act in accordance
with that level of judgment. Drawing
from social cognitive theory (Bandura,
1986), we hope that through the use
of lectures and case studies of ethical
dilemmas, ethical principles grounded in
various ethics theories will be reinforced,
and that students will gradually develop
a degree of automaticity in their deci-
sion making to achieve a consistency
between ethical judgment and ethical
intention. Automaticity in this situation
is defined as the ease with which indi-
viduals make decisions in the absence
of either conscious reasoning or internal
mental struggle. Indeed, people who dis-
play exemplary behavior in ethics exhibit
a high level of automaticity in their deci-
sion making (Lapsley & Narvaez, 2004).
Thus, we hypothesize as follows:
Hypothesis 4: Learning in ethical judg-
ment will lead to more ethical inten-
tion.
Almost all student participants had
not completed a course in which they
were introduced to business ethics
before the time of this study. Lectur-
ing was the main instructional practice
that was used in this study. Additional
instructional practices such as group
exercises and case studies were also
used. Students were exposed to various
ethics theories (e.g., utilitarianism, jus-
tice, rights) in Chapter 2 of Robbins and
DeCenzo’s (2005) text.
METHOD
Sample and Procedure
Participants were 340 undergraduate
business students who were enrolled
in Principles of Management courses
at a mid-Atlantic school and whom we
asked to participate in the study. Par-
ticipants were ensured of confidentiality
of their responses. To ensure honesty
in student responses, no names were
collected. Data were collected at two
different points in time: during the first
week and during the final exam week
of the spring semester of 2006. Student
responses were matched from pre–post
data using corresponding identifica-
tion numbers. Because of attrition and
missing data, we were able to match
responses for only 262 students. For
both the pretest and the posttest, the fol-
lowing instruction was used:
This instrument assesses your opinions
about controversial business issues. Dif-
ferent people make decisions about these
issues in different ways. You should
respond to this instrument without discuss-
ing them with others. In this instrument,
you are presented with three scenarios.
November/December 2008 69
 Following each scenario is an action. Your
task after reading the scenario is to rate
the action on a 6-point scale with 1 mean-
ing unethical and 6 meaning ethical. Your
answers should reflect your attitude and
behavior as they are now, not as you would
like them to be. Your honest responses
are appreciated. Please read each scenario
carefully and circle the number corre-
sponding to your response.
Of 262 students, 156 (59.8%) were
male, and the average age was 21.78 years
(SD = 3.77 years; minimum = 18 years;
maximum = 49 years). The sample was
predominantly White (208, or 79.4%) with
10.7% Black, 4.2% Asian, 1.5% Hispan-
ic, and 4.2% who reported other. The vast
majority of participants (78.8%) reported
working at least part-time while taking
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classes, with the average job tenure of
21.99 months (SD = 22.06 months). The
sample was nearly evenly split in manage-
rial experience, with 54% (138) reporting
having some managerial experience. The
student participants were predominantly
business majors (205, or 80%).
Measures
Ethical Judgment
We adopted Hunt and Vitell’s (1986)
definition of ethical judgment as a
respondent’s perceived ethicality of an
action described within the three sce-
narios in the MES developed by Reiden-
bach and Robin (1990; see the Appendix
for the full scenario texts). Our interest
was in the differential impact that each
ethical dimension or framework has on
students’ learning and subsequent ethi-
cal intention, and the MES allows for
such a multidimensional examination.
Ethical judgment ratings were collected
on all three ethics dimensions of moral
equity, relativism, and contractualism
using a 6-point scale from 1 (most
unethical) to 6 (least unethical).
Moral Equity. We used four items
to measure this dimension: Unfair–Fair;
Unjust–Just; Unacceptable–Acceptable to
my family1; and Morally wrong–Morally
right. Students were asked to indi-
cate their perception of the degree of
the action’s ethicalness in each of the
three scenarios. In the assessment at
the beginning of the semester (pretest),
the internal consistency reliability esti-
mates (Cronbach’s alpha) were .85, .87,
and .87 for the auto, sales, and retail
