business ethics unit V reflection paper

Teaching corporate crisis management through business

ethics education Sheldene Simola

Business Administration Program, Trent University, Peterborough, Canada

Abstract Purpose – The purpose of this research was threefold, including to provide a four-point rationale for teaching corporate crisis management as a module within a course on ethical decision-making in business and organizations; to provide evaluative data supporting this approach; and to highlight the implications of this approach for human resource development and training. Design/methodology/approach – Thirty-four undergraduates in a required course on ethical decision-making in business and organizations completed pre- and post-course assignments assessing their knowledge about crisis/management, as well as their skills in crisis recognition, evaluation and action planning. Participants also completed a survey on their perceptions of the crisis management module and its placement within the ethics course. Findings – Statistical analyses demonstrated significant knowledge acquisition on crisis/management; significant skill development on crisis recognition, evaluation and action planning; and significantly greater “true positives” and significantly fewer “false negatives” in post-course identification of crisis warning signs. Perceptions of the crisis management module and its placement within the course on ethical decision-making were positive. Research limitations/implications – Although the sample size was relatively small, small samples are associated with a greater risk of failing to detect an effect that is present, rather than the greater predicament of erroneously concluding that an absent effect is actually present. This information, coupled with the fact that the results demonstrated not only statistical significance but also large effect sizes using Cohen’s d, inspires confidence. Nonetheless, additional assessment with larger samples would allow for the possibility of convergent evidence. Similarly, additional assessment within different organizational contexts, including applications in human resource training and development is warranted. Future research should also include assessment of specific underlying teaching strategies and evaluation of whether certain models are associated with greater learning on a broader range of crisis management skills. Practical implications – Programs in business ethics education and training comprise one useful context in which to teach corporate crisis management. The program specified here addresses two training needs previously specified in the human resource development (HRD) literature on crisis management, including identifying specific methods of enhancing recognition or detection of crisis warning signs and also of providing tools and enhancing skills for assessing and containing crisis. Originality/value – Despite the centrality of both ethics and HRD to crisis management, there has been a dearth of research on whether ethics education is a useful context through which to teach this topic. This research addresses this dearth and suggests new avenues for HRD in this respect.

This research was supported by the Social Sciences and Humanities Research Council of Canada Grant. The author thanks Wanlin Li and Kimberly Heaslip for their assistance with data coding and entry.

The current issue and full text archive of this journal is available at www.emeraldinsight.com/2046-9012.htm

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Received 1 May 2013 Revised 16 August 2013

Accepted 26 August 2013

European Journal of Training and Development

Vol. 38 No. 5, 2014 pp. 483-503

© Emerald Group Publishing Limited 2046-9012

DOI 10.1108/EJTD-05-2013-0055

Keywords Teaching, Ethics, Crisis management, Human resource development, Business ethics education

Paper type Research paper

In recent years, a plethora of crises in various industry and environmental sectors has drawn substantial media attention. Such crises often stem from shortcomings in ethical awareness, judgment or action that allow what might have been preventable or relatively manageable problems to escalate into much more cumbersome, chronic or tragic situations (Nielsen and Dufresne, 2005; Gioia, 1995; Werhane, 1991). However, even when factors other than ethical lapses are at the root of such calamities, ethical considerations still remain paramount in the effective resolution of such predicaments (Pauchant and Mitroff, 1992; Seeger and Ulmer, 2001). In fact, ethics are so central to the effective management of organizational crises that the highly respected Ethics Resource Center (ERC, 2011, p. 4) recently noted that although “organizational crises may be viewed largely as operational issues, legal entanglements or public relations challenges […] much of what confronts us is really about character and ethics”. However, although the intersection of ethics, social responsibility and crisis management has received growing scholarly attention over the past decade (Sandin, 2009), there is still a dearth of research on whether business ethics education comprises a useful context through which crisis management can be taught. Moreover, despite the growing importance of crisis prevention and management in an increasingly globalized and environmentally at-risk world, this topic has been only scantily acknowledged and studied within a human resource development (HRD) context (Hutchins and Wang, 2008; Wang et al., 2009). Leading HRD scholars have, therefore, recommended not only additional strategic-level research into crisis management but also identified the need for some microstructural research, identifying and evaluating specific crisis-training programs that might be of benefit in HRD (Wang et al., 2009).

The purpose of this article is to describe and provide evaluative data for one specific approach to developing corporate crisis management knowledge and skills, that of a training module embedded in a course on business ethics. To accomplish its purpose, this article will be structured in the following way. First, the term crisis will be defined and its link to the social and environmental aspects of corporate social responsibility (CSR) identified. Second, a brief overview of crisis management, including the potential strategic, operational and training roles of HRD in crisis management will be provided. Third, a four-point conceptual rationale for identifying ethics training programs as one useful context in which to teach crisis management skills will be offered. Fourth, a description of a business ethics course through which crisis management has been taught will be given. This will include a discussion of both the focus and content of the course, including the crisis management module that draws upon and expands the foundational material on ethical decision-making covered in earlier segments of the course. Fifth, evaluative data from the most recent iteration of the course will be provided. The implications of this for HRD, as well as limitations and directions for future research, will be discussed. First consider the nature of corporate crises.

