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IJPSM 23,7

Comparative analysis of ethical leadership and ethical culture in local government

596

Rodney Erakovich
School of Business Administration, Texas Wesleyan University, Fort Worth, Texas, USA, and

Karin Lasthuizen
Research Group Integrity of Governance, Department of Governance Studies, VU University Amsterdam, Amsterdam, The Netherlands
Abstract
Purpose The purpose of this paper is to understand the role of ethical leadership and ethical culture as a safeguard against corruption. Design/methodology/approach Using survey data from public managers in local authorities in The Netherlands, Serbia, Montenegro and the USA in a comparative study. Findings The USA and The Netherlands, generally, display higher levels of organizational integrity than Montenegro and Serbia. Second, the strongest effects of ethical leadership were found in Montenegro. Third, in all four countries a rule-based approach to ethics dominated. Research limitations/implications It is difcult to determine the extent to which survey participants felt free to express their true opinions. Different social values need to be included as part of any comparative analysis. Practical implications The role of ethical leadership is crucial; the importance of laws and rules underpinning ethical conduct cannot be underestimated. Originality/value The paper contributes to the growing interest in comparative studies. Keywords Local government, Ethics, United States of America, The Netherlands, Montenegro, Serbia Paper type Research paper

International Journal of Public Sector Management Vol. 23 No. 7, 2010 pp. 596-612 q Emerald Group Publishing Limited 0951-3558 DOI 10.1108/09513551011078879

Introduction A core principle of good governance is for a local civil service that provides public services for citizens in an ethical environment that is free from corruption. The rise of corruption on the international agenda has reinforced this view, accelerating rapidly from being a marginalized component in international aid programs to moving, promptly, to occupying a privileged position in the political and administrative
Part of this research was generously supported by a grant from Midwestern State University.

discussions in developed and emerging countries (Javier, 2007). Corruption is acknowledged to be a key global factor in adversely affecting citizen trust in government. Further, corruption creates mistrust between management and employees and among employees. The common response in a traditional bureaucratic local government is a call for ethics enforced by bureaucratic authority (Fox and Miller, 1996; Weber, 1947). Contrasting the bureaucratic approach is an approach that argues for accountability as the key ethical control measure. Under this approach, accountability centers on external control while responsibility focuses on internal control. Postmodern theory advocates decentralization of government institutions and forces accountability and responsibility downwards to lower levels in the leadership chain. Dispersal of power among more participants increases the need for greater discretion in duties and calls for greater political inclusion of citizens in the publics business to hold public leaders responsible (Thompson, 1985; Gortner, 1991, 1995). Dramatic changes in society and government have taken place in Central and Eastern Europe during the last two decades, providing enormous challenges for researchers to conduct in-depth and comparative research. Serbia and Montenegro climbed from place 106 in 2003 (condence range 2,3) to place 85 in 2008 (condence range 3,4) in Transparency Internationals Corruption Perception Index, while The Netherlands and the USA remained stable at, respectively, position seven (condence range 8,9) and position 17 (condence range 7,4) during the same period (Transparency International, 2003, 2008). In 2003, the authors developed a questionnaire to measure integrity violations, ethical leadership and ethical culture in The Netherlands (Kolthoff, 2007; Lasthuizen, 2008). In 2006, this was adjusted for international comparative purposes and a rst comparative analysis was made between The Netherlands and the USA (Kolthoff et al., 2009). Later in 2007, the authors were given the opportunity to collect data in Serbia and Montenegro and compare these with new Dutch and American data. A rst impression of the results is described in this paper. Ethics and integrity in the public sector The term public ethics refers to the collection of values and norms, of moral standards or principles, which form the foundation of integrity. In general, ethics are a set of principles frequently dened as a code of conduct; that is, a framework for actions (Lawton, 1998, p. 16). Whereas the moral nature of these principles refers to what is judged to be right, just, or good (conduct)[1], integrity or ethical behavior means much more than not being corrupt or fraudulent. Rather, integrity is a quality or characteristic of individual or organizational behavior that denotes the quality of acting in accordance with the moral values, standards and rules accepted by the organizations members and society. Thus, integrity violations can be dened as violations of these moral values and norms. For empirical purposes, integrity is here dened as acting in agreement with the relevant moral values, standards, norms and rules, meaning that the research will focus on manifestations of behavior rather than intentions or underlying values. This focus conforms to the ethics triangle of Bowman et al. (2004), which recognize the complementarities and interdependencies of different ethical schools of virtues, rules and outcomes.

