The Effect of Organizational Forces on Individual Morality: Judgment, Moral Approbation, and Behavior

The Effect of Organizational Forces on Individual Morality: Judgment, Moral Approbation, and Behavior

The Effect of Organizational Forces on Individual Morality: Judgment, Moral Approbation, and Behavior

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Abstract: To date, our understanding of ethical decision making and behavior in organizations has been concentrated in the area of moral judgment, largely because of the hundreds of studies done involv- ing cognitive moral development. This paper addresses the problem of our relative lack of understanding in other areas of human moral- ity by applying a recently developed construct moral appro- bation-to illuminate the link between moral judgment and moral action. This recent work is extended here by exploring the effect that organizations have on ethical behavior in terms of the moral appro- bation construct.

nur understanding of ethical decision making and behavior in organizations

tJhas been informed by two largely separate streams of research. Formal decision making models (e.g., Ferrell and Gresham, 1985; Hunt and Vitell, 1986; Trevino, 1986; Jones, 1991) have dealt with the micro organizational aspects

of such decision making and have relied heavily on social psychology, particu- larly social cognition, for their theoretical foundations. The other strain of research on ethics in organizations deals with macro organizational issues-

e.g., organizational cultures, leadership, and institutional features such as

codes of ethics and has employed organization theory, in various forms, in the analysis (Victor and Cullen, 1988; Cohen, 1995). What has been lacking thus

far is theory that specifically relates macro level phenomena to micro level be- havior. Put differently, we need theory that explains, in detail, how an organi-

zation’s moral signals are perceived and processed by organization members, along with how likely those signals are to affect members’ behavior. This paper

attempts to provide such theory, by way of application of existing theory and new theory development.

As Jones (1991) pointed out, most formal models of ethical decision making in organizations can be expressed in terms of some variant of Rest’s (1986)

sequential four component model. By way of review, Rest’s description of the four steps is as follows:

(D1998. Business Ethics Quarterly, Volume 8, Issue 3. ISSN 1052-1SOX. pp. 43 1-445

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432 BUSINESS ETHICS QUARTERLY

1 ) Recognition-The moral agent must first recognize the moral issue. An

agent who does not recognize the moral aspects of an issue will certainly

rely on “non-moral” criteria in making a decision.

2) Judgment-The agent must then engage in some form of moral reason-

ing to arrive at a moral judgment. Moral reasoning has been described by

Kohlberg ( 1976), whose moral development hierarchy has been widely used

in both theoretical and empirical work.

3) Intent The moral agent then must establish moral intent. In so doings

he/she places moral concerns ahead of other concerns and decides to take

moral action.

4) Behavior-At this stage, the agent actually translates intent into moral

behavior. Helshe overcomes all impediments internal and external, and

carries out his/her intended moral action.

In this paper, we assume that organizational forces have an impact on each of

the four steps. After referencing some very recent research that has been done

on Step 1 of this sequence, we argue that organizational factors profoundly af-

fect the link between moral judgment (Step 2) and moral behavior (Step 4) by

describing the postulated psychological mechanisms.

Considering that Rest’s model has been in existence for 12 years, remark-

ably little research has been done on components other than moral judgment

(Step 2). Part of this concentration can be explained by the fact that Kohlberg

developed an instrument for measuring cognitive moral development (CMD)

thus saving scholars (himself, in particular) the burden of developing a new

instrument for each study. Rest ( 1979) accelerated the use of CMD as a variable

in empirical studies of ethical behavior by developing the Defining Issues Test

(DIT), a forced-choice psychometric instrument that replicates Kohlberg’s time

consuming instrument with reasonable accuracy, but is simple and quick to ad-

minister. As a result, hundreds of studies have been undertaken using cognitive

moral development as a variable.

Some of this research has attempted to link CMD to actual moral behavior

(Blasi, 1980; Thoma and Rest, 1986; Waterman, 1988). The theory (either ex-

plicit or implicit) behind this research stream is that people who have greater

cognitive skills in the moral realm will have stronger, more intrinsic spurs to

moral action. Since their reasoning is more autonomous, their behavior ought to

be more autonomous as well, leading them to carry out their moral judgments

with greater frequency than their less sophisticated counterparts (with lower

CMD scores). The somewhat surprising and disheartening conclusion that can

be drawn from this research is that the link beeween these two variables is not

particularly strong; cognitive moral development explains relatively little of the

variance in moral behavior. We are left with a relatively modest level of under-

standing of moral behavior.

