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Codes of Conduct

Codes of Conduct: Behavioral Research into Business Ethics

David M. Messick
Ann E. Tenbrunsel
Copyright Date: 1996
Published by: Russell Sage Foundation
Pages: 420
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    Codes of Conduct
    Book Description:

    Despite ongoing efforts to maintain ethical standards, highly publicized episodes of corporate misconduct occur with disturbing frequency. Firms produce defective products, release toxic substances into the environment, or permit dangerous conditions to existin their workplaces. The propensity for irresponsible acts is not confined to rogue companies, but crops up in even the most respectable firms.Codes of Conductis the first comprehensive attempt to understand these problems by applying the principles of modern behavioral science to the study of organizational behavior.

    Codes of Conductprobes the psychological and social processes through which companies and their managers respond to a wide array of ethical dilemmas, from risk and safety management to the treatment of employees. The contributors employ a wide range of case studies to illustrate the effects of social influence and group persuasion, organizational authority and communication, fragmented responsibility, and the process of rationalization. John Darley investigates how unethical acts are unintentionally assembled within organizations as a result of cascading pressures and social processes. Essays by Roderick Kramer and David Messick and by George Loewenstein focus on irrational decision making among managers. Willem Wagenaar examines how worker safety is endangered by management decisions that focus too narrowly on cost cutting and short time horizons. Essays by Baruch Fischhoff and by Robyn Dawes review the role of the expert in assessing environmental risk.

    Robert Bies reviews evidence that employees are more willing to provide personal information and to accept affirmative action programs if they are consulted on the intended procedures and goals. Stephanie Goodwin and Susan Fiske discuss how employees can be educated to base office judgments on personal qualities rather than on generalizations of gender, race, and ethnicity.Codes of Conductmakes an important scientific contribution to the understanding of decisionmaking and social processes in business, and offers clear insights into the design of effective policies to improve ethical conduct.

    eISBN: 978-1-61044-391-3
    Subjects: Business, Psychology, Sociology

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vii)
  3. Contributors
    (pp. viii-viii)
  4. preface
    (pp. ix-x)
    David M. Messick and Ann E. Tenbrunsel
  5. Introduction Behavioral Research into Business Ethics
    (pp. 1-10)
    David M. Messick and Ann E. Tenbrunsel

    Who is at fault when a worker on an oil platform falls to his death? Is it possible for well-intentioned organizations to socialize their employees unwittingly into committing illegal and immoral acts? How would such a process work? Does racial discrimination require intentional acts of suppression of racial minorities? What are the ethical obligations of persons, such as experts or consultants, who claim knowledge or skill that is beyond that of the average person? These are a few of the complex issues that are the concerns of the field of business ethics.

    Business ethics, the study of the moral and...


    • Chapter 1 How Organizations Socialize Individuals into Evildoing
      (pp. 13-43)
      John M. Darley

      When members of our culture think of acts of doing harm, we tend to think of an individual harm-doer who lies behind these acts, an evil individual who seeks out others and acts on them in evil ways. Perhaps our canonical image is that of a serial murderer, who moves among us, hidden behind the mask of normality, destroying the innocent. Contrary to cultural stereotypes, however, most harmful actions are not committed by palpably evil actors carrying out solitary actions. Instead, the typical evil action is inflicted on victims by individuals acting within an organizational context. Indeed, it may be...

    • Chapter 2 Social Influence and the Triple Tumor Structure of Organizational Dishonesty
      (pp. 44-58)
      Robert B. Cialdini

      A surprising thing happened to me several years ago, after the publication of a book I wrote for consumers. It seemed that an entirely unintended set of people became interested in it.

      The book, titledInfluence,was supposed to inform the public about the most powerful psychological pressures that cause a person to say yes to a request. In addition, it was designed to show readers how to recognize and resist the tactics of anyone who tried to use these pressures on them in an undue or unwelcome fashion. Although the book has proved more successful than I could have...

