Desarrollo Moral VII

British Journal of Management, Vol. 14, 223-235 (2003)

Management and Business Ethics: ACritique and Integration of Ethical

Decision-making Models

Dean BartlettManagement Research Centre, Department of Management and Professional Development, London

Metropolitan University, Stapleton House, 277-281 HoUoway Road, London N7 8HN, UKemail: [email protected]

This paper critically reviews the literature relating to the management of ethics withinorganizations and identifies, in line with other authors, a gap hetween theory andpractice in the area. It highlights the role of management (hoth as an academicdiscipline and from a practitioner perspective) in hridging this gap and views managers,with their sense of individual ethical agency, as a key locus of ethics withinorganizations. The paper aims to address the theory-practice gap by surveying thebusiness ethics literature in order to identify, draw together and integrate existingtheory and research, with a particular emphasis upon models of ethical decision-makingand their relationship to work values. Such an endeavour is necessary, not only becauseof the relative neglect of management practice by husiness ethics researchers, hut alsohecause of the current lack of integration in the field of business ethics itself. The paperoutlines some of the main methodological challenges in the area and suggests how someof these may be overcome. Finally, it concludes with a number of suggestions as to howthe theory-practice gap can be addressed through the development of a researchagenda, hased upon the previous work reviewed.

Introduction

Back in the mid-to-late 1990s, Shipley arguedthat 'we are, in the West, experiencing a turnback to ethics' in organizations (Shipley, 1998,p. 1). iiowever scandals such as that involvingthe American company Enron continue to occur.It has been argued that this is because business isinherently unethical because of its emphasis uponprofit-seeking (Sudhir and Murthy, 2001). In-deed, the enterprise of business ethics is some-times seen as a contradiction in terms - Werhaneand Freeman (1999) describe what they call 'thejoke about business ethics' (p. 1); 'It must be anoxymoron', or 'I didn't know business had anyethics'. While such ideas have been convincinglyrejected on both academic and pragmaticgrounds (e.g. Kaler, 2000), the limited impact ofthe ethical turn in organizations remains to be

explained. In this paper, I argue that the mainreason for such a failure is the gap that existsbetween theory and practice in the field ofbusiness ethics. I suggest that this gap can beaddressed by the development of an integratedand theoretically coherent account of ethicaldecision-making and make an initial contributiontowards this objective by critically reviewing theethical decision-making literature and integratingit with the Uterature on work values and moralreasoning.

The business ethics literature

The business ethics literature contains a numberof relatively distinct areas of inquiry. Indeed,some commentators have gone as far as descri-bing the fragmented literature on organizational

2003 British Academy of Management

224 D. Bartlett

ethics as being 'full of controversy' (Werhane andFreeman, 1999, p, 1), containing 'diverse andindependent research streams' (Dose, 1997,p, 219), as being in 'considerable disarray'(Castro, 1995, p, 781) and 'theoretically formlessand empirically weak' (Nicholson, 1994, p, 581),Furthermore, it has been argued that the field ofbusiness ethics as an academic discipline hasfailed to recognize the complexity and disorder ofreal-life management practice and has adoptedinsufficient methods of investigation and inade-quate theoretical and conceptual frameworks(e,g, Bowie, 2000; Maclagan, 1995), Two domi-nant approaches are those of moral philosophyand the psychology of moral development,however these approaches are of only iimitedvalue when it comes to attempting to applyethical theory to real-life situations (e,g, Corneliusand Gagnon, 1999), The negative impact ofsuch deficiencies is made worse by the relativeneglect of ethics within the business schoolcurriculum (e,g. Warren and Tweedale, 2002),giving rise to a situation where large corporationssuch as Enron continue to behave in unethicalways.

The following review divides the existingliterature into three main areas: 1) philosophicaltheories of ethics; 2) cognitive moral developmentand; 3) work values, moral reasoning and ethicaldecision-making. In an attempt to ensure suffi-cient breadth of coverage, whilst at the same timemaintaining a focus upon managerial aspects, thefollowing three subsections consider each of thesein respectively increasing depth of coverage.While the review describes the main theoreticalideas, it attempts also to draw heavily upon theempirical literature as, in line with other re-searchers (e,g, Hosmer, 2000), the current authorbelieves that rigorous empirical evidence providesone of the strongest validations of theory in thiscomplex and contentious field.

