Ethical literature review

ORIGINAL PAPER

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for Middle Managers’ Exercise of Moral Agency in Ethical Problems

Minna-Maaria Hiekkataipale1,2 • Anna-Maija Lämsä2

Received: 28 October 2016 /Accepted: 16 March 2017 / Published online: 22 March 2017

� Springer Science+Business Media Dordrecht 2017

Abstract This paper investigates qualitatively the signifi-

cance of different dimensions of ethical organisation cul-

ture for the exercise of middle managers’ moral agency in

ethical problems. The research draws on the social cogni-

tive theory of morality and on the corporate ethical virtues

model. This study broadens understanding of the factors

which enable or constrain managers’ potential for moral

agency in organisations, and shows that an insufficient

ethical organisational culture may contribute to indiffer-

ence towards ethical issues, the experiencing of moral

conflicts, lack of self-efficacy and morally disengaged

reasoning. In contrast, a healthy ethical culture can con-

tribute to motivation to tackle ethical problems, an

increased capacity for self-regulation and ultimately ethical

behaviour.

Keywords Corporate ethical virtues � Ethical culture of

organisations � Ethical problem � Middle manager � Moral

agency � Qualitative research � Virtue ethics

Introduction

The aim of this study is to investigate qualitatively the

significance of different dimensions of ethical organisa-

tional culture for middle managers’ exercise of moral

agency in the context of ethical problems in the workplace.

Ethical problems in business are situations in which, on the

one hand, one does not know what is the right or wrong

thing to do and, on the other, one knows the right thing to

do but fails to act accordingly (Nash 1990). As shown in a

substantial body of literature (e.g. Nash 1990; Dukerich

et al. 2000; Crane and Matten 2004; Dean et al. 2010;

Huhtala et al. 2011; Riivari and Lämsä 2014; Hassan et al.

2014), ethical problems, such as a lack of courage,

managing conflicts poorly, employees not taking respon-

sibility for their work, relationship problems and self-in-

terested behaviour, are everyday concerns for managers in

organisations.

In this paper, we follow the virtue-based theory of

business ethics (Solomon 1992) which, instead of empha-

sising an individualistic view of ethical behaviour in

organisations, posits that belonging to a community affects

people’s moral agency (Treviño 1986; Victor and Cullen

1988; MacIntyre 1999; O’Fallon and Butterfield 2005;

Nielsen 2006; Craft 2013; Ferrero and Sison 2014). We

argue in this study that the organisational environment, and

in particular the ethical organisational culture, is significant

in the exercise of the manager’s moral agency (see e.g.

Bandura 1991, 2001; Forte 2004; Nielsen 2006; Detert

et al. 2008; Dean et al. 2010; Kish-Gephart et al. 2010;

Yukl 2010; Kaptein 2011). In addition to moral agency

theory (Bandura 1991), which explains how moral rea-

soning together with other psychosocial factors such as an

individual’s self-concept or environmental circumstances

govern ethical behaviour (Bandura 1991), we approach the

topic by drawing on the only multidimensional model of

ethical organisation culture, namely the corporate ethical

virtues model of Kaptein (1998).

The focus of the paper is on middle managers’ moral

agency since they are responsible both for pursuing the

organisation’s strategic objectives and for keeping an eye

& Minna-Maaria Hiekkataipale

[email protected]

1 School of Business, JAMK University of Applied Sciences,

Rajakatu 35, 40200 Jyväskylä, Finland

2 JSBE Jyväskylä University School of Business and

Economics, Ohjelmakaari 10, 40014 Jyväskylä, Finland

123

J Bus Ethics (2019) 155:147–161

DOI 10.1007/s10551-017-3511-9

on the well-being of the staff. This is an interface position

that may itself serve as a breeding ground for ethical

concerns (Alam 1999; Treviño et al. 2008; Marshall 2012).

Also, middle managers are in a position to influence and to

be influenced in ethical matters by those above and below

them in the organisational hierarchy (Treviño et al. 2008;

Jackall 2010). On the other hand, as shown by Treviño

et al. (2008), middle managers can perceive ethical aspects

of the organisation differently from executives, and this can

have important implications for their moral agency.

Contributions of the Study

Nielsen (2006) proposes that managerial and bureaucratic

systems can manipulate and constrain the moral agency of

individual managers. Therefore, it is important to identify

what kind of organisational environment can enable the

exercise of moral agency (Detert et al. 2008; Wilcox 2012).

This research contributes to prior research on the topic

in the following ways. First of all, we show how the theory

of moral agency could add to earlier theories of ethical

organisational culture and consequently to individuals’

ethical behaviour. Moral agency theory is an overarching

theory of ethical behaviour which not only takes into

account moral reasoning based on the weighing of indi-

vidual moral standards (Rest 1984) and environmental

influences such as the ethical organisational culture (Tre-

viño 1986) and situational circumstances (Jones 1991), but

also considers how reasoning is translated into action

through anticipatory self-regulatory mechanisms, including

anticipated self-sanctions and social sanctions (Bandura

1991, 2001; Weaver 2006). Moreover, unlike most relevant

theories of ethical behaviour in the organisational context

(e.g. Treviño 1986; Victor and Cullen 1988; Collier 1998;

Kaptein 1998), moral agency theory offers a three-dimen-

sional view of how social influences, such as the organi-

sation’s ethical culture, can affect ethical judgment and

behaviour (Bandura 1991). In the first place, social influ-

ences affect individuals’ self-regulatory competence (Tre-

viño 1986; Bandura 1991). That means that individuals can

generate perceptions about moral behaviour by observing

the behaviour of others and by internalising the standards

that they observe in action. Secondly, the organisational

environment can provide collective support (e.g. support-

ive and positive feedback, clear guidelines and principles

for the sort of behaviour that is expected), for an individ-

ual’s own moral standards. Thirdly, the organisational

environment can facilitate the selective activation or dis-

engagement of moral self-regulation (Bandura 1991). We

argue here that combining the theory of moral agency and

the theory of ethical organisational culture adds a more

diverse theoretical viewpoint to the literature on the

subject.

The second contribution that this article makes to the

literature on ethical organisational culture and individual

ethical behaviour is a systematic empirical analysis of

middle managers’ perceptions of the ethical culture of their

organisation and the value of different corporate ethical

virtues. In addition, it provides a rich view of the actual

conduct of middle managers when handling ethical prob-

lems. Thus, this study broadens understanding of the

mechanisms which foster and hinder the effective exercise

of moral agency in organisations. Prior studies on the

ethical culture of an organisation (e.g. Kaptein 2010;

Huhtala et al. 2011, 2013a, b; Riivari and Lämsä 2014;

Huhtala et al. 2015) have measured the impact of ethical

organisational culture on, for instance, innovativeness,

burnout, sickness absence, occupational well-being and

managers’ work goals. This body of research offers rich

evidence to support the validity of the construct of ethical

organisational culture and shows the wide range of ways in

which it is important. These studies, however, do not

directly address the significance of ethical organisational

culture for the individual exercise of moral agency.

Thirdly, in spite of the significant organisational posi-

tion that middle managers hold (Jackall 2010; Treviño

et al. 2008), the ethical problems of specifically middle

managers are largely missing from recent business ethics

research (apart from a few empirical studies such as Alam

1999; Dean et al. 2010; Hiekkataipale and Lämsä 2015).