Analysis of ethical leadership 597

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To improve or safeguard organizational integrity, many boards of prot and not-for-prot organizations have developed policies whose bottom line is to minimize the extent of unethical behavior in the organization. As Trevino et al. (1999, pp. 132-3) stated, effective ethics and compliance management should be associated with less unethical and illegal behavior. Therefore, the starting point for this study is unethical employee behavior in the organization, which becomes visible in the incidence and prevalence of integrity violations, dened as violations of social moral values and norms and the laws and rules resulting from them. Conduct and leadership The leadership guidance system, the ability to inuence behavior, establishes the ethical climate that claries for employees the principles and norms to act by (Gortner, 1991). It inuences integrity policy. When leaders maintain close adherence to goals and values in their decision-making processes, it is easier for employees to recognize and deal with ethical issues (Barnard, 1938) according to the established integrity policy. In line with Trevino et al. (2000), it is clear that ethical leadership includes transformational leadership and transactional leadership elements. However, even though ethical leaders are likely to use both transformational and transactional leadership approaches to inuence their followers to engage in ethical conduct and refrain from unethical conduct, ethical leadership is not subsumed by these constructs (Brown et al., 2005, p. 130). Lasthuizen (2008, pp. 32-3) reviewed the state of the art concerning literature on ethical leadership and concludes that most scholars in the eld agree that role modeling is crucial leadership behavior both in general and specically for safeguarding organizational integrity. Many also see leadership traits like integrity, honesty and trustworthiness as prerequisites for setting a good example. Also, important are rewards and disciplines as they relate to the expectation that employees are more likely to do what is rewarded and avoid doing what is punished. In addition, leaders should speak about what is right and what is wrong, what is permitted and what is forbidden. It seems self-evident that communication about the true meaning of integrity in the organization is essential. Openness to talk about, and discuss, integrity stimulates employees to comply and helps to instill values that promote a commitment to ethical conduct. Ethical leadership is also thought to be positively associated with the followers willingness to report problems and deliver bad news to the leader, because an ethical leader is concerned for people, and makes fair decisions. Ethical culture and ethical climate Organization theory hypothesizes that organizational culture plays a critical role in the development of multiple organizational ethical climates (Ferrel and Fraedrich, 1989). Organizational culture includes the basic assumptions and beliefs that are shared by members of the organization (Schein, 1985). Organizational climates are part of and distinct from the organizational culture (Erakovich et al., 2006). The organizational climate has been dened as the shared perceptions of organizational policies, practices and procedures, both formal and informal (Reichers and Schneider, 1990; Vardi, 2001). One of the many types of work climates proposed (Schneider and Rentsch, 1988) is the ethical climate (Victor and Cullen, 1988, p. 101), the prevailing perceptions of typical organizational practices and procedures that have ethical content and those aspects of work climate that determine what constitutes ethical behavior at work.

Organizational ethical climate is a normative construct of shared behaviors guided by policies, procedures and systems in an organization that direct organizational members ethical actions and decisions (Agarwal and Malloy, 1999; Wyld and Jones, 1997; Key, 1999). These behaviors are observable and inuence organizational members in decision-making processes and involvement in misconduct (Vardi, 2001). When an organizational member is faced with an ethical issue and examines what the expectation is, ethical climate provides a basis for the perception of acceptable and ethical behavior (Fritsche, 2000). Based on Kohlbergs (1968) theory of moral development, Victor and Cullen (1987, 1988) developed a well-known theoretical typology of nine possible ethical climate types, which are typied along two dimensions of moral reasoning: the locus of analysis and ethical criteria or standards (Table I). These latter reect the three major classes of ethical theory, egoism, utilitarianism and deontology (Fritzsche and Becker, 1984), and may be distinguished in terms of maximizing the individuals own self-interest (egoism), maximizing the interests of as many people as possible (benevolence), and adherence to universal standards and beliefs (principle). The locus of analysis refers to the source of moral reasoning from which individuals receive their cues on what is considered ethically appropriate. This source might be the employees self-determined ethical beliefs (individual), the organizations standards and policies (local), or bodies external to the individual and organization, such as a professional association (cosmopolitan) (Victor and Cullen, 1988, pp. 104-6). According to empirical research, all nine ethical climate types actually occur in organizations (Agarwal and Malloy, 1999; Cullen et al., 1993), but Victor and Cullen (1988) conclude, based on their own empirical research, that ve types of ethical climate laws and codes, caring, instrumentalism, independence and rules are most likely, some of which combine more than one theoretical type. For the purpose of our research, we combined the types law and code and rules and worked with four types of ethical climate. In an organization, employees learn through formal and informal socialization processes what are correct behaviors within the organizational ethical climate (Cooper, 1998; Victor and Cullen, 1987), and react to it collectively (Ott, 1989). The countries investigated The USA The constitution of the USA established a republican form of government where political power is shared. Federalism divides power between the national government and the states. While not clearly dened by the constitution, states do have separate powers from the national government in many areas such as in forms of local governance.
Locus of analysis Ethical criterion Egoism Benevolence Principle Individual Self-interest Friendship Personal morality Local Company prot Team interest Company rules and procedure Cosmopolitan Efciency Social responsibility Laws and professional codes