70 Journal of Education for Business
vignettes, respectively. In the assessment
at the end of the semester (posttest), they
were .81, .77, and .74, respectively.
Relativism. We used two 6-point items
to measure this dimension: Traditionally
unacceptable–traditionally acceptable;
and culturally unacceptable–culturally
acceptable. Reliability estimates for this
dimension were .79, .82, and .84 for the
auto, sales, and retail scenarios, respec-
tively, at pretest and were .72, .75, and
.82, respectively, at posttest.
Contractualism. Two 6-point items
were used to measure this dimension:
Violates–does not violate an unspoken
promise, Violates–does not violate an
unwritten contract. Reliability estimates
for this dimension were .82, .79, and .91
for the auto, sales, and retail scenarios,
respectively, at pretest and were .75,
.74, and .89, respectively, at posttest. All
internal consistency reliability estimates
were above the recommended cutoff of
.70 (Nunnally, 1978).
(Un)ethical Intention.We wrote items
to measure the ethical motivation of the
students. For the behavioral intention in
the sales scenario, two items were used
to measure the behavioral intent of the
students: One item asked the students
how likely it was that they would engage
in the same action if they were the sales-
man, and the other asked the students
how likely it was that they would engage
in the same action if they were the sales-
man’s boss. Anchors for the items ranged
from 1 (very unlikely) to 4 (very likely).
Cronbach’s alpha estimate for this vari-
able was .75. For the auto and retail
scenarios, the ethical intention for each
scenario was measured with one item
asking the students to report the likeli-
hood of their engaging in the same action
depicted in the relevant scenario.
Control Variables. Data on typical
demographic variables (i.e., gender, age,
ethnicity, major, work experience, mana-
gerial experience) were used as control
variables. Of these variables, only gen-
der and age exhibited significant zero-
order correlations with other variables of
interest in the study and therefore were
retained in subsequent analyses.
RESULTS
To define ethics learning, we com-
puted difference scores for all student
participants for all ethical judgment rat-
ings of relevant ethics theories by taking
the judgment ratings from the beginning
of the semester and subtracting the indi-
vidual ratings from the end-of-semester
assessment. Although we realized that
criticism of difference scores as a mea-
sure of change has been made (e.g.,
Edwards, 1995), its use is appropri-
ate when individual differences in true
change exist (e.g., Rogosa & Willett,
1983). Following this procedure, each
student participant had nine difference
scores, a difference score for moral
equity, relativism, and contractualism
in each scenario (sales, auto, and retail).
Positive scores indicate that learning or
gain in ethical judgment was obtained at
the end-of-semester assessment. Table 1
shows the paired samples t tests compar-
ing M ethical judgment ratings between
beginning and end of the semester.
Table 2 shows the descriptive statistics
and intercorrelations of variables in the
study. We used the following formula
to compute the reliability of difference
scores: rdd = (σ2d – σ2ed)/σ2d where σ2ed
= σ2t1(1–rt1t1) + σ2t2t2 with t1 represent-
ing measurement at the beginning of
the semester, t2 indicating measurement
at the end of the semester, and σ2d
representing variance of the difference
score. As shown in Table 2, most differ-
ence scores had acceptable reliabilities,
except for learning in social contract for
auto scenario. Caution should be exer-
cised in interpreting findings from this
learning measure.
Hypothesis 1 states that students will
demonstrate more ethical judgment
related to moral equity at the end of the
semester after being exposed to ethics
training than they do at the beginning
of the semester. As shown in Table 1,
this was not the case. All three learning
effect sizes (ds) associated with moral-
equity ethical judgment for sales, auto,
and retail scenarios were negative and
near zero (ranging from –.02 to –.07).
Hypothesis 1 was not supported.
Hypothesis 2 states that students
will demonstrate more ethical judg-
ment related to relativism at the end
of the semester after being exposed
to ethics training than they do at the
beginning of the semester. As shown
in Table 1, the learning effect sizes
associated with ethical relativism for
 TABLE 1. Paired Samples t Tests Comparing Mean Ethical Judgment Ratings Between Beginning and End of Semester

