Machiavellianism, Profit, and

the Dimensions of Ethical

Judgment: A Study of Impact Donald H. Schepers

ABSTRACT. Research by Reidenbach and Robin ethical judgment and their various impacts on
(1990) provides a means to study the differential judgment and decision making.
impact of three dimensions of attitude toward ethics: A number of models of ethical decision
moral equity, relativism, and contractualism. It is making (e.g., Dubinsky and Loken, 1989; Ferrell
hypothesized that moral equity will be the most and Gresham, 1985; Hunt and Vitell, 1986;
significant predictor of ethical judgment and intent to
Jones, 1991; Rest, 1986; Trevino, 1986) have
act. It is also hypothesized that Machiavellianism
and profit will affect relativism and contractualism
suggested both individual and situational factors
dimensions, but not moral equity. Additionally, it is that influence the likelihood that an individual
hypothesized that Machiavellianism will interact with will make an ethical decision. Individual factors
profit to affect intent to act. Moral equity was found include personal values, cognitive moral devel-
to be the only predictor of ethical judgment, and opment, and religious upbringing. Situational
moral equity and contractualism were predictors of factors include organizational constraints, signif-
intent to act. Machiavellianism impacted contrac- icant others, and economic issues.
tualism, but not relativism. Corporate profit did not Reidenbach and Robin (1988, 1990) devel-
affect either ethical judgment or intent to act, and did oped a scale measuring three elements of ethical
not interact with Machiavellianism. Implications for judgment: moral equity, relativism, and contrac-
business ethics education and training are discussed. tualism. Further, each element has a different
source. Moral equity is derived from early child-
KEY WORDS: ethical decision-making, ethical
judgment, Machiavellianism
hood experience, relativism from adolescence,
and contractualism, from transaction experiences.
This research examines the differential impact of
Introduction elements of ethical judgment as specified by
Reidenbach and Robin (1990) on overall
In the post-Enron debate over the efficacy of ethical judgment, as well as the impact of
teaching business ethics (see, for example, Machiavellianism and corporate profit on the
Etzioni, 2002), there is much head-scratching different elements of ethical judgment. Further,
and concern over why business ethics education these variables are then examined with respect to
efforts have apparently had so little impact on intent to act.
executive behaviors. As one attempt to investi-
gate this issue, this research looks at elements of
Dimensions of ethical judgment
Donald H. Schepers is Assistant Professor in Management
at Baruch College, City University of New York. His
In the models of ethical decision making, ethical
research interests are in organizational justice, ethical judgment is understood to be predictive of
decision making and socially responsible investing. He ethical intent, using the Fishbein and Ajzen
has published in Organizational Behavior and (1975) theory of reasoned action. Figure 1 illus-
Human Decision Processes and Business and trates the decision model, based on the theory of
Society Review. reasoned action. A problem arises, and the

Journal of Business Ethics 42: 339–352, 2003.

© 2003 Kluwer Academic Publishers. Printed in the Netherlands.
340 Donald H. Schepers

Figure 1. A simplified model of ethical decision making.

decision maker becomes aware of the various the construct are broad-based moral equity,
dimensions of the problem, including the ethical relativism, and contractualism (Reidenbach and
dimensions. After recognizing that an ethical Robin, 1990).
issue is present, the decision maker will make a The moral equity dimension examines basic
judgment on the relative merits of the problem issues of right and wrong: fairness, justice, moral
and the various alternative solutions, and proceed right or wrong, and acceptability to family. This
to develop intent to act in a particular manner. dimension appears to draw on ethics training as
Fishbein and Ajzen (1975) theorized that an it might be received in early years.
individual’s attitude toward each discrete action, The relativistic dimension references the social
along with his/her subjective norms regarding and cultural perceptions of ethics. Such percep-
that action, would dictate an individual’s tions would typically be the product of later
judgment on each option action, and which training, as one becomes more familiar with
specific action, from the array of all perceived tradition and social milieu. These perceptions
actions, an individual chose as the best solution should differ between individuals, insofar as
to a particular problem. In this theory, attitude ethical mores differ between backgrounds. One
is a product of beliefs and values regarding the problem noted by Reidenbach and Robin (1990)
action. Subjective norms are an individual’s is the overlap between this dimension and the
beliefs regarding what others think should be moral equity dimension. Insofar as ethics learned
done. Intent to act is formed by selecting an in the family (a moral equity issue) is also a
action that at least minimally satisfies both product of the ethics of one’s culture and
criteria. Judgment, therefore, appears to be tradition (a relativistic issue), there will be high
informed both by individual attitudes and sub- correlation between these two dimensions.
jective norms. The contractualism dimension examines
Ethical judgment has been shown to be a individual perceptions regarding the tacit under-
multi-dimensional construct. Reidenbach and standings between individuals or between the
Robin (1988, 1990) have developed a three- individual and society. In Reidenbach and
dimensional construct for examining ethical Robin’s understanding, this broadens ethical
judgments (Figure 2). The three dimensions of judgment to include the notion of “exchange
 Machiavellianism, Profit, and Ethical Judgment 341

