This paper is designed to do three things while discussing the challenge of ethical behavior in organization. First, it discusses some reasons why unethical behavior occurs in organization. Secondly, the paper highlights the importance of organizational culture in establishing an ethical climate within an organization. Finally, the paper presents some suggestions for creating and maintaining an ethically-oriented culture.

Turning around and changing an organization's culture does not happen by chance. The purpose of this paper is to offer insights into what is needed for an organization to successfully transform itself from a culture and experience that does not support individual ethical behavior. The recent bond trading scandal at Salomon Brothers will be used to demonstrate that a successful ethical turnaround does not just happen spontaneously. In particular, we argue that new leadership, altering policies, structure, behavior, and beliefs are (...) paramount to successfully change to an organizational culture that supports ethical behavior. Schein's five primary mechanisms available to leaders for embedding and reinforcing culture will be used to systematically analyze efforts to change Salomon Brothers' culture. (shrink)

Frankl's elaboration of his theory that man's primary motvational force is the search for meaning.

According to the origin of the word "humanism" and the concept of humanitas where the former comes from, management could be called humanistic when its outlook emphasizes common human needs and is oriented to the development of human virtue, in all its forms, to its fullest extent. A first approach to humanistic management, although quite incomplete, was developed mainly in the middle of the 20th century. It was centered on human motivations. A second approach to humanistic management sprang up in (...) the 80's and centered on organizational culture. This implied a wider approach to the human condition while taking into account the influence of culture on behaviors and decisionmaking, but it is incomplete, too. There is a third approach to humanistic management, which is still emerging, that considers a business enterprise as a real community of persons. That means promoting unity and favoring the acquisition of human virtues. This humanistic management approach is a real challenge in order to achieve a higher moral quality in management, human virtues among people and more efficient organizations. (shrink)

We dedicate this book to John Thibaut. He was mentor and personal friend to one of us, and his work had a profound intellectual influence on both of us. We were both strongly influenced by Thibaut's insightful articulation of the importance to psychology of the concept of pro cedural justice and by his empirical work with Laurens Walker in reactions to legal institu demonstrating the role of procedural justice tions. The great importance we accord the Thibaut and Walker work is (...) evident throughout this volume. If anyone person can be said to have created an entire field of inquiry, John Thibaut created the psychological study of procedural justice. (To honor Thibaut thus in no sense reduces our recognition of the contributions of his co-worker, Laurens Walker, in the creation of the field. We are as certain that Walker would endorse our statement as we are that Thibaut, with characteristic modesty, would demur from it. ) Even to praise Thibaut in this fashion falls short of recognizing all of his contributions to procedural justice. Not only did he initiate the psy chological study of the topic, he also built much of the intellectual foun dation upon which the study of procedural justice rests. Thibaut's work with Harold Kelley (1959; Kelley & Thibaut, 1978) created a social psy chological theory of interdependence that, among many other applica tions, serves as the basis for one of the major models of the psychology of procedural justice. (shrink)

What can reason do for us and what can't it do? This is the question examined by Herbert A. Simon, who received the 1978 Nobel Prize in Economic Sciences "for his pioneering work on decision-making processes in economic organizations." The ability to apply reason to the choice of actions is supposed to be one of the defining characteristics of our species. In the first two chapters, the author explores the nature and limits of human reason, comparing and evaluating the major (...) theoretical frameworks that have been erected to explain reasoning processes. He also discusses the interaction of thinking and emotion in the choice of our actions. In the third and final chapter, the author applies the theory of bounded rationality to social institutions and human behavior, and points out the problems created by limited attention span human inability to deal with more than one difficult problem at a time. He concludes that we must recognize the limitations on our capabilities for rational choice and pursue goals that, in their tentativeness and flexibility, are compatible with those limits. (shrink)

A serious attempt to integrate ethics in management was done by Professor Juan Antonio Pérez López (1934–1996). His thought represents a break with current scholarly thinking on these subjects. The purpose of this article is to explain some of the most significant aspects of his theories, relating basically to his recourse to ethics as what defines the characteristic behavior of human beings, considered as individuals and as members of organizations. Pérez López used the anthropological conception underlying the ethics of Aristotle (...) and Thomas Aquinas to build a solid base for that ethics, starting from the decision-making process. He then used that ethical base to point to the kind of action theory and organization theory that could most effectively assist the human development of people and organizations. (shrink)

An organizational culture can be defined as "Organizational Humanizing Culture" if it presents the following features: (1) recognition of the person in his or her dignity, rights, uniqueness, sociability and capacity for personal growth, (2) respect for persons and their human rights, (3) care and service for persons around one, and (4) management towards the common good versus particular interests. Current findings and generalized experience suggest that an organizational culture with these features tends to bring about trust and associability, which (...) are basic elements for social capital (a sort of asset embedded in the relationships of individuals, communities, networks or societies). (shrink)

The last years of the 20th Century have been somewhat contradictory with respect to values like loyalty, trust or truthfulness. On the one hand, (often implicitly, but sometimes very explicitly), self-interest narrowly defined seems to be the dominant force in the business world, both in theory and in practice. On the other hand, alliances, networks and other forms of cooperation have shown that self-interest has to be at least "enlightened".The academic literature has reflected both points of view, but frequently in (...) an ambiguous way, since the concepts of loyalty and trust are somewhat elusive and equivocal. This paper attempts to analyze the concept of loyalty in depth, examining the different conceptions about the word that can be found in the literature. We begin by going to the management classics (specifically, Follett, Barnard and Simon), and we then turn to the anthropological approach of Pérez López (1993), with its built-in ethical analysis, and show how trust and loyalty are crucial to the development of organizations. We end by suggesting in what ways loyalty and trust can be created and fostered in organizations. (shrink)

The paper describes and discusses unethical behavior in organizations, as a result of (interacting) disputable leadership and ethical climate. This paper presents and analyzes the well-known bond trading scandal at Salomon Brother to demonstrate the development of an unethical organizational culture under the leadership of John Gutfreund. The paper argues that leaders shape and reinforce an ethical or unethical organizational climate by what they pay attention to, how they react to crises, how they behave, how they allocate rewards, and how (...) they hire and fire individuals. (shrink)

This paper is designed to do three things while discussing the challenge of ethical behavior in organization. First, it discusses some reasons why unethical behavior occurs in organization. Secondly, the paper highlights the importance of organizational culture in establishing an ethical climate within an organization. Finally, the paper presents some suggestions for creating and maintaining an ethically-oriented culture.