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COMMUNICATION
This book is dedicated to Geriel,
whose integrity is constant.
ORGANIZATIONAL
COMMUNICATION
Ethical Perspectives and Practices

2 nd
Edition

Edited by Steve May


The University of North Carolina at Chapel Hill
Copyright © 2013 by SAGE Publications, Inc.

All rights reserved. No part of this book may be


FOR INFORMATION reproduced or utilized in any form or by any means,
electronic or mechanical, including photocopying,
SAGE Publications, Inc. recording, or by any information storage and retrieval
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SAGE Publications Ltd.


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London EC1Y 1SP Case studies in organizational communication : ethical
United Kingdom perspectives and practices / Steve May, editor. — 2nd ed.

SAGE Publications India Pvt. Ltd. p. cm.


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Includes bibliographical references and index.
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ISBN 978-1-4129-8309-9 (pbk. : acid-free paper)
SAGE Publications Asia-Pacific Pte Ltd.
33 Pekin Street #02-01 1. Communication in organizations—Case studies.
Far East Square 2. Communication in organizations—Moral and ethical
Singapore 048763 aspects. I. May, Steve (Steve Kent), 1961-

HD30.3.C37155 2013
Acquisitions Editor: Matthew Byrnie
Associate Editor: Nathan Davidson 302.3’5—dc23
Editorial Assistant: Stephanie Palermini 2011031163
Production Editor: Catherine M. Chilton
Copy Editor: Megan Markanich This book is printed on acid-free paper.
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Permissions Editor: Karen Ehrmann

11 12 13 14 15 10 9 8 7 6 5 4 3 2 1
Contents

List of Figures and Tables ix


Preface xi
Acknowledgments xxi

Introduction: Ethical Perspectives and Practices 1


Steve May

Part I: Alignment 33
Case Study 1. Ethical Dilemmas in the Financial Industry 35
Katherine Russell, Megan Dortch, Rachel Gordon, and Charles Conrad
Case Study 2. The Ethics of the “Family Friendly” Organization:
The Challenge of Policy Inclusiveness 49
Caryn E. Medved and David R. Novak
Case Study 3. Managing the Ethical Implications of the Big Box: The Walmart Effect 59
Edward C. Brewer
Case Study 4. Just Window Dressing? The Gap (RED) Campaign 73
Michelle Amazeen

Part II: Dialogic Communication 85


Case Study 5. Ethical Contradictions and E-Mail Communication at Enron Corporation 87
Anna Turnage and Joann Keyton
Case Study 6. Toyota—Oh, What a Feeling, or Oh, What a Mess?
Ethics at the Intersection of Industry, Government, and Publics 99
Rebecca J. Meisenbach and Sarah B. Feldner
Case Study 7. Sanlu’s Milk Contamination Crisis: Organizational Communication
in Conflicting Cultural, Economic, and Ethical Context 111
Shari R. Veil and Aimei Yang
Case Study 8: What About the People in the “People’s Car”?
Tata Motors Limited and the Nano Controversy 119
Rahul Mitra
Part III: Participation 129
Case Study 9. Resistance and Belonging: The Chicago Blackhawks
and the 2010 Chicago Annual Pride Parade 131
Dean E. Mundy
Case Study 10. Is Agriculture Spinning Out of Control? A Case Study of Factory Farms in Ohio:
Environmental Communication, News Frames, and Social Justice 143
Jeanette Wenig Drake
Case Study 11. Ethical Storm or Model Workplace? 157
Joann Keyton, Paula Cano, Teresa L. Clounch, Carl E. Fischer,
Catherine Howard, and Sarah S. Topp
Case Study 12. Gaming the System: Ethical Challenges in Innovative Organizations 169
Natalie Nelson-Marsh

Part IV: Transparency 181


Case Study 13. Reward, Identity, and Autonomy: Ethical Issues in College Athletics 183
John Llewellyn
Case Study 14. The Case of Wyeth, DesignWrite, and Premarin: The Ethics of
Ghostwriting Medical Journal Articles 197
Alexander Lyon and Mark Ricci
Case Study 15. Fired Over Facebook: Issues of Employee Monitoring and
Personal Privacy on Social Media Websites 207
Loril M. Gossett
Case Study 16. Daimler’s Bribery Case 219
Roxana Maiorescu

Part V: Accountability 231


Case Study 17. The Deepwater Horizon Disaster: Challenges in Ethical Decision Making 233
Elaine M. Brown
Case Study 18. Outsourcing U.S. Intelligence 247
Hamilton Bean
Case Study 19. Silence in the Turmoil of Crisis: Peanut Corporation of America’s
Response to Its Sweeping Salmonella Outbreak 261
Alyssa Grace Millner and Timothy L. Sellnow
Case Study 20. Patrolling the Ethical Borders of Compassion and Enforcement 271
Kendra Dyanne Rivera and Sarah J. Tracy
Part VI: Courage 283
Case Study 21. Google’s Dilemma in China 285
Jane Stuart Baker and Lu Tang
Case Study 22. Speaking Up Is Not an Easy Choice: Boat Rocking as Ethical Dilemma 295
Ryan S. Bisel and Joann Keyton
Case Study 23. The Aftermath of Scandal: Picking Up the Pieces of a Shattered Identity 305
Elizabeth A. Williams

Afterword: Casework and Communication About Ethics: Toward a Broader Perspective


on Our Lives, Our Careers, Our Happiness, and Our Common Future 315
George Cheney

Author Index 323


Subject Index 331
About the Editor 347
About the Contributors 349
List of Figures and Tables

Table 1.1 Ethical Tensions and Ethical Perspectives 20


Table 3.1 The Impact of Walmart 60
Table 6.1 Toyota Recall Timeline: Some Key Dates 100
Figure 11.1 Mitsubishi Timeline 161
Table 14.1 Publication Program Budget 200
Table 22.1 E-Mail Exchange Among Jan (Intake Nurse), Lisa, and Claire (Immediate
Supervisors) With Tina (Executive Director) Copied in the First Message 297

ix
Preface

I first considered editing a case study book on organizational ethics nearly a decade ago. As
an instructor of organizational communication, I was frustrated by two features that were
lacking in most textbooks in the field. First, I found that many of the primary textbooks in
organizational communication included few, if any, case studies. By contrast, Business and
Management programs had a long and successful history with case-based teaching and,
as a result, cases were widely available. Yet, they did not necessarily offer the range and
variety of perspectives I wanted my students to learn.
Although I had developed many of my own cases over the years, including a semester-
long consulting case, I wondered why there was such a lack of cases in organizational
communication textbooks. Most textbooks included discussion questions and even the
occasional homework or fieldwork assignment, but these features never provided the
extensive application of organizational theory that in-depth cases provided for my stu-
dents. When cases were included in textbooks, they were typically short and general in
their description of organizational phenomena. Until recently, there was even a lack of
supplemental case study books to use in introductory or advanced organizational com-
munication courses. I wanted more for my students.
Second, it also became clear that few, if any, textbooks included an extensive discussion
of organizational ethics. Given the range and scope of organizational misconduct over the
past several decades, it struck me as a glaring omission in our teaching. Based on conversa-
tions with other colleagues around the world, I knew that many instructors were, at least
implicitly, discussing organizational ethics in their classrooms. But I found that many were
reluctant to explicitly identify organizational ethics as an issue in their courses. Textbooks
were not much help. When they included ethics, it was often relegated to a concluding
chapter. Business ethics books have been available for years, but they seemed to define
“organizations” and communication very narrowly. For example, rarely were nonprofit
organizations, government agencies, universities, churches, or other collectives discussed
in them. In addition, they often included classic, historical cases of ethics rather than
recent emerging ethical issues most relevant to today’s students.
The confluence of these two pedagogical frustrations was further set in motion with
the series of organizational scandals (e.g., Enron, Arthur Andersen, Tyco, WorldCom) that
have received such attention in the past decade. For this second edition, they have been
further compounded by the ethical misconduct in the financial sector that has produced
the worst economic downturn since the Great Depression. For years, my former students
had contacted me about their own personal ethical dilemmas in organizations, but now my
current students were asking important but challenging questions: What went wrong with

xi
xii CASE ST UD IE S IN O RGAN IZATIO N A L CO MMU N ICA TIO N

these organizations? Why? How common are such unethical practices in organizations?
Is this a new phenomenon? What should I do if I belong to an organization that engages
in unethical behavior? What if I observe a boss or coworker engaging in such behavior?
What changes are necessary in order to improve the ethical conduct of organizations and
the people in them? What can I do to help?
Their questions led to informative, instructive, and wide-ranging discussions of orga-
nizations and ethics, but I wanted a framework for discussing ethical issues with them
in both a theoretical and a pragmatic way. This book, then, is an attempt to focus and
structure a meaningful and productive dialogue about organizational ethics with students.
It is designed to integrate ethical theory and practice in order to strengthen students’ ethi-
cal awareness, judgment, and action in organizations by exploring ethical dilemmas in a
diverse range of cases. For this, the second edition of the book, the need to improve our
ethical behavior in organizations seems even more pronounced.

USES FOR THE BOOK


The book may be used in a variety of ways. Ideally, its availability will prompt some
instructors to begin teaching courses on organizational ethics. In such courses, it may be
used as a primary textbook. Or it may be used as a supplemental text for an introductory
or advanced course in organizational communication. The book will serve as an excellent
companion to a primary textbook in order to bring ethics to the foreground of students’
attention. As such, the book not only includes discussions of ethical perspectives and
practices but the case studies also cover a range of topics typical in many organizational
communication courses such as leadership, teamwork, organizational culture, work–
family balance, gender, new technologies, organizational change, crisis communica-
tion, decision making, power/resistance, and conflict, as well as emerging topics such as
telecommuting, offshoring, and social media, among others. In addition, instructors will
notice that many of the cases can be easily applied to common theories of organizational
communication such as classical management, human relations, systems theory, critical
theory, and postmodern theory.

WHY TEACH ORGANIZATIONAL ETHICS?


This ethics case study book is based on the belief that organizational theory and practice
have become increasingly wide ranging and diverse in the past two decades. Similar to
the emergence of new, diverse theories to understand organizations, organizations them-
selves are growing more and more complex. Their size, mission, function, structure, and
processes all seem increasingly fluid as organizations become more “emergent” and adapt-
able. As a result, books on organizational dynamics cannot necessarily present singular,
simplistic explanations of “the way organizations are.” Rather, they must provide students
with a range of organizational examples that best approximate the current and future evo-
lution of organizations—and the practices among and between them.
Preface xiii

One of the most recent shifts in organizations is a renewed interest in ethics, partly in
response to recent scandals but also in response to the desire to rethink the role of organi-
zations in our lives. Members of organizations are asking themselves the following ques-
tions: What are our mission, vision, and goals? What do we value? What principles should
guide our behavior with our multiple stakeholders? No longer is it accepted wisdom that
“business ethics” is a contradiction in terms. Instead, questions of ethics are being taken
seriously by many organizations around the world, particularly now that executives and
boards of directors have realized that ethics may actually enhance individual and organi-
zational performance. Rather than being viewed as merely a compliance or crisis issue,
ethics is now seen as part of the bottom line.
The intent of this book, then, is to raise students’ awareness regarding ethics and to
provide them with the tools to evaluate situations and conduct themselves ethically. It
introduces students to a broad, yet context-specific range of ethics-oriented issues in
organizations that will supplement and extend their understanding of organizational
communication. The book is based on the belief that students are best engaged when they
can directly address the challenges and opportunities they will encounter in their own
organizational lives. Often these challenges and opportunities converge around ethical
dilemmas that workers experience, as they seek to negotiate their interests with those of
their organization.
As a pedagogical tool, this book is designed to encourage students’ critical thinking skills
about ethics through analysis, reflection, and dialogue. Organizational ethics cases do
not present easy, linear answers to organizational problems and, as a result, students will
learn to explore complex, contextual, and conflicted questions about organizational life in
ways that integrate theory and practice. A primary purpose of the book, then, is to further
develop students’ understanding of organizations by stimulating analysis and discussion
of specific organizational practices that enable or constrain ethical action, thereby provok-
ing multiple alternatives or solutions that are made more accessible to them. Additional
features of the book include the following:

• An introductory chapter that explores multiple perspectives of ethics


• An innovative discussion of the most common practices of ethical organizations
• Timely case studies that examine a range of ethical dilemmas in diverse organizations
• Discussion questions at the end of each case study to prompt dialogue regarding the
opportunities for, and challenges of, ethical behavior in today’s organizations
• An afterword that raises new, challenging questions for ethical behavior in today’s
organizations

WHY USE CASE STUDIES?


