The Challenge of Ethical Behavior in Organizations
Author(s): Ronald R. Sims
Source: Journal of Business Ethics, Vol. 11, No. 7 (Jul., 1992), pp. 505-513
Published by: Springer
Stable URL: http://www.jstor.org/stable/25072301 .
Accessed: 22/06/2014 17:26
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact [email protected].
.
Springer is collaborating with JSTOR to digitize, preserve and extend access to Journal of Business Ethics.
http://www.jstor.org
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
The Challenge of Ethical Behavior
in
ABSTRACT. This paper is designed to do three things
while discussing the challenge of ethical behavior in organi
zation.
some
it discusses
First,
reasons
why
unethical
(3) The cha llenge of increased qua lity.
(4) The challenge of employee motivation
be
climate
some
presents
ethically-oriented
suggestions
culture.
It has often been
change,
an
within
organization.
for
creating
said that the only
is this more
workplace.
the past
one
recent
the U.S.
decade,
paper
an
battered
constant
in life is
true than
in the
"Over
concluded,
has been
corporation
its own out-of-date
survey
by foreign competition,
and out-of-touch
and,
management
technology
a flood of
more
and acquisitions.
mergers
recently
of the
The result has been widespread
streamlining
ranks and recognition
that the old way
or desirable"
is no
longer possible
doing
News
&
World Report, 1989, p. 42).
(U.S.
As the
compa
century approaches,
twenty-first
nies face a variety of
that will
changes and challenges
on
have a profound
impact
organizational
dynamics
In many ways, these
and performance.
will
changes
survive and prosper
decide who will
into the next
white-collar
of
business
century and who
are the
following:
will
a diverse
(5) The challenge of managing
workforce.
(6) The challengeof ethicalbehavior.
must all be met
these
challenges
by organiza
and managers
concerned
about survival and
in the future, this paper will focus
competitiveness
on the
of ethical behavior. More
challenge
specifi
some reasons' un
this
will
paper
cally,
(l) discuss
ethical behavior occurs in
organizations,
(2) highlight
the importance
of
in estab
culture
organizational
an ethical climate within
the
lishing
organization,
and finally, (3) present some
suggestions for creating
an
and maintaining
culture.
ethically-oriented
While
tions
and nowhere
As
the
Finally,
and
maintaining
and commit
ment.
havior occurs in organization. Secondly, the paper highlights
the importance of organizational culture in establishing an
ethical
R. Sims
Ronald
Organizations
not.
Among
these
challenges
(1) The challenge of international competition.
new
(2) The challenge of
technologies.
Ethics
and
the challenge
of ethical
behavior
The
of day-to-day
per
imperatives
organizational
are so
formance
that there is little time
compelling
or inclination
to divert attention
to the moral
con
tent of
Morality
organizational
decision-making.
in nature
appears to be so esoteric and qualitative
to
that it lacks substantive
relation
and
objective
quantitative
the meaning
distasteful
Besides,
performance.
understanding
of ethics and morality
the
requires
of
classroom
reworking
long-forgotten
studies. What
could
Socrates, Plato, and Aristotle
the world
that confronts
organiza
tions
the
century? Possibly
approaching
twenty-first
a gap in
exists between
philosophical
knowledge
executives
and
of dif
administrators
organizational
or
ferent generations. Yet, like it
not, there has and
will continue to be a surge of interest in ethics.
teach us about
Ronald R. Sims isAssociate Professor in the School of Business
Administration at theCollege ofWilliam andMary. His research
interests
and
include
management
transitions. His
and
ethical
behavior, experiential
learning, employee
and
and
training
development,
organizational
in a
articles have
appeared
variety of scholarly
practitioner-oriented
journals.
The word
Ethics
is a
"ethics" is often
philosophical
Journal ofBusiness Ethics 11: 505-513,1992.
? 1992Kluwer Academic Publishers.Printed in theNetherlands.
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
in the news
term
derived
these days.
from the
506 Ronald R. Sims
character or custom.
"ethos" meaning
to effective
is germane
in
leadership
an
in that it connotes
organizations
organization
code conveying moral
integrity and consistent values
in service to the
will
public. Certain
organizations
to a
commit
in a formal
themselves
philosophy
of a Code of Ethics or Standards of
pronouncement
Greek
This
word
definition
Conduct.
done
distributed
Other
with
idealism
that is that.
consistency.
ethical behavior is that which
is
defined,
as
as
to
accepted
morally
"good" and "right"
opposed
"bad" or "wrong" in a particular
Is it ethical,
setting.
to pay a bribe to obtain a business
for example,
contract
in a
it ethical to allow
foreign country? Is
to
withhold
information
that
your company
might
a
from
candidate
job
discourage
joining your organi
zation? Is it ethical to ask someone to take a
job you
career
know will not be
it
good for their
progress? Is
on
to
ethical
do personal business
company time?
