Management Ethics
by
Linda K. Treviño
  • LAST REVIEWED: 06 July 2020
  • LAST MODIFIED: 30 November 2015
  • DOI: 10.1093/obo/9780199846740-0005

Introduction

Behavioral ethics in organizations refers to the social scientific study of ethical and unethical decision making and behavior in organizational settings. The field is also sometimes referred to as organizational ethics to highlight the focus on behavior in organizational context. The emphasis on social scientific study differentiates behavioral ethics in organizations from the long-standing philosophical study of ethics more broadly or as it is applied to the business context. The latter focuses on normative questions about what is the “right” thing to do when facing a situation with moral overtones. While acknowledging overlap with these normative questions, behavioral ethics in organizations is concerned with understanding and predicting what people actually think and do in morally charged situations in organizations (rather than prescribing what they should do). Within behavioral ethics in organizations, the types of behavior studied include unethical behavior (defined as behavior that is contrary to accepted moral norms in society, e.g., cheating, lying, stealing), extraordinary ethical behavior that goes above and beyond moral minimums (e.g., charitable giving, whistle-blowing), and more routine ethical behavior that meets minimum moral standards and is not unethical (e.g., honesty). Given some of the challenges inherent in studying unethical behavior, much research has focused on intentions only. But as the field has developed attention has focused more on the study of behavior.

Textbooks

Two types of business ethics textbooks exist. The predominant type is written by a philosopher. It introduces a series of normative ethical decision-making frameworks that have arisen from long-standing philosophical traditions and then gives students practice applying those frameworks to cases. Relatively fewer textbooks exist in the organizational ethics realm, and given the newness of the field, no standard textbook approach has developed. Two prominent organizational ethics texts are Ferrell, et al. 2014 and Treviño and Nelson 2014.

  • Ferrell, O. C., John Fraederich, and Linda Ferrell. Business Ethics: Ethical Decision Making and Cases. 10th ed. Stamford, CT: Cengage Learning, 2014.

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    This text begins with an overview of the importance and development of business ethics in the context of stakeholder relationships and corporate social responsibility. It then identifies emerging business ethics issues, covers the institutionalization of business ethics in organizations, and explains the ethical decision-making process, including individual and organizational factors. Finally, it focuses on business ethics in a global environment. Multiple cases are offered to help with application of course concepts.

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  • Treviño, Linda Klebe, and Katherine A. Nelson. Managing Business Ethics: Straight Talk about How to Do It Right. 6th ed. Hoboken, NJ: Wiley, 2014.

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    This text is based in the theory and research supporting organizational ethics. In addition to a chapter on ethical decision-making frameworks, it includes material on ethical leadership, ethical culture, and the psychology of ethical decision making. The focus is on managers becoming more ethically aware, making better ethical decisions, and guiding others in an ethical direction. It also demonstrates how “prescriptive” decision-making frameworks may not be used in practice because of cognitive biases and other psychological influences on human behavior. It also includes material on corporate social responsibility and global business ethics. Application cases are included.

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Reference Sources

Academic journals are generally the best sources of information. But reference sources can also provide a good place to begin a search for information (e.g., Kolb 2008, Werhane and Freeman 2005).

Journals

Journals such as Academy of Management Review, Academy of Management Journal, Journal of Applied Psychology, Organizational Behavior and Human Decision Processes, and Journal of Management have increasingly been publishing research on behavioral ethics in organizations. Some journals that are more practitioner oriented, such as California Management Review, also publish organizational ethics-related articles. In addition the business ethics field has specialty journals, the primary ones being Business Ethics Quarterly and Journal of Business Ethics.

History

It is difficult to pinpoint when the field of behavioral ethics in organizations began. Concern about ethical behavior in business increased from the 1960s through the 1980s, as ethical scandals regularly made headlines. Baumhart 1961, a widely cited Harvard Business Review survey, was replicated in Brenner and Molander 1977. These surveys and others contributed to the understanding that unethical practices and pressures existed in business. But in organizational behavior there remained the sense that “ethics” was a mostly normative endeavor that belonged to philosophers or that social scientists’ attention to it was likely to be a passing fad. A few early studies in the management arena (e.g., Hegarty and Sims 1978, Hegarty and Sims 1979) point to the important influences of individual differences (e.g., Machiavellianism); organizational policies, such as codes of conduct; and rewards on ethical decision making. But it took decades before the field of behavioral ethics became recognized.

