Skip to main content
SpringerLink
Log in

Understanding the Ethical Cost of Organizational Goal-Setting: A Review and Theory Development

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

Goal-setting has become a popular and effective motivational tool, utilized by practitioners and substantiated with decades of empirical research. However, the potential for goal-setting to enhance performance may come at the cost of ethical behavior. I propose a theoretical model linking attributes of goals and goal-setting practices to unethical behavior through two psychological mechanisms – ethical recognition and moral disengagement; and addressing the moderating role of individual differences (e.g., goal-commitment and conscientiousness), as well as the broader organizational ethical context.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Adler P. S., Borys B. 1996. Two Types of Bureaucracy: Enabling and Coercive. Administrative Science Quarterly, 41: 61–89

    Article  Google Scholar 

  • Allison S. T., Messick D. M., Goethals G. R. 1989. On Being Better but not Smarter than Others: The Muhammad Ali Effect. Social Cognition, 7: 275–295

    Google Scholar 

  • Ashforth B. E., Anand V. 2003. The Normalization of Corruption in Organizations. Research in Organizational Behavior 25: 1–52

    Article  Google Scholar 

  • Austin J. T., Vancouver J. B. 1996. Goal Constructs in Psychology: Structure, Process, and Content. Psychological Bulletin, 120: 338–375

    Article  Google Scholar 

  • Bandura A. 1997. Self-Efficacy: The Exercise of Control. New York: Freeman

    Google Scholar 

  • Bandura A. 1999. Moral Disengagement in the Perpetration of Inhumanities. Personality and Social Psychology Review, 3: 193–209

    Article  Google Scholar 

  • Bandura A., Barbaranaelli C., Caprara G. V., Pastorelli C. 1996. Mechanisms of Moral Disengagement in the Exercise of Moral Agency. Journal of Personality and Social Psychology, 71: 364–374

    Article  Google Scholar 

  • Bargh J. A., Chaiken S., Govender R., Pratto F. 1992. The Generality of the Automatic Attitude Activation Effect. Journal of Personality & Social Psychology, 62: 893–912

    Article  Google Scholar 

  • Batson C. D., Thompson E. R., Seuferling G. 1999. Moral Hypocrisy: Appearing Moral to Oneself without being so. Journal of Personality & Social Psychology, 77: 525–537

    Article  Google Scholar 

  • Bersoff D. M. 2001. Why Good People Sometimes do Bad Things: Motivated Reasoning and Unethical Behavior. In J. Dienhart, D. Moberg, R. Duska (eds.), The Next Phase of Business Ethics: Integrating Psychology and Ethics, Vol. 3 (pp. 239–262). New York: JAI Press

    Chapter  Google Scholar 

  • Beu D. S., Buckley M. R. 2004. This War: How the Politically Astute Achieve Crimes of Obedience through the Use of Moral Disengagement. Leadership Quarterly, 15: 551–568

    Article  Google Scholar 

  • Bierbrauer G. 1976. Why did he do it? Attribution of Obedience and the Phenomenon of Dispositional Bias. European Journal of Social Psychology, 9: 67–84

    Article  Google Scholar 

  • Brief A. P., Buttram R. T., Dukerich J. M. 2001. Collective Corruption in the Corporate World: Toward a Process Model. In M. E. Turner (ed.), Groups at Work: Theory and Research (pp. 471–499). Mahwah, NJ: Erlbaum

    Google Scholar 

  • Brief A. P., Dietz J., Cohen R. R., Pugh S. D., Vaslow J. B. 2000. Just Doing Business: Modern Racism and Obedience to Authority as Explanations for Employment Discrimination. Organizational Behavior and Human Decision Processes, 81: 72–97

    Article  Google Scholar 

  • Brief A. P., Dukerich J. M., Brown P. R., Brett J. F. 1996. What’s Wrong with the Treadway Commission Report? Experimental Analyses of the Effects of Personal Values and Codes of Conduct on Fraudulent Financial Reporting. Journal of Business Ethics, 15: 183–198

    Article  Google Scholar 

  • Burnham, D.: 1988, ‹Punish or Perish at IRS,’ Washington Post March 13, C1& C2

  • Campbell J. P., McCloy R. A., Oppler S. H., Sager C. E. 1993. A Theory of Job Performance. In N. Schmidt, W. Borman (eds.), Personnel Selection in Organizations (pp. 35–70). San Francisco: Jossey-Bass

    Google Scholar 

  • Carver C. S., Scheier M. F. 1998. On the Self-Regulation of Behavior. New York, NY: Cambridge University Press