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Corporate crisis Classically, corporate crisis was defined as a situation that:

[…] threatens high priority values of the organization […] presents a restricted amount of time in which a response can be made […] and is unexpected or unanticipated by the organization (Hermann, 1963, p. 64).

Contemporary descriptions of crisis have reflected similar, but often elaborated themes (Caywood and Stocker, 1993; Fink, 1986; Seeger et al., 1998; Shrivastava, 1993; Weick, 1988). Following an integrative review of extant research, Pearson and Clair (1998, p. 60) defined organizational crisis as:

[…] a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.

More recent reviews have concurred on these themes and identified that crisis situations reflect six characteristics including that they are rare, significant, high impact, ambiguous, urgent and involve high stakes (James et al., 2011).

Although crisis situations might reflect a common set of underlying characteristics such as those identified above, these occurrences can also be of many different types (Gundel, 2005; Mitroff et al., 1996; James and Wooten, 2006). Examples include, but are not limited to:

• natural disasters such as floods or ice storms (Lalonde, 2004); • chemical, mechanical or nuclear accidents causing damage, injury or death

(Roux-Dufort and Vidaillet, 2003); • acts of abuse or violence (Wang and Hutchins, 2010); • crises of rumor, innuendo or sabotage (Fearn-Banks, 1996); and • situations precipitated by the implementation of strategic decisions by the firm

(Hastings, 2000).

In what is now a classic research on the relationship between environmental or human corporate crises and CSR, Shrivastava (1995) argued that corporations have traditionally conceptualized their social responsibilities in ways that privilege human desires over natural environmental needs; that privilege developed economies over developing economies; and that place CSR discourse and activities at the margins rather than centers of business practice. Consequently, many environmental and human crises have been caused by corporate decisions, operations and products, wherein there has been little integration of ethics and corporate responsibility with other strategic objectives. Shrivastava (1995), therefore, advocated for more ecocentric, sustainable and integrated approach to corporate strategy. By integrating aspects of CSR into strategy, the probability and impact of crisis would decrease, and the management of crisis would be proactive. Such themes were echoed by Mitroff (1994) and are also compatible with strategic approaches to HRD (Garavan, 1991, 2007).

Crisis management Crisis management is a proactive process in which various steps are implemented before, during and after a crisis (Caywood and Stocker, 1993; Simola, 2005). These steps include:

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• crisis prevention and early recognition of an impending or emergent crisis (Mitroff, 2001);

• evaluation of potential courses of action in relation to a range of stakeholders; and • the implementation of an action plan, including both short- and long-term

interventions (Mitroff et al., 1996; Ulmer and Sellnow, 2000).

Before crisis events occur, systematic efforts are made to reduce risks, to plan in advance for crises that could occur and, where possible, to avert crises altogether. Indeed scholars have noted that most crises exhibit a prodromal phase in which warning signs of some sort are present (Fink, 1986; Shrivastava, 1993; Simola, 2005). Signal detection through both technical and human sensing devices is a crucial mechanism through which early recognition of warning signs can occur and is, therefore, central to prevention and early intervention (Mitroff, 2001)

During crisis events, it is essential to contain the crisis, repair damage and respond in a timely way to the needs of a range of stakeholders (Alpaslan et al., 2009; Mitroff et al., 1996). Early, effective and ongoing communication is also critical (Augustine, 1995/ 2000; Gonzalez-Herrero and Smith, 2010; Netten and van Someren, 2011). In situations where early intervention was unsuccessful, significant organizational renewal might be necessary (Hurst, 1995).

Following the crisis, organizations must attend and respond to lessons learned to prevent or improve the management of future incidents (Mitroff et al., 1987; Mitroff and Pearson, 1993; James et al., 2011; Wang, 2008).

Role of HRD and training in crisis management Although the topic of crisis management has been largely absent from scholarship on HRD (Hutchins and Wang, 2008; Wang et al., 2009), some notable exceptions exist. For example, Hutchins and Wang (2008) identified several areas of shared concern and practice between the disciplines of organizational crisis management and HRD, including analysis of how elements of systems impact individual, group and organizational behavior and outcomes and multi-stream and strategic thinking and alignment. Similarly, drawing on the strategic HRD model of Garavan (1991, 2007), Wang et al. (2009) argued that by collaborating with relevant stakeholders to capitalize on the learning and performance elements of HRD, HRD professionals could play a crucial role not only in helping organizations prepare for ethical and crisis events but also in facilitating operational capability during such events. By aligning certain training or development programs with strategic directions on ethics and crisis prevention, relevant skills and competencies can be identified and developed. Especially salient to the current article are those skills for which there is consonance between the role and functions of HRD, and the skills required for effective crisis prevention and management, including those in recognition and evaluation of crisis risks and events, perspective taking in relation to stakeholder needs, managing emotions and making decisions under pressure, communicating and facilitating trust development and fostering a learning culture (see, for discussions, Reilly, 2008; Wooten and James, 2008).

Rationale for developing crisis management skills through business ethics education As alluded to earlier, ethics and crisis/management intersect in important ways. First, ethical lapses can precipitate, perpetuate or exacerbate crisis events. Second, ethics are

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integral to crisis management in that, regardless of the cause of the calamity, an effective resolution will involve ethical considerations (ERC, 2011; Pauchant and Mitroff, 1992; Sandin, 2009).