All too often I have overheard students in the buildings and on the sidewalks of universi-
ties describing courses in the following fashion: “It’s a theory course” or “It’s a practical
course.” On the one hand, students are dissatisfied when courses belabor what is common
sense. On the other hand, they are even more dissatisfied when courses have no clear
xiv CASE ST UD IE S IN O RGAN IZATIO N A L CO MMU N ICA TIO N

bearing on everyday life. One of the ways to bridge this dichotomy is to recognize that
understanding is the joint product of theory and common sense. As Karl Weick (1987)
aptly explained, “Theory and research should focus on what people routinely overlook
when they apply common sense. Theory should not be redundant with common sense; it
should remind people of what they forget” (p.106).
Ideally, then, this book should combine theory and practice as it relates to organiza-
tional ethics. My assumption is that the two are mutually dependent. For instance, we all
use implicit theories of the world around us to guide our behaviors. When those theories
do not seem applicable to everyday life, then we adjust them accordingly. The same should
hold true for the theories and practice of organizational ethics. Through this book, students
will examine various theories of organizational ethics. Yet each ethical perspective should
also be judged according to its applicability to the cases in this book. By studying these spe-
cific organizational cases, students should develop the critical thinking skills to determine
which theories are applicable and which theories are not. They should also gain an appre-
ciation for what “works” and what “doesn’t work” in organizations when it comes to ethics.
Yet, this appreciation—and the knowledge that derives from it—cannot simply be told
in a lecture. It is based on doing. According to Thomas Donaldson, the “case method,”
as it is often called, builds on the Socratic method of teaching, which involves the active
involvement of students who explore, question, and discover in the give and take process
with an instructor and fellow students.
In my teaching career, I have found that one of the primary teaching challenges is to
provide students with concrete, context-specific knowledge that will supplement their past
work experiences, which vary widely from student to student. Many college students often
need supplemental materials that ground their theoretical understanding in a practical
understanding of organizational life. This is particularly true in terms of ethical challenges
that students may face once they enter (or reenter) the full-time workforce.
Many instructors draw upon their own research and/or consulting experience to help
supplement students’ work experiences. Or they utilize the short, limited case studies that
are often found at the end of chapters in textbooks. However, many instructors complain
that such cases provide neither the detail nor the full range of organizational opportuni-
ties/challenges that will develop the critical thinking skills necessary for students to com-
prehend the complexities of organizations. Finally, instructors often question whether a
primary text, alone, allows students to confront—in a safe, classroom environment—the
ethical dilemmas that many workers face in their careers.
In the future, then, I believe that students will need to understand both the theoretical
developments in organizational communication and also how those developments are
enacted in ethical organizational practice. This book, then, is designed to address this focus
on praxis in a manner that clarifies the rapidly changing organizational environment—as
well as the diversity of organizational practices that has followed these changes. In short,
students need an explicit mechanism by which they can compare and contrast a growing
number of developments in organizations. In addition, students need to understand and
appropriately act upon the various ethical dilemmas and challenges they will confront in
the workplace. Case studies of ethical and unethical organizational practices are one of the
primary means to accomplish these goals.
Preface xv

Through case studies, students and instructors are able to directly assess ethical and
unethical decision making in a rich, diverse, and complex manner that moves beyond only
theoretical discussions of ethics (e.g., duty, rights, utility, virtue, relationships). In short,
this case study book explores “ethics in action” and, as a result, is both theoretical and
practical in its focus.

OVERVIEW OF THE BOOK


The Introduction provides the context for organizational ethics and an overview of
ethical perspectives and practices. It explores current and past examples of ethical and
unethical conduct in organizations. It also introduces students to some of the most
important challenges for enhancing the ethics of organizations, as well as a means for
analyzing ethical dilemmas they may face in organizations. Finally, the Introduction
provides the theoretical foundation for students and is divided into two primary sections:
(1) ethical perspectives and (2) ethical practices. The section on ethical perspectives gives
students an overview of common ethical theories such as duty, rights, utility, virtue, and
relationships. These theories provide one means for students to assess the case studies.
Any—or all—of the theories may be applied to each case study, although students may
find that one theory is either more prominent or more relevant in a case. The section on
ethical practices explores several behaviors that are most common among ethical orga-
nizations, including alignment, dialogic communication, participation, transparency,
accountability, and courage. Each practice is then applied to both ethical and unethical
organizations.
Parts I through VI include 23 case studies that represent a range of organizational types
and ethical dilemmas. Cases include not only business but also nonprofit organizations,
universities, and government agencies. The cases are organized according to the ethical
practices discussed in the Introduction. However, students may find that several of the eth-
ical practices may be relevant to each case. As a result, instructors should use the structure
of this section only as a preliminary guide for exploring the case studies. For example, the
cases could also be discussed according to topic (e.g., leadership, organizational culture,
decision making) or according to theory (e.g., classical management, human relations,
systems theory). At the least, though, students should also be prepared to discuss each
case according to the ethical perspectives (e.g., duty, rights, utility, virtue, relationships).
The book ends with the Afterword, which reminds students why our discourse around
ethics matters. It also extends ethics to broader organizational and cultural issues and pro-
poses a revised ethical theory. Finally, it offers several alternative directions for students
interested in further pursuing organizational ethics.
My hope is that the book will stimulate not only dialogue about but also action on issues
of organizational ethics. The recent scandals have brought public attention to the practices
of both unethical and ethical organizations and, as a result, we have a rare opportunity
to help our students create organizations of the future that are simultaneously productive
and ethical. Whether as employees, citizens, consumers, or stakeholders, our students will
hopefully make that difference in their own organizational lives.
xvi CASE ST UD IE S IN O RGAN IZATIO N A L CO MMU N ICA TIO N

BENEFITS OF CASE STUDIES


Case studies are one of the best ways to engage in dialogue about the real, day-to-day ethi-
cal dilemmas in organizations. They are also an ideal way to apply theories learned in the
classroom, whether they are ethical theories or organizational theories (e.g., see Donaldson
& Gini, 1996; Keyton & Schockley-Zalaback, 2004; Sypher, 1997). This case studies book
is based on the assumption that you need to not only understand the theoretical develop-
ments in organizational studies but you also should know how they are enacted in ethical
organizational practice.
This book, then, is designed to address this focus on praxis in a manner that clarifies the
rapidly changing organizational environment—as well as the diversity of organizational
practices that has followed these changes. In short, you need an explicit mechanism by
which you can compare and contrast a growing number of developments in organizations.
In addition, you will need to be prepared to understand and appropriately act upon the
various ethical dilemmas and challenges you may confront in your organizational lives.
Case studies of ethical and unethical organizational practices are one of the primary means
to accomplish these goals.
Case studies, in general, offer several benefits:

• Case studies provide an opportunity to explore the real-world functioning of


organizations in context.
• Case studies stimulate reflection on others’ actions.
• Case studies provide exemplars of appropriate and inappropriate, productive and
unproductive, useful and irrelevant behaviors.
• Case studies prompt lively discussion regarding alternative courses of action.
• Case studies provide an opportunity to apply theoretical knowledge to practical
situations.
• Case studies serve as an impetus for future action.

More specifically, the case studies in this book may also be used to develop skills in
these primary areas:

• Ethical engagement—You should develop the desire to pursue ethical issues in greater
detail and establish your own independent thinking about ethics.
• Ethical reasoning and decision-making—You should develop greater confidence in
your judgments and in your ability to understand and appreciate others’ points of
view regarding ethics.
• Ethical practice—You should develop the ability to respond to and proactively address
ethical challenges that may arise in your life.

Case studies, then, should increase your motivation and interest in ethical issues, should
improve your analytical and critical thinking skills around ethical challenges, and should
provide you with a foundation for making organizations more ethical.
Preface xvii

CASE STUDIES OF ORGANIZATIONAL ETHICS


My hope is that this book will motivate you to think more critically about organizational
ethics in your own life and also in the lives of others. More specifically, the book will
(1) introduce you to a range of ethical theories based on duty, rights, utility, virtue, and
relationships and (2) explore case studies of organizations that either enable or constrain
common elements of ethical practice such as alignment, dialogic communication, partici-
pation, transparency, accountability, and courage.
One of the reasons I was motivated to edit this volume is because many organizational
case study books tend to be both atheoretical and ahistorical in their focus and typically
marginalize ethics. By contrast, this book seeks to conceptualize and historicize ethics-
oriented cases by (1) providing a theoretical foundation of ethical perspectives that can
be applied to them, (2) identifying sets of ethical practices that might serve as examples
for future organizational behavior, and (3) drawing upon their relationship to other cases
(e.g., within an industry, a nation-state, a profession) within a particular period of time.
The contributors to the book were encouraged to utilize their own scholarly strengths and
expertise to develop fuller, richer cases, while also supplementing their expertise with
additional historical and current resources. As such, the cases should be seen merely as a
starting point for a more thorough and complex understanding of the cases themselves—
and others that may be related to them by topic, issue, ethical perspective, or practice.
The cases in this volume were selected because they focus on organizations that have
confronted challenging ethical dilemmas and, as a result, have acted ethically or unethi-
cally in response to them. That is, the cases in the book represent a full range of organi-
zational practices, from overt violations of the law to exemplars of responsible behavior.
Each case, however, is written to direct you to ethical dilemmas that present tensions, con-
tradictions, challenges, and/or opportunities for the organization and others that it affects.
You will also notice that, in contrast to some other case study books, these cases are about
real—rather than hypothetical—organizations. I believe it is important for such organiza-
tions to be included in a case study book, first to present you with a realistic account of
organizational life and second to hold unethical organizations accountable and to praise
ethical organizations.
As you will see when you read the cases, contributors were asked to define organization
broadly to include not only businesses but also other types of organizations (e.g., educa-
tional institutions, religious institutions, political organizations, nonprofit organizations)
and organizing, in general. This is in stark contrast to most business ethics case study
books that focus exclusively on corporations. Contributors were also encouraged to write
cases that examined broader cultural constructions of work (e.g., work and identity, work–
family balance, welfare-to-work programs, health care and work, globalization) that are
so relevant to our everyday lives. The book, then, not only explores ethical issues within
organizations but also within the social, political, economic, ideological, and technological
contexts that affect, and are affected by, organizations.
Each case also examines a unique dimension of organizational communication. Some
cases focus on the communication response of organizations after a product or service has
failed. Other cases in the book explore the communication strategies of leaders who have
xviii CASE ST UD IE S IN O RGAN IZATIO N A L CO MMU N ICA TIO N

produced ethical organizations. Or, in some cases, communication is discussed as a means


to “frame” organizational decisions. Still others explore how gender, race, and family are
constructed in and through communication within organizations.
You will also notice that a variety of sources were used in constructing these cases about
organizational ethics, including observations, interviews, questionnaires, and documents
(e.g., company documents, media coverage, legal materials, legislative hearings, profes-
sional association studies/reports). As a result, some cases are organized chronologically to
follow a timeline of events while others are structured in a narrative form.
Regardless of the structure of each case, though, you should first identify the ethical
dilemmas that are raised in the case. Once you have identified the ethical dilemmas, use
the ethical perspectives and practices in combination with outside resource materials to
fully understand, appreciate, and discuss their complexities. You should be able to under-
stand the context of the case, the evolution of the ethical dilemmas, and the key actors fac-
ing them. Finally, as you develop your own opinions about the cases, be sure to consider
alternative views that may be presented by your instructor or by other students. Doing so
strengthens your “ethical agility” and better prepares you for the variety of ethical dilem-
mas you may confront in the future.
Although I will not recount all of the cases here, you will find a wide array of organiza-
tions and ethical issues in this volume. Here are some of the cases:

• Walmart—The case examines criticisms of the company that its economic impact
“limits the ability of local businesses to survive.” The case study also examines how
Walmart has responded to charges that it negatively affects local businesses.
• British Petroleum (BP)—The case examines the range of decisions that led to the
country’s largest oil spill that damaged not only natural resources in southern states
but also the livelihood of many workers there.
• Mitsubishi—The case addresses a class action sexual discrimination lawsuit by several
female employees of the company and explores their claims, as well as the company
and union responses to them.
• Aon Hewitt—The case considers the degree to which single and married employees
with families should be treated similarly or differently.
• Enron—The case explores the ways in which overidentification of employees can
cause them to overlook, if not misrepresent, unethical behavior in an organization.
• Toyota—The case discusses how Toyota sought to manage a product recall crisis in
ways that maintained its reputation for safe vehicles.
• Google—The case explores the extent to which Google negotiated policies with the
Chinese government that allowed broader access to users’ data and content.
• College Athletics and Integrity—The case examines scandals and fraud in several uni-
versity athletic departments that have increasingly focused on the financial benefits of
sports programs at the expense of academic integrity.
Preface xix

• Wyeth—The case discusses how human health can be negatively affected when a
pharmaceutical company ghostwrites articles for prestigious medical journals, with-
out the general knowledge of physicians and patients.