Faira ————— Unfair

Justa ————— Unjust
Morally righta ————— Morally wrong
Acceptable to my familya ————— Unacceptable to my family
Traditionally acceptableb ————— Traditionally unacceptable
Culturally acceptableb ————— Culturally unacceptable
Violates an unspokenc ————— Does not violate an unspoken promise
Violates an unwriten contract ————— Does not violate an unwritten contract
a
Moral equity dimension
b
Relativism dimension
c
Contractualism dimension, reverse scored.

Figure 2. Ethical judgment scales (Reidenbach and Robin, 1990).

ethics”, those mores that make exchange viable H1: The broad-based moral equity dimension
(e.g., keeping implied as well as written con- will be a stronger predictor of overall
tracts). ethical judgment than either the rela-
Between-subject variability may be present in tivism or contractualism dimensions.
each of the three dimensions. In the moral equity
dimension, for example, what is judged as just or
fair by one individual may be seen as less just or Machiavellianism
less fair by another. A pricing policy that allows
higher prices in ghetto stores may be perceived One individual difference variable that has been
as fair by some (allowing for greater shrinkage), investigated in ethics studies is Machiavellianism
and unfair by others (stereotyping and victim- (Hegarty and Sims, 1978, 1979; Singhapakdi,
izing the poor). Similarly, individuals from dif- 1993). Machiavellianism is the tendency of an
ferent cultures may judge the same event as more individual to detach from considerations of ethics
or less acceptable (the relativism dimension). In and perform actions that profit the self
some cultures, employing twelve-year olds is an (Robinson and Shaver, 1973). It is not lack of
acceptable practice, whereas in other cultures, it ethics per se, but rather the ability to be very
is not acceptable. Finally, individuals from the calculating and use other individuals and situa-
same or different cultures may have differing tions for one’s own benefit. Further, Christie and
understandings of the implicit social contract Geis (1970) theorized that high Machiavellians
underlying business exchange. Some might accept would be more likely to exploit loosely struc-
bluffing in the context of negotiation, while tured elements of situations.
others might find such behavior reprehensible. Machiavellianism may be one individual dif-
It is assumed here that there will be less ference variable that would be correlated with
between-subject variance on the moral equity between-subject variances in specific dimensions
dimension than either the relativism or contrac- of ethical judgment. Specifically, those elements
tualism dimensions. The moral equity dimension of ethical judgment that are more likely to
is grounded in a sense of fairness, justice, and vary between individuals might also be more
right, and there may be stronger social consensus affected by an individual’s propensity towards
around these attributes than what is perceived as Machiavellianism. On the one hand, high
acceptable to tradition or culture (the relativism Machiavellians (high Machs) are not immoral
dimension) or what is tacitly assumed (the con- individuals, and therefore may share the same
tractualism dimension). This assumption leads to sense of right and wrong (the moral equity
the following hypothesis. dimension) with others in society. However, they
342 Donald H. Schepers