The list of examples could go on and on. Despite
in response to these ques
one's initial inclinations
Formally
tions, the major point of it all is to remind organiza
is
tions that the public-at-large
that
demanding
in
workers
officials,
managers,
government
general,
act accord
and the organizations
they represent all
to
ethical and moral
standards. The
a renewed concern with
maintaining
bring
standards of ethical behavior in organizational
actions and in the workplace.
ing
will
high
future
high
trans
and social scien
administrators,
Many executives,
on
tists see unethical
behavior as a cancer
working
too
the fabric of society in
many of today's organiza
tions and beyond. Many are concerned
that we face a
our
crisis of ethics in theWest
that is undermining
crisis
This
involves
business
competitive
strength.
and em
customers,
officials,
government
people,
ployees.
is unethical
worrisome
behavior
Especially
at all levels of the
among employees
organization.
a recent
For
study found that employees
example,
of retail thefts
for a
accounted
higher percentage
than did customers
1989). The
study
(Silverstein,
that one in every fifteen employees
steals
estimated
or
her employer.
from his
In addition, we hear about illegal and unethical
scandals in which
behavior on Wall
Street, pension
disreputable
executives
gamble
on
risky
business
retirement
with employees'
funds, compa
to hazardous
that expose their workers
working
in
and blatant
favoritism
and
conditions,
hiring
nies
such practices occur
practices. Although
their
nonetheless
the
world,
presence
throughout
serves to remind us of the
challenge facing organiza
promotion
tions.
This
is
will
be concerned
however,
organizations,
aspects of ethics of greater specificity, useful
and
ness,
Having
or shelved,
so, the recorded
and all too often
ventures
standards
challenge
for what
is
difficult
because
especially
constitutes
ethical behavior
lie in
a
clear-cut
wrong
"grey zone" where
right-versus
answers may not
As a result, sometimes
exist.
always
is forced on organizations
unethical
behavior
by the
it exists and laws such as the
in which
environment
Foreign Corruption
a sales
you were
Act.
Practices
For
if
example,
an American
for
representative
and
used
company
your foreign competitors
In
do?
the
bribes to get business, what would
you
is
it
is
States such behavior
United
illegal, yet
in other
is
countries. What
perfectly
acceptable
abroad
in many
countries women
Similarly,
discriminated
systematically
against in the work
is in the home. In the
it
is
felt
that
their
place;
place
ethical
here?
are
States, again, this practice is illegal. If you ran
an American
in one of these countries,
company
women
in important positions?
If
would
hire
you
in
be isolated
the
you did, your company might
United
and you might
lose
community,
larger business
business. If you did not, you might be violating what
most Americans
believe to be fair business practices.
issues re
of ethical
The effective management
ensure
that their managers
quires that organizations
and employees know how to deal with ethical issues
in their everyday work
lives. Therefore,
organiza
some of the
must first understand
tional members
reasons for the occurrence
of unethical
underlying
practices.
Unethical
behavior:
why
does
it occur
in
organizations?
The
for
potential
behave unethically
potential
that
and organizations
to
is limitless.
is too frequently
how greed overtook
example,
welfare when
evidence
individuals
the Manville
asbestos
this
Unfortunately,
realized. Consider,
for
concerns about human
Corporation
was
inhalation
suppressed
its
killing
to correct a known
or when Ford failed
employees,
its Pinto vulnerable
that made
defect
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
to gas
tank
low
speed rear-end collisions
that dump dangerous
1989). Companies
(Bucholz,
our
waste
into
rivers and oceans
materials
medical
also appear to favor their own interests over public
are
these examples
safety and welfare.
Although
than many others, they do not appear
better known
to be unusual.
In fact, the story
they tell may be far
explosions
following
more
we would
typical than
estimates
that about two-thirds
American
form
have
corporations
illegal behavior
of
like, as one
of the 500
been
or
expert
largest
in one
involved
another
practices
organizational
It is easy to define
commonplace.
institutions
like Stanford University
inappropriately
to
a
or to
using taxpayer money
buy
yacht
enlarge
their President's bed in his home as
morally wrong.
Yet these and many other unethical practices go on
in many organizations. Why
is this
almost routinely
so? In other words, what accounts for the unethical
actions of people in organizations, more
specifically,
actions in
those unethical
why do people commit
which
that
individuals knew or should have known
was
the organization
example
an unethical
committing
recently
provided
Baucus
by
act?
and Near
(1991)helps to illustrate this distinction.
its
Mid-Atlantic
competitor,
major
Coca-Cola
Bottling (New York Times, 1988). Since evidence showed
most executives in the firm knew of the illegal price
not only fined
fixing scheme, the court
Allegheny $1
million
but
sentence
that
restrict
sentenced
was
However,
imprisoned.
judge
also
to
it to three
since
suspended
the unusual
in
years
prison
a firm
cannot
penalty
allowed
?
a
be
the
on
place the firm
probation and significantly
its
operations.
