Individual Beliefs About Organizational Ethics

1. Abstract

The Individual Beliefs About Organizational Ethics (IBOE) scale is a psychometric instrument designed to evaluate an employee’s moral standards, ethical judgment, and acceptance or rejection of ethically questionable practices carried out for the perceived benefit of an employing organization. Originally developed and validated by Karen S. Froelich and Janet L. Kottke (1991), the IBOE assesses the degree to which individuals endorse or condemn behaviors that deviate from broader societal and organizational ethical codes in pursuit of corporate goals. Comprising a 10-item inventory, the scale is structured around two distinct yet complementary dimensions: Support for the Company (6 items), which measures the tolerance of questionable internal directives, corner-cutting, document falsification, and compromises to product safety; and Protecting the Company (4 items), which gauges an individual’s readiness to deceive external or internal stakeholders—such as clients, colleagues, and regulatory bodies—to insulate the enterprise from harm.

Items are rated on a 7-point Likert-type response scale ranging from 1 (strongly agree) to 7 (strongly disagree). Under this original scoring scheme, higher numerical values represent a greater ethical sensitivity or a refusal to condone morally dubitable behaviors. Subsequent psychometric research (e.g., Mudrack et al., 1999) has demonstrated that the IBOE can also be effectively utilized as a unified composite measure reflecting an employee’s overall lack of acceptance of ethically dubious conduct. Across empirical investigations, the scale exhibits robust internal consistency, with Cronbach’s alpha coefficients regularly exceeding .80 for both individual subscales and the global composite. Construct validity is supported by significant relationships with organizational tenure, affective organizational commitment, locus of control, equity sensitivity, and the Protestant work ethic. This article provides a comprehensive academic review of the IBOE, examining its theoretical grounding, psychometric structure, validation evidence, operational administration, and applied utility in modern organizational research.

2. Keywords

Individual Beliefs About Organizational Ethics, IBOE, Froelich and Kottke, organizational ethics, business ethics, ethical decision-making, unethical pro-organizational behavior, corporate social responsibility, psychometrics, scale validation, moral philosophy, organizational commitment

3. Authors

The Individual Beliefs About Organizational Ethics (IBOE) measure was developed by Karen S. Froelich and Janet L. Kottke. At the time of the scale’s initial development and psychometric validation, the authors were affiliated with academic departments dedicated to management, industrial-organizational psychology, and behavioral science.

• Karen S. Froelich, Ph.D.: Professor Emeritus of Management, Department of Management and Marketing, College of Business, North Dakota State University, Fargo, North Dakota, United States. Dr. Froelich’s research expertise spans strategic management, corporate governance, organizational ethics, and the strategic behavior of nonprofit and for-profit enterprises.
• Janet L. Kottke, Ph.D.: Professor of Psychology, Department of Psychology, California State University, San Bernardino, California, United States. Dr. Kottke specializes in industrial and organizational psychology, personnel selection, measurement development, diversity management, and workplace ethics.

Subsequent psychometric expansion, structural refinement, and cross-construct validation of the instrument were prominently conducted by organizational scholars including Peter E. Mudrack and E. Sharon Mason, who evaluated the scale within broader conceptual models of moral philosophy and employee attitudes.

4. Purpose

The primary purpose of the Individual Beliefs About Organizational Ethics scale is to measure an individual’s cognitive endorsement or rejection of organizational behaviors that violate societal or professional ethical norms. When organizations face intense competitive pressures, economic uncertainty, or aggressive performance metrics, systemic tensions emerge between institutional survival, profitability, and moral integrity. The IBOE provides organizational researchers and behavioral diagnosticians with an empirically validated, brief self-report metric designed to quantify the extent to which employees prioritize corporate success, organizational defense, and competitive advantage over moral obligations and universal ethical standards.

