Psychology Of Ethics In Organizations Research Paper

1. The Concept Of The Organization

Organizations can be understood as legal entities for which, on the basis of a contract, people work (Coleman 1990). Organizations act as legal entities through the actions of their employees. For this reason, organizations can also be characterized as secondary agents. In addition to having voluntary members who work for it, an organization may also have compulsory members. Such compulsory membership may be based upon national laws and regulations, as in the case, of students in compulsory schools, prison inmates, military inductees, forced laborers, or the inmates of psychiatric institutions. The discretion of members of an organization as representatives of the organization (i.e., those in a superior position, such as management or professional staff ) over other members of the organization (i.e., subordinates) are created on the basis of contractual and legal relationships. The relationship between a person and an organization has three aspects: (a) people act towards the organization as a legal entity, for example, when a person enters into a contract of employment with the organization; (b) by virtue of this contract, people take on a specific role in the organization and then act for the organization, for example, as a ‘superior’; and (c) in the context of the organization people also act for themselves, for example, when they try to prevent the promotion of a colleague in order to be promoted themselves.

2. Morality And Ethics In Organizations

Moral judgments and actions are permanent components of the activities of individuals in organizations. One’s own actions and the actions of others are judged as good and bad, just and unjust, fair and unfair. This can be accompanied by specific emotions such as outrage, embarrassment, or regret. In addition, people discuss what would have been a morally appropriate action in a given situation. While doing so, they attempt to give grounds for their conclusions (Gethmann 1989). At times, however, moral utterances are used as weapons in order, for example, to give others a bad conscience, to exclude others from access to particular resources, or to mobilize others to support one’s own cause. Thus, whereas morality is part of our everyday practice, ethics is concerned with the conceptual analysis of moral linguistic expressions (meta-ethics) as well as with the rational justification of norms on the basis of ethical theories (normative ethics). Ethics is thus a considered reflection on morality. Rationally justified moral demands and norms can be characterized as moral and ethical demands.

One important meta-ethical question for ethics in organizations is the problem as to whether it would make sense to ascribe to organizations not only a juridical, but also a moral and ethical responsibility (Curtler 1986). Speaking in favor of a morally and ethically justifiable responsibility of organizations is the fact that organizations can be understood as agents, and that the ends of these agents are not in every case reducible to the ends of the members of the organization. The question, however, is whether one should start from the assumption that organizations are to be understood as ends in themselves rather than as the means to the ends pursued by individual people. However, speaking against the view that organizations have an ethically justifiable moral responsibility is the fact that organizations have neither feelings of pain, nor a sensitivity for the suffering of others, empathy, or a conscience. Lenk and Maring (1992) come to the conclusion that people cannot exculpate themselves morally and ethically simply by pointing to the responsibility of the organization. Alternatively, the proof of the morally and ethically unacceptable actions of individual people does not automatically mean an exculpation of the organization.

The problems of normative ethics in organizations are the following: What objectives may organizations legitimately pursue vis-a-vis the members of the organization? What objectives may people in the organizations pursue? What conditions must organizational rules satisfy to be ethically acceptable? What should the interactions between people in organizations and between people and the organization be for them not to violate any ethical rules? Ethical problems such as these can occur in both profit and nonprofit organizations.

3. Normative Ethical Theories

Organizations are based on contracts. These contracts are morally and ethically permissible as long as they satisfy the following conditions (Garrett and Klonoski 1986, pp. 88–91): (a) the contract does not come about as the result of coercion, but rather is based upon the voluntary consent of all contracting parties; (b) the contracting parties know the terms of the contract; (c) no side may make intentionally false statements vis-avis the other parties about the underlying circumstances of the contract or consciously fail to disclose relevant facts to them; and (d) the contract cannot obligate the contracting parties to carry out morally and ethically unacceptable actions. From an ethical perspective, people should not enter into any contracts with organizations which could obligate them to carry out morally and ethically unacceptable actions. Since organizations can act only through the actions of people, it should also be possible in this way to rule out morally and ethically unacceptable actions by organizations. In practice, one of the difficult problems is the question of determining how dissimilar negotiating positions should be viewed; the side with the weaker negotiating position may face coercion to enter into the contract on the conditions of the stronger side.

However, theoretical contractual considerations are not fundamental from an ethical point of view, for they presuppose that there are criteria available by means of which one can distinguish between morally and ethically unacceptable actions and morally and ethically neutral actions. In addition, the justification for complying with contracts can also not be based solely on a contract; for, if the foundation of contracts were only personal interests, there would be no reason not to breach a contract at precisely the moment when one’s personal interests could be better served by breaching the contract.

The focus of utilitarianism (see Glover 1990) is on general good. Utilitarianism postulates that in a choice from among various possible courses of action, the moral and ethical courses of action are those whose empirical consequences result in the greatest good of all parties involved. Accordingly, it does, in general, make good sense to comply with contracts. If, however, in a particular situation it would be better for the overall good of all of the parties involved not to comply with a contract, one has, in the view of utilitarianism, an ethical duty to breach the contract. Thus, utilitarianism cannot underpin ethically contractual demands in organizations. Nevertheless, for behavior that is not covered by contracts, utilitarianism can tell people how they should conduct themselves toward others in organizations.

