Relationship between love of money and unethical behaviour Essay Example
Relationship between love of money and unethical behaviour Essay Example

Relationship between love of money and unethical behaviour Essay Example

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  • Pages: 15 (3902 words)
  • Published: August 25, 2017
  • Type: Research Paper
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The purpose of this study is to explore the correlation between love of money, attitude towards unethical behavior, and inclination to engage in unethical behavior (PUB) among Indian station alumnus direction pupils. Our aim is to develop a theoretical model that establishes a cause-and-effect relationship between these variables. We will investigate the role of attitude towards unethical behavior as a mediator in the connection between love of money and PUB. The objective is to enhance our understanding of this intricate association. Currently, it is uncertain whether love of money influences attitude towards unethical behavior or vice versa. This research specifically examines the indirect relationship (The Love of Money ? Attitude towards unethical behavior ? Unethical Behaviour), with gender acting as a moderating factor.

According to Ritter (2006), there is a noticeable improvement in ethical b


ehavior among female pupils, while male pupils do not show the same progress. With this observation in mind, our aim is to compare potential differences between male and female students using the same model. To assess unethical behavior, we utilize a 15-item measure called PUB, which consists of five factors: Abuse Resources, Not Whistle Blowing, Theft, Corruption, and Deception.

The basis for our theory stems from a limited number of research ideas. The business education field is widely recognized as being highly commercialized compared to other forms of education (Economist, 2004). Additionally, it is considered high-stakes due to the fact that many prominent CEOs worldwide have graduated from business schools. In a study titled "Why Do MBAs Make Better CEOs?" conducted by Herminia Ibarra, Morten T. Hansen, and Urs Peyer, it was discovered that CEOs with an MBA achieved an average score 4

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points higher than those without.

Indeed, five out of the top 10 individuals attended business school (although one of them dropped out before completing an MBA). Due to the growing number of scandals and unethical practices (such as Enron, Arthur Anderson LLP, Tyco, Satyam, and Bernie Madoff), the lack of business ethics and standards is a widely discussed topic, especially in the media. The Satyam scandal raises significant concerns about the MBA culture and business management education. It is worth noting that N. Mohan Rao, the controversial independent director on Satyam Computer Services' board, was previously the dean of the prestigious Indian School of Business in Hyderabad. "Business schools are also held responsible for the current global financial crisis."

Business Week reports that schools prioritize the charisma of leaders and emphasize a free market and profiteering. Research conducted by Cunningham et al. (2004), Tang et al. (2006, 2007), and Staw, Bell, and Clausen (1986) indicates that many students select business schools due to their aspiration for wealth and maintain these values throughout their careers. Consequently, these business students eventually ascend to managerial and executive positions.

Even Ramalingam Raju, the disgraced former president of Satyam, possesses an MBA from Ohio along with completing a course at Harvard Business School.

Individuals with excellent education may engage in unethical behavior due to a lack of emphasis on ethics in academic education. Even prestigious institutions like Harvard Business School are currently under scrutiny, as mentioned in "What they Teach You at Harvard-My Two Old years in the Cauldron of Capitalism" by Philip Broughton. It is crucial to incorporate ethical values and trust into business school education to ensure individuals maintain their ethics while

pursuing wealth. Unfortunately, when greed takes control, ethics and integrity often suffer as a result. Throughout the years, researchers have tried to identify the causes of these unethical behaviors and scandals. According to scholars, one main underlying cause is the "bottom-line mentality" (Sims, 1992, p. 508) or the focus on "maximizing shareholder value" (Kochan, 2002, p.

Profit-driven mechanisms generate pressure to maximize profits and opportunities for perverse bonuses, and can have significant flaws. Recent research affirms the notion that "the love of money is a root of all sorts of immorality" (source:, 1 Timothy, 6:10, New International Version), but income (money) is not (Tang and Chiu, 2003; Tang et al., 2007; Vitell et al.).

