Question:

Are the actions of people in the workplace a consequence of individual or organizational characteristics? What would promote ethical behavior at work?

Students must address one of the three topics below. Essays should be no longer than 2000 words exclusive of appendices, references, etc. This is a research essay and students are required to use at least twelve academic references: Six academic journal articles- peer reviewed – are recommended for quality purposes and six other quality references.

Answer:

Ethical behavior in the workplace: A Consequence of Individual and organizational characteristics?

Many questions relating to ethics management have been raised because of the recent increase in corporate scandals. One of these questions is on whether the actions of people in the workplace are a consequence of individual or organizational characteristics. Ethics management scholars are also interested in describing the measures that would promote ethical behavior at work.  The aim of this paper is to determine whether workplace behavior is shaped by individual or organizational characteristics. The paper hypothesizes that both individual and organizational characteristics influence people’s actions in the workplace.

In many instances, the objective of spearheading this debate is to debunk numerous misconceptions and myths relating to the efforts that would bring about ethical behavior. In many instances, however, there is consensus regarding the qualities of an ethical leader. Ethical leaders are regarded as caring, honest, and principled individuals who are able to make wise and balanced decisions to avert crises. Such leaders are also distinguished through their communication style, personal attributes, and conduct. This paper also discusses factors that promote ethical behavior in the workplace.

Ethical behavior in the workplace: The role of individual or organizational characteristics

Both individual and organizational characteristics play a critical role in shaping the ethical behavior of people within the workplace. According to Trevino & Brown (2004), one of the main sources of ethical behavior is individual characteristics. Individual characteristics are defined using attributes such as conscientiousness, locus of control, need for power, and moral reasoning (Trevino & Brown, 2004). These characteristics are inherent in an individual employee and they go a long way in influencing his tendency to engage in ethical or unethical behavior.

Trevino & Brown (2004) point out that certain individual characteristics need to be inherent in the individual for him to qualify as far as ethical leadership is concerned. At the executive level, such leadership tends to be a reputational phenomenon. In the majority of large organizations, very few employees interact face-to-face with senior executives. In that case, most of the things that they know about leadership have been gleaned from far-off places. One of the ways through which the executive strives to establish a reputation ethics in leadership is through creating the perception of being a “moral manager” or a “moral person” (Trevino & Victor, 2004).

There is a relationship between the perception of a “moral person” and good character. This relationship depends on the way the employee perceives the leader’s behaviors, traits, and decision-making processes. Either way, individual characteristics greatly influence judgment on the moral locus of the manager. Ethical leaders are normally associated with honesty and trustworthiness. Individual characteristics go a long way in determining whether one is viewed as ethical or unethical.

Reiss (1998) did a study with the aim of determining the extent to which individual attributes of gender, locus control, years of job experience, and major in college have an impact on the acceptability of various behaviors in the workplace. The study showed that locus of control, years of experience on the job, and gender have some impact on individuals’ decisions regarding acceptability of specific workplace behaviors (Reiss, 1998). These findings are similar to those of Trevino & Brown (2004). The evidence provided in Reiss’s (1998) study reinforces the conventional view that personal characteristics have a far-reaching impact on workplace behavior.

The moral values of the individual provide an excellent platform for the development of ethical behavior. When an individual’s moral values are upright and fit in well with those stipulated within the organization, it is said that “congruence” or “personal-organizational fit” has been achieved (Trevino, 1999; Elango & Paul, 2010; Valentine, 2002). In other words, value congruence is the point of intersection between individual and organizational characteristics. The information provided by managers regarding organizational characteristics is always important in determining where the individual’s values are consistent with those of the organization.

Moreover, it is imperative to assess the importance of value congruence as a useful trait for managers within the organization. According to Glover (1997), managers who possess high value congruence are able to resolve ethical challenges at higher ethical levels compared to managers with less value congruence. Less value congruence means that one’s values are internally less congruent. Glover (1997) adds that managers working in organizations whose sets of values are more consistent or whose value congruence is higher are more likely to arrive at higher-level ethical decisions compared to managers whose organizations have sets of values with less consistency.