As students of organizations, it is particularly important that you be able to first identify


current trends regarding ethics and then, second, to intervene in the emergence, develop-
ment, and acceptance (or rejection) of those trends. The case studies should help you in
that process. Before we move to the cases themselves, though, it is important for you to
have some additional background information regarding a range of ethical perspectives
and ethical practices. The Introduction will provide that theoretical and practical founda-
tion for you to thoroughly explore the case studies. The Introduction should give you the
tools to understand, critique, and apply theoretical and practical material to the cases and,
ultimately, to consider alternative, ethical futures for organizations.

REFERENCES
Donaldson, T., & Gini, A. (Eds.). (1996). Case studies in business ethics (4th ed.). Upper Saddle River,
NJ: Prentice Hall.
Keyton, J., & Schockley-Zalaback, P. (Eds.). (2004). Case studies for organizational communication:
Understanding communication processes. Los Angeles: Roxbury.
Sypher, B. D. (Ed.). (1997). Case studies in organizational communication 2: Perspectives in contemporary
work life. New York: Guilford Press.
Weick, K. E. (1987). Theorizing about organizational communication. In F. M. Jablin, L. L. Putnam,
K. H. Roberts, & L. W. Porter (Eds.), Handbook of organizational communication: An inter-
disciplinary perspective (pp. 97–122). Newbury Park, CA: Sage.
Acknowledgments

As in the case of all scholarly endeavors, this book could not have been completed without
the guidance, assistance, and support of numerous other individuals. So although I take
full responsibility for any of the limitations of the book, I also recognize that its strengths
are the culmination of many conversations with friends, family, colleagues, and students
over the course of several years.
At the least, the book is a creative collaboration that required the contributions of many
colleagues who produced the cases contained in it. Although I will not name each of the
case authors here, I do want to acknowledge their efforts to produce cases that, hope-
fully, will stimulate students’ ethical awareness, judgment, and decision making. The case
authors’ own varied interests and perspectives have helped represent an incredibly wide-
ranging and diverse set of ethical dilemmas in today’s organizations.
I am also grateful for the strong support of SAGE in the original development of this
book. In particular, I want to thank Todd Armstrong, senior acquisitions editor, for his
initial encouragement, insight, patience, and good humor in the development of the first
edition. He is, in many respects, the ideal editor. I have enjoyed the opportunity to work
with Matthew Byrnie on the changes that have been made in this second edition. Nathan
Davidson, associate editor, helped guide the book’s progress throughout the revision pro-
cess. I also want to thank Elizabeth Borders, editorial assistant, for her professionalism,
promptness, and thoroughness throughout the process. In addition, Catherine Chilton
and Megan Markanich were detailed and responsive in their work on the final stages of
the volume.
The early stages of the book emerged while I served as a leadership fellow at the
Institute for the Arts and Humanities at the University of North Carolina at Chapel Hill. Ruel
Tyson’s direction of the institute and his advocacy of ethical academic leadership served as
a motivator to follow through with the project. In addition, the leadership fellows offered
continual encouragement and support regarding the relevance and the significance of the
book. A year later, I served as an ethics fellow at the institute, supported by the direction of
Martha Crunkleton. My participation in that program further strengthened the intellectual
and theoretical foundations of the book. I would like to acknowledge the ethics fellows for
their engagement with the project and for their feedback regarding the teaching of case
study on organizational ethics.
I would also like to thank the Kenan Institute for Ethics at Duke University for ongo-
ing opportunities to both discuss organizational ethics and to put theory and research
into action through ethics training in a range of organizations. I am especially grateful to
Alysson Satterlund, who first established my connection to Kenan and who championed

xxi
xxii CASE ST UD IE S IN O RGAN IZATIO N A L CO MMU N ICA TIO N

my work to them. Elizabeth Kiss graciously accepted my offer to make a praxis-oriented


contribution by entering into an already productive and thought-provoking dialogue with
members of the institute. Noah Pickus has extended and expanded that role in a manner
that continues to stretch and challenge those of us committed to ethical organizational
change. Finally, members of the Ethics at Work team—John Hawkins, Deborah Ross,
Catherine LeBlanc, Amy Podurgal, Kathy Spitz, Morela Hernandez, and Doris Jordan—have
played an integral role in my own ethical learning and development as we tested theory
“in the field.” I would like to acknowledge that the ethical practices in the book are based
not only on my own research and teaching notes but also on a series of conversations with
my friends and colleagues at Kenan.
Similarly, many students in my Organizational Ethics and Corporate Social Responsibility
courses offered feedback on the first two chapters, as well as the cases themselves. Their
willingness to assist me and their insightful suggestions consistently affirmed my faith in
public higher education. In particular, I would like to thank Stephanie Evans, who gathered
and synthesized much of the material that became the foundation for the discussion of
ethical perspectives. Her dedication and professionalism helped move the project forward.
I would be remiss if I didn’t also acknowledge, albeit briefly, my own teachers—each of
whom motivated my interest in producing organizations that are not only productive but
that are also ethical. Those ideas first emerged at Purdue University under the guidance
of Linda Putnam, Cynthia Stohl, Phil Tompkins, and Jennifer Slack. Later, my interest and
expertise in the topic were further developed and honed at the University of Utah through
the intellectual support of Len Hawes, Mary Strine, Connie Bullis, Buddy Goodall, and Jim
Anderson. At each of my academic homes, I was fortunate to have many thoughtful and
thought-provoking mentors. I can only hope that I have motivated my own students in the
same manner.
My closest colleagues at the University of North Carolina at Chapel Hill have always
provided an enriching scholarly community that fosters intellectual engagement, colle-
giality, and mutual respect. I am particularly indebted to Bill Balthrop, whose leadership
of the Department of Communication Studies combined wisdom, wit, and commitment.
Bill and other faculty members there have created a context for both intellectual curiosity
and rigor. My colleagues in organizational communication have also been long-standing
sources of ideas and support. Ted Zorn, now at the University of Waikato in Hamilton,
New Zealand, has been my model editor. He taught me the art and grace of editing while
I served as the forum editor under his guidance as the editor of Management Communication
Quarterly. His thoroughness, sense of humor, integrity, and compassion for authors and
their work is an ethical template in its own respect. Dennis Mumby, Patricia Parker, and
Sarah Dempsey, always generous with their time and kind with their words, have been
wonderful colleagues who have been willing to further stimulate and stretch my thinking.
Finally, and most importantly, I could not have completed this book without the enthu-
siastic and loving support of my family. In so many respects, my parents provided the early
and solid ethical foundation for me. They taught me the lessons of hard yet honest work,
fairness, and respect. Hopefully, this book will, in some small measure, serve as a testa-
ment to their care of our family. My wife, Geriel, has been a steadfast source of support,
a sounding board, an analytical guide, a practical problem solver, a tension reliever, and
Acknowledgments xxiii

a loving companion. In addition, her business sense has frequently served as a reality test
for my work. She, more than any other person, helped bring this project to its completion.
During the final stages of the first edition, our daughter, Arcadia, was born. Her birth has
brought me boundless joy and wonder and has provided me with a new and broader sense
of perspective. Ultimately, her entry into the world has also produced a sense of urgency
and a profound commitment to further strengthen ethical conduct in our “organizational
society.” As she has grown during the development of this second edition, the need for
ethical engagement of our organizations has only intensified.

SAGE Publications would like to thank the following reviewers:

Rocci Luppicini
University of Ottawa

Kristin Froemling
Radford University–Radford

Paul E. Madlock
Texas A&M International University–Laredo

Ed Brewer
Appalachian State University–Boone
Introduction
Ethical Perspectives and Practices

The business of the modern world, for better or worse, is business. Unless we learn
to conduct business in ways that sustain our souls and the life supporting web of
nature, our future as a species is dim.

—Peter Barnes, Former President, Working Assets Long Distance


(now CREDO Long Distance)

THE CHALLENGE OF ORGANIZATIONAL ETHICS


If ethics were easy and straightforward in our organizations, there would be no need for
books such as this one. However, this is rarely the case. Ethical decision making and prac-
tice are fraught with difficulties and challenges. Ethics often stretches us and moves us to
think beyond our own self to consider others: our family, our work group, our organization,
our country, our culture. At the least, when we consider our own ethics, we have to ask our-
selves these questions: What is my own ethical position or stance? How is that similar to, or
different from, others? Will my actions have the intended consequences? What unintended
consequences might arise from my actions?
These are challenging questions to ask at a personal level. We must consider what we
deem appropriate and inappropriate, acceptable and unacceptable, right and wrong for
ourselves—but also in relation to others. At an organizational level, such issues can become
complex if not daunting. Given the rise of organizational power and influence, the poten-
tial impact of decisions is, in some cases, profound and far reaching. Stan Deetz (1992)
reminded us that, by many standards, the business organization has become the central
institution in modern society, often eclipsing the state, family, church, and community in
power. Organizations pervade modern life by providing personal identity, structuring time
and experience, influencing education and knowledge production, and directing news and
entertainment. From the moment of our birth to our death, organizations significantly
influence our lives in ways that often go unnoticed.

1
2 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

That is, over time, we have developed naturalized, taken-for-granted ideas about how
organizations should function and the role that they should play both in our personal lives
and in our culture. One of the goals of this book, then, is to raise your awareness regarding
many of our commonsense assumptions about organizations, particularly when it comes
to ethics. After you have read this book, I hope that you will have developed the awareness
to pursue ethical questions and establish your own views on organizational ethics. A sec-
ond goal of the book is to strengthen your ethical reasoning and decision making. It is not
enough to be aware of organizational ethics; it also requires strong critical thinking skills
to understand ethical situations and possible courses of action. After you have read this
book, you will have developed these skills as you learn about ethical theories, in general,
and ethical practices, specifically. Hopefully, you will have greater confidence in your own
decision making, and you will better understand the decisions of others. Finally, a third goal
is to motivate you to respond to—and proactively confront—ethical dilemmas that may
arise in your organizational life. Overall, then, it is my hope that, after reading this book,
you will believe that “organizational ethics matters” and that you will use your knowledge,
skill, and motivation to enhance the ethics of our organizations today—and in the future.
The stakes in organizational decisions can be particularly high: How safe is a particular
product or service? Does it have negative effects on its users? How should employees be
hired, trained, developed, compensated, and/or fired? How should wealth be developed
and distributed? What effect does the accumulation of wealth have upon social, economic,
political, and technological disparities with others? How do organizations impact our
values, our families, and our communities? Whose definition of ethics is dominant in an
increasingly global economy? These questions are certainly not exhaustive, and you may
come up with many others that are relevant to you.
Regardless of the question, it is clear that the consequences of organizational actions
can be great for all of us. Yet, at the same time, the ethical demands on organizations are
neither extraordinary nor excessive, according to Al Gini (2005):

A decent product at a fair price; honesty in advertisements; fair treatment of


customers, suppliers, and competitors; a strong sense of responsibility to the
communities [they] inhabit and serve; and the production of a reasonable profit
for the financial risk-taking of its stockholders and owners. (p. x)