Therefore, this paper is important in that it adds the middle

management perspective to earlier research in the field.

Theoretical Framework

Moral Agency

The social cognitive theory (Bandura 1991; Bandura et al.

1996, 2001) suggests that the relationship between moral

thought and conduct is mediated through the exercise of

self-regulation and, more specifically, the mechanism of

moral agency. Self-regulation, which is a key concept with

regard to the theory of moral agency, includes self-moni-

toring one’s own conduct, exercising moral judgment of

the rightness or wrongness of one’s conduct in terms of

one’s personal standards and the relevant circumstances,

and affective self-reactions (Bandura 1991, 2001). External

social sanctions (such as isolation in the workplace, dis-

missal, or reprimands) and internalised self-sanctions (such

as self-contempt, guilt, or self-condemnation) play a major

role in self-regulation (Bandura 1991, 2001).

Personal moral standards are formed in the course of the

individual’s socialisation process (Bandura et al. 1996).

Thus, social reality is essential to the development of

effective moral agency. However, the social environment

148 M.-M. Hiekkataipale, A.-M. Lämsä

123

can also activate the disengagement of moral self-regula-

tion and contribute to weak moral agency (Bandura et al.

1996).

The deactivation of self-regulation can take place

through (1) moral justification, (2) the use of euphemistic

language to hide the actual purpose of one’s action, (3)

advantageous comparison, (4) the displacement of

responsibility, (5) the diffusion of responsibility, (6) min-

imising or ignoring the consequences of one’s conduct, (7)

dehumanising the victim and (8) the attribution of blame

(Bandura et al. 1996; Weaver 2006; Treviño et al. 2006;

Detert et al. 2008). Let us now look briefly at these

mechanisms and their significance to moral agency.

The first disengagement mechanism is moral justifica-

tion, which refers to making unethical actions personally

and socially acceptable by portraying them as serving a

moral purpose, such as the success of the organisation or

community (Bandura 1991). The second, using euphe-

mistic language, means that reprehensible activities are

described in more neutral or even positive terms in order

to make them justifiable, and those who engage in them

are relieved of the sense of personal moral agency and

responsibility (Bandura et al. 1996). Moral self-regulation

can be weakened, thirdly, by means of advantageous

comparison, when unethical decisions and actions are

compared with even more harmful deeds so that the

original behaviour begins to appear benign (Detert et al.

2008).

People may also free themselves from responsibility by

displacing or diffusing responsibility (Bandura et al. 1996).

Detert et al. (2008) define the displacement of responsi-

bility as follows: ‘‘When individuals view their behaviour

as a direct result of authoritative dictates, they may dis-

place responsibility for their actions to the authority figure,

negating any personal accountability for the unfavourable

act’’. The diffusion of responsibility, on the other hand, can

take place when people work together in teams, for

instance, and take part in collective decision-making.

Fragmented jobs may also diffuse individual responsibility,

when people perform only sub-functions of larger entities

and exercise little personal judgment over the end result

(Bandura 1991). These two displacement mechanisms have

been found to be common in organisational settings where

people feel compelled to follow orders, and responsibility

for any harmful outcomes can be diffused to organisational

teams or units (Detert et al. 2008).

People may also avoid self-sanctions by minimising or

disregarding the consequences of unethical behaviour

(Bandura et al. 1996). As long as the outcomes of conduct

are ignored, minimised or disbelieved, there is no reason

for self-contempt or guilt. If the consequences of an action

are physically remote, people are more prone to ignore

them (Bandura 1991).

Finally, a sense of personal moral agency can also be

reduced by blaming other people for bringing suffering on

themselves, or devaluing them as human beings (Bandura

1991). In organisational life, the formation of closed

groups may lead to this type of disengagement behaviour

(Detert et al. 2008).

Effective moral agency requires not only the ability of

self-regulation but also the ability to exercise it under the

contradictory influences of working life (Bandura

1991, 2001; MacIntyre 1999). Self-efficacy is also funda-

mental to the exercise of moral agency (Bandura 1991).

The concept of self-efficacy refers to the idea that the more

people believe they can exert control over their motivation,

thought patterns and actions, the better they can resist

social pressures to behave contrary to their own moral

standards (MacIntyre 1999). Bandura (1991) suggests that

a strong sense of self-efficacy (or alternatively, self-belief)

reduces vulnerability to stress and depression under

adversity. From the point of view of moral agency, self-

efficacy beliefs are pivotal since they determine whether

people deal with ethical challenges pessimistically or

optimistically, what challenges they accept and how much

effort they put into overcoming difficulties and contradic-

tions (Bandura 2001).

Ethical Culture of Organisations

The focus of this paper, ethical organisational culture,

which is a subset of organisational culture, has been found

to exert a powerful influence on the ethical behaviour of

members of the organisation (Ford and Richardson 1994;

Treviño et al. 1998; Koh and Boo 2001; O’Fallon and

Butterfield 2005; Kaptein 2011; Martin et al. 2014; Huhtala

et al. 2015). Ethical organisational culture refers to that

aspect of the overall organisational culture that consists of

formal and informal systems of behavioural control which

either promote or hinder ethical behaviour (Treviño et al.

1998).

Operationalisation of the concept of ethical culture has

progressed from Treviño’s one-dimensional construct to a

more explicit definition of the different sub-dimensions of

ethical culture (e.g. Kaptein 1998, 2008). In this study, we

draw upon the only multidimensional model of ethical

organisational culture, developed by Kaptein (1998, 2008).

This corporate ethical virtues model (CEV) builds on

Solomon’s (2004) virtue-based theory of business ethics,

which suggests that virtues are desirable operational dis-

positions of both people and groups as moral agents.

According to Kaptein (2015), organisation’s ethical virtues

are embedded in the organisation’s strategies, structures

and culture. The key idea of the CEV model is that the

ethical culture of an organisation can be assessed, since

organisations are moral entities (Kaptein 2008, 2015). The

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 149

123

model assumes, further, that the stronger the presence of

each of the eight virtues, the more ethically the members of

the organisation will behave (Kaptein 2015).

Kaptein (1998, p. 70) constructed his eight-dimensional

model by conducting an extensive number of qualitative

interviews and observations in companies. The model was

later tested in several quantitative studies (e.g. Kaptein

2008, 2010, 2011; Huhtala et al. 2011, 2013a, b; Riivari

and Lämsä 2014; Kangas et al. 2015).

Corporate Ethical Virtues

The first dimension in the CEV model is the virtue of

clarity, which refers to how well the ethical expectations of

the organisation, such as its values, norms and principles,

have been translated into explicit, understandable and

concrete guidelines for ethical conduct (Kaptein 2011). If

clarity prevails in the organisation, expectations about what

responsible choices should be made when dealing with

ethical problems will be clear to both managers and

employees (Kaptein 1999). In his study, Kaptein (2011)

found evidence that high clarity encourages employees to

intervene and correct observed wrongdoings in the work-

place. There is also a substantial body of other empirical

evidence, suggesting that clear normative policies and

procedures reduce unethical behaviour in organisations

(see e.g. Riivari and Lämsä 2014; Huhtala et al. 2013b).

