How to act ethically and why it can be so hard

04 February 2016 -


Doing the right thing may seem easy enough, but it can be more difficult than you think: the latest in a series leading up to the announcement of the Management Book of the Year 2016 winners

By 2016 Management Book of the Year Shortlist author Donna Ladkin

Taking ethical action is easy enough in an abstract sense.

It may be possible to discern the ‘right’ thing to do in a certain circumstance. You may even garner up the moral courage to take that action. However, when working within an organisation, its context and culture inevitably interact with any action you take.

Your actions will both be affected by and, perhaps more importantly, will prompt a response from the organisation.

As countless whistle-blowers know, that response can often be more damaging to the person taking the action than to the system. Alternatively, the action you believe to be correct may prove to be problematic within the larger organisational context.

It can generate unintended consequences that you could not have anticipated.

Here, we look at what you need to take account of when you attempt to act ethically within organisations. In particular, we highlight the importance of the political and systemic nature of organisations when you are endeavouring to hold your own ethical line.

Attending to these aspects of organisations falls within the sphere of moral perception and the foundational chapters indicated the importance of watching for the ‘invisible’ facets of organising.

We will look at the nature of organisations themselves and identifies the characteristics that can make acting ethically within them a challenge.

Not to make ethical action an impossible aspiration, we also offer some generic strategies for navigating this difficult territory.

The nature of organisations

On joining an organisation, it becomes the micro-world in which you operate.

Each organisation has its own rituals, language, rules of engagement and taken-for-granted assumptions about what is ‘right’ and what is ‘wrong’. Different micro-worlds create different rules of play and what is fine in one micro-world is not acceptable in another.

A first step in navigating the ethical terrain of an organisation, therefore, is to be aware of its micro-world and its intrinsic ethics.

The American scholar Robert Jackall conducted one of the most sustained and thorough studies of ethics in organisations in the 1980s. Jackall interviewed over 100 executives in three large-scale USA-based organisations.

His study examines the particular micro-world of the bureaucracy – an organisational form that has come to dominate working lives. His study shows how this very form itself, which distributes responsibility and authority through hierarchies and splits production processes, gives rise to particular ethical issues.

A sociologist by background, Jackall found that people behaved very differently within organisational settings, particularly within bureaucracies, than they would do or would espouse to do in their homes or neighbourhoods.

The need for achievement and promotion almost uniformly outweighed any impulse towards ethical consideration in those he interviewed.

This was true at both the macro-level of how the organisation interacted with its competitors, suppliers or the communities in which they existed, or at the micro-level of interpersonal relationships within the firm.

When a manager was demoted, for instance, rather than offering help or support, other managers were more likely to snub this person lest they be associated with someone regarded as a ‘loser’ by senior managers.

Jackall attributes many of the issues he discovers to the nature of bureaucracies themselves.

Rather than merely being technical systems of organising, his research demonstrates the extent to which bureaucracies are also systems of ‘power, privilege, and domination’.

Rather than being driven by logic, many decisions within the organisations he examined were taken without real rationale, including the degree to which performance targets were understood to have been met.

The managers he spoke with were convinced of the arbitrary nature of much that affected them. For instance, markets were seen to be by their very nature capricious.

Political maneuverings meant that those people one had allegiance to could be fired and then one would be left with few contacts. Furthermore, promotion decisions were often based on the degree to which one was known, rather than on objective measures of performance.

All of these factors contribute to the creation of an uncertain, anxiety-producing context within which many managers work. Without a sense of security where so much is tenuous, ethics can easily be discarded in an effort to protect oneself.

Jackall’s research indicates that in the struggle between security and integrity, the perceived need for security is likely to win out.

The next three sections elaborate on aspects of organisations that impact on both the capacity of the individual to exercise ethical awareness and to take value-based action. These are:

  • organisational culture
  • organisational structure
  • compensation and performance management practices.

The important point about these aspects is that taken in isolation, each is seemingly ‘ethically neutral’.

In other words, there is seldom anything inherently ‘unethical’ about an organisation’s culture or structure or how it measures performance. Performance management systems are often established in order to provide desired levels of customer service. The ability to hit such targets could have ethical implications itself (think, for instance, of waiting time targets for those visiting accident and emergency departments).