A critical question is the extent to which interplay of individual and organizational values exert influence on the actual choices made by individuals whenever they are confronting ethical dilemmas (Brown & Trevino, 2006; Leonard, 2004; Victor, 1988). Serious theoretical problems arise whenever individuals who share similar values end up making different behavioral choices during the ethical decision-making process because of differences in organizational or cultural factors. In other words, ethical congruence does not derive from congruence of values in all situations. Other factors, which constitute the organizational characteristics, influence the way individuals resolve ethical dilemmas. Some of these characteristics include the example set by leaders, cultural norms with a specific geographical setting, as well as accountability and auditing practices within the organization.

The international dimension also brings about an element of complexity in the understanding of ethics. In today’s globalized world, actions of people in the organization are greatly influenced by the prevailing international context. In today’s global society, some hyper-norms seem to co-exist across cultures. The growth of global business practices has not stopped the persistence of regional and cultural norms. In essence, this indicates that factors that are outside the realm of both individual and organizational characteristics influence the actions of people in the workplace. Reiss (1998), refers to such factors as moderating influences. These moderating influences can be greatly understood by appreciating the way individual and situational characteristics interact and the effect of this interaction on the behavior of people within the organization (Reiss, 1998).

Other than individual characteristics, situational influences play a critical role in determining ethical behavior. Many organizations strive to create a positive ethical climate with the aim of developing corporate governance as well as establishing social control. The process of creating a positive ethical climate is widely regarded as highly cost-effective. In contrast, other intrusive measures of exerting social control in employees through ethical behavior are considered less effective. During the process of creating a positive ethical climate, the issue of damaged reputation and the costs associated with it does not arise. Moreover, managers do not have to live in fear of a sudden reduction in asset value when the employees’ ethical transgressions are finally exposed (Trevino, 2000).

A corporate entity can incur very huge costs simply because of failing to maintain a positive ethical culture. In the absence of such a culture, employees lack appropriate ethical-behavior models. A positive ethical climate is arguably the most important organizational characteristic for helping people make ethical decisions whenever they are in an ethical dilemma. Moreover, it becomes most effective when members within the organization are motivated to behave in an ethical manner.

It is also evident that for corporate governance to be enhanced, there should be concordance between individual and organizational ethics. Congruence between a positive ethical climate and positive individual ethics in most cases yields acceptable behavior within the organization. It is imperative for scholars to expound on the elements that bring about this congruence. Efforts to define these variables are ongoing in ethics research. In this case, most emphasis is on the nature of individual-level and organizational-level variables and how the resulting congruence influences ethical decision-making.

Some of the theories developed in business ethics research assert the importance of organizational characteristics. For instance, in the social learning theory, one of the main assertions is that most individuals tend to look outside themselves for ethical guidance (Ardichvili, Mitchell, & Jondle, 2009). They put into consideration the actions, ideas, and personal convictions of other individuals when seeking this guidance. This theory is useful in determining how actions of individuals are influenced within the organization. One of its implications is that ethical leaders provide this much-needed guidance. The credibility as well as attractiveness of such leaders put them in the position of role models, thereby enabling them to have a positive influence on the behavior of employees.

Legitimacy of moral behavior on the part of the leader is appropriate because it provides what may be referred to as “idealized influence” on people at the workplace (Glover, 1997). This type of influence is particularly useful for transformational leaders who end up succeeding in setting ethical standards. When the appropriate ethical standards are established, it becomes easy to hold all followers accountable for their actions. Such an environment of accountability tends to have a positive influence on people’s ethical behavior. At this point, the organizational leader may opt to use rewards and discipline as tactics for ensuring that the environment of organizational accountability is maintained (Glover, 1997).

Another crucial concept defined in the social learning theory is that of ethical role modeling (Ardichvili, Mitchell, & Jondle, 2009). It is imperative that ethical role modeling is carried out early on during the career of the employee. Such employees learn crucial lessons that enable them become ethical leaders. In the long run, the organization succeeds in reducing the occurrence of unacceptable behaviors such as discrimination, harassment, and bullying.