In another
case, Harris
Corporation
no
pleaded
con
test to
a
charges that it participated in kickback scheme
a defense department loan to the
Philippines
involving
(Wall Street Journal, 1989). Although this plea cost the
firm $500,000 in fines and civil claims, Harris's chief
executive
said
the firm
and
its
pleaded
no
contest
because
were
employees
of criminal conduct; he maintained
the
not
guilty
that top managers
costs
been
have
greater
diverted
than
management
the
fines,
and
attention
operations.
cases appear to be instances of
illegal
there is an important distinction
corporate behavior,
execu
between
them. In the first case,
Allegheny's
tives knew or should have known the firm's activities
both
Although
were
trust
is a clear violation of anti
illegal; price fixing
law. Further,
the courts ruled that evidence
it is not
clear
an
that Harris Corporations'
act. Some areas of the
illegal
the area relevant
including
managers
law are very ambiguous,
to this case, the
Foreign Corrupt Practices Act, and
or
it
may not at times know what
managers
legal
a firm may
in
thus,
engage
illegal;
inadvertently
behavior
that is later defined as illegal or unethical
(Baucus and Near,
1991).
answer to the
One
of why
individuals
question
commit unethical
actions is based on the
knowingly
idea that organizations often reward behaviors that violate
for example, how many
ethical standards. Consider,
executives are expected to deal in bribes and
payoffs, despite the negative publicity and ambiguity
business
of some
laws, and how good corporate citizens who
on
blow the whistle
may
organizational
wrongdoing
fear being punished for their actions. Jansen and Von
that organizations
tend to
(1985) explain
counternorms, accepted organizational
prac
develop
tices that are contrary to
ethical
standards.
prevailing
1.
Some of these are summarized
in
Figure
1
The
of
identifies
top
Figure
being open and
honest as a prevailing
ethical norm. Indeed, govern
mental
regulations requiring full disclosure and free
Glinow
a federal court
Recently,
judge found Allegheny Bottling,
a
franchise,
Pepsi-Cola bottling
guilty of price fixing.
The firm had ended years of cola wars by setting prices
with
have
would
committed
chemical wastes
dumping polluted
on Wall
into rivers, insider
Street, over
trading
for
Medicaid
the
services, and
government
charging
An
litigation
from firm
contrast,
Unfortunately,
are
embarrassingly
such practices as
would
litigation
indicated the firm had engaged in the illegal act. In
(Gellerman,
1986).
unethical
507
inOrganizations
of Ethical Behavior
Challenge
associated
with
dom of information
reinforce society's values toward
and
how
openness
honesty. Within
organizations,
not
ever, it is often considered
only acceptable, but
more
to
be
much
secretive
and deceitful.
desirable,
The practice of stonewalling, willingly
hiding rele
is quite common. One reason for
information,
this is that organizations
may actually punish those
are
too
who
open and honest. Look at the negative
vant
treatment
are
experienced
by many employees who
to blow the whistle
on unethical behavior
in
willing
their organizations.
the
Also, consider for example,
that B. F. Goodrich
disclosure
rewarded employees
who falsified data on quality aircraft brakes in order
to win certification
it
(Vandevier,
1978). Similarly,
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
508 Ronald R. Sims
has been
reported
at
Metropolitan
to withhold
informa
employees
encouraged
tion from the press about the Three Mile
Island
inci
nuclear accident (Gray and Rosen,
Both
1982).
dents represent cases in which
the counternorms
of
were
and deceitfulness
secrecy
and
accepted
ported by the organization.
1 shows that there are many
Figure
counternorms
zational
that promote
sup
other
organi
and
morally
these prac
practices. Because
ethically questionable
are
tices
rewarded and accepted suggests
commonly
a world
that organizations may be operating within
set of
its own
that dictates
rules.
This
accepted
a second answer to the
suggests
reasoning
question
?
act
of why organizations
knowingly
unethically
namely, because managerial values exist that undermine
In a recent
integrity.
analysis of executive
integrity,
some
that
Wolfe
have developed
managers
explains
ways of thinking (of which
that
unaware)
foster
they may be quite
unethical
behavior
(Wolfe,
1988).
is referred to as the bottom-line
culprit
This
line of
supports financial
mentality.
thinking
success as the
to be considered.
It pro
value
only
motes
short-term
solutions
that are immediately
One
the fact that they cause
sound, despite
or the
for others within
the organization
problems
as a whole.
an unrealistic
It promotes
organization
to a monetary
belief
that everything
boils down
financially
va.
^
Followthe rule?
at all coat?
*^^
vn'_get
Dowhatever it takes to \
the job
done_ ^
Becret?ve
and deceitful
c
y\_rv
/
s^
team
Source:
E.
Jansen,
Ambivalence
and
and
Von
Organizational
1 ^^ creditforyourown>s.
>^ action?;grandstand^
Glinow,
M.
Reward
A:
'Ethical
1985,
Systems',
Academy
ofManagement Review 10(4), pp. 814?822.
Fig.
1.
Societal
is for purposes of national
concern, a
expenditure
to
is devoted
sizable portion
Pork
pork-barreling.
a senator or
to the
refers
practice whereby
barreling
to allocate monies
to
forces Congress
representative
that take place in his or her home
special projects
district. In many cases, the projects have little value
and represent a drain on the taxpayers. They
do,
? and
? in the
create
however,
jobs
political support
home
is common,
district. This practice
because
of
it
members
believe
will
many
Congress
help them
get votes in the next election.
In some more extreme ? and
definitely
ethically
?
are
actions
such
situations,
questionable
designed
to reward some
in
large-scale campaign contributors
the home district. A case in point is the Maxi Cube
cargo handling
system. Funds for testing the Maxi
into the
Cube cargo handling
system were written
Senate
fiscal 1989 defense budget
the
final
during
at the request of
House Appropriations
conference
of Pennsylvania.
