A Classification Scheme for Codes of Business Ethics Author(s): Bruce R. Gaumnitz and John C.

Lere Source: Journal of Business Ethics, Vol. 49, No. 4 (Feb., 2004), pp. 329-335 Published by: Springer Stable URL: http://www.jstor.org/stable/25123179 . Accessed: 23/04/2013 08:33
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A Classification Scheme for Codes of Business Ethics

Bruce R.

Gaumnitz John C. Lere

ABSTRACT. ethics exists

academic nity, on this

A great deal of interest in codes of in both the business community and the
Within given rise the to academic a number commu of studies has

Introduction Researchers to systematically examine, may wish or in some way process codes classify, categorize, of business ethics in order to facilitate discussion, enable of codes use the scientific comparisons, of ethics. scientific method To of understanding to so, they might wish method. Hallmarks of the do and advance

community. interest

of codes of ethics. Many

the content of various

of these studies have focused

codes. One important way

is by the study of codes of ethics can be advanced applying formal tools of analysis to codes of ethics. An understanding of important dimensions that may
differ across codes these of ethics, a common and a means to describe dimensions, terminology to measure

these dimensions
They isons, will and also advance

will
facilitate our

facilitate
discussion,

applying
enable of

such tools.
compar codes of

include classi investigation data and fication, collection, quantification, the testing of hypotheses statistical by applying to empirical methods data. These processes pervade sciences, to codes tary used in research scholarly but tend to be absent of business and and some ethics. in the in articles physical devoted rudimen have been studies

understanding

ethics. The present paper describes to use in studying scheme codes

scheme uses six important dimensions

a classification of ethics. This

to distinguish

Although

counts

among
shape, introduces dimensions.

codes of ethics:
thematic metrics content, that

length,
and can be

focus,
tone. used

level of detail,
The paper also the to measure

categorizations

(Gaumnitz 1995; 1990;

KEY WORDS:
of ethics, ethical

business
comparisons,

ethics,

classification,
ethical issues,

codes
ethics,

Preble,

professional

ethics

and 1992; Miesing Singh, and Richard, 1985; Montoya 1994; Oz, and Hoffman, 1993; Preble 1999; Wiley, 2000), the ability to comprehensively capture the com in most inherent codes of business ethics plexities in its infancy. remains For the most part, even generally attributes accepted terminology of codes of ethics to try to measure wish that the that identifies the a researcher These of of

Kaye, Lefebvre

descriptive/exploratory Lere, 2002; Jamal and Bowie, and 1992; Langlois Schlegelmilch, and

might difficulties Bruce R. Gaumnitz is Professor ofAccounting at St. Cloud State University in St. Cloud, Minnesota, U.S.A. His research has been published in a variety of professional
and academic journals.

is lacking.

the

virtually preclude application to studies scientific method of codes ethics. paper introduces classification and discusses that

business This and

a robust

John C here University author of Financial

A

is Professor ofAccounting at St. Cloud State in St. Cloud, Minnesota, U.S.A. He is the two books, Pricing Techniques for the Executive and Managerial Accounting:
and Framework,

can be system powerful to summarize the structural applied concisely form and topical of codes of business emphasis ethics. An concepts and which example contained illustrates is provided in the that reinforces the the classification Although scheme

Planning-Operating-Control numerous articles.

its efficiency.

^g. **

2004. Journal of Business Ethics 49: 329-335, ? 2004 Kluwer Academic Publishers. Printed in theNetherlands.

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330 Bruce R. classification scheme

Gaumnitz

and John
ments

C. Lere
on another theme.

attempt to analyze will raise a number researcher must

appears simple to apply, any the content of a code of ethics of non-trivial issues that the of these A number

Once

again,

informa

tion
or more

loss results. imagine

statements

Here,

a code
spread

of ethics
across

containing
nine topic

nine
areas.

address. issues

implementation

are discussed

in the paper.

