Essay

Reinforcing Ethical Decision Making Through Corporate Culture

Al Y S. Chen Roby B. Sawyers Paul E Williams

ABSTRACT. Behaving ethically depends on the ability to recognize that ethical issues exist, to see from an ethical point of view. This ability to see and respond ethically may be related more to attributes of corporate culture than to attributes of individual employees. Efforts to increase ethical standards and decrease pressure to behave unethically should there- fore concentrate on the organization and its culture. The purpose of this paper is to discuss how total quality (TQ) techniques can facilitate the develop- ment of a cooperative corporate culture that promotes and encourages ethical behavior throughout an orga- nization.

Key words: corporate, culture, ethics, total quality

Al Y. S. Chen, DBA, is Associate Professor of Accounting at North Carolina State University, Raleigh. He has been involved in teaching total quality techniques and has directed quality improvement projects in industry. He has published articles dealing with total quality man- agement in Management Accounting and The Journal of Accountancy.

Roby B. Sawyers, CPA, Ph.D., is Associate Professor of Accounting at North Carolina State University. He has been involved at North Carolina State in efforts to integrate the teaching of ethics in the accounting and management curriculum. His research has been published in a variety of journals including T h e J o u r n a l of the American Taxation Association, Advantages in Taxation, Auditing: A Journal of Practice and Theory and The Journal of Accountancy.

Paul F. Williams, Ph.D., is Professor of Accounting at North Carolina State University. His teaching interests include managerial and financial accounting, and accounting theory. His research interests are in the areas of critical theory and sociology of knowledge. He has published articles in Critical Perspectives on Accounting; Accounting, Organizations and Society, and The Accounting Review among others.

Introduction

News sources continually report business activi- ties harmful to individuals, communities and society in general. Some notable examples include: questionable decisions concerning product design that sacrifice quality in an effort to reduce cost, lack of concern for environmental damage, and doubtful standards affecting the safety of employees, customers and other stake- holders. While many factors certainly contribute to problems such as these, evidence suggests that they are primarily caused by the lack of a cor- porate culture that explicitly promotes and encourages ethical decision making. Unethical conduct is not simply an individual decision, but is also a reflection of institutional culture with the result that such conduct may be related more to attributes of the business itself than to attrib- utes of the individual employee (McCuddy et al., 1993).

Managers report frequent pressure to com- promise personal ethics to achieve corporate goals and to translate moral considerations into strictly utilitarian terms (Jackall, 1988). This pressure may lead to employees not "speaking up" when confronted with ethical issues due to fear that adverse repercussions will follow, an event documented and experienced first hand by Boisjoly (1993) as a consequence of the space shuttle Challenger disaster. Perhaps one expla- nation for this pressure is the change that has occurred in our understanding and acceptance of the purpose of the management process.

Over 30 years ago, Mautz and Sharaf (1961) argued that being ethically sensitive rivaled the importance of being technically proficient (Shaub et al., 1993). Business has moved far away from

Journal of Business Ethics 16: 8 5 5 - 8 6 5 , 1997. © 1997 Kluwer Academic Publishers. Printed in the Netherlands.

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this view of management as a moral practice to the view that it is a value-neutral technical practice (Francis, 1990). The use of quantitative decision models like linear and dynamic pro- gramming, queuing theory and capital budgeting techniques serve as examples. Exclusive use of quantitative methods obscures the role of indi- vidual judgment which may result in business managers becoming so preoccupied with tech- nical issues that ethical issues are overlooked (Shaub et al., 1993). Likewise, the recent wave of adopting corporate codes of ethics is indica- tive of top management's desire to standardize decisions with ethical repercussions.' However, a reliance on rules and standards results in managers hiding behind a code of ethics believing they are ethical if they do not violate the rules. The role of ideals and professional judgment in the management process are lost.

Recently, there has been a call for a return to the view of business as a moral practice in which managers are concerned about the ethical con- sequences of what they do and in which the very practice of management produces these concerns as internal goods of the practice, i.e..

The fundamental business of business is ethical, the creation of values that enhance the welfare of communities, societies, and the world. Thus, ethics is central to the managerial task; in fact, it is the task of management (Buchholz, 1989: p. 28).