Beginning of semester End of semester

Measure N α M SD α M SD t df d

Moral equity
Sales 262 .87 2.532 1.0313 .77 2.553 1.000 –0.281 261 –.019
Auto 262 .85 2.019 0.9812 .81 2.059 1.008 –0.556 261 –.040
Retail 262 .87 1.557 0.8538 .74 1.620 0.839 1.242 261 –.073
Relativism
Sales 262 .82 3.177 1.246 .75 3.160 1.206 0.195 261 .014
Auto 261 .79 2.892 1.247 .72 2.861 1.276 0.325 260 .025
Retail 259 .84 2.077 1.203 .82 2.320 1.240 –3.140* 258 –.199
Contractualism
Sales 262 .79 3.040 1.470 .74 2.940 1.353 0.978 261 .071
Auto 261 .82 3.234 1.640 .75 2.889 1.514 3.096* 260 .219
Retail 259 .91 3.027 1.743 .89 2.810 1.640 1.810** 258 .128

p ≤ .05. **p ≤ .10.

*
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sales and auto scenarios were near zero
and nonsignificant (ds were .01 and
.025, respectively). Contrary to our
expectation, the learning effect size
associated with ethical relativism for
retail scenario was negative and statis-
tically significant (d = –.20), meaning
that students’ ethical relativism became
worse after training. Hypothesis 2 was
thus not supported.
Hypothesis 3 states that student
learning in ethical judgment will occur
with contractualism. As shown in Table
1, without controlling for relevant vari-
ables, positive gain in ethical judgment
was only significant in contractualism
for auto scenario (d = .22, p < .05) and
marginally significant for retail sce-
nario (d = .13, p = .06). No significant
ethical judgment gains were observed
in moral equity theory across the three
ethics scenarios. A decline in ethical
judgment occurred in relativism for
the retail scenario (d = –.20, p < .05).
This provides mixed preliminary sup-
port for Hypothesis 3. Given the sig-
nificant correlations between age and
gender and some of the learning dif-
ference scores (see Table 2) as well as
among the learning difference scores
themselves, we conducted a multivari-
ate analysis of covariance (MANCO-
VA) via a generalized linear model
with nine learning difference scores as
dependent variables, gender as a fixed
between-subjects factor, and age as a
covariate. The overall F test showed
that only learning in social contract for
the auto scenario was still significant
after controlling for other variables,
F(2, 252) = 6.26, p < .01, R2 = 4.7%.
Ethics learning occurred in contractu-
alism only in the auto scenario. Neither
moral equity nor relativism produced
any significant ethics learning in this
sample. Hypothesis 3 therefore was
weakly supported.
Hypothesis 4 states that learning in
ethical judgment will lead to more ethi-
cal intention. As shown in Table 2, eth-
ics learning in contractualism for auto
scenario was negatively and significant-
ly related to unethical behavioral inten-
tion for auto scenario (r = –.19, p < .01).
This indicates without consideration of
other relevant variables that the more
students learn about contractualism eth-
ics, the less likely they are to engage in
unethical behavior, thus lending pre-
liminary support for Hypothesis 4. On
the basis of this finding, we ran a hier-
archical multiple regression analysis in
which unethical behavioral intention for
auto scenario was regressed against gen-
der, age in the first step, contractualism
ethical judgment for auto scenario mea-
sured at the beginning of the semester
in the second step, and ethics learning
difference score for contractualism in
auto scenario in the third step. This was
done to assess the incremental influence
of contractualism ethics’ learning on
unethical behavior above and beyond
what student participants knew at the
beginning of the semester, with con-
trol for age and gender. The results are
shown in Table 3.
As shown in Table 3, at the begin-
ning of the semester, students’ ethi-
cal judgment of contractualism in the
auto scenario was positively related to
unethical behavioral intention (β = .39,
p < .01), indicating that the more stu-
dents perceived the behavior to be okay
or not violating an unbroken promise,
the more likely they would act like
the auto dealer. However, after hav-
ing been exposed to contractualism,
student learning in contractualism eth-
ics was negatively related to unethical
behavioral intention (β = –.43, p <
.01), meaning that the more students
learned about contractualism, the less
likely they were to act like the auto
dealer in the scenario. Further, ethics
learning in contractualism explained
11.2% of unique variance in behavioral
intention over and above age, gender,
and ethical judgment at the beginning
of the semester or pretest. Hypothesis
4 was supported. It is important to
note that although ethics learning was
not significant for the other two ethics
theories or for contractualism in the
retail and sales scenarios, the correla-
tions of learning difference scores with
unethical behavioral intentions were
all negative and significant, with rs
ranging from –.12 to –.37, except for
contractualism in retail (r = –.03), as
shown in Table 2.