Research Applications

Within empirical organizational scholarship, the IBOE serves as an indispensable tool for exploring the antecedents and consequences of ethical decision-making in the workplace. It is widely employed in studies examining:

• Unethical Pro-Organizational Behavior (UPB): The scale functions as an established indicator of an employee’s cognitive propensity to engage in unlawful or unethical acts intended to protect or advance the enterprise.
• Ethical Climate and Culture: Scholars utilize the scale to evaluate how organizational climate, executive ethical leadership, and institutional codes of conduct shape, reinforce, or degrade individual moral expectations.
• Whistleblowing and Compliance: The IBOE aids in modeling the psychological threshold at which employees decide whether to overlook internal malfeasance or report organizational violations to external regulatory entities.
• Cross-Cultural and Demographic Comparisons: Researchers deploy the instrument to trace demographic, tenure-based, generational, and cross-national differences in ethical attitudes within business environments.

Organizational and Diagnostic Applications

From an applied perspective, the IBOE offers significant diagnostic value for organizational development practitioners, compliance officers, and human resource consultants. While self-report ethics scales must be interpreted carefully in high-stakes personnel selection due to social desirability bias, the IBOE can be administered anonymously as part of organizational health audits, cultural assessments, and post-training interventions. By tracking aggregate scores across departments or managerial tiers, compliance executives can identify structural vulnerabilities where employees feel compelled to compromise ethical standards—such as falsifying documentation or deceiving consumers—to meet performance targets.

5. Psychological Construct

The construct assessed by the IBOE represents an individual’s normative cognitive schema concerning the acceptability of ethically compromised organizational behaviors. While classical ethical theories often view morality as an absolute personality disposition, organizational psychology conceptualizes individual ethical beliefs as situated within specific institutional contexts. The IBOE operationalizes this construct across two distinct empirical dimensions, while also functioning as a higher-order composite indicator of ethical intolerance.

Dimension 1: Support for the Company

The Support for the Company dimension evaluates an individual’s willingness to endorse or tolerate systemic, operational, and managerial actions that compromise integrity to secure operational outcomes. It reflects an underlying utilitarian rationale where business survival, managerial authority, and financial profit supersede ethical imperatives. Specific facets tapped by this 6-item dimension include:

• Subordination of Personal Judgment: Endorsement of hierarchical compliance even when a supervisor mandates alignment with an inaccurate or dishonest viewpoint.
• Competitive Rationalization: The rationalization that unethical conduct (e.g., engage in shady practices) is legitimate because marketplace competitors engage in identical tactics.
• Collusive Silence: The belief that employees should deliberately overlook peer or managerial wrongdoing if such concealment benefits the financial or operational position of the organization.
• Outcome-Driven Moral Disengagement: The pragmatic belief that leadership should disregard procedural and ethical propriety as long as desired corporate objectives are attained.
• Willful Falsification and Safety Compromise: Explicit tolerance for the falsification of institutional records and the prioritization of balance-sheet profitability over customer and product safety.

Dimension 2: Protecting the Company

The Protecting the Company dimension consists of 4 items centered on deception as a strategic, defensive behavior. While the first dimension examines broad operational tolerance of organizational misconduct, this factor directly measures an individual’s personal endorsement of active dishonesty to insulate the enterprise from external scrutiny, legal liability, or reputational damage. The items capture deliberate falsehoods directed toward four key organizational stakeholders:

• Internal Peers: Lying to co-workers to maintain internal operational secrecy or deflect culpability away from corporate interests.
• Supervisory Hierarchy: Deceiving managers or corporate leadership if doing so is perceived as shielding the broader enterprise from systemic harm.
• Inter-Organizational Agents: Misleading external business partners, vendors, or competitive representatives to secure tactical advantages or conceal liabilities.
• Clients and Consumers: Deceiving the end-consumer or client base to protect company revenues, operational standing, or corporate prestige.

Global Composite: Unacceptability of Ethically Dubious Actions

In addition to the two correlated subdimensions, researchers frequently examine the 10 items as a single composite indicator reflecting an employee’s lack of acceptance of ethically dubious corporate actions. High composite scores reflect a principled, deontological adherence to integrity, transparency, and consumer protection, whereas lower composite scores indicate an opportunistic, Machiavellian, or excessively deferential posture toward corporate interests.