The transformation of business into a moral practice requires that individuals see from an ethical point of view. We argue that this ability of individuals to respond ethically is related to the reinforcement and support the organization provides for ethical behavior. Efforts by other institutions in society (e.g. higher education and professional societies) primarily focus on creating ethical behavior through education processes directed at individuals (The Bedford Committee, 1986; The Treadway Commission, 1987). How- ever, these efforts are most effective when they are reinforced by a sound ethical environment in the business organization. Organizations often produce a corporate mentality which encourages people to behave in ways that are not necessarily consistent with individual or societal norms. The

more ethical the culture of an organization, the more ethical will be an individual's decision behavior (Sinclair, 1993; Ford and Richardson, 1994). Thus, efforts to strengthen the ethical conduct of employees must occur at the institu- tional level with, among other things, a focus on providing a corporate culture that promotes and encourages ethical behavior and allows employees to "voice" their concerns.^

The purpose of this paper is to discuss the potential of total quahty (TQ) techniques for managing and facilitating the development of a corporate culture that provides a context for, promotes, and encourages ethical behavior throughout a firm.^ In the following section, we discuss the impact of corporate culture on ethical sensitivity and ethical behavior. The link between T Q and ethics is presented next. The paper con- cludes with a discussion of the hmitations of T Q techniques.

Ethics and the corporate culture

Ethical sensitivity

Ethical sensitivity is the abihty of an individual to recognize the ethical nature of a situation in a professional context (Shaub et al., 1993). Behaving ethically depends on the ability to recognize that ethical issues exist, to see from an ethical point of view. If a situation is not recog- nized as containing ethical components, moral reasoning will not be used to address it. However, individuals do not operate in a vacuum. Individuals are influenced by organizations and their common goals and beliefs. Corporations construct cultures that can exercise good or bad influences depending on their goals, policies, structures and strategies (Brown, 1987).

Brown's remark implies that the problem of ethics is not one of the conduct of individuals. However, that is the way in which it has most often been treated. For example, the American Accounting Association's ethics seminars and case studies were structured around presenting indi- viduals with ethical dilemmas that require a private decision, i.e., ethics is viewed as a private matter, one of individual choice. As Bellah et al.

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(1991) argue, this view of ethics is a product of our American culture's reliance on a Lockean political and moral discourse of radical individ- ualism which emphasizes rights and severely inhibits, if not precludes, our ability to under- stand how individuals fmd themselves in moral dilemmas in the first place. The ethics problem is not one of individual misconduct so much as it is one of the inadequacy of institutions, the multinational business corporation being one of those. For a people who value a democratic form of life, we increasingly find ourselves enmeshed in institutions, like the multinational corporation, which are hierarchial and bureaucratic in nature, and we seem to lack the moral wherewithal to understand and reshape those institutions.

The problem of ethics

Perhaps the problem of ethics stems from our inclination to refer to ethical problems, which implies there are solutions. This approach to ethics utilizes a metaphor of science; there is a problem which means there is a solution. The philosopher Hillary Putnam (1990: p. 181) argues that the legal metaphor of "adjudication" is a more appropriate one. For example, he acknowl- edges that he accepts the Supreme Court decision on abortion as a wise one not because it is the correct solution, but because:

reasonable men and women should agree that it would have been decidedly Mwwise for the Court either to (1) read Roman Catholic theology into the Constitution; or (2) grant that persons have the right to receive and perform abortions even in the ninth month of pregnancy.

Another useful metaphor is that of reading (Putnam, 1990: p. 182), which involves the acknowledgment that there are better and worse readings. Putnam's example is that of Hamlet; a final interpretation of the play is impossible, but there are some interpretations that are better than others. What a twelve-year old child may read Hamlet to mean does not come as nearly to exhausting the understandings from the play as those of an adult reader knowledgeable in the

mores and language of Elizabethan England. According to Putnam, the metaphors of adjudi- cation and reading do not imply that resolving ethical disputes means a commitment to an optimal solution, but they do mean ". . . w e are committed to the idea of better and worse opinions. Reading great works of art and reading life are different but not unrelated activities" (1990: p. 183).

