Factors Influencing the Extent of the Ethical Codes: Evidence from Slovakia

Abstract

Even though formalization of ethical principles is a must in today’s business, research and evidence in the Slovak conditions remain scarce. Yet, creating an ethical business climate and especially the formalization of ethics through codes of ethics incorporated in corporate standards is a particularly interesting phenomenon in the conditions of transit economies due to the significant role of multinationals in this process. Therefore, the purpose of this study was to examine main factors influencing the extent of ethical codes in 225 subsidiaries of multinational companies operating in Slovakia. The conducted questionnaire study containing items focused on area and extent of ethical code, number of employees, economic performance, regional and industrial scope, ownership structure, and nationality of executive director was used as a tool for data collection. Factor analysis was processed to identify the interdependencies between observed variables and to find the latent variables. Further, the Kruskal–Wallis test was applied to identify the differences among the variables along with the Bonferroni correction test, which specified the items between which the significant difference occurred. The following findings emerged. First, companies with lower extent of ethical code use general phrases. When they want to specialize on any ethics problems, extent must be wider. Second, companies with a lower number of employees do not need extensive ethical code due to clear rules with which they are familiar in a direct way by owners. In multinational companies, the communication of ethical rules is realized via ethical codes with specific purposes because the direct way is impossible. Third, companies with foreign ownership used different managerial approaches, and therefore ethical codes differ in extent and content.

Exploring the intellectual structure of research in codes of ethics: A bibliometric analysis

“…Currently, research trends in this domain are aimed at gaining a better understanding of the effectiveness of codes of ethics (De Waegeneer et al., 2017; Kozáková et al., 2021). Researchers are mainly concerned with identifying which factors facilitate the implementation of codes and what their effects are (Erwin, 2011; Kaptein, 2011).…”

Ethics Codes Use in Turkish Supply Chains: Drivers, Company Performance and Sustainability

“…Employing ethical codes through the business is costly too (Pärli and Vögtli, 2020). New trends, methods and understandings may provide both opportunities and risks for companies (Kozáková et al, 2021). In fact, ethics and ethical considerations can help to reduce risk and improve the outcome (Kooskora and Meel, 2003) through right implemented ethical codes.…”

“…Ethical codes may be different in different settings. Kozáková et al (2021) examine the extent of ethical codes in 225 subsidiaries of multinational companies in Slovakia and identify that (1) companies with lower extent of ethical code use general phrases (2) companies with a lower number of employees do not need extensive ethical code due to clear rules set by owners; since the direct way is not possible for multinational companies, they realize the communication of ethical rules via ethical codes with specific purposes; and (3) companies with foreign ownership use different managerial approaches.…”

The effect of business ethics and governance score on tax avoidance: a European perspective

“…Ethics is currently an essential part of business success (Arjoon, 2005; Grigoropoulos, 2021), especially when taking into account the issues of trust encountered after recent financial scandals. Hence, in recent years, in Europe, Australia and the USA, there has been a sharp increase in the number of companies having chosen to adopt a code of ethical conduct (Adam and Rachman-Moore, 2004; Stevens et al , 2005; Kozáková et al , 2021).…”