By Justin Ames
Doctoral Fellow, Fowler Center for Business as an Agent of World Benefit
Doctoral Fellow, Weatherhead Management Design and Innovation
PhD in Management-Designing Sustainable Systems-2018
Weatherhead School of Management
Case Western Reserve University
The ethical behavior of for-profit businesses and the executives who guide them is increasingly being called into question. For example, (Hoffman, Frederick, & Schwartz, 2014) recently cited data showing that “Americans believe that the ethical standards of business are lower than those of society as a whole” (Hoffman et al., 2014). There is a general distrust that when executives are faced with a high-pressure strategic decision, they will adequately consider the interests of all stakeholders involved, opting instead to do all they can within the law (and sometimes outside the law) to meet the demands of ownership.
While it’s likely you may have occasionally interacted with an executive that you’re sure fits the stereotype above, it’s also likely that you know many executives who you consider to be good and virtuous individuals. In the aftermath of many corporate scandals, the efforts to reconstruct events often uncover stories of generally good people getting caught up in a bad situation. Current ethical decision-making models are inadequate for explaining the plight of the morally minded executive caught in a high-pressure strategic group decision-making process with moral implications. For decades, social scientists have endeavored to explain the ethical decision-making process that explains ethical behavior in organizations, yet, “much remains to be understood about how” unethical decisions are made (Kish-gephart, Harrison, & Trevin, 2010) and studies are rife with inconsistent findings (O’Fallon & Butterfield, 2005; Tenbrunsel & Smith-Crowe, 2008).
Descriptions of individual and organizational decision-making behavior are often divided between the “bad apple” argument-unethical behavior is driven by a few “unsavory individuals” (Simpson, 1987)-and the “bad barrel” argument-“organizational environment poisons otherwise good apples” (Trevino & Youngblood, 1990). In light of these arguments, we find ourselves asking: What about the good apples? What explains the ethical reasoning and behavior of a good apple caught in a bad barrel?
Nascent research suggests that when a morally minded executive finds themselves in ethical conflict with the consensus of the rest of the executive team, they experience significant levels of “moral stress” above and beyond the general stress normally associated with their job(Reynolds, Owens, & Rubenstein, 2012). Research also suggests that there is a heavy price to pay for experiencing moral stress as it can lead to higher levels of burnout, decreased job satisfaction, and turnover intent(DeTienne, Agle, Phillips, & Ingerson, 2012).
In a society demanding more from business in the form of social responsibility and sustainable human resource practices, how can the organization act to help the morally minded executive and retain valuable talent in the quest to improve the organization?
While the pressure associated with illegal actions seem obvious, let us examine the “grey areas” of ethical decision-making: decisions that may not be illegal, but may be considered to violate the values of one or more executives. Executives regularly take part in high-pressure group strategic decisions involving “moral considerations” (Tenbrunsel & Smith-Crowe, 2008) as members of senior management teams, and the collective actions of the team can come into conflict with the personal values of the individual executive. How can the executive, holding to his set of values, reconcile ethical conflict with the rest of the group, and decrease moral stress?
In a 2015 study Ames interviewed 30 executives who shared in the strategic decision-making responsibility for their organizations and had experienced a high-pressure decision-making process where they were forced to compromise with their own values. Ames found that decision-making process quality played a significant role in mitigating the effects of moral stress. High decision-making process quality was marked by high levels of collaboration, authentic consideration of alternative solutions, and a dedication to accessing and review of the best data available. Low decision-making process quality was marked by authoritarian unilateral decisions (ex: CEO pulling rank and making the decision alone), lack of data, and rushing decisions without fully discussing possible alternatives. In essence, the morally minded executive desires “due process” in the consideration of their ethical concerns. With due process intact, executives were often able manage down the effects of the ethical conflict.
For those professionals responsible or interested in shaping an ethical climate in their organization, influencing decision-making protocol to offer due process for values driven conflict may have a significant impact on decreasing moral stress, retaining valuable executive talent, and increasing their overall well-being.
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Ames, J. (2015). High Pressure Strategic Decision-making in Private Equity Portfolio Companies: The Role of Trust, Respect, and Credibility in Reconciling threats to Moral Identity. Cleveland.
DeTienne, K. B., Agle, B. R., Phillips, J. C., & Ingerson, M. C. (2012). The Impact of Moral Stress Compared to Other Stressors on Employee Fatigue, Job Satisfaction, and Turnover: An Empirical Investigation. Journal of Business Ethics, 110(3), 377–391. http://doi.org/10.1007/s10551-011-1197-y
Hoffman, W. M., Frederick, R. E., & Schwartz, M. S. (2014). Business ethics: Readings and cases in corporate morality. John Wiley & Sons.
Kish-gephart, J. J., Harrison, D. A., & Trevin, L. K. (2010). Bad Apples , Bad Cases, and Bad Barrels : Meta-Analytic Evidence About Sources of Unethical Decisions at Work, 95(1), 1–31. http://doi.org/10.1037/a0017103
O’Fallon, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996–2003. Journal of Business Ethics, 59(4), 375–413.
Reynolds, S. J., Owens, B. P., & Rubenstein, A. L. (2012). Moral stress: Considering the nature and effects of managerial moral uncertainty. Journal of Business Ethics, 106(4), 491–502.
Simpson, J. C. (1987). Wall Street’s courting of MBAs proceeds apace despite scandals. Wall Street Journal, 2(1).
Tenbrunsel, A. E., & Smith-Crowe, K. (2008). Ethical Decision Making: Where We’ve Been and Where We’re Going. The Academy of Management Annals, 2(1), 545–607. http://doi.org/10.1080/19416520802211677
Trevino, L. K., & Youngblood, S. A. (1990). Bad apples in bad barrels: A causal analysis of ethical decision-making behavior. Journal of Applied Psychology, 75(4), 378.