    Google Scholar 

  • Colman J. W. 1987. The Criminal Elite: Understanding White-Collar Crime, 4th edn. New York: St. Martin’s Press

    Google Scholar 

  • Cotton J. L., Vollrath D. A., Froggartt K. L. Lengnick-Hall M. L., et al. 1988. Employee Participation: Diverse Forms and Different Outcomes. Academy of Management Review, 13: 8–22

    Article  Google Scholar 

  • Cummings L. 1965. Organizational climates for creativity. Academy of Management Journal, 8: 220–227

    Article  Google Scholar 

  • Dachler H. P., Wilpert B. 1978. Conceptual Dimensions and Boundaries of Participation in Organizations: A Critical Evaluation. Administrative Science Quarterly, 23: 1–35

    Article  Google Scholar 

  • Disheau, D.: 1992, June 23, Sears Admits Mistakes at Auto Shops; Overhauling it’s Sales System. The Associated Press Newswire

  • Durkerich J. M., Waller M. J., George E., Huber G. P. 2000. Moral Intensity and Managerial Problem Solving. Journal of Business Ethics, 24: 29–38

    Article  Google Scholar 

  • Dweck C. S. 1989. Motivation. In A. Lesgold, R. Glaser (eds.), Foundations for a Psychology of Education. Hillsdale, NJ: Erlbaum

    Google Scholar 

  • Eichenwald, K.: 2002a, ‹Paid Huge Bonuses in ‹01; Experts See a Motive for Cheating,’ The New York Times March 1, A1

  • Eichenwald, K.: 2002b, ‹Andersen Guilty in Effort to Block Inquiry on Enron,’ The New York Times. June 16, A1

  • Elsbach K. D. 2001. The Architecture of Legitimacy: Constructing Accounts of Organizational Controversies. In J. T. Jost, B. Major (eds.), The Psychology of Legitimacy: Emerging Perspectives on Ideology, Justice, and Intergroup Relations (pp. 391–415). New York, NY: Cambridge University Press

    Google Scholar 

  • Epley N., Dunning D. 2000. Feeling “Holier than thou”: Are Self-serving Assessments Produced by Errors in Self- or Social Prediction? Journal of Personality and Social Psychology, 79: 861–875

    Article  Google Scholar 

  • Erez M. 1986. The Congruence of Goal-Setting Strategies with Socio-Cultural Values and its Effect on Performance. Journal of Management, 12: 83–90

    Article  Google Scholar 

  • Erez M., Earley P. C., Hulin C. L. 1985. The Impact of Participation on Goal Acceptance and Performance: A Two-Step Model. Academy of Management Journal, 28: 50–66

    Article  Google Scholar 

  • Ferrell O. C., Gresham L. C. 1985. A Contingency Framework for Understanding the Ethical Decision-making in Marketing. Journal of Marketing, 49: 87–96

    Article  Google Scholar 

  • Festinger L. 1957. A Theory of Cognitive Dissonance. Stanford, CA: Stanford University Press

    Google Scholar 

  • Fiske S. T., Taylor S. E. 1991. Social Cognition, 2nd edn. Massachusetts: McGraw-Hill

    Google Scholar 

  • Friedrich C. J. 1937. Constitutional Government and Politics. New York: Harper & Bros

    Google Scholar 

  • Gioia D. A. 1992. Pinto fires and Personal Ethics: A Script Analysis of Missed Opportunities. Journal of Business Ethics, 11: 379–389

    Article  Google Scholar 

  • Greenberg J. 1998. The Cognitive Geometry of Employee Theft: Negotiating “the line” between Taking and Stealing. In R. W. Griffin, A. O’Leary-Kelly, J. M. Collins (eds.), Dysfunctional Behavior in Organizations, Vol. 2 (pp. 147–193). Stamford, CT: JAI Press

    Google Scholar 

  • Greenberg J. 2002. Who Stole the Money, and When? Individual and Situational Determinants of Employee Theft. Organizational Behavior and Human Decision Processes, 89: 985–999

    Article  Google Scholar 

  • Greenspan, A.: July 16, 2002. Testimony of Chairman Alan Greenspan Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. Federal Reserve Board’s Semiannual Monetary Policy Report to the Congress

  • Higgins T. E. 1987. Self-Discrepancy: A Theory Relating Self and Affect. Psychological Review, 94: 363–386

    Article  Google Scholar 

  • Hunt, S. D. and S. Vitell: 1986. ‹A General Theory of␣Marketing Ethics,’ Journal of Macro Marketing Spring, 5–16