What is necessary for the adjudication of ethical issues is a sense of community, which encourages the communication of and supports the acceptance of those diverse opinions. For, as Putnam notes:

When the sense of community is absent or weak, when individuals feel contempt or resentment for one another, when the attitude becomes that any consensus that isn't the one an individual would have chosen himself isn't binding on him, them fantasy and desperation have free reign (1990: p. 185).

Corporate cultures can be constructed to become places in which this strong sense of genuine community is engendered, in which "adjudication" and "reading" can occur so that the ethical assumes an importance along with the technical.

Corporate Culture. Corporate culture is defined as "the shared values and beliefs of organizational members, specifically beliefs about what works within an organization, and values about pre- ferred end states and the . . . approaches used to reach them" (Reidenbach and Robin, 1991: p. 273). Many argue that ethical behavior stems from an ethical corporate culture (Fisse and Braithwaite, 1983; Murphy, 1989; Reidenbach and Robin, 1991; Sims, 1992; Ford and Richardson, 1994).'* At a more micro level, Wimbush and Shepard (1994) suggest that ethical behavior is related to the ethical climate of an organization which is a dimension of corporate climate (culture). The critical issue then becomes how to create and manage an ethical corporate culture.'

Managing Corporate Culture. Sinclair (1993) describes two approaches to managing culture to improve ethics in organizations, which are the

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strong and subculture approaches. The strong approach is characterized by the creation of a unitary culture in which values and norms are shared by all employees. The support and lead- ership of top management is crucial to create an organizational culture that evokes a uniform response to ethical issues.

The subculture approach relies on the view that common values and norms affecting ethical behavior are more likely to be found in groups within an organization than the organization as a whole. Instead of imposing corporate-wide ethical values, the culture of the organization is managed by focusing the values of subgroups towards goals that are consistent with those of the organization (Sinclair, 1993). Although different groups can have different values, organizations can still benefit by identifying points of consensus which can form the basis of an ethical corporate culture. While the strong approach rehes on management to articulate a set of moral values, the subculture approach encourages individuals to develop their own ethical values consistent with those of the organization (Sinclair, 1993).

Sinclair (1993) recognizes problems with both the strong and the subculture approaches. Strong cultures tend to maintain the status quo and may "drive out dissension producing 'strategic myopia' and rigidity" (attributed to Bourgeois, 1984; and Lorsch, 1985 by Sinclair, 1993: p. 67). Strong cultures tend to give individual employees limited power and may inhibit the organization's capacity to react and respond to the changing needs of it stakeholders (Sinclair, 1993). In the subculture approach, values of a particular group may never be accepted by other groups resulting in a conflict of beliefs that leaves top manage- ment unable to fmd a common basis on which to build an ethical foundation.

Reidenbach and Robin (1991) describe an ethical organization as one with a common set of ethical values accepted by all members of the organization. This nucleus of values guides the behavior of individuals when faced with ethical dilemmas. Individuals can not deal with ethical issues as they arise without a uniform set of cor- porate values to guide their behavior. The cor- porate culture is the vehicle for delivering and communicating that common set of values.

Cooperative culture

Francis (1990) suggests that working in large, bureaucratic organizational settings makes the achievement of professional virtues more diffi- cult. In contrast, it would appear that working in organizational settings characterized by a more malleable, cooperative form of management in which people engage each other freely in shaping the culture is more conducive to promoting ethical awareness and behavior. Sims (1992) rec- ognizes that organizational culture has a signifi- cant influence on establishing ethical behavior in an organization and enumerates normative recommendations for creating a culture that supports individual ethical behavior. However, Sims does not offer an approach that will sys- tematically aid in the development of a corporate culture that encourages and promotes ethical behavior throughout an organization. We contend that total quality techniques can be used to provide such a flexible, cooperative culture. "The principles of total quality . . . provide the nec- essary structural framework to help . . . employees and management communicate . . ." (Imai, 1986: p. 216). An organization incorporating T Q tech- niques can engender that sense of community aimed at excellence which has the potential to make the institution of the business corporation more ethical as well as making employees ethi- cally aware. In the next section, we argue that ethical behavior is an integral part of quality improvement efforts. We explore proven quality improvement techniques and discuss the benefits of applying these techniques to reinforce ethical decision making through corporate culture.