Perhaps in response to this gap in understanding, some recent work has fo-

cused on the first element in Rest’s model: recognition of the moral issue. Studies

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THE EFFECT OF ORGANIZATIONAL FORCES 433

by Trevino and Weaver (1996), Butterfield, Trevino, and Weaver (1996), and

Gautschi and Jones (1998) have examined various aspects of moral awareness,

based on the sensible proposition that recognition of the moral aspects of a de-

cision must occur before moral reasoning of any kind can take place. Furthermore,

since the more advanced stages of Kohlberg’s moral development hierarchy

(Stages 3 through 6) are likely to lead to judgments that are other than self-

interested, we might expect that recognition of moral issues and the subsequent

engagement of moral decision making processesf as opposed to non-moral pro-

cesses, will result in better behavior.

Moral Approbation

In a very recent paper, Jones and Ryan (1997) argue that a construct called

moral approbation, the desire of moral agents to be seen as moral by them-

selves or others, plays a critical role in moral decision making and behavior.

The substantially condensed version of this argument that is presented below

sets the stage for our explanation of how organizational factors affect the moral-

ity of individual organization members.

The moral approbation construct has two facets a desired level of moral

approbation and an anticipated level of moral approbation. The desired level of

moral approbation is derived from Jones and Ryan’s (1997) contention that hu-

man beings have a motive to be moral. This motive to be moral can come from

many sources, including philosophy (Aristotle,1934;Adam Smith,1759tl982),

religion (Frankena, 1968), biology (Hoffman, 1976; Kagan, 1984), socializa-

tion (Epstein, 1973) including impression management (Schlenker, 1980; Reis,

1981; Tetlock, 1985), and cognitive development (Epstein, 1973; Blasi, 1984).

This motive to be moral will vary, perhaps substantially, among human beings,

but will be present to some degree in virtually all people. According to the theory,

one manifestation of this motive to be moral is desired moral approbation, a

desire for moral approval from the agent’s referent group (Hyman, 1942/1980;

Williams,1970). The identity of the referent group will also vary from person to

person but will consist of those people to whom helshe looks for moral example

or feedback. The referent group could be as narrowly deElned as the person him/

herself or as broadly as an entire society, depending on the agent’s psychology.

Anticipated moral approbation is highly contextual and depends on the level

of moral responsibility that the agent anticipates will be attributed to him/her by

hislher referent group based on hislher planned behavior. Because the moral

approbation construct is best illustrated in complex moral decision making situ-

ations, Jones and Ryan (1997) use the example of an individual in an organization

contemplating his/her response to potential wrongdoing on the part of the orga-

nization to outline this part of their argument. In such situations, moral

responsibility is based on four characteristics of the decision making context:

1 ) severity of consequences (more severe consequences confer greater moral

responsibility on the agent);

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BUSINESS ETHICS QUARTERLY 434

2) moral certainty (situations involving unambiguously wrong behavior con- fer greater moral responsibility on the agent);

3) degree of complicity (greater involvement in the wrongdoing confers greater moral responsibility on the agent); and

4) extent of pressure to behave unethically (greater organizational pressure to go along with the wrongdoing reduces the moral responsibility on the agent).

The moral responsibility of an agent would then be a positive function of sever- ity of consequences, moral certainty, and degree of complicity, mitigated by pressure to behave unethically.

Having made a moral judgment (Step 2 of Rest’s model), the agent contem- plates a course of action: moral intent (Step 3). At the same time he/she estimates the level of moral responsibility likely to be attributed to him/her based on the four factors described above. The agent then compares the level of moral appro- bation that he/she anticipates from his/her referent group based on his/her planned behavior and compares it to the level he/she requires (desired moral approba- tion). If the behavior meets the agent’s threshold of desired moral approbation, he/she follows through with the planned behavior. If not, he/she modifies his/ her planned behavior until it meets the threshold. This process is graphically depicted in Figure 1 (Source: Jones & Ryan, 1997).

Figure 1

The Moral Approbatlon Model

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THE EFFECT OF ORGANIZATIONAL FORCES 435

Jones and Ryan’s (1997) indirect argument for the moral approbation construct consists of a demonstration that human beings make attributions of responsibility as the model predicts, followed by a detailed case that actual behavior varies along the same lines. The former set of arguments explains why the behavior documented in the latter set of arguments occurs. In summary, the moral approbation model repre- sents an attempt to explain why the link between moral judgment and moral behavior is weaker than we might expect and one mechanism by which organizational fac- tors may play a signiElcant role in actual moral action.