The philosophy of ethics: ethical theory

Ethical theory is generally based upon moralphilosophy and may be classified on manydifferent dimensions, however, there are severalbasic 'types' of moral philosophy which are usedin business ethics, such as egoism, utilitarianism,deontology, rights and relativism. Most ofthe different approaches may be considered as

revolving around a focus on either the outcomeof a situation (a consequentialist view) or uponthe process or means to that outcome (non-consequentialist). Two examples of consequenti-alist or teleological philosophies are egoism andutilitarianism, while non-consequentialist philo-sophies include deontological approaches such asthat of Immanuel Kant, While some of Kant'swritings are rather esoteric, his theory is oftenassociated with the moral rights and duties of anindividual; each person has both the right toexpect to be treated according to universal morallaws and the corresponding duty to behaveaccording to that law. The particular moral lawaccording to which people should behave isknown as the 'categorical imperative' and Kantproposed several versions of this law which, heclaimed, were equivalent although their similarityis sometimes rather difficult to apprehend. In itsfirst form, the categorical imperative states thatone should 'act as if the maxim of thy action wereto become by thy will a universal law of nature'(Kant, translated 1964), As Velasquez (1988)points out, the categorical imperative may beunderstood in a far less cumbersome and morereadily accessible way by reference to the 'GoldenRule': 'Do unto others as you would have themdo unto you'.

As well as such general theories of ethics, manytheories of ethics in particular situations or inrelation to particular problems have been pro-posed. The field of applied ethics is, however, toospecialist and voluminous to consider in anydepth here. Furthermore, the ever-wideningtheory-practice gap has resulted in what Bowie(1991) calls a 'crisis of legitimacy' in businessethics. Kaler (1999) went even further in his callto dispense entirely with ethical theory. Even ifone accepts the importance and achievements ofethical philosophy, the types of universal lawswhich are proposed as a guide to humanbehaviour are often difficult to apply in apractical way during the everyday life of organi-zational actors or, indeed, during the academicresearch process. Of course, depending uponone's view of the 'project' of business ethics, orwhat it aims to achieve, it could be argued thatethical theory need not concern itself withapplication to issues or problems, but couldsimply be about identifying what are good or badreasons for particular courses of action. Such aview, however, fails to address the pragmatic

Management and Business Ethics 225

concern for the management of organizationalethics (as well as the ecological validity ofresearch into business ethics) because it ignoresthe actual acting out of ethical incidents withinorganizations. In any case, many authors (e.g.Bowie, 2000) have concurred with earlier sugges-tions (e.g. Brady and Logsdon, 1988; Randall,1989) that much of the business ethics Uteraturehas a misplaced emphasis upon underlying philo-sophical theory and that researchers should focusinstead upon the more psychological aspects ofbusiness ethics, such as behavioural intentionsand the beliefs that shape those intentions.

The psychology of ethics: moraldevelopment

As well as universal moral philosophies, businessethics has made recourse to individual psycholog-ical theories of the development of moralreasoning and, in particular, the work of LawrenceKohlberg (e.g. 1969). He devised a methodologi-cal approach which persists in the empiricalstudies of moral and ethical issues and which isbased around the responses given by subjects to aseries of moral dilemmas, such as that involving aperson who stole a drug to save his dying wifebecause he could not afford to buy it and theinventor of the drug would not give it awaybecause he wanted to make money from hisinvention. Based upon the responses to dilemmassuch as these, Kohlberg developed a six-stagemodel of cognitive moral development (CMD)which describes an individual's general orienta-tion towards solving moral problems, known astheir socio-moral perspective. The theory hasbeen operationalized and research tools that areused to measure Kohlberg's level of socio-moralreasoning, such as the defining issues test (DIT)or the moral judgement interview (MJI), havebeen adapted specifically for research into busi-ness ethics (e.g. Elm and Weber, 1994).

Kohlberg's work has been criticized in relationto its application to business ethics generally (e.g.Marnburg, 2001) and to specific problems inparticular, such as its claims of sequential invari-ance and cultural universalism (e.g. Blasi, 1980).The notion of stages has also been disputed andthe theory is thought to be biased towards urbanWestern democratic cultures and gender-biased(e.g. Gilligan, 1982). Furthermore, studies on CMD

show generally weak, if statistically significant,links to both ethical decision-making and sub-sequent behaviour. The theory does, at least,provide a teleological account of how an in-dividual may develop morally and a rudimentaryunderstanding of moral reasoning processes. Theweaknesses of this approach, however, necessi-tate the drawing together of other strands inthe diverse Hterature on organizational ethics ifwe are to move towards more integrated andpractically useful theoretical frameworks.

