Advertisement

Journal of Business Ethics

, Volume 28, Issue 1, pp 43–58 | Cite as

Reinforcing Ethical Decision Making Through Organizational Structure

  • Harvey S. JamesJr.
Article

Abstract

In this paper I examine how the constituent elements of a firm's organizational structure affect the ethical behavior of workers. The formal features of organizations I examine are the compensation practices, performance and evaluation systems, and decision-making assignments. I argue that the formal organizational structure, which is distinguished from corporate culture, is necessary, though not sufficient, in solving ethical problems within firms. At best the formal structure should not undermine the ethical actions of workers. When combined with a strong culture, however, the organizational structure may be sufficient in promoting ethical conduct. While helpful, ethics training and corporate codes are neither necessary nor sufficient in promoting ethical behavior within firms.

culture ethical dilemmas incentive systems organizational ethics 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Adams, S.: 1995, ‘Manager's Journal: The Dilbert Principle’, The Wall Street Journal(May), pp. 22, A18.Google Scholar
  2. Badaracco, J. L. and A. P. Webb: 1995, ‘Business Ethics: A View from the Trenches’, California Management Review 37(2), pp. 8–25.Google Scholar
  3. Baucus, M. S. and J. P. Near: 1991, ‘Can Illegal Corporate Behavior Be Predicted? An Event History Analysis’, Academy of Management Journal 34(1), pp. 9–36.Google Scholar
  4. Baumhart, R. C.: 1961, ‘How Ethical Are Businessmen?’, Harvard Business Review( July-August), p. 6.Google Scholar
  5. Boisjoly, R. P., E. F. Curtis and E. Mellican: 1989, ‘Roger Boisjoly ad the Challenger Disaster: The Ethical Dimensions’, Journal of Business Ethics 8 (April), pp. 217–230.Google Scholar
  6. Brenner, S. N. and E. A. Molander: 1977, ‘Is the Ethics of Business Changing’, Harvard Business Review( January-February), pp. 52–71.Google Scholar
  7. Brickley, J. A., C. W. Smith, Jr. and J. L. Zimmerman: 1994, ‘Ethics, Incentives, and Organizational Design’, Journal of Applied Corporate Finance 7(2), pp. 20–30.Google Scholar
  8. Brickley, J. A., C. W. Smith, Jr. and J. L. Zimmerman: 1997, Managerial Economics and Organizational Architecture, chapter 2 (Irwin), pp. 14–35.Google Scholar
  9. Brien, A.: 1998, ‘Professional Ethics and the Culture of Trust’, Journal of Business Ethics 17, pp. 391–409.Google Scholar
  10. Brooks, L. J.: 1989, ‘Corporate Ethical Performance: Trends, Forecasts and Outlooks’, Journal of Business Ethics 8(1), pp. 31–38.Google Scholar
  11. Carroll, A. B.: 1975, ‘Managerial Ethics’, Business Horizons(April), pp. 75–80.Google Scholar
  12. Carroll, A. B.: 1978, ‘Linking Business Ethics to Behavior in Organizations’, Advanced Management Journal 43(3), pp. 4–11.Google Scholar
  13. Chen, A. Y. S., R. B. Sawyers and P. F. Williams: 1997, ‘Reinforcing Ethical Decision Making Through Corporate Culture’, Journal of Business Ethics 16, pp. 855–865.Google Scholar
  14. Connell, E. S.: 1984, Son of the Morning Star(Harper Collins, New York).Google Scholar
  15. Quoted in James E. McClure and T. Norman Van Cott: 1994, ‘Public Choice at the Little Bighorn’, Journal of Economic Education 25(2), p. 136.Google Scholar
  16. Crandall, W., J. A. Parnell and S. Shadow: 1996, 'Does Teaching Business Ethics Really Make a Difference?, Central Business Review 15(1), pp. 16–19.Google Scholar
  17. Cressey, D. R. and C. A. Moore: 1983, ‘Managerial Values and Corporate Codes of Ethics’, California Management Review 25(4), pp. 53–77.Google Scholar
  18. Gautschi, F. H. and T. M. Jones: 1998, ‘Enhancing the Ability of Business Students to Recognize Ethical Issues: An Empirical Assessment of the Effectiveness of a Course in Business Ethics’, Journal of Business Ethics 17, pp. 205–216.Google Scholar
  19. Gioia, D. A.: 1992, ‘Pinto Fires and Personal Ethics: A Script Analysis of Missed Opportunities’, Journal of Business Ethics 11, pp. 379–389.Google Scholar
  20. Hegarty, W. H. and H. P. Sims, Jr.: 1978, ‘Some Determinants of Unethical Decision Behavior: An Experiment’, Journal of Applied Psychology 63(4), pp. 451–457.Google Scholar
  21. Hegarty, W. H. and H. P. Sims, Jr.: 1979, ‘Organizational Philosophy, Policies, and Objectives Related to Unethical Decision Behavior: A Laboratory Experiment’, Journal of Applied Psychology 64(3), pp. 331–338.Google Scholar
  22. Jackal, R.: 1988, Moral Mazes: The World of Corporate Managers(Oxford University Press, New York).Google Scholar
  23. Jansen, E. and M. A. Von Glinow: 1985, ‘Ethical Ambivalence and Organizational Reward Systems’, Academy of Management Review 10(4), pp. 814–822.Google Scholar
  24. Jensen, M.C.: 1983, ‘Organizational Theory and Methodology’, Accounting Review 50(April), pp. 319–334.Google Scholar
  25. Jensen, M. C. and W. H. Meckling: 1992, ‘Specific and General Knowledge, and Organizational Structure’, in Les Werin and Hans Wijkander (eds.), Contract Economics(Blackwell, Cambridge, MA), pp. 251–281.Google Scholar
  26. Jones, T. M., and L. V. Ryan: 1998, ‘The Effect of Organizational Forces on Individual Morality: Judgment, Moral Approbation, and Behavior’, Business Ethics Quarterly 8(3), pp. 431–445.Google Scholar
  27. Kerr, S.: 1975, ‘On the Folly of Rewarding A While Hoping For B’, Academy of Management Journal 18, pp. 769–783.Google Scholar
  28. Kidder, R. M.: 1995, How Good People Make Tough Choices: Resolving the Dilemmas of Ethical Living(William Morrow, New York).Google Scholar
  29. Kohlberg, L.: 1969, ‘Stage and Sequence: The Cognitive-Development Approach to Socialization’, in D. A. Goslin (ed.), Handbook of Socialization Theory and Research(Rand-McNally, Chicago), pp. 347–480.Google Scholar
  30. Kohlberg, L.: 1976, ‘Moral Stages and Moralization: The Cognitive-Development Approach’, in T. Lickona (ed.), Moral Development and Behavior:(Holt, Rinehartand Winston, New York), pp. 31–53.Google Scholar
  31. Kreps, D. M.: 1990, ‘Corporate Culture and Economic Theory’, in James Alt and Kenneth Shepsle (eds.), Perspectives on Positive Political Economy(Cambridge University Press, New York).Google Scholar
  32. Laczniak, G. R.: 1983, ‘Business Ethics: A Manager's Primer’, Business( January-March), pp. 23–29.Google Scholar
  33. Laczniak, G. R. and E. J. Inderrieden: 1986, ‘The Influence of Stated Organizational Concern Upon Ethical Decision Making’, Journal of Business Ethics 6, pp. 297–307.Google Scholar
  34. Lindsay, R. M., L. M. Lindsay and V. B. Irvine: 1996, ‘Instilling Ethical Behavior in Organizations: A Survey of Canadian Companies’, Journal of Business Ethics 15, pp. 393–407.Google Scholar
  35. McCabe, D. L.: 1992, ‘The Influence of Situational Ethics Among College Students’, Journal of Sociological Inquiry 63, pp. 365–374.Google Scholar
  36. McClure, J. E. and T. N. Van Cott: 1994, ‘Public Choice at the Little Bighorn’, Journal of Economic Education 25(2), pp. 135–136.Google Scholar
  37. Metzger, M., D. R. Dalton and J. W. Hill: 1993, ‘The Organization of Ethics and the Ethics of Organizations: The Case for Expanded Organizational Ethics Audits’, Business Ethics Quarterly 3(1), pp. 27–43.Google Scholar
  38. Meyer, J. W. and B. Rowan: 1977, ‘Institutionalized Organizations: Formal Structure as Myth and Ceremony’, American Journal of Sociology 83(2), pp. 340–363.Google Scholar
  39. Middle Managers Most Likely to Be Unethical: 1987, Management Accounting(December), p. 3.Google Scholar
  40. Miller, G. J.: 1992, Managerial Dilemmas: The Political Economy of Hierarchy(Cambridge University Press, New York).Google Scholar
