Journal of Human Values

http://jhv.sagepub.com

Determinants of Unethical Business Behaviour among Owner Managers

Sunday Samson Babalola
Journal of Human Values 2009; 15; 61
DOI: 10.1177/097168580901500105
The online version of this article can be found at:
http://jhv.sagepub.com/cgi/content/abstract/15/1/61
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Determinants of Unethical Business

Behaviour among OwnerManagers
SUNDAY SAMSON BABALOLA

Several studies have identified entrepreneurship as a key factor in wealth creations in addition to
associating certain personality characteristics to its growth. The question is to what extent have these wealth
creations performed ethically. The present study is set to explore the cognitive orientation (locus of control,
risk taking ability and impression management) and demographic (age and gender) factors that are
associated with unethical business. Two hundred and fifty-six ownermanagers in the age range of 24 to 68
years participated in the survey study. Male participants accounted for 63.3 per cent, while female
participants were 36.7 per cent. The results indicate that risk taking and gender factors were consistently
and statistically significant predictors of unethical business across the three groups in this study. The group
situation appears to have effect on the individual contribution to unethical business. Implications are drawn
from the results, and priorities are established for future research.

(Birch 1979; Light and

Rosenstein
1995;
Introduction
Reynolds and White
Several empirical studies have stressed the1997). These studies
others
have
important role of free-enterprise economic system and
concentrated
on
the
through entrepreneurs (Drucker 1985; Light and
Rosenstein 1995; Reynolds 1997; Schumpeterfactors that facilitate
1934), just as the contribution of small firms to new per-formance. Despite
there
are
employment opportunities has received significant these,
arguments that there is
attention
limited literature on the
at the
Department of
Psychology,
Faculty of the
Social
Sunday Samson Babalola is a
Sciences,
Senior Lecturer of
Industrial/Organizational Psychology University of
Ibadan, Ibadan,

determinants of job
creation by the selfemployed
(Barkham
1994; Caroll et al.
1996; Cowling et al.
1997; Westhead and
Cowling 1995) with
relatively

Nigeria. E-mail: HUMAN VALUES 15:1 (2009): 6175

ss.babalola@m SAGE Publications Los
ail.ui.edu.ng

Angeles/London/New
Delhi/Singapore/Washington DC

JOURNAL OF

DOI:
10.1177/097168580901500105

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University on September
28, 2009

62 SUNDAY SAMSON BABALOLA

busines
towards
s setting
custome
and
rs,
little larger
workers,
atte
commu
competi
ntion
nity.
In
ng firms
to
busines
and
rese
arch s,
govern
on unethica
ment
busi l
(Estola
ness
behavio
2004).
use
Therefor
such ur
e, it is
as contradi
unet cts the
not wise
hical expecte
for
an
busi d
entrepre
ness
busines
neur to
,
s
in
a
make
whic
civilized
revenue
h
can society.
s
by
be Busines
cheating
dysf ss
on the
uncti demons
govern
onal
tration
ment
for
of
irand the
entr
custome
epre responsi
neur ble,
r
as
ial immatur
either of
grow e,
these
th.
unethica
may
Un
l
create
ethica
behavio
sanction
l
ur
s
busin
among
against
ess is
entrepre
whoever
defin
neurs
breaks
ed as
can
the laws
an
manifest
or
act
in four
negotiat
that is
different
ed
illegal
ways as
contract
or
reflecte
s. This
moral
d
by
advice
ly
entrepre
is
unacc
neurs
tenable
eptab
duties
where
le
and
strict
within
attitude:
rules
the

and up
re- incident
gulati s, lie to
ons and
gover deceive
ning custome
busin rs
ess (Hefter
trans 1986;
action Jones
s are1997;
imple Werner
ment et
al.
ed. 1989).
Strict These
imple types of
ment unethica
ation l
of
behavio
rules ur cost
and industry
respe billions
ct for(Jones
custo 1997;
mers Zemke
are 1986)
probl and
ems damage
in
the
most images
de- of
velopi corporat
ng
ions
count (Mahar
ries. 1992).
Studi This
es
study is
have therefor
show e
n thatfocusing
busin on
ess explorin
indivi g
the
duals factors
cut that
corne influenc
rs one
qualit unethica
y,
l
cover busines

s
among
owner
manage
rs
in
Nigeria.
It
is
expecte
d
that
the
present
study,
being
an
explorat
ory
study in
Nigeria,
will spur
expansi
on
or
compari
son in
future
researc
h
and
also
contribu
te new
empirica
l
analysis
of
individual
data
(person
ality
factors)
in
the
predictio
n
of
unethica
l
busines
s.