It is worth noting, however, that not all organizations seek to produce a profit for stock-
holders and owners. Others are more interested in the social welfare of citizens across the
world (Bonbright, 1997; Bornstein, 2004). For example, Ashoka, founded by Bill Drayton, is
a nongovernmental organization that operates in 46 countries and has assisted over 1,400
social entrepreneurs interested in improving human rights, education, environmental pro-
tection, rural development, health care, and poverty, among others.
It is also important to remember that our “organizational lives” are not separate or
distinct from other realms of our lives. Increasingly, it is hard to distinguish between our
public and private lives, work and family, labor and leisure (May, 1993). As a result, it is
crucial that we keep in mind that organizations are a part of life. They are not silos that
function in a vacuum without direct effects on all of us. For better or worse, they are part
and parcel of us.
Introduction 3

THE CURRENT STATE OF ORGANIZATIONAL ETHICS


In an era of widespread organizational scandals, it is appropriate that we study organi-
zational ethics more closely. This edited volume is not the first to explore organizational
ethics (Conrad, 2003; Donaldson & Gini, 1996; Malachowski, 2001; Michalos, 1995; Parker,
1998; Peterson & Ferrell, 2005; Seeger, 2002) nor will it be the last (Cheney, Lair, Ritz, &
Kendall, 2010). But it is a volume that seeks to capture a unique historical moment as citi-
zens have begun to seriously rethink and reevaluate the role of organizations in our lives.
Even a limited list of recent organizational misconduct should be enough to raise
concerns:

• Pfizer, the producer of Viagra, Zoloft, and Lipitor, was fined a record $2.3 billion by
federal prosecutors for illegal drug promotions that plied doctors with free golf, mas-
sages, and resort junkets. Similarly, Allergan, the maker of Botox, settled for $600 mil-
lion on charges that it illegally promoted and sold the drug for unapproved uses.
• Bernie Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth
management business into a massive Ponzi scheme that defrauded thousands of
investors of $65 billion.
• The U.S. Securities and Exchange Commission (SEC) won court approval to levy a $550 mil-
lion penalty against Goldman Sachs, the largest ever against a Wall Street firm, over claims
the bank misled investors in collateralized debt obligations linked to subprime mortgages.
• Former WorldCom CEO Bernard Ebbers was convicted of fraud and conspiracy
charges for his role for reporting false financial information, with losses estimated
at over $100 billion. Until the Madoff scheme was discovered, it had been the largest
accounting scandal in U.S. history.
• Adelphia founder John W. Rigas and his son Timothy Rigas were accused of looting
the company and cheating investors out of billions of dollars. Both were convicted of
conspiracy, bank fraud, and securities fraud.
• Martha Stewart was convicted of conspiracy, obstruction of justice, and making false
statements about her sale of ImClone Systems stock.
• Former Tyco CEO Dennis Kozlowski and former CFO Mark H. Swartz were found guilty
on 30 counts of stealing more than $150 million from the company.
• Former Qwest CEO Joseph Nacchio and six other executives were charged with
orchestrating a massive financial fraud that concealed the source of billions of dollars
in reported revenue. He was convicted on 19 counts of insider trading.
• Fannie Mae and Freddie Mac, both government-assisted entities (GAEs), face scrutiny
regarding questionable accounting practices that could place millions of mortgages of
U.S. homeowners at risk.
• Several pharmaceutical companies, including Merck and GlaxoSmithKline, have had
to withdraw drugs that have been deemed unsafe for public use. Most were found to
have hidden drug-related risks from physicians and the public. In addition, the Food
and Drug Administration (FDA) is facing questions that its regulatory control over drug
safety has been jeopardized by close relationships with the industry.
4 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

Even this limited list does not include scandals among nonprofit organizations (NPOs),
the military, churches, athletic teams, journalists, and the U.S. government. For example,
the national director of programs for the Boy Scouts of America was charged with receiv-
ing and distributing child pornography. Guards at Abu Ghraib prison in Iraq have been
accused of engaging in physical and mental abuse of prisoners. Congress is currently
conducting hearings on steroid use in baseball, although its use appears common in many
other sports, as well. Individuals in the Catholic Church were not only aware of child sexual
abuse among some of its priests but they also covered it up. Several well-known journal-
ists plagiarized articles, and the Bush administration “purchased” favorable reporting from
journalists in order to “sell” its programs to the public.
More recently, we have witnessed the meltdown of our global economy as a result of
unethical behavior within the financial industry. In the pursuit of greater profit, many of the
leaders of U.S. banks, financial service firms, and mortgage lenders, among others, risked
not only their own companies (note the failure of Bear Stearns, etc.) but also the homes
and livelihood of citizens in the United States and abroad. First identified as a series of
poor financial decisions, it has become increasingly obvious that these leaders externalized
their financial risks onto others for personal and corporate gain, while not recognizing the
potential, systemic, negative impact on the global economy. Their unethical behavior has
produced the worst economic downturn since the Great Depression, with no end in sight.
Given these historical events, reconsidering organizations and their place in our lives
affords us the opportunity to even reflect on some of our common beliefs about organi-
zations “as we know them”: choice of consumers, the value of market mechanisms, the
benefits of free trade, and the desire for ongoing growth and development (Cheney &
Frenette, 1993).
Undoubtedly, there is growing, if not renewed, interest in organizational ethics. For a
time, the recent scandals intensified the media scrutiny of organizations and their lead-
ers. Each new scandal seemed to produce additional clamor for organizational change,
with strategies that included improved legal compliance, stronger sentencing penalties
for white-collar crime, more rigorous professional codes of conduct, and more stringent
government oversight and regulation. The scandals also raised serious questions about
our trust in corporate America, in particular (Lorsch, Berlowitz, & Zelleke, 2005), and have
produced lawsuits, criminal trials, and legislation (e.g., the Sarbanes-Oxley Act). In several
cases, the scandals have produced the decline, if not the destruction, of several well-known
organizations—most notably Arthur Andersen.
However, even as I prepare this volume in mid-2011, I wonder whether media coverage
of the scandals—and the organizational ethics issues related to them—has begun to wane.
Has the public’s interest in organizational ethics already faded? Will the highly visible scan-
dals overshadow less overt misconduct, as well as some of the more subtle but substantive
ethical questions of today about “market forces,” consumerism, and globalization? Will the
recent economic meltdown continue to be viewed as an example of system-wide, unethical
behavior, or will it be attributed to “a few bad apples”?
Over the years, attention to such ethical scandals “appears to ebb and flow between the
well-publicized, most egregious acts of misbehavior and the mundane, naturalized, and
Introduction 5

often overlooked practices of everyday organizational life” (May & Zorn, 2003, p. 595).
Recently, however, several authors have noticed a renewed focus on organizational
ethics, among them Lynn Sharp Paine (2003), a noted Harvard professor of business
ethics. In her book, Value Shift, Paine explained that ethics has found its way back
onto the agenda of organizational leaders. Executives at businesses, for example, have
launched ethics programs, mission-driven strategies, values initiatives, and cultural
change efforts. In addition, companies have created ethics officers, high-level ethics
committees, ethics ombudspersons, codes of ethics, and ethics task forces. Finally,
companies have attempted to strengthen their relationships with various stakehold-
ers, developing programs on the environment, human rights, work–family balance,
corporate volunteerism, community assistance, product safety, customer service, and
philanthropy, among others.
This shift in focus has left many observers asking the following questions: What is hap-
pening? Why the recent emphasis on ethics? The obvious answer is that organizations have
realized that a lack of legal compliance can produce disastrous results, similar to many of
the scandals mentioned earlier in this introduction. But organizational scandals alone don’t
explain the change. According to Paine (2003), there are several additional reasons for the
shift in focus toward ethics among organizational leaders:

• Reasons related to risk management


• Reasons related to organizational functioning
• Reasons related to market positioning
• Reasons related to civic positioning. (p. 7)

In effect, many leaders have learned that ethics improves organizational performance
and, ultimately, the bottom line. Still others have decided that it is the right thing to do;
they have concluded that organizations should be fair, honest, respectful, responsive,
trustworthy, accountable, and responsible, regardless of whether it serves the organiza-
tion’s self-interest.
I hope that this edited volume of case studies—and others like it—will produce a visible
and sustained recommitment to organizational ethics, as Paine has noted. Although ethi-
cal scandals are not unique to our time, the confluence of ethical misconduct in so many
different realms and institutions provides a rare opportunity for organizational change.
To create such change, though, requires that we delve deeper into the fundamental issues
that enable and constrain the opportunities and challenges of creating organizations that
are simultaneously productive and ethical, responsive and responsible (see, for example,
Ihlen, Bartlett, & May, 2011). What can we learn from past eras of organizational mis-
conduct? What, if any, relationship exists between organizational ethics and broader
conceptions of ethics in our culture, as a whole? What are the prospects and limitations
of changing organizational ethics? To what extent are ethical failures based on individual,
group, organizational, or cultural phenomena? This volume is hopefully a first, limited step
toward answering some of these questions.
6 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

HAVE WE LEARNED ANYTHING FROM THE PAST?


Occasionally, it can be helpful to consider some of these questions by learning from ethical
and unethical behavior of the past. In many respects, the recent organizational scandals
may seem somehow different from those of the past. They seem larger, more significant,
and of greater consequence. Yet, in fundamental ways, they are similar in that they involve
greed, corruption, arrogance, and power. In the 1950s, it was the wealth and power of cor-
porations to create domestic oligopolies prior to international competition. In the 1960s, it
was the rise of unwieldy and often mammoth conglomerates that expanded without regard
to consumers’ needs. Hostile takeovers were the ethical concern of the 1970s. By the late
1980s, figures such as Ivan Boesky and Michael Milken became icons in the insider trading
scandals. In the 1990s, executive compensation, downsizing, and the transition to global
labor concerned us. The most recent “corporate meltdown,” according to Charles Conrad
(2003), was the result of “massive financial and status-related incentives combined with
declining external constraints combined to create a fraud-inducing system, which in turn
provided organizational actors with ready rationalizations/legitimations of practices that
‘pressed the envelope’ or worse” (p. 16 ). Somehow, each decade seems to have its own
ethical crises. Is history repeating itself? Have we learned anything from the past?
Charles Redding, considered by many to be a central figure in modern organizational
communication, may help us answer these questions. Back in 1982, he noted that “the pre-
ponderance of everyday problems that plague all organizations are either problems that are
patently ethical or moral in nature, or they are problems in which deeply embedded ethical
issues can be identified” (p. 2). Prominent author Robert Jackall (1983, 1988) argued in his
book Moral Mazes that businesses (bureaucracies, in particular) are vast systems of “orga-
nized irresponsibility.” Similarly, two social psychologists, Sabini and Silver (1982) claimed
that businesses have a “genius for organizing evil.” These comments came at a time when
prominent business authors were extolling the importance of ethics and numerous centers
and institutes for business ethics were emerging around the United States. One observer
even called ethics “the hottest topic in corporate America” (Sarikelle, 1989).
Redding also bemoaned that there seemed to be no sustained interest in organizational
ethics. He likened the lack of attention to organizational ethics to “wandering in a lonely
desert,” asking the question of any interested observers who might listen: “When will we
wake up?” At that time, over two decades ago, Redding explained that he noticed increased
talk about the ethical dimensions of organizational life, as managers and executives were
attending numerous conferences, seminars, and workshops that focused on ethical prob-
lems in organizations. Yet he wondered whether all of the ethical talk was backed up by
ethical action.
Redding’s question regarding an ethical “awakening” could be asked today, as well. No
doubt, many persons have awakened to issues related to organizational ethics (see, for
example, May, Cheney, & Roper, 2007). One can hardly pick up a newspaper or listen to
the evening news without some new ethical scandal in the business world. Ethics centers
and institutes have proliferated in the last two decades. The conferences and training pro-
grams that Redding noted in the early 1980s still continue today and, in many respects,
have grown. Yet, organizational scandals—in both the for-profit and not-for-profit sec-
tors—appear rampant. This time I hope we will learn from our mistakes and misdeeds.
Introduction 7