Moral Approbation and Organizational Influences on Moral Behavior

The moral approbation construct will be applied here in an effort to explain the impact of organizational factors on the moral decision making and behav- ior of individual members. From this perspective, the organization affects individuals in two distinct ways. First, the organization itself may affect the choice and composition of the referent group for many members of the organi- zation. Second, the organization may affect the level of responsibility that the individual attributes to him/herself through its effect on the four elements of moral responsibility.

Organizations and Referent Groups

As the above-summarized theory suggests, human beings seek approval from their referent groups. Individuals who are highly autonomous in moral matters (analogous to Stages 5 and 6 of Kohlberg’s moral development hierarchy) will regard self approval as the ultimate standard for moral action. Many individu- als, however, will require the approval of a broader group, including, for example, family members, close friends, church leaders, and teachers. Because organiza- tions play a major role in the lives of many people, acting not only as their principal source of income but also as a place where much of their time is spent and many of their friendships are formed, it is highly probable that organiza- tions will also be crucial determinants of at least part of their members’ referent groups. Some individuals in organizations may have a few organization mem- bers among their referent groups, while others may adopt the organization itself its values and its culture-as a referent group. While this assertion re- garding the link between referent group formation and organizations may seem intuitively obvious, a detailed, theory-based argument will aid our understand- ing of this phenomenon.

Theoretical support for organizational influences on referent group choice can be derived from Bandura’s classic works on social learning (1977; 1986). Bandura (1977) argues that social learning takes place through two primary mechanisms- response consequences and modeling. Learning by response consequences is what might be called learning by direct experience. Individuals respond to situational

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436 BUSINESS ETHICS QUARTERLY

stimuli in various ways as they conduct their lives and receive differential feed-

back- some positive, some negative to their responses. They learn to behave so

as to avoid the negative consequences and promote the positive consequences. In

organizations, individuals tend to engage in behaviors that prompt organizational

rewards and eschew those that result in punishment.

This form of direct learning serves an informative function, a motivational func-

tion, and a reinforcing function (Bandura, 1977). As information, response

consequences cause the individual to create hypotheses about which responses are

well suited to which situations. Bandura is clear in his rejection of the view that

this process in merely mechanistic; cognition plays a role in the interpretation not

only of the nature of the consequences but also of the relationship between the

response and the consequences. Response consequences also serve a motiva-

tional function. Because human beings ean anticipate events in their lives, the

expected consequences of certain responses can motivate them to behave in cer-

tain ways. A reinforcing function is also claimed for response consequences.

Reinforcement makes the message as to the propriety of certain behaviors clearer

and stronger. Organizations with consistent rewardlpunishment frameworks will

reinforce certain behaviors through this mechanism.

As Bandura (1977) points out, learning would be both slow and risky if indi-

viduals learned only by direct experience; their own experiences would not be

extensive enough to allow learning at a significant pace and their mistakes could

result in hazardous situations. Much social learning, therefore, takes place

through modeling. Here the individual learns by observing the behavior of oth-

ers and noting the consequences that ensue. The process is largely informative

(as above), taking place through symbolic representations of the observed be-

havior which inform the choice of responses thought to be appropriate.

Modeling has four component processes-attentional, retention, motor re-

production, and motivational. Attentional processes are selective in nature, which

refers to the fact that people tend to model their behavior on that which a) they

observe most frequently and b) seems to be most effectiveB Not surprisinglys

many human beings model their behavior on that which is most often exhibited

in the organizations where they work, and they are more likely to model the

behavior that is rewarded by the organization.

Observation alone often is not enough to assure that individuals will remem-

ber modeled behavior. Repeated exposure to behavior often results in

representational systems image-based or verbal-that produce retrievable

“memory codes” that guide behavior, thus serving as retention systems for the

learned responses (Bandura, 1977: 26). Organizations are often the source of

not only repeated exposure to certain types of behavior but also the images and

verbal representations that simplify the development of such memory codes.

Through motor reproduction processes, individuals “learn by doing.” They

develop and refine their responses along the lines of the modeled behavior. Fi-

nally, observational learning also serves a motivational function. Individuals

learn by observing behavior in others and favoring that which has functional

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THE EFFECT OF ORGANIZATIONAL FORCES 437

value i.e., that which has been rewarded. They are motivated to model their

behavior on this favored behavior because they hope to secure similar rewards.