Ethical Decision-Making Model Development and Testing

Little social science–based theory existed to guide management researchers until the mid-1980s, when both marketing (Hunt and Vitell 1986; see also Hunt and Vitell 2006) and management (Treviño 1986) scholars almost simultaneously offered models of individual ethical decision making that could guide future research. Linda Klebe Treviño’s model drew from moral psychology work (Kohlberg 1969, Rest 1986) and was tested in a number of studies (e.g., Treviño and Youngblood 1990; Greenberg 2002; Ashkanasy, et al. 2006). At around the same time (in the late 1980s) the classic Moral Mazes (Jackall 2010) was first published, which brought a more macro perspective to organizational ethics.

  • Ashkanasy, Neal M., Carolyn A. Windsor, and Linda K. Treviño. “Bad Apples in Bad Barrels Revisited: Cognitive Moral Development, Just World Beliefs, Rewards, and Ethical Decision Making.” Business Ethics Quarterly 16.4 (2006): 449–473.

    DOI: 10.5840/beq200616447Save Citation »Export Citation » Share Citation »

    In the behavioral laboratory Ashkanasy and colleagues found support for the interactionist perspective. Subjects made less ethical decisions if they were low in cognitive moral development and also received information that the organization condoned unethical behavior. Subjects high in cognitive moral development made more ethical decisions in the same environment. Available online for purchase or by subscription.

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  • Greenberg, Jerald. “Who Stole the Money and When? Individual and Situational Determinants of Employee Theft.” Organizational Behavior and Human Decision Processes 89.1 (2002): 985–1003.

    DOI: 10.1016/S0749-5978(02)00039-0Save Citation »Export Citation » Share Citation »

    In this study those at the lowest (preconventional) level of cognitive moral development who also worked in an environment without an ethics program were more likely to steal from their employers, whereas those at the conventional level of cognitive moral development who worked in an environment with an ethics program were less likely to do so. Available online for purchase or by subscription.

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  • Hunt, Shelby D., and Scott Vitell. “A General Theory of Marketing Ethics.” Journal of Macromarketing 6.1 (Spring 1986): 5–16.

    DOI: 10.1177/027614678600600103Save Citation »Export Citation » Share Citation »

    This theory proposes that individuals rely on normative ethical theory to guide decisions depending on whether deontological norms or perceived consequences drive the thinking process. The decision maker performs either a deontological or a teleological evaluation that leads to intentions and to behavior. The broader environment, from organization to industry to culture, influences initial thinking, such as how the individual perceives alternatives or consequences. Available online for purchase or by subscription.

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  • Hunt, Shelby D., and Scott J. Vitell. “The General Theory of Marketing Ethics: A Revision and Three Questions.” Journal of Macromarketing 26.2 (2006): 143–153.

    DOI: 10.1177/0276146706290923Save Citation »Export Citation » Share Citation »

    In this update of Hunt and Vitell 1986, the authors retained the centrality of normative ethical theory but added “action control” as a direct effect on behavior. They also elaborated on the environmental characteristics that can influence decision processes and added some personal characteristics, including cognitive moral development. They also reported on research, much of it scenario based, that supports the theory. Available online for purchase or by subscription.

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  • Jackall, R. Moral Mazes: The World of Corporate Managers. Oxford: Oxford University Press, 2010.

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    Originally published in 1988. Jackall takes a sociological perspective, arguing that bureaucracies are “moral mazes” and that the social structure of managerial work leads to unethical behavior. In the twentieth anniversary edition published in 2010 Jackall argues that the book’s ideas are useful for explaining the insulation, rationalization, and other processes that contributed to the 2007 financial crisis.

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  • Kohlberg, Lawrence. “Stage and Sequence: The Cognitive-Developmental Approach to Socialization.” In Handbook of Socialization Theory. Edited by David A. Goslin, 347–480. Chicago: Rand McNally, 1969.

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    Kohlberg’s theory explains how moral reasoning develops from childhood through adulthood and three levels. At the lowest level (preconventional) individuals do what is right to be obedient to authorities or to serve their own interests. At the conventional level people look to peers and leaders for guidance and to codes and society’s laws. At the postconventional level decision makers are more autonomous and more reliant on principles of justice and rights.

