Love of money - Attitude towards unethical behaviour

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BRM Research Proposal

Love of money, Attitude towards Unethical Behaviour and how they lead to the Propensity for Unethical Behaviour

SUBMITTED TO- DR D.ISRAEL

PREPARED by-

GROUP 7-BM-B

ALOK SRIVASTAVA B09068

SAKYABRATA DUTTA B09108

SAYAN MAJUMDER B09110

SANDEEP SOMISETTY B09123

Introduction

In this research that we propose to undergo, we are looking to investigate the indirect relationship between the love of money, attitude towards unethical behaviour and propensity to engage in unethical behaviour (PUB) among post graduate management students in India. We plan to test a theoretical model to ascertain the causal link between these variables. Attitude towards unethical behaviour may serve as a mediator of the relationship between the love of money and the PUB helping us better understand the complex relation. However, it is not yet known if love of money causes attitude towards unethical behaviour or it is the other way round. More specifically, in this study, we explore the indirect relationship

(The Love of Money Attitude towards unethical behaviour Unethical Behaviour ) and the moderating variables being the gender of the respondents. After ethics training, female students change and improve ethical behaviour, but male students do not (Ritter, 2006). On the basis of these suggestions, we attempt to examine the possible differences between male and female students using the same model. PUB has been measured using a 15-item Unethical Behaviour measure with five Factors: Abuse Resources, Not Whistle Blowing, Theft, Corruption, and Deception.

We develop our theory from a small set of research ideas presented below-

It is well known that management education is not only a highly commercialised business (more than other forms of education claims Economist, 2004).these days but is a high stakes affair considering that many of the top CEOs of the world are products of business schools. In a ranking done in 'Why Do MBAs Make Better CEOs?' by Herminia Ibarra, Morten T. Hansen, and Urs Peyer, CEOs with an MBA ranked on average a full 40 places higher than those without. Indeed, half of the top 10 went to B-school (although, admittedly, one of them dropped out before getting an MBA). Due to increasing list of scandals and other corruptions( Enron, Arthur Anderson LLP, Tyco, Satyam and Bernie Madoff) the lack of business ethics and standards is a well discussed topic, especially in the media.

The Satyam scandal raises serious questions about the MBA culture and business management education. It is significant that the controversial independent director on the board of Satyam Computer Services, N. Mohan Rao, was the dean of the high profile Indian School of Business in Hyderabad. "Business schools are also blamed for the current world financial crisis. The schools value leaders'charisma over substance and uncritically embrace free market and profiteering" (Business Week)

Many students enter business schools due to their love of money (Cunningham et al., 2004; Tang et al., 2006, 2007) and maintain these values over time (Staw, Bell, Clausen, 1986). Years later, business students become business managers and executives. " The disgraced  chairman of Satyam, Ramalingam raju, too has an MBA from Ohio and has done a course in the Harvard Business School. How is it that people with such elite education are involved in such unethical conduct? One reason is that management education has little concern with ethics. The Harvard Business School, the most prestigious of them all, is itself now under intensive scrutiny (What they Teach You at Harvard-My Two Years in the Cauldron of Capitalism, Philip Broughton) 

It is important to instil a value of ethics and trust at the b-school level which will help realise you can stick to ethics even while pursuing your love of money. When greed takes over you will notice that the first casualty are your ethics and integrity

Researchers over the years have tried to identify the causes of these unethical behaviours and scandals. According to some researchers, one of the real root causes of this ethics crisis is ''the bottom-line-mentality'' (Sims, 1992, p. 508) or ''maximizing shareholder value'' (Kochan, 2002, p. 139). Profit-based mechanisms create pressure (to maximize profits) and opportunity (to earn perverse bonuses) and may have some serious flaws.

Recent research supports the notion that ''the love of money is a root of all kinds of evil'' (http://www.biblegateway.com, 1 Timothy, 6:10, New International Version), but money (income) is not (Tang and Chiu, 2003; Tang et al., 2007; Vitell et al., 2006).

''People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil'' (the Bible: 1 Timothy, 6: 9-10).

