O R I G I N A L P A P E R

Business Students’ Insights into Their Development of Ethical Decision-Making

Rosina Mladenovic1 • Nonna Martinov-Bennie2 • Amani Bell3

Received: 27 April 2016 / Accepted: 26 March 2017 / Published online: 1 April 2017

� Springer Science+Business Media Dordrecht 2017

Abstract Motivated by the call for more research on stu-

dents’ perceptions of their ethical development in business

education programs, this study examines students’ reflec-

tions on how their understanding of ethics was challenged

and/or changed, and what facilitated the development of

ethical decision-making approaches in a first-year

accounting course. The results indicate that students

developed more sophisticated and contextualised views of

ethical issues in business, government and social contexts

including the need to consider their impact on various

stakeholders. Students attributed this development to the

various elements in the integrated course design including

the real cases sourced in current newspaper articles, an

ethical decision-making framework with various ethical

perspectives, the reflective journal component and the

ability to work in groups. These findings have implications

for the design of effective ethics education programs in

business.

Keywords Ethical decision-making � Ethical decision- making framework � Ethical perspectives � Integrated ethics education � Critical reflection � Group work

Introduction

The study of ethics in business originated in the 1950s (Bishop

1992) and has grown more important in recent years with much

publicised corporate failures such as Enron, followed by the

2007–2008 global financial crisis. Consequently, the public and

business leaders have exhorted business schools to develop

graduates who are ethical and successful managers and leaders in

‘making the world a better place’ (AACSB 2004). Despite the

importance of developing students as ethical graduates, few

studies explore students’ perceptions of how they develop ethical

decision-making skills. While our previous study showed that an

ethical decision-making framework improved students’ ethical

judgment and that integrated ethics education improved students’

ethical sensitivity (Martinov-Bennie and Mladenovic 2015), we

do not know, from the students’ perspective, why this occurred.

This study aims to explore students’ perceptions of whether

and how an integrated ethics education component challenged

and/or changed their beliefs and assumptions. Given the lacuna

of research on students’ perceptions of how they develop

capacity for ethical decision-making, this research offers a

significant contribution to ethics education and training by

providing insights into students’ perceptions about what facil-

itated their ethical decision-making development. Under-

standing how students experience different aspects of ethics

education offers insights into how business schools and edu-

cators might better support students’ and business profession-

als’ capacity to make ethical decisions.

Literature Review

Our literature review provides a brief overview of ethics in

accounting education, drawing especially on Bampton and

Cowton’s (2013) comprehensive analysis of this topic. We

& Nonna Martinov-Bennie [email protected]

1 The University of Sydney Business School, Sydney, NSW,

Australia

2 Faculty of Business and Economics, Macquarie University,

North Ryde, NSW, Australia

3 Sydney School of Education and Social Work, The

University of Sydney, Sydney, NSW, Australia

123

J Bus Ethics (2019) 155:275–287

DOI 10.1007/s10551-017-3523-5

then summarise key research findings on business students’

perceptions of ethics 1

and conclude by analysing how

reflection benefits student learning.

Ethics in accounting education

Bampton and Cowton’s (2013) comprehensive overview of

accounting ethics literature analyses 142 journal articles on

accounting ethics education published over the past

20 years. They found that prior research especially aims to

‘discover whether accounting students are more or less

ethical than others, [and] whether females are more ethical

than males’ and ‘whether accounting ethics education has

any long-lasting impact’ (556). Bampton and Cowton

(2013) recommend that ‘more qualitative work should be

undertaken…focussing on examining issues and research questions that are not amenable to investigation by…sur- veys using close-ended questions’ (561). Our paper

responds to this call.

A recent longitudinal study by Dellaportas et al. (2014)

showed that ‘ethics education is well entrenched in the

accounting curricula’ in Australia, the USA and the UK. In

Australian accounting degrees, ethics is usually integrated

into the curriculum, rather than being taught as a stand-

alone course (Dellaportas et al. 2014). This approach is

consistent with the view that a narrow, de-contextualised

approach is unlikely to successfully develop generic skills

(Sin et al. 2012). Recent research has focussed on deter-

mining what types of ethics interventions are effective, and

how and why they impact students (e.g. Shawver and

Miller 2015; Martinov-Bennie and Mladenovic 2015;

Miller et al. 2014).