The $10 million
Rep. John Murtha
was
a
item
specifically
targeted for
Philadelphia
toMurtha's
businessman
(and contributor
campaign)
who was to manufacture
the truck inMurtha's home
district.
The
pushed
ahead
project
And
<--I>
Be
A similar bottom-line
the "political
mentality,
sector.
bottom line," is also quite evident in the
public
For example, when
it comes to
the
spending money,
no
U.S.
has
of this
much
equal. Although
Congress
military
>
y\_l\
success.
Appropriations
.
<?
norms
vs.
Organizational
ethical
conflict.
counternorms:
obstacles,
financial
was that the U.S.
only problem
Army
had clearly said that it had "no known requirement"
for the handler. In response, Murtha was reported to
be "mad as hell" at the "nitpicking" by the army. He
oountanorma
Organizational
Sockstalnorm?or ethics
Be oponand honeat
are
such, rules of morality
merely
to
the
bottom-line
way
impediments
along
game. As
that executives
Edison
an
anyway and used his position on the
a series of
to freeze
committee
budgeting
approved.
Murtha
requests
is not
until
he
got
his
pet
Les Aspin
of
com
Wisconsin
got the Defense
Appropriations
a
to include $249 million
to continue
mittee
making
certain ten-ton
truck (inWisconsin,
that
naturally)
out. It, too, was
to
the army was
trying
phase
but Aspin wanted
the project
for his
unneeded,
alone.
Rep.
Is this
legal? Yes? Is it ethical? That
depends upon your point of view (Morgan,
1989).
it was appro
and Aspin
Clearly, Murtha
thought
the realities of
and
priate, given
today's private
home
district.
public
organizations.
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
Challenge
that managers
tend to rely on an
?
a view
that encourages
exploitative
mentality
a way
in
that
promotes
stereotypes
"using" people
is a
and undermines
empathy and compassion. This
also notes
Wolfe
selfish perspective,
highly
cerns for others in favor
one
that
of benefits
sacrifices
to one's
appearing ethical than
? a
relations
public
by
legitimate morality
It is this kind of thinking that leads
guided morality.
some
to hide their unethical
actions (by
companies
instance)
for
to
as
explain them
completely
acceptable.
to
It is not too difficult
recognize how individuals
can
in unethical
engage
practices with
knowingly
such mentalities.
on
The
short-term
overemphasis
votes in the next election
monetary
gain and getting
to
that not
decisions
and rationalizations
lead
may
in the
threaten
hurt individuals
long run, but
only
the very existence of organizations
themselves. Some
common
rationalizations
used to justify unethical
are
behavior
(1986):
easily derived from Gellerman
**
the behavior is not really unethical
Pretending
or
illegal.
**
the behavior by saying it's really in
Excusing
or your best interest.
the organization's
**
is okay because no one
behavior
the
Assuming
ever
else would
be expected to find out about
it.
**
your superiors to support
Expecting
tect you if
anything should go wrong.
Within
view
on corporate
the
illegality,
is that pressure and need force
members
to behave
and
unethically
rationalizations;
however,
corresponding
to recent research this
explanation
only
organizational
develop
and pro
the literature
predominant
according
accounts for
acts in some cases
(Baucus and
illegal
In their data, poor
and low
Near,
1991).
performance
excess that remains once
slack
(the
organizational
a firm has
internal and external
paid its various
were
not
to maintain
constituencies
cooperation)
associated with
and wrongdoing
illegal behavior,
frequently
According
occurred
in munificent
to the model
environments.
developed
from
more
increases
their actions
their toxic wastes under cover of night,
or otherwise
justify them by attempting
(see Figure 2), illegal behavior
certain conditions. For example, results
their research showed that (l) large firms are
acts than small firms;
to commit
likely
illegal
(2) although the probability of such wrongdoing
their
dumping
research
own
interests. In addition,
there is aMadison
? a
Avenue mentality
that
perspective
suggesting
can be convinced
is
if
that
the
public
anything
right
it's
is that executives may be more
The
idea
right.
about
and Near's
occurs under
con
immediate
concerned
509
inOrganizations
of Ethical Behavior
from Baucus
when
when
resources
resources
are
are
scarce,
it
is
greatest
is
plentiful;
(3) illegal behavior
stable environments
but is more
in
fairly
in
environments;
probable
dynamic
(4) membership
in certain
and a history
of repeated
industries
are also associated with
wrongdoing
illegal acts; and,
of
chosen
the
may
vary
type
(5)
illegal activity
prevalent
to the
of environ
particular combination
according
mental
and internal conditions under which a firm is
(Baucus and Near,
1991).
also suggest that conditions
and Near
operating
Baucus
of
are antecedents
and predisposition
of
opportunity
That
is, rather than tightening
illegal behavior.
creating pressure for illegal acts, itmay be
create oppor
that loosening
conditions
ambiguous
In terms of the model
tunities to behave
illegally.
conditions
in Figure 2,
firm size provided more
large
to engage in
activities than small
opportunity
illegal
it easy to hide
size; the former condition may make
activities. Rules,
and
other control
procedures,
illegal
often
of a firm,
mechanisms
lag behind
growth
presented
an oppor
members
with
providing
organizational
no internal rules
to behave
because
tunity
illegally
prescribe such behavior.
indicates a tendency or inclination
Predisposition
ones ? over
to select certain activities ?
illegal
or other
activities because of socialization
organiza
tional processes. Baucus
and Near
a
that
firm's managers
assumption
(1991) avoid the
or agents sub
Environmental
Munificence
EnvironmentalDynamism^?^^
Firm Size
" ?-?_ ,^
_._
_
Industry- ^
*""-*
_?
f
Illegal
Behavior
Three orMore PriorViolations- ^
Type ofViolation ?
