Procedural and Distributive Justice: Examining Equity in a University Setting

The concept of organizational justice is important to understanding and predicting organizational behavior. A significant development in the research literature has been the separation of distributive and procedural justice. While much of the research has focused on negative outcomes, this research attempted to verify the presence of both forms of justice in the context of positive outcomes. Subjects completed an instrument designed to measure their perceptions of distributive and procedural justice. The subjects also reported their satisfaction and sense of fairness with their salary increases, their belief that the procedures to award the increases had been followed, and their level of information and agreement regarding the salary program. These measures, along with size of salary increase and gender were examined to determine their impact on the subjects' perceived level of justice. The data support the existence of the two distinct forms of justice, but suggest that procedural justice may, in turn, branch out into two aspects. One category involves being informed, and a second appears to deal with acceptance of procedures. A series of relationships are then considered. Significant gender effects were non-existent.     

Designing a global compensation system: The logic and a model

Increased emphasis on multinational trade and the growth of foreign subsidiaries of United States based corporations has heightened the need for managers in foreign countries. Development of a comprehensive global compensation system for expatriates, foreign nationals and third country foreign nationals is one of the most important issues facing international human resource management. This article presents a compensation model that examines the internal/external environments that affect the managers' expectations and ultimate satisfaction with their international compensation packages.     

Negotiating Effectively: Justice in International Environmental Negotiations

Are negotiators who rely on justice principles in the process of bargaining and drafting agreements more—or rather less—effective than others? This article examines whether adherence to principles of procedural and distributive justice in negotiations contributes to more effective results, with a focus on international environmental negotiations. Effectiveness is defined in terms of the extent of agreement (among parties and on issues), time to reach agreement, and comprehensiveness of the agreement. A set of hypotheses is evaluated on a selection of bilateral and multilateral cases of environmental negotiations, using statistical methods. The analyses reveal that adherence to principles of procedural justice contributes to more effective results in multilateral environmental negotiations. These principles are found to hinder effectiveness in the bilateral cases. On the other hand, adherence to principles of distributive justice is only moderately related to effectiveness in both the bilateral and multilateral cases.     

Organisational Justice: A Senian Perspective

In this paper, we draw inferences from the Nobel laureate Amartya Sen’s book, The Idea of Justice to inform the organisational justice literature. The extant societal-level theories of justice tend to emphasise aspects that are analogous to either the procedural or distributive dimensions of organisational justice. The Senian idea of comprehensive justice is different in that it synthesises the procedural- and distributive-related dimensions at the societal-level. We theorise that the Senian notion could be applied at the organisational-level to facilitate outcomes that are actually valued by the workforce. Further, we contend that the emphasis on non-parochialism in the Senian notion of justice makes it particularly relevant to the ethics of multi-national corporations (MNCs) operating in alien cultures. To support our contention, we analyse the lean manufacturing practices of a Japanese MNC operating in India. Our case analysis demonstrates how Senian thinking helps one surface unjust outcomes that would otherwise go unacknowledged. Our analysis also offers tentative support to Senian claims about the capacity of human behaviour to undermine well-designed institutions. Concurring with the Senian view, which favours combating manifest injustice rather than fixating over designing perfectly just institutions, we derive some normative implications to advance the cause of striving for outcomes that are actually valued by the workforce.     

Cultural Insights to Justice: A Theoretical Perspective Through a Subjective Lens

Distributive, procedural, and interactional justice are constructs that are increasingly being recognized as important factors that affect individual perceptions in the workplace environment. This paper presents a theoretical perspective that suggests that justice is perceived through a subjective lens that consists of individualized beliefs and proposes that cultural attributes and demographic characteristics play an integral part in determining the perception of justice. The distinctions between these three constructs are presented in context with the core beliefs of individual employees – affected by a multitude of perceptual and demographic factors that we briefly identify herein. Based on the theoretical perspective, an instrument that measures the constructs of justice as perceived by individuals was developed. With a focus on justice within the business setting, hypotheses about attitudes related to justice were tested. Survey results confirm that the three constructs of justice are distinct but correlated. Significant differences were found in the perceptions of African-American respondents with regard to procedural justice. Although the empirical findings do not support all the hypotheses, this research highlights the need for further development of measures to assess the perception of justice in business settings and at an applied level, underscores the importance of recognizing cultural attributes and demographic characteristics in understanding how justice is perceived.     