Students’ Perceptions of Ethics in Business

We have some limited knowledge of how educators view

business ethics education (e.g. Blanthorne et al. 2007;

Adkins and Radtke 2004), the views of the accounting

profession (e.g. IFAC’s approach to global ethics education

in IES4 (2008)) and students’ views of the relative

importance of ethics education (e.g. De Lange et al. 2006).

For example, Kavanagh and Drennan (2008) found that

while graduating business students did not perceive ethics

as being important to their careers, employers sought eth-

ical awareness as an important graduate attribute.

However, there is little qualitative research on how

students perceive ethics in business, or on how their per-

ceptions and ethical decision-making skills change as a

direct result of ethical education. One study (Reid et al.

2011) took a phenomenographic approach to reveal that 44

mid-degree business students conceptualised ethics in one

of the three ways: as either subjective beliefs, as rules, or

by focussing on ‘the effect of one’s ethical stance on other

people through critical reflection’ (74). These conceptions

reveal

‘the huge differences in views of students who may well

be sitting together in the same classes….[and] high- light[s] the qualitatively different ways in which stu-

dents might understand notions such as …ethics…from the pithy definitions and unexamined, subjective views

at one extreme, to the eloquent, thoughtful and sensitive

views at the other extreme’ (77).

Baden’s (2014) thematic analysis of 96 business students’

reflections on their experiences of studying business ethics

and corporate social responsibility revealed that negative

and positive business cases had disparate effects. While

negative examples of ethical business behaviour were

important, they ‘increased cynicism and undermined

students’ self-efficacy’. By contrast, positive examples

‘offset the negative consequences arising from the negative

role models’ and ‘increased awareness that business can be

both ethical and profitable’ (154).

Clearly there is more work to be done in exploring

qualitative data on business and accounting students’ per-

ceptions of ethics and their reflections on the effectiveness

of ethics education.

The Benefits of Reflection for Student Learning

Students’ capacity to reflect on learning, and to learn by

reflecting on their experiences, are fundamental skills that

are essential for them to form new knowledge. Universities

have long recognised the need to develop students’

capacity to engage in reflective practices, both for personal

transformation and to prepare students for future careers

(e.g. Bain et al. 1999; Boud, Keogh and Walker 1985;

Kember et al. 1999; Rogers 2001; Thorpe 2004). Prior

research shows that written reflective activities are effec-

tive in multiple ways. These activities can: help students

explore their values, beliefs and assumptions (Carson and

Fisher 2006); enable students to document, review and

share their learning (Kember et al. 1999); stimulate critical

thinking (Hettich 1990); disrupt habitual ways of thinking

(Kerka 2002); encourage students to make connections

between old and new knowledge (Moon 2006); and help

them to make explicit connections between theory and

practice (Loo and Thorpe 2002).

1 This research reports on business students’ perception of ethical

education and their own ethical development within an introductory

financial accounting unit being the first unit for an accounting major

as part of a comprehensive business degree program which includes a

variety of units including law, finance, economics and marketing

depending on the major(s) chosen. We have included the literature on

both accounting students’ ethics education and business students’

ethics education for relevance and completeness.

276 R. Mladenovic et al.

123

Aims and Significance of This Study

This paper is the second study in a larger research project

exploring how a comprehensive integrated ethics education

program affects business students’ ethical sensitivity and

decision-making processes.

The findings of the previous study (Martinov-Bennie

and Mladenovic 2015) suggest that the comprehensive

ethics education program had a positive impact on stu-

dents’ ethical sensitivity and judgement.

This current study aims to build on these prior findings

by analysing the rich qualitative data students’ provide in

individual reflective reports, 2

and to explore their percep-

tions about whether and how the ethics education program

supported their capacity to make ethical decisions.

More specifically, by analysing students’ reflections on

their learning, this study aims to identify students’ per-

ceptions of:

1. How their beliefs and/or assumptions about ethics

changed; and

2. What supported the change.

The study provides important insights into how business

ethics education content and assessments could be

improved—with the ultimate aim of supporting students, as

future business professionals, to identify and manage the

ethical issues they will encounter throughout their careers.

This study fills a current gap in the literature on students’

perceptions of what facilitates their capacity for ethical

decision-making. It also responds to the call for more

qualitative research in ethics education (Bampton and

Cowton 2013) by investigating students’ perceptions of

what specific aspects of ethics education facilitated their

ethical decision-making.