Source:
Corporate
1991, Baucus,
Behavior
M.
Be
S. and Near,
Predicted?
An
P.: 1991, 'Can
J.
Illegal
Event
History
Analy
sis',Academy ofManagement Journal 34(1), pp. 9?36.
Fig. 2. Modified model
of the illegal corporation behavior
process.
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
510 Ronald R. Sims
scribe to a different
set of ethical
standards
than the
rest of
that organiza
society. Instead, they recognize
influence
tions, and industries, can exert a powerful
on their members,
even those who
initially have
ethical
standards.
fairly strong
As noted
in certain
above, organizations
operating
industries tend to behave unethically. Certain
indus
to
cultures
may predispose
try
organizations
develop
to select
cultures
that encourage
their members
acts. If an
unethical
organization's major competitors
are
in an
in part as a result
industry
performing well,
activities, it becomes difficult for organ
to choose
izational members
actions,
only unethical
and they may
unethical
actions as a standard
regard
of industry practice.
Such a scenario results in an
culture
that serves as a strong precipi
organizational
tant to unethical
actions. The next section looks at
of unethical
the organizational
culture-ethical
behavior
relation
*
Personal
profit
* Company
efficiency
* Operating
Individual friendships
*
Team interests
*
Social responsibility
*
Personal morality
*
Rules and standard procedures
*
Laws and professional
codes
the prior list, the ethical climate
suggested by
can
different
of different
emphasize
organizations
As
& Johnson example just cited,
In the
Johnson
things.
the ethical climate supported doing the right thing
?
of the cost.
due to social responsibility
regardless
In other
too
perhaps
cerns for
operating
when
considerations
When
ethical
Organizational
culture
and
ethical
?
many
con
social
may outweigh
are
difficult decisions
efficiency
similarly
is "yes," and it is
clear that the
question
increasingly
ethical tone or climate of organizations
is set at the
What
and
the
culture
do,
top managers
top.
they
in the
establish and reinforce, makes a
difference
big
act and in the way the
way lower-level
employees
as a whole
acts when
ethical dilemmas
organization
are faced. For
was no doubt
in
there
example,
to do
at
anyone's mind
Johnson & Johnson what
when
the infamous Tylenol
took
poisoning
place.
executives
their
pro
Company
immediately
pulled
?
duct from the marketplace
knew
that
"the
J
they
was to do the
& J
way"
right thing regardless of its
were
was that the
cost. What
saying
they
implicitly
ethical
that
framework
of the company
required
act in
in
this
fashion.
faith
they
good
The
of an organization
is the
ethical
climate
correct
set
is
about what
of
shared
understandings
behavior and how ethical issues will be handled. This
climate
sets the tone for decision
at all levels
making
Some of the factors that
in all circumstances.
be emphasized
are
organizations
Rentsch,
1991):
in different
(Hunt,
ethical
1991;
climates
Schneider
the ethical
dilemmas
climate
will
is not clear and positive,
in unethical
result
often
In such instances, an organization's
culture
to
can
its members
behave unethi
also
predispose
a
recent
For
has found
research
cally.
example,
with a history of
between
relationship
organizations
behavior.
behavior
"Do organizations
vary in the 'ethical climates' they
answer
to the
for their members?
The
establish
may
?
organizations
faced.
ship.
and
self-interest
*
of
and
illegal behavior
some
1991). Thus,
organizations
(Baucus and Near,
In
that reinforces
have a culture
illegal activity.
to
recruit
addition, some firms are known
selectively
and promote
employees who have personal values
violating
the
law
and
continued
also may
acts
as a part
socialize employees
illegal
of their normal
1977; Geis,
(Conklin,
job duties
concern
cases
account
in
For
of
his
instance,
1977).
electrical
equipment, Geis
ing price fixing for heavy
noted that General Electric removed amanager who
from his
refused to discuss prices with a competitor
the
his successor the position with
and
offered
job
would
believed
he
that management
understanding
consistent
with
illegal behavior;
to engage in
firms
activi
behave as expected and engage in price-fixing
ties (Geis, 1977, p. 124; Baucus and Near,
1991).
can all
and predisposition
Pressure, opportunity,
lead to unethical
activities; however,
organizations
an
stance to promote
must
still take a proactive
some
section provides
final
climate. The
ethical
to
for
available
useful
organizations
suggestions
amore ethical climate.
creating
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
Challenge
an ethical
climate:
Promoting
Some
and
strategies
suggestions
individuals
mines
literature
has
and reinforced
of
the kind
employees.