Ethical leaders have a crucial role to play in developing ethical organizational characteristics. These characteristics should be carefully selected and developed with the aim of ensuring that employees have adequate information regarding what constitutes acceptable organizational behavior. In most cases, organizational leaders who develop these characteristics also go a step further to put in place measures aimed at ensuring that the distance between ethical leaders and their followers within the organization is drastically reduced. This creates an excellent platform for congruence between individual and organizational characteristics to be established. Sometimes, negative perceptions towards leaders develop simply because the followers have never been close to them enough to understand them. Similarly, some employees end up making unethical decisions because they do not know who to turn to for ethical guidance.

The closer the leader-follower distance the greater the influence from the leaders within the organization. In some organizations, senior leaders tend to be ethical while junior and mid-level leaders are not (Ardichvili, Mitchell, & Jondle, 2009). In most cases, this is because the senior leaders fail to ensure that their ethical modeling influence is felt at all levels of the organization’s leadership hierarchy (Trevino, 2000). This waning influence of ethical modeling can be promoted by strengthening the organizational culture particularly through creation of social capital. When social capital is created, new norms emerge that implicitly influence the behavior of the managers as well as employees.

For ethical behavior to be promoted in the workplace, all stakeholders should understand that this is a complex undertaking. Individuals have to reconcile their individual characteristics with organizational characteristics. Jones (1991) points out that in many business schools, students are taught the value of applying multiple normative frameworks to ethical dilemmas whenever values conflict. Indeed, application of multiple normative frameworks can promote ethical behavior in the workplace as it enables individual assess the ethical problem from different dimensions.

In the consequentialist framework, one should look at the benefits and harms that a potential action brings to society (Butterfield, 2000). In the deontological framework, focus is on ethical principles, including rights, justice, virtue ethics, as well as the moral actor’s integrity (Weber, 1990). In situations of challenging ethical dilemmas where these approaches seem to conflict with each other, the individual may have to seek guidance from the managers to whom he is accountable.

In conclusion, both individual and organizational characteristics influence people’s actions in the workplace. To promote ethical behavior, it is imperative for organizational leaders to engage in ethical role modeling, particularly in an environment where organizational culture is continually being strengthened. Nevertheless, it is upon individual employees to assess ethical dilemmas from multiple dimensions before taking the most acceptable course of action.

 

References

Ardichvili, A., Mitchell, J., & Jondle, D. (2009). Characteristics of Ethical Business Cultures. Journal of Business Ethics, 85(4), 445-451.

Brown, M. & Trevino, L. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595-616.

Butterfield, K. (2000). Moral awareness in business organizations: Influences of issue-related and social context factors. Human Relations, 53(7), 981–1018.

Elango, B. & Paul, K. (2010). Organizational Ethics, Individual Ethics, and Ethical Intentions in International Decision-Making. Journal of Business Ethics, 3(1), 1-24.

Glover, S. (1997). Re-examining the Influence of Individual Values on Ethical Decision Making. Journal of Business Ethics, 16(12), 1319-1329.

Jones, T. M. 1991. Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16(27), 366–395.

Leonard, L. (2004). What influences IT ethical behavior intentions—planned behavior, reasoned action, perceived importance, or individual characteristics? Information & Management, 42(1), 143–158.

Reiss, M. (1998). The Effects of Individual Difference Factors on the Acceptability of Ethical and Unethical Workplace Behaviors. Journal of Business Ethics, 17(14), 1581-1593.

Trevino, K. & Brown, M. (2004). Managing to be ethical: Debunking five business ethics myths. Academy of Management Executive, 18(2), pp. 69-81.

Trevino, L. & Victor, B. (2004). Peer reporting of unethical behavior: A social context perspective. Academy of Management Journal, 353(2), 38–64.

Trevino, L. (1999). Managing ethics and legal compliance: What works and what hurts. California Management Review, 41(2), 131–151.

Trevino, L. (2000). Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42(4), 128–142.

Valentine, S. (2002). Ethical Context, Organizational Commitment, and Person-Organization Fit. Journal of Business Ethics, 41(4), 349-360.

Victor, B. (1988). The Organizational Bases of Ethical Work Climates. Administrative Science Quarterly, 33(1), 101-125.

Weber, J. 1990. Managers’ moral reasoning: Assessing their responses to three moral dilemmas. Human Relations, 43(19), 687–702.