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Assessing Differences in Ethical and Unethical Employee Behavior Using Ethical Work Climates
In a rare opportunity, the authors gathered data from two matched health care providers managed by an insurance company where auditors had discovered theft by employees in one of the matched organizations. Data were gathered about the organizations' ethical work climates (EWCs). Analysis revealed statistically significant differences in EWCs across the two organizations. As predicted, the organization with the morally preferred EWCs did not have theft. Both macro- and micro-organizational influences are explored to explain these differences, along with implications for practitioners and academic research. This is the first study to suggest that a priori EWCs can be useful in predicting observable behavior.
Keywords: business ethics; ethical behavior; ethical work climates; employee theft; theft by employees; health care providers
Managers and scholars are concerned with determining why employees violate company rules or commit unethical acts, in particular, why employees steal from the company. Why the concern? Past incidents clearly indicate one glaring truth: Stealing is costly for businesses. Employee theft has reached epidemic proportions for businesses throughout the world.1 The European Retail Theft Barometer, a Europewide study of crime in the retail sector, reported that retail crime cost European businesses L29.6 billion in 2001 (Bamfield, 2002). Similar results are reported in the United States. An estimated $52 billion a year is lost due to employee theft, according to John case, author and president of a security management consulting firm. case explained, "An astounding 95% of all businesses experience employee theft" (The Price of Internal Theft, 2000). A study conducted by researchers at the University of Florida reported that employee theft accounted for more than 44% of all retail losses in the United States. The researchers found that the amount of financial loss caused by the typical employee thief is more than $ 1,000 (Retail Loss Prevention and Theft Survey Results, 2001).
Accordingly, the important question, Why do employees steal? is explored. Scholars and managers have considered a number of possible explanations, ranging from the competitive or economic environments to the organizational culture or individual attributes as the cause of theft by employees and other unethical workplace behaviors. Using Victor and Cullen's (1988) work, we examine the organization's ethical work climate (EWC)...