Lit

nature
erat
and
ure
ground
Revi
s
of
ew
morality
,

Ethic includin
s
g moral
deal
judgem
s
with ents,
the standar
disti ds and
nctio rules of
n
betw conduct
een (Taylor
what 1975).
is
Similarl
right y,
and
wron Jones
g. It(1991)
is
defines
conc societal
erne
ethics
d
with as
the consisti
ng

of

JOUR decisio
NAL

ns that
HUMA are
legal or
N
VALU morally
ES
accepta
15:1 ble to
(200
9): the
61 larger
75 community.
To be a
society,
a group
must
accept
certain
fundam
ental
practice
s and
principl
es.
OF

Busines
s, as a
type of
society,
is
possibl
e only
within a
certain
social
context
of
instituti
ons,
agreem
ents,
underst
andings
and
shared
values
(Beu et
al.
2003).
Thus,
the
freedo
m
of
business to
make
profit is
limited
by the
values
of
fairness
, equal
opportu
nity,
honesty
and
truthfulness
(DeGeo
rge
1999).
The
interfac

e
former
betw indicate
een d that
ethic the
s andentrepr
entre eneurial
prenecontext
urshi poses a
p
number
involvof
es
unique
two ethical
relate chald
lenges.
sets Accordi
of
ng
to
issue Bucar
s.
and
The Hisrich
first (2001),
conc Cook
erns (1992)
the and
entre Bhide
preneand
urial Steven
conte son
xt for(1990),
ethic the
s,
financia
while l
and
the operati
seco onal
nd pressur
involves
es
found
the within
ethic most
al
entrepr
conte eneurial
xt forfirms
entre heighte
prenen
the
urshi incentiv
p.
e
to
Findi engage
ngs in
from expedie
the ncy.

The
unique
ethical
challenges
found in
entrepr
eneurial
venture
s,
according to
Morris
et
al.
(2002),
can be
traced
to their
newnes
s and
smallne
ss
compar
ed with
more
establis
hed
busines
ses and
entrepr
eneurial
firms.
Bhide
and
Steven
son
(1990)
also
suggest
that
there is
often
little
penalty
for bad
in
an
entrepr
eneurial
firm,

and e
of
that self, as
good the
canwheels
often of
be society
penal are
ized. grease
They d
by
state forgiven
that ess,
the forgetfu
funda lness
ment and
al
toleranc
reaso e..
n for A
actin numbe
g
r
of
propeethical
decisio
rly
must nbe making
the reindivi search
dual ers
have
s
sens used

self-

interes
t
theorie
s
to
explain
why
individ
uals
behav
e
unethic
ally.
Reinfor
cemen
t
(Trevin
o
1986)
and
social
exchang
e and
neocla
ssical
econo
mics
theorie
s
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2009

Determinants of Unethical Business Behaviour among OwnerManagers 63

behaviour
(Longenecker et
al. 1988). Thus,
(Grover 1993) have been
Al-Khatib et al.
used to demonstrate that
(2004)
suggest
individuals
are
pure
that the individual
egoists. On the other hand,
code of ethics is
Lewicki (1983) stresses the
the
appropriate
model of deception. He
unit of analysis
notes that deception is a
when
studying
product of the perceptions
ethics.

of the costs and benefits of

and
using
deception. Trevino
Youngblood
Importantly, his
model
allows
for
potential(1990) take as the
misperceptions.
Hestarting point the
speculates that peopleentrepreneurs
in
underestimate the costs ofstage
Kohlbergs
using deception because
they justify their own use ofcognitive
deception too readily todevelopment
model
in
dethemselves.

scribing
ethical
Cognitive processes have
dilemma. For the
also been implicated in
ownermanager
increasing
the
in a smaller firm,
entrepreneurs susceptibility
the need to obey
to biases and errors in
authority or to look
reasoning and judgement
for the approval of
under conditions of time
relevant
others
pressure, high level of
may
be
less
uncertainty, strong emotions
relevant.
The
and even fatigue (Baron
normative
1998;
Kahneman
and
structure within a
Lovallo 1994; Palich and
company is likely
Bagby 1995). According to
to be embodied in
Baron (1998), the arising
the
owner
challenge
can
be
manager
and
compounded
by
endirectly relates to
trepreneurs
strong
his
stage
of
commitment to his business
cognitive
moral
ideas, thus increasing his
development.
potential for a self serv-ing
They suggest that
bias.
The
sooner
an
situational
entrepreneur
exhibits
a
moderators
are
tendency towards egoism,
less significant for
the greater the pressure to
entrepreneurs.
engage
in
unethical

Their
model
implies that the
most
influential
factor determining
an
actors
behaviour
when
facing an ethically
sensitive business
issue

will be personal ethics,most

significant
which is moderated byeffects.
psychological
variables. Locus
of
However, in the view ofcontrol
and
Mischel (1977), individualtolerance
of
differences
can
deter-ambiguity
(risk
minate, in a given situation,taking) are some
most especially when theof
the
most
situation is ambiguouslyconsistently
structured so that people areemphasized
uncertain about how tocharacteristics in
categorize it, have tothe psychological
structure it in their own termsarea
(Begley
and
have
no
clear1995; Morris and
expectations about the mostZahra
2000),
likely
option
to
bedespite
the
appropriate in that situation.difficulties
in
The significance of individualidentifying
the
differences will be greatestsalient features of
to the degree that thethe
situation is unstructuredentrepreneurial
and each person expectspersonality
that virtually any response is(Sexton
and
equally likely to be equallyBowman
1983;
appropriate. Further-more,Shaver and Scott
Mischel (1977) stresses that1991). MacDonald
the
role
of
individual(1976)
defined
differences is minimal to thelocus of control as
degree that people arethe
extent
to
exposed
to
powerfulwhich
persons
treatments and conversely,perceive
when the treatments arecontingency
weak, ambiguous or trivial,relationships
individual
differences
inbetween
their
personal variables have theactions and their

outcomes. Locus
of control has
been linked to
ethical beliefs and
perceptions in a
number of studies.
In their studies
using
undergraduate
students
(Jones
and
Kavanaugh
1996;
McCuddy
and Peery 1996;
Terpstra et al.
1991) report that
individuals
classified
as
internals indicate
a
greater
sensitivity in their
responses.
Studies conducted
on
graduate
students
by
Trevino
and
Youngblood
(1990)
shows
similar
findings
while Jones and
Kavanaugh
(1996), in their
studies