Work values, moral reasoning andethical decision-making

Conrad (1993) problematizes the organizationalethics literature by describing two dominantviews. The first of these focuses upon individuals'ethical systems and represents what he calls an'undersocialised' view of ethics (i.e. one whichvirtually ignores the social context within whichethical behaviour occurs), while the secondfocuses upon organizational cultures and repre-sents what he terms an 'oversocialised' concep-tion (i.e. one which attributes ethical behaviourto the social context of the organizational culture,to the neglect of individual psychological factors).From the former point of view, Conrad suggests,ethics lie in the realm of the personal valuesystems of individual organizational actors andare therefore the unique product of that indivi-dual's life history. From the latter point of view,ethics are considered a component of organiza-tional culture (sometimes referred to in theliterature as the ethical or moral climate) andare a product of the socialization process whichindividuals undergo when being socialized intoaccepting those particular value-sets. The distinc-tion offered by Conrad is useful in helpingcategorize and make sense of the business ethicsliterature as it describes the two main streams ofempirical research and theoretical schools ofthought in the area. The true locus of organiza-tional ethics occurs, inevitably, somewhere inbetween these two extremes. However, the lack ofa coherent theoretical framework which is able toembrace the complexities of organizational rea-lity at these multiple levels of analysis constitutesa problem for the field in terms of the ecologicalvalidity of ethical research and theorising. Un-fortunately, Conrad does not offer any solution

226 D. Bartlett

to the problem he identifies, arguing simply thateither extreme is unrealistic and that we are onlyjust beginning to examine the ways in whichvalue-laden problems arise and are dealt with atwork. Studies which do examine such problemsare now, however, appearing in the literature andother authors have suggested potential solutionsto this problem (e.g. Goodwin, 2000).

Some writers (e.g. Weber, 1996) have arguedthat the problem is best overcome by changingthe unit of analysis, through focusing upon the'ethical issue' as the primary phenomenon ofinterest. Organizational ethics is best understood,argues Weber, not by recourse to individualcharacteristics on the one hand, or organizationalcharacteristics on the other, but rather by lookingat characteristics of the situation itself. Moralreasoning, Weber concludes, is issue-dependent,not deontological (relying upon the individualis-tic application of abstract philosophical theories)or utilitarian (focusing upon the pragmatic organi-zational concern for outcomes).

Another potential way of addressing theproblem of deciding upon an appropriate levelof analysis in the study of organizational ethicspresents itself in the form of role-theory. Boatright(1988), for example, has suggested that the typeof analysis engendered by the consideration ofthe roles possessed by organizational actors helpsto address the theory-practice gap by interveningbetween individual and organizational levels ofanalysis. He presents an overview of the mainmodels of managerial roles that are to be foundin the management literature and outlines therelevance of each of them to ethical conduct inorganizations, arguing that none of them presentsa wholly adequate theoretical account, but thateach offers particular insights into the relevanceof ethics in a business context.

By far the most common approach to address-ing the problem of under- or oversocializedmodels in the organizational ethics literature is,however, the adoption of an ethical decision-making framework which examines the influenceof both individual characteristics (such as personalvalue-systems) and organizational forces (such ascultural and structural characteristics) uponethical decision-making (e.g. Beyer and Lutze,1993; Ferrell and Fraedrich, 1997; Giacolone,Fricher and Beard, 1995; Schlegelmilch andRobertson, 1995; Weber, 1993, 1996). Unfortu-nately, the literature on ethical decision-making

has not yet reached a stage of theoreticalintegration and coherence. The remainder of thispaper is, therefore, devoted to a critical review ofthe available models of ethical decision-makingand an integration of this literature with thatsurrounding work values and moral reasoning.

The most widely cited model of ethicaldecision-making in organizations is that pro-posed by Trevino (1986, 1992) (see Figure 1). Themodel proposes that ethical decision-making isthe result of an interaction between individualand situational components, with the individual'sway of thinking about ethical dilemmas (oper-ationalized as their level of CMD) being moder-ated by three individually-based moderators (egostrength, field dependence and locus of control)and three situational moderators (immediate jobcontext, organizational culture and characteris-tics of the work itself).