Total quality and ethics

A revolution is transforming the worldwide business environment. The growth of interna- tional competition, the breakneck pace of technological innovation, and advances in com- puterized systems have created a new playing field for business around the world. Many Japanese firms have emerged as world-class pro- ducers and have become the focus of studies aimed at discovering their critical success factors.

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Much of Japan's global business success has been attributed to the implementation of total quality techniques.^

The application of TQ techniques in the United States

American industry has rediscovered T Q as it faces increased global competition and dimin- ishing quality of its products and services. Today, T Q techniques have been implemented by over 3000 U.S. organizations in the manufacturing and service sectors (U.S. GAO, 1991). However, as U.S. industry has moved to adopt total quality techniques, most of its benefits have been discussed in terms of its impact on the quality of products and services and the efficiency of the processes employed in the organization. In a study of the management practices of 20 com- panies implementing T Q practices, the United States General Accounting Office found that T Q techniques resulted in better employees relations, improved operating procedures, greater customer satisfaction and better financial performance (U.S. GAO, 1991). These successes imply that T Q techniques can be effectively implemented in U.S. firms. However, in general neither Japanese or U.S. firms have considered the potential ethical benefits of a total quality approach to business.

The quality-ethics connection

It has been argued that a distinctive leadership style allows Japanese companies to avoid common ethical problems found in U.S. firms (Taka and Foglia, 1994). Taka and Foglia argue that this unique leadership style is largely attributable to the Japanese societal value system. However, under the heavy influence of western culture and value systems over the last century , it is not clear how the Japanese could maintain a stable, pro- ductive and ethical work force relying only on management leadership style. The characteristic Japanese leadership style endures only if culti- vated and reinforced by a strong organizational culture.

Anecdotal evidence suggests that total quality techniques can be used to develop an ethically sensitive corporate culture that supports and encourages ethical behavior in the workplace. As an examiner for the Malcolm Baldridge National Quahty Award, Steeples (1994) found a high correlation between quality and ethics, apparent in both a company's actions and the actions of its employees.

Evidence also suggests that corporate catastro- phes are often the result of cultural failures and system breakdowns (rather than a lack of indi- vidual ethical behavior). Steeples (1994) suggests that a series of system deficiencies caused the disastrous Chicago flood of 1992 by making it virtually impossible for individuals to take posi- tive action. Likewise, Boisjoly (1993) provides a particularly vivid picture of management failure at Morton Thiokol when managers succumbed to NASA pressure and approved the launch of Challenger, even though engineers advised against it. The absence of an organizational culture where people were enabled to voice their concerns was, according to Boisjoly, what caused the Challenger tragedy. Boisjoly (1993) suggests that organizations must develop and foster top- down support for teamwork and information flow based on the cornerstones of responsibility, authority and accountability, the key tenets of a total quality approach to management.

T Q provides a model for creating socially responsive companies that build ethical expecta- tions into systems and provide organizational support to employees so that they can behave according to those expectations (Steeples, 1994). The reliance of T Q on ethical behavior is man- ifested in comments by Ishikawa, one of the world's foremost authorities on quahty control.

I am an advocate of quality control based on belief in people's goodness. If a person does not trust his . . . subordinates and imposes strict control and frequent inspection, Jie cannot be a good manager. His control is based on the belief that people are by nature evil, and such a system simply does not work (Ishikawa, 1985: pp. 65-66).

Ishikawa's view is reinforced by the management concept "Kaizen" which emphasizes continuous improvement in all business activities and focuses

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on improving the quality oi people (Evans and Lindsay, 1993). It is a cooperative approach aimed at facilitating continuous quality improvement through better communication among workers and managers.

Based on the successful implementation of T Q techniques in U.S. flrms, we explore the impli- cations of using these techniques to reinforce ethical decision making through the corporate culture. The next section discusses specific methods by which total quality techniques can be used to raise employees' ethical awareness and to create a cooperative corporate culture.

