How personal can ethics get: Hellriegel and Slocum

¶ … Personal Can Ethics Get?

Discuss fully how personal differences and preferences can impact organizational ethics. The scholarly journal Organizational Dynamics (Schminke, et al., 2007, p. 173) published a research piece called "The Power of Ethical Work Climates" that delves into the post-Enron corporate accountability legislation called the Sarbanes-Oxley Act (SOX). In referencing SOX Schminke explains that while external regulation plays an important role in "enhancing public confidence" in the business community, formal regulation is insufficient. Ethical violations -- even egregious ethical violations -- are not necessarily caused by overtly greedy people or by "…closet corporate psychopaths" (Schminke, p. 173). Instead of the hitherto mentioned suspects, Schminke (quoting Christopher Bauer of Bauer Ethics) asserts that ethical violations in corporations "…stem from conflicts between established ethical mandates and an individual's personal wishes or values" (p. 173).

In explaining the background for how an individual's personal preferences -- that may differ from the company's desires for that individual -- impact organizational ethics, Ronald R. Sims points to the "psychological contract" that all employees enter into when they are hired (Sims, 1991, p. 495). The psychological contract is a set of "unwritten reciprocal expectations" that exists between the employee and the company that hired that person. The mere fact of hiring that individual establishes "an implicit exchange of beliefs and expectations" regarding the actions of the individual vis-a-vis the organization and "the organization vis-a-vis the individual" (Sims, p. 495). Those expectations include working conditions, job responsibilities, the amount of authority the employer has over the employee "in directing work" (Sims, p. 495).

When that employee believes that the company (or his supervisor) has violated the psychological contract -- because his preference was to have "full autonomy in structuring the workday" only to discover that the supervisor's prerogative is to plan the employee's workday -- things can and do go downhill for the organization (Sims, p. 495). The employee in this instance is not going to achieve the autonomy he expected and hence a "breakdown in communication" will exist between the supervisor and the employee. That breakdown will "increase frustration" and will result in a "failure in mutual understanding…(and emotional responses) in both parties," Sims continues. The psychological contact can be and often is the "central determinant in whether a person behaves ethically" (Sims, p. 495).

In the text Organizational Behavior, the authors point out that there are many sources of personality differences (heredity, culture, family, group membership, life experiences, interdependence of influences) and indeed each of these personality differences does influence one's behavior on the job. Among the personality behaviors that impact workplace dynamics (including self-esteem, introversion / extraversion, locus of control), a very important behavior is related to self-esteem. As the authors point out on page 43, job-searching college students that reported high self-esteem got more job offers, set high goals for themselves, were more satisfied with their search for jobs and "…were more likely to accept a job before graduation than were students with low self-esteem" (Hellriegel, et al., 1989). And persons with a high "internal locus of control (internals) believe that the events in their lives are primarily (but not necessarily totally) the result of their own behavior and actions" (Hellriegel, p. 44). Having a strong sense of self-esteem, and being certain that one's own actions determine outcomes -- those behaviors are likely to be very helpful for employers searching for dependable, stable employees.

TWO: Discuss fully how organizational policies and procedures can impact ethics. It is important to mention at the outset that while corporations with strong codes of ethics -- even corporations that require employees to attend regular ethics training -- do well in strengthening the "organizational culture" they will not necessarily be able to "subsume the importance of the formal structure in affecting the ethics of individuals" (James, 2000, p. 44). Certainly James, assistant professor of economics at the Barney School of Business at the University of Hartford, knows something about students in the field of business education and preparation.

Business students -- when compared to non-business students -- are often "the most willing" to be cheaters, James explains (p. 45). That is true especially when they leave school and become employed in the business world, James continues. Hence, it is reasonable to assume that each person's privately held idea of ethical business behavior -- his or her preference for certain moral values -- is going to be independent from the organizational structure (including organizational ethics that the company preaches and teaches). On page 47 James points out that corporations with "Poorly designed incentive systems…" actually open the possibilities for individuals to exhibit differing approaches to ethics. Managers who are not wise in the ways of establishing "appropriate" incentives for employees "…may observe perverse and unintended actions by some workers" (James, p. 47).

Meantime an empirical study (Worrell, Stead, Stead, and Spalding, 1985) involving 338 students referenced by James shows that individuals whose preference is for unethical behavior have greater opportunities when organizational rewards are not carefully thought out. The study revealed that the "frequency of unethical behavior increases when it is rewarded and decreased when it is not" (James, p. 48). If the expectation among individuals is that unethical conduct will be "tolerated or necessary in order to achieve corporate goals" those individuals will do "bad things," James insists (p. 49).

Marshall Schminke asserts in his article (referenced in the first question) that when a company enforces "rules-based" programs it tends to focus on "preventing, detecting, and punishing violations of rules" (p. 174). Because of the thrust of rules-based programs of ethical matters, individuals tend to be motivated "…to simply attempt to avoid punishment," Schminke writes on page 174. On the other hand, when a company develops a "values-based" approach to company ethics is designed to encourage employees to "hold and act upon ethical aspirations" (Schminke, p. 174). Rather than creating within the community of employees a "…fear of doing something wrong," a values-based ethical strategy encourages employees to "be aware of ethical issues," Schminke continues (p. 174).

Yes, formal ethical programs within an organizational structure do matter, Schminke explains (p. 174), but informal organizational programs are more likely to help suppress and reduce ethical violations by individuals. By strengthening "…their climate for ethics" and by "leveraging the impact of informal ethical norms and systems, broad-based effects of well-managed ethical climate can impact leader behavior, training, and communications systems throughout the organization" (Schminke, p. 174). On page 178 Schminke states that "prudent managers" do not wait around for their employees to reach an agreement on what constitutions ethical behavior within an organization. Rather, Schminke goes on, worthy managers must "…take a proactive stance in creating an environment in which desired ethical norms emerge and flourish" (p. 178).

Some managers in certain companies fail to fully establish policies and procedures vis-a-vis ethics, according to a scholarly article in the Sociological Review (Clegg, et al., 2007, p. 398). Clegg references Cohen, March and Olsen's 1972 "garbage can" theory of company decision-making. In the garbage can approach management only makes decisions about ethics and morality in a "purely random" way (Clegg, p. 398). That is, when problems, solutions, participants and choices "flow around and coincide at a certain point" only then does management take a stand and make important decisions, according to Clegg (p. 398). This is poor management and it takes a toll on the ethical standards (if any) of the company. It also leaves employees without the ethical leadership they depend on. "Like garbage in a can," Clegg explains (p. 398), "yesterday's papers end up stuck to today's dirty Kleenex…" and hence no firm, workable ethical standards are in place. With the garbage can approach, there are no firm ethical principals or policies set out organizationally, and nothing ethically is fully explained to the employees. Rather than a well-thought-out policy that everyone in the company understands and has signed on to, when ethical issues come up there is instead a seat-of-the-pants response from management which is generally incomplete and insufficient.

THREE: Describe fully the ethical dilemmas that Valerie faces. Valerie's first problem has nothing to do with ethics per se. She is not a citizen of the United States so she cannot make decisions that involve the legal and ethical behavior of others without those decisions potentially effecting her in negative ways. The second problem Valerie faces is related to her boss, Waters. Aside from his unethical behavior, Waters is elusive, indifferent to team interaction and clearly he is arrogant. Waters' personality is not a good fit with the staff he is supervising; he is more of a dictator, removed from the day-to-day operations of the company, settled into a tightly guarded position that profits him and leaves others out of the dark behaviors he engages in. Going to him to try to determine why he only uses two perfumers was an waste of Valerie's time. Indeed, her obstinate, arrogant, greedy boss exacerbated the ethical dilemma.

As to Valerie's personal ethical dilemma, the paper jam that led her to view the evidence of Waters' $35,000 monthly kickbacks gave her some very compelling evidence of the skullduggery her boss was engaged in. Therein was her first ethical dilemma: should she remain quiet about this, or should she share this information with others and see what their response will be?