Critical Literature Review
ANDYXU666
Lecture1-WhatistheEthicalOrganisation.pptx— Ethics and Governance
What is “the” Ethical Organisation?
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Overview
The work context
Organisational culture
Ethical formal and informal cultural systems
Ethics codes – values & compliance
Ethical leadership
The relationship between leadership, culture, ethics codes and behaviour
The Moral Person
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An Ethical Organisation
At the start of our lecture series, what traits would you list of “the” ethical organisation?
Trust
Effective communication
Openness
Objectivity and fairness (merit)
Integrity
Transparency
Well formed organisational values
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Shouldn't it be Simple? – Just Be Ethical
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Shouldn't it be Simple? – Just Be Ethical
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Points to Ponder: “Dual Use” Technologies
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Points to Ponder
Is “the” ethical organisation the responsibility of the individual or the collective?
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The Solution Should be Simple
Just make all business students swear an oath, similar to what physicians do?
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Points to Ponder:
Are “Criminals” born or made?
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Ethics in Organisations
Individual personality is unimportant in organisational criminal behaviour, as it results from role fulfilling rather than individual pathology (Schrager & Short 1978)
A reliable picture of moral conduct can be ascertained “not so much in direct observation of the decision maker as in a firmer grasp of the decision maker’s environment” (Frederick 1992)
Bad apples and bad barrels: Most people are the product of the context they find themselves. They look up and around… (Trevino and Brown 2004)
What does literature say?
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Ethics and Organisations
What are some of the issues that emerged, for you, when you read the previous slide?
“Individual personality”
“role fulfilling”
“people are the product of the context”
“of moral conduct”
“decision maker”
“decision maker’s environment”
“reliable”
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Why is Organisational “Environment” Important?
Organisational “Membership” - Belonging
Persons in organisations are socialised in their roles (Katz and Kahn 1978).
Through this process, people accept the organisational goal structure and the culture (Clinard & Yeager 1980).
The expected role behaviour is learned from others’ expectations and the rewards that they receive from their organisational membership.
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Over the next two slides, think about Organisational Belonging
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Membership/Belonging to an Organisation
Membership implies belonging to organisational culture.
Organisational culture may be defined as the totality of shared assumptions, values and beliefs and is the social glue that holds the organisation together.
Organisational culture defines “how we do things around here” (Trevino & Nelson 2006)
The organisational culture includes the basic assumptions concerning what is right, proper and fair (Gottlieb & Sanzgiri 1996).
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Organisational Cultural System that is “Ethical”
Policies and codes - their effectiveness depends on other formal and informal systems. Ethics must be in the “blood line” of the organisation.
Leadership: creates, maintains and changes culture. Most important aspect of an organisation’s ethical culture
Selection and reward systems
Structure - authority, responsibility and ethical culture
Orientation and training programs.
Decision making processes assumptions and scripts
Trevino & Nelson (2006)
Membership to an Organisation
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Over the next two slides, think about Formal Organisational Culture and Codes of Ethics
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Membership: Ethics Codes
Have been around since the early 1900s
An international movement towards business ethics codes began in 1980s
Post-Enron, stock exchanges such as NYSE and ASX encouraged the adoption of formal ethics guidelines for company officers.
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Formulating a Code of Ethics
A code of ethics is, in essence, a formalisation of moral principles and responsibilities
The need for a code of ethics/conduct
Requirement by law, e.g. in U.S.