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VALUES 15:1
(2009): 6175

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64 SUNDAY SAMSON BABALOLA

g
reliance
on
a
on
person
gradu
al
ate
ethical
stude
standnts,
ard as
obser
oppose
ve a
d to a
nonstandar
signifi
d
cant
derived
differ
from
ence
ones
by
social
locus
milieu
of
(Hegart
contr
y and
ol of
Sim
gradu
1978).
ate
stude Hypot
nt
hesis
subje 1:
cts. There
With will be
regar signifi
cant
d to
relatio
the nship
linka betwe
ge toen
ethic extern
s, anal
intern locus
of
al
contro
locus l and
of
unethi
contr cal
busine
ol
seem ss.
Ther
s
more e also
consi seems
stent to be a
with clear
linkage
a
stron betwee

n
risk
taking
to
ethics,
as
ethical
dilemm
as are
inheren
tly
ambigu
ous and
often
consist
of
comple
x and
contradi
ctory
situatio
ns
in
which
different
element
s
or
cues
suggest
a range
of
possibl
e
outcom
es.
Chell et
al.
(1991)
describ
e
the
risktaker as
someon
e, who
in the
context
of
busines
s

ventu Horvath
re
and
pursu Zucker
es
man
busin (1993)
ess obtain
ideas signific
when ant
the correlati
probaons
bility betwee
of
n risk
succ apprais
eedin al and
g isrisky
low. situatio
Studi ns
es ofacross
high four
scho areas
ol
of risk
and (crimina
colle l, minor
ge rule
stude violatio
nts ns,
show financia
signi- l
and
ficant sports
relati risk)
onshi while
ps
the
betw result of
een Zukerm
risk an and
takin Kuhlma
g andn
the (2000)
devia study
nt
show
(Den that
ovan generali
and zed risk
Jess taking
or
is
1985)related
.
to
Simil scales
arly, for

impulsi
ve
sensati
on
seeking
and
aggress
ion. For
instanc
e,
people
assume
small
busines
s
owners
to
be
high
risktakers
while
the
quantita
tive
review
of
Rauch
and
Frese
(2002)
show
that
high
risk
taking
is
negativ
ely
associated
with
busines
s
succes
s.
Extrapo
lating
from
these

studi 9): 61
es to75
the
curre
nt
study
, it is
hypot
hesized
that:

Hyp
othe
sis
2:
High
risk
taki
ng
indiv
idua
ls
will
scor
e
high
er
on
unet
hical
busi
nes
s
mea
sure
s
than
low
risk
taki
ng
indiv
idua
ls.
JOUR
NAL
OF

HUMA
N

VALU
ES

15:1
(200

Impr
ession
manag
ement
is
the
process
whereb
y
individu
als
seek to
influenc
e
the
perception
of
others
about
their
own
image
(Rosenf
eld et
al.
1995).
The
prime
reason
for this
is that
people
need to
appear
more
altruisti
c and
societyoriente
d than
they
actually
are. For
exampl
e,
giving
the
impress
ion that

one andes
is
1992).
comp In view
etent of the
and fact that
ambit busines
ious s
can environ
lead ment
to
require
benef s
its
integrity
such (Chung
as
and
caree Monroe
r2003),
enha this
ncing study
opporwill
tuniti therefor
es
e
(Way explore
ne the
and relation
Liden ship
1995)betwee
.
n
Also, unethic
indivi al
duals busines
geners and
ally impress
belie ion
ve
manag
they ement.
are
more Hypot
ethic hesis
3:
al
There
comp will be
ared negati
to
ve
their signifi
peers cant
(Ran relatio
nship
dall
betwe
and
en
Fern impre

ssion
mana
geme
nt and
unethi
cal
busine
ss.
Bey
ond
these
psychol
ogical
charact
eristics,
it
is
also
useful
to
conside
r
person
al
charact
eristics,
two of
the
most
salient
being
age
and
gender.
Finding
s here
are
hardly
definitiv
e. With
age,
there is
cursory
evidenc
e
to
suggest
that
subject
s
become

more ical
cons situatio
ervati ns. The
ve incounter
their ethic argume
al
nt
is
attitu that
des younge
as
r
they people
get are
older more
(Rad idealisti
aev c and
1994; see the
Serwi world in
nek more
1992)black
.
and
Henc white
e,
terms.
youn
ger Hypot
peopl hesis
4:
e
Young
woul
er
d
subjec
have ts will
a
contri
more bute
libera positiv
l viewely to
unethi
of
cal
poten
busine
tially ss
uneth

scales
than
older
subjec
ts.
In
the field
of
criminol
ogy,
gender
is one
of the
stronge
st
correlat
es
of
criminal
ity while
the link
betwee
n
gender
and
noncomplia
nce
appear
s
to
extend
to
a
variety
of
forms
of
devianc
e not
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Determinants of Unethical Business Behaviour among OwnerManagers 65