Other models of ethical decision-making havebeen proposed by various authors (e.g. Bommer,Gratto, Gravander and Tuttle, 1987; Strong andMeyer, 1992), however many of these are toowidely focused and attempt to integrate analysisat many different levels. Such 'models' of thedecision-making process often fail to give acompelling account of the actual processes inwhich an individual engages when makingdecisions about ethical issues and constitute littlemore than a list of variables which may influencethat unexplicated process. Such an interpretationis supported by a review article (Ford andRichardson, 1994) which specifically stated thatits purpose was to 'assess which variables arepostulated as infiuencing ethical beliefs anddecision-making' (p. 205) and which went on todivide those variables into two distinct types;those unique to the individual decision-maker(nationality, religion, sex, age, education, em-ployment and personality) and those which weredeemed more situational in nature (referentgroups, rewards and sanctions, codes of conduct,type of ethical conflict, organizational culture,industry type and business competitiveness).Most of the empirical research reviewed by Fordand Robertson was questionnaire-based, usuallycross-sectional and often attempted to assess theimpact of only one or two narrowly-definedvariables. Apart from the small number of studiescited in this review which do address suchmethodological inadequacies, it would appearthat little has changed in the intervening period.

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Ethicaldilemma

Cognitions

Stage ofcognitive moraldevelopment

Individual Moderators

Ego strengthField dependenceLocus of control

Ethical/unethicalbehaviour

Situational Moderators

Immediate job context

ReinforcementOther pressures

Organizational culture

Normative structureReferent othersObedience to authorityResponsibility for consequencesCharacteristics of the work

Role talkingResolution of moral conflict

Figure L Trevino's (1986) model of ethical decision-makingSource: Reproduced by kind permission of the publisher from Trevino, L. K.(1986). 'Ethical Decision-making in Organisations: A Person-situation Interac-tionist Model', Academy of Management Review, 11(3), pp. 601-617. CopyrightAcademy of Management.

This is the case despite renewed calls for moresophisticated methodologies in the area (e.g.Crane, 1999) and the evident need for researchwhich addresses the decision-making processdirectly as the central phenomenon of interest,rather than examining factors which may impactupon that process. While a number of othermodels of ethical decision-making adopt CMD asa central component (e.g. Derry, 1989; Knouseand Giacolone, 1992; Strong and Meyer, 1992),the problems associated with it as described in theprevious section, plus its limitations with respectto the types of cognitions it specifies, mean that amore comprehensive description of the constitu-ent cognitions which describe the ethical decision-making process needs to be developed.

With respect to the burgeoning literature whichalready exists on ethical decision-making, thereare a host of alternative suggestions as to how bestto understand the cognitions involved in moralreasoning. For example, Messick and Bazerman

(1996) adopted an experiential perspective, de-scribing three different types of theories - theoriesabout the world, theories about other people andtheories about the self-impact upon ethicaldecision-making. Leidtka (1991), adopted asense-making approach to ethical decision-making in her study of the diflfering ways in whichorganizations send conflicting signals, (in theform of contending organizational values) totheir managers regarding appropriate behaviourin a given situation and how this impacts uponthe ethical decision-making process of managers.She described a two-stage ethical decision-making process consisting of an initial framingof the situation, based upon patterns of sense-making which she referred to as mindsets,followed by an evaluation of alternatives. Liedt-ka's (1989) 'values congruence' framework hasreceived some support in empirical studies, suchas Posner and Schmidt's (1993) study of attitudesto work and perceptions of ethical practice.

228 D. Bartlett

While Liedtka's qualitative interview-basedresearch looked at individual infiuences on theethical decision-making process with respect toconfiicting organizational signals, Falkenbergand Herremans' (1995) examined organizationalinfiuences in terms of formal and informalbehavioural control systems (as aspects of theinfiuence of organizational culture). They con-cluded that it is the informal systems, that is the'maze of unspoken rules', which dominateindividuals' attempts at resolving ethical issuesat work.

Harris and Sutton (1995) introduced a specifi-cally experiential factor into their attempt atunravelling the ethical decision-making process

using an empirical survey of business executivesand MBA students. They adopted a model ofethical decision-making (see Figure 2) originallyproposed by Hunt and Vitell (1986) whichsupplements the usual environmental and indivi-dual attributes which are said to impact uponethical judgements with wider experiential andcultural infiuences.