The second and third dimensions in the CEV framework

refer to the virtue of organisational congruency, which

means supervisors’ and senior management’s consistent

and unambiguous example of ethical behaviour and role

modelling (Kaptein 1999; Huhtala et al. 2011). Jackall

(2010) and Solomon (1992) make clear that the example

set by leaders is of critical importance in contributing to the

ethical behaviour of other organisational members. In other

words, managers act as role models and salient authority

figures whose example of (un)ethical behaviour is often

noticed and most likely followed by the other organisa-

tional members (Solomon 1999, p. 54; Treviño et al. 2006).

The fourth organisational virtue, feasibility, refers to an

organisation’s ability to enable ethical behaviour by

offering adequate time, financial resources, skills, training,

facilities, information, technology, etc. for attaining the

organisational objectives (Kaptein 2008, 2011). Thus, for-

mulating achievable objectives promotes ethically sound

choices (Kaptein 1999). In contrast, the lack of feasibility

may be a threat to ethical behaviour, if managers feel that

they are unable to achieve the set targets by means of

ethical conduct and that they are required to make deci-

sions or take actions that are not in line with their personal

moral standards (Kaptein 1999). This has been proposed

also by, for example, Jackall (2010, p. 213), who points out

that middle managers often carry the heaviest burden in

matters of organisational reform, for instance; unless ade-

quate support (time, skills, information, etc.) is provided by

their upper management, middle managers might become

overtly cynical.

The fifth dimension in the CEV framework is organi-

sational supportability. Kaptein (2008) suggests that an

open, supportive and healthy organisation motivates staff

to comply with normative ethical guidelines. According to

Kaptein (2008, p. 925): ‘‘The virtue of supportability refers

to the extent to which the organisation stimulates identifi-

cation with the ethics of the organisation among employ-

ees’’. In a supportive environment, employees commit to

the ethical objectives of the organisation and organisational

values (Kaptein 1999). High supportability has also been

found to promote a healthy working environment, which in

turn increases commitment to organisational goals (Huh-

tala et al. 2013a).

In transparent organisations, employees, peers, col-

leagues and superiors are able to recognise and observe the

consequences of (un)ethical behaviour. The sixth virtue,

transparency, covers elements such as information sharing

and open processes. Kaptein (2008) defines the organisa-

tional virtue of transparency as the degree to which actions

and consequences are visible to everyone in the organisa-

tion. In their empirical study, Huhtala et al. (2013b)

showed that ethical leaders increase the level of trans-

parency in an organisation by intervening in unethical

activity, handling violations actively and increasing

awareness of the consequences of unethical actions.

The seventh corporal ethical virtue is discussability.

This virtue refers to how extensively employees are able to

discuss ethical issues and unethical behaviour with the

management and their superiors. An open environment in

which discussion is encouraged strengthens ethical conduct

and increases the importance of ethical questions in gen-

eral. The opposite kind of culture reduces and even silences

ethical talk and increases the possibilities of unethical

conduct (e.g. Huhtala et al. 2013b).

The last organisational virtue in the CEV model, that is,

sanctionability, refers to the enforcement of ethical beha-

viour through punishment for behaving unethically and

rewards for behaving ethically (Kaptein 2008; Huhtala

et al. 2011, 2013b). For instance, Selart and Johansen

(2011) found that organisational feedback and adequate

information about ethically sound behaviour are vital to

managers’ ability to make ethical decisions.

Corporate Ethical Virtues and Moral Agency

There are several parallels between the foundations of the

corporate ethical virtues model and the theory of moral

agency. For example, both virtue theory and moral agency

theory address the highly social and contextual nature of

150 M.-M. Hiekkataipale, A.-M. Lämsä

123

morality (Solomon 1992, 2001, 2004; MacIntyre 1999;

Weaver 2006; Ciulla and Forsyth 2011; Ferrero and Sison

2014).

Second, both theories suggest that if organisations

actively develop and sustain virtuous practices, individual

moral agency is enhanced and strengthened in such a way

that it contributes to a more ethical organisational envi-

ronment, thus forming a virtuous circle (Kaptein 1998;

MacIntyre 1999; Huhtala et al. 2013b; Weaver 2006).

Third, the underlying virtue theory behind the CEV

contains a development aspect which focuses on what the

agent does and who or what the agent becomes (Ferrero

and Sison 2014). This viewpoint is shared in moral agency

theory, which in itself involves triadic reciprocal causation

(Bandura 1991). That means that people continuously

monitor their behaviour, make choices and guide their

actions according to their personal standards and changing

environmental influences; people’s self-regulatory capaci-

ties develop and may change over time (Bandura 1991).

Method

So far, Kaptein’s (1998) corporate ethical virtues (CEV)

framework, which was originally constructed on the basis

of extensive qualitative data, has, to our knowledge, been

applied only in quantitative studies, in which the ethical

organisational culture has been measured with the 58-item

CEV scale (see e.g. Huhtala et al. 2015). However,

Campbell and Cowton (2015) criticise strong causal

accounts of ethical behaviour and suggest that the impor-

tant questions in business ethics are essentially qualitative;

quantitative variables may not be capable of describing

them adequately. The qualitative approach that we have

chosen may therefore enable better understanding of the

role of organisational culture in the behaviour of an indi-

vidual faced with ethical issues than is possible with the

more common quantitative approach. Brand (2009), too,

drew attention to the need for increased emphasis on

seeking contextual understanding of research participants’

perceptions of business ethics, particularly using qualita-

tive methods. Also, a rich body of other research calls for

diverse methodologies in the field (e.g. O’Fallon and

Butterfield 2005; Aspers 2009; Craft 2013; Campbell and

Cowton 2015; McLeod et al. 2016).

This study draws on empirical phenomenology, which

acknowledges the central role of theory in research but at

the same time stresses the importance of the actor’s

experiences and perspectives in understanding phenomena

in the social world (Aspers 2009). This empirical study has

been conducted in the field of higher education, which in

recent years has been under increasing pressure, for

example in terms of finance and more intense competition

(Middlehurst 2010; Hotho 2013). According to some

research (Folch and Ion 2009; Preston and Price 2012;

Ben-David-Hadar 2013), these recent economic, demo-

graphic and managerial changes have affected the organi-

sational cultures of educational institutions, resulting in

new organisational practices, corporate values and norms

as well as changed identities for people working in the

sector, all of which might also have given rise to ethical

problems.

In this research, individual semi-structured interviews

were conducted in four higher education institutions in

Finland. All of the institutions are multi-disciplinary with

4000–8000 students. The sample was purposive and dis-

cretionary. It consisted of altogether 20 middle managers, 4

men and 16 women, with ages ranging from 35 to 58, the

average age being 50 years. All the respondents had mas-

ters or doctoral degrees. The work experience in a man-

agement position of these managers varied from one year

to twenty years.

The data were collected using the critical incident

technique (CIT), which allows respondents’ rich self-rec-

ollections of incidents (Gremler 2004). CIT is a systematic,

retrospective and flexible qualitative research method

(Gremler 2004; Butterfield et al. 2005) in which the critical

incidents are usually in the form of short stories told by the

subjects about their experiences, in this case middle man-

agers on the subject of ethical problems that had arisen in

the course of their managerial careers.