Recent
511
in Organizations
of Ethical Behavior
an
deter
organization
behavior
exhibited
by
to
if business
leaders want
by
ethical
a result,
ethical behavior
As
must
accept more
suggested several strategies for
in
behavior
(Adler
promoting
organizations
and Bird,
1988; Burns,
1987; Harrington,
1991;
executives
chief
Stead
1987;
Raelin,
etal, 1990). First,
promote
consciousness
in their
the top down ?
they
showing
Second,
support and care about ethical practices.
formal processes
should be used to support and
For
reinforce
ethical behavior.
internal
example,
use
involve
the
of
of
codes
corporate
regulation may
and the availability
of appeals processes.
ethics,
that the philosophies
of
Finally, it is recommended
as
as
well
immediate
top managers
supervisors focus
on the institutionalization
of ethical norms
and
are
that
into
all
practices
incorporated
organizational
levels.
is desired, the
measurement,
performance
must
to
and
be
reward
modified
systems
appraisal
account
for ethical behavior
and
Sims,
(Hegarty
et al,
1978, 1979; Trevino,
1986; Worrell
1985).
to Nielsen
(1988, p. 730):
According
as well
as
top managers
philosophies
a
immediate
critical
supervisors represent
organiza
tional factor
the ethical behavior
of
influencing
culture. Organiza
ethically-oriented
organizational
tions can also enhance an
culture
ethically-oriented
ethical
should
encourage
from
organizations
ethical
The
of
over a
et al,
1990). Research
employees
(Stead
period
of more
than twenty-five
years clearly supports the
conclusion
that the ethical philosophies
of manage
on the ethical behavior of
ment have a
major impact
?
their followers
(Arlow and Ulrich,
employees
and Molander,
1980; Baumhart,
1961; Brenner
1977;
and Sims, 1978, 1979; Posner
1978; Hegarty
Carroll,
and Schmidt,
Touche
and
1984;
Ross,
1988; Vitell
1987;Worrell
etal, 1985).
Festervand,
Nielsen
has
stressed
the
of
or
importance
(1989)
to ethical
in
behavior
managerial
contributing
to Nielsen, managers
unethical
behavior. According
contrary to their ethical phi
unethically
behaving
a
serious limit to ethical reason
losophies represents
of the research cited in the
ing in the firm. Much
states that
above
implicitly and explicitly
paragraph
ethical philosophies
will have little impact on em
are
ployees' ethical behavior unless they
supported
behaviors
that are consistent with
by managerial
these philosophies.
represent
Managers
significant
others in the
lives of employees
and
organizational
as such often have their behavior modeled
em
by
ployees.
One of the most
basic of management
principles
states that if you desire a certain behavior, reinforce
it. No doubt, how ethical behavior
is perceived
by
responsibility
reinforcement
their
establishing
organization's
in ethical behavior
system. Research
the conclusion
that if ethical
supports
strongly
behavior
In
they
for
many
ignore
to do,
choose
cases, mangers
. . . because
the unethical
of
possibility
punishments
[or]
they
to
gain
go along with
want
to avoid
rewards.
and their managers
Organizations
stand that the above recommendations
ponents
must
or
the
. .
under
are
com
key
and maintenance
of an
in the
development
to
by paying particular attention
principled
organi
zational dissent. Principled
is
dissent
organizational
an
culture
important concept linking organizational
to ethical behavior.
dissent
Principled
organizational
to
in the
by individuals
organization
status
on
the
protest
quo because of their objection
ethical grounds, to some practice or
policy (Graham,
to
an
committed
1986). Organizations
promoting
ethical climate should encourage
principled
organi
is the effort
zational
dissent
instead of punishing
such behavior.
should also provide more
ethics
Organizations
to
their employees'
training
strengthen
personal
must de
ethical framework. That
is, organizations
vote more
resources
to ethics
to
training programs
help
and
its members
their
clarify
ethical
frameworks
when
ethical
practice
self-discipline
making
in difficult circumstances. What
decisions
follows is
a useful
checklist
that organizations
seven-step
use
to
should
in
help their employees
dealing with
an ethical dilemma
1989; Otten,
(Schermerhorn,
1986):
(1) Recognize and clarify the dilemma.
(2) Get all the possible facts.
?
(3) List your options
all of them.
(4) Test each option by asking: "Is it legal? Is it
right?
Is it beneficial?''
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
512 Ronald R. Sims
concerns
(5) Make your decision.
check your decision
(6) Double
I feel
would
this? How
if my
would
by asking:
found out
family
I feel if my
"How
** problem-solving
Provide ethics
about
was
decision
effective
ethical
individuals
Certainly,
be
might
be
for a large corporation might
a
from
all
needed
office
supplies
purchase
are
often
such
gains
supplier. However,
particular
in nature. In the
rather than long-term
short-term
an
cannot
if its
operate
organization
long run,
and values are not congruent with
culture
prevailing
those of society. This is just as true as the observation
agent
purchasing
bribed to
cannot survive
that, in the long run, an organization
it
and services that society
unless
produces
goods
wants and needs. Thus an
culture that
organizational
com
more
not
is
ethical
behavior
promotes
only
cultural values, but, in fact,
patible with prevailing
makes good sense.
remains to be learned about why
much
Although
and creating
ethical behavior occurs in organizations
that en
cultures
organizational
can
benefit
behavior,
organizations
and maintaining
courage ethical
from
**
**
the following
Be
suggestions:
in
Encourage
regarding
setting
values
input
throughout
appropriate values
the organization
and practices for
the cultures. Choose
implementing
views
of employees
the
represent
values
that
at all levels
of the organization.
