Ethical behaviours in organizations: Directed by the formal or informal systems?

Past research has focused on individual culpability with the assumption that individuals will further their own self interest over that of the organization, given an appropriate opportunity. In contrast, this research shifts the focus from individual motivation to the influence of the formal and informal control systems of organizations on ethical behaviours. An open-ended interview approach was used to collect data. It was found that pressures within the informal system were the dominant influence in the resolution of ethical issues. The dominance of the informal system, however, varies according to the economic position of the organization.Loren Falkenberg and Irene Herremans are Associate Professors in the Faculty of Management at the University of Calgary. Both have published in a wide variety of academic journals. Loren Falkenberg teaches courses in business ethics and management of human resources while Irene Herremans teaches in the accounting and tourism areas.