The selection of respondents was based on snowball-

sampling. In this method, one respondent leads the

researcher to another (Silverman 2005, 2014). Individual

interviews were conducted face to face and they were

recorded and transcribed carefully, word for word, in order

to ensure the reliability of the research, as suggested by

Peräkylä (1997). All the respondents described between

one and five incidents that were associated with ethical

problems, and consequently altogether 52 problems were

found in the data. In this research, the Atlas.ti programme

was used for coding and categorising the data. In order to

guarantee the anonymity of the respondents, each manager

was given a number from 1 to 20, which is used in this

study to refer to each particular manager.

A brief example of the analysis is presented in Table 1.

To start the process and to get properly acquainted with

the data, all the critical incidents were read carefully sev-

eral times. Then, following Hsieh and Shannon’s (2005)

approach to conventional content analysis, an inductive

approach was chosen: the problems were grouped into six

categories according to their content, as shown in the

second column of Table 1. The research process then went

on to a theory driven analysis, drawing on the chosen

theoretical models (CEV and moral agency) as guidance

(Hsieh and Shannon 2005; Aspers 2009). Every ethical

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 151

123

problem was first thoroughly investigated to detect any

expressions that might refer to elements of moral agency in

the situation (personal moral standards, environmental

influences, self-sanctions, social sanctions, ethical (in)ac-

tion, forms of moral disengagement). Then, the analysis

proceeded to pick out expressions regarding the signifi-

cance of corporate ethical virtues for moral agency. This

significance was revealed in the descriptions of how ethical

problems emerged, how they were recognised, how the

problems were eventually handled (by the middle man-

agers) and what were the final outcomes of the process in

the organisation. In the last phase of the analysis, the vir-

tues relevant to each specific problem were identified.

Results

The different types of ethical problems identified from the

data of 52 critical incidents were: self-interested behaviour

(N = 15), avoiding/neglecting one’s responsibilities

(N = 12), hidden agendas (N = 10), gaps between targets

and resources (N = 7), conflicts in relationships between

subordinates (N = 7) and, finally, the questionable beha-

viour of a trade union representative (N = 1). Self-inter-

ested behaviour included, for instance, trying to maximise

personal benefits, manipulating students or peers against

the organisation and bending the organisation’s rules for

one’s own good. Sweeping problems under the carpet,

neglecting one’s tasks and leaving relationship conflicts

unsolved are examples of what is meant by avoiding one’s

responsibilities. Hidden agendas included, for instance,

lying and deliberately hiding information from employees

and upper management. The existence of a gap between

targets and resources was experienced when there were

perceived to be insufficient financial resources or a lack of

information; ethical problems occurred, for example, if a

manager had to push people beyond their limits to reach the

set targets, or the managers themselves had to speculate

about what was expected of them because of insufficient

information from upper management. An example of the

sort of relationship conflicts between subordinates that

were mentioned was staff members undermining each

other’s position. In the last category, the questionable

behaviour of a trade union representative, someone leaked

confidential information during a dismissal process. We

will now turn to a more detailed examination of the results

for each virtue.

Clarity

When the organisational virtue of clarity was experienced

as sufficient, it was interpreted as having an impact on the

exercise of moral agency in two ways. On the one hand,

clarity was described as guiding and motivating managers

towards ethical conduct. For example, managers reported

that with clear and explicit organisational rules they felt

obliged to take action; in one case, when an employee

avoided his duties due to a drinking problem and in another

case, when an employee falsified documents for his own

benefit. Managers underscored the importance of good

institutional guidelines, procedures and principles as

something they could lean on in complex situations.

On the other hand, high clarity seemed to support

middle managers’ capacity for self-regulation. Explicit

organisational instructions, such as how to act in cases of

substance abuse, were considered by the managers to be

Table 1 Example of the analysis

Manager Content of the ethical problem

(in a nutshell)

Expressions of moral agency

in the situation

Condensed expressions of the

significance of corporate ethical

virtues to moral agency

Corporate

ethical virtue

(sufficient/

insufficient) in

the situation

No. 2 One particularly demanding

employee pursues her own self-

interest and has been given

exceptional privileges compared

to others. Upper management does

not help in solving the case

‘‘If one has a very determined

employee, there are no good

solutions whatsoever. I don’t know

what to do, I don’t know how to

act, I just let her do as she wants. I

understand that this is not fair on

the others, and I feel bad, I

struggle with this’’

Lack of instructions, lack of support

and means to intervene in the

situation, ethical inaction

Awareness of the wrongdoing

causes moral conflict; self-

sanctions and ethical strain

Inability to treat employees equally

is acknowledged, yet accepted

since upper management provides

no support (diffusion of

responsibility, ignoring the

consequences)

Clarity

(insufficient)

Congruency of

supervisor

(insufficient)

152 M.-M. Hiekkataipale, A.-M. Lämsä

123

compatible with their own personal moral standards. This

was experienced as further enhancing feelings of self-ef-

ficacy, as shown in the following example, of self-inter-

ested behaviour on the part of an employee.

‘‘My predecessor and HR manager have done a lot

with this person, we have certain rules now. They

paved the way for me. It has become a little bit easier

for me to know what to do and stick to the rules. I

want to continue that good work.’’ Interviewee No. 3

Thus, our data suggest that if organisational guidelines

and the institutional logic and norms are compatible with

managers’ personal moral standards, moral agency is

strengthened (see also Bandura 1991, 2001; Wilcox 2012).

Managers also reported getting supportive feedback

from their employees when they managed to solve complex

problems in the working community. The successful han-

dling of problems according to the organisation’s guideli-

nes was thus considered to be rewarding and it also

contributed to the managers’ sense of pride and self-satis-

faction. This can also be seen as collective support for

adhering to moral standards contributing to managers’

capacity for self-regulation.

However, some of the relationship conflicts between

employees and some of the problems with self-interested

behaviour were described as being fuzzy, highly interde-

pendent, or long-term, with no clear patterns for their

solution, which indicated a lack of clarity in the organi-

sation. For example, lack of clarity was described as being

evident in situations in which employees or upper man-

agement deliberately and quietly bent the organisational

rules for the sake of their own self-interest, and sometimes

also treated students, supervisors or colleagues badly, even

viciously. Middle managers appeared to lack belief in their

efficacy to control such behaviour, which points to diffi-

culties in the exercise of moral agency.

Respondents also described features of moral disen-

gagement in their own behaviour, such as making moral

justifications, or ignoring or dismissing the consequences,

if they did not intervene in problems. Middle managers

talked about a sharp contradiction between their own moral

standards and prevailing conditions in the organisation, that

is, a moral conflict, but said that since they had no tools,

instructions, support or even courage to solve the problems,

they had made little effort to change things. In the next

quote, for instance, manager No 16 describes what coping

strategies s/he used when faced with the self-interested

behaviour of an upper manager.

‘‘The situation with x has not become any easier over

the years. I’ve come to the conclusion that I have

other things to do in my work, I have this other job

here, another network I work with, I don’t know if

this is a way out for me, which empowers me, and so

here (in the respondent’s main job) I just somehow

move on.’’ Interviewee No 16.

