Research shows correlation between values and salary preferences of business executives

10/07/04

MANHATTAN, KAN. -- Executives who downplay ethics and values in their decision making may also be the ones who prefer extraordinarily high salaries for themselves.

By comparison, those executives who are more inclined to consider ethics and values in their decisions preferred more fair pay throughout their organizations.

Diane Swanson, associate professor of management and the von Waaden business administration professor at Kansas State University, said this is the most significant implication of her recent research.

In addition, Swanson said executives who are more likely to downplay values in decisions and prefer extraordinarily high salaries are also the ones who have received more business education.

"This is yet more evidence of business education teaching greed and self-centeredness instead of service to community," Swanson said. "Business students should learn that business people not only serve themselves but society as well. They've got to have some community mindedness or we'll be stuck with even more ill-effects of corporate scandals in the future.

"One reason these findings are important is that, in the midst of corporate scandals that have racked society and destroyed jobs and trust in business, executives are still paid astronomical salaries," Swanson said. "This should be questioned."

She conducted the research with Marc Orlitzky from the University of Auckland in New Zealand. Swanson said the results are only preliminary and more executives must be surveyed to make stronger assertions.

Swanson and Orlitzky's research was funded by the Australian Graduate School of Management in Sydney, Australia.

Swanson will be speaking at the 2004 Japha Symposium on Business and Professional Ethics Friday, Oct. 29. Swanson's speech will be published as a chapter in a book by Blackwell Publisher.

She submitted a paper based on her research because it related to the theme "The Ethics of Executive Compensation." The symposium is sponsored by the University of Colorado.

Swanson is also chair and founder of the Business Ethics Education Initiative, an effort championing the need for ethics in business school curricula. She holds a doctorate with distinction from the Katz Graduate School of Business at the University of Pittsburgh in Pennsylvania for business administration in strategy, environment and organization. She received her master's in economics from the University of Missouri at Kansas City, with honors, in 1982, and her bachelor's in business from Avila College in 1980.

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