1989; Posner and

Schmidt
1987);
while Bucar and
just crime (Grasmick and
Hisrich
(2001)
Kobayashi 2002b). Gender
report that female
is used in this article to refer
entrepreneurs are
to biological sex. A number
slightly
more
of gender studies on ethics
ethical
than
use students and employees
males.
with mixed results. For
Grasmick et al.
instance, some findings
(1996) use powershow that men are more
control theory to
likely to engage in various
explain that the
unethical practices (Bertz et
greater
al. 1989); male business
compliance
of
students are less ethical on
female is due to
a majority of ethical indices
gender differences
(Ruegger and King 1992),
in
socialization
while Cole and Smith (1996)
experiences,
and Kohut and Corriher
particularly
(1994) findings indicate that
experiences
female business students
concerning
risk
are
less
receptive
to
taking.
In
the
questionable
ethical
ideal-type
responses.
Specifically,
patriarchal family,
Whipple and Swords (1992),
female
children
in a sample of US and UK
are socialized into
students state that female
a
cult
of
subjects are more critical of
domesticity where
unethical issues than male
strict adherence to
subjects. In their study
rules is expected.
among employees, Hollinger
Females
then
and Clark (1983) report that
come to believe
males are almost one and
that dire things will
three-quarters times more
happen
should
likely to report higher than
they transgress. In
average levels of theft
contrast,
male
activity
against
their
children, as part of
employers than are their
the
anticipatory
female co-workers. The
socialization
for
contradictory position shows
the workplace, are
that there are no significant
encouraged
to
gender-based
differences
take risks. And in
between
the
ethical
the process of
frameworks held by men andtaking risks,
women (Barnett and Karson

male
children
come to realize
that dire things
do not happen.
Their
transgressions
typically are not
detected
by
those in authority,
their peers do not
condemn them,
and they develop
self-concepts that
are
consistent
with
rule
violations. Thus,
in
a
purely
patriarchal
system, boys, as
compared
to
girls, will come to
perceive
lower
threats of formal
sanctions,
embarrassment
and shame for
transgressions.

Hypothesis 5:
Male subjects
will
score
higher on UBB
scales
than
female
subjects.

M
e
t
h
o
d
Samplin
g and
Data
Collectio
n

hundred and fortysurvey

The
sampling
frameseven
consisted
of
ownerquestionnaires
managers of small companywere returned, of
with fewer employees andwhich 256 usable
were
registered
businesssurveys
utilized
for
the
premises with OyoState
present
study
Ministry of Commerce and
Industry, Nigeria, Africa. Ayielding approxitotal
of
450
surveymately 56.89 per
questionnaires
werecent return. Table
shows
the
distributed to the randomly1
selected owner managersdemographic
of
the
using the Business Premisesprofile
sample.
Majority
Regis-tration Record. Each
the
of the ownermanagersof
respondents,
63.3
received a copy of the
questionnaire
with
aper cent, were
covering
letter
throughmale. Virtually all
the
research assistants. Threeof
respondents were

under 40 years of
age,
with
the
largest proportions
between the ages
30 and 39 (45.5
per cent) and 24
and 29 (36.4 per
cent). Fifty-six per
cent
of
the
respondents were
married while 63.3
per cent of the
respondents had
received either an
undergraduate or
grad-uate degree.

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66 SUNDAY SAMSON BABALOLA

graph
Education
ic
High school
College: Ordinaryvaria
National Diploma
Table 1
University Degree/
bles
D
eHigher National Diploma
Graduate degreeof
m

sex,

o
g
Instrumage,
r
marit
ents
a
al
p
statu
h
i A selfs and
creport

questi
P
ronnair
oe was
f desig
i
l ned in
ewhich
owner
o
f
mana
Rgers
e
swere
pasked
oto
n
dprovid
ee
nanswe
t
srs that
best
( chara
N
cteriz
=ed
them.
2
5The
6questi
) onnair
e was
divide
Variables
d into
Gender
three;
Male
the
Female
Age first
2429part
3039
asses
40+
sed
Marital status
the
Single
demo
Married

educ
ation,
the
seco
nd
part
dealt
with
perso
nality
factor
s of
risk
takin
g,
impre
ssion
mana
geme
nt
and
locus
of
contr
ol,
while
the
last
part
dealt
with
the
scen
arios
which
meas

ured
the
unet
hical
busin
ess.
Lo
cu
s
of
co
nt
ro
l:
Th
e
17
ite
m
Cr
ai
g
et
al.
(1
98
4)
sc
al
e
w
as
e
m
pl
oy
ed
. It
is
an
ou
tc
o
m
e
eff
ic

acy
me
asu
re,
whi
ch
pro
vid
ed
a
me
asu
re
of
the
sub
ject
s
per
cep
tion
of
the
rela
tion
bet
we
en
eve
nt
and
beh
avi
our.
It
ass
ess
es
bot
h
the
int
ern
al
and
ext
ern
al
dim

en
sio
ns
of
loc
us
of
co
ntr
ol.
Pa
rtic
ipa
nts
rat
ed
the
ir
agr
ee
me
nt
wit
h
ea
ch
sta
te
me
nt
on
a
5poi
nt
sc
ale
.
Cr
on
ba
ch

