Review of the Literature

A. Ethics and the Ethical Behavior

Various definitions of ethics can be found in the literature. Taylor [31] defined ethics as the enquiry into the nature and background of morality whereby morality refers to judgments, standards, and rules of conduct. Similarly, Sherwin [32] viewed ethics as the set of moral principles/values that guide behavior. According to Kinicki and Williams [33], ethics is the values of what is right and what is wrong that can induce people's behavior. These values could be the same, and they may vary among countries and cultures. It relates with the fundamental human relationship, which is concerned about what is right and what is wrong [34–36]. In sum, ethics is the standard of right and wrong, which is used to determine which behaviors are ethical and which are not. Due to the different standards across cultures and countries, this standard plays the role in influencing individual's behavior.

Similarly, various definitions of ethical behavior have been put forth. Steiner [37] defined ethical behavior as “fair conduct and just above and beyond constitutional laws, which conforms to government regulations.” Ethical behavior also can be described as individual behavior, which is shown to be objectively and morally correct [38] and legally and morally acceptable to the larger community [39] or can be accepted as right according to the ethical standards [33]. Hence, ethical behavior can be surmised as an individual's behavior that can be accepted morally and conform to the laws and regulations of either organization or community.

B. Determinants of Ethical Behavior

Playing the functional role in the organization, ethical behavior is positively associated with financial performance and employee attitudes [5], which is intrinsically valuable for the organization and those individuals who work within it. Similarly, highly ethical behavior can build relationships and reduce transaction costs between parties [40]. This is because managers form the link between the organization and its employees, shareholders, suppliers, and customers. Hence, ethical behavior should be fostered and encouraged [2].

Numerous predictors of ethical behavior have been revealed by past researchers. These predictors can be grouped into two main categories, namely, organizationally related factors and personally related factors. Both categories of factors have been widely reported to correlate with ethical behavior [9, 41–43]. Among the organizationally related variables that have been examined are referent group [44, 45], ethical climate [46–48], behavior of others [49, 50], managerial influence [51], rewards and sanctions [52, 53], method of compensation [12, 15], control system

[15], codes of conduct or codes of ethics [44, 52, 54–56], organizational effects [44,57], organization size [58, 59], organizational level [44, 55, 60], industry type [44, 61], and business competitiveness [52, 62]. Personally related variables have also received much attention as determinants of ethical behavior. These variables are those factors which involve individual's personal attributes, for example, religion [63, 64], age [6, 15, 58], ethical and legal perception [12], nationality [65, 66],tenure [6], sex and gender [6, 57, 64, 67], education and employment background[55, 58], Machiavellianism [13, 68], and locus of control [13, 52, 63, 69, 70].

Given that both organizationally related factors and personally related factors are equally important in predicting ethical behaviors, this paper aims to review the relevant literatures and subsequently propose a conceptual model linking two organizational elements (in the form of superior influence and peer influence) and one specific personal element (in the form of locus of control) and ethical behavior.

 
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