    • Chapter 3 Ethical Cognition and the Framing of Organizational Dilemmas: Decision Makers as Intuitive Lawyers
      (pp. 59-85)
      Roderick M. Kramer and David M. Messick

      Social dilemmas arise when conflicts exist between individual self-interests and the collective welfare. In organizational settings, such dilemmas can assume a variety of forms.

      A major focus of research on social dilemmas over the last two decades has been on trying to understand why people cooperate or fail to cooperate in such situations (see Dawes 1980; Komorita and Parks 1994; Kramer 1991; Messick and Brewer 1983 for literature reviews). In much of the research on social dilemmas, the decision to cooperate has been construed primarily in terms of conflicts between competing rationalities. For example, it has long been appreciated that...

    • Chapter 4 Can Socially Responsible Firms Survive in a Competitive Environment?
      (pp. 86-103)
      Robert H. Frank

      In his celebrated 1970 article, Milton Friedman wrote that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (p. 126). In Friedman’s view, managers who pursue broader social goals—say, by adopting more stringent emissions standards than required by law, or by donating corporate funds to charitable organizations—are simply spending other people’s money. Firms run by these managers will have...

    • Chapter 5 Beyond the Hidden Self: Psychological and Ethical Aspects of Privacy in Organizations
      (pp. 104-116)
      Robert J. Bies

      When people express concerns about privacy, it is usually in the context of “Big Brother” (Orwell 1949) and governmental intrusions into their private lives. Whether in the context of illegal governmental wiretapping and surveillance (for example, Watergate and the John Lennon case), Internal Revenue Service employees “perusing” taxpayer records (MacDonald and Tritch 1993), or the gathering of evidence at crime scenes (as in the O. J. Simpson case), privacy is an issue of central social importance.

      In recent years, concerns about privacy have emerged in a new context, the work organization. As the value of information increases and new technologies...

    • Chapter 6 Judge Not, Lest . . . : The Ethics of Power Holders’ Decision Making and Standards for Social Judgment
      (pp. 117-142)
      Stephanie A. Goodwin and Susan T. Fiske

      Ann Hopkins’s lawsuit against the accounting firm of Price Waterhouse highlighted the potential for powerful decision makers to misuse social categories and their corresponding stereotypes. In this case, ultimately reviewed by the U.S. Supreme Court, the senior partners had denied Ms. Hopkins a partnership in the firm, claiming that despite her exemplary work record she was unqualified for partnership because she was not feminine enough. The wording of the Supreme Court’s response toPrice Waterhouse v. Hopkins(1989) embodied a fundamental assumption in our culture: People should be evaluated on the basis of their individual characteristics without regard to their...

    • Chapter 7 Social Categories and Decision Making: How Much Differentiation Do We Need?
      (pp. 143-159)
      Myron Rothbart and Robert Mauro

      Individuals and organizations base their decisions, to a greater or lesser extent, on variables believed to correlate with criteria they wish to predict. The problem is that we do not seem to be particularly good at either isolating the correct predictors or knowing how much weight to place on those predictors (see Brehmer 1980). In the absence of certainty about relevant predictors, individuals and organizations alike fall back on the use of stereotypes, with all the attending shortcomings of that approach. The use of race as a predictor in decision making is particularly vexing, because it raises basic questions about...

    • Chapter 8 In-Group Favoritism: The Subtle Side of Intergroup Discrimination
      (pp. 160-170)
      Marilynn B. Brewer

      Although people tend to think in terms of dichotomies and bipolar distinctions, bipolarity may actually be a relatively rare natural phenomenon. The distinction betweenhotandcoldis one instance of a truly bipolar dimension. Since cold is literally the absence of heat, reducing heat increases cold, and cranking up the heat makes things less cold. The reciprocal relationship is perfectly negative.

      For many years, psychologists and social scientists have represented positive/negative evaluations and affect as bipolar concepts analogous to hot and cold. The implicit assumption has been that the more positive one's orientation toward an object or idea, the...