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

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    Rest expands on Lawrence Kohlberg’s work by proposing a multistage process of ethical decision making that begins with ethical awareness and then moves on to moral judgment, moral motivation, and behavior. Much subsequent research follows this line of thinking. Rest also developed a survey-based measure of cognitive moral development, the defining issues test, which remains the most widely used measure.

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  • Treviño, Linda Klebe. “Ethical Decision Making in Organizations: A Person-Situation Interactionist Model.” Academy of Management Review 11.3 (1986): 601–617.

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    In this model both individual differences and contextual influences (and their interaction) are taken into account. Relying on the Kohlberg 1969 theory of cognitive moral development (further developed in Rest 1986), the model proposes that most adults are susceptible to contextual pressures. The model also proposes individual difference moderators. Only a few studies have tested the interactionist perspective (Greenberg 2002; Treviño and Youngblood 1990; Ashkanasy, et al. 2006). Available online for purchase or by subscription.

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  • Treviño, Linda K., and Stuart A. Youngblood. “Bad Apples in Bad Barrels: A Causal Analysis of Ethical Decision-Making Behavior.” Journal of Applied Psychology 75.4 (1990): 378–385.

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    This partial test of Treviño’s model in the laboratory supported a dual-influences approach. Ethical and unethical decisions were influenced directly by cognitive moral development. Locus of control influenced decision making both directly and indirectly through outcome expectancies. Vicarious reward (recognition that ethical behavior was rewarded in the organization) influenced decisions indirectly through outcome expectancies. Available online for purchase or by subscription.

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Research Reviews

Since the mid-1980s enough theory-based empirical research has been conducted that substantive qualitative reviews (O’Fallon and Butterfield 2005; Tenbrunsel and Smith-Crowe 2008; Treviño, et al. 2006; Treviño, et al. 2014) and quantitative reviews (Kish-Gephart, et al. 2010) became possible. O’Fallon and Butterfield 2005 updates two previous reviews published in the Journal of Business Ethics (cited under Journals). Tenbrunsel and Smith-Crowe 2008 offers a new model of ethical decision making that takes intentionality and decision frames into consideration. Treviño, et al. 2006 is organized around James R. Rest’s four-stage model and focuses on research that the authors deemed to be substantial in impact and methodologically defensible. Kish-Gephart, et al. 2010 represents the first meta-analytic review of research on unethical choice in organizations. Treviño, et al. 2014 provides a review of the most recent research (from approximately the previous decade) related to ethical and unethical behavior in organizations.

  • Kish-Gephart, Jennifer J., David A. Harrison, and Linda Klebe Treviño. “Bad Apples, Bad Cases, and Bad Barrels: Meta-Analytic Evidence about Sources of Unethical Decisions at Work.” Journal of Applied Psychology 95.1 (2010): 1–31.

    DOI: 10.1037/a0017103Save Citation »Export Citation » Share Citation »

    Whereas qualitative reviews were forced to say that findings were mixed in many areas of study, this meta-analysis brings closure to some of these areas. Implications for future research are discussed, including that the study implicates the importance of moving toward a more impulsive approach to understanding ethical decision making. Available online for purchase or by subscription.

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  • O’Fallon, Michael J., and Kenneth D. Butterfield. “A Review of the Empirical Ethical Decision-Making Literature, 1996–2003.” Journal of Business Ethics 59.4 (2005): 375–413.

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    This is a qualitative review of empirical research on ethical decision making from 1996 to 2003. The authors note that more empirical research was published in the preceding seven years than in the four previous decades. Their review includes tables that list articles, years of publication, and key findings for research on the influences on ethical awareness, judgment, intention, and behavior. Available online for purchase or by subscription.

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  • Tenbrunsel, Anne E., and Kristin Smith-Crowe. “Ethical Decision Making: Where We’ve Been and Where We’re Going.” Academy of Management Annals 2.1 (2008): 545–607.

    DOI: 10.1080/19416520802211677Save Citation »Export Citation » Share Citation »

    The authors emphasize problems with definitions of what is “ethical.” In their model, if decision makers are aware that they are facing an ethical decision, they intentionally make an ethical or unethical decision. However, if they are unaware, their decision falls into the “amoral” domain. They may still make an ethical or unethical decision, but it is not “intended.” Decision frames are also important to the authors’ understanding of ethical decision making. Available online for purchase or by subscription.

