The Impact of Culture and Training on Code of Conduct Effectiveness: Reporting of Observed Unethical Behavior

Abstract

Prior research suggests both formal and informal norms influence employee behavior. While increased training is a typical recommendation to strengthen formal norms by increasing adherence to organizational codes of conduct, and therefore improve ethical behavior, there is little empirical evidence that code training actually strengthens formal norms or improves ethics-related behavior. Conversely, prior observations of unethical behavior serve as strong indicators of informal norms. These observations may be unknown to management and therefore difficult to moderate using other means, including with training on a code.

We test the impact of prior observations of unethical behavior and training for a code of conduct on intentions to report unethical behavior in the future, as well as possible mediators of these relationships. We find some support that training on the code increases intention to report and strong support for the notion that prior observations of unethical behavior decrease intentions to report. Responsibility to report and norms against whistle-blowing both mediate the prior observation-to-reporting intentions relationship, but not the training-to-reporting intentions relationship. An interesting by-product of training seems to be that, by increasing awareness of unethical behavior, and therefore the salience of prior observation, training may have indirectly influenced intentions in the opposite direction intended.

Citation

Curtis, M.B. and Williams, J.M. (2014), "The Impact of Culture and Training on Code of Conduct Effectiveness: Reporting of Observed Unethical Behavior", Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 1-31. https://doi.org/10.1108/S1574-076520140000018001