Relationship between love of money and unethical behaviour Essay

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In this research that we propose to undergo, we are looking to look into the indirect relationship between the love of money, attitude towards unethical behavior and leaning to prosecute in unethical behavior ( PUB ) among station alumnus direction pupils in India. We plan to prove a theoretical theoretical account to determine the causal link between these variables. Attitude towards unethical behavior may function as a go-between of the relationship between the love of money and the PUB assisting us better understand the complex relation. However, it is non yet known if love of money causes attitude towards unethical behavior or it is the other manner unit of ammunition. More specifically, in this survey, we explore the indirect relationship

( The Love of Money i? Attitude towards unethical behavior i? Unethical Behaviour ) and the moderating variables being the gender of the respondents. After moralss developing, female pupils alteration and better ethical behavior, but male pupils do non ( Ritter, 2006 ) . On the footing of these suggestions, we attempt to analyze the possible differences between male and female pupils utilizing the same theoretical account. PUB has been measured utilizing a 15-item Unethical Behaviour step with five Factors: Abuse Resources, Not Whistle Blowing, Theft, Corruption, and Deception.

We develop our theory from a little set of research thoughts presented below-

It is good known that direction instruction is non merely a extremely commercialized concern ( more than other signifiers of instruction claims Economist, 2004 ) .these yearss but is a high bets affair sing that many of the top CEOs of the universe are merchandises of concern schools. In a superior done in ‘Why Do MBAs Make Better CEOs? ‘ by Herminia Ibarra, Morten T. Hansen, and Urs Peyer, CEOs with an MBA ranked on norm a full 40 topographic points higher than those without. Indeed, half of the top 10 went to B-school ( although, true, one of them dropped out before acquiring an MBA ) . Due to increasing list of dirts and other corruptnesss ( Enron, Arthur Anderson LLP, Tyco, Satyam and Bernie Madoff ) the deficiency of concern moralss and criterions is a good discussed subject, particularly in the media.

The Satyam dirt raises serious inquiries about the MBA civilization and concern direction instruction. It is important that the controversial independent manager on the board of Satyam Computer Services, N. Mohan Rao, was the dean of the high profile Indian School of Business in Hyderabad. “ Business schools are besides blamed for the current universe fiscal crisis. The schools value leaders’charisma over substance and uncritically embrace free market and profiteering ” ( Business Week )

Many pupils enter concern schools due to their love of money ( Cunningham et al. , 2004 ; Tang et al. , 2006, 2007 ) and keep these values over clip ( Staw, Bell, Clausen, 1986 ) . Old ages subsequently, concern pupils become concern directors and executives. “ The discredited president of Satyam, Ramalingam raju, excessively has an MBA from Ohio and has done a class in the Harvard Business School. How is it that people with such elect instruction are involved in such unethical behavior? One ground is that direction instruction has small concern with moralss. The Harvard Business School, the most esteemed of them all, is itself now under intensive examination ( What they Teach You at Harvard-My Two Old ages in the Cauldron of Capitalism, Philip Broughton )

It is of import to instil a value of moralss and trust at the b-school degree which will assist gain you can lodge to moralss even while prosecuting your love of money. When greed takes over you will detect that the first casualty are your moralss and unity

Research workers over the old ages have tried to place the causes of these unethical behaviors and dirts. Harmonizing to some research workers, one of the existent root causes of this moralss crisis is ”the bottom-line-mentality ” ( Sims, 1992, p. 508 ) or ”maximizing stockholder value ” ( Kochan, 2002, p. 139 ) . Profit-based mechanisms create force per unit area ( to maximise net incomes ) and chance ( to gain perverse fillips ) and may hold some serious defects.

Recent research supports the impression that ”the love of money is a root of all sorts of immorality ” ( hypertext transfer protocol: //www.biblegateway.com, 1 Timothy, 6:10, New International Version ) , but money ( income ) is non ( Tang and Chiu, 2003 ; Tang et al. , 2007 ; Vitell et al. , 2006 ) .

”People who want to acquire rich autumn into enticement and a trap and into many foolish and harmful desires that plunge work forces into ruin and devastation. For the love of money is a root of all sorts of immorality ” ( the Bible: 1 Timothy, 6: 9-10 ) .