The respecting of basic rights as an unconditional moral and ethical duty is the object of the so-called categorical imperative of Immanuel Kant (1964, p. 96), who demanded that one never treat oneself and others only as a means, but always also as an end in itself. This is expressed in the demand for the respect of a person’s dignity, freedom, and right to life. The other basic rights, such as, for example, the right to privacy, property, freedom of conscience, or the right to freedom of expression can be derived from these fundamental human rights. One criticism expressed about Kant is that he merely postulates the categorical imperative as a ‘fact of reason’ without providing any further grounds for it. Discourse ethics (Habermas 1990, Apel 1999) takes as its point of departure the assumption that only a rational clarification of conflicts of interests can be an ethical clarification of conflicts of interests. According to discourse ethics, a rational clarification occurs whenever, through the exchange of sound arguments, an agreement is reached which can be consented to by all affected parties without coercion. Thus it is important to create conditions which enable the people involved to enter into a debate concerning the norms in dispute. Since conflicts can only be clarified rationally through debate between the affected parties, the preconditions for debate also constitute the basis of ethics. An important ethically relevant precondition for debating is that those debating may not exclude other people able to act and speak on their own account from debating with them, for consent to a debate is rational when it is based solely upon the recognition of the argument’s better grounds. And it is from these preconditions that the so-called principle of universalization of discourse ethics follows. It states that a norm is only just if and when all affected parties are able to accept the consequences and side effects expected to arise from the universal compliance with the norm for the satisfaction of the interests of each individual. Any skeptic wishing to give reasons for the ethical thesis that there are no universally binding rational norms would have to begin to argue. In doing so the skeptic has in fact already become involved in a rational argument. If, however, he or she has become involved in a rational argument, the skeptic has thus already accepted the preconditions of argument and the principle of universalization it implies.

Thus, discourse ethics is, in contrast to utilitarianism or Kant’s categorical imperative, rationally grounded. If one follows discourse ethics, a person is ethically bound by contracts only as long as, and to the extent that, it can be assumed that all contracting parties fulfill their commitments. If a party does not fulfill its commitments and if the compliance with the contract is thus attended with unreasonable disadvantages for the other parties, then the ethical duty to adhere to the contract is also suspended.

4. Exemplary Instances

In this section a rough outline will be given of some exemplary instances concerning ethics in organizations.

To regulate admittance, an organization frequently applies a procedure for the selection of personnel. These procedures must not violate the applicants’s right to rational self-determination and freedom from emotional and social harm. To ensure transparency, before the selection procedure is carried out, applicants should be informed of its objectives, the approach, and the possible consequences. The selection process is to be conducted tactfully and respectfully. The diagnostician is obligated not to disclose certain facts to third parties. This is to protect applicants from potential social stigmatization. The question of the justice of selection strategies is posed by the problem of whether people are hired merely as the result of how well they do in a diagnostic procedure. Should other criteria be decisive factors, the consequence would be a deviation from the allocation of the most qualified applicants to positions. Such a strategy could in the long run, however, have a detrimental effect on the common weal.

Within the organization employees are subordinated to the instructions of a manager on the basis of the employment agreement. They thus give up a part of their autonomy, trusting that the superior will neither misuse it for the benefit of the organization nor for his or her own personal benefit. From this there ensues an ethical and moral responsibility of the superior for the care and welfare of his or her employees. In the view of discourse ethics, the superior must implement this duty so that it becomes progressively unnecessary. This means that he should transparently organize the conditions within his or her area of responsibility and should manage the employees in such a way, that in the framework of their actions in the organization, they can win back, piece by piece, their self-responsibility.

Putting pressure on someone to act against conscience reduces a person to the status of a pure means for the predetermined ends of others and in so doing violates the basic moral and ethical right to rational self-determination. If the superior becomes convinced that a member of the organization has, on the basis of honorable motives, refused an activity for reasons of conscience and has seriously examined his or her matter of concern, the manager should make every effort to entrust that member of the organization with another activity.

Micropolitics is understood as the secret machinations by which individual members of organizations, or special groups in organizations, act for the attainment of private advantages (Velasquez et al. 1983). From the viewpoint of moral and ethical basic rights, the use of micropolitical tactics are to be rejected because the possibilities of another person achieving rational self-determination are restricted by means of tricks and deceit. A consequence of the discourse ethics view is the demand that people in organizations should collaborate on creating and preserving structures which make possible the open resolution of conflicts.