ETHICAL DILEMMAS
One of the ways to learn from the past—and also to enhance our ethical action in the
future—is to think about the nature of ethical dilemmas that organizations and their
members have faced. Throughout my discussion of organizational ethics in this introduc-
tion—as well as the remainder of the book—it is important to remember that it is people
who make decisions in and about organizations. Organizations don’t make decisions, per
se. People do, albeit within the accepted norms and standards of organizations. At one
level, then, any book on organizational ethics needs to account for the actions of individu-
als. So, although I frequently refer to organizational ethics, it is merely a shorthand way
of referring to the numerous individual and collective decisions that are made within and
between organizations.
In an accessible and popular book, How Good People Make Tough Choices: Resolving the
Dilemmas of Ethical Living, Rushworth Kidder (1995) explored the personal dimension of
ethical decision making. Each of us faces a multitude of ethical decisions throughout our
lifetime, even if they are not readily apparent to us. Those decisions shape our sense of self,
as well as others’ sense of us.
Kidder explained, though, that some of our attention to ethics is misdirected. He
claimed, for example, that right/wrong ethical dilemmas gain much of the public atten-
tion. On the one hand, we denounce persons who have engaged in organizational miscon-
duct. On the other hand, we praise the courage and integrity of those persons who have
engaged in “right action.” The former are often shunned while the latter are sometimes
idolized. But, in the end, right/wrong dilemmas tend to be fairly clear-cut and straightfor-
ward. By contrast, Kidder argued that “right/right dilemmas” are much more challenging
and merit more attention. Kidder (1995) explained his premise this way: “The really tough
choices . . . don’t center on right versus wrong. They center on right versus right. They
are genuine dilemmas precisely because each side is firmly rooted in one of our basic
core values” (p. 18).
Although any number of right/right dilemmas is possible, Kidder noted that several are
most common:

• Justice versus mercy


• Truth versus loyalty
• Individual versus community
• Short-term goods versus long-term goods

According to Kidder, each of the preceding dilemmas—and others like them—pose


the most difficult challenge for us since they represent pairs of values, both of which we
tend to accept. For example, in organizational terms, should a boss show mercy on an
employee who has made a costly blunder, or should the boss punish the employee? When
an employee finds out that a significant downsizing is imminent and a friend will be fired,
should the employee tell the friend the truth or remain loyal to the company? When an
employee conducts a safety study that suggests a product is unsafe for public use, should
the employee remain loyal to her/his company by staying silent or should the employee
8 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

inform the public? Should a company executive make a financial decision that will benefit
stockholders and employees in the short term but may have a negative impact in the long
term? We struggle with such ethical dilemmas because we are torn between two values,
both of which seem right, but we are forced to decide between them.
In most cases, we choose the action that is “the nearest right”—the one that best fits our
own ethical perspective of the world. As you will see later in this introduction, we may be
more or less oriented to duty, rights, utility, virtue, or relationships when it comes to ethics.
However, Kidder (1995) also encouraged us to explore whether there is a “third way” that
might enact both values, the “trilemma solution”:

Sometimes that middle ground will be the result of a compromise between the two
rights, partaking of each side’s expansiveness and surrendering a little of each side’s
rigidity. Sometimes, however, it will be an unforeseen and highly creative course of
action that comes to light in the heat of the struggle for resolution. (p. 167)

A trilemma solution may be a “compromise between the two rights, partaking of each
side’s expansiveness and surrendering a little of each side’s rigidity” (Kidder, 1995, p. 167).
Ideally, though, the resolution is not so much a compromise or middle ground position so
much as it is a creative means to move beyond the ethical dilemma by appreciating the
tension between the two values.

COMMUNICATING ABOUT ETHICS


Since organizations are so “close” to us, it can be challenging to talk about the ethical
dilemmas that arise from them. Before we continue further, then, we should explore how
we talk about ethics and how ethics is structured within our culture (see, for example,
Willmott, 1998).
For example, it is worth considering how ethical issues are communicated in contem-
porary life. Are ethical issues framed in a particular way? Are there particular persons or
groups who have greater (or lesser) opportunities to speak regarding ethical issues? Are
there ethical issues that are rarely, if ever, discussed publicly? That is, are some ethical
issues marginalized? How do persons tend to respond to ethical violations of the law or
cultural norms and expectations? How do persons who have violated them explain their
behavior? Noticing such patterns of discourse should provide you with interesting insights
regarding the place of ethics in our culture today.
For anyone interested in constructive conversations regarding organizational ethics,
it is important to consider the distinctions between descriptive ethics, normative ethics,
and analytical ethics (Goodpaster, 1995). The goal of descriptive ethics is to represent, in
a neutral and empirical manner, the “facts” of an ethical situation, as well as the values of
the persons and organizations involved. There is no attempt to make an ethical judgment
regarding the situation since the emphasis is on attaining accuracy, as best as possible. In
effect, the purpose of descriptive ethics is to “map the terrain” of the ethical situation. No
personal judgment is presented.
Introduction 9

Normative ethics, by contrast, according to Kitson and Campbell (2001), “seeks to


develop and defend judgments of right and wrong, good and bad, virtue and vice” (p. 11). It
involves exploring points of view and presenting one’s position. It introduces this question:
Given the situation, what is my ethical judgment about it? As an extension of the first two,
analytical ethics is interested in whether an ethical judgment is appropriate, in comparison
to other ethical judgments. It functions at a metaethical level by comparing and contrasting
different ethical perspectives, decisions, and practices. Therefore, analytical ethics provides
the justifications for a normative ethical judgment.
During discussions of ethics-based case studies of organizations, it is important to
distinguish the type of statement being made. Am I describing the ethical situation in the
case? Am I presenting a normative position or point of view in response to the case? Or
am I analytically arguing for a position or point of view in contrast to others? In everyday
conversation, it is all too common for us to describe situations in a normative or analyti-
cal manner, reflecting our own personal values or biases. However, it can often be a help-
ful exercise to bracket our comments in these three steps, beginning with description
and moving to defense of a position, based on an evaluation of multiple points of view.
However, we should keep in mind that the assumption that we can accurately describe
an ethical situation rests on the belief that the factual content can be separated from our
values (Willmott, 1998). While descriptive ethics claims to describe “what is,” some crit-
ics question whether such an approach actually privileges one way of viewing an ethical
situation over another—in effect, presenting what is ultimately a value-laden description
of a situation as if it is natural or taken-for-granted. As you discuss these cases with oth-
ers, you may find, for example, that what you consider to be clear-cut and factual may be
questioned by others.
Using the concepts of descriptive, normative, and analytical ethics as a conversational
guide, class discussions of organizational ethics may be conducted around some of the
following questions:

• How should organizational ethics be defined? That is, what constitutes responsible
and irresponsible action?
• Why should students, owners, employees, consumers, and citizens be interested in
organizational ethics?
• What are the prominent meanings and discourses surrounding ethics, in general, and
organizational ethics, specifically?
• How has ethics evolved historically?
• What is the relationship between organizational ethics and specific social, political,
economic, ideological, and technological conditions?
• How, if at all, has ethics changed the nature of management and organizational com-
munication?
• What is/should be the role of ethics in our emerging, global economy?
• How, if at all, has ethics changed organizing processes?
• From your perspective, how do ethics enable and/or constrain today’s organizations?
10 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

• How might a renewed emphasis on ethics change management and organizational


communication in the future?
• How, if at all, has recent attention to ethics affected management practices?
• What are the agendas for research, teaching, and practice that are relevant to persons
interested in organizational ethics?

ETHICAL PERSPECTIVES AND PRACTICES


Over the past two decades, we have seen the historical, social contract between employ-
ers and employees change, raising a series of ethical questions regarding the role of orga-
nizations—and businesses, in particular—in our culture. In the era of corporate mergers,
downsizing, restructuring, offshoring, and temporary work, it is now common to observe
that the old social contract, which guaranteed or implied lifetime employment in exchange
for employee competence and good behavior, has expired. Taking its place is a new social
contract in which employees are sent a mixed message, in which they are expected to work
more for less pay and limited employment stability and yet still remain loyal to the company.
This new social contract is the result of multiple cultural forces, including global compe-
tition, domestic deregulation, and technological change, as well as executive mismanage-
ment and corruption. Regardless of the reasons for the change, however, the impact will be
especially profound on management and labor relations in the years ahead. For example,
the dramatic changes in the workplace are being blamed for escalating workplace violence,
exploding workplace litigation, and growing numbers of employees seeking medical and
psychological help for work-related stress.
The range and scope of these organizational changes pose serious questions for persons
interested in ethics. Can organizations, in fact, be ethical? If not, what social, political,
economic, and technological conditions limit this possibility? If so, what would consti-
tute an ethical organization? Do our organizations have a unique ethical responsibility to
employees? Customers? Shareholders? Citizens? The environment? What ethical perspec-
tives and best practices within organizations might assist us in developing and sustaining
ethical organizations? In order to produce a dialogue about these responsibilities and their
implications for “managing” a new ethical agenda in organizations, this book includes case
studies that are drawn from diverse types of organizations. It is my hope that these diverse
readings will further your understanding of the multiple ways that organizations address
(or do not address) ethics.
As a means to further stimulate discussion regarding the cases in the book, you will need
additional background to raise ethical questions about the cases. The remainder of this
introduction explores two primary ethical tensions that are common in many organiza-
tions. It also briefly summarizes some of the primary ethical perspectives. Finally, it identi-
fies several “best practices” of ethical organizations, providing both positive and negative
examples of each organizational practice.
The purpose is not necessarily to provide a comprehensive overview of ethical theory
and practice. Several other books (Dienhart, 2000; Donaldson & Werhane, 1999; Gini,
2005; Johannesen, 1996; Shaw & Barry, 2001; Snoeyenbos, Ameder, & Humber, 2001) may
Introduction 11

serve that purpose. Rather, it is to provide you with an additional foundation for analyzing
the cases, reflecting on them, and discussing them with your instructor and your fellow
students. It is hoped that the result will be your ethical competencies will be improved and
that you will be better able to confront and respond to ethical dilemmas that you face in
your own organizational life.

ETHICAL TENSIONS
Different ethical perspectives lead to quite different conclusions regarding what constitutes
ethical behavior (Cheney, May, & Munshi, 2011). These differences are based on fundamen-
tal assumptions about the character of reality, the nature of individuals, and the obliga-
tion of individuals to one another (May & Mumby, 2005). The differences in these ethical
perspectives may be described as tensions—or oppositions—and can be plotted on axes
in order to locate one’s own perspective. These tensions are likely to either enable or con-
strain ethical action, and the most commonly noted tensions, according to Anderson and
Englehardt (2001) include foundational/situational, individual/community, and essence/
existence. However, we could also consider any number of additional tensions that are
found in most organizations such as centralization/decentralization, collaboration/com-
petition, control/autonomy, strategies/tactics, specialization/differentiation, and flexibility/
structure, among others.
For our purposes, the two most relevant tensions are (1) foundational/situational and
(2) individual/community. Briefly exploring these tensions will allow us to not only apply
them to the case studies but it will also enable us to better understand our own ethical
assumptions.

Foundational/Situational Tension
The first tension considers whether ethics is foundational or situational. As you read the
case studies, you should consider whether you believe that ethical behavior is based on a
set of actions that are constant or whether it is based on actions that are context-specific.
Foundational—or universal ethics—persists while situational ethics shifts over time.
Foundational ethics suggests that reality is given, self-evident, objective, and neutral
while situational ethics views reality as socially constructed, subjective, and interpreted.
If, for example, you were to develop ethics training for an organization from a foun-
dational approach, you might argue for a core set of values that the organization and its
members must adhere to in order to be ethical. Most likely, these values would be long
standing and widely accepted (e.g., telling the truth, respecting others). In my experience,
ethics training for organizations often draws on a foundational approach, since it fre-
quently focuses on a core set of principles that are applied to every organization, regardless
of size, structure, or industry.
For example, professional codes of ethics are expected to create a degree of stability
and consistency regarding ethical behavior across organizations in a profession, such as
medicine, accounting, psychology, or journalism.
12 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

As you think about this approach, ask yourself the following questions: Are there any
foundational values or principles that you believe all organizations should follow? If you
were working with an organization to improve its ethics, would you be willing to accept
your client’s values even if they contradicted your own? The answers to these questions may
help you determine if you take a foundational approach to ethics in your organizational life.
If, by contrast, you developed ethics training from a situational approach, you might
prefer to tailor ethics services to the specific needs of a particular organization. You might
argue, for example, that it is not enough to only “follow the rules” of legal compliance or
a formal code of ethics. Instead, you might focus on the distinct organizational culture of
your client and seek to adapt your training to meet the needs of that organization. As a
result, you might try to learn as much as possible about the organization itself, drawing
on member knowledge and experience, before you offer recommendations for improv-
ing the organization’s ethics. Such an approach would attempt to facilitate organization
member’s development of their own ethical behaviors, based on a collaborative process.

