Approaches to organisational culture and ethics

This paper assesses the potential of organisational culture as a means for improving ethics in organisations. Organisational culture is recognised as one determinant of how people behave, more or less ethically, in organisations. It is also incresingly understood as an attribute that management can and should influence to improve organisational performance. When things go wrong in organisations, managers look to the culture as both the source of problems and the basis for solutions. Two models of organisational culture and ethical behaviour are evaluated. They rest on different understandings of organisational culture and the processes by which ethics are enhanced. Firstly, the prevailing approach holds that creating a unitary cohesive culture around core moral values is the solution to enhancing ethical behaviour. Both the feasibility and desirability of this approach, in terms of ethical outcomes, is questioned. The second model queries the existence of organisational culture at all, arguing that organisations are nothing more than shifting coalitions of subcultures. In this second model, the very porousness of the subcultures provides a catalyst for the scrutiny and critique of norms and practices. Such diversity and debate is construed as potentially a better safeguard for ethical behaviour than the uniformity promised by the unitary, strong culture model.Dr. Amanda Sinclair is a Senior Lecturer in the Graduate School of Management. As a teacher on the MBA program of courses, including Ethics, she has a particular interest in the development and professionalisation of managers. Her current research focuses on organisational diversity, change and culture and administrative leadership and accountability.     

Organisational Virtue,Moral Attentiveness,and the Perceived Role of Ethics and Social Responsibility in Business: The Case of UK HR Practitioners

Examination of the application of virtue ethics to business has only recently started to grapple with the measurement of virtue frameworks in a practical context. This paper furthers this agenda by measuring the impact of virtue at the level of the organisation and examining the extent to which organisational virtue (OV) impacts on moral attentiveness (MA) and the perceived role of ethics and social responsibility in creating organisational effectiveness (PRESOR). It is argued that people who operate in more virtuous organisational contexts will be expected to be more attentive to ethical issues and in turn perceive a greater role for ethics and social responsibility in business. Analysis of results based on a sample of 137 HR professionals shows that where people report that their organisation provides meaningful work, they are more likely to display reflective MA and the belief that ethics and social responsibility are compatible with business objectives, suggesting that organisations who are interested in promoting an ethical culture should focus on their work structures and practices. More generally, OV is shown to have a more complex relationship with PRESOR than hypothesised pointing towards a more nuanced view of OV. The paper examines the implications of the results for organisations and research.     

Moral Emotions and Ethics in Organisations: Introduction to the Special Issue

The aim of our special issue is to deepen our understanding of the role moral emotions play in organisations as part of a wider discourse on organisational ethics and morality. Unethical workplace behaviours can have far-reaching consequences—job losses, risks to life and health, psychological damage to individuals and groups, social injustice and exploitation and even environmental devastation. Consequently, determining how and why ethical transgressions occur with surprising regularity, despite the inhibiting influence of moral emotions, has considerable theoretical and practical significance to management scholars and managers alike. In this introduction, we present some of the core arguments in the field; notably, the effect of organisational life and bureaucracy on emotions, in general, and moral emotions, in particular; the moral standing of leaders, managers and followers; moral challenges raised by obedience and resistance to organisational power and ethical blindspots induced by what may appear as deeply moral emotions. These issues are explored by a collection of geographically diverse articles in various work contexts, which are thematically organised in terms of (i) moral emotions, ethical behaviour and social pressure, (ii) moral emotions and their consequences within/across levels of analysis, (iii) psychoanalytic perspectives on the management of moral emotions, (iv) virtue and moral emotions and (v) moral emotions and action tendencies. We end by suggesting certain avenues for future research in the hope that the endeavour initiated here will inspire improved practice at work.     

Modes of Managing Morality: A Descriptive Model of Strategies for Managing Ethics

As an alternative to attempts to impose models of personal moral development (e.g. Kohlberg) upon organisations we propose an evolutionary model of managing ethics in organisations. The Modes of Managing Morality Model that we suggest, is based on an analysis that explains why business organisations tend to move from less complex modes of managing ethics to more complex modes thereof. Furthermore, it also identifies the dominant ethics management strategies that characterise each of the stages. It is done in a way that avoids claiming that the more advanced modes of managing ethics necessarily represent moral development by business organisations. Instead of claiming the organisations develop morally, we claim that organisations move through an evolutionary process of improving their sophistication in managing ethical performance.     