JOURN
AL OF

HUMA
N

VALUE

15:1
(200
9):
61
75

alpha
for the
presen
t
sampl
e was

0.81.
The
scale
used
five
point,
Likert
type
strong
ly
agree
to
strong
ly
disagr
ee
respon
se
format
.
Impre
ssion
Mana
geme
nt: A
20item
measu
re
develo
ped by
Paulh
us
(1984,
1986)
was
used.
The
report
ed
coeffic
ient

alpha
for
the
impressi
on
mana
geme
nt
scale
range
d
from

0.70
0.75.
The
scale
has
been
exten
sively
teste
d and
we
can
be
fairly
confi
dent
of
their
applic
ability
acros
s
time,
place
and
settin
gs.
Consi
stent
with
value
s
obtai
ned
in the
origin

al
risk
devel taking
opm in
ent busiof
ness
the ventur
scale e.
, theReliabi
Cron lity
bach analys
alph is for
a the
0.74. scale
The was
scale condu
used cted
five by
point inspec
,
ting
Liker itemt
total
type and
stro interngly item
agre correla
e totions
stro analys
ngly is.
disag Item
ree reducti
resp on
onse involv
form ed
at. elimin
Risk ating
takin items
g: Athat
self- with
repor itemt 4-total
item correla
state tions
ment .35
was and
devel interoped item
correla
to
meas tions
ure 0.20

as
sugge
sted
by
Beard
en et
al.
(1993
) and
Nunn
ally
(1978
).
Indivi
dual
items
that
meet
the
above
criteri
a
were
summ
ed to
form
multip
leitem
scale
s. The
items
were
score
d on a
5point
Likerttype
scale
from
strong
ly
agree
to
strong
ly
disagr
ee.

The chose
Cron n and
bach judged
alpha as
for repres
the entativ
of
scale e
was curren
t
0.73. trends
Unet in
hical Nigeri
busi a enness vironm
:
Aent.
short, Inform
two- ation
scen from
ario previo
was us
const studie
ructe s
d and(Calle
used n and
for Ownb
this ey
study 2003;
. TheFullert
scen on et
arios al.
used 1996;
were Muncy
and

Vitell
1992;
Strutt
on et
al.
1997;
Wilke
s
1978)
influe
nced
the
devel
opme
nt of
these
scena
rios.
Each
subje
ct
receiv
ed the
two
unethi
cal
busin
ess
scena
rios
with
the
rating
epub.com at
North West
http://j University on
hv.sag September 28,
2009
from

Downlo
aded

Determinants of Unethical Business Behaviour among OwnerManagers 67

acceptable
reliability
in
exploratory
research
suggested that
the
present
developed
scales
were
internally
consistent.

scales. The first unethical

business
scenario
involved manufacturing of
furniture for a public
school while the second
unethical
business
scenario
involved
production of drugs by a
pharmaceutical industry.
P
To minimize response
r
bias,
each
unethical
o
business
scenario
c
presented different orders
e
of statement items. There
are nine items at the end
d
of
each
scenario.
u
Respondents
indicated
r
the
extent
of
their
e
agreement with each
s
statement by choosing a
response using a fiveA group from the
point scale ranging from
University
of
strongly agree to stronglyIbadan,
Nigeria
disagree.
For
theGraduate
purposes of analysis,Professional
responses were coded soClass (MBA and
that a higher scoreMasters
in
indicated
highManagerial
acceptance
of
thePsychology
unethical
business(MMP))
were
described in the scenario.presented
with
Similar criterion used forunethical business
testing
the
reliabilityscenarios to read
analysis of risk takingand comment on
was used for unethicaltheir realisms and
business measures. Thethe severity of the
following Cronbach alphaunethical
of unethical businessbehaviour
were obtained 0.88described in each
for (Scenario1), 0.88scenario.
The
for (Scenario2) and group
also
0.93
for
(Combinedsupplied
scenarios).
Applyingsuggested
Nunnallys (1978) cri-referents
and
terion of 0.70 for

outcomes for each

scenario.
The
comments
provided by this
group were used
to make some
adjustments to the
scenarios.
The
study was pilot

tested with a complete (Finn 1974; Finn

questionnaire administered and
Mattsson
to 70 ownermanagers. All 1978; Lutz and
the ownermanagers that Eckert
1994).
participated in the pre- Specifically,
testing agreed that each of stepwise
the scenarios used in this regression
study had high realism. analysis
was
Participants both at the pilot used. For the
and main study were not independent
of
informed of the aims of the variable
study
until
they
had gender in the
a
completed
the analysis,
dummy variable
questionnaires.

was created. The

Statistical dependent
Analysis variable is the
composite scores
the
Cronbachs
alphafrom
scenarios
coefficients were computed
to test reliability (internalmeasures.
consistency) of all the
measures used in this
R
study. Correlation analyses
e
were computed. To test
s
predictive relationships of
u
psychological (locus of
lt
control, risk taking and
s
impression management)
and demographic (gender
and age) variables withMeans, standard
and
participants response todeviations
correlations
unethical
business,
a
all
multivariate
multipleamong
are
regression was performedmeasures

reported in Table
2. Risk taking
showed negative
significant
relationship
between age and
the
dependent
measures
of
unethical
business
while
locus of control
was
only
significantly
related to the risk
taking,
impression
management and
unethical
business
under
Scenario two. On
the other hand,
there
was
no
significant
relationship
between
impression
and
the
dependent
measures.