In addition to these areas of convergence between ethics and crisis/management, two further commonalities exist. In particular, analogous decision-making steps are used in both ethical management and crisis management. In this regard, consider that the dominant, behavioral frameworks used in business ethics (Jones, 1991; Treviño, 1986) are founded either overtly or implicitly on Rest’s (1986, 1994) four-component framework of ethical decision-making and action (Jones, 1991), involving early recognition of ethical concerns; evaluation or judgment to determine a good or “right” course of action; the formation of intention to give precedence to moral values; and the implementation of ethical action. Similarly, the dominant behavioral frameworks for crisis management (Fink, 1986; Mitroff et al., 1987; Shrivastava, 1993) also reflect either implicitly or explicitly analogous components involving early recognition of emergent crises; evaluation of crisis situations to determine a good course of action; and implementation of action plans.

Moreover, it is not only the consonance between ethical decision-making steps (Rest, 1986, 1994) and crisis management stages (Fink, 1986; Mitroff et al., 1987; Shrivastava, 1993) that is noteworthy. Rather, when one considers a range of specific factors that can impede early recognition, evaluation, intention or action relative to emergent ethical situations, one finds that these very same factors can also inhibit early recognition, evaluation, intention or action relative to crisis situations. For example, a number of factors including the use of cognitive heuristics (Hayibor and Wasieleski, 2009), implicit attitudes or other processes occurring below the level of conscious awareness (Banaji et al., 2007), moral courage (Kidder, 2005), certain types of compensation systems (Kurland, 1991), groupthink (Sims, 1992) and organizational culture or climate (Tenbrunsel et al., 2003) have all been identified as potential barriers not only to ethical decision-making and action but also to crisis decision-making and action (Burnette et al., 2011; Fischoff, 1989; Pauchant and Mitroff, 1992; Kidder, 2005; Schwartz, 1987; Spector, 2004). Therefore, by learning to identify and overcome a range of individual, group or organizational-level factors that can inhibit recognition, evaluation, intention and action relative to ethical situations, individuals will also develop a strong foundation through which to identify and overcome these same factors relative to crisis situations.

Course in business ethics through which crisis management has been taught The course through which crisis management knowledge and skills have been taught is a third-year, undergraduate, required course on ethical decision-making in business and organizations. The first purpose of this course is to enhance student knowledge and skills related to the four components of ethical decision-making articulated by Rest (1986, 1994). The second purpose of the course is to facilitate knowledge acquisition and skill development in crisis management by building upon the foundational knowledge and skills that students have acquired in ethical decision-making in the first part of the course. Hence, students are coached to expand and apply their growing competencies in ethical decision-making to increasingly more complex and challenging situations, including those involving crisis. Consider, below, the content topics covered in the course on ethical decision-making, including the module on crisis management. This information is also summarized in Figures 1 and 2.

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Content of course on ethical decision-making in business and organizations Ethical awareness or recognition. The first segment of the course focuses on how to identify and overcome a range of individual-, group- and organizational-level factors that can inhibit our ability to recognize ethical issues as they emerge. Examples of factors discussed in this segment of the course include:

Ethical Recognition Ethical Evaluation Ethical Intention Ethical Action

Poorly defined roles and boundaries associated with conflicts of interest Treviño & Nelson, 2007)

Sliding down a slippery slope (Tenbrunsel &

2004) Implicit attitudes and stereotypes (Banji et al.,

Messick, 2008) Use of language obscuring ethical dimensions of situations (Bandura, 2002) Use of cognitive heuristics (Hayibor & Wasieleski, 2009) Use of “acceptabl e risk” script (Gioia, 1995) Groupthink (Janis, 1982) Leaders not walking the talk (Treviño & Brown, 2004) Organizational culture or climate (Tenbrunsel et al., 2003)

Displacement of responsibility (Bandura,

Diffusion of responsibility (Barron & Yechiam, 2002; Darley & Latané,

Compensation or reward systems (Fong & Tosi, 2007; Hoffman & Siguaw, 1993; Kurland, 1991) Negative labelling of ethical action in unethical culture (e.g., Posner, 1976; Spender, 1980) Focus on zero sum solutions (Reiter, 1996; Treviño & Nelson, 2007)

Desire (Lurie, 2004) reflected in proactive movement toward values versus reactive avoidance of rule violations Exit-voice-loyalty Hirschman, 1970)

Distinction between moral motivation and moral courage (Comer & Vega, 2011) Moral courage in transition from intention to action (Sekerka & Baggozi, 2007; Worline, 2010)

Level of cognitive- developmental reasoning Kohlberg, 1969; 1976)

Conventional philosophical theories including consequentialist, deontological and virtue ethics (Donaldson & Werhane, 1996) Contemporary care ethics (Hamington & Sander- Staudt, 2011) Moral imagination (Werhane, 1999, 2008)

Figure 1. Overview of course in ethical decision-making in business and organizations (prior to module on crisis management)

____________________________________________________________________________________________________________

Levels of Prevention Framework Components of Ethical Decision-Making Assessment and Action Planning Tool

in Organizational Crisis Management that Can Inform Levels of Prevention within Levels of Prevention and

