Abstract

This study proposes a model that explains the ethical behavior of automobile salespeople in terms of their ethical perception, legal perception, method of compensation (commission-based or salary-based), age, and education. The model is estimated by using five scenarios that involve ethical issues commonly found in the automobile industry and responses from 184 automobile salespeople in a mid-Atlantic metropolitan area. The findings suggest that ethical perception is the most important determinant of ethical behavior. Also, method of compensation is a major determinant in four of five scenarios, and legal perception in two out of five scenarios. However, age and education are not significantly related to ethical behavior. A discussion of the results, limitations, and implications is presented for managers.