Downloaded from
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JOURNAL OF
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VALUES
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(2009):
6175

September 28, 2009

68 SUNDAY SAMSON BABALOLA

Table 2
Descriptive Data, Correlations Matrix and Reliabilities (Cronbachs Alphas in Brackets) of Variables of Study

Mean
Gender
Age
Scenario 1
Scenario 2
Combined
Impression
Locus
Risk

1.63
33.63
2.92
2.66
2.79
2.89
3.32
2.69

SD

.48
9.04
.95
.89
.86
.61
.58
.95

.13*
.16**
.22**
.20**
.11*
.05
.00

.15*
(.88)
.01
.74**
.09
.94**
.10
.13*
.09
.22**
.25**
.49**

(.88)
.93**
.01
.16**
.36**

(.93)
.08
(.74)
.20**
.54** (.81)
.46**
.28** .26** (.73)

Note: * p < 0.05, ** p < 0.01.

explained
by
differences
in
risk
Furniture Manufacturing Scenario 1
taking ( = 37),
The third model in the stepwise regression analysis gender factors ( = .
impression
has an F statistic 41.24 and is significant at the p 23),
management
( =
0.000 level. The R-square is 0.329 and the adjusted
.21)
and
locus
of
R-square is 0.321. The regression results indicated
control
(
=
.16)
(see
that 32.9 per cent of the variation in subjects
unethical business response scores for the Furniture Table 3). Thus, high
Manufacturing Scenario could be explained byrisk takers, low impression management
differences in risk taking ( .56), age ( .27), and
individuals, internally
gender ( .12) (see Table 3). Hence, high risk
controlled and male
takers, older individuals and male subjects
respondents are likely
contributed significantly to the prediction of unethical
to engage in unethical
business. The factors of locus of control and
business. The factor of
impression management were not found to be
age was not found to
significantly associated with subjects unethical
be
significantly
business scores for the Furniture Manufacturing
associated
with
Scenario 1.
subjects
unethical
business scores for
Pharmaceutical Industry Scenario 2 the
Pharmaceutical
Industry Scenario 2.
The fourth model in the stepwise regression analysis
has an F statistic 16.51 and is significant at the p
0.000 level. The R-square is 0.208 and the adjusted
R-square is 0.196. The results in-dicated that 20.8 per
cent of the variation in subjects unethical business
response scores for the Pharmaceutical Industry
Scenario could be

Combin
ed
Scenari
os

The third model in the

stepwise
regression

analysis has an F
statistic 32.68 and is
significant at the p
0.000 level. The Rsquare is 0.280 and the
adjusted R-square is
0.272.
The
results
indicated that 28 per cent
of
the
variation
in
subjects
ethical
response scores for the
combined two scenarios
could be explained by
differences in risk taking
( .50), age ( .19)
and gender ( .17)
(see Table 3). The
regression
result
indicated individuals that
are high in risk taking;
old, and males had
significant
positive
relationship
towards
unethical business. The
factors of locus of control
and
impression
management were not
found to be significantly
associated with subjects
unethical
business
scores for the Combined
Scenarios.

JOURNAL OF HUMAN

VALUES 15:1 (2009): 6175

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Determinants of Unethical Business Behaviour among OwnerManagers 69

Table 3
Stepwise Regression Analysis Results Under Unethical Business

Scenario 1

Scenario 2

Variables
.56

Risk taking
Age
Gender
Impression management
Locus of control

Note: p 0.05;

p 0.01;

.27

.12

.37

.23

.21

F (3, 252) 41.24

R2 0.329
Adj. R2 0.321

p 0.001;

.16
F (4, 251) 16.51
R2 0.208
Adj. R2 0.196

Combined
.50

.19

.17

F (3, 252) 32.68

R2 0.280
Adj. R2 0.272

p 0.000.