    • Chapter 9 Managing Work Force Diversity: Ethical Concerns and Intergroup Relations
      (pp. 171-186)
      Tom R. Tyler and Maura A. Belliveau

      How can groups maintain their cohesion and the ability to function effectively when they have internal conflicts of interest or of values? When there are disagreements within a group about the distribution of rewards, resources, or opportunities, social mechanisms for bridging those differences are crucial. Our discussion will focus on two mechanisms through which contemporary organizations facing increasing work force diversity can be effectively managed. These two mechanisms areprocedural justiceandsuperordinate identification.Each suggests a distinct managerial approach to maintaining group cohesion in the face of identity and interest conflicts.

      The effective management of diverse interests is becoming...

    • Commentary The Business Ethics of Social and Organizational Processes
      (pp. 187-194)
      Thomas Donaldson

      The preceding nine chapters discuss many ethical issues, but they may be conveniently grouped into three categories. The papers in the first category examine how individuals and organizations can unintentionally slip into unethical behavior—for example, how they can slowly succumb to stereotyping in decision making or to self—destructive attempts to manage appearances. Those in the second category speak to the economic advantages of ethical behavior—for example, how companies can recognize the costs of misbehavior and the payoffs for ethical behavior. Those in the third category identify many negative group tendencies that stem from group features such as...


    • Chapter 10 Do No Harm
      (pp. 197-213)
      Jonathan Baron

      Ethics, including business ethics, is often seen as a kind of constraint, like the law. When we desire to do something, first we must ask whether it is unethical. Even if it is the best thing to do, the ethicist, like the lawyer, can tell us that we shouldn’t do it. For example, it is “unethical” for doctors to inform someone that her lover is infected with HIV. In some states, it is also illegal.

      Ethical systems based on constraints imply an asymmetry between action and inaction. They hold us responsible for harms that we cause through action but not...

    • Chapter 11 Behavioral Decision Theory and Business Ethics: Skewed Trade-offs Between Self and Other
      (pp. 214-227)
      George Loewenstein

      Behavioral decision theory studies the trade-offs people make when they decide between options or courses of action. For example, someone choosing between jobs might trade off a high salary in one job against the high prestige of another job; for someone considering a risky prospect, such as starting a business, there would be a trade-off between certainty and expected value; and in intertemporal choices the typical choice is between earlier smaller rewards and later larger rewards. Behavioral decision theory also helps us to understand ethical decisions that involve tradeoffs. My focus is on managerial decisions involving trade-offs between a manager's...

    • Chapter 12 Responsibility Judgments and the Causal Background
      (pp. 228-242)
      Ann L. McGill

      Questions of business ethics commonly arise after some negative event has occurred—for example, when a product does not perform properly, when an employee is injured on the job, or when an explosion occurs at a factory, killing workers and neighbors. In such cases, business ethics may be considered in terms of causal judgments. That is, people may approach the question of ethics in decision making by first asking what caused the event and who is to blame. Hence, a complete analysis of business ethics requires an understanding of how people form causal explanations and how these explanations are related...

    • Chapter 13 Ethics as Hypothesis Testing, and Vice Versa
      (pp. 243-255)
      Joshua Klayman

      How is it that people come to be doing unethical things? This is obviously one of the fundamental questions of interest to those who study ethics. I approach this question from an outsider’s perspective, as someone who studies cognitive processes of reasoning and judgment. I believe that unethical behavior is closely tied to cognitive processing, particularly with regard to how people change, or fail to change, their ideas.

      It is intriguing to note how many different ethically troubling situations are linked in some way to processes of change and resistance to change. In chapter 1 of this book, for example,...

    • Chapter 14 Environmental Degradation: Exploring the Rift Between Environmentally Benign Attitudes and Environmentally Destructive Behaviors
      (pp. 256-274)
      Max H. Bazerman, Kimberly A. Wade-Benzoni and Francisco J. Benzoni

      Many of the ethical issues confronting individual and organizational decision makers are directly linked to the natural environment. These issues include decisions about the use of scarce resources, creating dysfunctional by-products, exposing workers to risky substances, and marketing profitable but potentially harmful products. Past decisions have already degraded many of the earth's ecological systems. We live under the threat of global warming; a significant percentage of the protective ozone layer has already been destroyed; growth and ravenous consumption have resulted in worldwide pollution, rapid resource depletion, and massive species extinctions. This degradation, destruction, and wastefulness speak powerfully to the need...