(Golan, 1986; Simola, 2005) and Vice Versa (Rest, 1986, 1994) Ethical Decision-Making Frameworks

____________________________________________________________________________________________________________

Organizational Health Promotion

Primary Prevention Ethical Recognition or Awareness

Secondary Prevention Ethical Evaluation or Judgment

Formation of Ethical Intention

Implementation of Ethical Action

“4Ps” Assessment:

(Weerasekera, 1996; Simola, 2005)

Predisposing Factors

Precipitating Factors

Perpetuating Factors

Protective Factors

Tertiary Prevention

Note: Analogous components of the levels of prevention and ethical decision-making frameworks appear on the same horizontal lines

Figure 2. Relationship of crisis management module to course on ethical decision-making

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• weak or poorly defined professional roles and boundaries associated with conflicts of interest (Treviño and Nelson, 2006);

• sliding down a slippery slope of unethical behavior through psychological numbing and induction mechanisms (Tenbrunsel and Messick, 2004);

• implicit attitudes and stereotypes occurring below the level of conscious awareness (Banaji et al., 2007);

• uses of language that may obscure the ethical dimensions of a situation (Bandura, 2002; Tenbrunsel and Messick, 2004);

• uses of cognitive heuristics that can lead to inaccurate predictions under conditions of uncertainty (Hayibor and Wasieleski, 2009);

• the presence of groupthink (Janis, 1982; Sims, 1992); and • factors associated with organizational culture or climate (Tenbrunsel et al., 2003).

Each of these factors is discussed within the context of common ethical dilemmas that occur in functional areas of business practice such as human resources management, marketing, operations, accounting and the like (Treviño and Nelson, 2006). For example, the potential role of implicit attitudes for impeding recognition of subtle forms of discrimination is discussed in the context of human resource functions involving selection.

Ethical evaluation or judgment. The second segment of the course focuses on enhancing skills in ethical evaluation or judgment such that students are able to identify good or “right” courses of action. This segment includes discussion of conventional philosophical theories such as consequentialism, deontology and virtue ethics (Donaldson and Werhane, 1996; Treviño and Nelson, 2006) along with a discussion of contemporary approaches involving care ethics (Hamington and Sander-Staudt, 2011). The ethical construct of “moral imagination” (Moberg and Seabright, 2000; Werhane, 1999) is also considered as one mechanism through which individuals might move beyond narrowly formulated scripts into identifying more creative ethical alternatives. Finally, given that the ability to discern a good plan of action is influenced by the ability to evaluate particular interventions relative to a range of stakeholders (Treviño and Nelson, 2006), students identify and evaluate short- and long-term consequences of alternative courses of action relative to multiple stakeholder groups.

Formation of ethical intention. The third segment of the course focuses on the formation of intention to give priority to certain ethical values. This segment emphasizes the benefits of forming ethical intention based on “desire” (Lurie, 2004) or proactive movement toward certain predetermined ethical values, rather than by reactive movement away from rule violations. The distinction between moral motivation and moral courage (Comer and Vega, 2011) is also discussed. Moral courage is identified as critical to the transition between intention and action, as it reflects the decision to give precedence to moral values even in the face of substantial pressure or personal costs to do otherwise (Sekerka and Bagozzi, 2007; Worline, 2010).

Implementation of ethical action. The fourth segment of the course focuses on factors that can impede or enhance our ability to actually implement ethical courses of action. Examples of topics covered in this section include:

• displacement (Bandura, 2002) or diffusion of responsibility (Barron and Yechiam, 2002; Darley and Latané, 1968);

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• consequences of certain compensation practices on ethical behavior (Fong and Tosi, 2007; Hoffman and Siguaw, 1993; Kurland, 1991); and

• predicaments with the use of zero sum solutions that simply arbitrate between conflicting claims.

Students are encouraged, when possible and appropriate, to creatively identify non-zero sum solutions that are simultaneously responsive to the underlying interests and needs of more than one stakeholder group (Reiter, 1996; Treviño and Nelson, 2006).

Application and expansion of foundational skills in ethical decision-making to more complex situations involving potential or actual crisis. Within the course, knowledge and skills related to ethical decision-making components (Rest, 1986, 1994) are initially taught in a simplified form, beginning with relatively basic, business-related dilemmas, involving only a single factor or two that might inhibit ethical recognition, evaluation, intention or judgment. As students develop comfort, confidence and competence with basic dilemmas, more complex problems are introduced. Complexity is increased by using dilemmas with multiple rather than singular factors that might impede ethical decision-making; situations involving a greater number of systems or levels of analysis; a greater number of stakeholders who could significantly impact or be impacted; or predicaments requiring more sophisticated knowledge of certain industries or functional areas of business practice. Indeed, these complexities also involve a range of ethical issues intersecting with or comprising crises.