Individual/Community Tension
The second tension considers whether the individual (libertarian approach) or the com-
munity (communitarian approach) should be primary. For our general purposes, we may
define community in terms of the organizations in the cases. To better understand this ten-
sion, we may ask three questions. First, is the advancement of the individual good for the
organization or is the advancement of the organization good for the individual? Second, is
the individual the source of ethics, or is the collective wisdom of the organization the basis
of ethical judgment? Third, is ethics better served by justice or by compassion (Anderson
& Englehardt, 2001, p. 47)?
To extend the ethics training example a bit further, an ethics training program might
integrate personal and organizational ethics. However, a more individual-oriented ethics
initiative might focus more exclusively on the ethical reasoning and action of organiza-
tional members. As a trainer, you might ask yourself this question: How can I best develop
ethics-based skills that are relevant and useful to every member of the organization? You
might assume that individual change among the members is likely to produce organiza-
tional change.
Or, by contrast, you might develop training tools that extract the collective wisdom of
the organization, since it is considered the basis of ethical judgment. For example, you
might be more focused on the advancement of the organization by improving its ethical
culture (May, 2009). In effect, you would be assuming that the organization and its leaders
should be the ethical guides for members of the organization, setting the ethical tone for
personal behavior.
As you consider the differences between the individual and community approaches
when you read the cases, also think about how the tension raises some challenging ques-
tions for all organizations. What happens when there are contradictions between the inter-
ests of the individual member and the organization? How can you best negotiate the needs
of the individual and the organization? Are their needs and interests inherently divergent
or are there ways to find convergence among them?
Introduction 13

WHAT IS THE ETHICAL RESPONSIBILITY OF AN ORGANIZATION?


Thinking about the preceding ethical tensions leads us to a broader, more practical ques-
tion. What is the ethical responsibility of an organization? How should it behave toward
its various stakeholders, such as members, customers, suppliers, distributors, governing/
regulatory agencies, and its community? Can/should an organization be separated from its
members when ethical matters are considered (see, for example, May, 2011)?
To begin thinking about these questions in more depth, it may be helpful to refer to
one of the best known and widely cited commentators on organizational ethics, Milton
Friedman. Although there is widespread debate regarding whether Friedman’s classic 1970
essay, “The Social Responsibility of Business Is to Increase Its Profits,” is an appropriate or
an inappropriate guide for ethical action, his views are still widely accepted and used with
the curriculum of many business schools.
Friedman was interested in exploring duties, and in his essay, he considered the respon-
sibilities of business. Given the recent corporate scandals and a renewed interest in orga-
nizational ethics, Friedman’s essay is very timely. His essay was in response to a growing
interest at that time in the new term corporate social responsibility (CSR). Taking a largely
economic perspective on business responsibility, Friedman critiqued arguments of the time
that businesses have responsibilities beyond making money. Because of their increasingly
significant role in political, social, and economic realms, critics had raised questions about
the broader role of businesses in society. According to Friedman (1970), the doctrine of CSR
required accepting that “political mechanisms, not market mechanisms, are the appropri-
ate way to determine the allocation of scarce resources” (p. 122). For Friedman, such an
approach was more firmly grounded in socialism than capitalism; therefore, he was highly
critical of expanding the responsibilities of business beyond making money.
Friedman, then, was primarily concerned with the economic outcomes of business
decision making. He believed that the greatest good would occur for all if businesses made
decisions based on increasing shareholder value. His essay has been widely used to sup-
port the common business adage that one’s first duty is to increase shareholder value. For
example, in the case of Enron, Friedman might argue that its executives’ mistakes were
not that they misled employees but that they misled the shareholders—who should have
been their primary responsibility. Friedman (1970) did suggest, though, that an executive
should try “to make as much money as possible, while conforming to the basic rules of
society, both those embodied in the law and those embodied in ethical custom” (p. 32).
Aside from this minor caveat, though, he explained that acting in a socially responsible
manner—at the expense of shareholders—is akin to spending someone else’s money for
the social interest. The person is, in effect, imposing a tax of his/her choice in the process.
He argued that it is best to trust market mechanisms when making decisions. A focus
on social responsibility, according to Friedman, is a “fundamentally subversive doctrine”
in a free society.
While accepted by many in the business world, Friedman’s arguments have also cre-
ated widespread criticism regarding economic justice (Schaefer, Conrad, Cheney, May, &
Ganesh, 2011). According to some, his essay raises many unanswered but important ques-
tions. What criteria should executives use in deciding which actions are acceptable and
14 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

which actions are unacceptable? Is a cost-benefit analysis of responsible behavior the only
way to decide how to act in a business? What about the role of companies in creating (e.g.,
lobbying) and resisting (e.g., violations, paying fines) laws? That is, to what extent does
Friedman address the relationship between economics and politics in today’s society? How
are we best able to determine the rules of society, based in “ethical custom”? Have ethi-
cal customs changed enough since 1970 to support CSR? How would Friedman respond
to corporate volunteerism? Philanthropy? Do executives only have a duty to serve their
shareholders? If shareholder value is improved by reducing labor costs by downsizing,
outsourcing, or offshoring, is that a responsible decision?

ETHICAL PERSPECTIVES
Beyond Friedman’s well-known and oft-repeated arguments, a more extensive under-
standing of the following ethical perspectives will allow us to understand that Friedman’s
arguments themselves are based on ethical perspectives: in this case, duty-based and utili-
tarian ethics. That is, he is speaking from a particular perspective. Regardless of whether
we agree or disagree with his views, we should understand the basis for his arguments.
However, we are not only interested in Friedman’s arguments. We are also interested in
your views, as well. So a brief exploration of ethical perspectives will also allow you to
better identify your own assumptions regarding ethics as you read the cases and as you
move forward in your own careers.

Duty
In general, a duty perspective is concerned with the individual’s obligations to others
(often, the collective). Duties are often viewed as natural, universal, rational, and self-
evident. In some examples of duty ethics—such as moral law—one performs an action
because of an obligation to follow a set of standards or rules. From this perspective, per-
sons have a duty to obey moral guidelines; therefore, it is often considered to be a form of
foundational ethics.
In other examples of duty ethics—such as deontology—actions are judged on the intrin-
sic character of the act rather than on its effects. Kant, for example, used the “categorical
imperative” to specify the universal character of duty: “One ought only to act such that the
principle of one’s act could become a universal law of human action in a world in which
one would hope to live.” In effect, if an action is right for one person, then it should be
right for everyone. In addition, he stated that “One ought to treat others as having intrinsic
value in themselves and not merely as means to achieve one’s ends.” So Kant argued that
“right actions” should be those that are done without qualification. From this perspective,
even some seeming “goods” such as intelligence and happiness can be suspect because
they can have negative effects for others, in some cases. He believed that the categorical
imperative was within the grasp of all rational humans to discover and, ultimately, come
to agreement—causing one’s own goodwill and rationality to benefit the collective as a
consensus develops on the right actions.
Introduction 15

As an Enlightenment philosopher, Kant also believed that a good action is one done by
free will and motivated by the right reasons. Thus, reason should guide the will of a person
and intentions are considered a part of ethical decision making. When reason guides the
will, the actions are done from duty, despite one’s personal inclinations. In effect, “good
will” is everything for Kant. In that respect, Kant is suggesting that an ethical action is one
that lies in the worth of the act itself and not in the consequences or outcomes of the act—
even if they are positive. Ethical decisions, from a Kantian perspective, then, require each
person to have respect for other rational humans. As a result, he focuses on the quality—or
intrinsic merit—of others in order to develop his universal principles of ethics. Following
religious rules and/or government laws, for example, is not ethical if the inherent dignity
and free will of others are harmed in the process.
From this perspective, improving the ethics of an organization might require developing
ethical, universal principles—rationally derived—that are enacted out a sense of duty or
responsibility. Members of an organization might ask themselves these questions: What
universal, ethical principles would I be willing to follow that would also become guides
for behavior throughout the entire organization? What are the “right actions” in this
organization that should be done without qualification? What behaviors are inherently
“good,” without considering their outcome or effect on the organization and its members?
Organizations that tend to focus on these questions seem most likely to address accept-
able and unacceptable behavior by a universal code of ethics since such documents often
explicitly identify duties to various stakeholders. At a more personal level, this perspective
would encourage organizational members to also choose the right action, even when their
inclination (often out of self-interest) is to do otherwise.

Rights
A rights perspective focuses on the obligation between self and other, based on the duty
that the collective owes the individual. The duty of the collective is owed to the individual
in the form of rights (e.g., equality). Similar to the duty perspective, a rights approach also
universalizes ethics; as a result, rights are often considered unalienable, such as in the U.S.
Constitution. From this perspective, then, the rights of all humans are granted, naturally,
and cannot be altered because they are rationally self-evident. The goal is to establish a
social compact, or contract (hence, often called the contractarian alternative to deontology),
of rights that are maintained between individuals and the community.
This covenant creates agreed-upon behaviors that are derived from natural law, accord-
ing to Hobbes. For Hobbes, all humans are bound to such agreements because they can be
understood through human reason which, itself, is a fundamental part of human nature.
Natural law, according to Hobbes, reminds us that our behaviors—and our laws—should
be consistent with our nature as reasoning persons. Similarly, Locke claimed that all
persons are born with, and possess, basic natural rights. They are possessed by everyone
equally and, therefore, cannot be taken away. Rights, then, become the basis by which
we judge not only the action of others but also those of institutions. The social contract
between people, he argued, can only be preserved if human rights or developed, main-
tained, and preserved.
16 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

For Rawls, in contrast to Locke, the standard for ethical action is based on a “reasonable
position.” Rights, for him, can be determined by placing persons behind a “veil of igno-
rance” or in “the original position,” where persons have a limited sense of past, present,
and future. In this position or behind this veil, one cannot anticipate how s/he be might
be affected by her/his own actions. For example, no person can expect to either benefit
or be harmed any more than others. From this perspective, then, an ethical person can
uphold the basic rights necessary to maintain a minimum level of dignity and justice that,
for example, produces fairness for all. Organizations, from this perspective, are obligated
to address injustices and resolve inequities. Regardless of the differences between them,
though, both Locke and Rawls sought to create principles and practices of justice through
rights. No society can be just if it is devoid of rights for its people, according to them.
From this perspective, improving the ethics of an organization might involve an
emphasis on compliance and legally sanctioned rights such as U.S. Equal Employment
Opportunity Commission (EEOC) guidelines, the Americans with Disabilities Act (ADA),
the Family and Medical Leave Act, and the National Labor Relations Act, among others.
These laws—as well as company policies—might be used to create equity or fairness in
organizations as a means to preserve human rights. For example, ethics training could
be devoted to issues such as gender equity, diversity, and/or the fairness of performance
appraisal processes. Members of an organization might ask these questions: How can we
best preserve the human rights and dignity of employees, owners, shareholders, suppliers,
distributors, customers, and communities? How might the diverse rights afforded to each
group be protected? What policies and procedures are just in this organization? Unjust?
What is our current social contract between one another and how can it be improved? How
might organizations behave so that no particular group benefits at the expense of others?

Utility
A utility perspective is based on the outcomes or consequences of an action and,
therefore, is considered “consequentialist.” Ethical actions should be judged according
to whether they produce positive effects, often in relation to other alternatives. Jeremy
Bentham, for example, noted that a principle of utility is necessary in order to evaluate
whether an action creates the greatest pleasure or happiness in relation to other alterna-
tives. He also believed that any actions should be considered in terms of not only their
immediate consequences but also their long-term effects, as well. What produces benefits
in the short term may not produce positive consequences over a longer period of time.
A utility perspective also suggests that the good of the collective is primary. According to
John Stuart Mill, the purpose of ethical action is to achieve the “greatest overall happiness
for the greatest number,” and actions are evaluated by the extent to which they contribute
to that end. However, not all pleasures are necessarily considered equal and he valued
intellectual pleasure over physical pleasure. In addition, the good of an individual may be
sacrificed for the good of many. By extension, then, followers of a utilitarian perspective are
also interested in the long-term consequences of any action, as previously noted.
Other (pluralistic) utilitarians do not necessarily equate the good with happiness
and focus on other goods, such as knowledge, maturity, and friendship. In addition, act
Introduction 17

utilitarians believe that every specific, individual action should be measured according
to whether it maximizes good. Finally, rule utilitarians believe that one must weigh the
consequences of adopting a general rule that would follow from that action.
From this perspective, improving the ethics of an organization might mean creating
change that will have positive consequences for the organization and its stakeholders. An
organization would need to have tools or mechanisms in place to evaluate its effects on
others. However, an ethical approach to utility would require moving beyond traditional
economic models of cost-benefit analysis to consider which decisions benefit the greatest
number with the greatest good. As a result, organizations might have to consider the unin-
tended and long-term consequences of their actions. Members of an organization drawing
on utility-based ethics may ask these questions: Have we considered all alternative actions
and selected the one that produces the greatest good or pleasure? How can we best serve
the ends of the collective rather than the individual? What specific actions or general rules
will either maximize or minimize “good”?

