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This paper uses a laboratory experiment to examine the effect of accountability pressure as a monitoring control tool to mitigate subordinates' propensity to create budgetary slack. The results suggest that budgetary slack is (lowest) highest when accountability pressure is (present) absent under a private information situation. The results further reveal that accountability pressure is positively associated with subordinates' perceived levels of honesty, which in turn is negatively associated with budgetary slack creation. The findings of this paper have important theoretical and practical implications for budgetary control systems design.

We use a laboratory experiment to examine a multitask environment common to practice, in which managers have multiple responsibilities, including both managerial reporting, as in participative budgeting settings, and effort provision toward daily tasks. Consistent with typical contracting arrangements, we examine incomplete contracts where honesty and effort are not enforceable. In such a multitask environment, when employers choose to offer comparatively generous wages to managers, we predict that managers will elect to provide higher effort. Meanwhile, we remain agnostic ex ante about the degree of misreporting due to findings in studies on gift exchange, moral licensing, and moral wiggle room. Overall, we find evidence that reciprocity, consistent with the gift-exchange model, does extend across both tasks. Implications for theory and practice are discussed.

The purpose of this paper is to investigate how trust, honesty and transparency impact the willingness and timeliness of communicating financial information between Government Finance Officers (GFOs) and members of the municipal boards they serve.

Survey data was collected from professionals who work with municipalities to ensure government resources are properly managed. Nonparametric local-linear regression was used to analyze the data.

Evidence suggests that trust in the board, GFO preference for honesty and greater transparency of the municipality influence the timeliness of communication. There is evidence that when the GFO and board members have a working relationship built on trust and the GFO has a preference for honesty, the GFO is more willing to share positive information with the board. In addition, there is evidence that with greater transparency and trust in the board, there is a reduction in the time of sharing positive information in situations where there is little discretion in disclosing and less willingness to share information.

A principal limitation of this study is the small sample size. In addition, the study was conducted using only participants from the pool of members of the Government Finance Officers Association of Texas. As an exploratory study, the survey included a minimal number of questions to gather data from actual GFOs and included only six possible scenarios. The time constraint resulted in a reduced number of questions related to the models used. Other limitations include the potential of missing variables, factors or perceptions related to scenarios not presented in the survey instrument.

The findings suggest that with greater transparency, there is less time between the event and the GFO communication to the board providing the opportunity to improve the effectiveness of the decision-making process.

This study is the first to explore the effects of increased transparency on the level of communication between the GFO and the board.

Discusses honesty and integrity as the basic principle of leadership. Defines quality leadership as a process beyond technical competence. Successful leaders continually demonstrate honesty and integrity as an essential element of their professional fabric; a lack of commitment to the principle renders all other skills meaningless. Depicts honesty and integrity as essential elements of human behaviour that promote and support quality relationships. Defines honesty and integrity in the context of building trust and maintaining credibility. Provides a sound philosophy that increases the probability for long‐term success and professional fulfilment. Includes quotes from contemporary and historical leaders.

Purpose — This chapter aims to present the way how to think about honesty in leadership, practically and simply on an example of the Czech Republic.Design/methodology/approach — This chapter discusses what (dis)honesty in leadership is, how it manifests and how it is perceived in the Czech Republic. It is illustrated with corruption statistics and a short interview with a Czech top manager from Microsoft.Findings — Contemporary leadership models accentuate soft side of leading personalities, including emotion, integrity, communication, networking, and serving others. Honesty belongs to necessary characteristics of effective leaders. Among Czech culture standards, several values are associated with integrity and honesty, particularly generosity, care about relatives, and confidence based on social relations as well as high evaluation of human behavior. The main weaknesses are low acceptance of formal structures and rules, the importance of informal communication, a strong tendency to conflicts and personal interpretation of any criticism.Originality/value — The complexity of (dis)honesty in leadership (encompassing its nature and impact factors) has received relatively little research attention.