The impact of the work environment on ethical decision making: Some Australian evidence

Business ethics has emerged in recent years as a field of significant scholarly endeavour. Particularly well documented is the existence of ethical conflict at work and the reported inseparability of business decisions and moral consequences. However, to date, the majority of studies have been conducted in the American business context.This paper examines the concept of ethical conflict as experienced by employees in the Australian context. According to a sample of Western Australian managers, ethical conflicts at work do occur — with relative frequency. Of considerable concern is the high incidence of cases where the demands of superiors are deemed to be the cause of this conflict. This finding is particularly disturbing as superiors are also the primary influence on employee ethical decision making. It would see that the ethics role models are also the instigators of unethical behaviour.This research has confirmed in the Western Australian context that the values of top management do have significant impact on the ethical choices made by employees. The management of organisational culture, therefore, is a key to raising ethical standards in business. The institutionalisation of ethics by such formal means as codes of ethics is a necessary, but insufficient, condition of ensuring ethical behaviour in organisations. Management of the informal climate is pivotal to the achievement of ethical organisational behaviour.Geoffrey Soutar is Professor of Management at Curtin University of Technology. He has particular interests in marketing and, in recent times, in the marketing of services. He has published widely across a number of management areas and has acted as consultant for both private and public sector organisations as well as for a number of unions.Margaret McNeil is a Lecturer in the School of Management at Curtin University of Technology. Her research interests include corporate innovation and financial services marketing. Consultancy has been in the areas of financial services, professional services and non-profit organisations.Caron Molster is a Research Assistant in the School of Management at Curtin University of Technology. She has a research interest in the area of ethics, having completed her thesis on this topic.     

Business Ethics in New Zealand Organisations: Views from the Middle and Lower Level Managers

This study is carried out to assess the state of business ethics in New Zealand organisations from the point view of middle and lower level managers. The survey results clearly indicate that companies in New Zealand give low priorities to ethics with other values in the corporate culture. A significant number of respondents also believe that pressures from the top to achieve results and the organisational climate and ruthless competition help create an unethical environment. A greater emphasis on ethical content in the business curricula has been overwhelmingly supported by the respondents. Moreover, the majority of respondents also think that the ethical standard in New Zealand businesses has declined in the past decade.Finally, a number of suggestions have been put forward by the respondents to develop and maintain a high standard of ethical environment. These include mandatory moral/ethical education both in the educational institutions and in commerce and industry, commitment of top management and written and published code of ethics.     

The Ethics Narrative and the Role of the Business School in Moral Development

Media stories of ethical lapses in business are relentless. The general public vacillates between revulsion, impatience, cynicism, and apathy. The role of the Business School in Moral Development is debated by scholars, accrediting agencies, and Schools of Businesses. It is a question to which there is no easy answer and one with which Business Schools continue to grapple. This article places the concept of “moral imagination,” theories of moral development, and ethics in a behavioral context. It then discusses a staple of business education, the case study, as a form of ethics narrative that provides ethical modeling within that context. Finally, in discussing the narrative role of the classroom professor in ethical modeling, it provides a framework for further discussion of the role of business education in moral development.     

Leadership and Business Ethics: Does It Matter? Implications for Management

This paper reviews the relationship between organisational leadership, corporate governance and business ethics, and considers the implications for management. Business ethics is defined, and the causes and consequences of unethical behavior are discussed. Issues pertaining to leadership, subordinate and organisation responsibility for business ethics are considered. The changing role of business leaders and the new concept of 'corporate governance' are examined, with an increasing importance being placed on ethical and socially responsible attitudes towards business. Organisational effectiveness and organisational efficiency, formerly central issues for practising managers, with directors thinking in terms of goal achievement for their respective organisations, have now been augmented by an awareness of issues in business ethics, and a requirement for members of the corporate governance to behave in more socially responsible ways. A secondary aim of the paper is to introduce an approach which illustrates how corporate governance and management could deal with some of the moral dilemmas that they may have to face.     