Congruency of Supervisors and Managers

Congruent behaviour on the part of upper management was

experienced as being significant for the middle managers’

exercise of moral agency in three ways. Firstly, congruent

(upper) managers enabled discussion and collaborative

reflection about ethical problems, which in turn encouraged

middle managers to express their own moral convictions

and increased their sense of self-efficacy (e.g. Weaver

2006). Secondly, the congruent behaviour of upper man-

agement was seen to set a standard for middle managers on

how to solve ethical issues in the organisation in the future,

and so it supported learning and developed their capacity

for self-regulation. Also, middle managers wanted to

reciprocate leaders’ supportive treatment (Treviño et al.

2006; Bonner et al. 2016), and get their social approval

(Bandura 1991). Thirdly, congruent executives took

authority (and responsibility) in the most complex situa-

tions, which greatly supported middle managers’ decision-

making and self-belief, as we shall now see.

‘‘I contacted my superior and asked what we could do

about this problem and x actually gave this person a

warning, x had the authority to do that. The matter

was looked at more widely by x. I didn’t have to take

sole responsibility for the case anymore. I definitely

got support, I was not alone, not at all.’’ Interviewee

No. 19

In contrast, incongruent behaviour on the part of upper

management was experienced by middle managers as

undermining the exercise of moral agency. A typical situ-

ation displaying lack of congruency happened when upper

managers were experienced as showing self-interest and

treating middle managers or other staff members unfairly.

If they communicated in what was perceived to be an

abrupt or even rude way, or behaved unexpectedly or made

arbitrary demands, this was also described as undermining

middle managers’ overall motivation to set an example of

open, honest and constructive communication, and added

to middle managers’ sense of isolation, secrecy and dis-

loyalty to upper management. Also, if problems were

swept under the carpet by the upper management, if

information was not shared or there were hidden agendas,

respondents reported feelings of ethical strain—the expe-

rience of ethical problems and stress caused by them—as

well as growing cynicism. It appeared that managers

recognised this type of behaviour as violating their own

moral standards, but they mostly accommodated

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 153

123

themselves to it by using morally disengaged reasoning

(e.g. the diffusion of responsibility). This freed them from

moral conflicts, as described by manager No. 1 in a case in

which an upper manager had falsely blamed the speaker for

serious malpractices:

‘‘At that point, I decided to mind my own business. I

closed the communication channel between us. My

way of working has changed here, I don’t ask x about

things any more.’’ Interviewee No. 1

Middle managers further justified a lack of congruency

by explaining that because the organisational culture

accepts that kind of behaviour, they have no possibility of

influencing the way their superiors behave; all they can do

is find a way to bear the situation. This indicates a lack of

self-efficacy, which is necessary for effective moral

agency. Managers also appeared to ignore the conse-

quences of incongruent behaviour on the part of upper

management, even when they were the ones who princi-

pally suffered from unethical behaviour.

Only in two specific cases did middle managers come

out strongly against their superiors’ direct orders and

behave according to their own moral standards. In those

cases, the respondents described how they had no choice

but to resist decisions that they considered were unfair,

indicating strong self-efficacy and a resistance to social

pressure. However, failing to be loyal to the management

led to feelings of moral conflict and ethical strain, as is

indicated in the next quote, concerning a case of unfair

treatment of a mentally ill employee.

It took me a little while to take the right action, since

I was given clear orders (to get rid of that sick per-

son). There was a time when I was very bothered by

it. But still, I wouldn’t change anything. Afterwards,

I’ve wondered if there was anything I could have

done differently. But I would certainly have hoped

for some discussion or interest in my well-being and

in this person’s well-being on the part of my superior,

some sincere support and a willingness to help, to

make this person well again.

Manager No. 5

Feasibility

Respondents complained that they often suffered from a

lack of adequate resources in relation to organisational

targets. This reflects low organisational feasibility (see e.g.

Huhtala et al. 2011). However, it appears that the middle

managers’ exercise of moral agency was not entirely con-

strained by the lack of resources; rather, it was first chal-

lenged but then finally strengthened, as the following will

show.

Respondents reported that they were forced to cut back

on what they considered essential expenses due to the lack

of financial resources. These decisions made the middle

managers worry about the fair division of the workload

among the staff and staff well-being, students’ learning, as

well as how the goals of the organisation as a whole could

be achieved. From the point of view of moral agency, these

difficult decisions appeared to create a moral conflict

between the managers’ personal moral standards and

pressure from the organisation, as expressed by interviewee

No. 9.

‘‘It gets crazier and crazier, it is a big ethical issue,

especially that one now has to think about such big

classes, and combining groups,’’ Interviewee No. 9

On the other hand, as interviewee No. 7 pointed out, low

feasibility had forced all levels of management to develop

new yet ethical approaches to reaching the organisation’s

targets during financially challenging times.

‘‘Finally, if we think about the big picture and the

general good, overall it will be beneficial, as I see it,

the organisation will benefit from these changes

eventually, we’ll be able to continue to work, a bit

more wisely, I think. We’ve been rebuilding the

organisation on a healthier basis’’ Interviewee No. 7

In spite of the evident lack of resources (time, money,

information) and the moral conflicts and the ethical strain

caused by them, managers described strong belief in

themselves and their ability to exercise moral agency in the

situations that arose, even when they perceived a lack of

both support and information from the upper management.

Managers had the feeling that they had to find and that they

succeeded in finding, good, innovative and ethical solu-

tions to the problems, sometimes with the support of their

employees. Moreover, there were no signs of moral dis-

engagement in the context of low feasibility.

This research indicates that having to balance between

inadequate resources and organisational objectives is a

challenge to managers’ moral agency. However, in line

with Kaptein (2015), we found that if the goals are chal-

lenging but attainable, middle managers will behave ethi-

cally because they feel that it is their responsibility to find

an ethical solution. Alternatively, as Jackall (2010) puts it,

when middle managers are left to sort out very complicated

problems related to inadequate resources by themselves,

they become adept at navigating these issues to the best of

their ability.

Supportability

The virtue of supportability was described as deficient

throughout our data. The perceived lack of appreciation

154 M.-M. Hiekkataipale, A.-M. Lämsä

123

and commitment on the part of employees towards the

work community appeared to have two consequences for

the exercise of moral agency. Firstly, after several failed

attempts to solve underlying problems such as relationship

conflicts between employees, managers described low self-

belief in their capacity to exercise control over events or

solve problems. Secondly, in spite of experiencing moral

conflict and ethical strain, in the end managers appeared to

settle for and adapt to the prevailing conditions, which

indicated moral disengagement.

For instance, in most cases of relationship conflicts

between employees, the intervention of the manager had

been actively disregarded by staff members for a long time,

and the manager felt helpless. This resulted in frustration,

low self-efficacy and, ultimately, in rather passive moral

agency, as shown in the following excerpt from the

interview.

‘‘I was bothered by the fact that the issue was unre-

solved. There had been situations like this before and

nobody had intervened in any way. Actually, I

wonder if this kind of intervention, being a middle-

man, can break a chain of events like this? I begin to

think not, if the people themselves don’t want it.’’

Interviewee No 14.