The Study Context

The business school at the study site expects that graduates

are: ‘able to demonstrate an understanding of pertinent

moral, ethical and corporate social responsibility consid-

erations and the potential impacts (positive and negative)

that business decisions can have on a range of stakeholder

groups’.

Our previous paper (Martinov-Bennie and Mladenovic

2015) describes the research context in depth. In brief, an

ethics education component has been integrated into the

first-year undergraduate introductory accounting unit as

part of the business education degree program. This ethics

component aims to develop students’ ethical sensitivity and

ethical judgment.

Part of the assessment of the ethics component consisted

of a newspaper group task and an individual reflective

report representing 20% of the total assessment for the unit.

Students self-selected their groups of 3–5 students at the

beginning of the semester in their seminars and completed

the assessment task outside class hours. Students were

required to select a business-related newspaper article (see

‘‘Appendix 1: Extracts from Instructions for Students:

Newspaper Group Task’’ section for instructions) and to

utilise an ethical decision-making framework, and a range

of ethical perspectives, to analyse and develop recom-

mendations to resolve the ethical issue(s) they identified.

The ethical decision-making framework, referred to as the

Ethical Conflict Resolution Process (ECRP) framework

was adapted from APES 110 (APESB 2010a, b) Code of

Ethics for Professional Accountants, Sect. 100.18 (see

‘‘Appendix 2: Ethical Conflict Resolution Process (ECRP)

Framework’’ section).

Following the completion of the group-based assess-

ment described above, students completed their indi-

vidual reflective reports. Students were asked to reflect

and comment on a range of issues, including their

experience of group work; the ECRP; discuss any chal-

lenges the tasks posed to their values, beliefs or

assumptions about ethics in general as well as in busi-

ness or society and how they might integrate their

learning in the future. This paper reports on data con-

tained in students’ individual reflective report (see

‘‘Appendix 3 Individual Reflection Questions (selected)’’

section for reflection questions).

One hundred and sixty-three of the total 272 students

(71%) enrolled in the unit completed their reflective reports

and gave their permission to use the data in this research

project.

Method

This study examines, through the thematic analysis of

qualitative data from the students’ individual reflective

reports, students’ perceptions of how their beliefs and

assumptions about ethics changed and what instigated that

change.

Thematic analysis is a relatively new but commonly

used method of qualitative data analysis and ‘is rapidly

becoming widely recognised as a unique and valuable

method in its own right, alongside other more established

qualitative approaches like grounded theory’ (Braun and

Clarke 2012, 57). It is ‘a method for systematically iden-

tifying, organising and offering insight into patterns of

meaning (themes) across a data set. [It] allows the

2 The reflective report data collected represent a separate assessment

task (and data) to that utilised in the previous study. Refer to the study

context section for more details.

Business Students’ Insights into Their Development of Ethical Decision-making 277

123

researcher(s) to see and make sense of collective or shared

meaning and experiences’ (Braun and Clarke 2012, 57).

The study’s primary data were students’ reflective reports,

which students submitted online via the learning manage-

ment system. Students’ names were removed from the

responses prior to analysis. University ethics committee

approval was granted and the authors sought students’

permission to participate in the study. Students were

assured that their responses were confidential and that their

names and other identifying features would be removed

before publishing extracts. Responses from 193 of the 272

(71%) students enrolled in the subject were available and

analysed for this study.

The students’ reflective reports were analysed themati-

cally by two coders in five phases: (1) familiarisation with

the data; (2) searching for themes; (3) reviewing themes;

(4) defining and naming themes; and (5) producing the

report (Braun and Clarke 2006). The coders independently

conducted the first two phases, which consisted of closely

reading the responses and distilling the main points. The

coders then collectively reviewed and agreed on the

themes, and selected quotes to illustrate each theme. The-

matic analysis requires that each quote provides ‘a vivid,

compelling example that clearly illustrates the analytic

points’ being made, with ‘extracts drawn from across data

items to show the coverage of the theme’ (Braun and

Clarke 2012, 67). The results section below details each

key theme. Quotes are presented verbatim, i.e. there may

be spelling or grammatical errors consistent with students

who have English as an additional language. 3

Results

The analysis revealed the majority of students—134 of

193 4

(69%)—stated that the ethics component of the unit

challenged or changed their assumptions or beliefs. 5

This

was despite many students’ cynical attitude towards, and

low expectations of, the ethics component at the outset of

the unit:

When we first started learning about ethical theories

and the ECRP, I was cynical about how useful the

material would be. My perception was that ethics had

been added to the course simply to satisfy critics who

felt the spate of recent corporate accounting scandals

could somehow be blamed on failing to teach exec-

utives proper ethics. I felt that it is pointless to

attempt to teach ethical behaviour in a formal course,

because ethical behaviour can only be developed

through life experience. These beliefs and assump-

tions have definitely been changed over the last few

weeks. (Student 38)

Although a minority of students (13%) noted that their

beliefs or assumptions had not been challenged or changed,

they did acknowledge that the ethics component of the

course confirmed or reinforced their beliefs or assumptions,

and made them more aware of ethical perspectives:

I don’t think my beliefs or assumptions have been

either challenged or changed during working on tis

task. If anything else they have been only reinforced. I

strongly agree with all the ethical perspectives that had

been introduced to us during classes and I feel that I

have always understood the importance of such per-

spectives in relation to companies and businesses

especially in our time. It has always been important for

me to evaluate actions not only on the grounds of

certain rules or laws but also from the ethical point of

view as I believe every person has to take responsi-

bility for their actions and understand the implications

of these actions from different positions. Introduction

of ECRP and ethical principles only reinforced my

views and position and directed me well and truly into

what I believe is the right direction. (Student 37)

My beliefs and assumptions have not changed much.

I have always been aware of ethics and the moral

responsibility of individuals and so forth due to my

upbringing as well as education throughout school

and university. However, after completing the ethical

case study, I have been made more aware of the

various ethical perspectives in which I can analyse

the decisions firms/individuals make. For example,

egoism, I was aware that people make decisions that

complement their self interests, however, I did not

know the actual term to describe it ‘egoism’. Also,

other perspectives such as utilitarianism and the

sunlight test etc. have broadened my ethical knowl-

edge and perceptions. It has taught me to look at

issues from different angles and the reasons behind

decisions made from those angles. This assignment

has only built on what I already know, not so

much alter the way I think. (Student 161)

3 ‘‘Students completed their reflective reports online. The platform

was unsophisticated, and as such, much of the typed text was hidden

from the student’s view as the visible text on screen was limited to a

small number of characters. Furthermore, the platform did not offer

spelling or grammar checks. This resulted in spelling and grammatical

errors in the responses provided’’. 4

Thirty-four students (18%) did not answer the question. 5

The terms ‘beliefs’ and ‘understanding’ are used interchangeably in

the paper based on Benedict Spinoza’s (1677/1982) doctrine that

understanding and believing are merely two words for the same

mental operation. As such, to Spinoza, the act of understanding is the

act of believing and people are incapable of withholding their

acceptance of that which they understand.

278 R. Mladenovic et al.

123

Our analysis of the reflections of the 134 students who

stated that their assumptions or beliefs about ethics had

been challenged or changed revealed two main themes.

These themes and their respective subthemes are reported

below. The first theme identifies how students’ assumptions

or beliefs about ethics had been challenged or changed; the

second theme identifies the learning processes that facil-

itated that change.

How did Students’ Beliefs and Assumptions About Ethics Change?

Although the majority of students acknowledged that their

beliefs and assumptions about ethics were challenged and

changed, the analysis of students’ reflections identified that

these reported changes differed between individual

students.

Complexity of Ethics

Many students acknowledged that the ethics task had made

them more cognisant of the complexity of ethical issues

and ethical decision-making. Students described how their

beliefs and assumptions about ethics had changed from a

naive ‘doing the right thing’ and ‘black and white’ view

towards a more sophisticated understanding:

My beliefs and assumptions have most definitely

been challenged and changed through the completion

of the assignment. Firstly I now recognise how

complex ethical dilemmas can be and how all the

accounting and ethical issues must be identified in

order to create a resolution. (Student 26)

Prior to doing this course I always thought that acting

ethically was rather simple, and based on doing the

right thing… There have definitely been changes to my personal values and beliefs. Firstly I now find

conflicting ethical situations more complicated, as we

have learnt to consider all stakeholders; this makes it

a lot harder to pass judgement on a situation. How-

ever this also makes the eventual conclusion more

appropriate as more thought has gone into the prob-

lem (Student 134)

