See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/281207466

The Use and Effectiveness of Codes of Ethics – A Literature Review

Conference Paper · November 2012

CITATIONS READS

14 20,861

1 author:

Anca Cristiana Yallop

Auckland University of Technology
32 PUBLICATIONS 480 CITATIONS

SEE PROFILE

All content following this page was uploaded by Anca Cristiana Yallop on 24 August 2015.

The user has requested enhancement of the downloaded file.

 International Conference “Marketing – from information to decision” 5th Edition 2012

The Use and Effectiveness of Codes of Ethics – A

Literature Review

Anca C. YALLOP
Coventry University London Campus, UK
[email protected]

Abstract: Several strands of literature attempt to address ethical behaviour and standards in
relation to the use of codes of ethics. This paper discusses relevant literature and studies on
codes of ethics, providing an overview of various definitions of the concept and a literature
analysis on codes of ethics‘ use in organisations in general and in marketing research
companies in particular. A first strand of research that examines the use of codes of ethics is
identified. A second strand of research that is identified and discussed in this paper attempts
to measure the effectiveness of codes of ethics. The literature suggests that the lack of use and
enforcement of codes of ethics in the marketing research industry is perceived to lead to
unethical behaviour. There is however little agreement in the literature on the extent of
usefulness of codes and the influence they have on behaviour.

Keywords: business ethics, codes, marketing research

JEL Classification: M39, Y80, Z19

1. Introduction

The degree to which an organisation can be held to be ethical is dependent on its ability to
create an ethical environment internally in its members‘ relationships with each other and
with the organisation itself, as well as externally in organisational members‘ relationships
with others. Codes of ethics are widely understood to act as a mechanism facilitating and
ensuring ethical behaviours within organisations.
The practice of business ethics in general and of ethics within the marketing research function
in particular has attracted substantial attention both from the public and from academics
(Malhotra, Miller, 1998). Many studies have focussed on the importance of business ethics in
the activities of organisations, with the aim of understanding the actual tendencies in business
and organisational environments of acting and behaving in accordance with particular norms
and standards that would generate an ethical business environment, good relational interaction
between actors involved, and good outcomes for the stakeholders involved. The whole realm
of ethics and, within this realm, of what constitutes an ethical business environment, is one in
which there is differing opinion.
Ethics is the study of what contributes good and bad conduct, including related actions and
values (Barry, 1979). Similarly, Thompson (2005) defines ethics as the study of right and
wrong; of the moral choices people make and the way in which they seek to justify them.
Ethics is concerned with the nature of specific decisions made and the ―goodness or badness‖
of those decisions in terms of the consequences of those decisions (Chonko, 1995). Business
ethics exists as a subfield of ethics. Business ethics also exists within the context of a variety
of business disciplines, most notably management as the base business discipline that most
business ethics scholars associate with. There is also marketing ethics and within this
subfield marketing research ethics exists as a smaller strand of research drawing from both
ethics and business ethics in the particular context of organisational activities concerning

502
 International Conference “Marketing – from information to decision” 5th Edition 2012

marketing research. Consequently, both these strands can be considered to be within the realm
of applied ethics.
There has been an increasing public concern around business ethics (Brenkert, 2008;
Chryssides, Kaler, 1996; Sligo, Stirton, 1998) and also an increasing prevalence of codes of
ethics (Murphy, 1995; Ziegenfuss, Martinson, 2002) (variously described as codes of conduct,
ethical codes, corporate ethical codes, codes of practice). That marketing research practitioner
ethics might be a fruitful site of exploration becomes obvious when one considers that
marketing research is a key activity within business for generating efficient outcomes in terms
of sales and profits.
The marketing profession is a very dynamic one, which involves a higher degree of risk-
taking and pressures from the business and organisational environment. Within this
environment, the marketing research function becomes one of vital importance in providing
the necessary know-how for achieving desired organisational outcomes. Because of the
performance pressures and the relationships foci, ethical issues are central to marketing
research activity, and marketing research professionals are confronted with many ethical
issues.
Internationally, there have been many instances in which organisations and business
professionals have behaved unethically. In the U.K. a recent example is the News
International phone hacking scandal that has led to the closure of the News of the World
newspaper after 168 years and theresignations of several high-profile executives (BBC News,
2012). In the U.S. a recent example is Siemens‘ foreign bribery case: Siemens‘ sales force
was accused of paying hundreds of millions of dollars in bribes to get contracts from big
companies or from governments around the world. This has led to a change of culture in the
organisation, an on-going process that is taking place through training and tighter controls
(BBC News, 2011). Another example of unethical behavior at the executive level is that of
Yahoo‘s CEOScott Thompson who, after just four months on the job, was recently fired for
lying on his resume,falsely claiming a computer science degree (Brooks, 2012).
In New Zealand, too, a country perceived as the least corrupt country internationally with an
index of 9.5 out of 10 (where 10 means very clean) (Transparency International, 2011), there
have been events that have demonstrated that the problem of unethical conduct is ever
present, even if it is usually not very visible (Brennan, 1991; Milton-Smith, 1997). In the field
of maketing research, for example, the recent New Zealand Post ‗lifestyle survey‘ has caused
the Privacy Commissioner to voice numerous concerns on participants‘ awareness as to how
their information would be used, respondents‘ privacy, and whether respondents understood
the purpose of the research (Privacy Commission, 2011). Previous research suggests that,
historically, New Zealand organisations placed less emphasis on ethical standards (Orr, 1995),
and feedback from professional bodies and industry associations indicates slow and uneven
progress in business ethics‘ institutionalisation (Milton-Smith, 1997). However, more recent
studies propose that important steps are being taken by New Zealand organisations to
incorporate business ethics and ethical values in their daily operations (Pajo, McGhee, 2003),
and that a number of measures have been put in place (such as revisions of professional codes
of ethics, changes in regulation and disclosure rules) to strengthen the standards of individual,
professional and corporate ethics in New Zealand (Milton-Smith, 1997). However, even with
the heightened recent emphasis indicating the necessity of existence and implementation of
legal norms and standards to be followed by New Zealand organisations, concerns are still
found with regard to the level of organisational ethical values, and of conflicts between
corporate and individual ethics (Alam, 1999). Oliver, Kearins and McGhee (2005) have done
some work analysing the codes of ethics of professional bodies in New Zealand, pointing the
way for further work to be done as to how the codes are implemented and enforced.
In Romania, a country that is placed at the other end of the global corruption barometer, with
a high rate of corruption (an index of 3.6 out of 10) (Transparecy International, 2011), there
are many examples that prove that Romanian organisations and business professionals show

