Ethics refers to the principles individuals utilize to aid in governing their activities and decisions. Organizational ethics refer to a set of principles and values that provide guidance to business practices in order to reflect concern for the whole society as they pursue profits (Nicholson, 1994). Organizational culture refers to the principles, beliefs, behaviors, traditions and attitudes that help the individuals to comprehend the ideals the organization stands for, how it operates and what it deems vital (Nicholson, 1994). Organizational culture is important because it determines the overall feeling, effectiveness, reputation, productivity and long-term success of the organization. If the culture is not advancing the right values, it will soon become apparent to the outside world, and this will affect the organization’s performance and the perception people have on their brand. Therefore, the culture may be subject to change in order to support the organization’s success and progress.
The current organizations need to go past the view that ethics is only necessary for protecting the organization’s reputation and therefore, they are able to avoid bad media coverage, and that ethics are simply a compliance with forced regulations (Bucar & Hisrich, 2001). The leadership of organizations should understand that a great opportunity awaits the organizations that are attentive to the potential of ethical behavior in shaping the future. An ethical culture provides all businesses with an opportunity to influence the social culture through the adoption of ethical behavior, from which communities benefit.
The ethical behavior on the part of the leadership of an organization is likely to have an impact on the employees’ morale and fidelity (Brown, Trevino, & Harrison, 2005). The code of ethics used by the leaders influences discipline processes and the acceptable behavior for all the employees. This implies that high ethical standards on the part of leaders are likely to inspire the employees to meet the same level. Ethical leaderships also promote the organization’s reputation and integrity in the community, which promotes business (Brown, Trevino, & Harrison, 2005).
Ethical behavior on the part of the employees ensures that they complete their work with honesty and integrity, since they adhere to the employee policies and rules (Kaptein, 2010). Ethical employees attain the standards for quality in their work by meeting the goals of the organization. This can also contribute in promoting the organization’s reputation for the production of quality products and services.
The leaders and employees that follow the code of ethics aid in creating an ethical organizational culture (Brown, Trevino, & Harrison, 2005). The leaders may foster an ethical culture by portraying the kind of behavior they would like to see in their employees (Weaver, Treviño, & Agle, 2005). The organization can also strengthen ethical behavior through a reward system for the employees that show values and integrity, which correspond to the organization’s code of ethics; as well as a discipline system for those that act contrary to the code of ethics (Weaver, Treviño, & Agle, 2005). A healthy organizational culture may also aid improving employee retention that increases productivity and in turn has financial benefits to the organization, through increased efficiency and reduction of the cost of replacing workers (Brown, Trevino, & Harrison, 2005).
Ethical Behavior as a Priority
Ethics is more than mere legal or moral responsibility and it is no longer a luxury or an option, but an organizational priority. The leaders in an organization have so much to deal with due to the high competition they are facing from rival businesses (Nicholson, 1994). They must change with the rapidly evolving technological advancements, rival products and services, the impact of globalization, as well as the opportunities and threats in their own industry. The leadership is obliged to keep themselves abreast with the organization’s mission, vision, values, culture, strategy and goals, which will enable them to easily mentor and give directions to the employees (Brown, Trevino, & Harrison, 2005). In order to achieve success in all the aforementioned areas of interest, the organizations need to make ethics a priority.
As an organizational priority, ethical behavior will not only impact on the process of decision making but also the organizational culture (Nicholson, 1994). For smooth running of the organization, there must be an alignment process that integrates ethical behavior with the mission, vision, values, strategies, and goals of the organization. Ethical behaviors are basically social in nature, and therefore, the alignment process would cater for relationships and defining their relational expectations. The main aim of an organizational culture is to achieve greater good for all, that is, interior associations between the leaders and the followers as well as the exterior associations with the clients, customers and the community at large (Nicholson, 1994). Ethical culture emerges when everyone is regularly treated well.