The Bible states that those who desire wealth often fall into foolish and harmful desires, leading to ruin and destruction (1 Timothy, 6:9-10). This verse highlights the role of the love of money as the root cause for various immoral actions. However, there is a lack of empirical research investigating the link between this love of money and unethical behavior. The controversial nature of this topic has hindered investigations by both laypeople and researchers. Consequently, studying unethical behavior in management research has been overlooked despite its importance. Hence, our study aims to establish a positive relationship between the love of money and the likelihood of engaging in unethical behavior (PUB) (e.g., Vardi and Weitz, 2004; Vardi and Wiener, 1996).


The topic of love of money, ethical attitude, and leaning to act unethically has been extensively discussed in various research journals.

Love of Money

According to the Bible, money is considered the root of all evil. The concept of love of

money encompasses one's emotional, behavioral, and cognitive attitudes towards money. It includes the meaning one attributes to money and their desire, value, expectation or ambition related to it. Love of money does not refer to one's need, greed or materialism but rather serves as a multi-dimensional individual difference variable with several first-order latent sub-constructs. Tang et al. (2007) and Law et al. (1998) proposed this definition based on Thomas Li-Ping Tang's (1992) initial attempt to develop a scale measuring the significance of money.

The concept of money morals encompasses six factors: attitudes, demands, direction, control, compulsion, and power. The love of money scale is a subset of this concept and was initially developed by Tang et al. (2002, 2003) to measure one's desire for money. This scale evaluates motivations, success, importance, and richness in relation to money. It measures how motivated someone is by money, the extent to which they view it as a symbol of success, the significance they attribute to money in their lives, and their longing for more wealth. Tang et al. (2007) later utilized a condensed version of this scale that solely focused on the sub-constructs of richness, motivation, and importance.

The money ethics scale and the love of money scale are unique graduated scales utilized in this research. These scales have been tested and validated in multiple studies conducted on different continents (Tang et al, 2007). Prior to the 1980s, there was limited testing on the significance of money in relation to other variables (Furnhaf, 1984). However, recent studies have concentrated on comprehending how the love of money interacts with various variables. An important subject extensively explored in recent literature is the

correlation between money and unethical behavior.

In a study conducted by Tang (2007), the relationship between income levels and quality of life was investigated. The study took into consideration several control variables including love of money, gender, marital status, and job satisfaction. The findings were intriguing as they demonstrated a negative correlation between love of money and job satisfaction, as well as income and quality of life. These outcomes indicate that love of money plays a crucial role in mediating the connection between income and quality of life.

Furthermore, other studies carried out by Tang et al. (2000, 2006, 2007) along with Hong Meng Wong (2008) have also examined the impact of love of money on consumer behavior, subjective well-being, salary satisfaction, wage satisfaction, commitment, work ethic, dedication across different geographic areas and professions.

The study of ethics and unethical behavior is wide-ranging, encompassing extensive research in this field. Ethics entails the principles individuals employ to differentiate between right and wrong, which differ among individuals. Philosophy has thoroughly explored ethics from ancient philosophers such as Socrates and Aristotle to its contemporary post-modern manifestation. The result reveals that the concept of money greatly influences all these ideas.

The perception of behavior as morally wrong based on personal ethical standards leads to an individual considering it unethical. The attitude towards unethical behavior is determined by whether a person deems a specific set of behaviors ethical or not. On the other hand, the likelihood of engaging in unethical behavior depends on how willing an individual is to participate in actions they perceive as unethical. Different authors have defined the components of unethical behaviors in varying ways. This study focuses specifically on unethical

behavior driven by a desire for financial gain within organizations, thus only white collar offenses are considered. When describing white collar offenses, Ivancevich et al. (2003) utilized concepts such as theft, cyber idleness, workplace deviance, counterproductive behavior, corruption, and organizational misconduct.

The text below describes various sub-constructs within different concepts. For example, organizational misbehavior encompasses 23 different sub-constructs such as incendiarism, blackmail, graft, intimidation, cheating, favoritism, dishonesty, espionage, fraud, incivility, bullying, kickbacks, lying, misinformation, privacy misdemeanor, retaliation, sabotage, sexual torment, substance abuse, thefts, threats, whistle blowing and keep backing information. However, this study only considers variables related to financial scandals that are influenced by the love of money. The unethical behavior is defined by five sub-constructs: 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 own personal benefit instead of for the company's. The usage of cyberspace for personal intents is also known as cyber idleness and is becoming an area of great concern in present-day organisations.

Factor Larceny

Larceny is widespread in companies, government offices, schools, colleges, and medical hospitals. Very often, employees take things from office and use them for their own consumption. This has been identified as one of the threats blighting many corporate and other establishments.

The factor larceny refers to the employee's tendency to steal goods, ware, and hard currency from the office without permission. It can include actions such as borrowing hard currency without asking, taking items without authorization, or giving them to friends.

Factor Corruptness

Corruptness is when individuals who have

little or no claim to resources illegally exchange them for their own personal gain. The Transparency International assesses the level of corruption in different countries through its annual corruption perception index. This ranking determines the perceived level of public sector corruption. Countries with high standards of living, like those in the Pacific and Scandinavia, rank highly on the index. However, India has a significantly low rank of 84 and a composite score of 3.4 out of 10.

This text highlights the prevalence of corruption in the Indian system, particularly in the corporate sector. Different forms of corruption include manipulating company accounts, deceiving stakeholders (as seen in the case of Satyam), taking advantage of one's position for personal gain, and manipulating subordinates' interests to increase profits and receive higher bonuses.

Factor Misrepresentation

Misrepresentation or fraud occurs when individuals deliberately provide false information to deceive others. This trend of misrepresentation or fraud is also observed within the corporate sector, reflecting a broader societal issue. It is not uncommon to encounter salespeople or agents who make false promises to secure more deals, while company advertisements often excessively exaggerate product qualities with the objective of attracting customers.

In addition, clients often face overcharging, hidden charges, and undisclosed benefits, which ultimately prevents them from taking advantage of these benefits. The existing literature primarily focuses on unethical behavior and lacks a comprehensive exploration of its relationship with other variables. However, recent corporate scandals have prompted some interesting studies on the underlying factors driving unethical behavior. Cohen et al. (1996) and McCarthy (1997) conducted research on ethical orientation among Canadian students and accounting students respectively. Mackewn et al. (2008) identified reasoning skills and philosophical outlook as

factors influencing the ethical judgment of students at a US university. Douglas et al. (2001) investigated the influence of organizational culture and ethical orientation on accountants' ethical judgments and discovered a significant relationship.

According to Allmon et al. (2000), age and religious orientation have a significant impact on ethical orientation. Tang et al. (2007) discovered that the love of money affects unethical behavior, with Machiavellianism playing a mediating role. Additionally, Tang et al. (2006) investigated the connection between attitudes towards unethical behavior and willingness to engage in such actions among US business school students, concluding that the former leads to the latter. The measurement scale for unethical behavior in organizations was initially developed by Tang and Chiu (2003). It consists of a 15-item-4-factor scale covering Abuse Resources, Theft, Corruption, and Not Whistle Blowing.

Later, the graduated scale was expanded to a 32 points one with the addition of misrepresentation (Luna-Arocas and Tang, 2004). However, Chen and Tang (2006) shortened this scale to a 15-item-4-factor one for their paper and it has been used for this research as well.

Formulation of Hypothesis

Love of Money and Propensity to Behave Unethically

The relationship between love of money and unethical behavior has been studied in various journals. Tang and Chen (2007) examined this relationship with Machiavellianism as the mediator variable, while considering college major (business and psychology) and gender as moderator variables.

The findings revealed that the relationship holds true for the entire sample, as well as for male pupils, but not for female pupils. It also holds true for concerned pupils, but not for psychology students. Furthermore, it holds true for male concerned pupils, but not for female concerned pupils. Other studies by

Hong Meng Wong (2008) on Malaysian Evangelical Christians and Tang and Chiu (2003) on Hong Kong employees also found a significant relationship. In addition to the support in literature, it is intuitively easy to comprehend the connection between the love of money and unethical behavior. Throughout history, money has been recognized as one of the primary motivators behind various forms of unethical behavior.

The more an individual loves money, the more they desire and strive to acquire it. They are more likely to focus on the end goal of obtaining money rather than the means of acquiring it. When a person highly values the ultimate outcome of their actions, they are often willing to disregard the mental discomfort caused by behaving in a way that goes against their personal beliefs. This is why someone with a strong love for money may act contrary to their own ethical principles. Interestingly, this relationship has been observed in countries like the USA and Hong Kong, where people are relatively affluent and money should not be a significant driver for unethical behavior. Therefore, it is expected that this relationship will be even stronger in India, a country with greater poverty, as the love of money is likely the main reason someone would want to behave unethically. Therefore, we hypothesize that there is a connection between attitude towards unethical behavior and propensity to behave unethically.

Attitude towards Unethical Behavior and Propensity to Behave Unethically

The relationship between these two variables can be explained using the theory of reasoned action (Ajzen and Fishbein, 1980).

This theory aims to explain the concept of behavioral intention by using two other concepts: attitude and subjective norm. Behavioral

intention refers to an individual's strong purpose or motivation to act in a certain way. Attitude represents the person's perception of the potential consequences of their behavior and how they value those perceived consequences. On the other hand, subjective norm refers to how the person perceives the expectations of others regarding their behavior and how inclined they are to conform to those expectations. According to this theory, an individual's behavioral intention is determined by combining their attitude towards the behavior and subjective norm, with different weighting depending on the person and the situation.

In essence, an individual's behavior can be predicted based on their attitude towards that specific behavior and their perception of how others will react to it. Therefore, attitude plays a crucial role in determining a person's ultimate actions. Essentially, any outward display of behavior directly stems from an individual's attitude towards that behavior. If someone believes that engaging in a certain action is wrong, yet still proceeds to do it, it creates cognitive dissonance. To resolve this conflict, the individual will either change their behavior or alter their beliefs. Consequently, the attitude towards unethical behavior should be positively correlated with the inclination to behave unethically.

However, the relationship between love of money and attitude towards unethical behavior may be weaker in India compared to the USA. This is because in a less developed state with limited resources and greater competition, individuals may be tempted to engage in unethical activities in order to fulfill their desires. Consequently, the impact of cognitive disagreement is expected to be less pronounced for an individual in a developing state compared to a developed state, although it is still expected

to exist. Therefore, our hypothesis is that love of money and attitude towards unethical behavior are related.

Love of money and attitude towards unethical behavior

There has been limited research conducted on the relationship between love of money and attitude towards unethical behavior in existing literature. Most studies have focused on exploring the connection between either of these variables and the inclination to act unethically. For instance, Hong Meng Wong (2007) examined the money profile of Malaysian Evangelical Christians and attempted to correlate it with their ethical attitudes.

As a result, they were categorized as successful money winners, careful money directors, and money apathetic individuals. The study revealed significant disparities in the attitudes towards unethical behavior among these three distinct groups. The first group displayed a greater tendency to perceive actions as ethical when compared to the others. While it is difficult to determine the relationship between love of money and attitude towards unethical behavior, it can be inferred that individuals with a stronger love for money are likely to possess differing ethical perspectives.

if he perceives a peculiar action to be ethical or not. An individual with a higher love of money is more likely to engage in unethical behavior and to avoid the cognitive dissonance, he is more likely to justify the same as ethical behavior. On the other hand, an individual with lower love of money is likely to have a stronger ethical code. Viewed in another way, love of money will change a person's attitude towards unethical behavior and will lead him to engage in unethical behavior. Hence, we hypothesize that

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

Studies have

indicated that males and females have a different attitude towards what constitutes unethical behavior. A large portion of that can be explained by the gender socialisation theory.

The process of socialization involves an individual teaching their norms, customs, and ideologies. According to the theory of gender socialization, men and women learn different values and norms based on their designated roles in society. Three theories have been proposed to explain gender socialization, including Sigmund Freud's psychoanalytic theory which suggests that gender differences emerge when children observe their genitals.

The concept of gender socialisation is explained differently by various theories. Social learning theory suggests that both men and women receive positive reinforcement when they exhibit their expected behavior. This theory uses positive reinforcement to explain gender socialisation. On the other hand, cognitive development theory proposes that men and women try to act differently according to their stereotypes in order to better understand the world and differentiate themselves from each other. Meanwhile, occupational socialisation theory suggests that individuals in the same profession tend to behave in a specific common manner in order to better adapt to their job requirements. Therefore, for the purpose of this research, the gender and occupational socialisation theories have contrasting expectations regarding the influence of gender on concepts such as love of money, attitude towards unethical behavior, and the tendency to act unethically.

While the former suggests that gender should have an impact, the latter implies that occupational socialization should be more influential due to the fact that the respondents all belong to the same business (concern school pupils in India). In order to address this duality, Mason and Mudrack (1996) examined the ethical and value systems

of both part-time and full-time employees, regardless of their gender. The theory of gender socialization proposes that there are gender differences in ethics variables regardless of employment status, while the theory of occupational socialization suggests that there are gender similarities in these variables. The study revealed interesting results. There were no significant gender differences among part-time employees, however, there were significant ethical differences between men and women among full-time employees. Women were found to be more ethical in nature.

This suggests that the separation of males and females in the workforce has resulted in the formation of distinct ethical attitudes in each group. It is found that males tend to display more unethical behavior compared to females. A similar argument suggests that males have a higher affinity for money compared to females. Studies have also shown that males are more driven by performance and competition rather than emotions and empathy, in comparison to females (Chen and Tang, 2006).

It is believed that increased greed for money in males may explain this occurrence. Therefore, we propose that certain intangible factors, such as education level and age of the respondents, could have influenced the results. However, these variables were taken into account by limiting the sample to individuals from business schools. In addition, the income of the respondents was also examined in the American context, as many business school students tend to have part-time jobs and be financially independent.

Despite this, there was no significant relationship found between income and the other variables. As students in Indian business schools typically do not have any source of income, this factor has not been considered.

Research Methodology


The sample chosen for this study specifically

included students from business schools in India. Consequently, an online questionnaire was distributed and the link was sent to selected respondents in business schools across the country.

In the final analysis, a total of 270 responses were collected, but only 262 were considered. The study was conducted with complete anonymity in order to address the tendency of people to be less forthcoming when discussing their ethical preferences in public (Chen and Teng, 2006).


All the concepts were measured using a five-point Likert Scale.

The abridged love of money graduated scale, which was developed by Chen and Tang in 2007, was utilized to measure the love of money. This scale consists of nine items and three factors and is based on the Likert scale. Numerous studies conducted in various countries and languages have cited and confirmed the reliability and validity of this measurement tool. Likewise, unethical behavior has been assessed using a five-factor graduated scale developed by Cheng and Tang in 2006. This scale comprises 15 items and has demonstrated good reliability, face validity, content validity, and measurement invariability. It has been used to measure both attitudes towards unethical behavior as well as propensity to engage in such actions.

During the measurement process, participants were asked to evaluate specific points on a scale ranging from very unethical to very ethical. In the case of assessing likelihood to engage in certain behaviors, participants were asked to indicate their propensity to engage in those behaviors. To minimize the influence of priming effects, the evaluation of inclination towards unethical behavior was conducted prior to assessing attitudes towards unethical behavior (Chen and Tang, 2007).

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