There is a famine of empirical research refering the love of money and immorality because many laic people and research workers may see this issue as a tabu, a religious/ controversial issue, non a scientific/academic issue, and to be overly value-laden, thereby, may hold shown great reluctance to analyze this tabu ( e.g. , Vardi and Weitz, 2004 ; Vardi and Wiener,1996 ) .Thereby, the concept of unethical behavior is an under-represented country of research in the direction field and deserves farther attending. Hence we take up the research, assert that the love of money is positively related to the leaning to prosecute in unethical behavior ( PUB ) .

LITERATURE REVIEW

Love of money, ethical attitude and leaning to act unethically has been widely discussed in a figure of research diaries.

Love of Money

From clip unknown, it has been known to the human cognition that money is one of the most of import factors impacting the attitude every bit good as behavior of people. Money finds reference in Bible every bit good ( “ Money is the root of all evil ” ) . For the present research, the undermentioned definition of love of money has been taken – love of money is “ one ‘s attitude towards money with affectional, behavioral and cognitive constituents ; the intending one attributes to money ; one ‘s desire for, value of, outlook about, or aspiration for money ; non one ‘s demand, greed or philistinism ; a multi-dimensional single difference variable ; and a 2nd order latent concept with several first order latent sub-constructs ” ( Tang et al, 2007, Law et Al, 1998 ) .

The first major effort to set up a scale capturing the significance of money was made by Thomas Li-Ping Tang ( 1992 ) . The money moralss was developed as a consequence which captured six factors like “ money as related to different demands, positive or negative attitude towards money, the direction or control of money and compulsion and power ” . The love of money which measures one ‘s desire and aspiration to acquire money is a subset of the money moralss graduated table. The love of money graduated table was foremost developed by Tang et Al ( 2002, 2003 ) that measured the concept on four different constituents viz Motivator, Success, Importance and Rich. It measures how much a peculiar person is motivated by money, to what extent it represents success to him, how of import money is to him and his desire to hold more money. Later, an abridged version of the love of money graduated table was used by Tang et Al ( 2007 ) where merely the sub-constructs Rich, Motivator and Importance were considered. This peculiar graduated table has been used for the intent of this research every bit good. The money moralss graduated table every bit good as the love of money graduated table have been tested and validated across a figure of surveies spread across different continents ( Tang et al, 2007 ) .

Prior to the 1980s, the relationship of money with other variables was non tested significantly ( Furnhaf, 1984 ) . However, there has been a batch of survey in the recent yesteryear which has tried to capture how love of money interacts with other variables. One striking subject has been that the relationship of money with unethical behavior has been explored to a great extent in the recent literature. Tang ( 2007 ) examined the relationship between the income degrees and the quality of life utilizing love of money along with gender, matrimonial position and occupation satisfaction as control variables. The research showed a few really interesting consequences. However, the one relevant to this research is the one wherein love of money is negatively related to occupation satisfaction, income is negatively related to the quality of life. This shows that love of money Acts of the Apostless as an of import variable in interceding the relationship between income and quality of life. Other similar surveies set up love of money as of import variable impacting consumer behavior, subjective well being and pay satisfaction. The impact of love of money on several other concepts like wage satisfaction, committedness, work ethic and committedness has been examined by Tang et Al ( 2000, 2006, 2007 ) and Hong Meng Wong ( 2008 ) with mark groups spread across geographicss and professions. The consequence has shown that love of money does hold important impact on all of these concepts.

Unethical Behaviour

The field of moralss and unethical behavior are really wide and considerable research has been done in them. Ethical motives is the criterion that a individual sets while judging what is right or incorrect. In other words, moralss is something really personal and varies across the population. Ethical motives as a portion of doctrine has been widely studied from the yearss of Socrates, Aristotle to its present post-modern signifier. When a individual Judgess some behaviour as incorrect harmonizing to his/her ethical criterions, he perceives the same as unethical behavior. Attitude towards unethical behavior is therefore defined as whether the individual considers a peculiar set of behavior as ethical or non. The leaning to prosecute in unethical behavior, on the other manus, is defined as how likely the individual is traveling to prosecute in behavior that he perceives every bit unethical.