Ethical theory in business ethics: A critical assessment

How is ethical theory used in contemporary teaching in business ethics? To answer this question, we undertook a survey of twenty-five of the leading business ethics texts. Our purpose was to examine the ways in which normative moral theory is introduced and applied to cases and issues. We focused especially on the authors' views of the conflicts and tensions posed by basic theoretical debates. How can these theories be made useful if fundamental tensions are acknowledged? Our analysis resulted in a typology, presented here, of the ways in which normative theory, and the difficulties within it, are handled in business ethics texts. We conclude that there is a serious lack of clarity about how to apply the theories to cases and a persistent unwillingness to grapple with tensions between theories of ethical reasoning. These deficiencies hamper teaching and ethical decision-making.     

Does it Pay to Be Ethical? Examining the Relationship Between Organisations’ Ethical Culture and Innovativeness

In this article, we examine the relationship between ethical organisational culture and organisational innovativeness. A quantitative empirical analysis is based on a survey of a total of 719 respondents from all levels of three Finnish organisations, both general staff and managers. The organisations belong to both the private and public sectors. The results of this study show that organisations’ ethical culture is associated with their organisational innovativeness, and that different dimensions of ethical culture are associated with different dimensions of organisational innovativeness. The ethical culture of the organisation had a specific role in process and behavioural innovativeness. It was found that congruency of management was the single dimension with the highest effect on organisational innovativeness overall and specifically on process and behavioural innovativeness. These findings suggest that when organisations are aiming for specific outcomes, such as organisational innovativeness, they need to be aware of what dimensions of ethical culture are particularly relevant.     

Ethics in Entrepreneurial Finance: Exploring Problems in Venture Partner Entry and Exit

This research advances our understanding of the manifestation of tensions and ethical issues in entrepreneurial finance. In doing so, we offer an overview of ethics in entrepreneurship and finance, delineating the curious paucity of research at their intersection. Using twelve vignettes, we put forward the asymmetries between entrepreneurs and investors and discuss a set of ethical problems that arise among key actors centring on the dynamics of venture partner entry and exit, applying the multiple-lens ethical perspective to analyse these issues. This analysis culminates in the introduction of a general classification scheme for ethical problems across venture partners. Our analysis highlights the moral dimension inherent in the entry and exit of venture partners and the importance of considering moral judgement, as well as intention in future analysis of any decision-making. Our study also points to the moral responsibility in finance, especially to the mutual moral responsibilities of investors and entrepreneurs. By integrating ethics into finance, this research also demonstrates that in the case of venture partner exit, an ethical approach and decent governance go beyond compliance to the law. We conclude with implications for practitioners, specifically with some proposals for a solution to the problem of blocked and forced exit. Together, we make several contributions to the literature by integrating ethics, finance and entrepreneurship, and we call for future research to stimulate a growing body of research within this presently overlooked area.     

The organizational context for moral development: Questions of power and access

In this article it is argued that much research into processes of moral learning and development in organisations has been conducted under somewhat controlled conditions, and that these do not permit testing of individuals' thought and action under more extreme circumstances. Therefore in practice one needs to acknowledge the effect of the actual organisational context. Three aspects or issues concerning the effect of this context on interventions are identified: first, systemic factors, especially corporate culture, impact on individual behaviour; second, consultants and developers may have difficulty when working with people at different levels of moral development; and, third, differential influence among members of an organisation affects the possibility of, and the enactment of, moral development programmes.Each of these considerations is discussed while employing conceptualisations based on Kohlberg's ideas. However the question of influence and power is not one which has been addressed to any significant extent by writers in this particular area. The essential argument in this article is that this must be done if the full potential of research into moral development in organisations is to be realised.Patrick Maclagan is Senior Lecturer and director of Research in the Department of Management Systems & Sciences, School of Management, University of Hull, U.K. His current research interests concern managerial behaviour and management learning with reference to ethics in organisations.     