6. Theoretical Framework

The development of the IBOE is anchored in fundamental models of ethical decision-making in organizations, drawing upon foundational scholarship in moral philosophy, cognitive moral development, and behavioral organizational theory.

Rest’s Four-Component Model of Morality

The psychological conceptualization of the IBOE aligns directly with James Rest’s (1986) Four-Component Model of Morality, which posits that ethical behavior emerges through four sequential psychological processes: moral awareness, moral judgment, moral motivation, and moral character. The IBOE primarily captures the second component—moral judgment. By presenting respondents with specific workplace dilemmas involving document falsification, competitive malpractice, and deliberate deception, the instrument operationalizes whether the respondent’s internal cognitive calculus classifies these acts as acceptable or impermissible within an institutional context.

Deontological vs. Teleological Moral Philosophies

The tension measured by the IBOE reflects the classical philosophical conflict between deontology and teleology (specifically utilitarianism):

• Deontological Ethics: Rooted in Kantian moral philosophy, deontology posits that certain actions are inherently right or wrong, regardless of their consequences. Under this paradigm, lying to a customer or falsifying a document is fundamentally impermissible, irrespective of whether it prevents organizational bankruptcy or preserves jobs. Respondents exhibiting high IBOE scores operate from a deontological stance, asserting that organizational survival never justifies deliberate moral breaches.
• Teleological and Utilitarian Rationalization: Conversely, teleological ethics assert that the moral worth of an action is determined solely by its ultimate consequences. Within corporate contexts, this can devolve into narrow corporate egoism, wherein any action—including deception and safety compromises—is deemed acceptable if it produces a net financial or competitive benefit for the firm. Low IBOE scores reflect this utilitarian rationalization.

Moral Disengagement in the Workplace

The IBOE also interfaces with Albert Bandura’s (1986, 1999) theory of moral disengagement. Bandura proposed that individuals employ specific socio-cognitive mechanisms to deactivate self-regulatory moral sanctions, enabling them to engage in unethical behavior without experiencing personal guilt. Several IBOE items explicitly mirror core moral disengagement mechanisms: advantageous comparison (“necessary… because the competition is doing so”), displacement of responsibility (“supervisor asking an employee”), and disregard or distortion of consequences (“profits should be given a higher priority than the safety of a product”).

7. Validity

The psychometric validity of the IBOE has been established through multiple empirical investigations exploring its construct, convergent, discriminant, and criterion-related validity.

Construct and Factorial Validity

Froelich and Kottke (1991) initially confirmed the construct validity of the 10-item instrument through exploratory factor analyses, which clearly delineated the two-dimensional framework of Support for the Company and Protecting the Company. In subsequent research, Mudrack and colleagues (1999) corroborated the scale’s structural stability, confirming that while the two subdimensions exhibit high intercorrelation, they capture meaningfully differentiated aspects of organizational ethics. Furthermore, confirmatory models demonstrated that a single higher-order factor adequately accounts for the common variance, supporting the operationalization of the scale as a global composite.

Convergent and Criterion Validity

Extensive correlation studies have validated the scale against a broad spectrum of individual difference variables, personality constructs, and organizational attitudes:

• Tenure and Demographic Correlates: Froelich and Kottke (1991) observed that both Support for the Company and Protecting the Company correlated positively with organizational tenure and chronological age. Older employees with longer institutional tenure demonstrated lower tolerance for ethically questionable practices, reflecting greater moral maturity and vocational autonomy.
• Equity Sensitivity: Mudrack et al. (1999) demonstrated that the composite measure of ethical intolerance correlated positively with equity sensitivity. Individuals classified as “Benevolents”—who focus on giving rather than receiving in interpersonal exchanges—were significantly less accepting of dubious organizational behaviors than “Entitleds”.
• Unacceptability of Self-Benefiting Malpractice: The IBOE composite exhibited a robust positive correlation with measures evaluating the unacceptability of gaining personal benefits at the expense of the employer, confirming that individuals who reject corporate-serving misconduct also reject self-serving misconduct.

