7 Criteria for Ethics

Organizations can strengthen ethics training programs by focusing on employees' sense of self-efficacy to encourage specific positive actions.

Walter O. Baggett, PHD, CPA
Associate Professor of Accounting, Manhattan College

Because of concerns with tone at the top and the control environment, internal auditors are increasingly being asked to evaluate ethics programs. Although these programs are intended to encourage ethical behavior, their stated goal is often negative — preventing unethical behavior. In fact, these objectives are opposite sides of the same coin: Encouraging ethical conduct prevents unethical practices.

Ethics programs that take a positive approach to promoting ethical conduct are more likely to succeed than training focused on deterring unethical behavior. Research based on psychologist Albert Bandura's concept of self-efficacy has demonstrated that increasing a person's confidence in his or her ability to perform specific behaviors to achieve desired outcomes is significantly more effective than simply changing attitudes and beliefs about behavior (see sidebar, "Bandura's Theory," at right). This research has included fields as diverse as accounting internal controls, health-care information systems, student academic integrity, and police force performance. Bandura defines self-efficacy as "beliefs in one's capacities to organize and execute the courses of action required to manage prospective situations." In every situation, the focus is on stimulating appropriate behavior.

Bandura's theory of self-efficacy provides a detailed road map that explains the social and psychological forces leading to behavior. Because self-efficacy represents a cognitive process, it can be taught and learned. The resulting increases in self-efficacy toward specific behaviors can be measured through questionnaires, which internal auditors can use to evaluate the effectiveness of ethics training programs. By addressing specific behaviors that teach people to "do the right thing," training programs based on Bandura's self-efficacy model can become preventive and detective measures for correcting inappropriate behavior and control breaches before they become major problems. Seven criteria suggested by Bandura's self-efficacy model provide internal auditors a basis for determining the effectiveness of ethics programs (see "Structural Paths of Influence").

1.Ethics programs must target specific behavior.

Most ethics training programs focus on teaching general ethics principles. However, where possible, organizations should tailor training to encourage specific behaviors — such as changing computer passwords, initialing approved invoices appropriately, and responding to security breaches — in response to known problems within each area of the organization. These new behaviors are based on the success of self-efficacy enhancing programs and their emphasis on promoting specific behavior instead of a generalized behavior, such as being "good."

Although the concept of generalized self-efficacy exists, it is not a clear and reliable predictor of behavior. For instance, 30 percent of people stop smoking by themselves without further encouragement. Similarly, fraud researchers assert that 20 percent of people will not engage in fraudulent activity, regardless of the opportunities or pressures put on them. The remaining people need training focused on encouraging specific behavior, such as techniques for quitting smoking or acting ethically.

In most organizational settings, the temptations and problems that represent ethical problems are well-known, but specific ethical issues may vary depending on the department. Ethics programs must recognize that people in sales face different problems than people in production. Although there may be some general areas that cut across all fields, such as respect for co-workers, most programs need to be tailored to promote specific actions on a department-by-department basis.

2. Ethics programs should include a process for raising questions and getting management action to correct apparent weaknesses in procedures.

Canadian political scientist Kenneth Kernaghan points out that there is a real need for a culture of openness and candor in his paper, "Encouraging 'Rightdoing' and Discouraging Wrongdoing: A Public Service Charter and Disclosure Legislation," which was part of a study of the sponsorship scandal that brought down the government of Canadian Prime Minister Jean Chrétien in 2003. Similarly, anti-corruption organization Transparency International advocates that systems and procedures should be in place to encourage people to do the right thing. Why force people to test their personal integrity? Make it easy for them to do what is right. Whether it is whistleblowing or preparing expense reports that make people document that their expenses are real, organizations should foster honest and open behavior.

Finding the areas that require "right-doing" behavior and developing actual procedures to fulfill these needs is no simple task. It is the point at which ethics programs move from "talking the talk" to "walking the walk" by becoming a part of continuous improvement. Suggestions proposed by training participants can become actual organizational changes that lead to ethical behavior.

Clearly, at some point procedures can be overbearing and give the impression that no one can be trusted. On the other hand, a system of checks and balances should be in place to ensure everyone is held accountable. A further benefit of such a process is that when management acts in response to issues that are raised, those actions enhance the organization's ethical culture.

3. Ethics training participants must perform the specified behavior to correct ethical breaches.

A difficulty with many ethics programs is they do not train people in what to do when confronted with a violation of ethical principles. Not surprisingly, when people encounter an ethics problem, they often ignore it because they are not confident that they can do the right thing. Even if they do the right thing, they are not confident it will resolve the problem.

Bandura's theory of self-efficacy is rooted in educational and developmental literature that holds that most people learn by watching and imitating others. They are more likely to learn if they are encouraged by other people, especially people they respect and who are similar to themselves. Bandura has defined four "information sources" that lead to behavior change: performance accomplishment, vicarious experience, verbal persuasion, and self-appraisal.

The first and most powerful source of learning behavior is performance accomplishment. A person who has actually done something tends to be confident he or she can do it again. Effective training programs teach people to deal with unusual situations by simulating reality. In the case of typical ethical problems, role playing provides participants with realistic practice on what they should do in a particular situation in a nonthreatening way. Part of this process includes instruction about the reasoning behind the actions. Watching other people perform a specific behavior and then replicating those actions also gives rise to Bandura's second source of behavioral change, vicarious experience, or modeling.

4. Training programs should include examples where the behavior is demonstrated by people who are similar to the participants.