November/December 2008 71
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72
TABLE 2. Descriptive Statistics and Intercorrelations Among Variables (N = 255)

Journal of Education for Business

Variable M SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1. Age 21.78 3.77 —

2. Gender 0.40 0.49 –.14 —
Learning as difference scores
3. Moral equity: Sales –0.03 1.09 .06 –.06 .71
4. Moral equity: Auto –0.05 1.17 .10 –.09 –.03 .77
5. Moral equity: Retail –0.06 .81 .01 .02 .19 .14 .62
6. Relativism: Sales 0.03 1.42 .01 –.13 .53 –.15 .09 .71
7. Relativism: Auto 0.03 1.43 .12 –.01 –.02 .39 .07 .15 .66
8. Relativism: Retail –0.25 1.28 .02 –.02 .19 .01 .49 .31 .11 .72
9. Contractualism: Sales 0.07 1.62 .06 –.06 .44 –.12 .19 .48 –.02 .16 .68
10. Contractualism: Auto 0.34 1.76 .21 –.11 –.04 .33 .04 –.09 .26 .05 .04 .52
11. Contractualism: Retail 0.23 1.83 –.06 –.01 .11 .20 .34 .06 .02 .33 .20 .17 .84
12. Unethical intent: Sales 1.93 0.65 –.03 –.10 –.24 .03 –.18 –.22 –.20 –.10 –.18 –.07 –.04 .75
13. Unethical intent: Auto 1.66 0.72 –.06 –.04 –.05 –.37 –.03 –.04 –.30 –.08 –.02 –.19 –.04 .27 —
14. Unethical intent: Retail 1.45 0.63 –.01 –.18 –.09 .09 –.17 –.08 –.04 –.12 –.01 .04 –.03 .32 .20 —
15. Self-rated ethics learning 2.54 0.84 .06 –.08 .12 –.05 .08 .07 –.07 .01 .01 .03 –.01 –.10 –.03 –.06 .92

Note. Correlations ≥ .12 are significant at p < .05 (two-tailed). Correlations ≥ .16 are significant at p < .01 (two-tailed). Reliabilities are shown in bold along the diagonal.