    • Chapter 15 The “Public” Versus the “Experts”: Perceived Versus Actual Disagreements About Risks
      (pp. 275-288)
      Baruch Fischhoff

      Citizens in modern societies live in a world of risks to their health, safety, and environment. Often these risks can be attributed to the activities of businesses in those societies. These attributions can, in turn, pose significant financial risks to these businesses. They may be fined or sued for their past actions; their future plans may be delayed or denied; their reputations may be stained, undermining their ability to raise capital or recruit skilled workers. Firms define themselves, in part, by how they manage their risks and their relations with the public concerned about those risks. Acquitting themselves requires understanding...

    • Chapter 16 Incremental Validity, Expertise, and Ethics
      (pp. 289-299)
      Robyn M. Dawes

      Ethical principles and mandates imply capacity. If, for example, I feel ethically bound to fulfill a promise, the act of making the promise implies the capacity of fulfilling it. (I admit at the outset that assessment of capacity cannot be absolute; there is always the element of greater or lesser uncertainty in any such assessment.) If, for example, as a nonviolent protester I believe I should love—or learn to love—the person assaulting or beating me, I must believe that such love is possible (as did Martin Luther King, Jr.). If, in contrast, I believe that such love is...

    • Chapter 17 Ethical Dilemmas in Risk Communication
      (pp. 300-317)
      Helmut Jungermann

      Industrial and political development in modem societies has produced, as a side effect, the task ofrisk communication.We are faced increasingly with technologies, projects, products, and activities that are associated with new, potentially severe, and long-range risks; correspondingly, many people are increasingly sensitive to such risks and demand to be informed about risks and to participate in risk decisions. As a result, communication about risks to health and environment has become a political necessity as well as a moral obligation. Such communication might influence decisions people make, either for themselves or for others. For example, physicians must inform their...

    • Chapter 18 The Ethics of Not Spending Money on Safety
      (pp. 318-327)
      Willem A. Wagenaar

      Safety is like oil; there is a sufficient supply, but getting the last drops of it involves bigger and bigger marginal costs. With a limited budget, complete safety is unattainable. Hence all companies face the decision about how much to spend on safety and consequently about how much safety will be bought. Having made that decision, they are in the awkward position of knowing that a little more safety could be obtained in principle but will not be obtained in practice. What, then, is a company to tell the widow whose husband died in a preventable accident—“We are very...

    • Commentary The Business Ethics of Risk, Reasoning, and Decision Making
      (pp. 328-341)
      Patricia H. Werhane

      The chapters in this section have focused on the psychological, social, and ethical aspects of risk, risk analysis, and our perception and communication of risks, harms, and benefits. A number of themes are evident in these different approaches. Some of the themes exemplify the distinction between the empirical and the normative; others focus on the notion of cognitive frames, or what I shall callconceptual schemes;and all raise questions of the role of the affective imagination, or what I shall callmoral imagination,in business ethics and in moral decision making. These themes give us insights into the richness...

  8. Summary The Psychology of Business Ethics
    (pp. 342-361)
    Russell Hardin

    The central problem of ethics is the problem of motivation. Indeed, one of the oldest characterizations of ethics is that it is about the conflict between self-interest and other concerns, such as the interests of others or doing the right thing in some sense. Morality is supposed to help us make the trade-off between our own interests and other concerns. To a large extent, that means that ethics is a subject for psychology as much as for philosophy, and this was evidently the view of one of the greatest moral theorists, David Hume, in whose massiveTreatise([1739-40] 1978) the...

  9. References
    (pp. 362-394)
  10. Index
    (pp. 395-409)