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  • Treviño, Linda K., Niki A. den Nieuwenboer, and Jennifer J. Kish-Gephart. “(Un)ethical Behavior in Organizations.” Annual Review of Psychology 65 (2014): 635–660.

    DOI: 10.1146/annurev-psych-113011-143745Save Citation »Export Citation » Share Citation »

    This review picks up where other reviews left off with an emphasis on reviewing some of the most recent research on ethical and unethical behavior in organizations, beginning with more macro topics and moving toward more micro ones. It highlights some of the most recent contributions in the areas of peer and leader influence in organizations, cognitive and affective advances such as knowledge about the effects of decision frames, moral disengagement, and emotions. Also included is coverage of the effects of ego depletion and self-regulatory processes on ethical and unethical behavior.

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  • Treviño, Linda K., Gary R. Weaver, and Scott J. Reynolds. “Behavioral Ethics in Organizations: A Review.” Journal of Management 32 (2006): 951–990.

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    This review organizes the research based on the Rest 1986 (cited under Ethical Decision-Making Model Development and Testing) ethical decision-making stages. James R. Rest expanded on Lawrence Kohlberg’s focus on moral judgment with the recognition that a decision maker must first be aware that she or he is facing a morally charged situation for moral judgment processes to be engaged. And beyond awareness and judgment, individuals must be motivated to engage in moral action if moral behavior is to occur.

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Influences on Ethical Decisions and Behaviors

Research suggests that ethical decisions and behaviors can be thought of as being influenced by individual differences, contextual variables, leadership influences, and the influence of issue characteristics.

Individual Differences

Similar to the broader organizational behavior field, the study of ethical and unethical behavior assumes that behavior is influenced in part by relatively stable individual differences. Some that have found support, such as locus of control and Machiavellianism, have been studied in organizational behavior more broadly. They will not be the focus here. Nor will cognitive moral development, discussed under Ethical Decision-Making Model Development and Testing. Here we focus on Relativism/Idealism, the Propensity to Morally Disengage, Moral Identity, and Moral Conation, individual differences that are, like cognitive moral development, somewhat unique to the behavioral ethics arena. The Kish-Gephart, et al. 2010 meta-analysis (cited under Research Reviews) supports the influence of cognitive moral development and Machiavellianism on both unethical intentions and behavior. Locus of control and job satisfaction were associated with unethical behavior only (not intentions), and idealism and relativism were associated with intentions (they have not been studied in relation to behavior). No support has been found for demographic effects of age or education level, and little support has been found for the effects of gender despite long-term interest in them in the behavioral ethics literature. Studies of other individual differences have been insufficient to warrant inclusion in the meta-analysis. But other individual differences that have been proposed include ego strength and field dependence (Treviño 1986, cited under Ethical Decision-Making Model Development and Testing), religion, values, and ethical sensitivity (Hunt and Vitell 2006, cited under Ethical Decision-Making Model Development and Testing). Several other individual differences have been proposed or studied in the organizational ethics literature only in the late 20th and early 21st centuries: the propensity to morally disengage, moral identity, and moral conation.

Relativism/Idealism

Forsyth 1980 develops a measure of relativism/idealism that represents individuals’ preferences for particular normative philosophical approaches. The work organizes people’s beliefs or preferences for how to make ethical decisions into two continua and creates a survey measure.

Propensity to Morally Disengage

Bandura, et al. 1996 introduces the propensity to morally disengage (or “moral disengagement”) as an extension of social cognitive theory, which assumes that people are self-regulating. In the case of moral behavior, the theory argues that individuals have internalized moral standards that guide their behavior and generally keep them from transgressing. Management scholars have brought moral disengagement into the organizational behavior literature, demonstrating that it can be measured reliably in adults and that it is associated with a variety of types of unethical behavior (e.g., Moore, et al. 2012).

  • Bandura, Albert, Claudio Barbaranelli, Gian Vittorio Caprara, and Concetta Pastorelli. “Mechanisms of Moral Disengagement in the Exercise of Moral Agency.” Journal of Personality and Social Psychology 71.2 (1996): 364–374.