Knouse and Giacalone (1992) supplement theirCMD-based description of the ethical decision-making process with a motivational element,suggesting that the decision-makers' level ofcognitive moral development is moderated bythe motivational processes described by expec-tancy theory. Expectancy theory relates intended

Culturalenvironment

Industryenvironment

Organizationalenvironment

Personalexperiences

Perceivedethical

problem

Deontologicalnorms

Perceivedalternatives

Perceivedconsequences

Probabilitiesof

consequences

Desirabilityof

consequences

Importanceof

stakeholders

Deontologicalevaluations

Situationalconstraints

Ethicaljudgements

Intentions

Teleologicaievaluation

Behaviour

Actualconsequences

Figure 2. Experiential model of ethical deeision-making (Hunt and Vitell, 1986)Source: Reproduced by kind permissioti of the publisher from Hunt, S.D. and S.A.Vitell (1986) 'AGeneral Theory of Marketing Ethics', Journal of Macromarketing, 8(2), pp. 5-16. Copyright SagePublications Inc.

Management and Business Ethics 229

action to the expectations of the individual interms of the perceived attractiveness or aversive-ness of the outcomes of the behaviour. Suchexpectancies are determined by a host of indivi-dual and situational factors similar to thosehypothesized to influence the ethical decision-making process. By introducing expectancy-valuetheory, one moves the analysis beyond a structural-descriptive enterprise and towards the develop-ment of a more wide-ranging, and thereforethorough, understanding of the types of cognitiveprocesses involved in ethical decision-making.

There is a growing literature in the area ofcognitive styles with respect to ethical decision-making, Mclntyre and Capen (1993), for example,conducted an empirical study using Fleming's(1985) typology of cognitive styles (based upon aclassification using the Myers-Briggs typology)and reported that cognitive style can infiuencewhether or not one considers an issue to beethical in nature, that is the initial framing ofissues as ethical. Snow and Bloom (1992) alsoconducted some empirical work on ethicaldecision-making styles using an initial theoreti-cally-derived group of seven distinct styles(grouped into either ends-oriented or means-oriented styles). They factor analysed managerialresponses to questionnaire items indicating whichof the seven different styles participants fell into.The results factored out into three bipolar factors,indicating that individuals could hold more thanone of the theoretically derived decision-makingstyles. The tendency of individuals to hold anumber of different decision-making styles sug-gests that ethical decision-making is likely to besituation-dependent, as proposed by Weber(1996), Furthermore, this apparent 'multiplicity'of individuals' reasoning processes when engagedin ethical decision-making draws a strikingparallel to work conducted in the area of values,particularly with respect to the distinction be-tween espoused and enacted values, and it is tothis area that I now turn,

Weber (1993) reviewed the literature relatingpersonal value systems to moral reasoning andconcluded that, while there appears to be anempirical basis for exploring the relationshipsbetween personal values and moral reasoning, theunderstanding of these relationships is 'signifi-cantly underdeveloped' (p, 443), He examined therelationship between Rockeach's (1973) classifi-cation of personal values and Kohlberg's stages

of moral reasoning and developed a 2 x 2 matrixof four different value orientations/moral reason-ing combinations. This research did not, how-ever, extend its assessment into the cognitivereasoning processes actually used by individualsto reach a decision.

Dose (1997) provides an extensive review of thework values literature and attempts to integratethis with the ethics literature with the goal ofproviding an organizing framework for research.Again, she proposes a 2 x 2 classification ofvalues and morals and offers a definition of workvalues (based on logic and her extensive review ofprevious theory) which relates ethics and workvalues to one another. She defines work values as'evaluative standards relating to work or to thework environment by which individuals discernwhat is "right" or assess the importance ofpreferences' (p, 227),

Fritzsche (1991) developed a model of ethicaldecision-making incorporating personal values,which was based upon a review of the empiricalliterature. The model portrays the set of personalvalues of the decision-maker as the dominantindividual-level input into the decision-makingprocess, which are mediated by organizationalculture. Subsequent empirical work (Fritzsche,1995) demonstrated the association of differingpersonal value systems with ethical and unethicalresponses to ethical dilemmas. However, thecross-sectional design of that particular studydid not establish causality. Furthermore, thedecision-making model described by Fritzschefails to specify fully exactly how the culturemediates individual personal values and itsdescription of the decision-making process islimited to listing the dimensions along whichalternative solutions may be evaluated,

A number of other empirical studies haveexamined the relationship between individual orpersonal values and ethical decision-making,Barnett and Karson (1987) presented a series ofvignettes to managers and found that, in mostcases, the decision could be predicted by thepersonal values of the respondents, the excep-tions to this finding involving relatively minor,everyday issues. They also found that thepropensity toward ethical action appears to besituationally specific and is likely to decrease insituations where one's actions would not bediscovered by others. Finally, those whose personalvalue systems were relatively more associated

