Week 6: Organizational Interity: A Character Ethic Approach

Last week you were exploring professional integrity and one's professional code of ethics. Let's continue this conversation focusing on organizations. In the news these days, there is much discussion of organizational integrity. What does this mean?

Organizational Integrity. The notion of integrity is multifaceted with many dimensions and applicable to both individuals and organizations. Carter (1996) describes integrity as necessitating “moral reflection,” “steadfastness,” the “keeping of promises,” and being “unashamed of doing what is right.” It requires: “(1) discerning what is right and what is wrong; (2) acting on what…[one has]…discerned, even at personal cost; and (3) saying openly that…[one is acting on one’s]…understanding of right from wrong (p. 7, Emphasis in original). In Corporate Integrity: Rethinking Organizational Ethics and Leadership, Brown (2005) adds that integrity entails being consistent, being conscious of interpersonal relationships, having a sense of inclusiveness, and pursuing a worthwhile purpose (pp. 5-9). Solomon (1999), in A Better Way to Think About Business: How Personal Integrity Leads to Corporate Success provides the key foundation to these definitions stating that integrity is “a synthesis of the virtues,” of the core human attributes that are considered praiseworthy. It is about “character,” the virtues “working together to form a coherent whole” (p. 38). Further, to be virtuous “is by its very nature both acting in one’s own self-interest and acting in a way that is socially productive” (Solomon, 1999, p. 34):

"The self-interest of…[businesses]…is served only because they do indeed pay attention to …[the consumer’s]…necessities, as well as to their own reputations for quality and fairness. It is essential to their own business that they do so. It is precisely because they rise above their own self-interests and consider the interests of others that they make a success of their enterprise. What they ultimately “sell” is their own integrity." (p. 36)

Handy (2003) states that, unlike in an industrial society where financiers are the owners of a company and employees are “treated as property,” in a knowledge economy, a good business is a community with a purpose, not a piece of property,” a “wealth-creating community” with members who have rights, and whose purpose is not to just “make a profit but to make a profit in order to do something better” (p. 67). These viewpoints resonate with central aspects of the long standing conceptualizations of the good corporation and the virtuous organization. Such companies are business enterprises that are ethical and good communities, blending economic efficiency with social responsibility, thus, fostering the good life, the happiness and enhancement of all of their stakeholders. These types of companies’ cultures and policies, while enabling financial success and prosperity, are advocates for human rights and distributed justice, respect and serve the fundamental human interests of its business partners, managers, workforce, customers, and civic communities, promote the development of autonomous, ethical professionals, and enable the company to be a good corporate citizen (Hartman, 1996; Houck and Williams, 1996). Following the Enron and WorldCom scandals, this trend in organizational culture and character has flourished, with companies participating in the United Nation’s Global Compact (UN Global Compact, 2007), and seeking to have high standings on such lists as Business Ethics 100 Best Corporate Citizens (Business Ethics, 2007). Many in the business arena are beginning to understand more fully that an enterprise’s reputation, its credibility and trustworthiness, is “built by its character” which is “formed by integrity and fair play” (Jackson, 2004).

As seen in the previous chapter, business enterprises are complex adaptive systems that are always evolving. Some organizations hold and will continue to practice the current prominent business philosophy of financial profits at all costs. Others see business practice differently and will shift to being value-driven, developing work environments that sincerely respect the human dignity of their workforce. As organizations strive to become exemplary businesses with integrity, they are faced with several challenges, including 1) developing a business strategy that does not promote seeking financial profits “at all costs,” 2) establishing a human resource management philosophy that sincerely values employees as multidimensional people, not just as expendable machines, 3) leadership accepting responsibility for creating a work environment that fosters employee health and safety, and does not harm the welfare of society, 4) promoting organizational cultures that will shift the current work ethic to be life-centered, and 5) reestablishing work and home life boundaries. With virtues and values lying at the core of organizational integrity and an employee-centric culture, a virtue-based ethical perspective would be critical in establishing and maintaining organizational integrity, and in addressing the above challenges. It can also enable executives, managers, and the workforce courageously engage in what Badaracco (2003) refers to as “defining moments,” times when leaders and employees, as professionals and corporate representatives, have to grapple with difficult issues and make choices rooted in personal identity, collective values, and the organization’s role in the local or global community.