Discriminant Validity

Crucially, Froelich and Kottke (1991) demonstrated that individual beliefs about organizational ethics were empirically distinct from traditional workplace attitudes, specifically organizational commitment and job satisfaction. While employees who rejected unethical behaviors exhibited positive organizational commitment, the magnitude of the shared variance ($r^2 < .15$) proved that the IBOE is not an artifact of general organizational sentiment. Furthermore, Mudrack et al. (1999) established discriminant validity by demonstrating that the IBOE correlated negatively with an external locus of control and Machiavellian orientation, confirming that the scale accurately captures moral conviction rather than mere institutional compliance.

8. Reliability

The IBOE has consistently exhibited high internal consistency reliability across diverse industrial and organizational samples, adhering to established psychometric standards for behavioral research.

Internal Consistency Across Samples

• Original Validation Sample (Froelich & Kottke, 1991): In the initial validation study involving employed adults, the 6-item Support for the Company subscale yielded a Cronbach’s alpha coefficient of $\alpha = .84$. The 4-item Protecting the Company subscale demonstrated a Cronbach’s alpha of $\alpha = .82$. These figures demonstrate high internal homogeneity among items within each subdimension.
• Replication and Composite Assessment (Mudrack et al., 1999): When evaluated as a unified 10-item composite metric measuring lack of acceptance of ethically dubious actions, the instrument demonstrated a Cronbach’s alpha coefficient of $\alpha = .82$. Subscale coefficients in this sample remained stable, hovering between $.80$ and $.83$.

Item-Total Statistics and Scale Homogeneity

Analyses of corrected item-total correlations across published studies show that all 10 items correlate well with their respective subscale totals, with coefficients routinely exceeding the standard .40 psychometric threshold (ranging from .46 to .71). No single item deletion results in a significant increase in Cronbach’s alpha, confirming that every item contributes meaningfully to the measured construct.

9. Factor Analysis

The latent structural properties of the IBOE were originally investigated through exploratory factor analysis (EFA) and later corroborated through confirmatory factor analysis (CFA).

Exploratory Factor Structure

Froelich and Kottke (1991) subjected the initial item pool to principal axis factoring with varimax and oblique rotations. The extraction criteria (eigenvalues > 1.0 and scree plot examination) consistently yielded a clean two-factor solution that accounted for the majority of the total variance:

• Factor 1: Support for the Company: The six items loaded cleanly onto this factor, with standardized factor loadings ranging from .52 to .78. Cross-loadings onto the second factor were negligible (all < .25). The items indexed institutional compliance, competitive rationalization, outcome prioritization, and administrative falsification.
• Factor 2: Protecting the Company: The four deception-oriented items loaded heavily onto this factor, with factor loadings spanning from .64 to .85. These items exhibited high conceptual parsimony, centered entirely around deceptive communication aimed at shielding the enterprise from co-workers, managers, partners, and clients.

Confirmatory Factor Modeling

In subsequent confirmatory evaluations, structural equation modeling was applied to assess the goodness-of-fit for both a two-factor correlated model and a higher-order unidimensional model. Results from these structural assessments showed that:

• The two-factor correlated model demonstrated acceptable fit to empirical data: $\chi^2/df < 2.5$, Comparative Fit Index ($\text{CFI}$) $ge .93$, Goodness-of-Fit Index ($\text{GFI}$) $ge .92$, and Root Mean Square Error of Approximation ($\text{RMSEA}$) $le .06$.
• The inter-factor correlation between Support for the Company and Protecting the Company was moderate to high ($r \approx .55$ to $.65$), confirming that while the subscales tap distinct behavioral spheres (systemic operational compliance vs. active interpersonal deception), they share common variance under an overarching corporate ethics schema. This statistical relationship supports both subscale reporting and composite scoring.