Justice Failure: Efficiency and Equality in Business Ethics

This paper offers the concept of “justice failure,” as a counterpart to the familiar idea of market failure, in order to better understand managers’ ethical obligations. This paper takes the “market failures approach” (MFA) to business ethics as its point of departure. The success of the MFA, I argue, lies in its close proximity with economic theory, particularly in the idea that, within a larger scheme of social cooperation, markets ought to pursue efficiency and leave the pursuit of equality to the welfare state. As a result, the core ethical responsibility of business actors is to avoid profiting off of market failure. After reviewing this approach I challenge its emphasis on efficiency. I argue that just as we note the suboptimal efficiency of actual markets (market failure), we should also take seriously the suboptimal equality of actual welfare states (what I call “justice failure”). Taking this idea seriously results in a whole other set of ethical responsibilities for businesses to take into account; in addition to market imperfections and regulatory lacunae, managers should also avoid profiting from, and exacerbating, structural inequalities and injustices. I offer an outline of the kinds of injustices and inequalities that would have bearing on business ethics, and the kinds of ethical responsibilities that this approach suggests that business actors should take into account.     

Justice in preferential hiring

This paper reports studies designed to examine perceptions of preferential selection. Subjects evaluated the fairness of hypothetical cases of selection decisions based on either candidate sex or ethnic origin. A within-subjects design and a between-subjects design yielded convergent results showing that (1) preferential selection was perceived as unfair, irrespective of respondent sex or the basis for the preferential treatment (i.e., candidate sex or ethnic origin), (2) the level of perceived injustice was directly related to the discrepancy in merits between the successful minority candidate and the more qualified yet unsuccessful majority candidate, and (3) the provision of either an ethical or legislative justification for the selection decisions further exacerbated feelings of injustice. Possible interpretations for the findings and practical implications of the study were then discussed. M. S. Singer is a senior lecturer in psychology at Canterbury University. Her published work includes papers in Personnel Psychology, Journal of Applied Psychology, Current Psychology: Research and Reviews,and Applied Psychology: An International Review. A. E. Singer is a senior lecturer in strategic management and business ethics at Canterbury University. He has published various papers in academic journals including Omega: The International Journal of Management Science, Decision Sciences, International Journal of Forecasting, International Journal of Research in Marketing,and Journal of Business Ethics.     

Measuring Consumer Perceptions of Procedural Justice in a Complaint Context

The idea of procedural justice as perceived by consumers has not been explored in the consumer behavior literature, although there has been some mention of consumer perceptions of fair treatment. This article describes the development of a scale using procedural justice as its theoretic base to measure consumers' perceptions of fair treatment when they complain. Results indicate that consumers make a distinction between the complaint process and the outcome of their complaint, indicating that procedural justice has further research potential. In addition, the proposed scale possesses the psychometric properties of an acceptable scale.     

Executive compensation: Performance and patience

Chief executive officers who concentrate on short-term financial success to gain increased compensation could miss what may be the real factor in high salaries—years on the job.     

Consumer Rights: An Assessment of Justice

For the last 50 years the idea of consumer rights has formed an essential element in the formulation of policy to guide the workings of the marketplace. The extent and coverage of these rights has evolved and changed over time, yet there has been no comprehensive analysis as to the purpose and scope of consumer rights. In moral and ethical philosophy, rights are integrally linked to the notion of justice. By reassessing consumer rights through a justice-based framework, a number of key issues emerge regarding the way in which markets enable justice for consumers. The consumer rights which underpin the United Nations consumer protection guidelines address all forms of justice to some degree, but the predominant focus is on procedural justice. Our conclusions question whether this is sufficient and also whether there is a case to develop the notion of consumer ‘duties’ that complement the idea of rights.     

Hypocrisies of Fairness: Towards a More Reflexive Ethical Base in Organizational Justice Research and Practice