Managers’ Moral Reasoning: Evidence from Large Indian Manufacturing Organisations

Increased globalisation has also seen increased scrutiny of corporate behaviour by the communities. Clearly managers are under increased pressure from stakeholders not only to outperform their competitors, but also are expected to do so in an ethical manner. In order to act ethically an individual is expected to have a well-developed moral imagination and moral reasoning. Literature on ethical reasoning research indicates a positive relationship between higher levels of moral reasoning and ethical behaviour. This paper presents the findings of a study of the moral reasoning/moral development of managers working in large manufacturing enterprises situated in the state of Punjab in India. Kohlberg’s theory of Cognitive Moral Development forms the basis of the study. Moral Judgement Interview (MIG) developed by Weber, on the basis of Kohlberg’s theory was used for the study. Moral Reasoning Scores were calculated using Abbreviated Scoring Guide. More than half of the managers scored at post-conventional level of reasoning while assessing the moral dilemmas. The reasoning scores varied for the three dilemmas. Manjit Monga is a lecturer in the School of Management, at the Division of Business, University of South Australia. Her research interests are in the area of management and workplace ethics, organisational culture, research ethics and resource management. The aythor is a lecturer in the School of Mangement, at the Division of Business,University of South Australia. Her research interests are in the area of mangement and workplace ethics,organisational culture,research ethics and human resource mangement.     

Corporate Social Responsibility in China: A Corporate Governance Approach

Ethics training—an important means to foster ethical decision-making in organisations—is carried out formally as well as informally. There are mixed findings as regards the effectiveness of formal versus informal ethics training. This study is one of its first kinds in which we have investigated the effectiveness of ethics training as it is carried out in the Indian IT sector. We have collected the views of Indian IT industry professionals concerning ethics training (N = 266), and employed positivist (regression analysis and hierarchical linear modeling) and interpretive research (content analysis). We first have argued that the importance of the perception towards ethics has bearings not only on the individual ideologies but also on the organisational ethical values. In doing so, first we have conceptualised a theoretical framework: Perception of Ethics Training in Employees and Organisations (PETINEO). Second, we have studied the correlations between various components of this model. Third, we, under the rubric of PETINEO, examined the effectiveness of ethics training programmes for the Indian IT companies. Fourth, we have elaborated upon the results of our study. Our results suggest that the combination of both formal and informal means to undertake ethics training has superior impact on ethical decision-making in the Indian IT industry as compared to the use of any one of them in isolation.     

Conflicting obligations,moral dilemmas and the development of judgement through business ethics education

Learning to address moral dilemmas is important for participants on courses in business ethics and corporate social responsibility (CSR). While modern, rule‐based ethical theory often provides the normative input here, this has faced criticism in its application. In response, post‐modern and Aristotelian perspectives have found favour. This paper follows a similar line, presenting an approach based initially on a critical interpretation of Ross's theory of prima facie duties, which emphasises moral judgement in actual situations. However, the retention of a modern element is suggested, with an invitation to hypothetically universalise detailed proposals for action, following Hare. This further step may reassure students/managers who seek additional closure in their decision‐making. Some pedagogical implications are also briefly raised regarding the use of case material and the need to recognise questions of social interaction and personal character as features of dilemma resolution in actual organisational contexts.     

An applied ethical analysis system in business

Much of the discussion on business ethics is philosophical in nature. There is no lack of theories and ideals on moral reasoning. What is missing is translating these moral theories and principles into specific, operational procedures that can indicate a proper course of action. Although most business actions are routine and do not raise serious ethical questions, many people experience difficulty in applying their personal moral principles to specific business decisions in ethically-dilemmatic situations.This study seeks to develop a framework that can be utilized to implement personal moral reasoning based on the teleological theory of Utilitarianism and the deontological theory of Ross's Prima Facie Duties in the business decision-making process. The central feature in the framework is a point-system that quantities the ethical worth of a proposed business action and determines whether the action would be ethically desirable if taken. It provides an objective element in an otherwise qualitative ethical inquiry process. This study also illustrates practical applications of the system by analyzing the ethical implications of a proposed action where foreign bribery is involved.Alan Wong is Assistant Professor of Finance, Indiana University Southeast. His areas of academic research are managerial ethics and financial options. He has published in theReview of Business and Economic Research.Eugene Beckman is the Director of the MBA Program at Indiana University Southeast. He was awarded the Faculty Excellence Award in 1989 and his primary areas of research are business ethics and marketing.     