Analysis of ethical leadership 599

Source: Victor and Cullen (1988, p. 104)

Table I. Theoretical ethical climate types

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Each state determines its power in relationship to local governance and there is likely to be considerable variation in the form local government has adopted in terms of commission, council-manager and mayor-council. The classic model of city manager-led local government is the council-manager form of government. While other formats and structures have evolved since the creation of the council-manager form in the rst two decades of the twentieth century, the form is deeply imbedded in both the history and ethos of the city management profession (Cox, 2004). According to the International City/County Management Association, 49 percent of all municipal governments in the USA use the council-manager form, or one of its variations (www.icma.org). Elected representatives, and a public administration that carries out legislative mandates separate from, yet inuenced by, the political process, exercise local communitys legislative power. The Netherlands Municipalities form the lowest tier of government in The Netherlands, below central government and the provinces. There are 443 municipalities and they all apply national legislation on matters like social security benets but they can also draft local legislation. Civil servants, councillors and the municipal executive are all responsible for ensuring that things run smoothly in their area. The municipal council acts as the school board for the publicly run schools in its area and is responsible for ensuring privately run schools have suitable premises. Municipalities are now expanding to include activities in health care, social work, culture, sport and recreation, e.g. after-school care and the management of arts centers and sports facilities. In recent years, many central government powers and responsibilities have devolved to the municipalities. Civil servants are responsible for preparing decisions and for carrying them out. Apart from civil servants working at the town hall, many municipalities have their own environmental control ofcers with powers to investigate offenses and impose nes, and road workers and refuse collectors may be directly employed by the municipality. The head of the ofcial hierarchy is the Municipal Secretary (gemeentesecretaris). The secretary serves as a channel of communication between the municipal executive and the ofcial apparatus that is divided into departments or directorates, under which separate sections deal with particular areas of municipal policy, such as the environment, water management, land-use planning, the economy, recreation, wildlife and transport. Responsibility for developing integrity policy for public administration lies with the Minister of the Interior. However, the policy developed is consequently implemented in a decentralized manner. Since 1992, ethics and integrity have been on the political agenda and given specic attention with varying intensity (Kolthoff, 2007, p. 44). Serbia and Montenegro After the dissolution of the Socialist Federal Republic of Yugoslavia in 1992, Montenegro remained part of a smaller Federal Republic of Yugoslavia along with Serbia. In 2002, Serbia and Montenegro came to a new agreement regarding continued cooperation and entered into negotiations regarding the future status of the Federal Republic of Yugoslavia. In 2003, the Yugoslav federation was replaced in favor of a looser state union named Serbia and Montenegro. On June 3, 2006, the Parliament