**
Do not automatically
ture.
Explore methods
and dissent,
mechanisms
Insure
(Cooke,
Integrate
1991).
ethical
the
and
situations,
that there
performance
into
decision-making
the
appraisal process.
even
In conclusion,
continue
organizations
and
organizations,
that organizational
has not
behavior
et
really been explored
(Hellreigel
must
challenge of ethical behavior
1989). The
al,
met
in
though ethical problems
concern
to
society,
greatly
the potential
individuals,
impact
can have
on ethical
culture
if they are truly
by organizations
about survival and competitiveness.
What
in
be
concerned
is needed
is for more
times
today's complicated
organiza
tions to step forward and operate with
strong, posi
to
cultures. Organizations
have
tive, and ethical
ensure
that their employees
know how to deal with
issues in their everyday work lives. As a result,
when
the ethical climate is clear and positive, every
one will
is expected
know what
of them when
ethical
inevitable
ethical
employees
unethical
the confidence
dilemmas
occur.
to be on
This
can
the lookout
give
for
behavior
the understanding
and act with
are
correct and
is considered
they
doing
be supported by top management
and the entire
will
organization.
References
Alder,
H.
J.
and Bird,
Executive
F. B.:
1988,
pp.
ed., Executive
in
Organizational
243-267.
'International
is Responsible
Integrity:Who
in S. Srivastva,
Values
a
opt for
"strong" cul
to
provide for diversity
or
such as grievance
complaint
or other internal review proce
Life
Integrity:
Dimension
(Jossey-Bass,
San
for
Human
Francisco),
Arlow, R and Ulrich, T. A.: 1980, 'Auditing Your Organiza
tion's Ethics', InternalAuditor 39(4), pp. 26?31.
R:
Baumhart,
1961,
'How Ethical
that a whistle-blowing
and/or
ethical
Baucus,
M.
S. and Near,
J.
P.:
are Businessmen?',
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
1991,
'Can
of
for theWorld',
The Search
Harvard
BusinessReview 39(4), pp. 26?31.
dures.
**
explain
that what
and goals regard
Do not pro
relationships.
ing employment
cannot deliver.
mise what the organization
realistic
should
are
grey areas where ethical trade
ambiguous,
offs may
be necessary. More
importantly,
no
some
situations
solution
have
simple
**
get
(particularly
unethically
In a similar fashion, an organization might
caught).
seem to
actions. For example, a
gain from unethical
programs
ethical
and
Like many basic business
the organization
should recognize
if they do not
having
training
clear-cut.
for be
reinforced
1991).
for all em
programs
(Drake
underlying
legal
and
Drake,
present
1988) principles
practical
aspects of carrying out procedural guidelines.
**
that not all ethical situations are
Understand
should en
culture
organizational
and
unethical
behavior
courage
discourage
"cost"
ethical behavior may
behavior. Admittedly,
An example
the loss of
be
the organization.
might
a multinational
firm refuses to pay a
sales when
to secure business
in a
bribe
country.
particular
An
for internal
(Harrington,
These
ployees.
in the local newspaper?"
printed
(7) Take action.
is established
procedure
Illegal
Corporate
Behavior Be Predicated? An Event History
Academy ofManagement Journal 34(1), pp. 9?36.
S. and Molander,
Brenner,
E.:
Analysis',
A.:
R
Fundamental
1989,
Business Ethics (Prentice-Hall, Englewood Cliffs, NJ).
S.: 1987, 'Good Corporate Citizenship Can Pay
Dividends', Dallas Morning News (April 15), p. Cl.
Carroll, A. B.: 1978, 'Linking Business Ethics to Behavior in
Organizations', Advanced Management Journal 43(3), pp.
4-11.
Cooke, R A.: 1991, 'Danger Signs of Unethical Behavior:
How to Determine
If Your Firm Is at Ethical Risk',
Business
Ethics
10, pp. 249?253.
Journal of
J.: 1977, Illegal But Not Criminal
Englewood Cliffs, NJ).
B. H.,
Drake,
of
E.:
and Drake,
Cultures',
Corporate
Managing
'Ethical
1988,
and
(Prentice-Hall,
Aspects
Legal
of
1961',
in G. Geis
and R Meier,
Management
eds., White-Collar
Crime: Offenses inBusiness, Politics, and theProfession (Free
Press, New
Gellerman,
117-132.
pp.
York),
S.W.:
1986,
"good" Managers
'Why
Ethical Choices', Harvard Business Review
Bad
(July?August),
pp. 85-90.
Theoretical
eds., Research
Greenwich,
Gray,
Staw
L. L.
and
Vol.