In addition, in this segment, two new tools that originated in healthcare are introduced for use in corporate crisis management, including the “levels of prevention” framework (Golan, 1986) and the “4Ps” framework (Weerasekera, 1996). Within the levels of prevention framework, it is argued that the least costly and most efficient way to manage a crisis is through the earliest forms of intervention, which range from organizational health promotion and primary prevention of a crisis, through to secondary prevention (treatment) and tertiary prevention (rehabilitation of an organization and its image) (Simola, 2005). Within the “4Ps” framework, crisis situations are assessed to identify points of intervention in resolving the crisis. The 4Ps framework involves:

• consideration of predisposing factors that made the organization vulnerable to the crisis;

• precipitating factors that served as immediate triggers for the crisis; • perpetuating factors that are maintaining or exacerbating the crisis; and • protective factors that can be leveraged to mitigate negative outcomes of the crisis

(Simola, 2005).

Students are taught to consider a range of factors when using both of these frameworks for crisis prevention and management. Figure 2 summarizes these frameworks and demonstrates their relationship to the foundational steps in ethical decision-making (Rest, 1986, 1994) studied earlier in the course.

Method Participants Participants comprised students enrolled from a third-year, required course on ethical decision-making in business and organizations that was offered as part of a BBA.

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program at a primarily undergraduate university. Two options for participation were given to students. These included providing informed consent for the use of data from course assignments or providing informed consent for the completion and use of data from an open-ended survey administered at the end of the course. Students had the choice of consenting to either, both or neither of these options. No incentives for participation were offered.

For use of data from course assignments, the sample comprised 34 students (age: M � 21.84 years, SD � 2.30; 67.60 per cent male). This represented an 81 per cent response rate, which is typical in this setting, given that no incentives for participation were offered. The ratio of men to women in the sample was consistent with the ratio found in the class as a whole, wherein 67.35 per cent of students were men. For use of survey data, the sample comprised 30 students (age: M � 22.03 years, SD � 2.32; 66.70 per cent male). Course assignments for two students were incomplete, reflected in lowered degrees of freedom for certain analyses.

Assessing student learning and perceptions Management scholars have identified analyses of what comprises useful evidence of teaching effectiveness, particularly for educational contexts in which classical experimental designs might not be possible. Among the insights offered by Schmidt-Wilk (2010) is the importance of connecting evaluative data to specific learning objectives. Other authors have focused on the importance of distinguishing not only between actual learning versus perceptions of a learning experience but also between actual learning versus self-reported learning (Shaftel and Shaftel, 2007; Sitzmann et al., 2010).

In keeping with these analyses, two types of evaluative data were collected. The first type of data included direct measures (pre and post) of actual learning and skill acquisition tied to the course objectives of enhancing knowledge about crisis/management and facilitating skill development in the areas of recognition, evaluation and action[1]. The second type of data included student perceptions of the crisis management module and its placement within the course on ethical decision-making in business.

Measures Pre and post-course assignment on crisis management. At the outset of the course, students were given a pre-course assignment that was positioned as a self-assessment of their knowledge and skills prior to taking the course. Students completed the pre-course assignment by reading a case study of a complex crisis involving the explosion of the space shuttle challenger and answering a series of questions that were designed to assess general knowledge about crisis/management, as well as to assess skills in crisis recognition, evaluation and action planning. Students were unaware that the same assignment would be given at the end of the course. Although students were not given a formal, content-based grade on the pre-course assignment, but rather, evaluated on quality of effort, a paid marker who was unaware of the research purposes of the assignments graded both the pre and post-course assignments using an identical and highly structured guide. Grade comparisons on content-based questions from the pre- and post-course assignments were used as direct versus perceived measures of knowledge acquisition. Grade comparisons on applied components of the pre- and

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post-course assignments were used as direct versus perceived measures of skill acquisition in the areas of recognition, evaluation and action planning. The use of highly structured grading of open-ended answers to the content knowledge and skill application sections of pre- and post-course assignments was favored over Likert scales because it provided a direct measure of actual learning, as opposed to an indication of perceived or reported learning.

Additionally, and in keeping with the importance of signal detection (Swets, 1996) in the early recognition of crises (Mitroff, 2001; Mitroff et al., 1987, 1993), assignments were also coded in relation to the extent to which students were able to demonstrate both sensitivity and specificity in their recognition of warning signs that likely contributed to the emergence of the crisis. These warning signs were subsumed by and reflected in factors that might have impeded early recognition of the crisis for actors in the case. Use of a large but finite set of factors covered during the segment of the course that focused on ethical decision-making and action enabled computation of four indices related to signal detection.

In this regard, an a priori case analysis was conducted. This analysis considered the range of individual-, group- and organizational-level factors covered in the course which, based on information provided in the case, might reasonably be considered to have played a role in impeding early recognition of warning signs associated with the impending crisis. Factors identified by students were coded according to whether they comprised true positives (correctly identifying warning signs as present when they were present), false positives (incorrectly identifying warning signs as present when they were absent), true negatives (correctly identifying warning signs as absent when they were absent) and false negatives (incorrectly identifying warning signs as absent when they were present).

Survey on student perceptions of the crisis management module and its placement within the course. The survey comprised open-ended questions assessing student perceptions about the module on crisis management and its placement within the course on ethical decision-making in business. This allowed diversity in responding, while still ensuring the privacy of participants (Miles and Huberman, 1994). Content analysis was conducted in order to identify themes.