230 D. Bartlett

with economical than ethical or political issueswere found to become more ethical as the level ofresponsibihty increased. Rosenberg (1987) alsoexamined the effect of managers' value systemson ethical decision-making behaviour using acomplex international management game tosimulate a competitive business environment.He found that the personal value systems ofmanagers were subordinated to the goals of thecompany and any confiict between the two wasresolved on the basis of utility rather than onethical or moral grounds. This would appear todisagree with the findings of Barnett and Karsen.However, the study was related particularly tothe issue of questionable payments and thedecision was also performed in a group (ratherthan an individual) context, thereby makingcomparison between the two studies problematic.Allen and Davis (1993) demonstrated a positiverelationship between individual values and pro-fessional ethics, but not between professionalethics and actual behaviour, however the studydoes not allow any inferences about the directionof the personal-professional value association tobe drawn.

Olivette (1995) found no relationship betweenthe personal value systems of individuals, definedas their ethical orientation, and their decisions asto whether a number of marketing scenarios wereperceived as being unethical or not, howeverother researchers (e.g. Badaracco and Webb,1995; Finegan, 1994) have presented resultswhich suggest that an individual's personal valuesconstitute one of the key resources upon whichthey draw during decision-making in a businesscontext. Still other researchers have focused uponthe mediating role of other personahty variablesin the decision-making process. Terpstra, Rozelland Robinson (1993), for example, found thatinterpersonal competitiveness, locus of controland religious beliefs exert an important infiuenceon an individual's level of ethicahty with respectto their responses to vignettes concerned withinsider deahng, while Sparks and Hunt (1998)examined the infiuence of ethical sensitivity.

A final stream of empirical research which isworthy of examination is far more descriptive innature and seeks to identify the types of everydaymoral issues that managers face and how theydeal with them. Goodwin (2000), for example,conducted research in eight business and pubUc-sector organizations in the UK. She reported that

respondents in her sample felt that there seemedlittle alternative but to go along with decisionswhich they felt were unethical, except in caseswhere they suffered a severe crisis of conscience.As Rosenthal and Bucholz (2000) argue, prag-matic research such as this provides an importantcontribution to our understanding of businessethics because it allows direct comparison be-tween theory and practice. The findings ofGoodwin were largely congruent with those ofan earlier study by Waters, Bird and Chant(1986). They conducted a series of open-endedinterviews with managers and found that moralissues are a significant aspect of everydaymanagerial life and that such issues may beclassified as relating to the relationships that existbetween managers and employees, peers andsuperiors, customers, suppliers and other stake-holders. They found that managers tend to thinkabout issues in moral terms either when there is aclear moral standard that they feel is relevant orelse when they feel that the transaction empowersthem to impact upon the well-being of others. Inthe second of their series of three papers. Birdand Waters (1987) outlined seven main moralstandards that managers use in thinking aboutmoral issues which they identified from the analysisof interview data. The seven standards were:1) honesty in communication; 2) fair treatment;3) special consideration; 4) fair competition;5) organizational responsibility; 6) corporatesocial responsibility and; 7) respect for the law.As they point out, these standards have thecultural status of a social convention, but as suchare invoked by individuals on an uneven basis.They completed their series of research paperswith an article outlining a typology of morallyquestionable acts based upon the role of themanager and consisting of non-role, role-failure,role-distortion and role-assertion (Waters andBird, 1989). Finally, Brigley (1994) conducteda survey of 712 managers for the Institute ofManagement and reported a wide array ofdescriptive findings. Perhaps not surprisinglyaround 90% of respondents claimed that theyadopt an ethical stance and that they wereprepared to speak out on ethical issues. Over80% of managers reported that they used theirown moral values in making ethical decisions,while around half reported that their organiza-tions had ethical codes in place. Where ethicaltensions did arise, they were mainly concerned

Management and Business Ethics 231

with pressures arising from harshly competitiveclimates and the need for bottom-line perfor-mance.

Defining a research agenda

Weber (1993, p. 436) identifies a commonlimitation of most studies which have examinedthe relationship between personal values andmoral reasoning: 'the recognition, but under-development, of a reasoning process whichtranslates personal values into behavioural ac-tion'. He continues that 'personal values are oftenleft unexplored and indirectly associated with thespecific forms . . . of moral reasoning' (p. 436).Researchers often fail, therefore, to fully capturethe cognitive processes which constitute ethicaldecision-making in the workplace by making this'leap from values to decision without emphasiz-ing the important intermediary step of reasoning'(Weber, 1993, p. 456). Similarly, by focusing onlyupon the level of moral reasoning, many studiesfail to provide an explanation of why suchreasons were selected. By adopting a decision-making framework, it is possible to embrace boththe value orientations of the individual and thereasoning process adopted during decision-making and thereby to provide a fuller explana-tion of ethical decision-making at work. In orderto achieve such broadly integrative coverage,without at the same time losing theoreticalrichness, it is necessary to pay particular atten-tion to the development of appropriate researchdesigns and methods.