503
 International Conference “Marketing – from information to decision” 5th Edition 2012

little awareness and interest in business ethics. Bribery remains one of the biggest issues that
Romanian organisations are confronted with. Other common ethical issues are related to
discrimination, sexual harrasment, use of company property for personal benefit, breaches of
confidentiality, abuse of employees, and bullying. Also, the presence of codes of ethics in
Romanian organisations is due largely to the arrival of foreign capital in the Romanian
market. Codes of ethics are more likely to be found in large organisations with foreign
capital.There is not only a lack of corporate codes of ethics in Romanian organisations but a
lack of ethics and compliance departments as well (Center for Business Integrity, 2011).

2. Definition of Codes of Ethics

Academic literature on codes of ethics focuses particularly around organisational / corporate

codes of ethics (Pajo, McGhee, 2003). Various attempts to define a code of ethics have been
made (Berenbeim, 1988; Hosmer, 1991; Stevens, 1994). However, there is a lack of clarity
around what exactly a code of ethics consists of, and there is confusion between a code of
ethics and other ethics documents that comprise ethical guidelines (Pearce, David, 1987;
Schwartz, 1999; Stevens, 1994). Codes of ethics may be variously described as codes of
conduct, codes of practice, ethical codes, corporate ethical codes, ethical guidelines, business
conduct, codes of professional behaviour, operating principles and so on (Fisher, 2001;
Marnburg, 2000; Schlegelmilch, Houston, cited in Schwartz, 1998).
Schwartz (1999) suggests that it is very difficult to isolate a code of ethics from other various
documents that present ethical guidelines and principles such as a code of conduct or a code
of practice. He presents a thorough analysis of various ethics documents and identifies that
„…a code of ethics could also be a code of conduct, code of practice, corporate credo, or even
a values statement‟ (p. 20).
Several definitions of a code of ethics have been provided in the literature, such as the
following:
 The Encyclopedia of Applied Ethics (Chadwick, 1998) defines codes of ethics as
„those bundles of intentional or behavioural requirements that members of a
profession or other group must comply with in order to remain part of the group‟
(p.528).
 Melrose-Woodman and Kverndal (1976; cited in Schlegelmilch, Houston, 1989)
define a code of ethics as „…a statement setting down corporate principles, ethics,
rules or conduct, codes of practice or company philosophy concerning responsibility
to employees, shareholders, consumers the environment or any other aspects of
society external to the company‟ (p. 11).
 Berenbeim (1988: 91, cited in Schwartz, 1999) defines a code of ethics as „…a major
vehicle for stating ethical principles.‟ (p. 91).
 A written code of ethics is defined by Hosmer (1991: 185) as „…a statement of the
norms and beliefs of an organisation … is an attempt to set the moral standards of the
firm.‟
 Stevens (1994: 64) states that codes of ethics are „...written documents or statements
ranging from five to fifty pages … which are intended to impact employee behaviour
… [within codes] companies attempt to manage and articulate ethics through these
messages which are designed for both internal and external audiences … [they] are
managerial tools for shaping change. They often demand from employees higher
standards of behaviour than required by law.‟
 Schwartz (2002: 28): „A corporate code of ethics is a written, distinct, formal
document which consists of moral standards used to guide employee or corporate
behaviour.‟

