Fairness in hierarchical and entrepreneurial firms

Abstract

Discussions of fairness in the workplace are built on assumptions about the organization of work and about fairness. Writers on business ethics have not appreciated that work is often organized differently in different stages of the life cycle of a firm. In this paper it is argued that the conceptions of fairness applied to a mature firm are often not applicable to a fledgling one. In a mature firm authority and responsibility are typically delegated and divided into specific jobs with relatively rigid boundaries. Thus, it has been argued that fairness in hiring requires specific job descriptions, fairness in remuneration requires standardized and graded salaries, and fairness in due process requires peer review. However, in the formative stages of a corporation, there may be very little differentiation or specialization. There is a continual re-definition of individual tasks through interaction with others as knowledge about products, production, and consumer demand are acquired by trial and error in the marketplace. Fairness takes a different form in this firm. The principle that similar people are to be treated similarly and different people differently can be operationalized in two ways. The mature firm typically focuses on differences; a fledgling, entrepreneurial one on similarities. How some of the issues of fairness in hiring, pay, and due process need to be reformulated once they are placed within the context of an entrepreneurial firm with its emphasis on similarity are then discussed.