The constituents of unethical behaviors have diversely been defined by different writers. Since this paper attempts to look at unethical behavior within organisations and those which are driven by love of money, white collar offenses have merely been considered. Ivancevich et Al ( 2003 ) attemped to specify a white neckband offense and used concepts like larceny, cyber idleness, workplace aberrance, counterproductive behavior, corruptness and organisational misbehavior. Each of these concepts may include many other sub-constructs. Organizational misbehavior, for illustration, contains at least 23 different 1s like “ incendiarism, blackmail, graft, intimidation, cheating, favoritism, dishonesty, espionage, fraud, incivility, bullying, kickbacks, lying, misinformation, privateness misdemeanor, retaliation, sabotage, sexual torment, substance maltreatment, larcenies, menaces, whistle blowing and keep backing information ” . However, for the intent of this survey, merely those variables that are related to the fiscal dirts are influenced by love of money are taken into consideration. The five sub-constructs that have been used to specify unethical behavior include Abuse Resources, Theft, Corruption, Deception and Not Whistle Blowing ( Tang, 2004 ) . These variables have been described in some item here:

Factor Abuse Resources

This factor measures the extent to which the employee is utilizing office resources like Xerox, cast, telephone and cyberspace for their ain personal benefit instead than for the company ‘s. The usage of cyberspace for personal intents is besides known as cyber idleness and is going an country of great concern in present twenty-four hours organisations.

Factor Larceny

Larceny is widespread in companies, authorities offices, schools, colleges and medical infirmaries. Very frequently, employees take things from office and utilize them for their ain ingestion. This has been identified as one of the threats blighting many corporate and other establishments. The factor larceny has been measured by the employee ‘s inclination to steal goods, ware and hard currency from the office. It may affect borrowing hard currency from the counter without inquiring, taking ware place or endowing it to friends.

Factor Corruptness

Corruptness is the illicit exchange of resources done by parties who have small or no claim to them for fostering their ain benefits. The Transparency International comes out with one-year steps of the corruptness perceptual experience index which ranks the assorted states harmonizing to the sensed degree of public sector corruptness in them. While relatively comfortable states with high criterions of life like those in the Pacific and Scandinavia rank extremely, India has an abysmal place of 84 and a composite mark of 3.4/10. This is merely one of many surveies that indicate a high grade of corruptness nowadays in the Indian system. Corruptness in the corporate sector may take many signifiers like distorting the histories of the company and fooling stakeholders ( as done in the instance of Satyam ) , mistreating one ‘s place in the organisation to have gifts, money and other benefits and playing with the involvements of sub-ordinates to increase the bottom-line of the company and hence get a higher fillip.

Factor Misrepresentation

Misrepresentation or fraud is the act of deliberately deceptive people through the inaccurate representation of facts. The society as a whole has seen a rise in the figure of instances of misrepresentations or frauds and the same has been reflected in the corporate sector as good. It is non really unusual to come across gross revenues individuals or agents doing false promises for doing one excess trade and company advertizements immensely overstating merchandise qualities to enticement clients. Besides, frequently clients are charged more than the existent monetary value, charged more in secret after being promised price reductions or existent benefits are hidden from them so that they can non avail of them.

The bing literature chiefly deals with the assorted aspects of unethical behavior and the efforts to set up the relationship with other variables are relatively less in number.. However, the rise of corporate dirts in recent yesteryear has led to few interesting surveies on understanding the drivers of unethical behavior. Cohen et Al ( 1996 ) and McCarthy ( 1997 ) effort to mensurate ethical orientation among Canadian pupils and collegiate accounting pupils severally. Mackewn et Al ( 2008 ) identified concluding accomplishments and philosophical orientation as factors impacting the ethical opinion of pupils at an US university. Douglas et Al ( 2001 ) studied the impact of the consequence of organisational civilization and ethical orientation on comptrollers ‘ ethical opinions and found important relationship. Allmon et Al ( 2000 ) observes that of the assorted demographic variables, merely age and spiritual orientation have important impact on ethical orientation. Tang et Al ( 2007 ) found that love of money had impact on leaning to act unethically through a mediating variable of Machiavellianism. Tang et Al ( 2006 ) once more examined the relationship between attitude towards unethical behavior and leaning to act unethically among concern school pupils in USA and found that the former led to the latter.

The graduated table for mensurating unethical behavior in organisations was foremost developed by Tang and Chiu ( 2003 ) . It was a 15-item-4-factor graduated table holding the points Abuse Resources, Theft, Corruption and Not Whistle Blowing. Later, another factor was added to the graduated table in the signifier of misrepresentation and the graduated table was expanded to a 32 points one ( Luna-Arocas and Tang, 2004 ) . Chen and Tang ( 2006 ) , nevertheless, shortened this graduated table to a 15-item-4-factor 1 for their paper and this has been used for the intent of this research every bit good.

