The independent variables are the presence (absence) of adverse selection condition and the level (high or low) of ethical reasoning. The level ot moral reasoning was measured by the Gibbs Sociomoral Reflection objective Measure" (SROM: 1984)
The two main effect hypotheses examined the effect of presence (or absence) of adverse selection condition and level of ethical reasoning. The two interaction-effect hypotheses explored the effect of the independent variables on the decision to continue or discontinue the unprofitable project measured by the 10-point scale.
The participants are 67 MBA and Ms-Accounting students required to read and response a hypothetical case. The adverse selection condition is manipulated in the case. Then, the participants completed SROM, and demographic questionnaire
An analysis of variance presented that the main effects and the interaction effect are significant thus, the hypotheses were supported. In sum, the adverse selection conditions have a greater impact on the project evaluation decisions of managers with low moral reasoning level.
Both studies employed the level of moral reasoning as a determinant of ethical behavior Ponemons study possesses the interesting psychological hypothesis formulation and rbbust perimental design. Rutledge and Karim's study 1999) examined the ethical consideration on evaluation judgments and were based on experimental design. The experimental lab design of both studies advantages in high internal validity but raised the question about generalizability. The general conclusion is that the level of moral reasoning positively correlates to the ethical behavior.