Virtue
In some respects, virtue ethics represents a middle ground between duty and rights.
Persons have the duty to self-actualize and, therefore, should be granted the right to accom-
plish that self-actualization. This perspective suggests that all humans are born with inher-
ent potential, and as a result, human development is the struggle for self-actualization. An
action is judged based on whether it allows for expression of full potential, thus creating
benefits for both the individual and the community. Ethical virtue focuses on realizing
one’s social, spiritual, and intellectual potential—or other habits that are considered
important to society. The development of virtue, then, requires the cultivation of good
habits. These habits occur within a social realm because humans are, according to Aristotle,
“social animals,” thereby suggesting that ethics involves being a contributing member of
a community. Doing so satisfies one’s natural constitution, particularly when we use our
intellect and contemplate before we make decisions. Society, then, has an obligation to
develop educational and learning opportunities for citizens to develop their full potential.
A virtue (e.g., prudence, temperance, justice, fortitude) is often seen as an internal fea-
ture of humans that produces ethical behavior. For the Greeks, virtue also included not
only individual attributes but also societal attributes. Aristotle, for example, also argued
that virtue should be connected to the good of a society and can be developed not by fol-
lowing principles but by living a harmonious, balanced life. In The Nicomachean Ethics, he
described ethics as the process of both doing good works and living well and, therefore,
also connected virtue to happiness.
Plato, a student of Socrates, is perhaps best known as an advocate for virtue-based eth-
ics. He identified courage, temperance, wisdom, and justice as the most important virtues.
However, Plato considered justice to be the central virtue, and as a result, a primary ques-
tion in The Republic of Plato is as follows: What is the nature of justice? Ultimately, Plato’s
aim was to create social and political stability on a foundation of moral and spiritual
absolutes by which every person might live. Plato, for example, suggested that the shep-
herd’s responsibility is to consider those under his/her care, thereby articulating an early
18 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

principle of ethics and authority. For Plato, authority is always used for the benefit of the
subordinate. Authority, properly understood, serves as a trustee for the interests of those
over whom authority is wielded. In this respect, Plato has been used to better account for
the multiple stakeholders that any one leader—or organization—might serve. Implied in
his comments is the belief that “reluctant leaders” tend to be more virtuous because decent
people accept power “because they can find no one better than themselves, or even as
good, to be entrusted with power.”
From this perspective, an organization’s ethics might be improved by strengthening
personal and institutional virtues in order to maximize human potential—both within and
outside the organization. The organization would need to address the unrealized potentials
of others. Or, more specifically, members might focus on improving the organization’s cul-
ture or strengthen a person’s character—particularly his/her ability to learn. Appropriate
questions might include the following: What personal and organizational values are most
important to us? Can they be aligned? How can we infuse the organization’s culture with
ethics and facilitate the full potential of its members? What are the best means to help oth-
ers self-actualize and develop to the best of their abilities? How can we emphasize respon-
sibility, reflection, courage, collaboration, and commitment, among other virtues? What is
the most virtuous way to use one’s authority in an organization? Should the authority of a
particular person or group be presumed in an organization? What strategies might be used
to develop balanced, harmonious, and happy lives among the collective?

Relationship
As a relatively new perspective, relationship ethics focuses on the care that emerges
in and through communication. Proponents of this perspective believe that dialogue is
the basis of successful relationships and that, ultimately, productive relationships are the
foundation for ethical action among individuals and within (and across) cultures. Via com-
munication, organizational relationships among various stakeholders (e.g., employees,
stockholders, executives and managers, customers, suppliers, community members) are
built, developed, maintained, transformed, repaired, and, on occasion, dissolved. This per-
spective is interested in the processes that enable productive and satisfying relationships,
such as a willingness to listen and engage others in interaction and a desire to establish
trust through openness. Ongoing care and attention to relationships, then, is important to
consider from this perspective. Attention is focused on the evolution and negotiation of
relationships—and the adaptations that may be necessary to successfully sustain them.
Further, relationship ethics seeks to create a dialogic community that uses “power with”
others rather than “power over” others. As a result, our attitudes toward each other
become an important foundation for ethical action.
This emphasis on the “other” is important in the work of Martin Buber. He suggested
that interaction with others provides the opportunity for the development of personality,
self, and reflection. In effect, our “self” arises in and through our dialogue with significant
others such as family, friends, and coworkers. Each person in a communicative situation,
then, should be cognizant of his/her effect in the development of others. Such attention
requires a sense of responsibility for others through respect, honesty, spontaneity, and
Introduction 19

genuineness. It also requires that all of us engage in “perspective-taking” as we seek to


fully understand and appreciate another person’s views and experiences. Ethical practice,
then, emphasizes authentic communication that fosters a sense of equality, interest, and
commitment between people. In addition, each participant in a conversation is expected
to be fully present.
Mikhail Bakhtin also suggested that, through dialogue, persons produce centripetal
(change) or centrifugal (stability) forces in a relationship. That is, the specific speech acts
of each person may either sustain or alter the status quo in a relationship. These micro-
practices of communication may also have an iterative effect; they are repeated, expanded,
and altered in new relationships with others. This partially explains why some organiza-
tions find it difficult to change their ethical cultures since sets of communicative practices
become embedded and sedimented in everyday talk.
As a related ethical perspective that focuses on relationships, feminists such as Carol
Gilligan propose an “ethic of care.” Drawing on the female voice and critiquing traditional
notions of moral development, she suggests that interdependence is central to ethical
behavior. As a component of interdependence, people should nurture others and be
compassionate toward them. In an ethic of care, then, mutuality and reciprocity become
central principles. Ethical actions sustain the caring relationship between self and oth-
ers, and as a result, bonds of trust, loyalty, affection, and engagement are essential to an
emphasis on care.
Efforts to create positive ethical change in organizations, from this perspective, would
focus not surprisingly on relationships of all types: superior/subordinate, employee/
customer or client, owner/worker, coworker/coworker, and so on. However, relational
dimensions of ethics and care would not only be limited to employees within an organi-
zation but they would also likely include relationships with regulators, government agen-
cies, and communities, among others. From this ethical point of view, an organization
might emphasize the importance of dialogue, participation, and collaboration in order
to build and strengthen relationships. In addition, an organization might shift its focus
from engaging in dialogue about stakeholders to engaging in dialogue with stakeholders.
Members of such an organization might ask these questions: With whom do we have
important relationships? How can we foster those relationships to the benefit of all?
In what ways can we develop perspective-taking regarding others’ points of view and
experiences? How can we best care for others in and through dialogic communication?
See Table 1.1.

ETHICAL PRACTICES
I suspect that your reaction to many of the questions at the end of each theoretical per-
spective is that they seem overly idealistic and unrealistic. While I may agree with you to
a certain extent, the seeming irrelevance of some of the questions merely confirms how
far many of our organizations have drifted from ethics. As you read through the case
studies, seriously consider how the actions of the organization—and its members—might
be changed if one or more of the ethical perspectives were applied in a rigorous manner.
20 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

TABLE 1.1 Ethical Tensions and Ethical Perspectives


Situational

Relationship Utility

Virtue
Foundational

Rights Duty

Individual Organizational
Note: Each ethical perspective may be plotted on two axes, based on the foundational/situational and individual/
community tensions.

I hope that the preceding brief summary of the various ethical perspectives helps you to
better understand and evaluate the ethical dilemmas common to organizations and their
members. But it is also important to consider how we act in response to those dilemmas.
In many respects, each of the cases in this book is designed to test the strengths and limita-
tions of the ethical perspectives. As you read the cases, you should also think about how
decisions were made—or might have been made—based on the perspectives. You may find,
for example, that a particular ethical perspective is presented in a case. You may discover
that several seemingly contradictory ethical perspectives can coexist in a single case. Or
you may realize that an ethical perspective raises a set of questions that cut across cases.
Introduction 21

However, you should not feel limited to merely applying the perspectives to the vari-
ous cases in the book. You should also feel free to evaluate your comfort (or discomfort)
with the ethical perspectives themselves, as a result of reading the cases. That is, how
can we rethink the appropriateness of each ethical perspective, based on the current
organizational issues discussed in the cases? Are there some perspectives that are more
or less suited to today’s organizational life? Turning to the future, we might also ask this
question: Which ethical perspective provides the best opportunity for ethical behavior for
the future? The cases, then, can also serve as a means to “test” the appropriateness of the
ethical perspectives, while simultaneously taking into account the past, present, and future
of organizations and their members.
This book—and the cases in it—should be read, then, not as an argument for either a
foundational or a situational approach—or a community or individual approach—to orga-
nizational ethics. Rather, I hope that reading about both general principles and specific
behaviors will allow you to think about both the foundational (i.e., ethical perspectives)
and the situational (i.e., specific cases) dimensions of ethics, as well as the community and
the individual. Keeping both of the tensions in mind, simultaneously, means that the cases
may be used to evaluate and adapt the perspectives, and in turn, the perspectives may
be applied in specific situations or cases. This integration of theory and practice—often
referred to as “praxis”—provides a more thorough (and challenging) method for both evalu-
ating others’ actions and considering our own actions (see Cheney, 2004).
Ultimately, then, although each of you will have differing views of the ethical perspec-
tives and the cases, you share at least one common ethical challenge: All organizations and
their members must balance a variety of competing demands and conflicting values in
determining how to negotiate a range of common ethical dilemmas, such as justice versus
mercy, individual versus community, cost versus quality, competition versus collaboration,
flexibility versus structure, and long term versus short term, among others. Balancing these
demands and managing among these values requires not only ethical vigilance but also
ethical insight, combining ongoing analysis and reflection.
Although I have suggested that ethics, as presented in this book, should be viewed
neither as singular nor relativist, I would be remiss if I did not offer at least some ideas
regarding practices that seem common to most ethical organizations. Without attempting
to necessarily create a universal list, we should then ask this: What practices do ethical
organizations share in common?
In my experience, an ethical organization does the following:

• Alignment occurs in personal, professional, and organizational aspirations and


behaviors
• Fosters dialogic communication
• Encourages participation in decision making
• Establishes transparency in structures, policies, and procedures
• Emphasizes accountability for anticipating and responding to ethical crises
• Promotes courage to identify and resolve ethical dilemmas
22 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

Alignment
One of the common practices among ethical organizations is that they tend to align for-
mal policies and procedures (e.g., ethics code, employee handbook, training and develop-
ment, performance appraisal) with the organization’s informal culture (e.g., norms, rituals,
narratives). While the former prescribes an organization’s ethics, the latter describes the
day-to-day experience of the organization’s ethics. In order to develop, maintain, and refine
ethical practice, an organization—and its members—will need to, in effect, “walk the talk.”
In order to sustain a culture of ethics, an organization needs more than an ethics code. It
needs the will to engage in the myriad behaviors that keep informal and formal dimensions
aligned, ethically. For example, Enron had a widely accepted, formal code of ethics.
In retrospect, however, we now realize that such formal and very visible features of
Enron’s culture hid an informal set of unethical practices. Similarly, Tyco’s code of ethics
also masked a reality different from its public image.
In each of these ethics codes—and many others like them—the question is whether the
codes’ prescribed practices are deeply embedded in the everyday life of the organization’s
members—whether they “stick” ethically. That is, ethical organizations have both high
aspirations and realistic, practical means to meet those aspirations.

ENRON

Our Values

Communication
We have an obligation to communicate. Here, we take the time to talk with one
another . . . and to listen. We believe that information is meant to move and that
information moves people.

Respect
We treat others as we would like to be treated ourselves. We do not tolerate abusive
or disrespectful treatment.