are also more attuned to opportunities to exploit exacerbate this tendency for profit to affect either
the given situation for personal benefit, and judgment or intention. This leads to the fol-
therefore may seek variance in the tacit exchange lowing hypotheses:
understanding (the contractualism dimension).
One evidence of this will be lower scores (more H3: High profits will interact with
“ethically acceptable” ratings) on the contrac- Machiavellian tendencies as follows: low
tualism dimension. Machiavellians will have higher percep-
Similarly, Chang and Ding (1995) found tions of ethical problems, regardless of
opportunism to be related to the masculine- profit. High Machiavellians, however, will
feminine dimension of culture (Hofstede, 2001). perceive fewer ethical problems under
Masculine societies were more likely to have conditions of high profits than under
higher levels of opportunistic behaviors than conditions of low profit.
feminine societies. Lower scores on the relativism
dimension may be correlated with higher levels
of Machiavellianism, therefore. This leads to the Intent to act
following hypothesis.
According to the theory of reasoned action
H2a: The broad-based moral equity dimen- (Fishbein and Ajzen, 1975), judgment predicts
sion of ethical judgment will not differ intent to act. Two issues are of interest here. First,
according to an individual’s level of do the dimensions of ethical judgment have a
Machiavellianism. differential impact on intent? Second, does
Machiavellianism or profit affect the relationship
H2b: Scores on the relativism dimension of between judgment and intent?
ethical judgment will be negatively The answer to the first question would appear
correlated with level of Machiavel- to be affirmative. Given that the moral equity
lianism. dimension is contended to be a stronger predictor
of overall ethical judgment, moral equity should
H2c: Scores on the contractualism dimension likewise be a stronger predictor of intent to act.
of ethical judgment will be negatively This leads to the following hypothesis.
correlated with level of Machiavel-
lianism. H4: The broad-based moral equity dimension
will be a stronger predictor of ethical
intent than either the relativism or con-
Profit tractualism dimensions.

Hunt and Vitell (1986) asserted that profit is a Further, an individual’s level of Machiavel-
situational variable that will affect the ethical lianism is predicted to impact the elements of
decision making process by altering intention. ethical judgment differentially. Machiavellianism
That is, an individual may judge an action to be was predicted to correlate negatively with
ethical, and yet act in an unethical fashion due individual levels of relativist or contractualist
to greater profit gained through the unethical dimensions of ethical judgment, but not corre-
action. An alternative explanation might be that late with one’s moral equity dimension of ethical
greater profits alter the judgment process by judgment. Accordingly, it is predicted here that
inducing the decision maker to perceive fewer Machiavellianism will influence intent to act
ethical problems. An inside trader, for example, through either the relativist or contractualist
might commit the act while (a) acknowledging dimensions of ethical judgment, but not the
the wrongness of the act, or, alternatively, (b) moral equity dimension. This leads to the fol-
rationalizing that insider trading is not really all lowing hypotheses.
that evil. Further, high Machs may further
 Machiavellianism, Profit, and Ethical Judgment 343

H5a: The moral equity judgment will not (SD = 3.8). Sixty-seven (99%) listed full-time
mediate the impact of Machiavellianism work experience (M = 4.4 years, SD = 3.0
on intent to act. years). There were 30 males and 38 females (44%
and 56%, respectively).
H5b: The relativism dimension of ethical
judgment will mediate the impact of
Machiavellianism on intent to act as Design
follows: high Machs will be more likely
to judge acts as acceptable on this Each participant was given an in-basket of six
dimension, and intend to act accord- memos. The in-basket technique has been shown
ingly. to be useful in decision-making research
(Dukerich et al., 1990). The initial instruction in
H5c: The contractualism dimension of ethical the in-basket was that they were to play a cor-
judgment will mediate the impact of porate regional franchise manager, C.J. Folger,
Machiavellianism on intent to act as for a fast-food restaurant chain, “Jose’s”. They
follows: high Machs will be more likely had recently returned from a trip, and had a few
to judge acts as acceptable on this minutes to go through these memos prior to a
dimension, and intend to act accord- meeting with the CEO. C.J.’s assistant had edited
ingly. each memo to include action items, so that C.J.’s
orders could be carried out. Four of the memos
Consistent with Hunt and Vitell (1986), high were filler memos, one pertained to a separate
profit should occasion more instances of un- unrelated experiment, and the memo for this
ethical action. Consistent with the reasoning experiment (Appendix A) completed the in-
presented regarding Machiavellianism, this effect basket. The memos were always in the same
should be greater when high Machiavellianism order, this memo being fifth in the stack, two
is present than when low Machiavellianism is memos after the other experimental memo.
present. Low Machs may not be susceptible to Following the in-basket, participants completed
profit due to their inability to detach from moral the Reidenbach and Robin (1990) scale of
judgments, while high Machs will readily detach ethical judgment (Figure 2), as well as an
for economic gain. This leads to the following omnibus measure of ethical judgment. In
hypothesis. addition, participants completed the Mach IV
scale (Christie and Geis, 1970; see Appendix B
H6: High profits will interact with for items and scoring) to measure
Machiavellian tendencies as follows: low Machiavellianism.
Machiavellians will be unlikely to The memo was from the executive vice-
commit unethical acts, regardless of president of marketing, and described the results
profit. High Machiavellians, however, will of a marketing survey indicating that a serving
be more likely to commit unethical acts staff of “young, attractive Hispanics” resulted in
under conditions of high profit than low higher same-store sales and profit. The marketing
profit. vice-president wanted to share these results with
franchise managers, and asked the opinion of the
participant. The options listed were to share the
Method results and encourage action, or ask the vice-
president to wait for further discussion due to
Participants reservations the participant had regarding this
matter. Participants indicated which action they
Sixty-eight full-time MBA students from a wished by circling the appropriate number next
business and society class participated in an in- to the action item. A low profit condition memo
basket exercise. Average age was 28.1 years told participants there was an anticipated 5%
344 Donald H. Schepers