504
 International Conference “Marketing – from information to decision” 5th Edition 2012

 Kaptein and Schwartz (2008: 112) use the concept ‗business code‘ to include all the
different types of codes at the corporate level and to imply that the code is developed
by and for a specific company. A ‗business code‘ is defined as: „…a distinct and
formal document containing a set of prescriptions developed by and for a company to
guide present and future behaviour on multiple issues of at least its managers and
employees toward one another, the company, external stakeholders and/or society in
general.‟
All the above definitions seem to address the need to define an organisational / corporate
code of ethics, or as Kaptein and Schwartz (2008) identify it, a ‗business code‘. However, in
the literature, a distinction is made between corporate codes of ethics and professional codes
(Kaptein, Schwartz, 2008; Schwartz, 1999; Stevens, 1994), such as codes of ethics developed
by professional institutions and associations (e.g. Market Research Society New Zealand –
MRSNZ, European Society for Opinion and Marketing Research – ESOMAR, American
Marketing Association – AMA). As suggested by Tucker, Stathakopolous and Patti (1999),
only a limited number of studies focus on codes of ethics of professional associations.
 Stevens (1994: 64) describes professional codes as „…codes that communicate the
goals and beliefs for groups and professionals by which individual practitioners can
be guided.‟
However, as Stevens (1994) states, the terms are often used interchangeably bycorporations
and in academic literature. This interchangeability is also reflected in the definition of a code
of ethics provided by Grundstein-Amado (2001) and Frankel (1989):
 Grundstein-Amado (2001: 462) defines a code ofethics as a„statement of principles
that describes desirable professional conduct and guides individuals in resolving
ethical problems‟.
 Similarly, Frankel (1989: 109) describes a code of ethics „as both a foundation and
guide for professional conduct in the face of morally ambiguous situations‟.
The above definitions of corporate code of ethics and / or professional codes of ethics share
similar characteristics, such as:
1) A code of ethics is a written and formal document;
2) It consists of ethical guidelines and principles to be followed by employees /
practitioners; and
3) It is designed to guide employees‘ / practitioners‘ / organisations‘ behaviour or
conduct.
Despite the fact that organisations and professional associations have different goals and
objectives, the developed codes of ethics serve a similar purpose, that of creating and
generating ethical behaviour (Oliver, Kearins, McGhee, 2005). Furthermore, as noted earlier,
codes of ethics are known by different names, such as codes of professional behaviour, codes
of conduct and operating principles (Schlegelmilch, Houston, 1989).
Following on from Steven‘s (1994) proposition that distinctions between organisational codes
of ethics and professional codes „often become blurred and sometimes overlap‟ (p. 64), in this
paper, as per definitions above, the term ‗codes of ethics‘ is used when discussing
organisational codes of ethics and / or professional codes of practice / conduct. For all these
reasons, the code of ethics‘ definition proposed in this paper is the following: ‗A code of
ethics is a written document that incorporates ethical guidelines and principles, and is
designed to guide employee / practitioner behaviour‘.

3. Use of Codes of Ethics

505
 International Conference “Marketing – from information to decision” 5th Edition 2012

Previous studies show that codes of ethics are now prevalent around the world and attract an
increased usage in organisations (Chonko, Wotruba, Loe, 2003; Oliver, Kearins, McGhee,
2005; Schlegelmilch, Houston, 1989; Weaver, Trevino, Cochran, 1999). However, codes of
ethics have typically been more likely to be developed and used in larger rather than smaller
organisations (White, Montgomery, 1980).
According to a survey conducted by Center for Business Ethics (1992), over ninety percent of
American large corporations had a code of ethics. More recently, in Canada over eighty-five
percent of them have a code (KPMG, 2000; Lindsay, Lindsay, Irvine, 1996).
Even more recently, of the largest European corporations, sixty percent of U.K. companies
have a code (Webley, Le Jeune, 2005), over fifty percent of German companies have a code,
and in France thirty percent of companies have a code(Langlois, Schlegelmilch, 1990). In
Romania, there is little interest in the development and use of codes of ethics. A survey
conducted by Center for Business Integrity in collaboration with Transparency International –
Romania revealed that of the 631 companies that were surveyed, only 117 have a code of
ethics, while the remaining 514 (81.5%) show no special interest for a more responsible way
of doing business. Of the 117 companies that have a code of ethics, 86% have foreign capital.
In New Zealand, very few studies have examined the use of codes of ethics by New Zealand
organisations, how they are implemented and perceived, and what their effects are. A study
by Pajo and McGhee (2003) on the institutionalisation of business ethics in the New Zealand
organisations suggests that more and more companies are taking steps to incorporate ethical
values into their daily operations. However, less than a quarter of the 192 New Zealand
organisations surveyed indicated that resources were being set aside to accomplish the
objective. Moreover, almost fifty percent of the surveyed New Zealand companies did not
have a code of ethics, and the simple existence of an ethical code was not normally seen as
sufficient to guarantee ethical behaviour. Within their survey, only one of the managers
indicated that their organisation makes use of a code of ethics.
Similarly, a study on views from New Zealand middle and lower level managers as regards
the state of business ethics in organisations (Alam, 1999) shows that New Zealand
organisations gave lower priorities to ethics than other values in the corporate culture (i.e.
securing profits, for example). A large number of middle and lower level managers also
believed that pressures from the top management to achieve results, the organisational climate
and ruthless competition help create an unethical environment. Moreover, the majority of
them believed that ethical standards in New Zealand organisations had declined from 1989 to
1999.
Internationally, several studies stress the importance of codes of ethics as a necessary tool for
creating and establishing an ethical environment within organisations (Ferrell, Skinner, 1988;
Hunt, Chonko, Wilcox, 1984; Oliver, Kearins, McGhee, 2005; Schlegelmilch, Houston, 1989;
Segal, Giacobbe, 2007; Ziegenfuss, Martinson, 2002).
Ziegenfuss and Martinson (2002) analyse the use of codes of ethics within the field of
management accounting. This study examines whether members of the Institute of
Management Accountants (IMA) use the institute‘s codes of ethics in recognising and
resolving ethical dilemmas. The study indicates that a significant statistical relationship exists
between members‘ rating of IMA code of ethics and their perception and judgement.
However, the study found only weak associations among members‘ ethical perception and
judgement, and personal ethical philosophy, corporate ethical values, age and
certification.Employees‘ perceptions about the usefulness of codes of ethics were also
investigated by Wotruba, Chonko and Loe (2001). Their research findings suggest that the
perceived usefulness of codes of ethics is positively related to the degree of familiarity with
the code. Code familiarity is seen as a factor that influences the extent to which the code is
used and, in turn, has an impact on the employee‘s behaviour.

