Business Ethics

David Wasieleski, James Weber, David M. Wasieleski, James Weber

• Verlag: Emerald Publishing Limited
• Jahr: 2019
• ISBN:
  9781789736854
• Thema: Commerce
• Thema: Commerce Général

The Business and Society (BAS) 360 book series is an annual publication targeting cutting-edge developments in the broad business and society field, such as stakeholder management, corporate social responsibility and citizenship, business ethics, sustainability, corporate governance and others. Each volume will feature a comprehensive discussion and review of the current 'state' of the research and theoretical developments in a specific business and society area. As business and society is an inherently multi-disciplinary scholarly area, the book series will draw from work in areas outside of business and management, such as psychology, sociology, philosophy, religious studies, economics and other related fields, as well as the natural sciences, education and other professional areas of study.
This volume focuses on research drawn from work grounded in 'Business Ethics.' Scholars known in this discipline contribute to a 360-degree evaluation of the theory, including cross-discipline research, empirical explorations, cross-cultural studies, literature critiques and meta-analysis projects.
The book should appeal to a wide range of readers; from emerging and senior business school educators researching and teaching in the business and society field, to doctoral and masters level students across the business, social sciences and natural sciences seeking to learn about this multi-discipline and sustained field of management study. Business executives and managers could benefit from reading how the business and society field began, the path it has taken and the new, emerging directions that scholars envision for the field.

PART 1
FOUNDATIONS

Chapter 1

Behavioral Business Ethics: The Journey From Foundations to Future

Jennifer J. Kish-Gephart, Linda Klebe Treviño, Anjier Chen and Jacqueline Tilton

Abstract

The field of behavioral business ethics has come a long way since its inception nearly five decades ago. Pioneered in part in response to a number of high-profile corporate scandals, the early field of business ethics was thought by many to be a fad that would recede along with the salience of the scandals of the day. Yet, this could not have been further from the truth. The need for behavioral business ethics research remains ever-present, as evidenced by the sustained number of scandals and unethical behavior within and by organizations. Moreover, research in this area has burgeoned. In the 1980s, only 54 articles had been published on this topic (Tenbrunsel & Smith-Crowe, 2008); today, a similar search yields over 3,000 “hits.” In light of the area’s growth, we suggest the need to take a look back at the seminal work that sparked social scientific work in the field. In particular, this chapter has two main objectives. First, we provide a review of select foundational work. In so doing, we identify some of the key trends that characterized early knowledge development in the field. Second, we draw on this historical context to consider how past trends relate to current work and speak to future research opportunities.

Keywords: Business ethics; behavioral business ethics; moral psychology; ethical decision making; organization science; historic foundations

The study of ethical decision-making and behavior in organizations has come a long way since the sporadic work that characterized the business ethics field nearly five decades ago. In the 1970s, only 10 articles had been published on the topic of business ethics in organizational behavior (Tenbrunsel & Smith-Crowe, 2008) while today (in 2018), a similar search yielded over 3,000 “hits.” Additionally, in 2005, O’Fallon and Butterfield noted that more empirical research articles had been published in the preceding seven years than in the previous four decades and the upward trend has continued, as seen in recent reviews (e.g., Kish-Gephart, Harrison, & Treviño, 2010; Moore & Gino, 2015; Treviño, Den Nieuwenboer, & Kish-Gephart, 2014; Treviño, Weaver, & Reynolds, 2006; Weaver, Reynolds, & Brown, 2014).

In light of this area’s growth, we take a look back at some of the seminal work that started the field. For those who are new to the field, its current success may give the false impression that it has always been accepted as a legitimate area of study. Yet, for many years, business ethics researchers struggled with the perception that the study of ethical decision-making and behavior in organizations was “just a fad” and would recede along with the salience of the most recent high-profile scandal. This latter belief is particularly surprising given that scandals are not new to American history and have been cited as the motivation behind business ethics-related writings and research since at least the 1950s. Consequently, rather than providing a comprehensive review of business ethics work (as there are many excellent reviews available to interested readers; e.g., Moore & Gino, 2015; Tenbrunsel & Smith-Crowe, 2008; Treviño et al., 2014; Treviño et al., 2006; Weaver et al., 2014), our goal in this chapter is to provide a summary of the historical trends that characterize the early years of business ethics research. In so doing, we aim to elucidate the “historical knowledge” that “gives solidity to the understanding of the present and may suggest guidelines for the future” (Elton, 1967, p. 67 as cited by Warren & Tweedale, 2002, p. 211).