TABLE 3. Hierarchical Regression Results for Ethics Learning on
Behavioral Intentions
Unethical behavioral
Variable intentions (β)
Step 1
Age –.02
Gender –.06
Step 2
Ethical judgment: Auto .39
Step 3
Ethics learning: Auto –.43
DISCUSSION
The purpose of this study was to
examine how much of a difference eth-
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ics teaching can make in students’ level
of ethical judgment and subsequent
ethical intention. Using the three ethi-
cal dimensions developed by Reiden-
bach and Robin (1990), we found that
student learning was only statistically
significant for contractualism ethics, as
depicted in the auto scenario.
In the present study, we attempted
to enhance students’ learning of ethical
judgment, which is a small but important
part of an individual’s ethical reasoning
skill. Through lectures and discussions
of various ethics theories and the notion
of social responsibility, we were able to
expand students’ worldview of ethics,
evidenced in a small gain in students’
understanding of contractualism eth-
ics. This provides preliminary support
for Giacalone and Thompson’s (2006)
proposition that focusing on a human-
centered view in teaching business eth-
ics might lead to more student learning
and ethical outcomes.
Our findings show that no single theory
of business ethics is capable of providing
solutions to the multitude of moral and
ethical issues encountered in businesses,
primarily because broad theories of eth-
ics have failed to provide precise but
simultaneously generalizable solutions
to an immense array of context-bound
moral dilemmas (e.g., auto vs. sales vs.
retail) and practices of questionable eth-
ics faced by businesses.
Our finding that student learning in
ethical judgment was only significant
in relation to contractualism supported
Donaldson and Dunfee’s (1999) asser-
tion that businesses, as social institu-
F df t ∆R2 R2
0.74 2, 255 –0.28 .006 .006
–0.94
2.04 3, 254 5.24 .018 .024
9.91 4, 253 –5.72 .112 .135
tions, are best understood as operating
under explicit and implicit social con-
tracts. Thus, contractualism approach-
es using methodologies derived from
classical political philosophies (Locke,
1948; Rawls, 1971) may be better theo-
retical tools to explain and effectively
teach ethical reasoning and decision
making for improved ethical decisions
and subsequent behaviors.
The ultimate goal of an ethics educa-
tion is to produce more ethical behavior,
a precursor of which is ethical inten-
tion. Our study was among the first to
examine the linkage between students’
learning in ethics and their subsequent
ethical intention. We found that student
learning in contractualism ethics signifi-
cantly predicts ethical behavioral inten-
tion, supporting Bandura’s (1986) social
cognitive theory. Our findings were also
consistent with an ethical decision-mak-
ing model grounded in the theory of rea-
soned action (Ajzen & Fishbein, 1980)
and subsequently expanded to include
sociocultural and individual factors such
as rule-based and results-based reason-
ing (Hunt & Vitell, 1986).
Earlier in this article, we referred
to the debate among scholars as to
the effectiveness of various teaching
methods (stand-alone course, chapter
coverage of ethics topic embedded in
business subject courses or corporate
training) in enhancing ethical reasoning
and decision making. However, like the
other scholars in the debate, we over-
looked a significant distinction between
education and training, in terms of their
respective processes and goals. This is
a significant distinction that needs to be
addressed prior to undertaking studies
designed to enhance students’ learn-
ing of ethics as poignantly stated by
John W. Moore, editor of the Journal of
Chemical Education (1998):
Training to me means a narrowly focused
program that leads to high proficiency in
a specific skill. It prepares a student for
one particular job or activity but provides
neither broad perspective nor flexibility
of approach. On the other hand educa-
tion . . . encourages general approaches
to problem solving and inculcates ways
of thinking that are productive, effective,
and rewarding. An education prepares a
student to deal with and solve a broad
range of problems, and to choose prob-
lems which are important and which are
not. (p. 135)
In the current debates regarding the
usefulness of teaching business eth-
ics, we concur with Schminke’s (1998)
argument in suggesting that an impor-
tant source of noise is attributable to the
noncomparability of theoretical frame-
works used:
Business ethics research consists of two
distinct subdisciplines. One, primarily
descriptive and based in the social scienc-
es, addresses the question of “what is.”
The other, primarily normative (or pre-
scriptive) and based in moral philosophy
addresses the question of “what ought to
be.” Historically, these two approaches
represented distinct areas of inquiry . . .
Meta ethics addresses the developmen-
tof ethical theories and the relationships
between different theoretical systems
and disciplines . . . Thus, business eth-
ics researchers must first consider and
map the relationship between ethical and
social science theories in order to dis-
cover and capitalize on synergies between
the two. (pp. 2–5)
Limitations
Several limitations of the present study
should be noted. First, without measur-
ing ethical awareness, we assumed that
all students were aware of the ethical
dilemmas in the study. This may or may
not have been true. Future researchers
should replicate the present study with
a direct measure of ethical awareness
or sensitivity. Second, the lack of cor-
respondence among ethical frameworks
(i.e., utilitarianism, justice, rights views
of ethics) presented in Robbins and
DeCenzo’s (2005) text that we used in
this study and moral equity, relativism,
and contractualism measured in the MES
might have limited the potential gain in
students’ ethical judgment gain. Third,
the difficulty of measurement of business
November/December 2008 73
 ethics training has been suggested else-
where (e.g., Park, 1998), and research-
ers and educators need to account for
the variation in ethics learning due to
teaching-style differences. The students
from the present sample came from
various course sections taught by three
instructors. Although the same curricu-
lum was used in those courses, indi-
vidual instructor teaching styles might