Safeguarding reputation
Improving customer service (and thus sales)
Seeking like-minded partners and suppliers
Attracting and retaining the best employees
Responding to internal and/or external pressure
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A code of ethics should be organisation-specific. E.g. Religious body vs commercial company; small vs large company
Codes are guidelines, not laws. Spirit of following the code is more important than the form. E.g. A waiter greeting with sincerity vs merely following what is required
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Effectiveness of Ethics Codes
Code effectiveness depends on cultural values and communication
Use collaboration to create/revise the code
Discuss/debate code frequently
Use code to resolve ethical issues
Communicate ethical decisions
Reward behaviour that is consistent with the code
Stevens (2008)
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Reward systems
Reward systems can encourage ethical behavior
People do what is rewarded
Rewards do not have to be explicit
Set goals for ethical conduct
Reward systems can encourage unethical behavior
Think about how attempts to motivate can backfire
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Over the next two slides, think about Ethics vs Values
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Help People Be Ethical: Giving Voice to Values
The challenge is being ethical in the workplace – voicing your values
To help people be ethical we should focus on post decision making;
People know what is the right thing to do – let us help them do it more effectively;
Need to practice the doing - preparing scripts and templates – these help make us better at voicing our values.
GENTILE, M. (2010). Giving Voice to Values: How to Speak Your Mind When You Know What’s Right. New Haven; London: Yale University Press. Retrieved December 10, 2020, from http://www.jstor.org/stable/j.ctt1np94q
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Ethics of Values? Or Ethics of Compliance?
Values approach - is proactive and inspirational; emphasises expected behaviour, high standards
Compliance approach - is reactive and punitive; emphasises required behaviour, obeying the law
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Over the next two slides, think about Informal Organisational Culture -
Who are the “Social Influencers”?
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The Responsibility of Managers
Managers have responsibility for ethical behaviour in organisations because they affect culture, policies and practices:
Begin with clear standards
Design a plan to continually communicate organisational standards;
Managers are role models.
(Trevino & Nelson 2006)
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Informal Organisational Culture
Culture also contains informal norms
Heroes and role models
Rituals
Myths and stories
Language
Trevino & Nelson (2006)
Developing, influencing and changing the ethical/unethical culture
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Organisational Culture and “Influencers”
Managers: formal statements, structure, systems, processes, physical setting, rituals, stories, etc.
criteria for scarce resources, rewards, status, recruitment, selection, promotion, retirement, excommunication
Influencers (leaders) affect culture through:
attention (or ignore)
critical incidents and crises (heroism)
role modeling / teaching / coaching
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Social or Collective Agreement
Acceptable Behaviour
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The Fundamental Building Block of the Ethical Organisation?
Moral person
Of good character
Traits
Integrity
Trustworthiness
Honesty
Behaviours
Do the right thing
Concern for people
Being open
Personal morality
Decision making
Hold to values
Objective/fair
Concern for society
Follow ethical decision rules
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What is “The” Moral Person?
Personal morality
What or who creates this standard of “Morality”?
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Personal Morality Next Week ….Kantian Ethics
Kantian Ethics
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References
Clinard, MB, & Yeager, P. C. 1980, Corporate crime, The Free Press, New York.
Frederick, NL 1992, 'Ethics and Integrity - Beyond Internal Controls', Managerial Auditing Journal, vol. 7, no. 1.
Gottlieb, JZ & Sanzgiri, J 1996, 'Towards an ethical decision making in organizations', Journal of Business Ethics, vol. 15, pp. 1275-85.
Katz, D, & Kahn, R. L. 1978, The social psychology of organizations, 2 edn, Wiley, New York.
Schrager, L & Short, J 1978, 'Toward a Sociology of Organizational Crime', Social Problems, vol. 25, pp. 407-19.
Stevens, B 2008, 'Corporate ethical codes: Effective instruments for influencing behavior', Journal of Business Ethics, vol. 78, pp. 601-9.
Treviño, LK & Brown, M 2004, 'Managing to be ethical: Debunking five business ethics myths.' Academy of Management Executive, vol. 18, no. 2, pp. 69-81.
Trevino, LK, Hartman, L.P., & Brown, M 2000, 'Moral person and moral manager: How executives develop a reputation for ethical leadership', California Management Review, vol. 42, no. 4, pp. 128-42.
Trevino, LK, & Nelson, K. A. 2006, Managing business ethics: Straight talk about how to do it right, 4 edn, John Wiley & Sons, New York.
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