In a critical review of research methodology inbusiness ethics, Randall and Gibson (1990)concluded that 'the methodology in businessethics research is clearly in need of improvement'(p. 468). Describing the whole research processfrom theory, through hypothesizing, conceptua-lizing, operationalizing and sampling to datacollection and analysis, they observed that mostresearch in business ethics is lacking in theory, isconceptually confused, shows little concern forvalidity or reliability, uses predominantly surveymethods of data collection which often consist ofambiguous or vague questions and usually usesonly one or two variables in data analyticprocedures. Less than 5% of the articles reviewedused in-person interviews as the primary methodof data collection. Other techniques included

laboratory-based research, computer simulationsand ethnographic observations. A further pro-blem concerns the use of scales and measureswhich, as Mudrack and Mason (1995) point out,are usually built by individual researchers tomeasure whatever theoretical constructs theyhave decided to employ and which, therefore,do not permit comparison between differentstudies and the accumulation of knowledge.Researchers could avoid some of these weak-nesses by steering away from the construction ofscales or instruments for measuring pre-definedtheoretical constructs which are, themselves,often of questionable status. Similarly, at thedata analysis stage, researchers can draw from abroad range of theoretical insights derived fromthe literature, without at the same time becomingtoo closely tied to particular operationalizationsof theoretical variables favoured by any oneparticular theorist. Given the lack of any coherentand widely accepted theoretical base, the effortsat theoretical integration which are still requiredand, therefore, the necessarily exploratory natureof research in the area, it is suggested thatqualitative methods offer a most appropriateway in which to go about obtaining data tosupport or refute the existing theoretical schemesreviewed earlier.

Marshall and Rossman (1989) identify thecircumstances under which qualitative researchis appropriate as: first, when there is a need tobetter understand complex interactions, tacitprocesses and often hidden beliefs and values;second, in exploratory investigations when therelevant variables have not yet been identified (or,I would argue in the case of organizational ethics,have been identified too early and unquestion-ingly by some researchers); third, in areas wherethere does not exist much of a conceptual scheme;fourth, when quality, depth and richness of datais required to reveal valuable explanations ofprocess and, finally, in developing more accuratemeasures or indicators of concepts. Most of theseconditions apply to research in the area ofbusiness ethics and, as a qualitative approach isalso useful in exploring the cognitive processeswhich intervene between reasoning and action, ittherefore constitutes perhaps the most fruitfulmethod of inquiry in the area at present.

A further justification for focusing uponqualitative methods of data collection andanalysis concerns the nature of the subject

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matter, that is concerning personal value systemsand ethical reasoning, which is inherently sub-jective and experiential; as Blake and Carroll(1989) state, quite simply, 'when confronted withan ethical dilemma, no two people think inexactly the same way about the right thing to do'(p. 99). In Hne with other researchers whoadvocate a move towards more experientialmethods in the study of business ethics (e.g.Crane, 1999), it is argued that the nature ofethical decision-making prescribes the use ofsuch techniques which provide a valuable, butunderutilized, way of closing the theory-practicegap. Furthermore, they provide a mechanism foraddressing concerns about validity in ethicsresearch as they are sensitive to how people usevarious accounts of their decision-making tojustify or understand their own ethical position.This is significant because, as Weber (1996)suggests, the framing of ethical issues and themoral rationales used by individuals to constructan issue as 'ethical' influences the outcomes ofethical decision-making in the work place.

Beyer and Lutze (1993) suggest that ethicaldiscourse often concerns things 'that matter topeople and that may be costly to them or othersin various ways [and that] people will not alwaystell others their true values, nor act according tothe values they profess' (p. 34). They compare thedifference between espoused and enacted valuesto Argyris' (1976) distinction between espousedtheories versus theories-in-use and Mintzberg's(1978) distinction between intended and realizedstrategy.

