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Discriminant analysis discriminates ethical and unethical behaviour

In order to identify the important variables that predict ethical and unethical behaviour, discriminant analysis was used. Prior research suggested that the variables that affect ethical decisions were attitudes, leadership, the presence or absence of ethical codes of conduct and the organisation’s size. To determine which of these variables were the best predictors of ethical behaviour, 149 firms were surveyed and asked to indicate how their firm operated in 18 different ethical situations. Of these 18 situations, 9 related to marketing activities. These activities included using misleading sales presentations, accepting gifts for preferential treatment and pricing below out-of-pocket expenses. Based on these nine issues, the participating firms were classified into two groups: ‘never practice’ and ‘practice’. An examination of the variables that influenced classification via twogroup discriminant analysis indicated that attitudes and a company’s size were the best predictors of ethical behaviour. Evidently, smaller firms tended to demonstrate more ethical behaviour on marketing issues.