of Montenegro declared the independence of Montenegro (http://en.wikipedia.org/wiki/ Montenegro#cite_note-19) formally conrming the result of the referendum on independence. Serbia did not obstruct the ruling, conrming its own independence and the union of Serbia and Montenegro ended shortly thereafter. Serbia Local Government Reform Program was launched in 2004 in order to re-establish the roots of government founded on the community and basic principles of the Serbian society, aiming to restore the tradition of efcient, appropriate and accountable local government. In 2007, Montenegro voted to separate from Serbia and become a separate country yet follows the Serbian law. Since local government reform in 2004, municipalities retain control of a wide range of communal and utility services, although this continues to be qualied by parliamentary failure to enact a law establishing municipal rights to ownership of property. Social sector responsibility remains conned to pre-schools and maintenance of primary and secondary school buildings. A new law on local public nance was enacted in 2006 and promises to make substantial progress in the equity, transparency and stability of the scal decentralization system. The 2006 law substantially increases the discretion of local government while limiting that of the federal government. In particular, local governments gain the right to determine rates of property tax and to collect it. They are also awarded the right to borrow money. Methodology For this research project, quantitative data analysis of survey material was selected as the most appropriate analytical method. To enhance the reliability and validity of the survey research, the questionnaire drew as much as possible on existing and already tested variables and scales. KPMGs Integrity Thermometer, a survey conducted in many public and private organizations in The Netherlands as well as the USA, was selected as the most appropriate available for gathering primary data[2] (Kaptein and van Reenen, 2001; Kaptein et al., 2005; Huberts et al., 2007). For every type of integrity violation (e.g. corruption or abuse of information), a number of specic behaviors were selected for the questionnaire of a large 2003 survey (Kolthoff, 2007). Ten questions on ethical leadership comprising the variable ethical o leadership (Trevin et al., 2000) and questions comprising the four ethical climate dimensions of Victor and Cullen (1987) as described before were added and for the purpose of this comparative research a questionnaire of a 150 items in total was developed. This questionnaire was tested in more than 20 municipalities in The Netherlands by the Ofce of Local Government Ethics before using it for comparative projects and was used in an earlier comparative research by Kolthoff et al. (2009). Table II shows the main survey variables. Samples This research required a large sample of respondents to capture the variability between organizations/countries. To ensure an adequate availability of organizations, a convenient and opportunistic non-probability sampling plan was used. City ofcials were consulted as to the purpose of the survey and agreed to allow certain groups of employees to participate.

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Ethical leadership

602

Ethical climate Benevolence Law and rules

Independence Instrumental Integrity violations

Table II. Main study variables items and scale

Item My manager sets a good example in terms of ethical behaviour My manager can be trusted My manager communicates the values and principles we have to respect My manager discusses ethics and values within his department My manager acts in his private life in an ethical responsible way My manager listens to what employees have to say My manager denes success not just by results but also the way that they are achieved My manager makes fair and balanced decisions My manager disciplines employees who violate ethical standards My manager has the best interests of employees in mind Response scale 1, completely disagree; 2, disagree; 3, disagree more than agree; 4, agree more than disagree; 5, agree; 6, completely agree Item In this organization, employees look out for each other The most important concern in this organization is what is best for the employees The laws and ethical code governing an employees profession are key ingredients for ethical behavior in this organization Employees follow legal and professional standards exactly The rst consideration is whether a decision violates law It is important to follow rules and procedures at all times To be successful, people in this organization go by the rules Employees interpret the law (rules, regulations, policies, professional requirements, government laws, etc.) as it applies to their position and then comply with it You are expected to do what benets yourself Response scale 1, completely disagree; 2, disagree; 3, disagree more than agree; 4, agree more than disagree; 5, agree; 6, completely agree Item Accepting bribes from external parties Selling condential information to external parties Favoring of friends or family outside the organization Accepting gifts, favors or entertainment (less that $25) from external parties Accepting gifts, favors or entertainment (value more than $25) from external parties Engaging in activities that pose a conict of interest Response scale frequency. In my opinion, [. . .], has occurred in the past year within my unit 0, never; 1, once; 2, several times; 3, regularly; 4, often (weekly) Response scale acceptability. In my opinion, [. . .], within my unit is 0, never acceptable; 1, seldom acceptable; 2, sometimes acceptable; 3, mostly acceptable; 4, always acceptable

Data collection In Serbia and Montenegro, the directors of the Center for Public Administration in each country collected survey data by hand delivering and collecting each survey in an unmarked envelope to ensure condentiality. Surveys were translated without loss of construct validity. In the USA, the human resource manager of the participating city in Texas distributed the surveys and collected them in unmarked envelopes to ensure condentiality. In The Netherlands, surveys were collected by the ofce of local government ethics and participants received the guarantee that the results would