Middle managers’ exercise of moral agency appeared

passive also in incidents in which teachers had spread

negative information to students in order to smear col-

leagues, managers, or the whole organisation. The inter-

viewees again voiced a sense of responsibility and the

obligation to take action, but they mostly ended up aban-

doning their attempts to intervene. As a result, managers

expressed serious concerns about the decreased well-being

of the whole working community (themselves included)

and even the reputation of the school. The managers

observed that the whole organisational culture needed to be

changed in this respect (by upper management), and they

insisted that highly educated staff members should know

that this was not ethical behaviour. These arguments

indicate both a diffusion of responsibility and moral justi-

fication. The next excerpt, from the interview with manager

No. 8, is an example of low supportability in a case of

pedagogical reform and its outcomes.

There was no consensus among the teachers as to

whether this was the right direction pedagogically, so

the reform was kind of forced on them. So generally

there was a very strong feeling of distrust and

opposition. It was at that point we tried to do some-

thing, but the issues had simmered for such a long

time, it was difficult to solve them. That caused a lot

of problems. The whole reform turned into a dirty

word. The issue was also taken up by the students, I

don’t even know what was discussed, there was

opposition, the students were worried if they were

going to learn anything! I spoke to the teachers and I

had to speak to them several times. Then it turned out

that a few teachers, it was apparent (that they had

manipulated the students), I said that we needed to

talk about this, we had some serious discussions, and

I think the discussion possibly made a difference

somehow. But it was funny, I don’t know if they were

telling the truth, but they didn’t realise, or didn’t want

to understand, or didn’t understand that there was an

ethical problem in what they did when they spoke to

the students, how much damage they did.

Transparency

In our data, ethical problems are often considered to be too

complicated, too sensitive and too personal to be handled

openly. This indicates a low level of transparency. Low

transparency was experienced as being connected to

indifference to ethical problems and consequently to

ignoring their consequences, to moral conflicts, low self-

efficacy and capacity for self-regulation, and the diffusion

of responsibility.

In the first place, when managers monitored how

unethical decisions remained hidden and were silently

accepted by the upper level of management, the low

transparency appeared to increase middle managers’ own

general indifference towards ethical issues and led to their

ignoring the consequences of ethical problems. This was

described, for instance, in a case in which someone in a

middle management position acted openly against the basic

ethical principles of the organisation but was not punished.

On the contrary, the person was quietly promoted, and their

serious malpractices were hidden. This was interpreted as

increasing indifference to and cynicism about ethical

behaviour among other middle managers.

In spite of their own moral standards and knowledge

about ethical problems, managers described the obstacles

and challenges to making their organisation more trans-

parent, thus revealing an insufficient sense of self-effi-

cacy. For example, interviewees experienced difficulty

giving critical feedback to their staff about unethical

practices, such as neglecting their duties or behaving in a

self-interested way. Open discussion about ethical prob-

lems also appeared to be somewhat uncomfortable.

Mostly the middle managers felt that upper management

is responsible for initiating more general discussion about

ethical conduct and thus for creating transparency. This

can be regarded as a manifestation of the diffusion of

responsibility. One manager illustrated this viewpoint as

follows:

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 155

123

‘‘In these situations (ethically questionable decision-

making situations), I try to say that we should stop

and reconsider, I try to present an alternative, but I’m

not a member of the executive group.’’ Interviewee

No. 17

Our findings concerning the virtue of transparency lend

support to Moberg (2006), Weaver (2006) and Wilcox

(2012), who argue that in order to exercise moral agency,

middle managers need to be able to observe and understand

the consequences of unethical behaviour. This study shows,

too, that a lack of transparency creates cynicism and

indifference to ethical questions which, in turn, has been

found to be connected to moral disengagement (Detert

et al. 2008).

Discussability

Sufficient discussability was experienced as motivating

managers to take determined action when faced with ethical

problems, usually with the help of their superiors. Discuss-

ability was also described as increasing the self-efficacy of

middle managers, thus improving their exercise of moral

agency when dealing with ethical problems. For example, in

one case of an employee’s long-standing, destructive, self-

interested behaviour, the middle manager felt that handling

the problem together with staff and upper management

resulted in a more transparent and trusting atmosphere in the

organisation as well as in stronger self-belief on the part of

the manager that s/he could cope with similar situations in

the future. Managers also reported experiences of learning

when they were able to discuss ethical issues with their

superiors and/or with their subordinates.

Even though the need for open discussion about ethical

problems was widely recognised and was underscored in

most of the interviews, managers expressed the view that

silence is widely embedded in organisational practices. The

virtue of discussability was mainly described as low. Low

discussability had several implications for the potential

exercise of moral agency. For example, managers reported

that talking about ethical problems even at their own

middle management level, not to mention upper manage-

ment level, was neither common nor expected from them.

Open talk about ethical issues appeared not to be a part of a

professional middle manager’s role. Our data showed that

the tacit social expectation that one would keep silent

regarding ethical matters could override middle managers’

ethical concerns and personal moral standards, and this

contributed to moral conflicts, but resulted in inaction in

ethical problems, as is illustrated in the next excerpt.

‘‘It is interesting, we talk a lot about interaction, we

want to underscore it and it is important. It would be

good if it was open, good and constructive, but

somehow we are blind, even then it doesn’t make part

of our everyday routine and behaviour.’’ Interviewee

No. 17.

Managers justified inaction and muteness for example,

by asserting that ethical problems concern people’s private

matters and should not be handled openly. Moreover, the

fear of getting oneself onto some kind of blacklist was

sometimes felt to prevent middle managers from openly

communicating their ethical concerns. It appears, then, that

in order to avoid social sanctions, middle managers usually

refrain from raising ethical issues for wider discussion.

They adapt to the situation by justifying it morally and also

by ignoring possible consequences. However, blame for

any lack of discussability was laid firmly at the door of

upper management, or even with headstrong subordinates,

which indicated the diffusion of responsibility.

This study shows that a lack of discussability, in other

words, considering ethical issues to be an inappropriate

topic for discussion by middle managers, can restrict

middle managers’ moral agency. This has also been found

in other research (e.g. Bird and Waters 1989; Moberg

2006; Weaver 2006; Treviño et al. 2006).

Sanctionability

Sufficient sanctionability affected the exercise of moral

agency in several ways. First of all, managers expressed

feelings of self-satisfaction and pride when they were able

to take action against unethical behaviour under the moral

standards applied by the organisation as a whole. Feelings

of self-efficacy, empowerment and learning were also

described in the next excerpt.

‘‘My superior was of the opinion that this discussion

(about employees’ relationship conflicts and spread-

ing false rumours) needed to take place. And we did it

together. At that point I got support and it was good.

It created the feeling, the atmosphere, that we inter-

vene in problems here. We don’t turn a blind eye.’’

Interviewee No. 8

Secondly, when middle managers reported that mea-

sures had been taken in the organisation to punish unethical

action, they also reported positive organisational outcomes

such as increased trust, dialogue and a better atmosphere.

This in turn seemed to create a virtuous circle which again

reinforced middle managers’ capacity for self-regulation.

In other words, they were more motivated and confident

about acting in further problems because there was a sense

of social obligation and wide support for it among the staff.

The role of upper management was again highlighted here

as having an important influence on the moral behaviour of

middle managers.