Values-Based Organizational Culture
Greater than competency, experience and aptitude, ethical behavior is required of all individuals at all the levels of an organization (Nicholson, 1994). Kidder (1995) suggests that the fundamental task of every organization is to create and nurture a value-based culture by considering the shared core values (honesty, respect, responsibility, fairness and compassion that drive decision making), common language (acquired through ethics training and is used for communicating readily and comfortably about sensitive issues that may be difficult to discuss), commitment at the top (Leadership by example and reward for the individuals who choose to do right) and moral courage (the quality of mind and spirit that puts one in a position to deal with ethical dilemmas firmly and confidently without withdrawing or shying away).
Management and Change of Organizational Culture
The management of organizational culture requires the leadership of the organization to understand the current culture in order to make a decision on whether to maintain it or alter it. The leadership needs to articulate the culture of the organization through slogans, ceremonies and shared experiences among the individuals in the organization (Weaver, Linda, & Cochran, 1999). The success in the management of culture can easily be attained when the leadership considers offering rewards and promotions to employees who exhibit consistency in their behavior, which corresponds to the desired cultural values.
For effective management of ethical behavior to take place, it must start with top management, which is tasked with instituting the culture of the organization and defining what would and what would not be considered as the acceptable behavior (Weaver, Linda, & Cochran, 1999). The leadership of the organization should offer training programs on how to tackle various natures of ethical dilemmas. They should develop a clearly written code of ethics and address individual issues of behavior and conscience as well as privacy.
When changing the organizational culture, the leadership needs to come up a clear idea of the kind of culture they want to create. They ought to start with the end result in mind by visualizing how and what they would like it to look like. The next step should be to create new impressions through new slogans, stories, ceremonies and break with tradition intentionally. These new impressions should be reinforced with both formal and informal incentives in the company that enhance ethical values such as trustworthiness, respect and fairness (Bucar & Hisrich, 2001). They ought to bring in outsiders to fill up positions of employment within the organization, including important managerial positions.
Setting up an ethical organizational culture is more demanding than having a draft of values statement, setting up policies or training programs to ensure that the workers are knowledgeable about the regulations (Bucar & Hisrich, 2001). The ethical organizational culture is meant to make it easier for all the individuals in the organization to do the right thing and at the same time make it harder for them to do the wrong thing. Most unfortunately, many organization have created cultures that make it easier for individuals in the organization to do the wrong thing and harder for them to make ethical decisions.
The organization need to be concerned about the individuals that they want to recruit and how they give incentives to the employees. It is more challenging to take up new individuals with less than ideal values and change them to be in line with the organization’s values than it is to hire in terms of character and offer training programs for skills (Weaver, Linda, & Cochran, 1999). When looking at candidates, the leadership of organizations ought to consider that most individuals have the capacity, willingness and the desire to be ethical but unfortunately, many individuals have a greater desire to succeed, which is so strong that they are ready to sacrifice their ethics in order to achieve success. On this basis, when recruiting and interviewing, it is very important for the leadership to convey, specifically with reference to the organization, that if they (prospective employees) need to succeed in the organization, then they are expected to portray certain values that are openly mentioned (Weaver, Linda, & Cochran, 1999).
If an organization is to make advancements when making the point that it is important for the employees to exhibit certain values, then a negative occurrence should ensue should they fail to display the values. Conversely, it may not also mean that each employee who displays the desired values gets promoted, on the basis that each employee needs to be competent and be good at their jobs in the first place (Bucar & Hisrich, 2001).
After telling their values and believing in them, organizations ought to reinforce them through teaching, enforcing, advocating and modeling (Weaver, Treviño, & Agle, 2005). Teaching involves training, performance reviews, mentoring the kind of behavior that the organization expects of the employees and ensuring that they understand what these values look like. Enforcing involves putting in place appropriate consequences and praise, which is proportional to behavior, but the organization, should encourage what it allows. Advocating involves displaying on the walls, parts of performance reviews, recruiting literature and yearly reports on the values the organization stands for (Weaver, Treviño, & Agle, 2005). Modeling involves the appropriate actions by the leadership, which can be emulated by the employees.