Purpose — This study explores organizational ‘honesty’ when implementing corporate community initiatives (CCIs) with a particular focus on those community projects which are carried out in developing countries.Design/methodology/approach — This exploratory chapter adopts a qualitative case study approach and uses both primary and secondary data.Findings — The exploratory examination of organizational ‘honesty’ in relation to the ‘motives, decision-making and outcomes’ when implementing CCIs, provides unique findings which indicate the multi-faceted nature of organizational motives, the engagement of salient stakeholders in CCIs’ implementation and the underlying economic nature of the expected outcomes from the initiatives which are largely considered to be socially progressive. Framework consisting of four evaluative criteria is proposed as a possible evaluative framework to examine organizational ‘honesty’ in the implementation of CCIs.Research limitations — Although this study provides an initial explorative perspective of the debate on organizational ‘honesty’ in corporate social responsibility (CSR), it is limited by its scope and generalizability of the findings as it was based only on three cases.Originality/value — The chapter provides a unique and internal perspective of the manifestation of organizational ‘honesty’ in the implementation of CCIs. It shows that determining such ‘honesty’ within CCIs is complex and requires an in-depth assessment of a range of evaluative criteria.

This study contributes to the participative budgeting and budget misrepresentation literature by exploring: (1) whether managers’ judgments of fair behaviors are malleable and context-dependent and (2) if these judgments of fair behavior impact cost reporting misrepresentations. Two experiments investigate these questions. Experiment 1 (n = 42) tests whether the behavior that managers judge to be “fair” differs based on the decision context (i.e., initial economic position [IEP]). Experiment 2 (n = 130) investigates: (1) how managers’ deployment of fairness beliefs influences their reporting misrepresentations and (2) how decision aids that reduce task complexity impact managers’ deployment of fairness beliefs in their misreporting decisions. The study found that managers deploy fairness beliefs (i.e., honesty or equality) consistent with maximizing their context-relevant income. Hence, fairness beliefs constrain misrepresentations in predictable ways. In addition, we find more accounting information is not always beneficial. The presence of decision aids actually increases misrepresentations when managers are initially advantaged (i.e., start with more resources than others). The implications from these findings are relevant to the honesty and budgeting literature and provide novel findings of how managers’ preferences for fairness constrain managers from maximizing their income. The chapter demonstrates that contextual factors can influence the deployment of managers’ fairness beliefs which, in turn, differentially impact their reporting misrepresentation. Another contribution is that providing decision aids, which reduce task complexity, may not always benefit companies, since such aids may increase misrepresentation under certain conditions.

Purpose — The aim of this chapter is to explore the relative bounds between the domains of dishonesty and honesty, focusing on the antecedences and consequences of these phenomena.Design/methodology/approach — This conceptual paper discusses the literature on the nature of (dis)honesty in management based on the chapters published in this book but also other management literature.Findings — (Dis)honesty is a complex concept, especially in international management. The chapter brings out two main features of dishonesty. First, dishonest behavior occurs always in result of moral path dependency, and second, both honest and dishonest behaviors seem to be contagious — belonging to our social surrounding, we inevitably mirror others.Originality/value — The complexity of (dis)honesty in management (encompassing its nature, impact factors and consequences) has received relatively little research attention.

The purpose of this paper is to analyse generational differences with regard to honest behaviour and honesty as a personal value in post-Soviet business environment: in Estonia and Latvia.

In total, 781 service employees from six retail organizations in Estonia and Latvia were surveyed to assess likelihood of dishonest behaviour and to rank their values according to the Rokeach instrumental value scale.

Older generations report higher likelihood of honest behaviour than younger generations. Post-war and early generation X, born between 1945 and 1970, also rate honesty and responsibility higher as their individual values.

The complexity of generational differences in ethical behaviour and honesty as a personal value has not been widely researched in post-Soviet business environment.

Trust is not a homogeneous phenomenon. In economic relationships different trust structures are at work, including distrust, negative trust and lack of trust. Perceived honesty and competence co‐determine the trust structures economic agents have in their interactions with others. Trust structures influence the way agents engage in economic relationships. Honesty and competence should be developed to improve trust in economic relationships. Ethics is not a luxury of advanced economies, it is an indispensable means to foster economic development.