influence student learning above and
beyond the course content. The fact
that we were unable to partial out the
variance due to individual instructors’
teaching-style differences makes the
present findings less than definitive.
Contribution of Study
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The results of this study added one
important value to the teaching of busi-
ness ethics. Our findings suggest that the
amount of learning (predifference and
postdifference) significantly predicts
unethical behavioral intent: Specifical-
ly, the more that students learned, the
less likely they were to report that they
would engage in the behaviors depicted
in the scenarios. This pattern of finding
is consistent across ethical frameworks,
except for social contract in the retail
scenario. Students failed to perceive
a social contract existing between the
retailer and the customers. Although the
amount of student learning is small in
this study, it provides hope to ethics
educators that a positive gain in student
ethical reasoning is attainable.
It is important to note that the pres-
ent study was undertaken in a Principles
of Management course, where the stu-
dents were mostly juniors, with at best
a rudimentary understanding of the true
nature of the business–society relation-
ship. The topics of ethics in general and
business ethics in particular were covered
in 1 week’s learning activity out of a total
of 15 weeks, or approximately 7% of
the total learning package. A stand-alone
ethics course with more in-depth ethics
coverage will result in more improvement
in moral reasoning. The results from the
study demonstrate first that a need exists
for a well-designed instructional curricu-
lum in business ethics to increase ethical
reasoning (as evidenced in ethical aware-
ness and judgment) and that devoting
more time to the discussion and practice
74 Journal of Education for Business
of (a) ethics theories, (b) application of
rules, (c) analysis, and (d) selection of the
most ethical alternative would produce
significant outcomes of enhanced inten-
tion to behave as prudent ethical individu-
als in real-life business dilemmas. Future
research would benefit from this study
by incorporating different ethical theories
and examining the incremental value that
each ethical theory has on student learn-
ing in a comprehensive ethics course.
NOTES
1. This item was originally classified as rela-
tivistic by subject-matter experts. However, it was
given a different meaning by survey respondents
in Reidenbach and Robin’s (1990) study, one that
is more in line with the notion of justice based on
moral equity.
Dr. Nhung T. Nguyen is an assistant profes-
sor of human resource management at Towson
University. Her research interests include the use
of situational judgment and personality tests in
personnel selection, management education, and
the application of meta-analysis and structural
equations modeling in organizational research.
Dr. M. Tom Basuray is a professor of manage-
ment in the College of Business and Economics
at Towson University. His research interests are in
areas of organizational effectiveness, leadership,
and development.
Dr. William P. Smith is an associate profes-
sor of management at Towson University. His
research interests include business ethics, privacy
in the workplace, and the role of social activism in
corporate governance.
Dr. Donald Kopka is an assistant professor of
management at Towson University. His research
interests include entrepreneurship, business devel-
opment, and teaching pedagogy.
Mr. Donald N. McCulloh is a senior lecturer
in management at Towson University. He received
his MS in financial management from George
Washington University in 1968. His research
interests include business ethics, leadership, and
managment.
Correspondence concerning this article should
be addressed to Dr. Nhung T. Nguyen, Depart-
ment of Management, Towson University, 8000
York Road, Towson, MD 21252, USA.
E-mail: nnguyen@towson.edu
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APPENDIX
Ethical Dilemmas (Adopted from R. E. Reidenbach & D. P. Robin, 1990)
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1. Auto scenario: A person bought a new car from a franchised automobile dealership in the local area. Eight months after the car was
purchased, he began having problems with the transmission. He took the car back to the dealer, and some minor adjustments were made.
During the next few months he continually had a similar problem with the transmission slipping. Each time the dealer made only minor
adjustments on the car. Again, during the 13th month after the car had been bought the man returned to the dealer because the transmission
was completely overhauled.
Action: Because the warranty was for only 1 year (12 months from the date of purchase), the dealer charged full price for the parts and labor.
2. Sales scenario: A young man, recently hired as a salesman for a local retail store, has been working very hard to favorably impress
his boss with his selling ability. At times, this young man, anxious for an order, has been a little overeager. To get order, he exaggerates
the value of the item or withholds relevant information concerning the product he is trying to sell. No fraud or deceit is intended by his
actions, he is simply overeager.
Action: His boss, the owner of the retail store, is aware of the salesman’s actions but he has done nothing to stop such practice.
3. Retail scenario: A retail grocery chain operates several stores throughout the local area including one in the city’s ghetto area. Inde-
pendent studies have shown that prices do tend to be higher and there is less of a selection of products in this particular store than in the
other locations.
Action: On the day welfare checks are received in the area of the city, the retailer increases prices on all of his merchandise.

1 2 3 4 5 6

Unfair Fair
Unjust Just
Unacceptable Acceptable
Morally wrong Morally right
Traditionally unacceptable Traditionally acceptable
Culturally unacceptable Culturally acceptable
Violates an unspoken promise Does not violate an unspoken promise
Violates an unwritten contract Does not violate an unwritten contract

Note. Students were asked to check the box corresponding to their judgment of the ethicality of the action depicted in each scenario.

November/December 2008 75