increase in same-store sales, with a 1% increase ipant in the low profit condition did not
in revenue, and a high profit condition memo complete the manipulation check. Mean score
indicated 15% rise in same-store sales and 5% for the low profit condition was 3.97 (SD =
increase in profits. Three subject matter experts 1.69), and mean score for the high profit condi-
were asked to submit low and high sales and tion was 5.09 (SD = 1.20), on a scale of 1
revenue increases for fast-food franchises, and all (normal profit) to 7 (exceptional profit). The
three submitted similar percentage increases in difference between groups was significant [t (66)
same-store sales and revenue independently. = –3.16, p < 0.01], indicating that the partici-
A separator page divided the in-basket memos pants in the high profit condition did perceive a
from the scales. Participants were asked to significantly higher profit in the hiring policy
remember the memo above, and fill out the memo.
Reidenbach and Robin (1990) scale as to how
they personally perceived such a hiring policy.
They were also asked on a separate page to Judgment as dependent variable
indicate an omnibus measure of ethicality of such
a policy. For this item, they were reminded of Participants completed two measures of ethical
the content of the memo and asked to circle the judgment: a single item measure (the omnibus
number most reflective of their opinion, from 1 measure mentioned above) and the Reidenbach
(Highly ethical practice) to 7 (Highly unethical and Robin (1990) scale. The mean for the
practice). omnibus measure of ethics was 4.87 (SD = 1.77),
On a separate classroom occasion, participants on a scale of 1 (highly ethical practice) to 7
also completed the Mach IV scale (Christie & (highly unethical practice), and the median was
Geis, 1970). Split-half reliability for this instru- 5.00. On this scale, participants judged the policy
ment has averaged .79 across multiple samples. to be unethical. The mean was significantly
The items and scoring are in Appendix B. different from the neutral point, 4 [t (67) = 4.04,
p < 0.000].
In order to test the first hypothesis, the three
Results Reidenbach and Robin (1990) dimensions were
computed. The three factors were found using
Pretest of memo options oblimin rotation with Kaiser normalization, but
only after relaxing the eigenvalue requirement.1
A pretest was conducted using an undergraduate The eigenvalue for the third component (the
sample. The results indicated that the choice to relativism dimension) was 0.750. The eigenvalue
give site managers the information was consid- requirement was relaxed in order to test the three
ered unethical. The mean value for releasing the dimensions of ethical judgment as proposed by
hiring policy information to managers was 5.01 Reidenbach and Robin (1990) separately. Total
(SD = 1.41) on a scale from 1 (very ethical) to variance explained by the three factors was
7 (very unethical). The mean was significantly 87.4%. Factor loadings are in Table I. Taken
different from the neutral point [t (29) = 4.36, together, the first four items (moral equity
p < 0.000]. dimension) had a Cronbach’s alpha of 0.94
(N = 67), M = 5.10, SD = 1.77. The next two
items (relativism dimension) had a Pearson cor-
Manipulation check of profit condition relation = 0.66, p < 0.001, (N = 68), M = 4.71,
SD = 1.98. The last two items (contractualism
A manipulation check was given as part of the dimension, reverse scored) had a Pearson corre-
in-basket to insure that participants recognized lation = 0.86, p < 0.001 (N = 68), M = 3.90,
the profit condition. Of the 68 participants, 33 SD = 1.96. Items were averaged together to
(49%) were in the low profit condition and 34 obtain a composite score for each dimension.
(50%) in the high profit condition. One partic- These three dimensions were then correlated
 Machiavellianism, Profit, and Ethical Judgment 345