be processed anonymously. In all instances, the participants were informed that this was an organizational analysis and not an investigation into integrity violations. In two cities in Montenegro, surveys were collected from managers of key departments. In total, 50 surveys were distributed and 25 were returned and usable, representing a 50 percent response rate. In Serbia, managers of all major departments in one city were surveyed. Of the 52 surveys delivered, 31 were returned as usable, representing a 60 percent response rate. In the USA, 28 surveys were distributed to key department managers representing about 15 percent of the city employees and 95 percent of the citys departments. Of these, 27 surveys were returned, representing a 96 percent response rate. In The Netherlands, all 120 managers in one city received the survey of which 67 were returned, representing a response rate of 56 percent. In the USA, surveys were coordinated with the city manager and collected from managers of key departments. Results The initial step in the data analysis was to compute descriptive statistics and internal consistency reliability coefcients for the variables to be used in our research. Descriptive statistics A total of 150 managers/supervisors participated in this study, including 31 (20.6 percent) from Serbia, 25 (16.6 percent) from Montenegro, 27 (18 percent) from the USA and 67 (44.6 percent) from The Netherlands. In Table III, the results on the observed frequency and acceptability of integrity violations in the four participating countries are presented. In Figures 1 and 2, these ndings are presented in a graphical way. The data presented here produce several interesting ndings. The trends concerning the frequency of integrity violations follow consistent patterns. For all integrity violations, except for small gifts (Table III), the USA and The Netherlands have lower scores on the frequency than Serbia and Montenegro, which might
The USA n 27 Frequency (scale range: 0 never to 4 often/weekly) Bribing 0.19 Selling information 0.00 Favoritism external 0.78 Small gifts 1.48 Large gifts 0.44 Conict of interest: sideline activities 0.33 Acceptability (scale range: 0 never to 4 always) Bribing 0.00 Selling information 0.00 Favoritism external 0.15 Small gifts 1.11 Large gifts 0.33 Conict of interest: sideline activities 0.04 Note: Mean score, scale range: 0, never to 4, often/weekly The Netherlands n 67 0.26 0.11 0.35 1.28 0.13 0.15 0.10 0.09 0.31 1.58 0.23 0.16 Serbia n 31 0.32 0.26 1.65 0.97 0.65 0.91 0.13 0.10 0.68 0.55 0.23 0.52 Montenegro n 25 0.68 0.76 1.64 1.48 1.08 1.12 0.08 0.08 0.60 0.88 0.32 0.28

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Table III. Descriptive statistics integrity violations per country

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Frequency integrity violations (mean) 1.8 1.6 1.4 Mean score The USA The Netherlands Serbia Montenegro

604

1.2 1.0 0.8 0.6 0.4 0.2 0.0

Bribes

Figure 1. Frequency of integrity violations

Selling Favoritism Small gifts information external Integrity violations

Large gifts

Conflict of interest

Note: Mean score, scale range: 0, never to 4, often/weekly

Acceptability integrity violations (mean) 1.8 1.6 1.4 1.2 Mean score 1.0 0.8 0.6 0.4 0.2 0.0 Bribes Selling Favoritism Small gifts information external Integrity violations Large gifts Conflict of interest The USA The Netherlands Serbia Montenegro

Figure 2. Acceptability of integrity violations

Note: Mean score, scale range: 0, never to 4, always

be expected. For the acceptability of integrity violations, we see that there is a much smaller difference between the countries in this study. Nevertheless, for small gifts, the frequency as well as the acceptability score of small gifts is higher in the USA and in The Netherlands than in Serbia and Montenegro, which seems surprising. An explanation for this could be that small gifts are nowadays generally accepted in the USA and in The Netherlands after an initial

zero-tolerance policy in, for instance, The Netherlands which evoked a lot of discussion and an intense debate on integrity violations and ethical codes (Lamboo et al., 2008), while this debate is in its infancy in Serbia and Montenegro. The observed frequency of bribery, selling information and large gifts is relatively high in Serbia and Montenegro, while the acceptability of these violations is just as low as in The Netherlands and in the USA. Favoritism and conict of interest on the other hand are considered more acceptable in Serbia and Montenegro than in The Netherlands or the USA and their frequency is consequently also higher. Descriptive statistics for ethical leadership and ethical climate are shown in Tables IV and V. These composite scores demonstrate adequate variability with scores on each scale ranging from at or near the low end of the scale up through the maximum possible value in each case. Scores on each multi-item scale demonstrated adequate reliability with all internal consistency reliability coefcients $ 0.60. In addition, signicant differences exist between the several countries with their respective forms of governance in terms of leadership, ethical climate and integrity violations. Oneway analysis of variances (ANOVAs) were performed to compare the four countries groups on each of the ve scales as noted in Table IV. All the above mentioned signicant scores indicate that individuals from the four countries differ on the different dimensions. Table V shows that, with regard to ethical leadership, the USA performs signicantly best, followed by Serbia, The Netherlands and last Montenegro. Additionally, all countries have relatively high scores on the ten statements on ethical leadership.
No. of items Leadership Ethical climate Benevolence Law and rules Independence Instrumental 10 2 5 1 1 Min. 1.70 1.00 2.26 2.00 1.00 Max. 6.00 6.00 6.00 6.00 6.00 M 4.85 3.95 4.56 4.62 6.03 SD 0.92 1.13 0.77 0.71 1.39 ANOVA F 3.96 * F 3.99 * F 7.99 * * F 6.05 * F 6.06 *

