Journal of Business Ethics

, Volume 53, Issue 4, pp 365–370 | Cite as

The Impact of Banality, Risky Shift and Escalating Commitment on Ethical Decision Making

  • Robert W. Armstrong
  • Robert J. Williams
  • J. Douglas Barrett
Article

Abstract

This paper posits that organizational variables are the factors that lead to the moral decline of companies like Enron and Worldcom. The individuals involved created environments within the organizations that precipitated a spiral of unethical decision-making. It is proposed that at the executive level, it is the organizational factors associated with “power” and decision-making that have the critical influence on moral and ethical behavior. The study has used variables that were deemed to be surrogate measures of the ethical violations (OSHA and EPA violations), the risky shift phenomenon (executive team size), banality of wrong-doing (reputation score for firms) and escalating commitment (tenure with the firm/change in revenue for declining firms). The research found that there were small correlations between ethical violations and the three organizational variables.

ethics Worldcom Enron banality risky-shift escalating commitment ethical decision making 

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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Robert W. Armstrong
    • 1
  • Robert J. Williams
    • 2
  • J. Douglas Barrett
    • 3
  1. 1.College of Business, Department of MarketingUniversity of North AlabamaFlorenceU.S.A
  2. 2.Department of Management, Langdale College of BusinessValdosta State UniversityValdostaU.S.A
  3. 3.College of Business, Department of Economics and FinanceUniversity of North AlabamaFlorenceU.S.A

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