Results As indicated via comparison of pre- and post-course assignment questions assessing knowledge about crisis/management, students demonstrated greater knowledge about organizational crisis/management at the conclusion of the course (t(31) � 17.00, p � 0.001, d � 3.01). The effect size as indicated by Cohen’s d is large. Cohen’s d effect sizes indicate increases in knowledge (or skill) from pre- to post-measures in standard deviation units. For example, a Cohen’s d of 1.0 would indicate an increase of 1.0 standard deviation units.

As indicated via comparison of pre- and post-course assignment questions assessing skills in early recognition, students demonstrated stronger abilities to recognize factors in the case study that were impeding early awareness of crisis situations at the conclusion of the course (t(33) � 9.61, p � 0.001, d � 1.65). In addition to this, students demonstrated significantly more true positives in their identification of crisis warning signs at the end of the course (t(33) � 10.03, p � 0.001, d � 1.72), as well as more false positives at the end of course (t(33) � 8.43, p � 0.001, d � 1.45). Students also

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demonstrated both fewer true negatives (t(33) � �8.43, p � 0.001, d � 1.45) and fewer false negatives (t(33) � �9.746, p � 0.001, d � 1.67) in their identification of crisis warning signs at the end of the course. The effect sizes indicated by Cohen’s d are all large.

Skills in evaluating crisis situations and identifying an appropriate action plan were stronger at the conclusion of the course (t(30) � 12.69, p � 0.001, d � 2.28). The effect size as indicated by Cohen’s d is large.

Themes emerging from responses to the post-course survey are summarized in Table I. There was unanimous agreement among participants that learning about crisis management within a course on ethical decision-making is helpful. The most common elaborations of why this is helpful were statements indicating various forms of intersection between ethics and crisis/management. Student perceptions of the most

Table I. Themes emerging from post-course, open-ended

survey questions

Emergent themes for survey questions

Per cent of participants offering theme-related

comment

Is it helpful to teach crisis management as part of a course in business ethics? Please explain

Yes (includes yes, definitely, most definitely, very important) 100.00 Please explain

Synergies between business ethics and crisis management 47.00 Crisis management skills will be needed in future career 30.00 Led to acquisition of specific management skills 20.00 Important to learn crisis management given recent world events 16.71 Crisis management is complex and so it is helpful to learn about it 10.00

What is the most specific thing you learned about crisis management that you will carry with you into your career?

Specific factor(s) that can impede early ethical (and also early crisis) recognition 26.67 Specific framework(s) for assessing crises and determining action plan (i.e., levels of prevention, 4Ps) 20.00 Importance of listening to “voice” as it might reflect “loyalty” vs unconstructive trouble-making (i.e., Hirschman, 1970) 20.00 Importance of early uptake and action in relation to warning signs 16.67 Importance of communicating with stakeholders 16.67 Sometimes organizations need to go beyond legal requirements to do the right thing 10.00

What, if any, positive impacts did learning about corporate crisis management have on you?

Acquired skills for managing crisis 40.00 Acquired skills for recognizing crisis 13.33 Greater awareness of relationship of ethics and crisis management 13.33 Developed understanding of importance of early intervention 6.67

What, if any, negative impacts did learning about corporate crisis management have on you?

None 50.00 Realization that there are risks to speaking up about potential problems 16.67

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useful thing learned about crisis management reflected both the acquisition of knowledge or skills related to specific tools such as the “levels of prevention” (Golan, 1986) or the “4Ps” frameworks (Weerasekera, 1996) that can be used in crisis management (Simola, 2005), as well as a range of specific insights which have applicability both to ethical management and crisis management. However, despite many positive perceptions, close to 17 per cent of students also reported a negative impact of the crisis management module, which was that voicing concerns about potential problems in an organization might carry personal risks. The implications of these findings are considered in the Discussion section.

Discussion The purpose of this research was three-fold, including:

• to provide a conceptual rationale for teaching crisis management within the context of business ethics;

• to provide evaluative data on such an approach; and • to highlight the implications of this approach for HRD and training.

In terms of the conceptual rationale, four factors suggesting business ethics education as one useful context in which to teach crisis management were offered. These included the fact that ethical lapses often directly precipitate, perpetuate or exacerbate crisis situations (Nielsen and Dufresne, 2005; Gioia, 1995, Werhane, 1991); the criticality of sound ethical reasoning relative to a range of stakeholders in the effective resolution of crisis situations (ERC, 2011; Pauchant and Mitroff, 1992); the consonance between components of ethical decision-making (Rest, 1986, 1994) and components of crisis management (Fink, 1986; Mitroff et al., 1987; Shrivastava, 1993); and the presence of research demonstrating that the same individual-, group- and organizational-level factors which can impede ethical recognition, evaluation, intention and action can also impede crisis recognition, evaluation intention and action (Burnette et al., 2001; Sims, 1992).

Results demonstrated that both knowledge of crisis/management and skills in crisis recognition, evaluation and action planning improved significantly from pre- to post-course assessment. Although this finding is not necessarily surprising, given the topics covered in the course, it is nonetheless important given the premium on demonstrating actual rather than perceived knowledge and skill acquisition (Sitzmann et al., 2010).