Ethical implications of TQ techniques

Traditional, bureaucratic organizational forms are often characterized by strict departmentalization of job functions that create barriers to effective communication and planning. In addition, the outcome focus of management by objectives sends a message to middle managers that what is important is achieving those outcomes, regard- less of how it is done. A T Q approach to business emphasizes continuous improvement of the processes of an organization and breaking down organizational barriers through structural changes that promote better communication and a greater sense of community (Brassard, 1989). In addition to changes in the organizational structure, the use of T Q management tools can develop and enhance the planning skills of managers, and help identify internal opportunities for improvement.'' This section discusses how T Q techniques can both achieve world class excellence in the manufacturing and service processes of an organization and improve an organization's ethical culture.

A total quality approach to managing culture to improve ethics includes fundamental aspects of both the strong and subculture approaches discussed by Sinclair (1993). However, a total quality approach integrates and extends the methods, avoiding the felt lack of personal responsibihty and the lack of discernment created in the strong approach. It also avoids the lack of a focused organizational commitment to ethics that often accompanies the subculture approach.

Customer focus

A key concept in the T Q philosophy is satisfac- tion of the customer. However, T Q adopts a very broad definition of customer which includes not only traditional consumers of products or services but also stockholders, the community, co-workers, and others who are directly or indirectly affected by the product or service. This recognition of multiple stakeholders brings with it certain ethical responsibihties that may not be readily apparent. These include obligations to communities affected by mergers and acquisitions (which may result in layoffs), responsibilities to consumers affected by advertising of dangerous products (i.e. cigarettes), and responsibilities to host countries affected by the presence of multinational companies.

Total cost management (TCM) has been used by many Japanese firms as a business paradigm for managing all company resources and the activities that consume those resources with a focus on stimulating and managing change. Chen and Zuckerman (1994) argue that, under the T C M paradigm, companies must consider the entire environmental impact of their products by looking for substitutes for inputs that are haz- ardous and for processes that can reduce the gen- eration of waste. Combining a focus on multiple stakeholders and T C M offers a systematic approach for continuously improving operations and reducing waste throughout the product life cycle. Firms will find such integration desirable to reduce costs, reduce environmental liability, and minimize adverse community concerns over their operations.

Viewing the community as a stakeholder sheds new light on practices such as plant closings and environmental pollution. Treating co-workers as customers implicitly emphasizes the need to respect one's co-workers and therefore may increase worker's sensitivity to ethical issues arising out of authority/subordinate work rela- tionships and work-place safety. This responsi- bility to multiple stakeholders has been used as justification for whistle blowing. However, the task of ethical management is to anticipate the pressures which lead to the unethical behavior and provide adequate channels of communica-

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tion within an organization so that whistle blowing is not necessary (Bowie and Duska, 1990).

to address the welfare of foreign workers that are in any way associated with their companies or products (Zachary, 1994).

Top-down support

A T Q approach to management recognizes the necessity of top-down support for effective orga- nizational change. It is essential that direction and attitude are seen to emanate not only from written policy but from actual behavior of top management. The development of an ethical corporate culture depends on the tone at the top as well. Top executives must live up to the ethical standards they are espousing and support ethical behavior in others. Of course, positive organiza- tional change requires participation and com- mitment from everyone in an organization.

Many companies implementing T Q tech- niques emphasize the importance of creating a safe work environment. Top management is the key in establishing a safety-first mind set in these organizations. Chen and Rodgers (1995) note that Milliken and Company's top management consider minimizing accidents and reducing hazardous working conditions more important than investing in new production technology. Meetings throughout the organization typically start with announcements of safety procedures and reports. Concerns for each other are given the highest priority. Subsidiaries' performance is evaluated based on the minimization of safety incidents as well as on productivity. In order to thrive in the highly competitive textiles industry, Milliken's strategy is to produce high quality products with total customer satisfaction at competitive costs. Such a customer-focused philosophy emphasizes safety considerations during the entire product life cycle.

As manufacturing facilities and suppliers of U.S. based multi-nationals are shifted overseas, more and more companies are being confronted with new ethical problems stemming from worker safety issues, harsh working conditions and the exploitation of women and children in the workplace. Top management at Levi Strauss & Co., Nordstrom Inc., Wal-Mart Stores Inc. and Reebok International Ltd. have all taken steps

Participation and communication through teamwork

Increasing participation, better access to infor- mation, and breaking down barriers to commu- nication are fundamental goals of T Q (Roth, 1993). T Q is based on two-way communication, top-down and bottom-up. Top management can not lead effectively without delivering the quahty message through well managed communication strategies. However, continuous process improve- ment is typically not led by top management but rather is initiated and driven from the bottom- up through effective feedback and communica- tion mechanisms like employee suggestion programs.