Analysis of ethical leadership 605

a
9.6 0.69 0.80

Notes: Signicance at: *p 0.05, * *p , 0.001; n 150

Table IV. Descriptive statistics for ethical leadership and ethical climate

The USA n 27 Ethical leadership Ethical climate Benevolence Law and rules Independence Instrumental 5.35 3.94 4.92 4.63 2.41

The Netherlands n 67 4.70 3.81 4.34 2.83

Serbia n 31 4.91 4.53 4.93 4.80 3.42

Montenegro n 25 4.65 3.63 4.32 4.11 3.78

Notes: In The Netherlands this item was not included in the questionnaire; scale range: 1, low to 6, high

Table V. Mean scores for ethical leadership and ethical climate per country

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For the ethical climates, we see that the dominant ethical climate in all four countries is law and rules although benevolence and independence also score relatively high in Serbia. These ndings are different from the pattern we found with regard to the frequency and acceptability of integrity violations, which makes it interesting to look at the relationship between ethical leadership and ethical climates at the one hand and integrity violations on the other. Correlations In Tables VI and VII, we present the calculated correlations between ethical leadership and ethical climate with the six corruption-related integrity violations, respectively, the observed frequency and the acceptability. A rst observation is that ethical leadership has stronger (negative) correlations with the observed frequency and acceptability of integrity violations in Montenegro than in Serbia, and the other two countries included in this survey. From this, also follows that the relatively high score on ethical leadership in Serbia does not result in more effective leadership. In all four countries, law and rules was the dominant ethical climate (Table V). In both Serbia and Montenegro, this type of climate seems an effective way to combat integrity violations (frequency). In Montenegro, this also holds for the effect of the law and rules climate on the acceptability of integrity violations. The effects of ethical leadership and ethical climates on integrity violations in the USA and The Netherlands are smaller, which might have to do with the higher level of organizational integrity as was made clear by the gures presented in Table III. Discussion and conclusions The data presented in this paper gave reason to several preliminary observations and conclusions. The trends concerning the frequency and the acceptability of integrity violations follow consistent patterns; the USA and The Netherlands display in general higher levels of organizational integrity than Serbia and Montenegro. When comparing ethical leadership between the participating countries the USA performs best, but followed by Serbia before The Netherlands and Montenegro. The dominant ethical climate in all four countries is law and rules. The correlations between ethical leadership and climate on the one hand and the observed frequencies and acceptability of integrity violations on the other, revealed that the strongest effects of ethical leadership were found in Montenegro and that, although Serbia scored relatively high on ethical leadership, this does not result in more effective leadership. Additional qualitative research which might delve deeper into possible cultural explanations could provide valuable information on this intriguing nding. In all four countries, law and rules was the dominant ethical climate in public administrative organizations. In both Serbia and Montenegro, this type of climate seems an effective way to combat the amount of integrity violations, but only in Montenegro does this also hold for the acceptability of integrity violations. The effects of ethical leadership and ethical climates on integrity violations in the USA and The Netherlands are smaller, which we think might have to do with the fact that these countries have a longer tradition in integrity management resulting in general in a higher level of organizational integrity. Further, these ndings might thus be the result of cultural backgrounds and differences, although Serbia and Montenegro share a lot of these.

606

Frequency of 0.14 20.62 0.09 0.14 0.11

Bribes

Selling information

Favoritism external

Small gifts

Large gifts

Conict interest

The USA

The Netherlands

2 0.08 2 0.07 0.29 2 0.08 2 0.25 20.14 0.03 20.28 0.05 20.28

20.24

0.32 0.07 0.07 2 0.24 2 0.18

0.25 20.13 20.14 20.04 20.22

0.17 2 0.20 2 0.10 2 0.03 2 0.01

Serbia

2 0.19 2 0.23 0.26 2 0.02 20.18 20.17 0.36 20.10 20.10 20.17 0.43 0.02

2 0.27 2 0.27 2 0.07 2 0.03

20.16 20.18 0.27 0.03

0.04 2 0.16 0.08 2 0.14

Montenegro 2 0.26 2 0.38 2 0.10 0.00 20.07 20.09 0.15 0.09

Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental 2 0.10 2 0.44 2 0.29 0.20 2 0.45 20.16 20.49 20.43 0.28 20.60 20.56 20.56 20.16 20.05 0.01 20.21 20.23 0.09 20.21 0.10 2 0.45 2 0.41 0.45 2 0.63 2 0.53 2 0.56 2 0.22 0.04 0.11 20.40 20.33 0.33 20.68 20.51 20.60 20.28 0.09