506
 International Conference “Marketing – from information to decision” 5th Edition 2012

Schlegelmilch and Houston (1989) examine British large organisations as regards corporate
codes of ethics‘ use, content and attitudes. The study analyses the spread of corporate codes
of ethics, popular titles used for corporate codes of ethics, circulation of codes of ethics,
timing of the introduction of codes, formats, contents and some arguments for and against
codes of ethics and their implementation. Providing a comparison between the U.S. (where
three out of four organisations had a code of ethics) and the U.K. (where codes were not so
widely used), the study found that large British companies were becoming increasingly
interested in thinking formally about business ethics and designing an organisational code of
ethics. Although attitudes and opinions in relation to the use and implementation of such
codes of ethicsare discussed, the employees‘ attitudes and behaviour generated by an
understanding and implementation of the code of ethics are not examined. The authors
conclude by saying that the limited value of codes of ethics as an isolated measure suggests
that corporate codes of ethics need to be accompanied by ethical education and other
processes that support their enforcement. In this respect, the findings of the study are
inconclusive.
Fisher (2001) also analyses the use of codes of ethics by organisations from the U.K. The
author explores how codes of ethics are understood and responded to by those whom the
codes seek to influence. The employees‘ reaction to codes is analysed using interview
material, with an attempt to interpret their attitudes. The study seeks to understand the
dialogic tensions in people's understanding of ethical codes and suggests that managers'
understandings and responses to codes are mediating factors between codes and their
implementation. The general findings suggest that they were aware of the codes of ethics‘
existence but were hazy about their content.
Similarly, Oliver, Kearins and McGhee (2005) investigate the use of codes of ethics and its
content. Different New Zealand professional bodies‘ codes are analysed here, providing a
content analysis based on Cressey and Moore‘s (1983) three point typology, examining policy
area, authority and compliance. Differences in the codes‘ content and the implications for the
bodies are discussed, suggesting that codes do not appear to meet adequate professional
standards for guiding ethical behaviour (Oliver, Kearins, McGhee, 2005).
Other studies focus explicitly on the content and functions of codes of ethics (Brinkmann,
Ims, 2003; Schwartz, 2001). From an educational, regulatory and aspirational perspective,
Brinkmann and Ims (2003) identify six main functions of ethical codes – to increase
individual moral awareness and behaviour, to recognise moral conflicts and help with
resolving them, to communicate ideals for individuals and collective conscience (moral
climate), to assume and reinforce pre-/conventionalism, cynicism, outer-directedness, to
hinder necessary / possible learning of conflict handling by dialogue, and to conceal a
disputable practice. The authors attempt to illustrate the code effects in general and the code
dysfunctions in particular. It is suggested that most people have a positive attitude towards
codes, but on the other hand, many of these people seem realistic about or sceptical towards
code efficiency and code enforcement.

3.1. Use of codes in the marketing research industry

In the marketing research industry in particular, it is becoming clear that there is more and
more pressure to recognise and apply specific standards and guidelines in an attempt to ensure
ethical behaviour, to ensure industry consistency regarding acceptable and unacceptable
practices, and to maintain credibility with the public upon whose goodwill the industry
depends (Peterson, 1996). Marketing research associations have designed codes of ethics to
be followed by their members (such as the American Marketing Association code of ethics,
European Society for Opinion and Marketing Research code of ethics, etc).
In Romania, the professional body that regulates the marketing research industry and
marketing research organisations is the Romanian Society for Opinion and Marketing
Research (SORMA). The SORMA code of ethics is that of the European Society for Opinion