With respect to gathering verbal informationabout ethical issues from managers, either duringinterviews or by observing communications with-in an organization. Bird, Westley and Waters(1989) point out that managers often use moralexpressions for a variety of reasons, some ofwhich are problem-solving or functional, butsome of which are dysfunctional. They analyseddiscourse from a series of interviews and identi-fied the sub-narratives within the discourse whichreferred to several different 'uses' of moral talk bymanagers. While they offer no particular advicewith respect to methodology, they do imply thatthe methods chosen to conduct research intobusiness ethics should be sensitive to the differentuses of moral talk by managers. In order toachieve this sensitivity, it is necessary to considerthe nature of ethical discourse and attempt to

build-in mechanisms into the data collection andanalysis procedures which recognise the implicitnature of values and beliefs and the associatedthreats to validity and reliability, including thatof socially desirable responding. This latterconcern has been considered in relation to someof the more quantitative research approaches(e.g. Randall and Gibson, 1990), but less so withrespect to qualitative inquiry (e.g. Goodwin,2000). Beyer and Lutze (1993) have, at least,suggested a number of methodological ap-proaches which help alleviate the problem ofhow explicit, conscious or accessible values maybe to individual subjects (such as observation,analysis of symbolic behaviours and non-directiveinterviewing) and such techniques may also proveuseful in helping validate findings in the face ofthe potential threat of social desirability.

The nature of ethical discourse is examinedin an interesting and scholarly edited volumeentitled The Ethical Nexus (Conrad, 1993). AsConrad points out in the introduction to thebook, 'it is through discourse that individualsdevelop their own views of morality; throughdiscourse that organizations develop and incul-cate core values and ethical codes; and throughdiscourse that incongruities . . . are managed andcontradictions . . . negotiated' (p. 2). He goes on,in the first chapter of the book, to point outthat 'unfortunately, the organisational ethicsliterature is largely devoid of discussions ofvalue-laden discourse' (p. 18). Notwithstandingthe small number of studies reviewed in theprevious section and while it is possible to findthe occasional use of discourse theory in theempirical literature (e.g. de Graaf, 2001), it ishoped that the call made for such approaches inthe current paper will go some small way towardsrectifying this situation.

A further factor to consider in developing arationale for a future research agenda concernsthe causes of the current disarray of the businessethics field which are due to forces which may belabelled 'the sociology of science', such as itsrelative youth as an academic discipline, itssearch for legitimacy and the claims of variousparties as to the justification of their role as'experts'. With respect to the role of managementin this field, the preceding review would agreewith other commentators in the area (e.g. Kaler,2000), that management is well-placed to providea rich and substantive contribution in terms of

Management and Business Ethics 233

the development of the type of decision-makingframework described above with its ability toaddress issues at both the individual and theorganizational level of analysis. This is whatfuture research must aim to achieve throughtheory development, testing and further integra-tion of the literatures which have been drawntogether here and by the adoption of methodsthat are sensitive to both the 'messy' nature ofreal-life management practice and the nature ofethical discourse. Bowie (2001) has argued thatacademics risk becoming redundant unless theyseek out and form closer alliances with practi-tioners in the area and such an enterprise istherefore essential if management academics areto retain a role in the management of ethicswithin organizations and help close the theory-practice gap.

Conclusion

Although theoretical bases for the study ofbusiness ethics have been offered in the form ofboth moral philosophies and the psychologyof moral development, these approaches are onlyof limited value when it comes to attempting toapply ethical theory to real-life situations (e.g.Bowie, 2000; Cornelius and Gagnon, 1999). Inthis connection, Maclagan (1995) has suggestedthat business ethics researchers need to recognizethe complexity and disorder of real-life manage-ment practice and adopt methods of investigationand theoretical and conceptual frameworks thatallow for this, rather than attempting to borrowfrom the abstract concepts of philosophical ethicstheory. The limited description of the ethicaldecision-making process offered by Kohlberg'sstages of CMD, coupled with the theoreticalcriticisms and limitations of this approach (e.g.Marnburg, 2001) also make this a less thansatisfactory theoretical framework for under-standing ethical decision-making at work.

One of the most promising avenues of inquiryappears to be the development and application ofa comprehensive work values/ethical decision-making framework. This approach offers a con-ceptual framework which appeals to both theindividual level of analysis, in terms of a decision-making framework, and the organizational levelof analysis, in terms of the influence of organiza-tional culture through values. It is important.

however, to bear in mind the critique offered byConrad (1993) and described at some length in thepreceding review. If future research is to avoidfalling into the trap of undersocializing or over-socializing ethics in the workplace, it is necessaryto address intervening psychological processes andto adopt data collection and analysis methodswhich are sensitive to this issue and whichdemonstrate a concern for ecological validity.

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