Quantitative analysis also considered not just the sensitivity but also the specificity with which participants were able to identify crisis warning signs, subsumed by and reflected in factors inhibiting early recognition of the crisis as indicated in the case. Participants showed significantly higher rates of true positives and significantly lower rates of false negatives at the end of the course compared to the beginning, indicating increased sensitivity to warning signs at the conclusion of the course. However, participants also showed significantly higher rates of false positives and lower rates of true negatives at the end versus the beginning of the course. These findings are interrelated in that, given the finite set of factors discussed in the course, the greater the number of false positives, the fewer the number of true negatives, and vice versa.

This tendency toward greater false positives (and fewer true negatives) at the end of the course might have reflected eagerness on the part of participants to be thorough. In

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their zeal to identify as many warning signs as possible, they might have erred on the side of over-inclusion. However, when it comes to errors in early recognition, false positives might well be a less concerning error than false negatives. In particular, false positives reflect greater caution. Although false positives in the real world might, at times, be associated with inconvenience, disruption or some degree of expense associated with sounding a warning bell when none is actually needed, such errors are often still less costly than failing to recognize actual warning signs of a crisis and then having to deal with the aftermath. Therefore, in keeping with the adage that “it is better to be safe than sorry”, occasional false positives might be preferable to false negatives. That said, if the occurrence of false positives is too frequent, this can result in diminished credibility of decision-makers and diminished willingness on the part of organizational members or other stakeholders to respond to what they assume is another error in prediction. Hence, consideration needs to be given to ways of improving specificity in signal detection. This might include more detailed and explicit discussion of the types of errors that can be made in signal detection, and the range of costs, both financial and other, that can be associated with each type of error.

In terms of student perceptions on the post-course survey, it is noteworthy that there was unanimous agreement among participants that learning about crisis management within a course on ethical decision-making is helpful. The most common elaborations of why this is helpful were statements indicating various forms of intersection between ethics and crisis/management. However, many of the elaborations given for why it is helpful to learn about crisis management in the context of business ethics actually reflected good reasons for studying crisis management generally, as opposed to good reasons for studying crisis management in the context of business ethics in particular. For example, among the reasons participants cited were that crisis management skills will be needed in their future careers, that crisis management is an important topic given recent world events and that the crisis management module provided specific management skills. The inclusion of these more general reasons for why it is important to learn about crisis management suggests that although there are important intersections of ethics and crisis/management, and although business ethics courses might be one useful context in which to teach crisis management, learning about crisis management is important generally and would not necessarily need to be taught specifically through a business ethics course to be of perceived interest or value to students.

Student perceptions of the most useful thing learned about crisis management reflected not only the acquisition of knowledge or skills related to specific tools such as the “levels of prevention” (Golan, 1986) or the “4Ps” frameworks (Weerasekera, 1996) that can be used in crisis management (Simola, 2005) but also a number of specific insights which have applicability both to ethical management and crisis management. These included the importance of listening to expressions of “voice” among employees, as voice might reflect “loyalty” among employees who truly care about the company (Hirschman, 1970); the importance of early uptake of warning signs and communication with stakeholders; and the fact that sometimes organizations need to move beyond minimal legal requirements and do the “right thing” relative to stakeholders. This identification of insights with relevance to both ethics and crisis management reflected the perceived importance of ethics to crisis prevention and management, even though crisis management skills might be taught in a range of course contexts.

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In terms of positive impacts of the module on crisis management, participants cited increased awareness of the relationship between ethics and crisis management. Additionally, although participants most commonly identified no negative impacts of the module on crisis management, and although there was also unanimous agreement that studying crisis management as part of the course in ethical decision-making was useful, close to 17 per cent of participants also reported a negative impact of the crisis management module involving the realization that voicing concerns about potential problems in an organization might carry personal risks. This finding emerged despite the fact that specific blocks of time focused on developing skills for and managing the risks associated with, voicing concerns (Hirschman, 1970) about potential problems in the organization while still being true to ethical values. Although participants simply identified their perception of this potential negative impact in the absence of elaboration as to if and under what circumstances prospective personal risks might influence future decisions to voice concerns, additional exploration of ways to encourage and facilitate voice in this respect would be helpful. These explorations should draw upon recent and salient research on “giving voice to values” (Gentile, 2011) as well as other factors positively associated with the development or expression of moral courage (MacDonald, 2011; Sekerka et al., 2011; Worline, 2010).

Implications for HRD As indicated by Wang et al. (2009), two areas in which strategic HRD can play a central role in crisis management are as follows. First, through the development of a learning culture, strategic HRD (SHRD) facilitates the use of learning from crisis for the prevention or improved management of future crises. Second, SHRD enhances the competitive advantage of the firm through the identification and development of core capabilities that are aligned with organizational values and goals (Garavan, 1991, 2007). Therefore, to the extent to which the firm integrates CSR, environmental concern and ethics into strategy, rather than treating these issues as marginal, it will also be important for the firm to develop capabilities in these areas, including the proactive prevention, recognition and management of environmental, human or other crises (Shrivastava, 1995). Findings from the current research suggest that one potentially useful context in which to combine training and development initiatives on these issues is through business ethics education. In this regard, in their integrative review of the crisis management and HRD literatures, Hutchins and Wang (2008) identified that most of the crisis management research they had identified focused differentially on only certain areas of crisis management such as preparation, containment and business recovery. One area of lack was research on recognition or signal detection of crisis warning signs, which is a prerequisite to any sort of management or learning. The current study not only identified specific barriers to recognition or detection of crisis warning signs but also demonstrated an effective program through which these processes were enhanced. Similarly, in their study identifying the role of HRD in developing crisis management competencies, Wooten and James (2008) identified a need to develop training programs for managers on the skills needed for the damage control phase of a crisis. Again, the current study offers a specific program aimed not only at enhancing recognition of crisis warning signs but also, at providing specific tools and skills in assessment and action planning to contain the effective management of the crisis. In these ways, the current research builds upon extant HRD literature on crisis