In the following sections, we begin by defining (un)ethical behavior and distinguishing normative (the study of the “ought”) from descriptive (the study of “what is”) ethics research. Next, we review some of the key works that typified the business ethics research landscape across three different time periods: (1) the years before business ethics became a discernable field (between the 1960s and early 1980s), (2) the “birth” of behavioral business ethics as a field (mid- to late 1980s), and (3) the subsequent two decades that helped substantiate the field’s durability (from the 1990s to early 2000s). We conclude the chapter with a discussion of future research opportunities.

Defining Behavioral Business Ethics

Before turning to the review, two points are worth noting. First, Treviño and colleagues (2006) identified three outcomes that are commonly studied within behavioral business ethics – including extraordinary ethical behavior that goes beyond society’s moral minimums (e.g., charitable giving, whistleblowing), more routine ethical behavior that meets minimum moral standards of society (e.g., honesty, treating people with respect), and unethical behavior (behavior that is contrary to accepted moral norms in society; e.g., lying, cheating, stealing among others). Due to length restrictions, our chapter will focus on the latter two. However, we point interested readers to extant reviews on whistleblowing (Mesmer-Magnus & Viswesvaran, 2005; Miceli, Near, & Dworkin, 2013 and voice Morrison, 2011, 2014). We also follow prior convention by using the term “ethical” behavior broadly to refer to both ethical and unethical behavior in an organizational context (Treviño et al., 2014).

A second consideration is the distinction between normative and descriptive ethics. The normative or philosophical approach to business ethics offers multiple normative frameworks to guide ethical decision-making and behavior (frameworks that help people decide what they “should” do in ethical dilemma situations and then are applied to business ethics decisions and issues). By contrast, the social scientific approach has focused on explaining and predicting actual ethical and unethical decision-making and behavior – what people think and do when facing a morally charged issue and what influences their thinking and action. In this chapter, we prioritize the social scientific study of business ethics although we recognize the important contributions of normative work. And, because the mid- to late 1980s and early 1990s raised a discussion among business ethics scholars about how the two approaches might (or should) be separate or even integrated (e.g., Donaldson & Dunfee, 1994; Kahn, 1990; Treviño & Weaver, 1994; Weaver & Treviño, 1994), we also discuss and cite normative work where appropriate.

Setting the Stage – Pre-1980S Work in Business Ethics

Concern about the values, morals, or ethics of business is nothing new. Historians point to questions posed by concerned citizens and journalists about the ethics of American business as far back as the early days of our country’s history (e.g., Zinn, 2003). Yet, as we describe below, the study of business ethics has relatively recently become a distinct social scientific field. In this section, we provide a brief account of some of the key works and historical events that preceded and, in many ways, helped to inspire the “birth” of the field.

Pre-1960s

According to a review by DeGeorge (1987), “the principal activity during this long and indefinite period was primarily theological and religious,” including work that raised questions about the rights of workers and the morality of capitalism. He referred to this period as “ethics in business” (DeGeorge, 1987, p. 202, italics original) because business was just one of many areas of life in which ethics was applied (e.g., government, family and personal life). Although business ethics did not yet exist as a “distinctive field” (DeGeorge, 1987, p. 202), some foundational research touched on related topics. Barnard (1938), for example, dedicated the last chapter in his book, “Functions of the Executive” to executive responsibility, arguing for the moral leadership of executives:

the quality of leadership, the persistence of its influence, the durability of its related organizations, the power of the coordination it incites, all express the height of moral aspirations, the breadth of moral foundations. (p. 286)

In criminology, Cressey (1953) provided an early study of financial trust violation crimes (occurring mostly within organizations) that would later become highly influential for contemporary understandings of rationalizations and moral disengagement techniques.