There is a dearth of empirical research concerning the love of money and evil because many lay people and researchers may consider this issue as a taboo, a religious/ controversial issue, not a scientific/academic issue, and to be excessively value-laden, thereby, may have shown great reluctance to study this taboo(e.g., Vardi and Weitz, 2004; Vardi and Wiener,1996).Thereby, the construct of unethical behaviour is an under-represented area of research in the management field and deserves further attention. Hence we take up the research, assert that the love of money is positively related to the propensity to engage in unethical behaviour (PUB).

Literature Review

Love of money, ethical attitude and propensity to engage in unethical behaviour has been widely discussed in a lot of journals and scholarly articles. For the purpose of this research, we found the following articles particularly interesting and important:

  • 'Attitude towards and Propensity to Engage in Unethical Behaviour: Measurement Invariance across Major among University Students' by Yuh-Jia Chen and Thomas Li Ping-Tang
  • This particular study attempted to establish a relationship between the respondents' attitude towards unethical behaviour and their propensity to behave unethically. The respondents were from two separate categories - business school students and students of psychology. The test was conducted in two separate time periods- one immediately and the other after a time lag of four weeks. The scale used was a 15 item scale where, on every item the respondents were asked if they thought a particular behaviour was unethical and if they had engaged in it. Gender was taken as a moderating variable. The test showed that a student's orientation towards unethical behaviour could predict his/her propensity to engage in unethical behaviour immediately after but not after the time lag. It also showed that male students were more likely to behave unethically than female students.

  • 'Intelligence Vs Wisdom: The Love of Money, Machiavellianism, and Unethical Behaviour Across College Major and Gender' by Thomas Li Ping-Tang and Yuh-Jia Chen
  • This study attempts to study the relationship between love of money and unethical behaviour using Machiavellianism as a mediating variable and business major and gender as the moderating variables. The measurement of love of money was done in Time 1 and that of unethical behaviour was done at both Time1 and Time 2. The time period was used to introduce a course on business ethics to the students of business school but not to the students of psychology. The results indicated a change in the propensity for unethical behaviour among business schools vis-a-vis the students of psychology. The results also showed that Machiavellianism was a mediator in case of business school and male students only.

  • 'The Meaning of Money revisited' by Thomas Li-Ping Tang
  • The objective of this study was to find a scale for the measurement of attitude towards money. The money ethics scale was generated as a result which captured six factors like "money as related to different needs, positive or negative attitude towards money, the management or control of money and obsession and power". A 30 item scale was developed as a result and this was used to test the relationship between attitude towards money and the demographic variables of the respondents. 

  • 'Income and Quality of Life: Does the love of money make a difference' by Thomas Li-Ping Tang
  • Using love of money along with gender, marital status and job satisfaction as control variables, the relationship between the income levels and the quality of life was examined. The research showed a few very interesting results. However, the one relevant to this research is the one wherein when love of money was negatively related to job satisfaction, income was negatively related to the quality of life. This shows that love of money acts as an important variable in moderating the relationship between income and quality of life. Other similar studies establish love of money as an important variable impacting consumer behaviour, subjective well being and pay satisfaction.

  • 'Deterring White Collar Crime' by John. M. Ivancevich, Thomas N. Duening and Jacqueline N. Gilbert and Robert Konopaske
  • The paper attempts to probe the reasons behind the wave of corporate scams and scandals that hit the United States in the late 90s and early 2000s and suggested remedies for tackling the same. But more importantly for our research, this paper attempts to define what a white collar crime is. It may be mentioned here that unethical behaviour for the purpose of this project is meant only in the corporate context. The study of unethical behaviour in organization as studied in this paper gives valuable insights into the subject and the background behind the construction of the scale measuring propensity to behave unethically.