507
 International Conference “Marketing – from information to decision” 5th Edition 2012

and Marketing Research (ESOMAR), and members of SORMA adhere to the ESOMAR‘s
code of ethics. In New Zealand, the Market Research Society New Zealand (MRSNZ) is the
association that develops the code of ethics for New Zealand marketing research organisations
to use. The MRSNZ code was inspired by ESOMAR‘s code of ethics. Most New Zealand
marketing research organisations and practitioners refer to the MRSNZ code of ethics. This
code clarifies expectations through specific description of acceptable practices in marketing
research. The existence of a code highlights the accepted importance of business ethics in the
marketing research industry and the fact that there is a perception of widespread ethical
problems.
Studies investigating the use of codes of ethics in marketing research organisations are scarce.
Few studies examine ethical codes – organisational and / or professional codes – and their
role in creating an ethical environment in marketing research organisations (Ferrell, Skinner,
1988; Hunt et al., 1984; Segal, Giacobbe, 2007).
However, the majority of these studies treat only the theoretical utility of codes of ethics. One
such study outlines the specific ethical problems faced by marketing researchers practitioners
in their interactions with both respondents and clients, such as research integrity, treating
outside clients fairly, and confidentiality (Hunt et al., 1984). The study attempts to examine
the extent to which the professional codes of conduct address major ethical problems of
marketing researchers. The approach applied is to analyse the content of the codes of ethics,
to see if they include guidelines referring to the highlighted ethical issues. The limitation of
this study is that it does not address how professional codes of conduct are applied and
implemented in marketing research organisations, providing just a content analysis of codes.
Ferrell, Hartline and McDaniel (1998) analyse the existence, enforcement and awareness of
codes of ethics within the three main types of participants involved in marketing research:
research departments, marketing research firms, and data subcontractors. The study suggests
that marketing research firms and data subcontractors tend to possess and enforce internal
codes of ethics, and are aware of and enforce external codes to a greater extent than corporate
research departments. In a more recent study, Segal and Giacobbe (2007) examine the
Australian marketing research industry and propose to identify the key factors that contribute
to unethical marketing research practices in Australia. Attitude and behaviour of senior
management coupled with a lack of personal values seem to be top key factors contributing to
unethical behaviour; in addition, the lack of recognition and enforcement of formal codes of
ethics appears to be a key factor. The study, however, does not present ethical issues
Australian marketing practitioners are facing and / or how they arrive at a resolution when
encountering an ethical dilemma in creating and delivering marketing research services. As
mentioned before, their study suggests that lack of recognition and enforcement of a formal
code of marketing research ethics is perceived to be leading to unethical behaviour. A better
understanding of the code of ethics‘ implementation process and other variables that would
affect the researchers‘ behaviour thus becomes important (Segal, Giacobbe, 2007).

4. Effectivess of codes of ethics

The increasing use of corporate ethical codes is recognised in the literature, but there are
concerns that a code may be just an instrument in a company's image management
(Marnburg, 2000). Although there is no shortage of academic literature about codes of ethics‘
use, awareness and enforcement, there is very little on how effective a code is in guiding
ethical behaviour. Kaptein and Schwartz (2008) identified a relatively small number of
studies (79) examining the behavioural effects of codes of ethics, studies that produced
conflicting results. In addition, in the literature there appears to be no agreement as to how
useful and effective codes of ethics are (Grundstein-Amado, 2001; Valentine, Barnett, 2002,
2003; Weller, 1988; Wotruba, Chonko, Loe, 2001).
Marnburg (2000) contends that the introduction and use of ethical codes must have the
intention of achieving behavioural change or the maintenance of already superior behaviour.

508
 International Conference “Marketing – from information to decision” 5th Edition 2012

He claims that previous research has, with some exceptions, failed to demonstrate that the
introduction of ethical codes has had any behavioural effect. Therefore, a survey of
Norwegian professionals was undertaken in order to analyse the existence or non-existence of
ethical codes, and their influence on the professionals‘ attitudes. The main and singular
hypothesis tested was that there will be differences in ethical attitudes between employees
who work in companies having ethical codes, and employees who work in companies without
ethical codes. The findings of the study suggest that ethical codes did not have any attitudinal
effects on professionals. Ethical codes seemed to be an inferior document in most
organisations. The study suggests that the foundation of ethics is in the mind of the individual,
and a further body of research explores this theme (Glenn, Van Loo, 1993; Lee, Yoshihara,
1997; Schwartz, 2001).
Cleek and Leonard (1998) also examine whether codes of ethics are effective in promoting
ethical behaviour. Similar to Marnburg‘s (2000) findings, their research results indicate that
codes of ethics are not influential in determining a person‘s ethical decision-making
behaviour.
Several articles concentrate on the nature of the relationship between codes of ethics and
individual behaviour. Schwartz (2001) examines the relationship between corporate codes of
ethics and behaviour, interviewing fifty-seven employees, managers, and ethics officers from
four large Canadian companies. Unlike Marnburg (2000) and Cleek and Leonard (1998), the
results propose that codes of ethics are a potential factor influencing the behaviour of
corporate agents. The author suggests eight metaphors (or themes) which emerged from the
interview data, and which explain the role of codes in influencing behaviour. Thus, the code is
seen as a:
 rule-book that helps to clarify what behaviour is expected from employees;
 sign-post that leads employees to consult with other people, peers or corporate
policies to determine if a certain behaviour is acceptable;
 mirror that provides employees with an opportunity to confirm whether behaviour is
acceptable;
 magnifying glass that suggests a note of caution to employees before acting;
 shield that allows employees to better challenge unethical requests;
 smoke detector that leads employees to try to convince others of their unethical
behaviour;
 fire alarm that leads employees to contact the appropriate authority and report
violations; and
 club that causes employees to comply with the code‘s provisions.
Schwartz suggests that codes can potentially influence behaviour in a variety of fashions as
identified by the various metaphors. However, he admits that codes of ethics and their
influence on behaviour have to be studied more fully. Although the study‘s initial concern
was to analyse the codes of ethics‘ influence on behaviour and how they make a difference,
greater clarification is needed.
McDonald and Nijhof (1999) develop a framework for implementing an ethics programme as
this implementation framework may stimulate morally responsible behaviour in organisations
and, combined with a code of ethics, could increase the ethicalness in the employees‘ actions
and behaviour. It is proposed that for an organisational programme to be effective, five
dominant conditions are necessary: (1) awareness of formal organisational goals and
corresponding informal norms; (2) suitable procedures for decision-making; (3) correct
distribution of resources; (4) existence of necessary skills; and (5) personal intentions for
ethical behaviour. Thus, organisational elements, such as codes of ethics have a great