Ethical Aspects in Nordic Business Mergers: The Case of Electro-Business

Postmerger integration is a highly challenging and demanding task. Its success depends not only on economic factors but also on the organisational members' feelings and their personal contribution to the new entity. Mergers are usually made for the sake of profitability in the first place, whereas less attention is paid to employees in such situations. This article describes various ethical observations made in our study on corporate mergers in the Nordic Electro-business industry. We examine how the organisational change was experienced by personnel, what kinds of ethical reflections surfaced in different phases of the process, and what conclusions might be drawn from them. The main focus is on the ethical meanings that emerged in our interviewees' stories spontaneously, without the topic of ethics having been separately brought up in the interview situation. The organisational members: we interviewed 35 electro-business employees who were either transferred from Vattenfall's contracting unit to the acquiring company or were already working there at the time of the merger. These persons were interviewed twice: first in 2001, the year of the initial merger, and again in 2005, 4 years from the start of the process and 1 year from the final ownership change. The merger process seemed to lead to decreased responsibility among the organisational members, which highlights the discrepancy between genuine ethical thinking and executive talk. Our study also revealed a dramatic shift in the moral attitudes of the managers who fell from power in the turmoil of organisational change. This moral dimension is evident in their sharply critical argumentation against the new operating model and new corporate management, as well as in their eventual indifference and non-commitment to the organisation. The ethical meanings of 'the good life' and a happy work community slowly disintegrated and were replaced by a longing for the earlier communality and sense of togetherness in their old organisation. This meant that 'the good life' would have to be sought elsewhere.     

From Tell-Tale Signs to Irreconcilable Struggles: The Value of Emotion in Exploring the Ethical Dilemmas of Human Resource Professionals

This paper explores the character of emotion (felt and displayed) and its value in understanding ethical dilemmas in work organisations. Specifically, we examine the emotional labour of human resource professionals (HRPs). Through in-depth interviews and diary study, we uncover the emotional and ethical struggles of HRPs as they search for the ‘right thing to do’ in situated interaction. Through the lens of emotion, we chart the process of how the very framing of what is deemed ‘right’ can move from the social to the moral order (Bauman, Postmodern ethics, 1993) and vice versa. Based on our findings, we contribute to understanding the linkages between emotional and ethical dilemmas, and how expectations of multiple ‘others’ at the individual, interpersonal and organisational level shape and constrain ethical choices.     

“Moral Distance” in Organizations: An Inquiry into Ethical Violence in the Works of Kafka

In this paper, we demonstrate that the works of Franz Kafka provide an exemplary resource for the investigation of “moral distance” in organizational ethics. We accomplish this in two ways, first by drawing on Kafka’s work to navigate the complexities of the debate over the ethics of bureaucracy, using his work to expand and enrich the concept of “moral distance.” Second, Kafka’s work is used to investigate the existence of “ethical violence” within organizations which entails acts of condemnation and cruelty purportedly in the name of ethics. Kafka’s work provides insight into the processes of moral distancing across a range of organizational contexts including highly formal as well as more informal settings. The paper enriches the concept “moral distance” by identifying the existence of facilitators of moral distance beyond the mechanisms of formal rationality that have been the focus of existing studies. We argue that Kafka’s intense portrayal of “ethical violence” points to an aporia at the very heart of organizational ethics.     

The ethical use of crowdsourcing

Crowdsourcing has attracted increasing attention as a means to enlist online participants in organisational activities. In this paper, we examine crowdsourcing from the perspective of its ethical use in the support of open innovation taking a broader system view of its use. Crowdsourcing has the potential to improve access to knowledge, skills, and creativity in a cost‐effective manner but raises a number of ethical dilemmas. The paper discusses the ethical issues related to knowledge exchange, economics, and relational aspects of crowdsourcing. A guiding framework drawn from the ethics literature is proposed to guide the ethical use of crowdsourcing. A major problem is that crowdsourcing is viewed in a piecemeal fashion and separate from other organisational processes. The trend for organisations to be more digitally collaborative is explored in relation to the need for greater awareness of crowdsourcing implications.