The current State of the Field
Currently, there is relatively very little information known about what is required of an individual to follow through on ethical judgment, but the underlying assumption is that, making ethical decisions is interpersonally difficult especially if the individual has to challenge a peer or superior, and also personally risky given that the individual risks being marginalized in a group or may even suffer job loss (Treviño, Weaver, & Reynolds, 2006).
The central issues entail the associations amongst individual characteristics, organizational contexts and the multiple features of ethical behavior by the individuals either alone or in groups. There is a growing interest in positive psychology in many organizations especially in the understanding constructs like courage, which could be specifically important in explaining and predicting behavior for the individuals who have the strength to follow through on their ethical beliefs and judgments (Beeri, Vigoda-gadot, & Werner, 2013).
Modern leaders are increasingly feeling pressured to promote ethical behavior in their organizations, which makes them look for ways they can use to manage the ethical behavior. The currently used mechanisms involve understanding the composition of the present ethical culture of the organization, improving that ethical culture and sustaining ethical behavior so that it becomes embedded in the organization (Beeri, Vigoda-gadot, & Werner, 2013).
As noted, there have made great strides towards understanding the factors that influence individual ethical behavior in organizations, but much work is yet to be carried out. The next generation of research ought to give a focus on theory development, methodological vigor, and investigation into the neglected areas of study and the translation of the knowledge obtained from research for the practitioners (Butterfield, Linda, & Weaver, 2000). For instance, methodological rigor involves rigorous qualitative methods that can be applied to numerous topics for which the current knowledge is limited. It requires using contemporary construct development methods to come up with measures that demonstrate solid construct validity before they are implemented (Beeri, Vigoda-gadot, & Werner, 2013).
Individual, Group, and Organizational Influences
Ethical decision making can be influenced by individuals alone or in groups, opportunity and the organization’s policy on ethical behavior. Individuals respond to ethical dilemmas with cognitions that are determined by their level of cognitive moral development (Butterfield, Linda, & Weaver, 2000). The cognitive moral development determines an individual’s decision with regard to what is considered right or wrong (Trevino, 1992). However, there exists other circumstantial moderator of ethical and unethical decision making like the organizational culture.
As individuals interact in group settings, behavioral regularities emerge that form the basis for work group norms. The norms aid in establishing and maintaining the standards that describe the right things that can be done and the things that are worth doing (Butterfield, Linda, & Weaver, 2000). In turn, the standards work to influence the individual’s choices and result in actions that are acceptable in the organization.
There is also evidence of the application of moral philosophies in ethical decisions and are found to differ between work and non-work situations for the same person. This is in the sense that individuals are separated from each other in group settings by their respective organizational value systems than they are by their personal values (De Cremer, 2011). There also exists a strong relationship between the individual values and the organizational value systems, which implies that they are highly likely to influence policy and organizational outcomes. For instance, when an individual has an opportunity of engaging in an ethical or unethical behavior, their differential relationships with fellow employees and the organization’s leadership comes to play and predict their behavior outcomes in a marketing organization, compared to their own personal values.
Increased formalization of ethical values in organizations is a major factor that should be considered in influencing the behavioral outcomes of employees. This is because formalization will clearly spell out the nature of work and the roles expected of the employees (Butterfield, Linda, & Weaver, 2000).