TABLE I
Factor loadings of ethical judgment dimensions

Item Component

Moral equity Contractualism Relativism

Just 00.919 00.069 00.056

Fair 00.941 00.000 –0.016
Right 00.954 –0.056 –0.069
Acceptable to family 00.856 –0.061 –0.080
Acceptable to culture 00.186 –0.070 00.747
Acceptable to tradition –0.062 –0.012 00.974
Contradicts unspoken promise –0.044 00.951 00.079
Contradicts unwritten contract 00.038 00.977 –0.058
Eigenvalue 04.73 01.51 00.75

with the omnibus ethical judgment item. Results sion, moral equity was the only predictor of
are in Table II. As can be seen, the moral equity overall ethical judgment.
and relativism dimensions correlate significantly To check the assumption that there was more
with the omnibus measure, but the contrac- variance in the sample population for relativism
tualism dimension does not. The correlation of and contractualism dimensions, the coefficient of
these two dimensions is consistent with variation was calculated. This statistic is the
Reidenbach and Robin’s (1990) assertion that the standard deviation divided by the mean, and
four items of the moral equity dimension and the multiplied by 100. The result is a percentage
two items of the relativism dimension would measure of relative dispersion about the mean
overlap. Additionally, the moral equity dimension (Anderson et al., 1993). For the moral equity
has a higher correlation with the omnibus ethics dimension, the coefficient of variation was
measure than either of the other two dimensions, 34.7%, for the relativism dimension, 42.0%, and
partially supporting the first hypothesis. for the contractualism dimension, 50.2%. While
As an additional test of the first hypothesis, the there is no test of significance, it is clear there is
three ethical judgment dimensions were regressed least dispersion about the mean for the moral
onto the overall ethical judgment. Sex, age, and equity dimension, and greatest dispersion about
years of full-time work were entered in a first the mean for the contractualism dimension.
block as control variables. The control block was The Machiavellian score can range from a low
not significant (Table III). In order to provide a of 40 to a high of 160 (Christie and Geis, 1970).
strong test of the power of moral equity as a pre- For this sample, the mean score was 95.41
dictor, relativism and contractualism were entered (SD = 14.99), the median score was 96, the
in the second block, and moral equity entered minimum score was 55, and the maximum score
in the third block. For relativism and contrac- was 130 (N = 68). The Mach scores were cor-
tualism, the r-squared change was significant related with the three ethical judgment dimen-
(F (2,50) = 9.17, p < 0.000). Relativism was a sions (Table II). The Mach score was not
significant predictor of overall ethical judgment. correlated with either the broad-based moral
When moral equity was entered (block 3), the equity or relativism dimension, and negatively
r-squared change was again significant (F (1,49) correlated with the contractualism dimension.
= 20.06, p < 0.000). However, the variance The more Machiavellian an individual was, the
accounted for by relativism was subsumed into less likely he/she was to perceive this hiring
the moral equity dimension. In the full regres- policy as violating either an unwritten contract
 346

TABLE II
Correlation of ethical judgment measures, Machiavellianism, and control variables

Correlations

Mean SD Omnibus Moral Rela- Contrac- Machiavel- Age Sex

ethical equity tivism tualism lianism
judgment

Omnibus ethical judgment 04.87 01.77

Moral equity 05.10 01.77 00.627***
Relativism 04.71 01.98 00.496*** 00.654***
Contractualism 03.90 01.96 00.121 00.326** 00.395**
Donald H. Schepers

Machiavellianism 96.43 15.06 –0.016 –0.151 –0.193 –0.256*

Age 28.09 03.77 00.070 –0.047 –0.043 –0.067 00.172
Sex 00.067 00.067 –0.028 –0.074 –0.227 –0.072
Full-time work 04.26 03.05 00.070 –0.124 –0.054 –0.091 00.195 00.809*** –0.196

* p < 0.05; ** p < 0.01; *** p < 0.001.