Behavior,
Cummings,
8
(JAI Press,
I.: 1982,
Rosen,
The
Warning
Harrington,
J.:
'What
1991,
America
Corporate
is Teach
Sims,
H.,
1978,
Jr.:
'Some Determinants
D.,
J. W.,
Slocum,
of
Jr.,
R
and Woodman,
W.:
1989, Organizational Behavior (West Publishing, St. Paul,
MN).
Hunt,J. G.: 1991, TowardA LeadershipParadigm Change (Sage,
Newbury Park, CA).
Jansen,
E. and Glinow,
Organizational
M.
Reward
A.:
'Ethical
1985,
Systems',
Ambivalence
Academy
Job:
Alert
Companies
'Values
1984,
the American
and
as the Executive's
'The Professional
1987,
Academy
Executive
ofManagement
Aide
171 ?
1, pp.
Schermerhorn, J. R.: 1989,Management for Productivity (John
Wiley, New York).
Schneider, J. B. and Rentsch, J.: 1991, 'Managing Climates
A
Cultures:
Futures
in
Perspective',
Los
Times
(December
Angeles
Stealing',
D. L,
and Stead,
E., Worrell,
Stead, W.
ed.,
J. Hage,
and
ofManagement
Review 10(4), pp. 814-822.
Morgan, D.: 1989, 'Truck Army Does Not Want to Be Tied
Up inHouse Turf Battle', Washington Post (August 12), p.
J.
D-l.
2), p.
'An
G:
Integrative
Model for Understanding and Managing Ethical Behav
ior in Business Organizations', Jou mal ofBusiness Ethics 9,
233-242.
Touche Ross: 1988, Ethics inAmerican Business: An Opinion
Survey (Touche Ross and Co.).
L. K.:
tions:
A
'Ethical
1986,
in
Organiza
Making
Interactionist
Model',
Academy
Decision
Person-Situation
ofManagement Review 11(3), pp. 601?617.
U.S. News &World Report: 1989 (January 16), p. 42.
K.:
'The Aircraft
1978,
and
Brake
theMoral
Scandal:
A
eds., Interpersonal
J. J. Babarro,
and
Relationships
Understanding
Cau
in A. G
isUnpleasant',
Behavior:
Com
(Prentice-Hall,
Englewood Cliffs, NJ), pp. 529-540.
S. and Festervand,
Vitell,
and
Unethical Decision Behavior: An Experiment', Journal of
Applied Psychology 63(4), pp. 451?457.
Hellreigel,
A:
munication
21-30.
W.
W.:
Schmidt,
tionary Tale inWhich
ing About Ethics', Academy ofManagement Executive 5(1),
Hegarty,
J.
de-Camp',
182.
New
(Norton,
the
206-216.
Athos
S.
and
Vandevier,
Conn.).
and
York).
pp.
pp.
Raelin,
1986, 'Principled Organizational Dissent: A
in B. M.
Essay',
in
Organizational
on
'Ethics
1986,
Manger: An Update', CaliforniaManagement Review 24(3),
Trevino,
Graham, J.W.:
M.
G.
Posner,
pp.
Make
L.:
to Potential Dilemmas', TheWall Street
Employees
Journal
17.
p.
(July 14),
and
California
123?
pp.
3(2),
Future ofOrganizations (Lexington Books, Lexington, MA).
Silverstein, S.: 1989, 'One in 15 Employees in Study Caught
Review (Winter), pp. 120-121.
Geis, G.: 1977, 'The Heavy Electrical Equipment Antitrust
Case
A.
Otten,
in
Burns,
Conklin,
Organizational
Executive
ofManagement
Academy
130.
and Problems
Concepts
R. P.: 1989, 'Changing Unethical
Behavior',
Changing?', Harvard BusinessReview 55(1), pp. 55?71.
Bucholz,
513
Organizations
Nielsen,
of Business
'Is the Ethics
1977,
in
of Ethical Behavior
Challenge
Practices
Business
T.:
and Beliefs
Ethics
of
6, pp.
'Business
1987,
Industrial
D.:
aging
1988,
Conflicts,
Journal
of
Is Convicted
in
111?122.
Wall Street Journal: 1989, 'Harris Corp.
Kickback Plan', (June 5), p. A7.
Wolfe,
Ethics:
Executives',
'IsThere
in the Bottomline:
Man
Integrity
to Executive
in S. Srivastva,
ed.,
Integrity',
Obstacles
Executive Integrity:The Search For High Human Values in
Organization
HL
Worrell,
Decisions:
tingencies
57,
San
(Jossey-Bass,
D. L, Stead,W.
'Unethical
Reports
Life
E., J. G
The
and Spalding, J. B.: 1985,
Impact
and Managerial
pp. HO
Francisco),
of Reinforcement
Philosophies',
Con
Psychological
p. 355.
A2.
New York Times: 1988, 'Corporate Prison Term
gheny Bottling' (September 1),p. D2.
Nielsen,
R. P.:
Action
1988,
'Limitations
of Ethical
Reasoning
for Alle
as an
(Praxis) Strategy', Journal of Business Ethics 7, pp.
College ofWilliam andMary,
Graduate School ofBusiness Administration,
Williamsburg, Virginia 23185,
725-733.
This content downloaded from 195.34.79.253 on Sun, 22 Jun 2014 17:26:57 PM
All use subject to JSTOR Terms and Conditions
U.S.A.