However, such measurement systems can also inadvertently result in unethical outcomes, as will be illustrated.

Let’s start, however, by considering the impact organisational culture can have on individuals’ capacity to recognise and act on ethically salient situations.

Organisational culture

First, just what is organisational culture? Organisational culture has been defined as the taken-for-granted modes of operating that inform any group of people, whether that group is a dyad or a large organisation (O’Reilly et al., 1991).

O’Reilly and his colleagues go on to suggest that organisational culture is a set of values that is reflected in both informal norms and the formal organisational system.

The American organisational behaviour scholar Edgar Schein is known for his work in identifying three ‘levels’ of an organisation’s culture:

  • Its ‘artifacts’, which are those material ‘things’ and identifiable processes that operate at the most transparent level;
  • Its attitudes and beliefs that are not easily seen but are reflected in the organisation’s ways of operating; and
  • At the deepest level, the organisation’s values and assumptions (Schein, 1992).

It is at the level of ‘values and assumptions’ that the interrelationship between an organisation’s culture and how individuals within it are prompted (or not!) to identify ethical aspects of situations is both most powerful and most problematic.

Assumptions cannot, after all, be identified in the same way that the office layout, bonus schemes, car parking arrangements or any other organisational artifacts can be identified and manipulated.

Yet research has indicated that the extent to which an organisation’s underlying assumptions are experienced has a significant impact on the moral imagination of those working within it (Caldwell and Moberg, 2007).

Those assumptions are themselves influenced by other factors, including the industry or organisational sector that the organisation is a part of, its enacted as well as espoused purpose, the values held by the top team and/or founder, and the ‘socio- material’ practices embedded in how work gets accomplished.

Let’s take a look at each of these in more detail.

Industry or organisational sector

The American business ethicist Edmund Hartman suggests that those wishing to lead ethical careers should start by considering the very industry or organisational sector they join.

Some industry sectors are recognised as being inherently problematic from an ethical perspective. For instance, the tobacco industry creates products that are known to shorten human lives and the pharmaceutical industry has been criticised for questionable pricing practices resulting in the poor being prohibited from receiving medicines they need.

Hartman (2006) advises young business students that a crucial step in their ability to exercise virtue within organisations is to be aware of the ethics inherent in the industry they join.

Furthermore, this is not a static judgement.

Sectors such as banking have had their ethical reputations tarnished by the 2008 financial crisis, which revealed less than sound practices both in the USA and in Europe.

This is not to say that all banks and financial services firms are ethically questionable, it is just to highlight the changing views concerning the inherent ethics (or not) within various sectors.

Underlying the ethical difficulties inherent to particular industry sectors is the purpose towards which those industries’ activities are directed. ‘Purpose’, another seemingly ethically neutral aspect of organisational life, can have a significant impact on how ethics are perceived and acted upon, as considered in the next section.


Apart from tobacco companies, munitions manufacturers or pharmaceutical companies, the purpose towards which an organisation’s activities are directed largely remains unquestioned in terms of whether those activities are ethical or not.

Change is afoot however, as industry sectors that have been left relatively unscrutinised in terms of their products face increasing inspection.

For instance, manufacturers of sugary drinks are beginning to feel public pressure to reduce the levels of sweeteners used as the health implications of their products are revealed. Fast-food firms increasingly come under fire for the levels of salt and saturated fats present in their products.

In these instances debate is on the rise concerning the ethics of organisations selling products that contribute to customers’ ill health.

These cases reveal a deeper-seated issue of ‘purpose’ that speaks to what an organisation is actually trying to do in the world. An organisation’s espoused purpose is often enshrined in its mission statement, that official document declaring what the organisation is about.

Seldom does an organisation’s mission statement explicitly articulate the organisation’s desire to act unethically.

However, the extent to which a mission statement provides unwavering commitment to a particular cause can blinker organisations from recognising the effects of single-minded determination to achieve a particular goal.

Mastering the Ethical Dimension of Organisations by Donna Ladkin is shortlisted in the Management and Leadership Textbook category of the 2016 CMI Management Book of the Year, in association with the British Library and sponsored by Henley Business School

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