 Machiavellianism, Profit, and Ethical Judgment 347

TABLE III Results are listed in Table IV. There was a main
Regression of ethical judgment dimensions on effect for profit on relativism, but not in the
omnibus ethical judgment predicted direction. That is, the group with
lower profit indicated a lower perception of an
Variables Model 1 Model 2 Model 3 ethical problem, while the group with higher
profits perceived the ethical issue as more serious.
Age 00.004 00.000 –0.055
Sex 00.058 00.072 00.023
There was also a main effect for Machiavellianism
Full-time work 00.064 00.093 00.167 on the contractualism dimension. Low
Relativism 00.533*** 00.157 Machiavellians perceived more of an ethical
Contractualism –0.072 –0.124 problem. There were no interaction effects.
Moral equity 00.605*** These findings contradict the prediction that
profit would induce fewer perceptions of ethical
Adjusted R2 –0.041 00.205** 00.411***
∆R2 00.259*** 00.200***
problems, but confirm that Machiavellianism
does influence ethical judgment in the contrac-
** p < 0.01; *** p < 0.000. tualism dimension. The profit motive appears
to affect the relativism dimension of ethical
judgment, but in the opposite direction to that
or promise. This supports hypotheses 2a and 2c, predicted. Higher profits appear to increase sen-
but not hypothesis 2b. sitivity to ethical issues. Machiavellianism appears
In order to examine hypothesis 3, a multi- to affect the contractualism dimension of ethical
variate ANOVA was conducted. The sample was judgment in the predicted direction, but does not
split at the median score on the Machiavellian interact with profit.
dimension, with one case randomly assigned A logistic regression was used to test the three
from the high to low group in order to balance hypotheses concerning ethical intent. Choice
the sample.2 The overall ethical judgment, moral patterns were used as a proxy for ethical intent.
equity, relativism, and contractualism dimensions Age, sex, and full-time work experience were
were entered as dependent variables, and profit entered in the first block as control variables.
(low vs. high) and Machiavellianism (low vs. Machiavellian score and profit condition were
high) were entered as the independent variables. entered in the second block. Should any element

TABLE IV
Multivariate ANOVAa of machiavellianism and profit on ethical judgment dimensions

Judgment Item Condition

Highb Lowb

Dimension Mean SD Mean SD F

Moral equity Machiavellianism 4.79 1.81 5.40 1.71 1.72

Profit 5.25 1.78 4.94 1.78 0.235
Relativism Machiavellianism 4.32 2.10 5.09 1.80 1.59
Profit 5.24 1.89 4.18 1.95 4.05*
Contractualism Machiavellianism 3.34 1.89 4.47 1.89 4.70*
Profit 4.35 1.94 3.46 1.90 2.41

* p < 0.05.
a
Only main effects have been listed for simplicity.
b
n for all cells is 34.
348 Donald H. Schepers

of ethical judgment mediate the impact of these equity subsumed the variance accounted for by
variables on choice, the variable would lose relativism. Contractualism remained a significant
predictive power. As with the test for ethical predictor of intent. The B value for moral equity
judgment, to provide a strong test for the power was twice the B value for contractualism, sup-
of moral equity as a predictor variable, the porting hypothesis 4.
relativism and contractualism scores were entered
in the third block, with the moral equity score
entered in the fourth block. The results are in Discussion
Table V.
As before, the control variables were not sig- This research makes three contributions to our
nificant predictors. Neither Machiavellianism nor understanding of the judgment and decision
profit influenced choice, providing no support making process regarding business ethics. First,
for hypotheses 5 and 6. Neither mediation nor it is clear that the major predictor of judgments
interaction could be tested, due to the fact that of what is or is not ethical, and what one will
neither variable predicted intent. The addition of do, given that judgment, is based on perceptions
relativism and contractualism was significant of fairness, justice, right, and acceptability to
(block χ2 (2, N = 66) = 16.1), with both one’s family (the moral equity dimension).
variables as significant predictors of intent. In Included in this factor might also be issues of
both cases, those who perceived the policy as acceptability to one’s tradition and culture. The
unethical were less likely to agree to the policy. second contribution is that Machiavellianism, the
The Cox and Snell r-squared (an approximation ability of the individual to detach from ethical
of the adjusted r-squared) was 0.27 (Cox and concerns, is predominantly effected through
Snell, 1989). As before with ethical judgment, exchange ethics concerns, and expressed in either
moral equity was a significant predictor in its tacit promises or contracts. The third contribu-
own right (block χ2 (1, N = 66) = 13.7), and the tion is that corporate profit is not very likely to
Cox and Snell r-squared was 0.41. Individuals affect either individual judgment or decision
who judged the act as unethical on the moral making, making it an unlikely suspect in deter-
equity dimension were less likely to agree to the mining unethical behavior.
policy. Again, similar to ethical judgment, moral It appears that most individuals, faced with an

TABLE V
Logistic regression on action choices

Variablea Model 1 Model 2 Model 3 Model 4

Age 0.20 (0.17) 00.20 (0.18) 00.133 (0.22) 00.08 (0.32)

