In this paper I examine how the constituent elements of a firm's organizational structure affect the ethical behavior of workers. The formal features of organizations I examine are the compensation practices, performance and evaluation systems, and decision-making assignments. I argue that the formal organizational structure, which is distinguished from corporate culture, is necessary, though not sufficient, in solving ethical problems within firms. At best the formal structure should not undermine the ethical actions of workers. When combined with a strong culture, (...) however, the organizational structure may be sufficient in promoting ethical conduct. While helpful, ethics training and corporate codes are neither necessary nor sufficient in promoting ethical behavior within firms. (shrink)

Ethics researchers advise managers of organizations to link rewards and punishments to ethical and unethical behavior, respectively. We build on prior research maintaining that organizations operate at Kohlbergs stages of moral reasoning, and explain how the over-reliance on rewards and punishments encourages employees to operate at Kohlbergs lowest stages of moral reasoning. We advocate designing organizations as ethical communities and relying on different assumptions about employees in order to foster ethical reasoning at higher levels. Characteristics associated with ethical communities are (...) identified and AES Corporation and Semco S/A serve as examples of corporations exhibiting the design characteristics and assumptions of ethical organizations. (shrink)

This article is about the relationship between business and ethics in academic research. The purpose of this investigation is to examine the status of the separation and the integration theses. In the course of this article, I defend the claim that neither separation nor integration is entirely accurate; indeed they are both potentially confusing to our audience. A strategy of reconciliation of normative and descriptive approaches is proposed. The reconciliation project does not entail synthesizing or dividing prescriptive and empirical approaches, (...) but rather respecting the identity of both inquiries, while recognizing the limitations they place on each other. The research agenda of the reconciliation project is discussed. (shrink)