156 M.-M. Hiekkataipale, A.-M. Lämsä

123

However, our data show how commonly managers

experienced a lack of clear sanctions. This was interpreted

as having wide-ranging implications for the exercise of

moral agency. Personal moral conflicts developed espe-

cially when the wrongdoings of top management were

disregarded and accepted in the organisation. For example,

middle managers reported that they had felt growing cyn-

icism and a sense of hopelessness, given up certain per-

sonal or organisational objectives, or even planned a

change of career, to escape from morally intolerable situ-

ations. It was perceived that in order to cope with a lack of

sanctionability and consequent moral conflicts, middle

managers came up with some kind of moral justification or

the diffusion of responsibility. For instance, they justified

their turning a blind eye to problems by explaining that

they had no power over their superiors and thus no

responsibility in the matter. If they tried to intervene in

unethical behaviour on the part of upper managers, in most

cases their initiatives were ignored. This was experienced

by middle managers as leading to a vicious circle of lower

self-efficacy, and growing indifference to ethical issues.

Finally, middle managers’ exercise of moral agency was

felt to be undermined when certain staff members were

considered to be very good at debating, challenging and

overruling decisions and sanctions on ethical problems.

Such people were also thought to have powerful allies at

the top of the organisation. Under those circumstances,

managers felt that the only way out was to leave the

problem unsolved and regard it as unavoidable, and out of

their reach. Apparently, due to a lack of self-efficacy,

managers evaluated the consequences of doing nothing as

more morally tolerable than the consequences of active

interference. That means that middle managers’ ability to

be steadfast and stick to decisions was ultimately com-

promised by using advantageous comparison, moral justi-

fication, diffusion of responsibility and ignorance of the

consequences.

To sum up, as Wilcox (2012) claims, the collective and

mutual reinforcing of norms and duties, that is, sufficient

sanctionability in the terms of this study, provides middle

managers with potential for moral agency (see also Huhtala

et al. 2013b). We argue that support, encouragement and

open feedback on middle managers’ virtuous actions from

both upper managers and employees reinforce managers’

self-efficacy, capacity for self-regulation and thus moral

agency, a result supported also by Moberg (2006).

Summary and Discussion

The results of this study show that a low level of corporate

ethical virtues may affect middle managers’ capacity to

exercise moral agency, for instance by increasing moral

disengagement (see e.g. Nielsen 2006; Moberg 2006;

Weaver 2006; Detert et al. 2008; Wilcox 2012; Martin

et al. 2014). On the other hand, sufficient virtues were

connected to the experience of successfully handling ethi-

cal problems, learning, a sense of self-satisfaction and self-

efficacy. This indicates that a virtuous ethical culture can

create the potential for effective moral agency when

responding to ethical problems (e.g. Weaver 2006; Wilcox

2012).

Moreover, drawing on Solomon (1992) and Weaver

(2006), we conclude that middle managers adopt socially

defined roles in organisational settings and this can some-

times obscure their moral agency. We found evidence that

actors who positionally represent the organisation (top-

level managers) are often assumed to be responsible for

exercising moral agency while middle managers are given

no role here (Weaver 2006).

The results of this study on the significance of the vir-

tues of discussability, transparency and sanctionability lead

us to posit that both middle and upper managers prefer to

avoid public talk about ethics, or visible rewards and

sanctions, possibly to sustain their and others’ organisa-

tional ‘‘face’’, and organisational harmony (Martin et al.

2014). We now propose, consistently with Moberg (2006),

Kaptein (2011, 2015) and Bonner et al. (2016), that if

employees are left without any encouragement (from their

superiors) to behave ethically, this will lead to cynicism

and less commitment to the organisation’s objectives and a

reduction in moral behaviour, thus contributing to low

supportability. Low supportability, for its part, can dis-

courage middle managers from exercising moral agency, as

a vicious circle of compartmentalised middle management

roles (shared expectations of not getting involved in

problems) and moral muteness (Bird and Waters 1989;

Detert et al. 2008) undermine ethical behaviour (see also

Macintyre 2006; Rozuel 2011). Organisational virtues are

thus interdependent (Kaptein 1998, 2008).

To sum up, drawing on Bandura (2001) and Weaver

(2006), we propose that sufficient organisational virtues

make the exercise of moral agency more central, salient

and important to middle managers (see also Weaver 2006).

On the other hand, this study confirms that a lack of

organisational virtues can inhibit middle managers from

understanding themselves as accountable moral agents and

thus prevent them from taking courageous action when

handling ethical problems (MacIntyre 1999; Wilcox 2012).

Our study proposes that the position of middle manage-

ment is complex and may contain role expectations that,

with a low level of organisational virtues, can contribute to

ethical strain, cynicism, moral disengagement and unethi-

cal behaviour (Bird and Waters 1989; Macintyre 1991;

Treviño et al. 2008; Jackall 2010; Wilcox 2012; Martin

et al. 2014; Huhtala et al. 2015). This study confirms,

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 157

123

further, that middle managers also shape their ethical

organisational culture when they act as moral agents

(Bandura 2001; Weaver 2006; Huhtala et al. 2013b).

Several examples were given in which the organisational

atmosphere was felt to improve and more open commu-

nication practices were adopted when middle managers

exercised effective moral agency.

Theoretical Implications

In this article, we integrated work on ethical organisational

culture, the CEV model (Kaptein 1998) in particular, and

the theory of moral agency (Bandura 1991), to bring a

more diverse and multidimensional theoretical viewpoint

to the current literature on the interdependence of organi-

sational virtues and individual ethical behaviour (Craft

2013; Ferrero and Sison 2014). Drawing on Bandura

(1991), we will now show the threefold relationship

between corporate ethical virtues and moral agency.

In the first place, middle managers observe the beha-

viour of upper management, peers and employees and

generate their own perceptions of what kind of moral

behaviour is desired. Organisational virtues, and the ethical

role modelling of upper management (Kaptein 1998) in

particular, can thus generate standards for behaviour which

middle managers adopt and internalise through the learning

process (Bandura 2001). In addition to congruency, the

virtues of transparency and discussability are also neces-

sary in this context (MacIntyre 1999). Secondly, alignment

between the individual’s and the organisation’s moral

standards clearly strengthens the self-efficacy beliefs of

middle managers (Bandura 1991) if there is collective

support for adherence to those standards (e.g. sufficient

clarity, transparency, sanctionability) and thus the rein-

forcement of ethical behaviour (Bandura 1991). Thirdly,

low organisational virtues may encourage the selective

activation of moral self-regulation. Here this means, as we

have shown, that when virtues such as transparency are

low, managers may feel encouraged to ignore ethical

problems and turn to morally disengaged reasoning (Martin

et al. 2014).

Finally, since both virtue ethics and the theory of moral

agency (Solomon 1992; Weaver 2006) address the con-

textual nature of morality, this article also contributes by

demonstrating how different virtues become important to

moral agency in practical everyday ethical problems. The

article has also answered Kaptein’s (2008) call and con-

tributed to the model of corporate ethical virtues by

examining one particular level in the hierarchy, that is,

middle managers, and also by examining the actual

(un)ethical conduct of managers, not just their intentions.

From the methodological point of view, this article has

substantially widened the perspective of the corporate

ethical virtues model by reporting qualitative research. It

has offered a rich view of the connection between corpo-

rate virtues and moral agency in the context of real, lived

ethical problems.