Sex 0.71 (0.72) 00.51 (0.76) 01.22 (0.98) 02.20 (1.34)
Full-time work 0.01 (0.22) 00.03 (0.22) 00.14 (0.26) 00.64 (0.43)
Profit 00.20 (0.76) 00.92 (0.99) 01.25 (1.58)
Machiavellianism –0.02 (0.03) –0.01 (0.03) –0.05 (0.06)
Relativism 00.53* (0.24)b 00.05 (0.38)
Contractualism 00.51* (0.26)c 00.74* (0.38)d
Moral equity 01.56* (0.63)e
Cox and Snell – R2 0.056 00.069 00.270 00.407
Model Chi-square 3.79 04.69 20.77** 34.47***
Block Chi-square 00.89 16.09*** 13.70***

* p < 0.05; *** p < 0.001

a
Values indicate value of B, followed by standard error in parenthesis.
b
Wald = 5.08; c Wald = 3.80; d Wald = 2.10; e Wald = 4.77.
 Machiavellianism, Profit, and Ethical Judgment 349

ethical dilemma in business, base judgment and contrary to declarations by some CEOs and top
intent to act on ethical premises formed early in executives, corporate profit (or value maximiza-
life, either through family or cultural influences. tion for shareholders) is not the probable motive
While this may suffice in many instances, as rules behind opportunistic behaviors. It appears that
and regulations get more intricate, such an unethical actions are much more likely to be
approach may well be wanting. Business presents caused by the incentive of personal as opposed
particular situations that are much more complex, to corporate profit. This presumption was not
with more participants, and multiple affected tested in this research, and should well be done,
stakeholders. Judgments of ethical or unethical in particularly in a field setting with real managers.
such instances demand a strong understanding of The issue is complex, since corporate profits also
exchange ethics, not simply moral equity or accrue to the individual in the form of bonuses,
relativism. promotions, and stock options, to name but a
Take, for example, the use of off-balance sheet few personal incentives. Such a field test will have
entities to enhance corporate profits. The to accommodate the impact of corporate on
practice is quite legal, and one perhaps used by personal profit in order to fully understand the
many corporations. From that standpoint, it issue.
might be judged “fair” or “right”. The question A curious footnote to this issue is that higher
then becomes, does it violate a tacit promise to corporate profits appeared to elevate some
society to openly reveal the actions and value of concerns about the ethics of this policy. There
the corporation so that investors may judge for is no clear interpretation of this. It is interesting
themselves the worth of investment? The answer that this elevation of concern happened only on
to such a question is far beyond the scope of this the dimension that is dependent on perceptions
research, but this research suggests that judgments of tradition and culture. One might expect the
made in the dimension of exchange ethics may ethnic nature of this hiring policy to raise
be instructive in understanding the widening rift concerns here, but it seems only in the context
between corporate accounting practices (to name of higher profit that higher concerns were found.
but one issue) and social expectation regarding This research was done with a highly multi-
same. cultural population (less than half are native-born
The second issue reinforces the importance of U.S. citizens). It may be simply be that the
the first. If high Machs are likely to take advan- abnormal profits raised concern of the ethicality
tage of the range of understandings of exchange of ethnic hiring policies. This may be an inter-
ethics in order to commit what might well be esting topic for future research with multi-
judged unethical activity, then it behooves society national groups and corporations.
and corporations to train business people in While the in-basket technique has been argued
exchange ethics, and to give such issues a per- as a valid proxy for a decision making environ-
manent place in social and corporate dialogue. ment (Dukerich et al., 1990), the participants in
Research has clearly indicated the value of this exercise were MBA students. The findings
embeddedness in producing ready access to using a student population might not generalize,
attitudes (Ajzen, 2001). While high Machs are particularly with respect to situational variables
presumably resistant to change in attitude, rein- such as corporate profit, since these individuals
forcing the attitude structure of low and are not in a true business decision making setting.
moderate Machs may create a corporate climate However, this research did investigate the impact
that will constrain such activity. of individual difference variables on judgment as
Finally, the third issue strongly suggests that, well, and such findings may be fairly robust.
350 Donald H. Schepers