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    The authors argue that internalized moral standards can be disengaged through eight interrelated cognitive mechanisms (diffusion of responsibility, use of euphemistic language, etc.). If standards are disengaged, the individual feels freer to transgress without guilt. People differ in their propensities to morally disengage. Researchers have expanded the focus of research from children to adults in work settings. Available online for purchase or by subscription.

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  • Moore, Celia, James R. Detert, Linda Klebe Treviño, Vicki L. Baker, and David M. Mayer. “Why Employees Do Bad Things: Moral Disengagement and Unethical Organizational Behavior.” Personnel Psychology 65.1 (Spring 2012): 1–48.

    DOI: 10.1111/j.1744-6570.2011.01237.xSave Citation »Export Citation » Share Citation »

    After summarizing the moral disengagement literature in organizational ethics, the authors develop a parsimonious and reliable eight-item measure of the propensity to morally disengage in adults and demonstrate its relationship to a variety of other constructs. In four additional studies they demonstrate the relationship between the propensity to morally disengage and four types of unethical behavior outcomes.

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Moral Identity

Although related constructs (such as moral character) have existed in the moral psychology literature for some time, moral identity is relatively new to the behavioral ethics literature. Shao, et al. 2008 reviews the literature on moral identity that has been found to be related in expected ways to ethical and unethical behavior in multiple studies.

  • Shao, Ruodan, Karl Aquino, and Dan Freeman. “Beyond Moral Reasoning: A Review of Moral Identity Research and Its Implications for Business Ethics.” Business Ethics Quarterly 18.4 (2008): 513–540.

    DOI: 10.5840/beq200818436Save Citation »Export Citation » Share Citation »

    This review relates moral identity to other conceptualizations that have existed in the moral psychology literature and emphasizes the social cognitive roots of Aquino and James R. Reed’s conceptualization. It also covers antecedents and consequences of moral identity. Among the consequences of most interest are increases in prosocial behavior (e.g., charitable giving) and decreases in unethical behavior. Available online for purchase or by subscription.

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Moral Conation

A number of scholars have become interested in ideas of moral courage and efficacy as ways of understanding the relationship between judgment and action and how individuals are motivated to act despite challenges. The most developed of these ideas is that of moral conation (Hannah, et al. 2011).

  • Hannah, Sean T., Bruce J. Avolio, and Douglas R. May. “Moral Maturation and Moral Conation: A Capacity Approach to Explaining Moral Thought and Action.” Academy of Management Review 36.4 (2011): 663–685.

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    Hannah and colleagues refer to moral conation as encompassing three components (moral courage, moral efficacy, and moral ownership). They propose that moral conation increases the likelihood that an individual will take moral action. This is an important addition to the behavioral ethics literature, because this construct has the potential to explain and predict the understudied link between ethical judgment and action. Available online for purchase or by subscription.

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The Moral Self

Jennings, et al. 2015 provides a review and integration of the literature on the moral self.

Contextual Influences

Behavioral ethics in organizations is differentiated from research on individual ethical decision making by its focus on behavior in organizational context. It acknowledges the significant impact of the ethical environment in an organization that contains many features, including ethical codes of conduct. The ethical environment has been characterized in multiple ways, including ethical climate (Victor and Cullen 1988; Martin and Cullen 2006) and ethical culture (Treviño 1990; Treviño, et al. 1998). It is important to note that the terms “ethical climate: and “ethical culture” do not map neatly onto the way the terms “climate” and “culture” have been used in the traditional organizational behavior literature, causing confusion at times. Some of the research on contextual influences is reviewed in Treviño and Weaver 2003.

Ethical Codes

Ethical codes of conduct identify the types of ethical issues that are likely to arise in a particular setting and provide organizational members with guidance regarding expected behavior. Codes of conduct became prominent in the defense industry in response to the Defense Industry Initiative of the 1980s. At that time the defense industry responded to ethics scandals by forming a self-regulatory initiative, which continues in the early 21st century. Companies designed codes of conduct to guide their employees in the complex world of defense contracting that includes responsibilities to government customers, rules regarding arms sales overseas, and other topics. Codes became more widespread across business and other organizations after the US Sentencing Commission issued new guidelines for organizations convicted of federal crimes in 1991. The commission uses a carrot-and-stick approach—the “carrot” being incentives (reduced sentences/fines) offered to organizations when seven requirements indicate that the organization has exercised due diligence—that is, that the organization is being managed in a way that supports employees doing the right thing. Among these requirements is the establishment of legal compliance standards and communicating those standards to employees. Most organizations have responded to this expectation by developing codes of conduct. The research on ethical codes is reviewed in Kish-Gephart, et al. 2010.