Character, Community, and Organizational Ethics. The virtue ethic approach can serve as a fundamental principle in developing a theory of organizational culture that seeks to serve the common good, and benefits all the company’s stakeholders (Arjoon, 2000). Its focus on character can assist organizations to develop honest, trustworthy and compassionate leaders, as well as people-centered cultures that foster community rituals that pass on the organization’s values, promote employee recreation, and enliven workplace spirit. While changing policies and procedures can change outward workforce behaviors, shifting organizational cultural beliefs and values can enable managerial perspectives to evolve, and become integral to their professional code of ethics.

While duty ethic approaches as outlined by Kant (1996) in The Metaphysics of Morals and Hume (1983) in An Enquiry Concerning the Principles of Morals do not exclude virtue, the renewed interest in virtues, including character, “the personal traits we value in ourselves and for which we seek to value others” (Sennett, 1998, p. 10), has given rise to articulating specific virtue-based ethical perspectives for business models, and for assessing organizational behavior. This is exemplified by Solomon’s (1992) Ethics and Excellence: Cooperation and Integrity in Business, and Hartman’s (1996) Organizational Ethics and the Good Life. But no fully developed business virtue ethic has been constructed, even though it would be beneficial (Baker, 2008), nor has the concepts developed specifically addressed the cyber-socio nature of contemporary business enterprises.

Virtue ethics complements the deontological and consequentialist approaches usually used in dealing with business issues (Whetstone, 2001), and is concerned with having character and making responsible choices. It is not a prescriptive stance, but a call to discern and seek higher standards, to be critically reflective, to act in a praiseworthy manner, and challenge oneself to realistically live the ideal (Crisp and Slote, 1998).

While virtue-based ethical systems contain a notion of duty, as the writings of ethicists such as MacIntyre (1984), Nussbaum (2001), Slote (1992), Hursthouse (2001), and Foot (2003) indicate, an ethical approach founded upon virtue understands moral decisions as stemming from “who one chooses to be,” not on “how one is to act.” The person is conceptualized as a whole, not a compartmentalized entity, and seeks “happiness,” strives for “excellence,” and desires the “the good life” (O’Toole, 2005). Virtues enable the good life. They are dispositions and inclinations that are part of one’s character that:

"…not only sustain practices that enable us to achieve the goods internal to practices, but which enable us to achieve the relevant kind of quest for the good, by enabling us to overcome the harms, dangers, temptations and distractions which we encounter, and which will furnish us with increasing self-knowledge and knowledge of the good. The catalogue of the virtues will therefore include the virtues required to sustain the kind of households and the kind of political communities in which men and women can seek for the good together and the virtues necessary for philosophical enquiry about the character of the good." (MacIntyre, 1984, p. 219)

Virtues are particular human aspects that give unity to one’s life, and to humanity as a whole. Virtues can be moral (e.g., prudence, justice, compassion and temperance) or intellectual (e.g., wisdom, creativity, and critical thinking) (Aristotle, 1987). They are dispositions and a manner of being in the world. They are ways of living and working that foster human flourishing, the inner striving to reach the fullness of one’s human potential, and the ability to contribute to society. They strongly influence how one establishes priorities and makes decisions. They aid one in being consistent and accountable when making decisions; that is, making a personal and deliberate response to a situation faced (Niebuhr, 1963).

In what does the unity of an individual life consist? The answer is that its unity is the unity of a narrative embodied in a single life. To ask ‘what is the good for me?’ Is to ask how best I might live out that unity and bring it to completion. To ask ‘what is the good for…[humanity]…?’ is to ask what all answers to the former questions have in common…[I]t is important to emphasize that it is the systematic asking of these two questions and the attempt to answer them in deed as well in word which provides the moral life with its unity. (pp. 218-219)

Hauerwas (1981) refines this ethical notion by concentrating on virtue itself, stating that virtue-based ethics is not merely about embodying a set of virtues, but about character and community. It is about the dynamic interplay between character, the nurturing community with an influential culture and challenging stories, decision-making, choice, action and accountability. Virtue involves habit, ways of being and acting that are formed through encountering cultural traditions, engaging with leadership models, and actively self-reflecting in a critical manner. Virtues are fashioned through a paradoxical process of learning character traits and values via cultural stories and norms, and experience. The process entails honest grappling with life’s positive and negative crises in light of what one has learned, hammering out one’s own articulation of them, and making them one’s own by integrating them into one’s personality, behaviors, and work ethic.

A virtue-based or character ethic approach is not about individuals developing a sense of self and ethics in isolation, but in community, for individuals, business enterprises and civic communities highly influence each other. The social communities in which employees live and the business settings in which they work are critical to the development of their moral vision, and their ability to become professionals with integrity.