509
 International Conference “Marketing – from information to decision” 5th Edition 2012

importance if brought together with other individual, personal values and intentions to
generate an ethical behaviour in the organisation. On a similar note, Doig and Wilson (1998)
raise questions about the use of codes of ethics as frameworks for defining ethical conduct
and suggest that the use of codes alone may be less effective and may have less impact on
managers and employees than expected.
The relationship between codes of ethics and organisational context interest other authors too.
Somers (2001) analyses the relationship between codes of ethics, employee behaviour and
organisational values. In particular, the relationship between codes of ethics and employees‘
attitudes and behaviour is examined. The results show that the presence of codes of ethics was
associated with less perceived wrongdoing in the organisation, but not with an increased
propensity to report observed unethical behaviour. It is noted that future research focused on
clarifying the dimensions of the context in which ethical codes operate and on understanding
the processes embedded in this context seems highly desirable.
The study undertaken by Fisher (2001), examining the use of codes of ethics in British
organisations, reflects the idea that codes of ethics contribute to a loss of personal ethical
responsibility on the part of employees. Codes of ethics undermine or challenge personal
integrity and codes of conduct restrict and limit the development of wider loyalties.
Lee and Yoshihara (1997) studied the ethical behaviour of Korean and Japanese business
executives; their study has also found that codes of ethics are an important factor in
improving ethical standards, although not as important as the business executives‘ personal
values.Similarly, Glenn and Van Loo‘s (1993) study has shown that codes of ethics appear to
be less influential than the individual's strong personal value system. It is suggested that
support for codes is declining.
In contrast, codes of ethics are regarded as an important factor in generating ethical
behaviour. It is however unclear how effective a code of ethics is in dealing with ethical
issues and making ethical decisions when required. For this reason, an in-depth analysis of
codes of ethics‘ effectiveness appears to be needed in order to provide a better understanding
of what constructs and generates ethical behaviour.

5. Conclusion

For the purpose of this paper a thorough literature survey was conducted in order to examine
codes of ethics‘ use and effectiveness in the business environment. Various definitions of a
code of ethics have been provided in the literature. Codes of ethics are variously described
and known by different names (e.g. code of conduct, code of practice, ethical guidelines,
business conduct, operating principles). The literature suggests that there is a level of
confusion between a code of ethics and other ethical documents and a lack of clarity around
what a code of ethics consists of. A distinction is made between corporate codes of ethics (i.e.
developed by organisations) and professional codes of ethics (i.e. developed by professional
bodies) albeit these terms are used interchangeably by corporations and in academic literature.
A code of ethics is defined in this paper as a written and formal document that includes
ethical guidelines to be followed by employees/practitioners and is designed to guide their
behaviour and conduct.
Codes of ethics are prevalent around the world – though more present in the United States –
and tend to be more present in larger organisations. In New Zealand, however, studies on use
of codes of ethics are scarce; these studies suggest that only half of top New Zealand
organisations use a code of ethics and that New Zealand organisations give low priority to
ethics. In Romania too, the majority of Romanian organisations do not show an interest in
business ethics and do not have a code. Studies investigating the use of codes of ethics by
marketing research organisations are scarce. Recent studies suggest that the lack of use and
enforcement of codes of ethics in the marketing research industry is perceived to lead to
unethical behaviour.

510
 International Conference “Marketing – from information to decision” 5th Edition 2012

Codes of ethics are seen as an important tool in creating and establishing an ethical
environment. Nevertheless, there is little agreement in the literature on the extent of
usefulness of codes and the influence they have on behaviour, with some scholars proposing
that a code of ethics has a significant influence on ethical perceptions, judgements and
behaviour, while others are more sceptical, suggesting that the foundation of ethics is in the
mind of the person, through the personal value system. More in-depth research around the
usefulness and effectiveness of codes of ethics is therefore needed.