In short, organizations may be an important factor in an individual member’s

choice of referent group. Some individuals, of course, will be self-referent on

moral matters, depending on only their own moral standards for moral approba-

tion. For many people, however, the referent group will include family members,

close friends, church leaders, and/or teachers and some are likely to include

other organization members, groups within the organization, or, in the extreme

case, the organization itself as part of their source of moral approbation.

The conclusion that organizations influence the choice of referent group for

individual members should not be surprising. Many human beings spend a great

deal of time in organizational settings and depend on organizations for their

livelihood. Thus, through reward and punishment systems, authority structures,

formal and informal rules, and organizational cultures, organizations create the

environments though which individuals “enact” much of their lives. Social

learning is the process through which the dimensions of that enactment are

created. Thus do organizations enter the referent groups of at least some of

their members.

Organizational Influences on Attributions of Moral Responsibility

Organizational forces are also likely to influence attributions of moral responsi-

bility, an important determinant of moral approbation. The moral agent makes such

attributions based on the four factors included in the model: severity of consequences,

moral certainty, degree of complicity, and extent of pressure to behave unethically

(as represented in our example). This subsection describes the effect of organ-

izational forces on these four components of moral responsibility.

Severity of Consequences. At first glance, severity of consequences would seem to be set by the circumstances that define the immediate situation and

hence immutable by organizational forces. Jones (1991) has described magni-

tude of consequences, a related concept, as an element in the determination of

issue contingency. However, the critical determinant in the moral approbation

model is the moral agent’s perception of severity of consequences, a perception

that the organization may influence through such mechanisms as schemata

and euphemism.

Gioia (1992) discusses the importance of schemata cognitive frameworks

for making sense out of complex phenomena-on ethical decision making in

organizations. By influencing an individual’s choice of a schema, the organiza-

tion can influence the range of choices the individual feels that he/she has.

Viewing an issue with a moral component (such as the potential recall of Ford

Pintos because they tended to burst into flame in certain types of rear end colli-

sions-Gioia’s situation) as an economic (cost-benefit) problem, a legal problem,

or a customer complaint problem will dictate different solution sets than will

viewing the same circumstances as threats to the lives and health of dozens of

human beings. Thus does schema formation affect moral decision making. More

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438 BUSINESS ETHICS QUARTERLY

specifically, such schema use could affect an individual’s attributions regarding

severity of consequences. An economic problem involving cost and benefits to

the company (e.g., costs of litigation, harm to reputation for safety, costs of

fixing the automobile itself to reduce the risk) will often be couched solely in

terms of a common metric money which substantially attenuates the perceived

severity of consequences of the situation. Moral responsibility and thus the

agent’s attributed level of moral approbation will be reduced accordingly, per-

mitting him/her to act less aggressively to address the anticipated wrongdoing,

in essence reducing the probability of moral action.

Organizations also frequently use euphemisms to mask or attenuate the se-

verity of certain actions. The quintessential offender in terms of euphemisms is

probably the military. Reporting battlefield deaths in terms of “body counts,”

for example, as the Army did during the Viet Nam War, tends to trivialize the

fact that for each number in a body count, another human being lost his (or, less

likely, her) life. The severity of consequences component of attributions of re-

sponsibility would be lessened by the use of such euphemisms.

Through these techniques and others, then, the organization can, intention-

ally or not, shape individual members’ perceptions of the severity of consequences

associated with organizational actions. As the severity of consequences is per-

ceived to increase, attributions of responsibility also rise, along with the actor’s

behavioral response.

Moral Certainty. Organizations can also serve to reduce or enhance the level

of moral certainty attached to a moral issue. Because organizational decision

making is highly complex (Stephens and Lewin, 1992) and organizations are

often hierarchical, individuals at lower levels often do not have all the facts that

are deemed necessary to fully understand a situation demanding action. When

moral issues are at stake organizational wrongdoing, for example lower level

individuals may reason (perhaps correctly) that, although the problem seems

evident enough from their perspective, if they had the vantage point of a higher

level person, with the attendant information, they would see that only a minor

problem (or no problem) existed. This phenomenon of isolation from “the big

picture” is exacerbated by the tendency of some organizations to structure work

relationships so that group members have little contact with members of other

work groups. Any attempt to verify information or “compare notes” on moral

problems is impeded by this type of structure. The perspective on moral situa-

tions in organizations described above reduces the amount of moral certainty

that an individual member factors into his/her assessment of moral responsibil-

ity. The behavioral response necessary to achieve his/her desired level of moral

approbation declines accordingly.