unethical
business
could
portend
a
danger
Discussion
signal
to
business
The main objective of this study was to investi-gate success as its detection
factors that predict unethical business. The fitness could lead to negative
coefficients (R2) were not so high for the threeassociated
models (.208.329), but the statistical sig-nificance consequence for the
enterprise.
was high (p 0.000). The findings of the three business
Possibly, this is why
groups in this study showed different pre-dictor
variables contributed to each of the group criterion. studies have shown
relationship
This reflects in findings of earlier studies using this negative
between
high
risk
method (Callen and Ownbey 2003; Smith et al.
taking
and
business
1999). Furthermore, the findings also showed the
importance of individual differences in the success (Rauch and
determinant of a given situation. As Mischel (1977), Frese 2002). There is
expressed individual differences will be minimal to possibility that owner
the degree that the situation is weak or trivial as managers have greater
can be found between Scenario 1 and Scenario 2. tendency to engage in
business
The analysis of the two unethical businessunethical
because
most
often
scenarios and the combined scenarios revealed
there
is
little
or
no
positive significant contribution of risk taking and
penalty
for
bad
in
gender to unethical business. First, the result of high
entrepreneurial
firm
risk taking was in line with studies such as Denovan
and Jessor (1985) that found significant relationships (Bhide and Stevenson
between risk taking and the deviant. Positive1990) most especially
in developing nations,
significant relationship of risk taking to
as
monitoring
and
implementation of rules
are fraught with lapses

here and there. There is

there-fore a need to
include the situational
variables
in
further
research of this nature
so as to eliminate doubt
on
why
owner
managers
express
positive
tendency
towards
unethical
business.
Male
participants
were found to score
higher on unethical
business than their
female
counterparts.
This
finding
is
consistent with some
previous studies that
males were likely to
engage in un-ethical
behaviour (Bertz et al.
1989; Ruegger and
King
1992)
while
females
were
less
receptive
to
questionable
ethical
responses (Cole and
Smith 1996; Kohut and

Corriher 1994) and critical of unethical issues

(Whipple and Swords 1992).

JOURNAL OF

HUMAN VALUES
15:1 (2009):
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70 SUNDAY SAMSON BABALOLA

that is
inheren
t in our
It
environ
howe
ment.
ver
Explan
contr
ation of
adict
socializ
ed
ation
the
experie
studi
nces
es of
given
Barn
by
ett
Grasmi
and
ck et al.
Kars
(1996)
on
seems
(1989
appropr
) and
iate as
Posn
the
er
reason
and
for the
Schm
findings
idt
of this
(1987
nature
)
conside
findin
ring the
gs.
cultural
Thus,
environ
male
ment in
predi
Nigeria
sposi
where
tion
the
towar
researc
ds
h took
the
place. It
uneth
should
ical
be
could
noted
be a
that
reflec
Nigeria
tion
is
of
among
male
cultural
chau
settings
vinis
that are
m
high in

power
distanc
e.
Step
wise
regressi
on
analysis
showed
the positive
significa
nt
contribu
tion of
age on
two of
the
three
groups
under
study.
The
findings
contradi
cted the
findings
of
Serwine
ck
(1992)
and
Radaev
(1994),
which
stated
that
older
individu
als
become
more
conserv
ative in
their
ethical
attitudes

. Thisssion
result manag
porte ement
nds aand
great locus of
conce control
rn assignific
one antly
expec contribu
ts
ted to
that unethic
good al
exam busines
ple s
in
will Scenari
flow o
1
from while
top age
down factor
ward. did not.
The Possibl
result y,
the
might nature
also of the
be abusines
point s
er toinvolve
the d could
rising have
declin been
e inrespons
social ible for
value this.
s andAlthoug
integr h prior
ity instudies
Nigeri (Jones
a.
and

Th Kavana
e
ugh
result 1996;
of theMcCud
analy dy and
sis Peery
also 1996;
show Terpest
ed ra et al.
that 1991)
impre support

ed
external
locus of
control
on the
unethic
al
dilemm
a, this
was
less
clearcut
in
this
study. It
was
only in
one
group
that
there
was
support
.
Though
, prior
studies
used
student
s
(underg
raduate
and
graduat
e), the
current
study
used
the real
practitio
ner in
the field
(owner

manag
er). The
stepwis
e
regressi

on as it is
analy well
sis known
revea
led JOURNAL
an OF
HUMAN
inver
VALUES
se
15:1
relati (2009):
onshi 6175
p
betw
een
uneth
ical
busin
ess
and
impre
ssion
mana
geme
nt
revea
led
amon
g
owne
r
mana
gers.
This
show
ed
the
inclin
ation
of the
owne
r
mang
ers to
want
to toe
the
acce
ptabl
e
ways,

that the
busines
s
environ
ment
require
s
integrity
(Chung
and
Monroe
2003).
Thus,
confirmi
ng
Rosenf
eld et
al.
(1995)
descript
ion of
impress
ion
manag
ement
has a
tendenc
y to be
societyoriente
d than
one
actually
is.
Howev
er, the
inverse
relation
-ship
finding
contradi
cted
Lewisck
is
(1983)
proposition
that
that

peopl to
unethic
e
engage
al
in
underin the
busine
estim unethic
ss.
ate al.
Risk
the
taking
cost
and
Concl
of
gender
usion
using
were
dece The
found
ption.
to be
focus
The
signific
of this
findin
ant
study
g
contrib
was to
seem
utors to
investig
s to
unate the
show
ethical
psychol
that
busine
ogical
the
ss
and
partic
respon
demogr
ipant
se for
aphic
s
each
variabl
must
scenari
es that
have
o and
predict
subd
the
owner
ued
combin
manag
their
ed
ers
ego
scenari
evaluat
beca
os. The
ion of
use,
informa
unethic
as
tion
al
Long
provide
busine
enec
d
by
ss
ker et
this
scenari
al.
study
os.
(1988
should
Risk
)
be
taking,
noted
useful
age
, the
for
and
tende
policy
gender
ncy
makers
factors
towar
and for
were
ds
various
found
egois
ethicall
to be
m
y
contrib
leads
oriente
utory
to
d
factors
press
organiz
to the
ures