Appendix A. 0*3. One should take action only when sure it is

In-basket Memo (high profit condition) morally right.
0*4. Most people are basically good and kind.
TO: C.J. Folger, Assistant VP, Franchise 0*5. It is safest to assume that all people have a
FROM: Mary Copeland, E.V.P. Marketing vicious streak.
RE: Store Personnel 0*6. Honesty is the best policy in all cases.
DATE: October 5, 2000 0*7. There is no excuse for lying to someone else.
0*8. Generally speaking, men won’t work hard unless
Our marketing survey was just completed for the 12 they are forced to do so.
months ending July 30. It shows clearly that there 0*9. All in all, it is better to be humble and honest
are higher rates of same-store sales (repeat customers) than to be important and dishonest.
at sites where our front-line personnel are young, *10. When you ask someone to do something
attractive, and Hispanic. Examining comparable sites for you, it is best to give the real reasons for
with different workforces, the young, attractive, wanting it rather than reasons that carry more
Hispanic workforce sold 15% more product than any weight.
other workforce. We anticipate that this increase in *11. Most people who get ahead in the world lead
productivity would translate into a 5% increase in clean, moral lives.
profits in the coming year. 012. Anyone who completely trusts anyone else is
I want to share these results with all our site asking for trouble.
managers for consideration in their hiring policies. 013. The biggest difference between most criminals
What do you think? and other people is that the criminals are stupid
enough to get caught.
C.J. – What should I tell Ms. Copeland? Please circle what *14. Most men are brave.
you want me to do. 015. It is wise to flatter important people.
0*1. She should contact all site managers with her *16. It is possible to be good in all respects.
results and encourage them to act with these *17. Barnum was wrong when he said that there’s a
results in mind. sucker born every minute.
0*2. Tell her I have some very serious reservations 018. It is hard to get ahead without cutting corners
about this, and want to talk with her when I get here and there.
back. 019. People suffering from incurable diseases should
have the choice of being put painlessly to death.
020. Most men forget more easily the death of their
Appendix B. father than the loss of their property.
The Machiavellian (Mach IV) scale

The Mach IV scale consists of 20 items, with a six- Notes

point Likert scale (–3 to +3, 0 point omitted). Scoring
is accomplished by summing point values and adding 1
There is conflicting evidence regarding the three-
40 to the tally. Starred (*) items are reverse scored. The
factor solution found by Reidenbach and Robin
scoring key is as follows (the “0” point is omitted):
(1990). Simpson, Brown, and Widing (1998) found
Agree strongly: +3 all eight items loaded onto one factor (Cronbach’s
Agree somewhat: +2 alpha = 0.93). Flory, Phillips, Reidenbach, and Robin
Agree slightly: +1 (1991) listed all three factors, but did not indicate
the eigenvalues (average Cronbach’s alpha = 0.86, low
Disagree slightly: –1 = l75, high = 0.94). LaTour and Hinthorne (1994)
Disagree somewhat: –2 found that the moral equity and relativism items
Disagree strongly: –3 loaded on the same factor (Cronbach’s alpha = 0.92),
while the contractualism items loaded on a second
0*1. Never tell anyone the real reason you did some- factor (Pearson correlation = 0.40, p < 0.01). Tansey,
thing unless it is useful to do so. Hyman, and Brown (1992) used only the moral
0*2. The best way to handle people is to tell them equity and relativism items, and found they loaded on
what they want to hear. one factor (Cronbach’s alphas between 0.94 and 0.97
 Machiavellianism, Profit, and Ethical Judgment 351

for five groups of subjects). In the current study, a of Selected Ethical Issues in Accounting’, The
two-factor solution was indeed found, with moral Accounting Review 67(2), 284–302.
equity and relativism loading to the same factor. The Hegarty, W. H. and H. P. Sims, Jr.: 1978, ‘Some
eigenvalue requirement was relaxed here in order to Determinants of Unethical Decision Behavior’,
test the hypotheses regarding Machiavellianism and Journal of Applied Psychology 63, 451–457.
contractualism. Given subsequent results from the Hegarty, W. H. and H. P. Sims, Jr.: 1979,
regression equations, there appears more support for ‘Organization Philosophy, Policies, and Objectives
the two-factor solution than the three-factor solution, Related to Unethical Decision Behavior: A
but this analysis is beyond the scope of this paper. The Laboratory Experiment’, Journal of Applied
author thanks an anonymous reviewer for comments Psychology 64, 331–338.
on this issue. Hofstede, G.: 2001, Culture’s Consequences: Comparing
2
The sample was also tested by dropping two cases Values, Behaviors, Institutions, and Organizations
from the high group. There was no difference in Across Nations, 2nd ed. (Sage Publications,
results. The author thanks an anonymous reviewer for Thousand Oaks, CA).
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of Marketing Ethics’, Journal of Macromarketing 6(1),
5–16.
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352 Donald H. Schepers

Trevino, L. K.: 1986, ‘Ethical Decision Making in Baruch College,

Organizations: A Person-Situationist Model’, City University of New York,
Academy of Management Review 11, 601–617. Management Department,
One Bernard Baruch Way, Box B9-240,
New York, NY 10010,
U.S.A.
E-mail: Donald_Schepers@[Link]