Formulation of Hypothesis

Love of Money and Propensity to Behave Unethically

The relationship between love of money and unethical behavior has been researched upon in rather a few diaries. Tang and Chen ( 2007 ) examined the relationship between love of money and the leaning to act unethically with Machiavellianism as the go-between and college major ( concern and psychological science ) and gender as the moderator variables. The consequences indicated that the relationship hold good for the whole sample, for male pupils but non for female pupils, for concern pupils but non for psychological science pupils and for male concern pupils but non for female concern pupils. Other surveies which probed this relationship were Hong Meng Wong ( 2008 ) for Malayan Evangelical Christians and Tang and Chiu ( 2003 ) for Hong Kong employees, both of which showed important relationship.

Apart from the support in literature, it is intuitively easy to understand the relationship between love of money and unethical behavior. From the antediluvian times, money is considered one of the chief drivers of all sorts of unethical behaviors. The higher the love of money of a individual, the more is his desire and aspiration for acquiring money and the more likely he is to concentrate on the terminal of acquiring money than the agencies of acquiring the same. When the ultimate aim of a individual ‘s actions is really extremely valued by him, he is really frequently willing to predate the mental uncomfortableness that is caused by moving in a manner that is against his personal beliefs. That explains why a individual with greater love of money will be willing to move against his ain ethical beliefs. Interestingly plenty, the relationship has already been validated in topographic points like USA and Hong Kong where people are comparatively flush and money should non be a large driver for unethical behaviors. Therefore the relationship is expected to be merely stronger in instance of India since in a relatively hapless state, love of money should be the major ground why a individual would desire to act unethically. Hence, we hypothesize that

H1: Love of money is positively related to leaning for unethical behavior.

Attitude towards Unethical Behaviour and Propensity to Behave Unethically

The relationship between these two variables can be explained with the aid of the theory of reasoned action ( Ajzen and Fishbein, 1980 ) . This theory attempts to happen explicate the concept of behavioral purpose with the aid of two other concepts, viz. the attitude and subjective norm. Behavioral purpose is defined as the strength of purpose of an person to act in a peculiar manner. Attitude is what he perceives to be possible effects of his behavior and how he values those sensed effects. Subjective norm, on the other manus, is the sensed outlook of others every bit far as his behavior is concerned and how far he intends to follow with those outlooks. Harmonizing to this theory, the behavioral purpose of a individual is the amount of his attitude towards that behavior and subjective norm weighted in different proportions depending on the individual and the circumstance. In other words, the behavior of a individual can be predicted by his attitude towards that particular behavior and what he thinks of other people ‘s reactions if he behaves in that manner. Therefore attitude plays an of import function in finding how a individual will finally act.

Intuitively talking, any manifestation of behavior is a direct result of the attitude of the individual towards that behavior. If a individual thinks making something is incorrect and still returns to make it, it creates cognitive disagreement. The individual tries to come out of this phase either by altering his actions or altering his beliefs. So the attitude towards unethical behavior should hold a positive relation with the leaning to act unethically. However, the relation may be weaker in India than in USA because in a less developed state with limited resources and greater competition, people might be tempted to indulge in an activity they consider is unethical in order to foster their additions. Therefore, the consequence of cognitive disagreement is expected to be less pronounced for a individual in a developing state than in a developed state, but it is still expected to be at that place. Hence we hypothesize that

H2: Attitude towards unethical behavior is positively related to leaning for unethical behavior.

Love of money and attitude towards unethical behavior

Love of money and attitude towards unethical behaviors have non been tested much in the existing literature. Most of the research is concerned with the relationship of either of these variables with the leaning to act unethically. Hong Meng Wong ( 2007 ) tested the money profile of Malayan Evangelical Christians and tried to map them to their ethical attitudes. Consequently, they were classified as successful money winner, careful money director and money apathetic persons. The research indicated that the three different groups had important differences in their attitude towards unethical behavior. The first group was more likely to see actions as ethical compared to others.

Compared to the relationship between love of money and leaning for unethical behavior, it is much more hard to speculate the relationship between love of money and attitude towards unethical behavior. It is true that a individual with a higher love of money is expected to hold a different ethical attitude i.e. if he perceives a peculiar action to be ethical or non. A individual with a higher love of money is more likely to prosecute in unethical behavior and to get away the cognitive disagreement, he is more likely to warrant the same as ethical behavior. On the other manus, a individual with lower love of money is likely to hold a stronger ethical codification. Viewed in another manner, love of money will alter a individual ‘s attitude towards unethical behavior and will take him to prosecute in unethical behavior. Hence, we hypothesize that

H3: Love of money is positively related to attitude towards unethical behavior.

