Code of ethics and moral awareness ; A study about the relationship between code of ethics and moral awareness and the moderating impact of locus of control

Abstract

The purpose of this study is to examine the effectiveness of code of ethics on moral sensitivity of individuals and evaluate whether individual differences such as locus of control have any effect on this relationship. Although code of ethics has been argued to have significant effect on moral awareness and acts as a moral reminder (Pflugrath, Martinov-Bennie & Chen, 2007; Ariely, 2012), there is an ongoing debate regarding its effectiveness in promoting ethical behaviours in organisations as the research evidence is found to be mixed (Loe, Ferrell & Mansfield, 2000; O’Fallon & Butterfield, 2005; Craft, 2013). Additionally, to our knowledge, there is no empirical research on the moderating effect of locus of control in ethical decision making literature. The study was conducted by sending a survey questionnaire consisted of measures of moral awareness and locus of control to 500 individuals who are students at BI Norwegian Business School and University of Oslo as well as people from our social and professional network. Results of this study show that code of ethics is not significantly related to moral awareness. On the other hand, locus of control was found to have significant moderating effect on the level of moral awareness one has when a reminder of code of ethics was presented. Individuals with external locus of control tend to be less ethically sensitive than those who have internal locus of control. This finding has confirmed what previous studies have found regarding the relationship between locus of control and moral awareness (Ho, 2010), and has raised a question concerning the effectiveness of code of ethics itself in navigating ethical behaviours. The academic and practical contribution of this study is to reflect on the effectiveness of code of ethics in organisations. Such reflection is relevant for the mainstream research on code of ethics and is necessary for organisation´s rethinking of their use of code of ethics as a fulfilment of external expectations. Keywords: moral awareness, code of ethics, locus of control, ethical decision making