  • Jackall R. 1988. Moral Mazes: The World of Corporate Managers. New York: Oxford

    Google Scholar 

  • Jones T. M. 1991. Ethical Decision-Making by Individuals in Organizations: An Issue Contingent Model. Academy of Management Review, 16: 366–395

    Article  Google Scholar 

  • Kahn W. A. 1990. Toward an Agenda for Business Ethics Research. Academy of Management Review, 15: 311–328

    Article  Google Scholar 

  • Kanfer R., Ackerman P. L. 1989. Motivation and Cognitive Abilities: An Integration/Aptitude-Treatment Interaction Approach to Skill Acquisition. Journal of Applied Psychology, 74: 657–690

    Article  Google Scholar 

  • Kerr S. 1975. On the Folly or Rewarding A While Hoping for B. Academy of Management Journal, 18: 769–783

    Article  Google Scholar 

  • Klein H. J., Wesson M. J., Hollenbeck J. R., Alge B. J. 1999. Goal Commitment and the Goal-Setting Process: Conceptual Clarification and Empirical Synthesis. Journal of Applied Psychology, 84: 885–896

    Article  Google Scholar 

  • Klein H. J., Wright P. M. 1994. Antecedents of Goal Commitment: An Empirical Examination of Personal and Situational Factors. Journal of Applied Social Psychology, 24: 95–114

    Article  Google Scholar 

  • Latham G. P. 1986. Job Performance and Appraisal. In C. L. Cooper, I. T. Robertson (eds.), International Review of Industrial and Organizational Psychology. Chichester, England: Wiley Ltd

    Google Scholar 

  • Latham G. P. 2001. The Reciprocal Effects of Science on Practice: Insights from the Practice and Science of Goal-setting. Canadian Psychology, 42: 1–11

    Article  Google Scholar 

  • Latham G. P., Erez M., Locke E. A. 1988. Resolving Scientific Disputes by the Joint Design of Crucial Experiments by the Antagonists: Application to the Erez-Latham Dispute Regarding Participation in Goal Setting. Journal of Applied Psychology, 73: 753–772

    Article  Google Scholar 

  • Latham G. P., Marshall H. A. 1982. The Effects of Self-Set, Participatively Set and Assigned Goals on the Performance Of Government Employees. Personnel Psychology, 35: 399–404

    Article  Google Scholar 

  • Latham G. P., Steele T. P. 1983. The Motivational Effects of Participation versus Goal Setting on Performance. Academy of Management Journal, 26: 406–417

    Article  Google Scholar 

  • Latham G. P., Steele T. P., Saari L. M. 1982. The Effects of Participation and Goal Difficulty on Performance. Personnel Psychology, 35: 677–686

    Article  Google Scholar 

  • Latham G. P., Wexley K.N. 1981. Increasing Productivity through Performance Appraisal. Reading, MA: Addison-Wesley

    Google Scholar 

  • Latham G. P., Winters D. C., Locke E. A. 1994. Cognitive and Motivational Effects of Participation: A Mediator Study. Journal of Organizational Behavior, 15: 49–63

    Article  Google Scholar 

  • Leana C. R., Locke E. A., Schweiger D. M. 1990. Fact and Fiction in Analyzing Participation Research: A Critique of Cotton, Vellrath, Froggatt, Lengnick-Hall, and Jennings. Academy of Management Review, 15: 137–147

    Article  Google Scholar 

  • Locke E. A., Latham G. P. 1984. Goal Setting: A Motivational Technique that Works. Englewood Cliffs, NJ: Prentice Hall

    Google Scholar 

  • Locke E. A., Latham G. P. 1990. A Theory of Goal Setting and Task Performance. Englewood Cliffs, NJ: Prentice Hall

    Google Scholar 

  • Locke E. A., Schweiger D. M. 1979. Participation in Decision-making: One More Look. In B. M. Staw (ed.), Research in Organizational Behavior, Vol. 1 (pp. 265–339). Greenwich, CT: JAI Press

    Google Scholar 

  • Locke E. A., Shaw K. N., Saari L. M., Latham G. P. 1981. Goal-setting and Task Performance: 1969–1980. Psychological Bulletin, 90: 125–152

    Article  Google Scholar 

  • Loe T. W., Ferrell L., Mansfield P. 2000. A Review of Empirical Studies Assessing Ethical Decision-making in Business. Journal of Business Ethics, 25: 185–204

    Article  Google Scholar 

  • Ludwig T. D., Geller E. S. 1997. Assigned versus Participative Goal Setting and Response Generalization: Managing Injury Control among Professional Pizza Deliverers. Journal of Applied Psychology, 82: 253–261

    Article  Google Scholar 

  • Mento A. J., Steel R. P., Karren R. J. 1987. A Meta-analytic Study of the Effects of Goal-Setting on Task Performance: 1966–1984. Organizational Behavior and Human Decision Processes, 39: 52–83

    Article  Google Scholar 

  • Milgrim, S. 1974. Obedience to Authority: An Experimental View. New York: Harper & Row

    Google Scholar 

  • Miller K. I., Monge P. R. 1986. Participation, Satisfaction and Productivity: A Meta Analytic Review. Academy of Management Journal, 29: 727–753

    Article  Google Scholar 

  • Minor W. W. 1981. Techniques of Neutralization: A Reconceptulaization and Empirical Examination. Journal of Research in Crime and Delinquency, 18: 295–318

    Article  Google Scholar 

  • Mitchell R. K. 1997. Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. Academy of Management Review, 22: 853–887

    Article  Google Scholar 

  • Mitchell T. R. 1973. Motivation and Participation: An Integration. Academy of Management Journal, 16: 670–679

    Article  Google Scholar 

  • Moon H. 2001. The Two Faces of Conscientiousness: Duty and Achievement Striving in Escalation of Commitment Dilemmas. Journal of Applied Psychology, 86: 535–540

    Article  Google Scholar 

  • O’Fallon M. J., Butterfield K. D. 2005. A Review of the Empirical Ethical Decision-Making Literature: 1996–2003. Journal of Business Ethics, 59: 375–413

    Article  Google Scholar 

  • Rest J. R. 1986. Moral Development: Advances in Research and Theory. New York: Praeger

    Google Scholar 

  • Robin D. P., Reidenbach R. E., Forrest P. J. 1996. The Perceived Importance of an Ethical Issue as an Influence on the Ethical Decision-making of Ad Managers. Journal of Business Research, 35: 17–28

    Article  Google Scholar 

  • Rothkopf E. Z., Billington M. J. 1979. Goal-Guided Learning from Text: Inferring a Descriptive Processing Model from Inspection Times and Eye Movements. Journal of Educational Psychology, 71: 310–327

    Article  Google Scholar 

  • Scott M. B., Lyman S. M. 1968. Accounts. American Sociological Review, 33: 46–62

    Article  Google Scholar 

  • Schweitzer M. E., Ordóñez L., Douma B. 2004. Goal-Setting as a Motivator of Unethical Behavior. Academy of Management Journal, 47: 422–433

    Article  Google Scholar 

  • Shalley C. E., Oldham G. R., Porac J. F. 1987. Effects of Goal Difficulty, Goal-Setting Method, and Expected External Evaluation on Intrinsic Motivation. Academy of Management Journal, 30: 553–563

    Article  Google Scholar 

  • Shah J. Y., Friedman R., Kruglanski A. W. 2002. Forgetting all Else: On the Antecedents and Consequences of Goal Shielding. Journal of Personality and Social Psychology, 83: 1261–1280

    Article  Google Scholar 

  • Shah J. Y., Kruglanski A. W. 2002. Priming against your Will: How Goal Pursuit is Affected by Accessible Alternatives. Journal of Experimental Social Psychology, 38: 368–383

    Article  Google Scholar 

  • Simon H. A. 1945. Administrative Behavior. New York: The Free Press

    Google Scholar 

  • Singhapakdi A., Vitell S. J., Kraft K. L. 1996. Moral Intensity and Ethical Decision-Making of Marketing Professionals. Journal of Business Research, 36: 245–255

    Article  Google Scholar 

  • Skarlicki D. P., Folger R. 1997. Retaliation in the Workplace: The Roles of Distributive, Procedural, and Interactional Justice. Journal of Applied Psychology, 82: 434–443

    Article  Google Scholar 

  • Staw B. M., Boettger R. D. 1990. Task Revision: A Neglected Form of Work Performance. Academy of Management Journal, 33: 534–559

    Article  Google Scholar 

  • Stevenson, R. W.: 1992, ‹Sears Ducks, Then Tries to Cover,’ The New York Times June 17, D1

  • Strauss G. 1982. Workers Participation in Management: An International Perspective. Research in Organizational Behavior, 4: 173–265

    Google Scholar 

  • Street M. D., Douglas S. C., Geiger S. W., Martinko M. J. 2001. The Impact of Cognitive Expenditure on the Ethical Decision-Making Process: The Cognitive Elaboration Model. Organizational Behavior and Human Decision Processes, 100: 29–57

    Google Scholar 

  • Sykes G., Matza D. 1957. Techniques of Neutralization: A Theory of Delinquency. American Sociological Review, 22: 664–670

    Article  Google Scholar 

  • Tenbrunsel A. E., Messick D. M. 1999. Sanctioning Systems, Decision Frames, and Cooperation. Administrative Science Quarterly, 44: 684–707

    Article  Google Scholar 

  • Tenbrunsel A. E., Wade-Benzoni K. A., Messick D. M., Bazerman M. H. 2000. Understanding the Influence of Environmental Standards on Judgments and Choices. Academy of Management Journal, 43: 854–866

    Article  Google Scholar 

  • Tetlock P. E., Skitka L., Boettger R. 1989. Social and Cognitive Strategies for Coping with Accountability Conformity, Complexity, and Bolstering. Journal of Personality and Social Psychology, 57: 632–640

    Article  Google Scholar 

  • Trevino L. K. 1986. Ethical Decision-Making in Organizations: A Person-Situation Interactionist Model. Academy of Management Review, 11: 601–617

    Article  Google Scholar 

  • Trevino L. K., Butterfield K. D., McCabe D. L. 2001. The Ethical Context in Organizations: Influences on Employee Attitudes, Behaviors. In J.␣Dienhart, D. Moberg, R. Duska (eds.), The Next Phase of Business Ethics: Integrating Psychology and Ethics, Vol. 3 (pp. 301–340). New York: JAI Press

    Google Scholar 

  • Trevino L. K., Youngblood S. A. 1990. Bad Apples in Bad Barrels: A Causal Analysis of Ethical Decision-making Behavior. Journal of Applied Psychology, 75: 378–385

    Article  Google Scholar 

  • Umphress, E., K. See, A. Barsky, C. Gogus, L. Ren and A. Coleman: 2005, ‹Be Careful What you Wish for: Goals Influencing Ethical Behavior in Organizations’, Symposium Presented at the 65th Annual Conference of the Academy of Management, Honolulu, Hawaii

  • Vaughan D. 1992. The Macro-Micro Connection in White-Collar Crime Theory. In K. Schlegel, D. Weisburd (eds.), White-Collar Crime Reconsidered (pp. 124–145). Boston: Northeastern University Press

    Google Scholar 

  • Velasquez, M. G. and C. Rosankowski: 1985, Ethics: Theory and Practice (Englewood cliffs, NJ, Prentice-Hall)

  • Victor B., Cullen J. 1988. The Organizational Bases of Ethical Work Climates. Administrative Science Quarterly, 33: 101–125

    Article  Google Scholar 

  • Vidaver-Cohen D. 1998. Moral Climate in Business Firms: A Conceptual Framework for Analysis and Change. Journal of Business Ethics, 17: 1211–1226

    Article  Google Scholar 

  • Wagner J. A. 1994. Participation’s Effects on Performance and Satisfaction: A Reconsideration of the Research Evidence. Academy of Management Review, 19: 312–330

    Article  Google Scholar 

  • Wood R. E., Locke E. A. 1987. The Relation of Self-efficacy and Grade Goals to Academic Performance. Educational and Psychological Measurement, 47: 1013–1024

    Article  Google Scholar 

  • Wright P. M., George J. M., Farnsworth S. R., McMahan G. C. 1993. Productivity and Extra-Role Behavior: The Effects of Goals and Incentives on Spontaneous Helping. Journal of Applied Psychology, 78: 374–381

    Article  Google Scholar 

  • Yeager, P. C. 1986. Analyzing Corporate Offenses: Progress and Prospects. In J. Post (ed.), Research in Corporate Social Performance and Policy, Vol. 8 (pp. 93–120). Greenwich, CT: JAI

    Google Scholar 

  • Yukl G. A., Latham G. P. 1978. Interrelationships among Employee Participation, Individual Differences, Goal Difficulty, Goal Acceptance, Goal Instrumentality, and Performance. Personnel Psychology, 31: 305–323

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management, University of Melbourne, 5th Floor Babel Building, Parkville, VIC, 3010, Australia

    Adam Barsky

Authors
  1. Adam Barsky
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Adam Barsky.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Barsky, A. Understanding the Ethical Cost of Organizational Goal-Setting: A Review and Theory Development. J Bus Ethics 81, 63–81 (2008). https://doi.org/10.1007/s10551-007-9481-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-007-9481-6

Keywords

Search

Navigation