Chen and Rodgers (1995) note that active participation and open communication are encouraged through the use of teams. Teamwork is essential to encourage interaction across functional areas. This interaction is perhaps the key mechanism in explaining TQ's effect on ethical sensitivity. Interacting subgroups are influential in shaping corporate culture. As dis- cussed in Mathews (1988), work groups can sometimes take on family-like relationships. As the overlap between work and one's personal life becomes more interwined, employees are more likely to consider the impact of their actions on others in the organization.

Communication is also enhanced through the use of suggestion boxes and opportunity for improvement programs. Encouraging employees to submit suggestions for improvement provides an opportunity for management to involve staff in decision making and problem solving. When workplace teams have the authority to approve the implementation of those suggestions without management involvement, employee empower- ment is also enhanced. Responding to and acting on employee suggestions provides employees with a voice and is an important source of overall job satisfaction.

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Employee empowerment

A T Q approach to management recognizes and utilizes the potential of employees, encouraging them to make decisions and assume responsibility over the processes of the organization. Integrated with customer focus, genuine employee empow- erment is essential to reach TQ's goal of customer satisfaction. Employees must be given authority to make decisions and handle customer disputes on the spot in order to make things right. The empowerment of employees that results in continuous improvement of the quality of the products and services of a company also gives workers authority and responsibility to take action when confronted with ethical dilemmas such as product safety. Just as quality is the responsibility of every individual in an organiza- tion, ethics is the responsibility of all employees. In a Toyota assembly plant in Japan, each worker along the production line is empowered to stop production if quality problems arise (Womack et al., 1990).* Employee empowerment systems such as this require the trust of coworkers in the entire organization and allow people to develop the "skills" of a responsible citizen.

Balanced incentive programs

The dominance of financial rewards in the tra- ditional workplace is a key obstacle to trans- forming business into a moral practice (Francis, 1990). If performance evaluation systems are based solely on financial measures and rewards, workers and managers are encouraged to take actions that lead to favorable individual evalua- tions, but that may be detrimental to the orga- nization's overall goals. Coye (1986) suggests that it is important to incorporate ethical considera- tions into performance evaluation systems. Firms employing T Q techniques motivate workers primarily through a balanced mix of financial and non-financial factors including job satisfaction, control and authority, opportunities for contin- uous education and personal growth, and peer recognition for goal achievement. The reward structure can also be used to encourage concern for others which engenders ethical behavior

through the explicit recognition of the impor- tance of quality and safety issues within a company.

Levi Strauss & Co. provides both financial and psychic rewards to motivate employees. Employees are evaluated by subordinates as well as superiors. Incentive pay of workers in sewing plants is tied to team performance, rather than individual performance. One-third of an em- ployee's evaluation is based on "aspirational behavior" including such issues as valuing diversity, managing ethically, communicating effectively and empowering employees (Mitchell and Oneal, 1994). At Milliken, rewards are largely based on employees' competence, educa- tion and skill levels (Chen and Rodgers, 1995). Educational programs provided in Milliken's training programs allow motivated employees to improve themselves and the quality of the company's work force. Production associates are paid based on the number of different job skills they can perform, consequently employees are rewarded for learning cross-functional skills.

Just as the quahty improvement and operating and efficiency benefits of T Q require a flexible approach characterized by an ongoing and co- ordinated effort by management and employees, the ethical benefits of T Q should not be expected to come about over-night or to develop in isolation. T Q is more than a set of indepen- dent components and the successful development of a cooperative culture promoting and encour- aging ethical behavior requires an integrated process of continuous improvement.

Conclusions, limitations and implications

In The Power of Ethical Management, Blanchard and Peale (1988) suggest five principles of ethical power for organizations - Purpose, Pride, Persistence, Perspective, and Patience. The T Q concepts discussed in this paper provide a cohesive framework incorporating these elements and can create a corporate culture promoting and encouraging ethical behavior. When employees are empowered and actively participate in decision making they will feel proud of their work and of the organization and will be more

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aware of ethical issues. In all successful T Q implementations, top management must be committed to continual enhancement of quality as well as ethical behavior throughout the organization. Decisions must be made in an environment that encourages the consideration of a multitude of values, not only dollars and cents. Perspective and patience means ap- proaching decisions with a broad and long-term view in balancing results with how those results are achieved.