  • Kish-Gephart, Jennifer J., David A. Harrison, and Linda Klebe Treviño. “Bad Apples, Bad Cases, and Bad Barrels: Meta-Analytic Evidence about Sources of Unethical Decisions at Work.” Journal of Applied Psychology 95.1 (2010): 1–31.

    DOI: 10.1037/a0017103Save Citation »Export Citation » Share Citation »

    This study found the influence of codes on unethical choice to be minimal. Codes must be enforced in order to affect behavior. Available online for purchase or by subscription.

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Ethical Climate

The ethical climate construct was introduced in Victor and Cullen 1988 as a multidimensional approach to understanding the prescriptive climates that exist to guide behavior in organizations. Martin and Cullen 2006 reviews the ethical climate research.

  • Martin, Kelly D., and John B. Cullen. “Continuities and Extensions of Ethical Climate Theory: A Meta-Analytic Review.” Journal of Business Ethics 69.2 (2006): 175–194.

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    Martin and Cullen conducted a meta-analytic review of the ethical climate research. They found support for multiple dimensions of ethical climate that influence job satisfaction and organizational commitment and, through those mediators, dysfunctional organizational behavior and employee psychological well-being. They point the way to future research in this domain. Available online for purchase or by subscription.

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  • Victor, Bart, and John B. Cullen. “The Organizational Bases of Ethical Work Climates.” Administrative Science Quarterly 33.1 (1988): 101–125.

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    In this paper Victor and Cullen proposed nine climates based on the ethical criteria that are used to guide decisions (egoism, principle, benevolence) and the locus of analysis (individual, local, cosmopolitan). They also developed a survey measure that has been used in many studies. Although their nine dimensions have not been supported empirically, Kish-Gephart, et al. 2010 (cited under Research Reviews) supports the effect of three perceived ethical climate dimensions on unethical decisions. Available online by subscription.

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Ethical Culture

Around the same time that Victor and Cullen 1988 (cited under Ethical Climate) introduced the ethical climate construct and measure, Linda Klebe Treviño proposed an ethical culture construct based on the idea that formal and informal ethics-related organizational systems would have an impact on ethical behavior. The idea of ethical culture was first introduced in Treviño 1986 (cited under Ethical Decision-Making Model Development and Testing) and is elaborated on in Treviño 1990. The construct was also measured in an empirical study where both climate and culture were included (Treviño, et al. 1998). The formal ethical culture systems include everything from leadership to codes of conduct, to training programs, to organizational structure and performance evaluation systems. The informal systems include heroes and role models, the language of daily organizational life, and norms and rituals of daily behavior. Treviño and Weaver 2003 includes research on the influence of ethical context in an edited book.

  • Treviño, Linda Klebe. “A Cultural Perspective on Changing and Developing Organizational Ethics.” In Research on Organizational Change and Development: An Annual Series Featuring Advances in Theory, Methodology, and Research. Vol. 4. Edited by William A. Pasmore and Richard A. Woodman, 195–230. Greenwich, CT: JAI, 1990.

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    This paper outlines the ethical culture construct in detail, explains its expected relationship to ethical/unethical conduct, and also focuses on how one might develop an ethical culture or transform a culture into a more ethical one.

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  • Treviño, Linda Klebe, Kenneth D. Butterfield, and D. L. McCabe. “The Ethical Context in Organizations: Influences on Employee Attitudes and Behaviors.” Business Ethics Quarterly 8.3 (1998): 447–476.

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    This study finds that ethical climate and culture are highly correlated and they predict organizational commitment in similar ways. But they predict unethical conduct somewhat differently. An ethical culture dimension was more predictive of unethical conduct in organizations with ethics codes. By contrast, dimensions of ethical climate were more associated with unethical conduct in organizations without codes. Available online by subscription.