  • 'Income, Money Ethic, Pay Satisfaction, Commitment and Unethical Behaviour: Is the Love of Money the Root of Evil for the HongKong Employees' by Thomas Li-Ping Tang and Randy K. Chiu
  • This paper attempted to validate the age old hypothesis 'money is the root of all evil' among 211 full-time employees in Hongkong, China. The studies indicated that love of money has a more direct relationship between unethical behaviour than money or the level of income itself. The paper hypothesizes that income levels affect the love of money, which then affects pay satisfaction and organizational commitment (the two mediator variables) and hence unethical behaviour (evil). While constructing the scale measuring unethical behaviour, the authors identified 'abuse position', 'abuse resources', 'abuse power' and 'take no action' as the four factors and 15 items were captured in that particular scale. This scale was the first such scale and laid the groundwork for more refined scale measuring unethical behaviour. The love for money scale constructed in this study was also a departure from the existing MES scale. The factors used in this study were the money as a motivational tool, as a representation of success, its importance and the desire to be rich. The two scales constructed during this study were immensely valuable for this research.

  • 'The Love of Money, Satisfaction, and the Protestant Work Ethic: Money Profiles Among University Professors in the U.S.A. and Spain' by Robert Luna-Arocas and Thomas Li-Ping Tang
  • This study conducted among University Professors in USA and Spain attempts to relate money profile with work-related attitudes and satisfaction. The money profile comprises factors like success, budget, equity and evil of the love of money scale. On the basis of the these factors, the individuals are then classified into different categories like achieving money worshippers, careless money admirers, apathetic money managers and money repellent individuals, and their characteristics are observed. The study once again uses the love of money scale discussed earlier and establishes a relationship between the money profile and income, work ethic and satisfaction.

  • 'Religiousness, Love of Money, and Ethical Attitudes of Malaysian Evengelical Christians in Business' by Hong Meng Wong
  • This study examines the relationship between business ethics and religiousness with 'love of money' as the mediating variable. This is one study where the relationship between love of money and ethical attitude has been studied, albeit among a different set of respondents. The study suggested that even if religiousness be kept constant, ethical attitude strongly varies with change in love of money.

Thus a review of the existing literature indicates that a lot of research has been done in measuring love of money, attitude towards behaving unethically and establishing their relationship with the propensity to behave unethically. There is also a study that establishes the relationship between love of money and ethical attitude. However, since the study was done for very different kinds of respondents than the one this study attempts to capture (Malaysian evangelical Christians as opposed to Indian business school students), one cannot be confident about its applicability here. Also none of these studies have been conducted in an Indian context. The high degree of difference in the love of money, attitude towards unethical behaviour and propensity to behave unethically between India and the more developed countries calls for some interesting deviations to be observed here. Thus this study tries to address the two main gaps in the existing literature - establishing relationship between love of money and ethical attitude among MBA students and testing the entire model in India.

Theoretical Bases for the Derivation of the Hypothesis

The different hypotheses that this project attempts to capture as well as the theoretical bases are described below:

  • H1: Love of money and attitude towards unethical behaviour are positively related to each other
  • Both these variables are attitudes- one towards money and other towards what the person thinks is ethical/unethical. As such, it is difficult to predict which one is the predictor variable and which one is the mediating variable. However, there is a high degree of chance that the two variables will be related to each other the person who has a higher love of money is likely to rate less number of actions as unethical and vice versa. The existing literature also supports such hypothesis [Hong Meng Wong, 2008].

  • H2: Love of money is positively related to the propensity to behave unethically
  • This hypothesis has already been validated for the business school students in USA. In India, the relationship is expected to be even stronger as in a poorer country, the love of money might be one major reason why anyone would want to indulge in unethical behaviour.

  • H3: Attitude towards unethical behaviour is positively related to propensity to behave unethically
  • Any manifestation of behaviour is a direct outcome of the attitude of the person towards that behaviour. If a person thinks doing something is wrong and still proceeds to do it, it creates cognitive dissonance. The person tries to come out of this stage either by changing his actions or changing his beliefs. So the attitude towards unethical behaviour should have a positive relation with the propensity to behave unethically. However, the relation may be weaker in India than in USA because in a less developed country with limited resources and greater competition, people might be tempted to indulge in an activity they consider is unethical in order to further their gains. The effect of cognitive dissonance is expected to be less pronounced for a person in a developing country than in a developed country.