These beliefs and assumptions have definitely been

changed over the last few weeks. I have learnt to

better appreciate the huge variety of ethical per-

spectives, and the fact that ethical decisions are not

straightforward—decisions may be unethical from

one perspective and ethical from another. (Student

38)

…my understanding of them [ethical issues] has been significantly improved. My underlying assumptions

of right and wrong have been coloured. Although in

the article our group studied, TriStar, there was

clearly right and wrong, the process made me aware

of the possibility and complexity of ethical grey

areas. These grey areas are where the true value of

the ethical conflict resolution framework lies, and this

I believe has been the most useful part of this learning

experience. (Student 29)

Several students commented that that they now understood

the distinction between the law and ethics, for example:

At first I grappled with the difference between what is

legal and what is ethical. I found an article that I felt

was perfect for the task but soon found that the issue

was a blatant breaking of the law and thus left very

little scope for debate about the ethical issues. It is

now evident to me that a situation can be considered

unethical without the law deeming it wrong. I was not

aware that I had felt like this, but now I can see the

problem with my thinking. (Student 149)

Some students offered alternative views on complexity

with many students’ understanding of ethics becoming less

‘black and white’ and more nuanced. For example, Student

79 initially viewed ethics as complex, and then found that

the ECRP framework simplified ethics and made it more

‘logical’:

Before I was introduced to the ethical conflict reso-

lution process, I think of the ‘ethic’ in too broad and

complicated term. Then I learned ECRP which was

concise and logical, now it seems quite logical to

think in ethical ways to respond to situations. (Stu-

dent 79)

A Contextualised View of Ethics

Students’ review of a variety of newspaper articles, and

their subsequent discussion of the ethical issues they

identified, not only challenged their limited perspectives,

but also contextualised their understanding of ethics within

accounting, business, government and social environments.

This activity enabled students’ understanding to shift from

initial naive views, such as that large corporations are

trustworthy, to a more sophisticated understanding of the

importance of ethics in business contexts. This more

sophisticated understanding included the importance of

both businesses in general, and accountants in particular,

acting ethically due to the impact of their actions on var-

ious stakeholders and society. This broader perspective is

evidenced in the representative quotes below:

Business Students’ Insights into Their Development of Ethical Decision-making 279

123

This course has also made me more sceptical of the

business world, in my naivety I believed business was

generally honest and followed the law. However as

our group did research for our article I was shocked

to see just how many companies act unethically, they

aren’t isolated events, rather acting unethically seems

to be the norm for business. I feel the course has

changed my view of ethics, as well as making me

more aware of how business truly acts. (Student 134)

Moreover, this task has enlightened me to the fact

that even governments can be unethical and helpless

to deal with corruption. (Student 10)

Before working this task, my understanding of ethics

is very brief. Now, I can think of the consequences of

unethical behaviours to the individual and society in

depth. I realised that in a real business world, in order

to obtain more profit, some company may have

unethical behaviours when they operating the busi-

ness. Although they what they did do not break the

laws, it will bring great impact on individual and the

whole society. (Student 115)

Some students were able to translate their learning about

ethics in the unit to the practical context of their future

careers and work of accountants, for example:

I thought accountants were only response with [re-

sponsible for] reporting business transactions and prof-

itability in companies before. However, there are more

should be concerned today. In our future career will be

confronted with ethical issues and have to make some

ethically informed decisions. I realize ethical perspec-

tives and ECRP indicate the importance and benefits

from studying ethics. The purpose of learning ethics in

this unit is providing preparation and some techniques to

equip you for meeting these challenges. (Student 58)

My beliefs has been changed, as learned in the course

unit last semester about what is ethics. As different

people have different values and points of view

towards the same issue, I have ever never thought

about how ethics would exist in the work of an

accountant. But through this teamwork presentation, I

have changed my mind on working ethically on the

work of accountant. (Student 124)

Impact on Stakeholders

Students also reported that the ethics component shifted their

beliefs about ethics from a more self-focussed perspective to

a broader understanding of the negative consequences of

unethical behaviour on a range of stakeholders:

I believe that my beliefs or assumptions have been

challenged and slightly changed. Previously I gener-

ally looked at a situation from my own perspectives

rather than making a concerted effort to look at each

decision from the perspective of all involved… Thus for a conflict t