2 0.14 2 0.52 2 0.42 0.27 2 0.38 2 0.42 2 0.32 2 0.26 2 0.43

Note: When lled in , the correlation could not be computed because at least one of the variables is constant

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Table VI. Correlations between ethical leadership and ethical climate with frequency of integrity violations per country

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The USA 20.54

The Netherlands

Serbia

Montenegro 2 0.40 2 0.50 2 0.03 2 0.36 20.40 20.50 20.03 20.36

Note: When lled in , the correlation could not be computed because at least one of the variables is constant

Table VII. Correlations between ethical leadership and ethical climate with acceptability of integrity violations per country Bribes 2 0.26 20.03 0.42 20.48 0.03 20.24 0.00 20.27 0.35 0.15 20.31 20.30 20.30 0.15 20.18 20.24 20.26 20.18 0.01 2 0.03 2 0.26 2 0.15 0.02 2 0.13 2 0.31 2 0.33 0.29 2 0.37 2 0.51 2 0.38 2 0.31 2 0.11 2 0.08 2 0.10 0.40 0.09 20.12 20.13 0.35 0.05 20.11 20.09 0.01 20.22 20.43 2 0.12 2 0.07 2 0.02 2 0.29 2 0.43 20.28 0.15 2 0.08 0.06 2 0.42 0.13 0.03 Selling information Favoritism external Small gifts Large gifts 0.04 0.17 20.18 20.13 20.04 20.20 20.12 20.24 0.23 0.10 20.06 20.22 20.14 0.20 20.52 20.60 20.59 20.28 20.34 Conict interest 0.14 0.02 2 0.08 2 0.16 2 0.08 0.00 2 0.01 2 0.16 0.21 2 0.09 2 0.28 2 0.20 2 0.13 2 0.40 0.03 2 0.11 2 0.08 0.10 2 0.23

Acceptability of

Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental Ethical leadership Ethical climate Benevolence Laws and rules Independence Instrumental

We also realize that the explanation could lie in methodological problems in the collection of the data. We simply do not know if all participants really felt free to express their honest opinion, and were dependent on cooperating persons in Serbia and Montenegro without oversight on the procedures ourselves. Central and Middle European countries might also need more time to adjust their value system to their new form of government. Transition to democracy leads to changing societal values, de-emphasis on authority and rising support for a professional local government that is free from corrupt behaviors (Inglehart, 2000). Such change must embrace anti-corruption values that guide relationships between political processes, private interests and civil society. It is important for central governments to re-examine and redene current values and add new values to redene new systems of intergovernmental relations found in the societal cultures of their nations (Hofstede, 2001). Societal values inuence the culture and climate dimensions of public organizations. It is essential for governance policy to be congruent with societal values, and such a process takes time. Therefore, the data presented here are still very raw. Nevertheless, we hope that they provide the start of a promising exchange of research results in the eld of ethics and integrity for further comparative and longitudinal research[3].
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Lawton, A. (1998), Ethical Management for the Public Services, Open University Press, Philadelphia, PA. Ott, J.S. (1989), The Organizational Culture Perspective, Dorsey Press, Chicago, IL. Reichers, A. and Schneider, B. (1990), Climate and culture: an evolution of constructs, in Schneider, B. (Ed.), Organizational Climate and Culture, Jossey-Bass, San-Francisco, CA, pp. 5-39. Schein, E. (1985), Dening organizational culture, in Shafritz, J.M., and Ott, J.S. (Eds), Classics of Organization Theory, Wadsworth Publishing, New York, NY, pp. 430-41. Schneider, B. and Rentsch, J. (1988), Managing climates and cultures: a futures perspective, in Hage, J. (Ed.), Futures of Organizations, Lexington Books, Lexington, MA. Thompson, D.F. (1985), The possibility of administrative ethics, Public Administration Review, Vol. 45, pp. 555-62. Transparency International (2003), Annual Report, Transparency International, Berlin. Transparency International (2008), Annual Report, Transparency International, Berlin. Trevino, L.K., Hartman, L.P. and Brown, M. (2000), Moral person and moral manager: how executives develop a reputation for ethical leadership, California Management Review, Vol. 42 No. 4, pp. 128-42. Trevino, L.K., Weaver, G.R., Gibson, D.G. and Tofer, B.L. (1999), Managing ethics and legal compliance: what works and what hurts?, California Management Review, Vol. 41 No. 2, pp. 637-47. Vardi, Y. (2001), The effects of organizational and ethical climates on misconduct at work, Journal of Business Ethics, Vol. 29, pp. 325-37. Victor, B. and Cullen, J.B. (1987), A theory and measure of ethical climate in organizations, Research in Corporate Social Performance and Policy, Vol. 9, pp. 51-71. Victor, B. and Cullen, J.B. (1988), The organizational bases of ethical work climates, Administrative Science Quarterly, Vol. 33, pp. 101-25. Weber, M. (1947), The Theory of Social and Economic Organizations, pp. 145-6, Parsons, A.M. and Parsons, T. (Eds & Trans.), The Free Press, New York, NY, pp. 145-146. Wyld, D.C. and Jones, C.A. (1997), The importance of context: the ethical work climate constructs and models of ethical decision-making an agenda for research, Journal of Business Ethics, Vol. 16, pp. 465-72.