References

1. Alam, K.F., (1999), Business ethics in New Zealand organisations: Views from the
middle and lower level managers, Journal of Business Ethics, 22 (2): 145-153.
2. Barry, V.E., (1979), Moral issues in business, Belmont, CA: Wadsworth Publishing
Company.
3. BBC News, (2012), Phone hacking scandal: Timeline, Retrieved from
http://www.bbc.co.uk/news/uk-14124020, retrieved on 10.8.2012.
4. BBC News, (2011, December 13), US charges eight in Siemens foreign bribery case.
Retrieved from http://www.bbc.co.uk/news/business-16166354, retrieved on 11.7.2012.
5. Berenbeim, R.E., (1988), Ethics codes and educational programs, Security Management,
32 (10): 91-97.
6. Brenkert, G.G., (1998), Trust, business and business Ethics: An introduction, Business
Ethics Quarterly, 8 (2): 195-204.
7. Brennan, M., (1991), Is there more to ethical marketing than marketing ethics?,
Marketing Bulletin, 2: 8-17.
8. Brinkmann, J., Ims, K., (2003), Good intentions aside: drafting a functionalist look at
codes of ethics, Business Ethics: A European Review, 12 (3): 265-274.
9. Brooks, C., (2012, May 15), Yahoo CEO Not Alone: 7 Execs Busted for Resume Lies.
Business NewsDaily. Retrieved from http://www.businessnewsdaily.com/2523-yahoo-
ceo-resume.html, retrieved on 7.8.2012.
10. Center for Business Ethics, (1992), Instilling ethical values in large corporations, Journal
of Business Ethics, 11 (11): 863-867.
11. Center for Business Integrity, (2011, December 19), Integrity in the Romanian business
environment, Transparency International – Romania. Retrieved from
http://www.transparency.org.ro/politici_si_studii/studii/integritatea_mediu_afaceri/Studiu
CIB.pdf, retrieved on 7.7.2012.
12. Chadwick, R.F., (Ed.), (1998), Encyclopedia of Applied Ethics (1st Ed.), Academic Press.
13. Chonko, L.B., (1995), Ethical decision making in marketing, Newbury Park CA: Sage
Publications.
14. Chonko, L.B., Wotruba, T.R., Loe, T.W., (2003), Ethics code familiarity and usefulness:
Views on idealist and relativist managers under varying conditions of turbulence, Journal
of Business Ethics, 42 (3): 237-252.
15. Chryssides, G.D., Kaler, J., (1996), Essentials of business ethics, London: McGraw-Hill.
16. Cleek, M.A., Leonard, S.L., (1998), Can corporate codes of ethics influence behaviour?,
Journal of Business Ethics, 17 (6): 619-630.
17. Cressey, D.R., Moore, C.A., (1983), Managerial values and corporate codes of ethics,
California Management Review, 25 (4): 53-77.

511
 International Conference “Marketing – from information to decision” 5th Edition 2012

18. Doig, A., Wilson, J., (1998), The effectiveness of codes of conduct, Business Ethics: A
European Review, 7 (3): 140-149.
19. Ferrell, O.C., Skinner, S.J., (1988), Ethical behaviour and bureaucratic structure in
marketing research organizations, Journal of Marketing Research, 25 (1): 103-109.
20. Ferrell, O.C., Hartline, M.D., McDaniel, S.W., (1998), Codes of ethics among corporate
research departments, marketing research firms, and data subcontractors: An examination
of a three-communities metaphor, Journal of Business Ethics, 17 (5): 503-516.
21. Fisher, C., (2001), Managers' perceptions of ethical codes: dialectics and dynamics,
Business Ethics: A European Review, 10 (2): 145-156.
22. Frankel, M.S., (1989), Professional codes: Why, how, and with what impact?, Journal of
Business Ethics, 8 (2): 109-115.
23. Glenn, J.R., Van Loo, M.F., (1993), Business students' and practitioners' ethical decisions
over time, Journal of Business Ethics, 12 (11): 835-847.
24. Grundstein-Amado, R., (2001), A strategy for formulation and implementation of codes
of ethics in public service organizations, International Journal of Public Administration,
24 (5): 461-478.
25. Hosmer, L.R.T., (1991), The ethics of management (2nd ed.), Boston: Irwin Homewood,
Ill.
26. Hunt, S.D., Chonko, L.B., Wilcox, J.B., (1984), Ethical problems of marketing
researchers, Journal of Marketing Research, 21 (3): 309-324.
27. Kaptein, M., Schwartz, M.S., (2008), The effectiveness of business codes: A critical
examination of existing studies and the development of an integrated research model,
Journal of Business Ethics, 77 (2): 111-127.
28. KPMG, (2000), Business Ethics Survey Report, Toronto: Ontario.
29. Langlois, C.C., Schlegelmilch, B.B., (1990), Do corporate codes of ethics reflect national
character? Evidence from Europe and the United States, Journal of International Business
Studies, 21 (4): 519-539.
30. Lee, C.Y., Yoshihara, H., (1997), Business ethics of Korean and Japanese managers,
Journal of Business Ethics, 16 (1): 7-21.
31. Lindsay, R.M., Lindsay, L.M., Irvine, V.B., (1996), Instilling ethical behaviour in
organisations: A survey of Canadian companies, Journal of Business Ethics, 15 (4): 393-
407.
32. Malhotra, N.K., Miller, G.L., (1998), An integrated model for ethical decisions in
marketing research, Journal of Business Ethics, 17 (3): 263-280.
33. Marnburg, E., (2000), The behavioural effects of corporate ethical codes: Empirical
findings and discussion, Business Ethics: A European Review, 9 (3): 200-210.
34. McDonald, G., Nijhof, A., (1999), Beyond codes of ethics: an integrated framework for
stimulating morally responsible behaviour in organizations, Leadership & Organization
Development Journal, 20 (3): 133-147.
35. Melrose-Woodman, J., Kverndal, I., (1976), Towards social responsibility: Company
codes of ethics and practice, Management Survey Report, 28, London: British Institute of
Management.
36. Milton-Smith, J., (1997), Business ethics in Australia and New Zealand, Journal of
Business Ethics, 16 (14): 1485-1497.
37. Murphy, P.E., (1995), Corporate ethics statements: Current status and future prospects,
Journal of Business Ethics, 14 (9): 727-740.