The following criteria have been postulated for the creation of quality working conditions in organizations (Levine et al. 1984, Luczak et al. 1989, p. 58): (a) at work people should find working conditions that are feasible, tolerable, unrestricted, and not dangerous; (b) in terms of job content, the work assignment, working environment, and pay should meet standards of social adequacy; (c) in addition to this, work should be accompanied by a certain amount of latitude in terms of activities and scope of operations; (d) the work should provide an opportunity to acquire skills; (e) it should give the worker satisfaction and preserve and further develop their personality, i.e., their self-confidence and willingness to take on responsibility; (f ) the workers should, in addition, have the possibility of participating in the organization of their working conditions; and (g) finally, the effects of the working conditions should be socially compatible (e.g. profamily). Apart from this, demands are made for environmentally friendly working conditions.

As many case studies prove, safety insufficiencies and risks are frequently well-known in factories, planning offices, and laboratories long before there are deaths and disasters. Often the members of the organization are aware of such insufficiencies. If they do not get any response to their warnings in the organization, some contribute to the protection of the public by making these risks public (James 1989).

The due-process doctrine (Carroll 1992, pp. 421–8) concerning the termination of employment, demands that discharges ought to take place in accordance with codified regulations. Thus, notice of termination should not be given arbitrarily, but only when certain facts can be shown to be the case. The affected parties are to be informed of the grounds for the termination. They should have the opportunity to comment on these grounds and thus effect, if appropriate, the rescinding of the termination.

5. Forms Of Enforcement And Implementation

There are starting points available for rendering morally and ethically acceptable conduct practically possible by and in organizations at the macro, intermediate, and micro levels.

At the macro level of many national constitutions, government agencies are committed to the protection of fundamental human rights or to compliance with the principle of equal treatment. It is, however, disputed in many countries whether, for the guaranteeing of these principles, the state or the administration of justice ought also to intervene or be permitted to intervene legally in the relationship of private organizations and members of organizations. In addition, a problem of substantive law is the extent to which it is not just promulgated, but actually applied as well.

At the intermediate level, independent unions and a right to strike guaranteed by the government have played an important role. Unions, however, frequently do not only pursue moral and ethical objectives, but above all the particular interests of their members. Professional associations with a high public reputation, such as the professional associations of scientists, engineers, physicians, architects, or psychologists (Lindsay 1996), can also influence practices at the intermediate level by means of moral and ethical conduct guidelines for their members in organizations. Associations in which organizations have joined together can likewise introduce moral and ethical standards on the basis of a voluntary self-commitment on the part of the organizations. The motivation behind the introduction of standards, however, is frequently not only the facilitation of morally and ethically acceptable conduct in organizations, but also the improvement of reputation in the public eye as well as the avoidance of statutory regulations. Although such self-interested motives are legitimate, they must not result in a biasing of the standards.

On the micro level, the public denunciation of organizations on the basis of unethical practices can be an effective means of enforcing moral and ethical standards in organizations. If individuals with a high degree of moral sensitivity have a very strong position in an organization, as is sometimes the case for private entrepreneurs, the result can be that they try to make their moral views binding for the objectives, rules, and processes in the entire organization. Even individual members of an organization without any special position in the organization can trigger changes as conscientious objectors or ‘whistle-blowers.’

Regarding the implementation within the organization of external legal and ethical standards, two ideal typical strategies are currently being discussed, namely the so-called compliance approach and the integrity approach (Paine 1994). In the compliance approach externally predetermined standards are translated into internal active and restrictive regulations, compliance with which is enforced within the organization by means of controls and sanctions. In the integrity approach an effort is made through an organizational development process at all levels of the organization to activate the moral sensitivity of the members of the organization. The danger in the compliance approach is that, due to the strong outside control, members of the organization become morally desensitized and develop a mentality of getting around the guidelines. In the integrity approach, members of an organization cannot invoke written rules to defend themselves against morally and ethically inadmissible expectations. What is important is a sensible combination of the compliance and the integrity approaches.

6. Summary

Organizations can be understood as legal entities for which, on the basis of a contract, persons work. Moral judgments and actions are permanent components of the activities of individuals in organizations. Ethics is a considered reflection on morality. Ethics in organizations deals with the ethically justifiable moral responsibility for the structures and processes in organizations. People cannot exculpate themselves morally and ethically simply by pointing to the responsibility of the organization. However, the proof of the morally and ethically unacceptable actions of individual people does not automatically mean an exculpation of the organization. Discourse ethics can underpin the ethical commitment to transparent contracts entered into voluntarily. In addition, the basic-rights approach provides concrete examples and discourse ethics provides formal rules for the determination of ethically unacceptable obligations to which one should not commit oneself in a contract. Exemplary instances were discussed, namely ethical guidelines for personnel selection, ethical problems in the superior–subordinate relationship, the freedom of conscience in organizations, the ethical problematic of micropolitics in organizations, the right to make public abuses in organizations (whistle blowing), as well as ethical rules for dismissal from organizations. Different forms taken by the enforcement of ethical standards in organizations at the macro, intermediate, and micro levels were presented. Finally, a sensible combination of the compliance and the integrity approaches regarding the implementation of moral and ethical standards in organizations was proposed.

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