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DOI 10.1007/s10551-008-0015-7
ABSTRACT. This study investigates factors impacting respondents indicated that their firm had a com-
perceptions of ethical conduct of peers of 293 students in prehensive ethics and compliance program in place
four US universities. Self-reported ethical behavior and (Ethics Resource Center, 2008a).
recognition of emotions in others (a dimension of But ethical abuses are not limited to for-profit
emotional intelligence) impacted perception of ethical organizations. Large non-profit organizations like the
behavior of peers. None of the other dimensions of
Smithsonian Institute, United Way, and Red Cross
emotional intelligence were significant. Age, Race, Sex,
GPA, or type of major (business versus nonbusiness) did
have been investigated for financial irregularities or
not impact perception of ethical behavior of peers. violation of ethics rules (Harned, 2008; Wulfson,
Implications of the results of the study for business schools 2001). The Olympics, often associated with high
and industry professionals are discussed. ideals and true sportsmanship, have been tarred with
issues like alleged drug use by high-profile athletes
KEY WORDS: emotional intelligence, ethical behavior, and alleged bribes paid to secure Olympic venues.
ethical conduct Even government employees report a high incidence
of ethical misconduct. More than half the respon-
dents of a recent survey of government employees
Introduction said that they had observed misconduct in the past
year (Ethics Resource Center, 2008b). In addition,
The popular media has paid considerable attention nearly one-third of the respondents said that the
to the illegal and abusive lending practices of the government is not socially responsible.
financial-service industry and the subsequent It is not surprising that business schools have been
collapse of the subprime-mortgage market in the criticized for doing an inadequate job of teaching
United States (Sachdev, 2008). This mess has spiked students how to apply ethical principles and to
foreclosure rates, damaged the US real estate market, understand the social responsibility of firms
and is expected to continue dampening the US (Verschoor, 2003). In 2003, the board of directors
economy late into 2008. Other major business of The Association to Advance Collegiate Schools
scandals in the press last year include contaminated of Business (AACSB International), a not-for-profit
pet food that resulted in the deaths of several cats and organization devoted to the improvement and pro-
dogs, recall of millions of toys that contained motion of higher education in accounting and
excessive amounts of lead, and evidence that a for- business administration, strengthened the focus on
mer manager at Siemens bribed government officials ethics in their new accreditation standards. In addi-
in Nigeria, Russia, and Libya. Unfortunately, ethical tion, they established the Ethics Education Task Force
problems and scandals are not likely to fade away to examine how the crisis in business ethics can be
in the near future. In a recent national survey of used to strengthen business curricula. The task force
human resource professionals by the Society for in their 2004 report clearly identified a need for
Human Resource Management (SHRM) and the business educators to focus more on ethical
Ethics Resource Center (ERC), only 33% of the responsibility of individuals and businesses.
540 Jacob Joseph et al.
While many business schools have responded to investigation of ‘‘individual, situational, and issue-
their critics by strengthening the ethics component related influences’’ of the ethical decision-making
in their curriculum, a big debate still exists among process (O’Fallon and Butterfield, 2005, p. 399).