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management. These benefits noted additional assessment of this teaching framework and its associated tools within different organizational contexts as HRD initiatives is warranted. As described below, this would include further identification and development of skills needed not only to articulate concrete action plans but also to implement them.

One significant and distinctive aspect of the training framework and tools provided here is that they explicitly consider and leverage positive aspects of organizational functioning. This has important implications both for the crisis management literature and the HRD literature. In particular, the levels of prevention framework asserts the importance not simply of primary prevention of crises but also organizational health promotion (Simola, 2005), which is a much more proactive approach to ensuring a resilient, sustainable and vital organization and network of stakeholders. Similarly, the “4Ps” framework considers not simply predisposing, precipitating and perpetuating factors to crisis situations but also protective factors which enable organizations and stakeholders to flourish, and which can be leveraged to mitigate negative impacts of crisis events (Simola, 2005). Given the rise of positive psychology (Lopez and Snyder, 2009) and positive organizational scholarship (Cameron et al., 2003; Cameron and Spreitzer, 2012), elaboration of both crisis management and HRD from an explicitly positive perspective (Luthans and Youssef, 2004) might also serve as a fruitful research direction. In terms of the environmental and human aspects of CSR and sustainable business practice, this type of positive approach might reduce the probability or impact of crises, as well as the required degree of post-crisis management. A positive, proactive approach, both to crisis management and the strategic development of organizational capabilities would be consistent not only with classic research promoting a more ecocentric, sustainable approach (Shrivastava, 1995) but also, with a range of more recent models of CSR and environmental sustainability, emphasize proactive promotion of health and resilience rather than reactive prevention of crisis (see, for review, Murillo-Luna et al., 2008).

Limitations and other directions for future research Although evaluative data suggest that instructional programs on ethical decision-making in business comprise one useful context through which to teach crisis management, some limitations exist. First, because administrative requirements precluded the use of a true experimental design, the direct measure of student learning involved a quasi-experimental (pre-test, post-test) design. Within this type of design, improvements in knowledge and skills could be attributable to extraneous factors such as growing personal maturity or analytical skills being learned in other contexts (Stangor, 2004). However, although such alternate explanations are possible, they would seem somewhat unlikely in the current context, in which the list of content topics covered is fairly comprehensive and specific, particularly in relation to the more specific assessment and planning frameworks derived from the ethics and crisis management literature.

Second, the sample size in this most recent iteration of the course was relatively small. However, small sample sizes are associated with a greater risk of failing to detect an effect that is present, rather than erroneously concluding an absent effect is actually present (Gravetter and Wallnau, 2004). Given that improvements in knowledge and skills were not only significant but also large in terms of effect size, some degree of confidence can be placed in the results. Nonetheless, continued assessment, in

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larger-sized classes, would allow for additional types of analysis and for the possibility of convergent evidence.

Third, although the current course was focused around Rest’s (1986, 1994) components of ethical decision-making, the assessments of skill acquisition focused on recognition, evaluation and articulation of a concrete action plan. In reality, articulation of a concrete action plan and implementation of that action plan involve two overlapping but different skill sets. In particular, although articulation of a concrete plan is necessary for implementation of that plan, implementation requires additional skills, such as active listening or conflict resolution skills. Hence, further development of the course should include identification of pragmatic skills that are needed to actually implement an action plan, as well as pre- and post-course assessment of these (Hoover et al., 2010).

A final direction for future research would be to consider not simply additional contexts in which crisis management can effectively be taught but also specific teaching strategies that are useful (Cirka and Corrigall, 2010; McQueeny, 2006; Reilly, 2006; Simola, 2010). It would also be helpful to explicitly compare two or more theoretically based teaching approaches within the same content area to investigate whether certain models are associated with greater learning and more positive perceptions of learning crisis/management knowledge and skills.

Note 1. Although Rest (1986, 1994) originally articulated four components to his ethical

decision-making model (i.e., ethical awareness or recognition; ethical evaluation or judgment; formation of intention to act ethically; and implementation of ethical action), leading researchers have identified that the third step, involving the formation of intention, does not necessarily always occur. Rather, individuals move from moral awareness and judgment directly to moral action, without the necessity of moral intention (Ferrell and Gresham, 1985; Treviño, 1986). Therefore, outcome measurement in this study focused on the three components of recognition, evaluation and action

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About the author Sheldene Simola is an Associate Professor of Business Administration at Trent University, Peterborough, Canada. She completed her PhD at Queen’s University, Kingston. Her teaching and research interests are in the areas of business ethics and corporate crisis management. Sheldene Simola can be contacted at: [email protected]

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