Ethics and effectiveness as measured by communications in loan presentations

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Virginia Tech

This study assessed intended communication behavior in terms of ethics, information content effectiveness, and the potential relationship between the two. Participants were 33 university finance majors who wrote open-ended responses to simulated loan presentation scenarios containing ethical communication content.

The analysis consisted of a combination of qualitative and quantitative methods. A panel of bank loan officers judged the finance majors" open-ended responses for ethics and content effectiveness. From the officers' scores, the responses were categorized as: (1) ethical, (2) unethical, (3) effective, (4) ineffective, (5) ethical/effective, (6) ethical/ineffective, (7) unethical/effective, or (8) unethical/ineffective.

The finance majors' answers tended to be judged as ethical, but the judgements were mixed as to the effectiveness of their responses. The responses that were judged to be both ethical and effective tended to be direct followed by a sales pitch on the benefits of the loan. The sales pitch portion of the responses was typically irrelevant to the question posed in the scenarios. Responses that were judged to be both unethical and ineffective tended to be either responses that were naive or responses that avoided the question being asked in the scenario.

The findings indicate that it is difficult to provide an unethical response that is also effective. However, an ethical response can just as easily be effective or ineffective. In other words, an effective response is likely to be ethical, but an ethical response gives no indication as to whether it is effective or ineffective.

One main conclusion resulted from the findings: Effective communication does not have to occur at the expense of communicating in an unethical manner.

Beneficiaries of this study are both business people and educators. It can help banking trainers determine what content should be targeted in management training programs with regard to communication behavior in a loan presentation. Business communication faculty can benefit in two primary ways: the study shows the intended communication behavior of finance majors ("where the students are") and it provides preliminary data on what communication techniques are considered effective, ineffective, ethical, and unethical by business people, specifically loan officers.