Gender and Love of Money, Attitude towards Unethical Behaviour and Propensity to Behave Unethically

Surveies have indicated that males and females have a different attitude towards what constitutes unethical behavior. A big portion of that can be explained by the gender socialisation theory. Socialization is the procedure by which a individual tends to instill his/ her norms, imposts and political orientations. Gender socialisation theory suggests that work forces and adult females tend to larn different sorts of values and norms in maintaining with their defined function in the society. There have been three different theories proposed to explicate gender socialisation. Sigmund Freud ‘s psychoanalytic theory suggests that gender differences come into being every bit shortly as kids observe their genitalias. Social larning theory utilizations positive reinforcement work forces and adult females receive when they exhibit their expected behavior to explicate the gender socialisation. Cognitive development theory proposes that work forces and adult females try to move otherwise harmonizing to their stereotypes in order to better understand the universe around them and distinguish themselves from each other.

The occupational socialisation theory, on the other manus, suggests that people in the same business tend to act in a peculiar common manner in order to better adapt to the demands of their occupations. Therefore for the intent of this research, the gender and occupational socialisation theories carry contrasting anticipations about the impact of gender on concepts like love of money, attitude towards unethical behavior and the leaning to act unethically. While harmonizing to the former, gender should hold an impact, the latter suggests that since the respondents all belong to the same business ( concern school pupils in India ) , occupational socialisation should predominate and the function of gender should be nullified.

Mason and Mudrack ( 1996 ) tried to turn to this duality by analyzing the value and ethical systems in full and portion clip employees, both male and female. The gender socialisation theory suggests that there is gender difference in moralss variables irrespective of the employment position. The occupational socialisation hypothesizes gender similarity on the same variables. The survey showed some interesting findings. While there was no important gender differences in portion clip employees, the ethical differences between work forces and adult females was important for full clip employees and adult females were found to be more ethical in nature. . This led the writers to reason that the segregation of males and females within the work force has led to the development of different ethical attitudes in the two groups and males by and large are more unethical compared to females. . The same line of idea leads us to reason that males will hold more love of money compared to females. Surveies have besides indicated that males are more goaded by public presentation and competition than emotions and empathy as compared to females ( Chen and Tang, 2006 ) . More love of money in males can explicate this phenomenon. Hence we hypothesize that

H4: There is a positive correlativity between gender ( male ) and love of money

H5: There is a positive correlativity between gender ( male ) and attitude to unethical behavior

H6: There is positive correlativity between gender ( male ) and the leaning to act unethically

On the footing of the above treatments, the following theoretical account has been suggested:

Love of Money

Attitude towards Unethical Behaviour

Leaning for Unethical Behaviour

Gender

Some of the immaterial variables that could hold impacted the consequences were the sort of instruction and the age of the respondents. Both these effects have been eliminated by curtailing the sample to respondents from concern schools. Another variable that was studied in the American context was the income of the respondents since most concern schools pupils at that place have portion clip occupation and are self-sufficient. Even after this, there was no important relationship observed between income and the other variables. Since concern schools pupils in India do non normally have any beginning of income, this factor has non been taken into consideration.

Research Methodology

Sample

The sample selected for this study consisted of merely concern schools pupils in India. Accordingly, an online questionnaire was floated and the nexus was sent to selected respondents in concern schools all over the state. In the concluding analysis, 270 responses were collected of which merely 262 have been considered. Care was taken to do the study wholly anon. in nature since it has been observed that people are by and large non really forthcoming while speaking about their ethical penchants in public. ( Chen and Teng, 2006 )

Measures

All the concepts have been measured by utilizing a five point Likert Scale. For mensurating the love of money, the abridged love of money graduated table was used ( Chen and Tang, 2007 ) . It is a 9-item-3-factor Likert graduated table. The measuring and functional equality of this graduated table have been widely established and cited in many different surveies across assorted states and linguistic communications. Unethical behavior has been measured by utilizing a 15-item-5-factor graduated table ( Cheng and Tang, 2006 ) . This graduated table besides has good dependability, face cogency, content cogency and measurement invariability informations. The graduated table has been used to mensurate both the attitude towards unethical behavior and leaning to act unethically. While mensurating the former, the respondents have been asked to rate the peculiar points on a graduated table of really unethical to really ethical. In instance of the latter, the respondents have been asked how likely they will prosecute in the behavior as mentioned in these points. To cut down priming effects, the measuring of leaning to act unethically has been done before the attitude towards unethical behavior ( Chen and Tang, 2007 ) .

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