  • H4: There is a positive correlation between gender (male) and love of money
  • H5: There is a positive correlation between gender (male) and attitude to unethical behaviour
  • H6: There is positive correlation between gender (male) and the propensity to behave unethically
  • Studies have indicated that males and females have a different attitude towards what constitutes unethical behaviour. There were two conflicting theories about the ethical orientation in males and females. The gender socialization theory suggests that there is gender difference in ethics variables regardless of the employment status. The occupational socialization hypothesizes gender similarity on the same variables. The two theories were tested by E. Sharon Mason and Peter E. Mudrack in the paper 'Gender and Ethical Orientation: A Test of Gender and Occupational Socialization Theories' and the results were different for unemployed and employed respondents. This led the authors to argue that the segregation of males and females within the work force has led to the development of different ethical attitudes in the two groups and males generally are more unethical compared to females. The same line of thought leads us to argue that males will have more love of money compared to females. Studies have also indicated that males are more driven by performance and competition than emotions and empathy as compared to females. More love of money in males can explain this phenomenon.

On the basis of this, the following model is suggested:

Some of the extraneous variables that could have impacted the results were the kind of education and the age of the respondents. Both these effects have been eliminated by restricting the sample to respondents from business schools. Another variable that was studied in the American context was the income of the respondents since most business schools students there have part time job and are self-sustaining. Even after this, there was no significant relationship observed between income and the other variables. Since business schools students in India do not usually have any source of income, this factor has not been taken into consideration.

Operationalization of Variables

Love of Money

Considerable research has gone into the construction of a love of money scale. The Money Ethics Scale developed by Thomas Li Ping is still considered one of the most reliable and valid ones. It is based on six factors which are if the respondent thinks money is good, if he thinks money is the source of evil, if money symbolizes achievement, if it represents self-esteem, if he budgets it carefully and if money gives him the freedom. It is a 30 items scale and it is a Likert scale with seven options. In subsequent researches, the scale has been shortened to a nine item one with three sub-constructs- "I want to be rich (affective), money is motivator (behavioural) and money is important (cognitive)"and measured on a five point Likert scale. The items are mentioned below:

Rich

  • Having a lot of money is good
  • It would be nice to be rich
  • I want to be rich

Motivator

  • I am motivated to work hard for my money
  • Money reinforces me to work harder
  • I am highly motivated by money

Importance

  • Money is important
  • Money is valuable
  • Money is good

Unethical Behaviour

Unethical behaviour has variously been defined by different authors. Some of the constructs used to define unethical behaviour include theft, cyberloafing, workplace deviance, counterproductive behaviour, corruption and organizational misbehaviour. Each of these constructs may include many other sub-constructs. Organizational misbehaviour, for example, contains at least 23 different ones like "arson, blackmail, bribery, bullying, cheating, discrimination, dishonesty, espionage, fraud, incivility, intimidation, kickbacks, lying, misinformation, privacy violation, revenge, sabotage, sexual harassment, substance abuse, thefts, threats, whistle blowing and withholding information". However, for the purpose of this study, only those variables that are related to the financial scandals are influenced by love of money are taken into consideration. Tang and Chiu developed a 15-item-4-factor scale for measuring unethical behaviour. The four items that were considered were Abuse Resources, Theft, Corruption and Not Whistle Blowing. Later, another factor was added to the scale in the form of deception and the scale was expanded to a 32 items one. Chen and Tang, however, shortened this scale to a 15-item-4-factor one for their research and this has been used for the purpose of this project. The scale is described below:

Factor Resource Abuse

  • Use office supplies (paper and pen), Xerox machine and stamps for personal purposes
  • Make personal long distance calls at work
  • Waste company time surfing on the internet, playing computer games and socializing

Factor not whistle blowing

  • Take no action against shop lifting by customers
  • Take no action against employees who steal cash/merchandise
  • Take no action against the fraudulent charges made by one's company

Factor Theft

  • Borrow Rs. 100 from cash register overnight without asking
  • Take merchandise and/or cash home
  • Give merchandise away to personal friends

Factor Corruption

  • Abuse the company expense accounts and falsify accounting records
  • Receive gifts, money and power due to one's position and power
  • Lay off 500 employees to save the company money and increase one's personal bonus

Factor Deception

  • Overcharge customers to increase sales and to earn higher bonus
  • Give customers discount first and secretively charge more money later
  • Make more money by deliberately not letting clients not know about their benefits

Objectives/ Research questions proposed:

The basic objective of the research is to determine the effect of love of money and ethical attitude of a B School student on the propensity for unethical behaviour. The gender of the person is the moderating variable.