educators as to how business ethics should be taught Emotional intelligence is a relatively new concept
(Lowry, 2003). AACSB International does not pre- and is being looked at by researchers across many
scribe a set of courses but requires schools to justify disciplines (Ng et al., 2007). Emotional intelligence
how curriculum contents meet the mission of the gained a lot of attention in the popular media after
school and learning goals of each program. Unfor- the publication of Daniel Goleman’s book, Emotional
tunately, some business school faculty think teaching Intelligence, in 1995. Mesmer-Magnus et al. (2008) in
business ethics is a waste of time. Reasons cited by a study of 198 undergraduate students at a university
faculty include the belief that values are formed in found that overall emotional intelligence (EI) as
childhood and cannot be changed during their short measured by the 16 item Wong and Law EI scale
stay at universities and that employers do not really was significantly correlated with both ethical
care about ethics (Mathieson and Tyler, 2008). behavior of peers and ethical behavior of self. They
Mathieson and Tyler (2008) examine these and cogitate that employees with high EI may be less
other objections raised by business faculty, and likely to interpret others’ unethical actions as justi-
present evidence to refute these negative perceptions fication for their own unethical behavior. Past
and support the need for a strong commitment to research has concluded that emotional intelligence
ethics education. positively impacts job performance, leadership
effectiveness, and job satisfaction in a variety of jobs
(Cherniss et al., 2006). Van Rooy and Viswesvaran
Literature review (2004) in a meta-analysis found a correlation of 0.23
between EI and performance. The four-dimensional
In the last few years, a number of studies have definition of emotional intelligence proposed by
examined factors impacting ethical behavior of stu- Davies et al. (1998) has been considered to be the
dents. Lawson (2004) reported that students felt that most comprehensive (Law et al., 2004). The four
unethical behavior was the norm in the business dimensions are appraisal and expression of emotion
world. This study also found a strong relationship in oneself (SEA), appraisal and recognition of emo-
between student’s propensity to cheat in an aca- tion in others (OEA), regulation of emotions in
demic setting and attitude toward unethical behavior oneself (UOE), and the use of emotions to facilitate
in the business world. Deshpande and Joseph (2008) performance (ROE). One of the objectives of this
in a study of counterproductive behavior of 217 paper is to examine the impact of various dimen-
students of a large northeastern public university sions/facets of EI on perception of ethical behavior
found that business majors were no different than of peers.
non-business majors when in came to unethical Reviews of the ethical decision-making literature
behavior. On the other hand, Bernardi et al. (2004) have identified a number of studies over time that
in a study of cheating behavior of 220 students from have suggested an ever present influence of signifi-
three universities reported that business students cant others like coworkers or peers on ethical
scored significantly lower on moral development decision making by individuals (Loe et al., 2000;
and moral reasoning scales that other majors. In O’Fallon and Butterfield, 2005). Deshpande et al.
addition, they found that 66.4% of all students (2006) in a study of 203 hospital employees in
reported that they cheated in high school, college, or Midwestern and Northwestern United States found
both high school and college. This is very disturbing that ethical behavior of peers had the most signifi-
because previous research suggests that these students cant impact on ethical behavior. These findings are
are likely to continue their unethical behavior in a in line with Bandura’s Social Learning Theory
professional work setting (Nonis and Swift, 2001; (Bandura, 1977) which suggests that referent others
Sims, 1993). have a significant impact on the behavior of indi-
Previous reviews of studies done in business ethics viduals (O’Fallon and Butterfield, 2005). It is also
have strongly recommended the need for additional consistent with Differential Association Theory
Impact of Emotional Intelligence and Other Factors on Perception of Ethical Behavior of Peers 541
which ‘‘assumes that ethical/unethical behavior is States. The survey used to collect data for this study
learned in the process of interacting with persons was handed out in late 2007 and early 2008 in var-
who are a part of intimate personal groups or role ious classes on the participating campuses. There
sets’’ (Ferrell and Gresham, 1985, p. 90). More were no incentives given to the students to partici-
recently, Kidwell and Valentine (2008) in a study of pate in the study. Two hundred and ninety-three
military reserve personnel found a negative rela- surveys were deemed useable giving us a response
tionship between perceptions of positive workgroup rate of 85%. This was not unexpected given that the
context and withholding efforts or neglecting job surveys were handed and collected during class to
duties by employees. ensure a high response rate. Table I indicates that
While past research has used perception of ethical 62% of the respondents were females. The average
behavior of peers as an independent variable, current age of a respondent was 22 years. The grade point
research suggests that a measure of ethical behavior of average of an average respondent was 3.28. Of the
peers is a more valid measure of ethical misconduct respondents, 27.6% were accounting majors. Also
than a self-reported measure of ethical behavior. 82.3% of the students were white.