512
 International Conference “Marketing – from information to decision” 5th Edition 2012

38. Oliver, G., Kearins, K., McGhee, P., (2005), ‗Professional codes of ethics: a New Zealand
study, New Zealand Journal of Applied Business Research, 4 (1): 97-116.
39. Orr, A., (1995), New Zealand: The results of openness, OECD Observer, 192: 51-53.
40. Pajo, K., McGhee, P., (2003), The institutionalisation of business ethics: Are New
Zealand organisations doing enough?, Journal of Management & Organization, 9 (1): 52-
65.
41. Pearce, J.A., David, F., (1987), Corporate mission statements: The bottom line, The
Academy of Management Executive, 1 (2): 109-115.
42. Peterson, B., (1996), Ethics revisited, Marketing Research: A Magazine of Management
& Applications, 8 (4): 47-48.
43. Privacy Commission, (2011), Reports on Aspects of Privacy Compliance and Practice of
the NZ Post Lifestyle Survey 2009. Retrieved fromhttp://privacy.org.nz/reports-on-
aspects-of-privacy-compliance-and-practice-of-the-nz-post-lifestyle-survey-
200/?highlight=post, retrieved on 10.7.2012.
44. Schlegelmilch, B.B., Houston, J.E., (1989), Corporate codes of ethics in large UK
companies: an empirical investigation of use, content and attitudes, European Journal of
Marketing, 23 (6): 7-24.
45. Schwartz, M., (1999), The relationship between corporate codes of ethics and behaviour:
A descriptive exploration and normative evaluation, York University, North York,
Ontario.
46. Schwartz, M., (2001), The nature of the relationship between corporate codes of ethics
and behavior, Journal of Business Ethics, 32 (3): 247-262.
47. Schwartz, M.S., (2002), A code of ethics for corporate code of ethics, Journal of Business
Ethics, 41 (1): 27-43.
48. Segal, M.N., Giacobbe, R.W., (2007), Ethical issues in Australian marketing research
services: An empirical investigation, Services Marketing Quarterly, 28 (3): 33-53.
49. Sligo, F., Stirton, N., (1998), Does hindsight bias change perceptions of business ethics?,
Journal of Business Ethics, 17 (2): 111-124.
50. Somers, M.J., (2001), Ethical codes of conduct and organizational context: A study of the
relationship between codes of conduct, employee behaviour and organizational values,
Journal of Business Ethics, 30 (2): 185-195.
51. Stevens, B., (1994), An analysis of corporate ethical code studies: ―Where do we go from
here?‖, Journal of Business Ethics, 13 (1): 63-69.
52. Thompson, M., (2005), Ethical theory (access to philosophy) (2nd ed.), London, UK:
Hodder & Stoughton.
53. Transparency International, (2011, December 1), Global corruption perceptions index.
Retrieved from http://cpi.transparency.org/cpi2011, retrieved on 8.9.2012.
54. Tucker, L.R., Stathakopolous, V., Patti, C.H., (1999), A multidimensional assessment of
ethical codes: the professional business association perspective, Journal of Business
Ethics, 19 (3): 287-300.
55. Valentine, S., Barnett, T., (2002), Ethics codes and sales professionals' perceptions of
their organisations' ethical values, Journal of Business Ethics, 40 (3): 191-200.
56. Valentine, S., Barnett, T., (2003), Ethics code awareness, perceived ethical values, and
organisational commitment, Journal of Personal Selling and Sales Management, 23 (4):
359-368.

513
 International Conference “Marketing – from information to decision” 5th Edition 2012

57. Weaver, G.R., Trevino, L.K., Cochran, P.L., (1999), Corporate ethics practices in the
mid-1990's: An empirical study of the Fortune 1000, Journal of Business Ethics, 18 (3):
283-294.
58. Webley, S., Le Jeune, M., (2005), Corporate use of codes of ethics: 2004 Survey: Institute
of Business Ethics.
59. Weller, S., (1988), The effectiveness of corporate codes of ethics, Journal of Business
Ethics, 7 (5): 389-395.
60. White, B.J., Montgomery, B.R., (1980), Corporate codes of conduct, California
Management Review, 23 (2): 80-87.
61. Wotruba, T.R., Chonko, L.B., Loe, T.W., (2001), The impact of ethics code familiarity on
manager behaviour. Journal of Business Ethics, 33 (1): 59-69.
62. Ziegenfuss, D.E., Martinson, O.B., (2002), The IMA code of ethics and IMA members'
ethical perception and judgment, Managerial Auditing Journal, 17 (4): 165-173.

Discussant: Associate Prof. Ciprian-Marcel POP, PhD., Babeș-Bolyai University of Cluj-Napoca

514
Copyright of Proceedings of the International Conference Marketing - from Information to Decision is the
property of Risoprint Publishing House and its content may not be copied or emailed to multiple sites or posted
to a listserv without the copyright holder's express written permission. However, users may print, download, or
email articles for individual use.

View publication stats