ation
n
s. It
d
is
also
D
usef
i
ul to
r
educ
e
ators
c
who
t
desig
i
n
o
cour
n
ses
s
with
for
the
Fu
inten
tur
tion
e
of
Re
raisin
se
g
arc
busin
h
ess
ethic
As an
al
awar explorat
enes ory
study in
s.
evaluati
ng
L
ifactors
that
m
have
it
ainfluenc
e
on
ti
unethic
o
al
n
busines
ss, this
astudy

might
have
some
weakne
sses.
First,
the
study is
not
rooted
in
broadbased
theory.
As
a
result,
the
findings
herein
should
be
viewed
as
a
demons
tration
of
a
relation
ship
rather
than as
confirm
ation of
a
generali
zed
theory.
Also
worthy

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Determinants of Unethical Business Behaviour among OwnerManagers 71

manager informed
family
the business owner
background.
that
the
wood
These and some
of note is the disparity in thebought in

number of male and female

managers from this study;
this can not be divulged from
the cultural and religious
diversity in existence in
Nigeria. As a cross-sectional
study, causal interpretations
of these findings should be
made with caution. Although
we cannot be certain about
the direction of these
relationships,
there
are
reasons to believe that the
causal chain runs from
personality traits to the use
of
unethical
business.
Because personality traits
are both global and stable
over time, it is likely that they
underlie un-ethical dilemma
and not vice versa.
Many other variables that
were not addressed in this
study may influence owner
managers
unethical
business, such as situational
variables,
self-esteem,
importance of religious faith
and

Appen
dix
Unethical
Business:
Scenario 1
A
furniture
manufacturing
company got a contract to make
chairs and tables for the public
secondary school in the local
government council. The factory

other
vari-ables
should
be
examined in future
research.
Nonetheless, the
study
demonstrates
a
significant
relationship that is
grounded in data
and in itself, may
contribute
to
building
the
theoretical
foundation
this
line of research
needs
(Sass
2000) (Table A1).
The
use
of
scenarios
also
imposes
certain
limitations on the
results. Scenarios
can only examine
hypothetical
situations, but this
is
the
recommended
method
for
researching
ethical dilemmas
because
it
reduces socially
desirable
responding (Brief
et al. 1996). This
study being an
exploratory one in
Nigeria can be
expanded
or
comparisons
made in future
research by using
different means to

measure observed ownersupplied.

managers or replicated inresponse
complaint
other settings.

In
to
the
of the
factory manager, the
business owner said
that
what
was
for the work is of inferior quality
supplied was what
and will not be enough to make
he ordered for and it
the quantity of the furniture to be
should be used for

the work. He also

said that the factory
manager should not
bother himself much
as few quantities will
be supplied as the
necessary officials
concerned will be
settled.

Table A1
Scenario 1

S/N
Unethical business: Scenario 1
1 The ownermanager can manipulate situation to achieve his purpose.
2 The ownermanager is smart.
3 I wont blame the manager; I blame the situation of the country.
4 The contract from the government is an opportunity for the owner-manager to
grasp his own share of the national cake.
5 I would feel indifferent to the managers action.
6 I will not be happy with the manager because he used inappropriate wood.
7 It is not bad for the owner-manager to tell a lie to achieve his goal.
8 The ownermanagers action deserves condemnation.
9 The ownermanager should not be bound by any oath of office in a difficult
country like this.

JOURNAL OF HUMAN
VALUES 15:1
(2009): 6175

North West
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September 28, 2009

72 SUNDAY SAMSON BABALOLA

cal
compan
y
sold
U the
n previous
e week
had
t been
h returned
i as not
c good for
consum
a ption
l (Table
B A2).
u What
s this
means is
i that
n continuo
e us sales
this
s of
product
s will be
: difficult
S because
c itbeen has
e tagged
n fake
a product.
the
ri Dele,
manufac
o turer
2 thought
about
Dele
got a
call
that
the
consi
gnme
nt of
the
parac
etamo
l
produ
cts his
pharm
aceuti

the
paymen
t of the
loan he
obtaine
d from
the
bank
for
produci
ng this
product
and told
his
manag
er that
the
brand
name
has to
change
and repacked
for the
market
again
so as to
meet
up with
the loan
repaym
ent. His
manag
er then
asked,
could
the
proble
m
we
are
experie
ncing
now be
due to
one of
the
adulter
ated
chemic
als that
were

used ction?
in theKeep
produquiet,

Dele
said.

4
I think
I can endure
the capital lost in the process of starting a business.
Unethical7business:
Scenario
2
Table
A2 8can manipulate things/ situation to achieve his purpose.
1
Dele
Scenario
2is smart.
2
Dele 9
3
I wont
blame
Dele; I blame the situation of the country.
Risk
taking
4
I would
feel
indifferent
to Deles actions.
1
The situation
is an opportunity
for Dele to make money.
S/N5
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