According to Vardi (2001, p. 319), this measure The student survey covered measures of ethical
‘‘minimizes the potential perceived threat, as well as behavior of peers, ethical behavior of self, emotional
social desirability’’ associated with measures asking intelligence, and demographic measures. It also
subjects their own misconduct. Studies done by the included a number of variables not included in this
Ethics Resource Center in 2003 and 2005 have also study. Ethical behavior of peers was measured using
used misconduct by others as the dependent variable. 12 items (e.g., students make personal calls at work).
More recently, Andreoli and Lefkowitz (2008) also These items were based on previous business ethics
make a strong case for using ethical behavior of research (Jackson, 2001; Viswesvaran et al., 2000).
coworkers instead of measures self-reported mis- Ethical behavior of self was measured using 12
conduct. They suggest that self-report assessment of similar items (e.g., I make personal calls at work).
misconduct suffer from ‘‘fake good’’ bias. One of the These items, as presented in the Appendix, were
arguments they make is that people often attribute rated on a four-point Likert scale (4 = very fre-
their repressed thoughts and behavior to others or quently, 1 = very infrequently). The Cronbach’s
project their misconduct on others. This theory is alpha for ethical behavior of peers and self was 0.87
based on the defensive mechanism of psychological and 0.73, respectively.
projection or projection bias. We will use ethical The Wong and Law EI Scale (WLEIS) was used
behavior of peers as the dependent variable in our to measure four dimensions of emotional intelli-
study. In addition, we will also examine if self- gence (Law et al., 2004). Self-emotions appraisal
reported ethical behavior has an impact on perception of (SEA) was measured using the following items:
ethical behavior of peers. A review of ABI-INFORM I have a good sense of why I have certain feelings
and current literature reviews of the ethical decision- most of the time, I have good understanding of my
making literature did not identify any other study own emotions, I really understand what I feel, and
that has examined the impact of self-reported ethical
behavior and various individual level variables on the
perception of ethical behavior of peers. The variables
we will examine in our study are self-reported ethical TABLE I
behavior of individual, level of emotional intelli- Demographic variables
gence, GPA, color, sex, major in college. We will
also test for overclaiming by subjects. Item N Mean SD
I always know whether or not I am happy. Others- Respondents were asked to rate their degree of
emotions appraisal (OEA) was measured using the familiarity with different categories like movies,
following items: I always know my friends’ emotions products, TV shows, and designer labels on a three-
from their behavior, I am a good observer of others’ point Likert scale (3 = very familiar, 1 = not at all
emotions, I am sensitive to the feelings and emotions familiar). All these items were nonexistent. These
of others, and I have good understanding of the fake items are presented in the Appendix. Over-
emotions of people around me. Use of emotions claiming score were arrived at by adding up score of
(UOE) was measured using the following items: fake items and dividing by the number of items.
I always set goals for myself and then try my best to High scoring respondents claimed that they were
achieve them, I always tell myself I am a competent aware of nonexistent items. Cronbach’s alpha for this
person, I am a self-motivating person, and I would scale was 0.78. Respondents were also asked to
always encourage myself to try my best. Regulation of provide their age, race, sex, GPA, and college major.
emotions (ROE) was measured using the following
items: I am able to control my temper so that I can
handle difficulties rationally, I am quite capable of Results
controlling my own emotions, I can always calm
down quickly when I am very angry, and I have good Table II indicates that self-reported ethical behavior,
control of my own emotions. This scale was recently OEA, age, and Business major were significantly
used by Deshpande and Joseph (2008) to examine correlated with ethical behavior of peers (EBP).
tendency of nurses to engage in unethical behavior. While overclaiming was not significantly correlated
Cronbach’s alpha for SEA, OEA, UOE, and ROE with EBP, it was significantly correlated with ethical
was 0.80, 0.80, 0.80, and 0.85, respectively. behavior of self. We also observed a number of sig-
Overclaiming scales were used to control for nificant correlations between other predictors of
social desirability bias in our survey. The procedure EBP. Thus, it would be hasty and premature to
to detect overclaimers in this study was initially draw conclusions on the impact of various inde-
proposed by Randall and Fernandes (1991). pendent variables as the intercorrelations can impact
TABLE II
Correlations among the variables
1 2 3 4 5 6 7 8 9 10 11 12
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