The 1960s

Tensions between business and society were marked in the 1960s. As DeGeorge described, “the 1960s are known as a period of revolt against authority, of student unrest, and of the emergence of a counter-culture, partly as a result of the Viet Nam War [sic]”; it was also marked by:

the decay of the inner cities, and with the development of modern industries, the growth of ecological problems, of pollution, and of toxic and nuclear waste […] [and] the rise of consumerism. (1987, p. 202)

Although businesses were highly profitable during this time, Petit (1967) noted that executives were experiencing a “moral crisis.” He described the apprehension among business people who increasingly felt that the long-standing “profit ethic” – which had been slowly eroding in societal acceptance since the Great Depression and New Deal in the 1930s – was being challenged and replaced by a less understood “social responsibility ethic.” Interestingly, it was during this period that business schools began to offer social issues courses (DeGeorge, 1987), and “business ethics” was becoming part of the vernacular (Purcell, 1977).

Despite the aforementioned unrest and several high-profile scandals (e.g., price fixing of electrical equipment in 1961; the fixing of television quiz programs in 1959), business ethics research during this decade continued to be rare and indistinct. One exception was Baumhart’s survey of executives’ opinions and beliefs published in the Harvard Business Review (HBR) in 1961, followed by a book in 1968. Whereas a growing number of people were questioning executives’ motives (suggesting they were solely profit-driven), Baumhart noted a lack of empirical examination of executives’ actual “ideas, problems, and attitudes” (p. 7). To attempt to remedy the situation, he mailed questionnaires to 5,000 Harvard Business Review readers and received 1,531 responses. Although this was not a random sample by any means, respondents reported that they experienced many pressures to compromise their personal code of ethics and that it was difficult to maintain the same code at work as at home. They also believed, however, that good ethics is good business in the long run and that top management must lead the way in reducing unethical practices. Baumhart concluded his report with optimism, encouraged by respondents’ statements of “courageous decisions made for ethical [and not self-interested or profit motive] reasons” (p. 176).

The 1970s

Many serious and highly publicized political and corporate scandals emerged during the 1970s. The Watergate scandal implicated Richard Nixon for unlawful use of power, such as using the IRS to punish dissenters, interfering with the CIA, and misusing the FBI and Secret Service; this scandal also involved revelations of illegal lobbying by major corporations (Lewis, 1979). In 1975, on the heels of Watergate, a US Securities and Exchange Commission investigation led to over 400 companies admitting to questionable or illegal payments to foreign governments (which ultimately motivated the passage of the Foreign Corrupt Practices Act in 1977). There was also “growing public anxiety about economic instability, inflation, unemployment, questions about the adequacy of energy and other resources, and of the ability of future economic growth to satisfy national needs and aspirations” (Silk & Vogel, 1976, p. 22). According to a Business Week article (1973), “not since the electrical equipment price fixing cases of the early 1960s have so many people—friends as well as enemies—questioned so sharply the ways business conducts its affairs” (p. 178). Cressey and Moore (1983) noted that public confidence in business had fallen so low that one top executive publicly “expressed concern that corporate officials were beginning to be perceived as ‘little more than manicured hoodlums’” (p. 53). Perhaps not surprisingly, these events coincided with a “surge in writing dealing with business ethics” (Carroll, 1975, p. 75).

Academic writing on business ethics from the 1970s and into the early 1980s tended to involve case studies and survey reports. Purcell and Weber (1979), for example, provided an in-depth case study of the Norton Company in Worchester, Massachusetts – “one of the few major corporations to have [an] institutionalized ethical policy” (p. 5). Strother (1976) considered the Watergate Scandal using Barnard’s (1938) theory of executive responsibility. Research during this period, however, was primarily dominated by atheoretical survey studies that reported on managers’ or employees’ beliefs and opinions (e.g., Allen, 1980; Bowman, 1976; Carroll, 1975; Carroll & Beiler, 1975; Lincoln, Pressley, & Little, 1982; Purcell, 1977; Walton, 1977). In a follow-up to Baumhart’s (1961) survey, for instance, Brenner and Molander (1977) reported the results from 1,227 Harvard Business Review readers. Similar to Baumhart’s study, the results suggested that business people continued to see themselves as more moral than their peers; but, fewer respondents in the 1977 study believed they had experienced an ethical dilemma at work, suggesting to the authors the uncomfortable possibility that ethical standards had actually declined or unethical behavior had become more normalized since the 1961 study (Brenner & Molander, 1977). In another study of 1,500 employees, Allen (1980) reported that “less than 10 percent [of the respondents] felt that the organizations in our society ...