Moreover, the research study would also help in establishing the following:

  • The effect of gender on propensity for unethical behaviour.
  • The relationship between love of money and ethical attitude.

Research Design:

The Information collected through the questionnaire will be analysed through various analytical and statistical tools. The proposed hypotheses will be tested from the data collected.

Data Collection Procedure:

The questionnaire will be sent to the respondents through emails. Only the online medium will be used.

Choice of Respondents:

The respondents will be B-School students across India.

Likely Implications

The results of the research can provide insights into the minds of a B-school graduate. It will help in testing the validation of claims like 'high salaries are the main motive for getting into B-Schools' and 'unethical attitude leads to managers committing frauds and scandals in large corporations.' The study can also be helpful in understanding if there is a need for change in B Schools' selection procedure so as to reduce the cases of corruptions at corporate level which has taken a new shape in India after the Satyam scandal. The research can help in bringing out a course on ethics which can check the unethical attitude.

Limitations and Future Scope of Research

Limitations

The research won't consider samples from all the B schools and hence the sample may not be very representative. The research measures only the propensity for unethical behaviour and not the actual unethical behaviour. The research will not cut through various disciplines of management and hence cannot be generalised on that basis. Another limitation is that the respondents may give socially acceptable responses considering the issue to be sensitive.

Future Research:

There is a huge scope for further research. Research can be done on the root cause for propensity of unethical behaviour: Are the B schools weakening the moral character of the students and laying more emphasis on qualitative education on ethics? Researchers need to look into the kind of courses that can bring about proper business ethics among the students. Researchers need to also look whether ethics training starts in the family, school or elsewhere.

References

  • Yuh-Jia Chen and Thomas Li Ping-Tang, 2006, 'Attitude towards and Propensity to Engage in Unethical Behaviour: Measurement Invariance across Major among University Students', Journal of Business Ethics
  • Thomas Li Ping-Tang and Yuh-Jia Chen, 2007, 'Intelligence Vs Wisdom: The Love of Money, Machiavellianism, and Unethical Behaviour Across College Major and Gender', Journal of Business Ethics
  • Thomas Li Ping-Tang, 1992, 'the Meaning of Money Revisited', Journal of Organizational Behaviour
  • Thomas Li-Ping Tang, 2007, 'Income and Quality of Life: Does the love of money make a difference', Journal of Business Ethics
  • John. M. Ivancevich, Thomas N. Duening and Jacqueline N. Gilbert and Robert Konopaske, 2003, 'Deterring White Collar Crime', Academy of Management Executive
  • Thomas Li-Ping Tang and Randy K. Chiu, 2003, 'Income, Money Ethic, Pay Satisfaction, Commitment and Unethical Behaviour: Is the Love of Money the Root of Evil for the HongKong Employees', Journal of Buiness Ethics
  • Robert Luna-Arocas and Thomas Li-Ping Tang, 2004, 'The Love of Money, Satisfaction, and the Protestant Work Ethic: Money Profiles Among University Professors in the U.S.A. and Spain', Journal of Business Ethics
  • Hong Meng Wong, 2007, 'Religiousness, Love of Money, and Ethical Attitudes of Malaysian Evengelical Christians in Business', Journal of Business Ethics
  • E. Sharon Mason and Peter.E.Mudrack, 'Gender of Ethical Orientation: A Test of Gender and Occupational Socialization Theories', Journal of Business Ethics
  • Thomas Li Ping Tang, J.K.Kim and D.S.H. Tang, 2000 'Does Attitude towards Money moderate the relationship between Intrinsic Job Satisfaction and Voluntary Turnover?', Human Relations
  • Thomas Li Ping tang, T.L.N Tang, B.Y. Homaifar, 2006, 'Income, the Love of Money, Pay Compariosn and Pay Satisfaction: Race and Gender as Moderators', Journal of Managerial Psychology
  • S.P Deshpance, 1997, 'Manager's perception of proper ethical conduct, the Effect of Age, Sex and Level of Education', Journal of Business Ethics 

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