Just as the number not be determined in the previous count measure

of for

themes

represented the nine-statement here

could code

Classification This section

system describes to describe different codes dimensions of ethics The that

number that can

example, sheds only of statements contained be determined

the nine-theme limited light on the in the code. All the nine-theme

from

can be used surements in codes are length,

content, and

and mea differences dimensions thematic

that can be used across

to indicate

these dimensions. level of detail,

tone.

focus,

shape,

statistic is that at least nine statements summary must be present. The actual number of statements could be nine, 90, 900, or more. This presenta tion also fails to allow one to form a compre hensive ethics. understanding of a code of business

Length Level examina easy starting point for a systematic tion of a code of ethics is to count the number or ideas that it contains. statements of distinct can range from the count to This single digits To illustrate much this measure larger numbers.1 An of length, statements The all that item or distinct a code of ethics that contains nine code. is that is described as a nine-statement of this measure What measure of detail is needed that but This is also some not form of composite the number of

involves

statements, are present. of central mean

mean,

only the number

sounds

that of themes like a call for a measure choice theme.

of

The obvious tendency. number of statements per

representing the average

is the This
state

primary it captures does of

limitation

number

count

is the length of the code. An to address the content nothing statements themselves. Each counts as one more in is an impor loss occurs

ments measure a mean detailed ments

as a is easily theme, per interpreted of the code's level of detail. A code with statements of five than a code with is more per theme a mean of two state

nature

the

simply total. Although length tant dimension, serious information if this measure is all that is used. the overall

statement

theme. this while per Unfortunately, statistic has considerable immediate appeal, if told that the mean number of statements per theme for a particular code is three, one can determine the number of statements. across two of themes There 10 themes themes. if told three code that a particular statements per theme, and contains nine separate still have rather limited nature has been about of the said the code. in the nor the present state 30 be might or six statements

neither Focus Another tions a code of ethics to examining approach nature is to concentrate of the obliga the upon and number ments

to arrange them by "theme" imposed or topic area.2 Unlike the preceding approach, counts this technique the number of topics con ameasure of focus (few themes sidered, providing or topics) or breadth (many themes or topics).3 A shortcoming if used by itself of this measure is that it ignores the level of detail that charac on one theme statement terizes the code. One is reported no differently than multiple state

spread even Moreover, has an average of addresses statements, information For one three

spread across

themes, one would about

the

thing, to

development content of the themes that comprise ations imposed

nothing this point

or groupings the code. The nature remains entirely

topical of statements of the oblig Surely,

unclear.

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A Classification structure the overall however, code is now well defined. or shape

Scheme for Codes of the

of Business

Ethics

331

Shape To that notion, dispel in Exhibit summarized consider 1. Each the three codes nine

levels of detail of three state average (a mean ments The essential difference here per theme). is that the authors of Code C and its affiliated are with Theme 1, organization preoccupied which is presumably to of crucial importance satisfactory industry. emphasis 2 or 3. behavior Their on Theme and performance code much places 1 than it does in their greater on Themes

contains

statements. addresses focused.4 theme their

Thus, they have equal length. Each three themes. Hence, they are equally The mean of statements number per for each code. This means that

is three

are equal. What levels of detail average differs across the three codes presented in Exhibit 1 is their thematic Thematic emphasis. emphasis is a multi-variate that addresses the concept relative themes. Theme places followed Code C concentration Code A of statements across for displays equal emphasis 3. Code B 1, Theme 2, and Theme on the greatest Theme 1, emphasis 2 and Theme 3, respectively. by Theme is still more for Themes for Theme A, B, and C equal focus extreme, providing 2 and 3 but much 1. exhibit (three (nine length and equal themes), equal equal greater

In contrast, Code A exhibits equal across the B three and Code themes, emphasis an intermediate The reporting occupies position. of the number of statements, the number of and the mean number of statements themes, per theme fails to shed light on the relative disper across themes or the "shape" sion of statements of the code of business ethics. A of capturing "horizontal" the code An be What "shape" of ethics extreme one with themes. stresses entirely is needed of a code is one is a means of ethics. that stresses

example nine statements A

theme coverage. a of horizontal code would that covers nine

distinct

emphasis emphasis Codes

statements),

example nine statements ferent

"vertical" code of ethics is one that a particular or almost theme, entirely to the exclusion of others themes. An of a vertical code would be one with all of which of the same be used address theme or slightly dif

EXHIBIT 1
Sample code structures

aspects Numbers may in Exhibit done 2 Theme

statement statement statement

CODE A:

Theme
statement statement statement

Theme
statement statement statement

separate tinguish to indicate how many each theme. Referring code code

topic. to capture shape. As is 1, columns may be used to dis are then used themes. Numbers statements back to appear within the horizontal

CODE

B:

Theme
statement statement statement statement statement

Theme
statement statement

Theme
statement statement

in the previous that example paragraph, as having a "1 1 1 1 1 could be described 1111" In contrast, the shape shape or structure. of the vertical code in the previous is paragraph
"9".