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  • Treviño, Linda Klebe, and Gary R. Weaver, eds. Managing Ethics in Organizations: Social Scientific Perspectives. Stanford, CA: Stanford University Press, 2003.

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    In this academic book the authors review much of their own research conducted over the previous decade, which includes research on the institutionalization of organizational ethics via corporate ethics programs, the effects of these programs on employees, and work on ethical climate and culture.

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Leadership

Interpersonal influences on ethical decision making (such as peer influence or social networks) are also important, but these influences have not been studied very much. The one interpersonal influence that has been researched rather extensively is leadership influence. Integrity has long been considered an essential leadership characteristic, and a moral dimension has been a part of leadership constructs, such as transformational leadership and authentic leadership. But to put the focus more squarely on “ethical” leadership as a separate construct, Brown, et al. 2005 introduces an explicit ethical leadership construct and importantly a separate measure of ethical leadership. Since then the measure has been used extensively to advance understanding of the antecedents and outcomes of ethical leadership in organizations. Research on antecedents has produced mixed results, suggesting that more work is needed. Scholars have learned that ethical leadership is associated with increased positive and reduced negative employee outcomes. Scholars are also beginning to understand the relationships between senior-level and supervisory-level leadership (Mayer, et al. 2009) and the processes by which leaders have their effects (Schaubroeck, et al. 2012; Kalshoven, et al. 2011).

Moral Intensity

Relying on social cognitive theory, Jones 1991 introduces the moral intensity construct to the behavioral ethics literature in a model that expanded on existing ethical decision-making models. It proposes that ethical issues differ in important characteristics that should influence ethical awareness, judgment, and behavior.

  • Jones, Thomas M. “Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model.” Academy of Management Review 16.2 (1991): 366–395.

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    Jones proposes a moral intensity construct with six elements: magnitude of consequences, probability of effect, temporal immediacy, proximity, concentration of effect, social consensus. In mostly vignette-based research, moral intensity has been related to ethical intentions, but more research is needed on its relationship with behavior (see Kish-Gephart, et al. 2010, cited under Research Reviews). Available online for purchase or by subscription.

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New Developments

Until the early 21st century the field of behavioral ethics in organizations took a mostly cognitive and deliberative view of organizational ethics. According to this view, individuals either recognize an issue as an ethical issue or not; they deliberate about what is right, they decide what to do, and then they are motivated to act, depending on other contextual influences, such as reward systems. Characteristics of organizations have also been thought to influence this deliberative process. However, work conducted largely by psychologists from outside organizational behavior (e.g., Haidt 2001) challenged the deliberative cognitive approach, proposing instead a more impulsive/intuitionist/affective understanding of ethical decision making. Management scholars, in works such as Reynolds 2006; Reynolds, et al. 2010; Sonenshein 2007; and Gino, et al. 2011, among others, have picked up on this charge and have offered proposals and research that is moving the field in this new direction. A 2011 issue of Organizational Behavior and Human Decision Processes (115.2) offers a sense of recent work and what is to come. Bazerman and Tenbrunsel 2011 reviews much of the relevant work on this new approach in Blind Spots. Weaver, et al. 2014 offers a comprehensive review of work on moral intuition. Much of the research in this vein falls more into the realm of behavioral ethics than organizational ethics, because researchers focus on individual cognitive processes. As this work continues it will be important to bring the organization back in, because it is in “organizational ethics” that management researchers have the most to offer. Traditionally, little research has focused on ethical decision-making at the group level. One recent investigation (Thau, et al. 2015) tackled a group-level question: when will individuals be unethical for the sake of the group?.

  • Bazerman, Max H., and Ann E. Tenbrunsel. Blind Spots: Why We Fail to Do What’s Right and What to Do about It. Princeton, NJ: Princeton University Press, 2011.

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    This book reviews much of the research on how cognitive biases lead people to engage in unintentional, unethical behavior. The book uses the terms “bounded ethicality” and “ethical fading” to refer to the psychological processes that interfere with people doing what is right and what happens when individuals fail to recognize the ethical nature of the situation. Includes useful references to recent research.

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  • Gino, Francesca, Maurice E. Schweitzer, Nicole L. Mead, and Dan Ariely. “Unable to Resist Temptation: How Self-Control Depletion Promotes Unethical Behavior.” Organizational Behavior and Human Decision Processes 115.2 (2011): 191–203.