Hauerwas (1974) stresses that through the making of choices one freely creates one’s self. One is responsible for one’s actions. One’s disposition is formed as a result of a conscious or an unconscious grappling with and interpreting of one’s life experiences, family values, community’s norms and mores, and work experiences. As he states:

"Character is…the qualification of our self-agency, formed by our having certain intentions (and beliefs) rather than others. Character is not a mere public appearance that leaves a more fundamental self hidden; it is the very reality of who we are as self-determining agents. Our character is not determined by our particular society, environment, or psychological traits; these become part of our character,…but only as they are received and interpreted in the descriptions which we embody in our intentional action. Our character is our deliberate disposition to use a certain range of reasons for our actions rather than others (such a range is usually what is meant by moral vision)…" (p. 59)

Personal or organizational virtues are ideals that are standards; that is, benchmarks for character and the norm for actions, as well as aspirations that give direction to professional life and work. Being virtuous involves being embodied in the world, engaged with it, present to others, and striving to flourish as a human person or institution. It is about not only having virtuous character traits, but acting virtuously. Possessing the traits is not enough. Being virtuous means knowingly acting in a virtuous manner, and taking responsibility for one’s decisions. This is true whether speaking about the integrity of individuals, work teams, or business organizations. Both the individual and the organization are agents, and are to be virtuous, and have a sense of responsibility. Both the individual and organization are accountable for their choices, decisions and actions.

Being virtuous as a professional or business entails being actively engaged in the formation of one’s personal or organizational character. As Hauerwas (1975) states:

"Our character gives us direction…Our character is constantly being challenged by situations which seem to contain new elements that we have not taken into account in the previous descriptions which we have embodied....The ability to “step back” is…dependent on the kinds of belief and intentions we entertain within our…character. What we believe and think does not make some difference in what we do, it makes all the difference….. Our future is what we determine it to be from the depths of who we are; it can be as rich or narrow as we make it…Our moral life is not limited to passive accommodations to the good; it includes changing the world through our intentional activity rooted in character. Moreover, the kind of person we are, our character, determines to a large extent the future we will have." (pp. 123-125, Emphasis in original.)

In regards to the workplace, a virtue ethic approach is a challenge to gauge business success not by the mere following of pragmatic business and management principles, but by being a worker, a manager, or a business leader with integrity who makes a lasting contribution. It is a call to conduct business as if people and civic communities are core stakeholders. It is a challenge to establish an organizational culture and work environment that enables people to align their talents and energies with the business’ goals, work to their fullest potential, and maintain quality of life.

Thus, from a virtue ethic perspective, organizational and business ethics are inherently political in nature for they are concerned with not only aiding in decision-making and taking action, but also in “creating the right kind of community” in business enterprises—communities with clearly discerned values that aid the development of people who posses civic virtue and foster the good life (Hartman, 1996, p. 9). The notion of a virtuous community with a clearly articulated sense of ethics integrated into its narratives and traditions is central to understanding organizational integrity, and in developing methods to assist it in formulating its work ethic.

In this ethical perspective, businesses are defined by their “role(s) and responsibilities in the larger community,” and deal more with “individuals in (and out) of business roles as well as the role of business and business in society, the-individual-in-the-organization”, than policies and regulations. It entails a sense of “social and institutional awareness, a sense of oneself as an intimate (but not inseparable) part of the business world with a keen sense of the virtues and values of that world” (Solomon, 1993, p. 111, Emphasis in the original). The business enterprise is to be a “good community” that positively shapes the personal and professional values and behaviors of its leaders and workforce, enables its employees to develop a professional ethical code rooted in what is virtuous, and creates meaningful work and job satisfaction (Hartman, 1996). Thus, not only are business organizations to have an upstanding character, they have a responsibility to form a culture and work environment that empowers employees to flourish as human beings, formulate a fulfilling work ethic, establish healthy and responsible work habits, cultivate meaningful relationships with family and friends, and actively participate in civic affairs.

From a value-based ethical approach, then, organizations conduct business, operate, treat employees and serve customers from a sense of integrity. Such integrity is embodied in the vision, beliefs, and values that are given form in its culture, policies, daily operational procedures, code of conduct, and workplace community.

But how can one speak of organizational character, virtues and values in a pluralistic world and business environment that values diversity, and respects individuality and autonomy? What do you think?