Differences in Occurrence of Unethical Business Practices in a Post-Transitional Country in the CEE Region: The Case of Slovakia

Abstract

This study aims to contribute to the understanding of unethical practices in business and asks whether certain types of organizations are considerably more exposed to unethical business practices than others are. Drawing from the tenets of institutional theory, the paper investigates the occurrence of unethical practices in different organizational “fields”, namely the industry sector (with focus on Finance and Construction), company membership in professional networks, company ownership (public/private), and company age. The method of stratified random sampling by proportional allocation is used to establish the sample (n = 1295), composed mostly of company owners and higher managers. Results show that, in general, the industry sector, membership in professional networks, and company age are associated with significant variance in the perceived incidence of unethical practices, whereas company ownership has no significant effect in this regard. More specifically, the construction sector is significantly more exposed to unethical practices than other sectors in the sample, while the finance sector is not. Companies with membership in professional networks report a significantly lower occurrence of unethical practices. Young companies are significantly more exposed than their more mature counterparts; however, here the effect of company size must be accounted for. The research was conducted in one of the former CEE block countries—Slovakia. Given their common communist past and comparable peripeties with the transition process, these findings might be useful for understanding business ethics issues in a wider context of the CEE region.