Gaps in Current Knowledge and Obstacles that Limit Our Understanding
There are a number of knowledge gaps that still exist in the literature pertaining behavioral ethics, and there is hope that future research will provide the answers to those knowledge gaps (Treviño, Weaver, & Reynolds, 2006). These researches that will close the knowledge gap include the ones done in the areas of judgment and behavior, which is currently undergoing changes to make the research concerning organization ethics more effective. Previously, research on behavioral ethics was based on individual-level cognitive perspective for a long time. However, currently, the research has been better since more fundamental approaches have started to emerge (Treviño, Weaver, & Reynolds, 2006). For instance, there are more enthralling approaches that have been arrived at to carry out studies that investigate judgment and behavior as applied to ethical decision making. For instance, research suggests that prefrontal damage is associated with deception, violence, aggression and other antisocial behaviors.
In addition, the Financial Magnetic Resonance Imaging is being used to trace and discover different sections in the brain during moral in opposition to non-moral reasoning decision making. This concept acts by the model tracing blood flow in the participants’ brain during decision making (Treviño, Weaver, & Reynolds, 2006). With regard to research findings, social scientists have provided ethical decision making models that are grounded in or tied to neurology and which dare the dominant cognitive perspective. According to social institutionist’s models, ethical decision making is highly influenced by emotions, social cues and social priming by the environment as opposed to moral cognition alone (De Cremer, 2011).
Advanced research approaches are now focusing on higher levels of analysis because much decision in organizations occurs in groups or organization-level phenomenon. More encouragement has been directed to future researching approaches to detect whether and how moral awareness, motivation and judgment can be conceptualized and studied at a group level. In addition, research in the future should focus on determining whether the hierarchical level of decision making group matters (Treviño, Weaver, & Reynolds, 2006).
Future research should focus on finding out the consequences of ethical and unethical behavior in organizations. Current research is looking into the positive consequences of ethical leadership, for example positive employee attitude and the willingness of the employees to report problems to the management (Treviño, Weaver, & Reynolds, 2006). For instance, varied cultures have varied preferences for quality in opposition to merit as a basis for moral decision making. Thus, it is necessary for research to find out which behavioral ethics are culturally specific and those which are not, to be precise. To close this gap, organizations need this ethical information to perform effectively. In addition, cross cultural research should focus more and develop on theories that explain the prospective association between national and sub national cultures with matters concerning moral identity, awareness and effect, cognitive issues of disengagement and bias and group and organizational effects on ethical behaviors (De Cremer, 2011).
Conclusion Offering Directions for Future Research on Behavioral Ethics in Organizations
Reviews of varied empirical studies in ethical behavior indicate that researchers have started several streams of research and most of their results suggest that many organizations in the current world espouse comparatively high ethical values to run their businesses. In addition, these organizations also encounter a number of ethical issues during their existence that mostly require the management to make decisions to solve the issues that evolve during the initiation and the running of a new venture. Research has also shown that organizations are established to support the existence of an ethical climate as these organizations evolve and emphasize CSR (Baucus & Cochran, 2009). However, some small research studies that have been carried out on small business owners and their employees and which research instruments have not been shown to prove valid, present a different nature of feedback concerning ethics in organizations (Baucus & Cochran, 2009).
Sometimes researchers find it challenging to study ethics in varied organizational settings because of limited knowledge of the literature behind each discipline. Therefore, it is important for researchers and business scholars to apply and empirically test one of the widest and common conceptual models of ethics as well as largely transfer and test research ethics into entrepreneurial contexts (Baucus & Cochran, 2009).
Future research on the ethics in organizations can be easier if the researchers start by empirically testing arguments from varied results of conceptual articles on ethics and entrepreneurship. Entrepreneurial firms can replicate the international research that has been carried out on ethics such as the entrepreneurial research by Bryant in 2009, which investigated the relationship between self-regulation and more awareness. These kinds of research can be studied together with other international researches to deduce the difference that appears across national borders. These correlations can be used to determine the best way to come up with ethical concepts that can be applied everywhere in all organizations. In addition, for successful results, there must be a great collaboration between the ethics and entrepreneur scholars. In attempt to develop better research designs and insightful questions regarding research, research teams and scholars can work together to bridge the knowledge gap that exists in these entrepreneurships and these ethical concepts.
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