According to Bandura, people are most likely to learn through vicarious experience when the people who demonstrate the behavior are similar to themselves. One of the most interesting applications of this theory of learning in action is in health promotion literature for patients with diabetes. There, the challenge is maintaining necessary blood sugar levels, which involves a host of complex issues such as appropriate diet, exercise, and medications. Although the underlying literature is fairly standard, the actual material is shaped for the target audience, taking into account patients' age, ethnicity, economic level, race, and other cultural factors.

Programs are much more effective when they present basic material in a form with which people can relate. The need to address specific behavior further enhances this need for realism. For example, an ethics training course can teach participants to better cope with a security breach involving confidential client information by detailing the intricacies involved in tactfully discussing a breach with a supervisor.

5. Training instructors should review and positively reinforce behaviors learned by participants.

The third source of self-efficacy in learned behavior is verbal persuasion. On the surface, this may seem like a typical lecture where a knowledgeable and respected instructor tells people how to do something. Following on the vicarious experience concept, a better scenario would be an instructor who participants can relate to and trust. Such an instructor is more likely to convince individuals that they can perform the desired behavior.

Based on the performance accomplishment part of Bandura's self-efficacy model, verbal persuasion is more effective when it takes the form of coaching by the instructor. For example, a speaker who describes the steps involved in his or her whistleblowing activities can encourage other people to take similar ethical actions. Such training should be coupled with policies and procedures that encourage employees to do the right thing rather than discourage wrongdoing.

6. Training program participants should experience and learn to cope with the stresses associated with ethical behavior by assessing their own emotional and physical states.

The fourth source of learning behavior is self-appraisal. Unlike the other three sources of behavior, self-appraisal does not deal with the actions themselves, but the effect the actions have upon people. This concept is especially important when teaching behaviors involving ethics, which often take place in a stressful environment and are charged with strong emotional overtones. These emotions can make it virtually impossible to behave appropriately.

The usual method for teaching people to perform self-appraisal is to provide them with situations where they are aroused, bring that arousal to their attention, and discuss ways of dealing with it. Role playing is the ideal method of self-appraisal. Although role playing involves real behavior, it is less intimidating because it is "make believe." As a result, it can teach people to anticipate the physical and emotional strains associated with behaviors. In such circumstances, it may be better to postpone an action until the person is less tired or when the situation is less stressful. The important point is not the problem of postponement, but rather the fact that if these factors are not addressed, the desired behavior will not be performed successfully, if at all.

7. The general principles in codes of conduct should be an integral part of the strategic planning process.

Like all strategic plans, the principles of an organization's code of conduct should become part of daily operating activities. Bandura's theory of self-efficacy recognizes that behavior takes place in a complex environment of social and structural factors that can facilitate or impede a person's actions. In recognition of the impact of these factors, management must continuously implement programs that eliminate structural factors that enable wrongdoing and impede right-doing. Given the changing nature of the environment, these factors can never be totally eliminated; hence, the need for continued vigilance. From this perspective, ethics codes and risk assessment can help provide direction for developing strategic plans.

The social side of ethical behavior points to organizational culture, which includes its values and attitudes. Ethics program researchers such as The Open Compliance & Ethics Group suggest that organizations should have regular monitoring programs in place for assessing their culture. Although these measures of attitudes and values may be helpful, research clearly indicates that self-efficacy is more influential than simple attitudes and values in learning behavior. That does not mean that values have no place in ethics programs. Organizations should have general statements of ethical values, but those values must be linked to specific behavior.

Because strategic planning, in its simplest form, is a statement of "who we are and what we do," such plans should include a commitment to ethical values. Like the goals and methods of an organization, ethical behavior is constantly challenged over time. As an organization strives to meet the challenges of a changing environment and improve on past performance, it must also continuously reassess its standards of ethical conduct. Both the operational and ethical imperatives require performance measurement, reassessment, and continuous updating of strategic plans.

MEASURING BEHAVIORAL CHANGE

Ethics programs should result in ethical behavior. As self-efficacy is a cognitive concept, it can be measured through questionnaires. The measurement process starts by defining the specific desired behaviors to include in these tests. Describing these behaviors in a way that is both accurate and understandable requires test developers to use psychometric procedures such as a panel of experts and samples of the actual target population. The questions are generally couched in the form of "How confident are you that you can...?"

As questionnaires are used over time, it becomes possible to assess their reliability. Research in other fields has demonstrated that carefully developed measurement tools can be highly reliable and useful in assessing the effectiveness of training programs at increasing a person's self-efficacy toward specific behaviors. In health-care programs, for instance, high self-efficacy toward patients' behaviors involving illness self-management reliably points to greater adherence to treatment regimes. In turn, these patients have demonstrated longer life expectancies and a better quality of life.

Although this measurement process is complex, it helps ensure that ethics training programs are effective at increasing self-efficacy. Such metrics can also help predict changes in behavior. It is this ability to scientifically test the theory that gives the application of Bandura's self-efficacy concept such high credibility and reliability as a basis for developing and evaluating ethics programs.

To comment on this article, e-mail the author at walter.baggett@theiia.org.

Internal Auditor is pleased to provide you an opportunity to share your thoughts about the articles posted on this site. Some comments may be reprinted elsewhere, online, or offline. We encourage lively, open discussion and only ask that you refrain from personal comments and remarks that are off topic. Internal Auditor reserves the right to edit/remove comments.

Name:

Email:

Subject:

Comment:

---

To make something bold:
<strong>Text to bold</strong>

To make something italic:
<em>Text to italicize</em>

To make a hyperlink:
<a href="URL">Text to link</a>

---