  41. Minkler, A. P.: 1993, ‘Knowledge and Internal Organization’, Journal of Economic Behavior and Organization 21, pp. 17–30.Google Scholar
  42. Murphy, P.: 1988, ‘Implementing Business Ethics’, Journal of Business Ethics 7, pp. 907–915.Google Scholar
  43. Murray, E. J.: 1964, Motivation and Emotion(Prentice-Hall, Englewood Cliffs, NJ).Google Scholar
  44. Nash, L. L.: 1990, Good Intentions Aside: A Manager's Guide to Resolving Ethical Problems(Harvard Business School Press, Boston, MA).Google Scholar
  45. Newstrom, J. W. and W. A. Ruch: 1975, ‘The Ethics of Management and the Management of Ethics’, MSU Business Topics(Winter), pp. 29–37.Google Scholar
  46. Paine, L. S.: 1994, ‘Managing for Organizational Integrity’, Harvard Business Review(March/April), pp. 106–117.Google Scholar
  47. Reidenbach, R. E. and D. P. Robin: 1991, ‘A Conceptual Model of Corporate Moral Development’, Journal of Business Ethics 10, pp. 273–284.Google Scholar
  48. Rich, A. J., C. S. Smith and P. H. Mihalek: 1990, ‘Are Corporate Codes of Conduct Effective?’, Management Accounting(September), pp. 34–35.Google Scholar
  49. Robin, D., M. Gallourakis, F. David and T. Moritz: 1989, ‘A Different Look at Codes of Ethics’, Business Horizons 32( January/February), pp. 66–73.Google Scholar
  50. Schein, E. H.: 1992, Organizational Culture and Leadership, second edition ( Jossey-Bass, San Francisco, CA).Google Scholar
  51. Shaw, W. H.: 1996, ‘Case 1.2: The A7D Affair’, Business Ethics, second edition (Wadsworth Publishing Company, Belmont, CA), pp. 37–41.Google Scholar
  52. Sims, R. R: 1992, ‘The Challenge of Ethical Behavior in Organizations’, Journal of Business Ethics 11, pp. 505–513.Google Scholar
  53. Stark, A.: 1993, ‘What's the Matter with Business Ethics?’, Harvard Business Review(May-June), pp. 38–48.Google Scholar
  54. Trevino, L. K.: 1990, ‘A Cultural Perspective on Changing and Developing Organizational Ethics’, Research in Organizational Change and Development 4, pp. 195–230.Google Scholar
  55. Trevino, L. K., K. D. Butterfield and D. L. McCabe: 1998, ‘The Ethical Context in Organizations: Influences on Employee Attitudes and Behaviors’, Business Ethics Quarterly 8(3), pp. 447–476.Google Scholar
  56. Trevino, L. K. and K. A. Nelson: 1995, Managing Business Ethics: Straight Talk About How To Do It Right( J. Wiley & Sons, New York).Google Scholar
  57. Vaughan, D.: 1983, Controlling Unlawful Organizational Behavior: Social Structure and Corporate Misconduct (University of Chicago Press, Chicago).Google Scholar
  58. Victor, B. and J. B. Cullen: 1988, ‘The Organizational Bases of Ethical Work Climates’, Administrative Science Quarterly 33, pp. 101–125.Google Scholar
  59. Vidaver-Cohen, D.: 1998, ‘Motivational Appeal in Normative Theories of Enterprise’, Business Ethics Quarterly 8(3), pp. 385–407.Google Scholar
  60. Waters, J. A. and F. Bird: 1986, ‘Everyday Moral Issues Experienced by Managers’, Journal of Business Ethics 5(October), pp. 373–384.Google Scholar
  61. Waters, J. A. and F. Bird: 1987a, ‘The Nature of Managerial Moral Standards’, Journal of Business Ethics 6( January), pp. 1–13.Google Scholar
  62. Waters, J. A. and F. Bird: 1987b, ‘The Moral Dimension of Organiz ational Culture’, Journal of Business Ethics 6( January), pp. 15–22.Google Scholar
  63. White, B. J. and R. B. Montgomery: 1980, ‘Corporate Codes of Conduct’, California Management Review 23, pp. 690–697.Google Scholar
  64. Worrell, D. L., W. E Stead, J. G. Stead and J. B. Spalding: 1985, ‘Unethical Decisions: The Impact of Reinforcement Contingencies and Managerial Philosophies’, Psychological Reports 57, pp. 355–365.Google Scholar

Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Harvey S. JamesJr.
    • 1
  1. 1.Department of EconomicsUniversity of HartfordWest HartfordU.S.A.

Personalised recommendations