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Organizational Ethics

Organizational ethics has been studied for many years, particularly in response to widely publicized scandals in both the for-profit and nonprofit sectors worldwide. Such scandals raise important questions about organizational ethics and have become more prominent in recent years as business organizations have become increasingly central institutions, often eclipsing the state, family, and community in their social, political, economic, and technological influence. At its core, organizational ethics research explores the tension between what people should do (prescriptive ethics) and what people actually do (descriptive ethics) in their organizations. This entry discusses the significance of organizational ethics research, its most common topics, relevant theories, and typical methodologies. In addition, this entry addresses some of the key challenges of conducting organizational ethics research.

The Value of Organizational Ethics

From the organization’s perspective, emphasizing ethics is important in terms of issues of risk management, market positioning, civic positioning, and organizational functioning. From the individual’s perspective, organizational ethics is important as employees seek security, equality, opportunity, and, ultimately, happiness and fulfillment at work. Ideally, there is alignment between the interests and perspectives of the employee and the organization but, at times, personal values may conflict with organizational values. In such cases, individuals are faced with an ethical dilemma between acting on behalf of the organization or acting consistently with their own personal identities.

In this respect, organizational ethics is concerned with clarifying what constitutes human welfare and the kind of behaviors necessary to promote it. Ethical issues emerge when our perception of what constitutes human welfare requires clarification around an ethical dilemma. For example, employees may face right/right dilemmas such as truth versus loyalty, in which they experience a tension between telling the truth about ethical concerns at work or remaining loyal to the company and/or coworkers. In such right/right dilemmas, decisions are challenging because they represent competing “goods” in which each option is rooted in one of our basic core values. Similarly, employees may confront other right/right dilemmas such as justice versus mercy, short- versus long-term decisions, and the individual versus the community. Scholars have sought to understand and affect such tensions in ethical dilemmas by examining ethical awareness, ethical judgment, and ethical action, thereby creating organizations that are simultaneously productive and humane, responsive and responsible, and economically and ethically viable.

Topics of Organizational Ethics Research

Historically, a wide range of practices have been studied under the broad definition of organizational ethics, including legal compliance, globalization and labor conditions, equal opportunities (e.g., sex, race, age, disability) in the workplace, corporate governance, social and environmental responsibility, economic justice, employee control and discipline, fair wages and benefits, customer redress for accidents and product malfunctions, advertising and marketing misrepresentation, philanthropy and community involvement, and whistle-blowing, among others. There is also a great deal of research in the field of organizational ethics that defines and refines the role of overlapping concepts such as ethical orientation, ethical recognition, ethical intent, ethical judgment, and ethical reasoning. Such topics emerge as ethical issues because of their relationship to the social, political, economic, technological, and environmental conditions in our society.

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