Integrity
We work with customers and prospects openly, honestly, and sincerely. When
we say we will do something, we will do it; when we say we cannot or will not do
something then we won’t do it.

Excellence
We are satisfied with nothing less than the very best in everything we do. We will
continue to raise the bar for everyone. The great fun here will be for all of us to dis-
cover just how good we can really be.
Introduction 23

TYCO

Why We Exist and the Essence of Our Business

We will increase the value of our company and our global portfolio of diversified
brands by exceeding customers’ expectations and achieving market leadership and
operating excellence in every segment of our company.

What We Seek to Achieve

Governance
Adhere to the highest standards of corporate governance by establishing processes
and practices that promote and ensure integrity, compliance, and accountability.

Customers
Fully understand and exceed our customers’ needs, wants, and preferences and
provide greater value to our customers than our competition.

People
Attract and retain, at every level of the company, people who represent the highest
standards of excellence and integrity.

Operating Excellence
Implement initiatives across our business segments to achieve best-in-class oper-
ating practices and leverage company-wide opportunities, utilizing six sigma mea-
surements.

Financial Results/Liquidity
Consistently achieve outstanding performance in revenues, earnings, cash flow,
and all other key financial metrics. Establish a capital structure that meets both long-
and short-term needs.

Aligned work—work that is both excellent and responsive to the needs and wishes
of the broader community in which it takes place—is most readily carried out when an
organization’s mission, its members, and its various constituencies share some common
ground, work collaboratively, and engage in activities that advance mutual goals. Or, at the
least, they acknowledge differences and seek to negotiate their competing interests in ways
that will benefit all. In contrast, when there are wide disparities within and across these
groups, aligned work is elusive. As a current example, some of the recent scandals among
journalists (e.g., plagiarism, contrived stories, accepting money to “sell” government
24 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

programs to the public) indicate that their personal and professional goals often conflict
with their employers. Given the competitive nature of the information and news business
today, journalism is faced with a credibility crisis as it seeks to balance objectivity with
profits—particularly since the industry is increasingly dominated by media conglomerates.
To successfully align the formal and informal dimensions of organizational life, then,
ethical organizations find ways to keep ethics “alive.” Beyond ethical alignment, ethical
organizations do so by fostering dialogic communication, confronting difficult realities by
promoting participation to meet the highest ethical standards, establishing trust through
transparent operations, emphasizing accountability for anticipating and responding to
crises, and promoting the ethical courage to identify and resolve ethical dilemmas.

Dialogic Communication
Alignment is best facilitated by dialogic systems in which communication is open and
decentralized. A dialogic organization values the perspective of all employees and facili-
tates their ability to voice their opinions and concerns. It also promotes the ability of all
stakeholders to have a substantial influence on the organization’s decisions. Employees
of dialogic organizations understand the perspective of others in ways that promote
understanding among different departments, make managing diversity possible, and
acknowledge the need for “collective mindfulness.” In order to establish dialogue, all par-
ties understand that they are interdependent and, therefore, are responsible for effective,
responsible communication. Leaders are better able to communicate their goals to employ-
ees, and in turn, employees are better able to provide useful feedback to leaders. A dialogic
organizational culture also limits employees’ desire to take concerns to the media, courts,
or others outside the organization.
There are a number of organizations that foster dialogic communication, including Levi
Strauss & Co., Hanna Andersson Clothing, and Patagonia, among others. However, one
company has developed an ethics training program that is quite extensive and might be
considered dialogic: BellSouth (now AT&T). For example, the company has integrated its
ethics and compliance training materials into multiple delivery sources to demonstrate to
employees that ethics is integral to every part of the business and to leverage existing infra-
structure. Using media such as CD-ROMs, videos, and the company’s Intranet, BellSouth has
blended its ethics and compliance training into new employee orientations, general man-
agement courses, sales training, and other learning modules. The ethics and compliance
team sees human resources (HR) as a key partner in its work and continually looks at ways
to include ethics and compliance topics in other employee training programs. In addition,
each operations unit has a compliance executive and a coordinator responsible for ethics
and compliance oversight in that operating division. These managers draw information
from “the bottom up,” conduct risk assessments, and report back to the compliance office
when gaps in training or communication are discovered. If the subject can best be handled
on a small scale, the compliance coordinator will take care of it. However, if the corporate
compliance office sees that many areas are addressing similar issues, time and money can
be saved by creating cross departmental programs. Examples of this include antitrust and
environment training. While the company uses technology to deliver the message, it views
Introduction 25

that the most productive work comes from face-to-face meetings, where employees are
given the time to sit and discuss the nuances of various ethical dilemmas.
By contrast, there are many organizations that still suffer from monologic communica-
tion that limits candor, fosters secrecy, and manages communication and information in
a top-down manner. One well-known example includes the Sears Auto Center scandal in
the early 1990s. In June of 1992, the California Bureau of Auto Repairs (BAR) revoked the
operating permits of 72 auto centers in that state. The decision was based on 18 months
of undercover investigation into repair practices at 35 centers. The California BAR accused
Sears of fraud and willful departures from accepted trade standards and launched a sting
effort in 1990 after receiving 250 customer complaints. According to BAR, in 42 of 48
visits, Sears employees performed unnecessary services or repairs. On average, customers
were bilked of $250 when Sears unnecessarily replaced new parts, and in some cases, cars
emerged in worse condition. The problem was caused by the company’s efforts to improve
lagging profits after the recession of the 1980s that had hurt Sears. As a result, a new
compensation policy was created to give commissions to auto mechanics that, in effect,
provided an incentive for the mechanics to provide additional services. Employees were
instructed to sell a certain number of services in an 8-hour day. If they failed to meet the
goals, employees received a cutback in their hours or were transferred. When confronted
with the allegations, however, Sears communicated an angry denial. It was not until the
story became news that the company began to communicate more directly and honestly
with its customers, placing full-page ads to apologize to them. Even then, though, the chair-
man of Sears only admitted that “mistakes may have occurred.” Similar claims might be
made about Nike and secrecy surrounding its sweatshops in Asia, as well as both Ford and
Firestone in the case of the rollover deaths of drivers of Ford Explorers, which included
each company blaming the other.

Participation
Ethical organizations are, by their very nature, participatory—both internally and
externally. Participatory organizations empower their employees to engage in decision
making through delegation. Such organizations develop skills among employees by
enabling and motivating them. They produce organizational commitment by encouraging
a culture of trust that rewards and recognizes high performance and responsibility. As a
result, participatory organizations are well known for their ability to recruit, develop, and
retain talented employees. Externally, participatory organizations listen to their stake-
holders’ concerns and are responsive to their feedback, using their knowledge and skills
to improve organizational performance. In response to the opportunity to participate,
stakeholders tend to be particularly loyal to and invested in such organizations.
One of the classic examples of a participatory organization is W. L. Gore & Associates.
Best known as the maker of GORE-TEX, Gore is well known for its ability to motivate its
employees through participation. Gore has developed a variety of rules that focus on pro-
viding the resources and opportunities for a work environment in which employees par-
ticipate and, as a result, take greater responsibility for their work. For example, Gore has
become a successful innovator in its field by requiring managers to act more like coaches
26 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

than bosses by (1) listening to employees’ concerns, (2) avoiding close supervision, (3)
trusting employees to work within a framework of clear direction, and (4) being respon-
sive to employees’ feedback. In addition to Gore, companies such as 3M, the Grameen
Bank, the RR Donnelley Corporation, Ashoka, CREDO Long Distance, and the Mondragon
Corporation in Spain have been praised for their participatory workplace cultures.
As noted in one of the cases in this book, NASA has been less successful in its efforts
to involve employees in important decisions—even those that affect the safety of its
astronauts. For years, NASA was well known for a variety of its successes, particularly
the Apollo missions. However, in recent years, they have been better known for the vis-
ible, public failures in the Challenger and Columbia disasters. Although NASA has blamed
technological problems (e.g., the O-rings) for the disasters, oversight commissions have
indicated that a lack of participation in decision making is at least one of the causes. Still
fairly hierarchical in its structure, NASA employees were aware of the technical problems
with both shuttles. However, there were few, if any, mechanisms in place for persons with
the knowledge to fully participate in launch decisions. This lack of participation at all
levels of NASA is particularly troubling since the Rogers Commission (in its review of the
Challenger disaster) had noted that experienced engineers were discouraged from provid-
ing negative feedback about the O-rings. The Columbia disaster suggests that although
feedback mechanisms were later put in place they were not used. Other well-documented
cases include the Ford Pinto and its exploding gas tanks and A.H. Robins and its Dalkon
Shield contraceptive IUD, which resulted in sepsis and sometimes death for the women
who used it (Anselmi, 1994).

Transparency
Ethical organizations engage in decision making that is transparent to their employees
and other stakeholders. Transparent organizations have clear and visible governance, mis-
sion, policies, procedures, and guidelines. The actions of transparent organizations allow
others to fully comprehend processes such as hiring, performance appraisal, and promo-
tion, among others. In addition, transparent organizations are candid, thereby producing
greater trust, respect, and fairness. Employees of transparent organizations better under-
stand the rationales for decision making and more fully support them and learn to make
effective decisions themselves. As a result, employees of transparent organizations are
more likely to accept the decisions of leaders, even when the decisions do not necessarily
benefit the employees themselves. Such benefits are particularly common in industries
or organizations with strained labor/management relations. For other stakeholders—such
as shareholders—transparency provides greater confidence that the organization is being
managed effectively, thereby increasing its perceived value.
Although companies such as Ben & Jerry’s, Fair Trade Coffee, and Tom’s of Maine are
best known for their transparency, there are less visible examples, as well. One example is
Baxter International, which is discussed later in one of the cases. The company’s medical
therapies are used by health care providers and their patients in more than 100 countries.
Because Baxter’s 40,000 employees are located throughout the world (with more than half
outside the United States), the company has approached the challenge of communicating
Introduction 27

its business practice standards to a global workforce by decentralizing its ethics training
programs. All new employees—and in many cases, prospective employees—are given a
copy of the company’s business practice standards, which have been translated into 14
different languages. Each new employee takes part in mandatory training conducted by
managers who have been designated as ethics trainers. Additional training programs and
training schedules are left up to each region and business unit, with headquarters provid-
ing resources. For example, the team responsible for the company’s Asian operations
has developed a yearly training program, based on real-life scenarios, that is designed to
encourage group discussion and participation. In Latin America, the company’s employees
develop and present their own scenarios as part of the training. In addition to the large
library of case studies, Baxter is developing web-based vehicles to supplement existing
communication channels of ethical standards. These efforts suggest that, at least inter-
nally, Baxter is seeking to infuse ethics in a transparent manner.
A much more visible case, Enron, is evidence of the risks of a nontransparent organi-
zation when it comes to ethics. The level of secrecy (and related risk) upon which Enron
was built, and upon which it failed, cost the jobs and retirement incomes of thousands,
contributed to a slump in the stock market, and may have exacerbated California’s 2000
to 2001 energy crisis. The collapse of the company, the largest bankruptcy in U.S. history,
was followed by several criminal and civil lawsuits against the executives of the company.
These lawsuits have suggested that the arrogance and greed of Enron’s leaders was related
to the lack of transparency in decisions made at the highest level of the company. In short,
since rank-and-file employees did not necessarily realize their jobs and the company were
at risk, they could not hold leaders accountable for their decisions. It appears that they
had limited information about the specific decisions that were being made, and when
criticisms were raised within the company, employees were reprimanded for making their
concerns public. Similar, related examples include R.J. Reynolds and the tobacco industry,
the Catholic Church, and WorldCom.

Accountability
Ethical organizations are accountable to their multiple stakeholders in a responsible
and responsive manner. This accountability is evident in the high quality of products/
services offered by such organizations. Accountable organizations view legal and indus-
try compliance as important but have minimum expectations. Rather, they accept direct
responsibility for any actions that negatively affect their stakeholders, and they seek to
maximize their positive contributions to those stakeholders. Ethical organizations are also
accountable to broader sets of stakeholders, including both local and global communities.
Employees of accountable organizations take “automatic responsibility” for ethical chal-
lenges and strive to promote aspirational, ethical opportunities. Accountable organizations
have a bias toward action that prompts member involvement and learning. As a result,
employees develop better problem-solving skills and are less likely to blame others for
mistakes. