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Our study asked why corporations introduce formal programs to manage ethics and why those programs display varying characteristics. We used control theory to delineate an ethics program's scope and its orientation toward compliance- and valuesbased control. Managerial choice theory suggests that environmental factors and management's ethical commitment will influence these dimensions. Environmental factors were the stronger influences on scope, but management commitment was the stronger determinant of control orientation. Research and policy implications are discussed.
American businesses are investing in formal ethics programs (Berenbeim, 1992; Center for Business Ethics, 1992). A recent survey of large U.S. corporations found that 78 percent of responding companies had codes of ethics, 51 percent had telephone lines for reporting ethical concerns, and 30 percent had offices for dealing with ethics and legal compliance. Nearly two-thirds of those offices were created in the 1990s (Weaver, Trevino & Cochran, in press). Corporate ethics officers now have their own professional association (the Ethics Officer Association) with members representing nearly 300 major corporations. One CEO estimated that his company spends $1 million per year on its ethics and legal compliance programs (Barbakow, 1995).
Our study concerned the factors influencing these formal efforts to manage employees' ethical conduct. In the academic and practitioner literatures, these efforts have often been attributed to governmental pressure (Bureau of National Affairs, 1996; Rafalko, 1994; United States Sentencing Commission, 1995; Wall Street Journal, 1994). But this common focus on governmental pressure suggests a narrow and deterministic view of corporate ethics programs. By contrast, we propose a managerial choice perspective (Child, 1972, 1997) that highlights the active role of management, both in responding to external pressures and in taking positive action on its own. A managerial choice perspective allows for "pro-action as well as re-action" (Child, 1997: 46) and recognizes that managers enjoy " 'bounded' autonomy" (Child, 1997: 53).
We used survey and archival data from Fortune 500 companies to examine how formal ethics programs reflect external pressures and top management's own commitment to ethics. In this article, we first use control theory to identify specific dimensions over which ethics programs may vary. We then apply our choice perspective and propose that both environmental and management factors influence ethics programs' dimensions. We also propose that some dimensions of ethics...