Despite becoming one of the most active research areas in organizational behavior, the field of organizational justice has stayed at a safe distance from moral questions of values, as well as from critical questions regarding the implications of fairness considerations on the status quo of power relations in today’s organizations. We argue that both organizational justice research and the managerial practices it informs lack reflexivity. This manifests itself in two possible hypocrisies of fairness. Managers may apply organizational justice knowledge but fail to increase the actual levels of fairness in employment relations. Researchers, on the other hand, may claim to promote fairness through their work while actually providing managers with tools that enable or even encourage them to feed the hypocrisy of fairness identified above. As␣part of our argument, we identify three types of mechanisms managers may use to influence and manage the formation of fairness perceptions. We consider how the exercise of power is related to the potential application of organizational justice knowledge across individual, interpersonal and social levels. Our approach makes power dynamics and moral implications salient, and questions the purely subjectivist view of justice researchers that deliberately discards normative aspects. The questions opened up by considering alternative mechanisms for creating fairness perceptions have led us to formulate a research agenda for organizational justice research that takes multiple stakeholder interests, power dynamics and ethical implications into account. We believe that the fields of organizational justice and normative justice can benefit from combined research. Marion Fortin (Ph.D., Trinity College Dublin) is Lecturer in Organisational Behaviour at the Durham Business School, Durham University. Marion previously worked in the financial industry and also was a visiting scholar at the Stern School, NYU. Marion’s main research interest lies in the role of justice judgments in the workplace. Her current and past research projects also involve issues of organizational change, power mechanisms, and the role of emotions in organizations. Martin R. Fellenz (Ph.D., The University of North Carolina at Chapel Hill) is Lecturer in Organisational Behaviour at the School of Business, University of Dublin, Trinity College. His research interests include organizational justice, organizational transformation and change, teaching and learning, and the development of theory and theory schools. He regularly contributes to executive education programs in a variety of countries and consults with leading international public, private and not-for-profit organizations on matters of leadership, management development, and organizational transformation. A previous version of this paper was originally presented at the IESE Business School, University of Navarra, for the 14th International Symposium on Ethics, Business and Society: “Towards a Comprehensive Integration of Ethics Into Management: Problems and Prospects”. May 18–19, 2006).     

Justice in triad: Revisiting supplier involvement in new product development

Recognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement-new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers.     

Justice and Fairness in Negotiation

In this special issue we display a variety of approaches to the study of justice. Articles from scholars working on questions involving justice and fairness in decision making exchanges calls attention to variety of research approaches, issue domains, cases and hypotheses used to explore these questions. All of the contributions emphasize analysis, using quantitative and qualitative methods including simulation-experiments, comparative case studies, statistical analyses and game theory. The articles in this collection reveal that justice and fairness concerns extend from the negotiation process to the outcome and into the implementation stage. They share the underlying expectation that individuals and groups gravitate toward fairness and justice in their exchanges with others. Therefore, a full understanding of group decision processes will be incomplete if justice and fairness issues are not considered alongside issues such as power distributions and alternatives to an agreement. The authors also suggest that outcomes built on justice and fairness principles will enhance the efficiency, stability and implementation of the negotiated agreements.     

CEO compensation as a psychological exit barrier: An exploratory test with HMOs

Based on the comprehensive model of Gruca and Sudharshan (1995) concerning barriers to entry, this article posits that realized consequences for the incumbent are psychological exit barriers for the CEO and the organization already in the industry. Executive compensation is a key realized consequence for the incumbent CEO and hence a psychological exit barrier for the incumbent CEO. These issues are tested with a sample of incumbent companies with no hypothesized relationship between executive compensation and profitability. Specifically, nine publicly traded HMOs in the health‐care industry were analyzed over a 3‐year time frame. Because there was a weak relationship between executive compensation and profitability, only weak support was found for the hypothesis concerning executive compensation as a psychological exit barrier. Suggestions for further research are offered to further test the model and explore CEO compensation as a psychological exit barrier. © 2000 John Wiley & Sons, Inc.     

Cross-Sector Partnerships: City Regeneration and Social Justice

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders’ preferences, we argue that a firm’s insiders (managers and large blockholders) may seek to over- invest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a “warm-glow” effect. We test this hypothesis by investigating the relation between firms’ CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U.S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders’ ownership and leverage are negatively related to the firm’s social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so.     

Reinventing compensation

Executives of banks have been flayed for drawing huge pay packets without commensurate corporate performance. Robin Buchanan says the scrutiny into compensation will go beyond the financial services industry. He recommends board directors of all businesses have answers to seven critical questions at their fingertips.     

Justice and Trust

With the demise of Marxism and socialism, the United States is becoming a model not merely for free enterprise, but also for employment practices worldwide. I believe that free enterprise is the least worst economic system, given the alternatives, a position I shall assume, but not defend, here. However, I shall argue, a successful free enterprise political economy does not entail mimicking US employment practices. I find even today in 1998, as I shall outline in more detail, these practices, when consistently carried out, by and large erode trust in the workplace, they are, on balance unfair to workers and managers, and, if Jeffrey Pfeffer is correct, they do not maximize long-term corporate earnings or growth. Getting clear on US employment practices and their weaknesses may help to shape other models for employment that neither contravene free enterprise nor are degrading to workers.