Practical Implications

A few recommendations can be made here for management

development and improvement of the exercise of moral

agency in organisations. First of all, as upper-level man-

agers act as important role models for middle managers,

they need to communicate their moral standards publicly

and avoid speaking euphemistically when dealing with

ethical problems (Moberg 2006; Martin et al. 2014). Public

moral leadership and adequate control over employees’

behaviour are also fundamental to the exercise of moral

agency at all levels of an organisation (MacIntyre 1999;

Moberg 2006; Weaver 2006). In addition, feedback on

one’s perceived moral character (not just performance or

competence) from both upper management and employees

is necessary to support middle-level managers’ capacity for

moral self-regulation (Weaver 2006; Moberg 2006). We

agree with Kaptein (2011) and Moberg (2006) that not only

should management behave ethically, but employees

should experience their behaviour as ethical.

From the point of view of recruitment, organisations

should try to gather information about the moral character

and behaviour of applicants instead of focusing purely on

evaluations of their performance or competence (Moberg

2006). Since, as shown also in this study, people can shape

and improve the nature of their social systems, such as the

prevailing ethical culture (Bandura 2001), a virtuous

organisational culture can be better sustained by recruiting

virtuous moral agents.

Research Limitations and Further Research

This research has produced novel and rich evidence

regarding the significance of corporate virtues for middle

managers’ exercise of moral agency, but it has some lim-

itations. We acknowledge that by conducting qualitative

research with a sample of 20 middle managers, we could

make only limited interpretations of the connections

between corporate virtues and the exercise of moral

agency. In order to gain a more comprehensive under-

standing of the phenomenon, other managerial levels’ and

employees’ perspectives should also be included in the

sample. Moreover, analysing differences between men and

women might also offer interesting avenues for further

research.

Consistently with Alvesson (2002, p. 14), who argues

that all management takes place within a certain culture,

including not only the organisational culture but also

158 M.-M. Hiekkataipale, A.-M. Lämsä

123

societal-level and industrial-level cultures, we acknowl-

edge that the higher education context may have its own,

unique cultural characteristics. This could be further stud-

ied by comparing our findings with results from other

environments, for example from the service industry or

even other educational organisations. There is also room

here for cross-cultural comparison; the same study could be

carried out in the higher education sector in other countries.

It is our belief that prior research on ethical organisa-

tional culture has not paid adequate attention to organisa-

tions in which highly skilled employees have considerable

power to shape the ethical tone of their organisation. So far,

empirical research has concentrated on the dominant role

of managers and supervisors in the ethical culture of

organisations (e.g. Huhtala et al. 2013b), while neglecting

employees as professionals who can behave as determined,

effective and active moral agents (Moberg 2006). Fur-

thermore, as pointed out by Weaver (2006), less salient

features of the institution might also have an impact on

managers’ moral agency. We found evidence in several

interviews that industry networks (the teachers’ union, in

this study) might reinforce particular beliefs about what

practices are acceptable in the field. This can lead to

reification of those beliefs, and managers in the field then

experience them as given (Weaver 2006). However, since

our focus was on detecting the significance of organisa-

tional virtues for moral agency, this result requires more

investigation in future studies.

Validity and Reliability

Issues of reliability and validity are important also in

qualitative research, since the descriptions produced by the

researcher should—in some controllable way—correspond

to social reality (Peräkylä 1997). In order to assess the

trustworthiness of our research, we turn to Lincoln and

Guba’s (1985) well-known (Marshall and Rossman 1999;

Cho and Trent 2014) four-step criteria for evaluating the

reliability and validity of qualitative research.

The first criterion concerns the credibility of the

research. According to this criterion, the subject of the

inquiry must be described carefully (Lincoln and Guba

1985). In addition, the research findings should be sent to

the participants to ensure that the interpretations made by

the researchers are accurate (Cho and Trent 2014). In this

case, we have described the research sample and the

respondents’ background as precisely as possible. How-

ever, we have been careful to protect the anonymity of the

respondents, since ethical problems are often considered to

be sensitive issues (see also Campbell and Cowton 2015).

Moreover, the different categories of ethical problems were

shared with the practitioners in discussion sessions which

each lasted one and a half hours. The research process and

five categories of ethical problems were introduced in

detail to two groups of 30 lower- and upper-level middle

managers in two of the higher education institutions in

which the data were gathered. In addition, one session with

five managers was arranged to discuss particularly the

interpretations of the significance of ethical organisational

culture for moral agency. In these sessions, the managers

discussed the problems and validated the findings as con-

sistent with their experiences.

The second criterion, that is, transferability, means the

extent to which the research findings are transferable from

one context to another (Lincoln and Guba 1985; Marshall

and Rossman 1999; Cho and Trent 2014). In this study, we

have shown carefully how the data collection was carried

out and how the analysis was guided by the theoretical

concepts and models. We have also addressed the limita-

tions of our approach. This means that conditions have

largely been met for a similar study to be carried out in

another context.

The third criterion is dependability. This suggests that

peer researchers should be able to follow the decision trail

used by the researcher (Cho and Trent 2014). In our study,

the final analysis was first made by one of the researchers

and then confirmed by the other. Finally, the fourth crite-

rion, confirmability, captures the traditional concept of

objectivity (Marshall and Rossman 1999). In this study, the

interviews were recorded and transcribed word for word.

Moreover, the data that were collected are in retrievable

form and are available for further investigation, as also

suggested by Marshall and Rossman (1999). The inter-

views were conducted in Finnish, but the excerpts pre-

sented in this article were translated by a native English

speaker in order to ensure as close a correspondence as

possible with the original text. The quotations make it

possible for readers to further evaluate the confirmability of

the research.

Conclusion

This research lends support to a body of prior research on

the socialising effect of organisational culture on individ-

uals’ (un)ethical behaviour in organisations. Our study

shows that a low level of corporate ethical virtues may

limit middle managers’ capacity to exercise moral agency

by increasing moral conflicts, ethical strain, cynicism, lack

of self-belief and, finally, morally disengaged reasoning.

On the other hand, experiences of learning, a sense of self-

satisfaction and self-efficacy were seen to be connected to

sufficient virtues. The results of this study suggest, further,

that organisational virtues influence the moral agency of

middle managers in three dimensions: through the inter-

nalisation of social standards, through the reinforcement of

(A)moral Agents in Organisations? The Significance of Ethical Organisation Culture for… 159

123

their personal moral standards and through facilitation of

the selective activation of moral self-regulation. In addi-

tion, they suggest that moral agency evolves through

practice and in interaction with others. We conclude that a

virtuous ethical culture can create the potential for the

effective moral agency of middle managers when they are

faced with ethical problems.

Acknowledgements This study was funded by the Foundation for

Economic Education (Grant Number 150102.).

Compliance with Ethical Standards

Conflict of interest Minna-Maaria Hiekkataipale declares that she

has no conflict of interest. Anna-Maija Lämsä declares that she has no

conflict of interest.

Ethical standard All procedures performed in this study were in

accordance with the ethical standards of the institutional and national

research committee and with the 1964 Helsinki Declaration and its

later amendments, or comparable ethical standards. Individual

informed consent was obtained from all the participants in the study.

The authors declare that no conflict of interest exists.

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