10. Instrument / Measurement Tool

The operational characteristics and structural specifications of the IBOE are summarized below:

• Instrument Name: Individual Beliefs About Organizational Ethics (IBOE)
• Authors: Karen S. Froelich and Janet L. Kottke (1991)
• Instrument Type: Self-report psychometric rating scale
• Target Population: Working adults, management professionals, corporate executives, and organizational researchers
• Item Count: 10 items (6 items for Support for the Company; 4 items for Protecting the Company)
• Response Format: 7-point Likert-type response scale
• Response Anchors:
  • 1 = Strongly agree
  • 2 = Agree
  • 3 = Somewhat agree
  • 4 = Neither agree nor disagree
  • 5 = Somewhat disagree
  • 6 = Disagree
  • 7 = Strongly disagree
• Scoring Instructions:
  • All 10 items are formulated such that agreement reflects tolerance or endorsement of ethically dubious behavior.
  • Under the original scoring protocol (Froelich & Kottke, 1991), items are scored directly from 1 to 7 without reverse-coding. Consequently, higher scores indicate greater ethical intolerance (i.e., strong disagreement with unethical practices and higher moral standards).
  • Support for the Company Score: Calculated as the sum or mean of items 1 through 6 (score range: 6 to 42, or mean 1.0 to 7.0).
  • Protecting the Company Score: Calculated as the sum or mean of items 7 through 10 (score range: 4 to 28, or mean 1.0 to 7.0).
  • Global Composite Score: Calculated as the sum or mean of all 10 items (score range: 10 to 70, or mean 1.0 to 7.0).
  • Alternative Coding: Some contemporary studies reverse-code all items ($1 \rightarrow 7, 7 \rightarrow 1$) so that higher scores reflect higher acceptance of unethical pro-organizational behavior. When utilizing the scale, researchers must clearly specify their scoring direction.
• Administration Time: Approximately 3 to 5 minutes

11. Permissions & Fee and Test Year

The Individual Beliefs About Organizational Ethics (IBOE) instrument was originally published in 1991 in the peer-reviewed journal Educational and Psychological Measurement (Froelich & Kottke, 1991). The copyright for the original article and its contents is held by Sage Publications, Inc.

• Academic and Non-Commercial Research Use: The scale items were published in full within the original validation article (Table 1, p. 380). In accordance with standard academic practice, the scale may be used by independent researchers, educators, and graduate students for non-commercial scientific research, provided that appropriate scholarly attribution and citation are given to Froelich and Kottke (1991) and the publisher.
• Commercial Applications and Reproduction: Organizations, corporate consultants, or commercial testing entities wishing to republish the scale, incorporate it into proprietary software platforms, or deploy it for paid organizational audits must obtain formal copyright clearance and licensing permissions through Copyright Clearance Center (CCC) or directly via Sage Publications, Inc.
• Fee: There are no testing fees for academic and non-profit research use when the measure is compiled independently from the published scholarly literature.

12. References

• Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Prentice-Hall.
• Bandura, A. (1999). Moral disengagement in the perpetration of inhumanities. Personality and Social Psychology Review, 3(3), 193–209. https://doi.org/10.1207/s15327957pspr0303_3
• Froelich, K. S., & Kottke, J. L. (1991). Measuring individual beliefs about organizational ethics. Educational and Psychological Measurement, 51(2), 377–383. https://doi.org/10.1177/0013164491512017
• Mudrack, P. E., & Mason, E. S. (1996). Individual ethical beliefs and perceived corporate social responsibility: An examination of two aspects of the construct. Journal of Business Ethics, 15(2), 197–202. https://doi.org/10.1007/BF00705587
• Mudrack, P. E., Mason, E. S., & Stepanski, K. M. (1999). Equity sensitivity and ethical judgments. Journal of Occupational and Organizational Psychology, 72(1), 29–39. https://doi.org/10.1348/096317999166488
• Rest, J. R. (1986). Moral development: Advances in research and theory. Praeger.
• Treviño, L. K., Weaver, G. R., & Reynolds, S. J. (2006). Behavioral ethics in organizations: A review. Journal of Management, 32(6), 951–990. https://doi.org/10.1177/0149206306294258
• Umphress, E. E., & Bingham, J. B. (2011). When employees do bad things for good reasons: An examination of unethical pro-organizational behaviors. Organization Science, 22(3), 621–640. https://doi.org/10.1287/orsc.1100.0559

13. Items of the Scale (Questionnaire)