Organizational Ethics, Duty of Care, and Whistleblowing

Personal Differences and Organizational Ethics

Personal differences and preferences can impact organizational ethics because the leadership of a firm often dictates ethical standards for the remaining employees. For example, the ethical culture at Wisson is partly shaped by the actions of Waters. The preferences of different managers with respect to ethical standards impact both the organization's written ethical code and its ethical norms. Within each unit of the organization, ethics can differ further based on the personal differences and preferences of the unit's manager.

Organizational ethics is heavily influenced by the key personalities within the company. In this case, the leadership of Wisson above Waters appears to have allowed a particular culture to unfold within his units, and it is within the context of that culture that the ethical breaches have occurred. The dynamic is not simply that Waters lacks ethical standards — the organization as a whole does not support a strong ethical climate. Valerie fears for her job while Waters takes bribes. The culture that would allow this situation is one fostered by ownership, either through indifference or because ownership actively promotes such behavior. The written code of ethics is not enforced with sufficient rigor to have a meaningful impact on the organizational culture, leaving only the personal preferences of senior managers as the key factor shaping ethics at Wisson.

The Role of Policies and Procedures in Ethical Enforcement

As the Wisson case demonstrates, policies and procedures alone do not ensure that ethical standards are met. What policies and procedures do is provide a framework for members of the organization to understand the ethical standards the organization wishes to uphold. Further, policies and procedures should reinforce this ethical code.

It is important that policies outline expected norms of behavior first and foremost. Policies are the written manifestation of a corporation's ethical standards — at Wisson, for example, the policy against bribery is clear. The role of procedures is to modify behavior in such a way that policies are successfully met. Procedures provide frameworks for the enforcement of ethical standards, including investigation mechanisms, whistleblower protections, and punishment procedures for guilty parties. At Wisson, the policy against bribery exists but is not supported by any investigation or enforcement mechanisms. The company therefore has very few methods at its disposal to enforce its desired ethical culture and, at best, can do so in an ad hoc manner.

Policies and procedures serve as a support to the leadership element. While personal preferences shape organizational ethics broadly and inspire employees to uphold ethical standards, policies and procedures are what allow those preferences to become an ingrained component of the organization's ethical culture. Procedures in particular are critical because they have the capacity to specifically alter behavior within the organization. The actions of lower-level managers will often trickle through the organization. For example, Valerie considers that she faces an ethical dilemma and may choose to ignore the bribery, which means that Waters effectively dictates the ethics of the organization. However, procedures such as whistleblower protections and investigative processes would allow her to transcend her supervisor's ethical standards and enforce the organization's own standards. Conversely, the current absence of such procedures may indicate that ownership does not genuinely hold ethical standards and views the written policy as something for show — not something to be followed up on with any rigor.