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Toward an Ethical Theory of Organizing

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Abstract

Current organizations are underpinned by utilitarian ethics of Modernity. Pure economic motive driven organizations detach themselves from larger societal interest. Rising number of corporate scandals and intraorganizational income inequalities are breeding similar trends in society at large. Current organizations base their competitive advantage on resources and capabilities which boils down to economic supremacy at all cost whether it is named I/O or RBV of the firm. This theoretical article posits Ethics-based Trust as the main competency and capability for attaining sustained competitive advantage. It in no way condemns utility view of the firms but treats it as a natural yet secondary outcome of genuine ethicality of the firm. Cultivating an ethical culture in the firm through identifying antecedents, organizational practices, and the outcomes where profitability is an automatic but secondary outcome under the supremacy of ethics is detailed in the multilevel model presented in this article. The main call of this article is to posit ethics and morality over and above short-term profits so that organizations fulfill their trustee role for society through enacting socio-humanistic theories within organizations. A brief analysis of the proposed ethical theory of firm is undertaken in light of the “schooling” notion in the contemporary organization theory literature.

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Notes

  1. Happiness of utilitarian philosophy is, however, very difficult to distinguish from physical pleasure, comforts, and luxuries. Bentham was the first post-enlightenment utilitarian to take happiness as right rather than treating right as means to happiness (Worden 2009a, b).

  2. We would rather exclude consumers and customers as being immediate stakeholders. They are stakeholders because transacting with them brings financial gains to the shareholders or immediate stakeholders.

  3. Argandona calls the economics-driven modernist organization theories as culturally impoverished and anthropologically restrictive.

  4. The same scenario can be applied to organizational settings where senior managers assume the role of teachers and employees that of students.

  5. Throughout the remaining sections of this article wherever a page number appears in parenthesis without an authors’ name, it denotes self-referencing.

  6. Studies of ethical behavior of US, Australian, and Israeli business students reveal that for them “only moral of business is making money (and that) moral values are irrelevant to the business world” (Sims and Gegaz 2004).

  7. Oppression is used here to mean the conventional educational and organizational pressures of relentless economics-driven individualism, over competitive behavior and the mindset to equate success only and only with material gains.

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  1. School of Professional Advancement, University of Management and Technology Lahore, Lahore, Pakistan

    Naveed Yazdani

  2. Rector, University of Management and Technology Lahore, Lahore, Pakistan

    Hasan S. Murad

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Yazdani, N., Murad, H.S. Toward an Ethical Theory of Organizing. J Bus Ethics 127, 399–417 (2015). https://doi.org/10.1007/s10551-014-2049-3

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