    DOI: 10.1016/j.obhdp.2011.03.001Save Citation »Export Citation » Share Citation »

    These authors rely on the idea that self-regulation is a finite resource that can be depleted by acts of self-regulation, leaving individuals with impaired self-control and an increased likelihood of cheating. They find that subjects who are depleted of their self-control resources are more likely to impulsively cheat. Available online for purchase or by subscription.

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  • Haidt, Jonathan. “The Emotional Dog and Its Rational Tail: A Social Intuitionist Approach to Moral Judgment.” Psychological Review 108.4 (2001): 814–834.

    DOI: 10.1037/0033-295X.108.4.814Save Citation »Export Citation » Share Citation »

    Haidt argues that much (if not most) ethical decision making is not deliberative but rather intuitive. People react emotionally to situations first (with disgust or other emotions) and then arrive at explanations only after the fact when they are asked to explain their reactions. This perspective has raised important questions about the extent to which ethical decision making is a deliberative versus a more automatic/intuitive process. Available online or by subscription.

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  • Reynolds, Scott J. “A Neurocognitive Model of the Ethical Decision-Making Process: Implications for Study and Practice.” Journal of Applied Psychology 91.4 (2006): 737–748.

    DOI: 10.1037/0021-9010.91.4.737Save Citation »Export Citation » Share Citation »

    Reynolds proposes that ethical decision making involves both a deliberative conscious reasoning process and a more reflexive pattern-matching approach based on prototypes. He introduces the reader to brain research and explains the two types of processing involved. He also references moral decision-making studies that have analyzed brain patterns to better understand ethical decision making. Finally, he offers ideas for future empirical research. Available online for purchase or by subscription.

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  • Reynolds, Scott J., Keith Leavitt, and Katherine A. DeCelles. “Automatic Ethics: The Effects of Implicit Assumptions and Contextual Cues on Moral Behavior.” Journal of Applied Psychology 95.4 (2010): 752–760.

    DOI: 10.1037/a0019411Save Citation »Export Citation » Share Citation »

    In this study Reynolds and colleagues study ethical decision making as an automatic process. They first use implicit association test (IAT) methodology to measure respondents’ implicit assumptions about the morality of business. In two studies they then show that this implicit assumption influences decisions (beyond explicit attitudes) and also interacts with subtle contextual cues to influence ethical behavior. Available online for purchase or by subscription.

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  • Sonenshein, Scott. “The Role of Construction, Intuition, and Justification in Responding to Ethical Issues at Work: The Sensemaking-Intuition Model.” Academy of Management Review 32.4 (2007): 1022–1040.

    DOI: 10.5465/AMR.2007.26585677Save Citation »Export Citation » Share Citation »

    Sonenshein offers his sense-making intuition model (SIM) as a way of thinking about ethical decision making as more intuitive and less deliberative. The model proposes that people in organizations construct ethical issues in response to the equivocal and uncertain environments in which they find themselves. They make intuitive judgments about these issues and then justify these judgments to others. Available online for purchase or by subscription.

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  • Thau, S., R. Derfler-Rozin, M. Pitesa, M. S. Mitchell, and M. M. Pillutla. “Unethical for the Sake of the Group: Risk of Social Exclusion and Pro-Group Unethical Behavior.” Journal of Applied Psychology 100 (2015): 98–113.

    DOI: 10.1037/a0036708Save Citation »Export Citation » Share Citation »

    Thau and coauthors studied whether the risk of exclusion from one’s group will motivate group members to engage in pro-group unethical behavior (behavior on behalf of the group and its outcomes). They conducted a field study and a follow-up laboratory study. They found that group members who have a high need for inclusion will engage in more pro-group unethical behavior when the risk of exclusion from the group is high.

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  • Weaver, Gary R., Scott J. Reynolds, and Michael E. Brown. “Moral Intuition: Connecting Current Knowledge to Future Organizational Research and Practice.” Journal of Management 40.1 (2014): 100–129.

    DOI: 10.1177/0149206313511272Save Citation »Export Citation » Share Citation »

    Weaver and colleagues review work on the process and content of moral intuition, focusing on four areas: leadership, corruption in organizations, training and education in ethics, and “divestiture socialization.”

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