CODE C:

Theme
statement statement statement statement statement statement statement

Theme
statement

Theme
statement

Of course, not all multi-theme codes have just one statement It is also important to per theme. realize that themes (e.g., honesty, confidentiality, are In other classes. etc.) simply categorical no have natural order words, they (i.e., they are not ordinal groupings). without either Therefore, or information, loss of generality the numbers used within order. Exhibit 2", to indicate each theme statements many appear be in descending listed may this convention, Code C from is a "5 2 how

Adopting 1 has a "7 1 1" shape, Code B and Code A has a "3 3 3" shape.5

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332 Bruce R. This you ethics code classification with

Gaumnitz

and John Tone A final a mixture scripting

C. Lere

are told

is reversible. Suppose process that an organization has a code of a "5 2 2" shape. The shape of the communicated this compact else can be determined from this that this code The It three or statements. communicated. code The has focus with

characteristic of (thou

of a code

of business typically shall) and

ethics have

has been What

is its tone. Codes

of business directing shall

ethics

notation. statement? contains

It can be determined 5 + 2 + 2 or nine has been that this

length of the code can be determined themes breadth Now ments (count of the the code

though both directing are present in most codes of business of business ethics with inspirational, or positive statements tones make

pro (thou statements. Even not) statements and prospecting ethics, codes

columns). has been

communicated.

having and

number computed 3 themes).

both the number of state computed of themes, the number the mean can statements of theme be per to be The three across (9 statements spread code's level of detail has been The "5 2 2" classification information.6 considerable

aspirational, use of directive greater than do codes of business ethics with or tones. negative legalistic, regulatory, to Tone reflects an overall emotional reaction subjective of a code impression tone may be more discussed behind or attribute of business

and ethics. than actual

Although other dimensions

communicated concisely

as well.

conveys

it is an important motivations Legalistic associated

subjective in this paper,7 the that can suggest a code of business

ethics. closely

are more codes regulatory or discipli with enforcement codes whereas inspirational to the organization's purpose to use a code and tone is to represent For that are positive. 6 containing statements. to be 75% emotional

Thematic To of

content

nary mechanisms, tend to be linked

or mission statement.

terms theme content, incorporate descriptive can be appended to the numerical designation the code's shape. These additional modifiers

possible

metric of

the percent example, positive Tone for positive. reaction, tone. As

statements

are arranged to themes in the same to correspond counts statement in which the theme order appear. a code means across
themes

consider statements this code

of ethics

In other

words,

a "5

four
are

containing Five themes. Three

each

eight statements additional

covered

1 1 1, honesty" statements spread address

one

2 negative be said might relates

Because formal

tone

to overall

the
state

this metric

"honesty" ment. This

theme.
present,

(unspecified)
by

code

is not code These

1, confidentiality" the same shape.

to a "5 1 1 comparable even though they have two codes differ with

codes of ethics, are apt to be identified

of is only a crude measure area in the of analysis progresses more of tone refined measures and developed.

Discussion If researchers wish to systematically examine, or in some way process codes the scientific method, using of

the greatest respect to the theme with emphasis. con a "3 2 1 1 1, honesty, As a final example, fidentiality" statements, code has contains three five statements themes, eight that address

classify, categorize, ethics of business they need cate about to be codes

two statements related honesty, each themes and three more statement. themes notation, modifiers zation of is The also nature of these

to confidentiality, covered by one three additional into the list characteri the of

easily incorporated if desired, by extending the numerical that follows shape of the code.

to more clearly communi them both ethics, among to In addition, need selves and to others. they a set of characteristics be able to clearly identify ethics that can be measured, of codes of business able and summarized, are ethics business ments, these analyzed. Since qualitative may codes docu involve and add of inherently measurements

the

the Nevertheless, judgment. described classification process

terminology can above

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A Classification considerable and discussions The

Scheme for Codes cation

of Business structure

Ethics

333 a framework may degrade about whether ethics for dis into and are

to examinations rigor and precision ethics. of codes of business in

cussions,

to provide communication

summarized concepts I and the derived measures summarized Table a starting in Table II provide for the point fundamental systematic of business scheme discussion ethics. and The of codes investigation classification proposed notation add additional and no classifi

unproductive disagreements in what codes of business respects similar or different. Vague terminology
communication, measurement,

hampers
analysis.

and

Exhibit

and its associated

efficiency. ill-defined With

an illustration 2 provides of the type of are and comparisons that discussion by supported to structured the proposed the study approach of business ethics.

terminology

TABLE I
Fundamental concepts

STATEMEMT:
idea or requirement.

Statements

are the building

blocks of codes of business

ethics. Each

statement

represents

a separate

LENGTH: THEME:
of statements

The

length of a code of business is a collection

in a code of

ethics

is the number

of statements

that it contains. topic or idea. The

to the number of

A theme
present

of one or more
business ethics

statements
must always

that address a particular

be greater than or equal

number
themes.

FOCUS/BREADTH:
with few themes are

Focus
focused.

and breadth
Codes with

are terms that correspond

many themes are broad.

to the number
examples

of themes
are referred

addressed. Codes
to as "vertical"

Extreme

and "horizontal"

codes

(see Table

II).

TONE: Tone reflects a composite reaction to and subjective impression of a code of business ethics. emotional to Codes of business ethics may be classified along a tone continuum ranging from inspirational/aspirational
legal/regulatory.

TABLE II
Derived measures

DETAIL:

Detail

is measured

as

the

average

or mean

number

of

statements

per

theme.

It is a

single

measure

for

a code of business
EMPHASIS: The

ethics
number proportion themes, represents

taken as a whole.
of statements of not or of total

A higher(lower)
that address that a

mean

corresponds
theme theme

to a greater(lesser)
of that

level of detail.
emphasis. is a character

the Alternatively, istic of individual SHAPE:

statements of ethics the

particular address the as of a whole. the

is a measure may be used.

theme's

Emphasis

a code

taken

Shape to

captures

details

distribution

of

statements

across

themes.

It

may
zontal"

be expressed
"vertical."

using numbers

(see text) or be viewed

as being

a location

along

the continuum

from "hori

HORIZONTAL:
extreme example

A pure horizontal
of shape, representing

code

stresses theme
breadth

coverage.
for the

It has one
of

statement
statements

per theme. This

present.

is an

ultimate

number

VERTICAL:
example of

A pure vertical
shape, representing

code uses all of its statements

ultimate focus.

to emphasize

a single theme. This

is the other extreme

THEMATIC
a theme.

CONTENT:
of

Thematic
thematic content

content

characterizes
are

the aspect common

honesty, confidentiality,

to the statements
and continuing

that comprise
professional

Examples

categories

development.

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334 Bruce R.

Gaumnitz

and John

C.

Lere

EXHIBIT 2
Communication
SCENARIO: A researcher asks another researcher to

illustration
comment the similarities, differences, and charac

upon

teristics of the codes of business RESEARCHER'S

ethics for

two organizations.

This first code of ethics contains nine statements, each addressing a different RESPONSE: to virtually any employee at any theme. Thus it is a "1 1 1 1 1 1 1 1 1". It is equally applicable/inapplicable in any industry. As a result, this code appears to be a legal-compliance document level in any business organization
has a negative code or also regulatory contains tone. nine statements and is a "3 2 1 1 1 1, control, Two of the

and The

second

quality

honesty."

four

stand-alone
the

themes,
horse's

the ones
health its

about hoof
owner or

dipping

and the duty

are directly

to communicate
related to being

significant
a Master

observations
Farrier (i.e.,

concerning

care-provider,

to in the horse shoeing industry). They are also directive or inspirational statements that contribute participant more nine is than six this code focused instead of this code's positive tone. Touching themes, upon narrowly an average of one is appreciably greater. With the first one, and its emphasis on quality control and honesty and a half statements per theme it is also more detailed than the first code.

Conclusion A classification can scheme both for codes of business

the precision and effi improve In addition, of communication. orderly ciency or can serve as a starting classifications point measurements. The foundation for quantitative and classification notation, scheme, proposed allow for the appli associated may terminology ethics cation statistical business of systematic techniques ethics. methodologies to the study and/or of codes of

The ideas in other code sentences may not be as those in the sentence as clearly different above. and For example, I will not violate the privacy I obtain about information of my confidentiality as statement Is this one business. employer's or are there two obligations in this written sentence: information business tiality and of (1) I will I not not violate about violate I obtain the my privacy of obtain employer's the confiden about my

(2) I will information

employer's Some code sentences or contain obligation

business?

Appendix Although a code in of statements the number counting have been is easy once the statements is not is and what what identified, determining a statement The judgment. requires professional of statements when do is not as the number ties relate encountered to sentences that code of sentences. necessarily Two major the same difficul ideas and include an

do not include an ethical an obligation that really no of An additional obligation. example imposes are important is: Ethics for the the first sentence such a of society. Because efficient functioning it is not sentence includes no specific obligation, considered classification A statement to be a statement scheme. that really is: Iwill behave could no additional imposes in an ethical manner. this by itself is the in a code included it adds nothing to for purposes of this

number

identifying that contain multiple not or may not more

a statement

obligation one While whole code

sentences obligation Some ethical

or requirement. sentences contain

containing the statements other manner statements

argue that of ethics, when statements other

than one

statements also

a code might For example, obligation. sentence: I and obey be honest will the include I will be is really two statements: the law. This I will obey the law.

the Presumably, already present. an in ethical define behaving so satisfying of the other the obligations satisfies this statement. exist as to one would

honest.

of opinion differences While may is and what is not a statement, what

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A Classification Schemefor Codes of Business Ethics 335

expect decline with to of opinion of differences as more is gained experience significantly codes. classifying the number References
Gaumnitz, B, and C. Lere: 2002, 'Contents of

J.

Notes related to identifying difficulties Implementation are statements discussed in the appendix. 2 A theme is a collection of one or more related
statements. The theme "honesty," for example,

all of which the following statements, encompasses might be found in a single code of business ethics: (1) shall not mis Members shall be honest. (2)Members represent their educational backgrounds. (3)Members shall not misrepresent their professional certifications
or licenses. The number of statements present in a

Business Ethics of Professional in the United States', Journal of Organizations Business Ethics 35(1), 35-49. 'Theoretical 1995, Jamal, K. and N. E. Bowie: a Meaningful Considerations for Code of Professional Ethics', Journal of Business Ethics 14(9), 703-714. in Australian 'Codes of Ethics 1992, Kaye, B. N.: Business Corporations', Business Ethics Journal of 857-862. 11(11), 1990, 'Do Langlois, C. C. and B. B. Schlegelmilch: Codes Codes of Ethics Reflect National Evidence from Europe and the United States', Journal of International Business Studies 21(4), 519-539. and Lefebvre, M. and J. B. Singh: 1992, 'The Content Focus of Canadian Corporate Codes of Ethics', Journal of Business Ethics 11(3), 799-808. P. and J. F. Preble: 1985, 'A Comparison of Miesing, Five Business Business Philosophies', Journal of Corporate Character? Ethics 4(6), 465-476. I. D. and Montoya, A. J. Richard: of Codes of Ethics 'A 1994, in Health

of

code
or

of business
to the

ethics must
number of

always be greater
themes.

than set of
and

equal

Although
themes, some there themes

there
may such as

is no
be

generally
agreement conflict

accepted
of interest,

general honesty,

concerning

obeying the law. As when identifying statements, dis occur to is when agreement likely identifying themes in the early attempts to classify codes of ethics. Over
time the amount

of

disagreement

is apt

to

decline.

A more
over

focused
just one

code would
or two

spread the nine

whereas

state its nine are

ments

themes,

a broader

code would
statements.

address four or more be evident

tedious

themes with

It should

that some
to say, and

descriptions
confusing

tedious

to write,

to hear.

Was

that a "1 1 1 1 1 1 1 1 1" or a "1 1 1 1 1 1 1 can be overcome 111" code? These disadvantages For by using superscripts. example, alllllll 1 1 code might be described as a "l9" code and a 1111111111 code might described as a "l10"
code. Adopting this convention and omitting super

Comparative Study Care Facilities and Energy Companies', Journal of Business Ethics 13(9), 713-718. E.: 'Ethical Standards for Computer Oz, 1993, A Comparative Professionals: of Four Analysis Business Ethics Codes', 12(9), Major Journal of 709-726. Preble, J. F. and R. C. Hoffman: 1999, 'The Nature of Ethics Codes in Franchise Associations Around the Globe', Business Ethics 18(3), Journal of 239-253. C: 'Ethical Standards for Human 2000, Wiley,
Resource Management Professionals: A

1 has a scripts that equal one, Code C from Exhibit "7 1 1" or "7 l2" shape, Code B has a "5 22" shape,
and Code A

Comparative Analysis of Five Major of Business Ethics 25(2), 93-114.

Codes', Journal

seem this paragraph or these computations B in 1 Exhibit has bewildering, recalling that Code a "5 2 2" shape may make things easier. 7 There may be interpersonal differences in how tone is perceived and even differences in perception by the Should
same person over time. In addition, cultural differ

is a "33."

Department of Accounting, St. Cloud State University, 120 4th Avenue South,

St. Cloud, MN
E-mail:

56301-4498,
U.S.A.

ences may play a role in determining how tone is per ceived. Therefore, the metric although suggested in the paper does capture aspects of tone, it should be used and interpreted with caution.

bgaumnitz@stcloudstate.

edu

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