Limitations

In this paper, culture has been viewed as a manageable trait of an organization. However, Hammond and Preston (1992: p. 800) suggest that "there is a danger in treating culture . . . not as something that infuses the organization, but as something to be managed and set aside so that various techniques . . . may be brought to the fore." Culture and technique are sometimes viewed as separable (Hammond and Preston, 1992) but historical and cultural contexts must be considered in interpreting practices and implementing techniques (Kondo, 1990). Care must be taken in importing successful Japanese techniques without reservation. Future research is required in order to examine the potential of cross-cultural transfers of Japanese management techniques.

The Japanese culture and management philos- ophy have both positive and negative ethical implications. While Japanese corporations avoid many ethical problems arising in the United States, Japanese companies face their own problems with gender inequity, uneven societal wealth distribution, and exclusionary practices arising from the merging of politics and business. While U.S. companies can learn from the Japanese experiences with total quality tech- niques, Japanese companies can learn from their U.S. counterparts as well.

Implications

The implementation of a total quality approach in business has many benefits. By integrating the functions of an organization and by connecting quality and ethics, T Q techniques can help institutions "produce what is of value to cus- tomers and provide what is valuable to society" (Steeples, 1994: p. 75). The quality of the work- place will be improved as friction between employees is reduced through better communi- cation, more effective teamwork, and the recog- nition of co-workers as customers. Under the increasing threat of litigation and increased government regulation, the business organization itself will benefit from increased ethical aware- ness throughout the organization.' Society in general will benefit as employees and the orga- nizations they work for are better prepared to identify and address product safety, environmental and other issues in an ethical manner.

Notes

' Berenbeim, 1992 reports that 84 percent of U.S. companies surveyed had an ethics code with 45 percent enacting them since 1987. " While Boisjoly, 1993 recognizes that ethical behavior requires personal integrity and responsibility, unless organizations also give individuals a voice, disasters like the Challenger accident can still occur. •* We do not argue that T Q techniques inevitably create a more ethical organization, only that the potential inheres in them. •* Critics of the view of corporate culture as a deter- minant of ethical behavior argue that "it may serve to camouflage dubious practices" (Sinclair, 1993: p. 67). Weiss, 1986 suggests that codes, credos and other artifacts of organizational culture can discourage individuals from taking personal responsibility for ethical decisions in the workplace. ' At a more basic level, one can question whether culture can be managed at all or is simply something that an organization "is". For a commentary on this view, see Sinclair, 1993.

' Although often attributed to the Japanese, quality control using statistical methods was initially devel- oped by Walter Shewhart and Bell Laboratories in the late 1920s and early 1930s. Shewhart's student, W. Edwards Deming introduced statistical quality control

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to America's defense industry during World War II. Statistical quality control techniques were first used by Japanese industry during the post-war reconstruc- tion period. With the assistance of Joseph M. Juran, the Japanese subsequently formed a consortium of universities, industry and government to engage in research and disseminate knowledge of quality control. T Q techniques have been used successfully by Japanese companies for over four decades, helping them become world leaders in industry. ' A discussion of these management planning tools (brainstorming with affinity diagrams, ranking issues with prioritization matrices, identification of root causes and logical links among critical issues with interrelationship diagrams, etc.) is beyond the scope of this paper. See Imai, 1986, Goal/QPC, 1988 and Brassard, 1989 for a description and explanation of how these tools can be used to help implement the techniques discussed in this paper. ' Interestingly, Womack et al. (1990) report that the production line is almost never stopped by workers because the quality problems are solved in advance and the same problem never occurs twice. ' For example, the Federal Sentencihg Guidelines for organizations that took effect on November 1, 1991 may hold companies responsible for federal crimes committed by employees. For a discussion of the effect of these guidelines on corporate behavior, see Rafalko, 1994.

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Department of Accounting, College of Management,

North Carolina State University, Raleigh, NC 27695-8113,

U.S.A.