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Further reading Allen, J. and David, D. (1993), Assessing some determinant effects of ethical consulting behavior: the case of personal and professional values, Journal of Business Ethics, Vol. 12, pp. 449-58. Bailey, S.K. (1964), Ethics and public service, in Bruce, W. (Ed.), Classics of Administrative Ethics, Westview Press, Boulder, CO, pp. 63-78. Cohen, D.V. (1995), Creating ethical work climates: a socioeconomic perspective, Journal of Socio-Economics, Vol. 24 No. 2, pp. 317-44. Debicka, A. (2008), Proper instruction could help ght corruption, Local Government Brief, Spring, pp. 17-24, available at: www.unpan.org (accessed January 2, 2008). Denhardt, R.B. (1993), Theories of Public Administration, 2nd ed., Wadsworth Publishing, Belmont, CA.

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Erakovich, R. (2005), Relationship of organizational culture and ethical climate in public administration organizations, unpublished doctoral dissertation, University of Texas, Arlington, TX. Finer, H. (1941), Administrative responsibility in democratic government, in Bruce, W. (Ed.), Classics of Administrative Ethics, Westview Press, Boulder, CO, pp. 5-26. Gill, G. (2000), The Dynamics of Democratization: Elites, Civil Society and the Transition Process, St Martins Press, New York, NY. Goodpaster, K. (1986), The moral agenda of corporate leadership: concepts and research techniques, Proceedings of the Donald S. McNaughton Symposium, Syracuse, NY. House, R.J. and Dressler, G. (1974), Perceived leadership behavior scales, in Beardon, W.O. and Netemeyer, R.G. (Eds), Handbook of Marketing Scales, Sage, Newbury Park, CA, pp. 305-6. Jones, T. (1995), Instrumental stakeholder theory: a synthesis of ethics and economics, Academy of Management Review, Vol. 20 No. 2, pp. 404-38. Lambsdorff, J.G. (2007), The Institutional Economics of Corruption and Reform: Theory, Evidence and Policy, Cambridge University Press, Cambridge. Leys, W.A.R. (1943), Ethics and administrative discretion, in Bruce, W. (Ed.), Classics of Administrative Ethics, Westview Press, Boulder, CO, pp. 27-47. Michael, B. (2004), The rapid rise of anticorruption industry, Local Government Brief, Spring, pp. 17-24, available at: www.unpan.org (accessed January 2, 2008). Rohr, J.A. (1989), Ethics for Bureaucrats: An Essay on Law and Values, 2nd ed., Marcel Dekker, New York, NY. Taylor, F.W. (1947), Principles of Scientic Management, W.W. Norton, New York, NY. van Wart, M. (1998), Changing Public Sector Values, Garland Publishing, New York, NY. Waldo, D. (1980), The Enterprise of Public Administration: A Summary View, Chandler & Sharp Publishers, Novato, CA. Corresponding author Emile Kolthoff can be contacted at: [email protected]

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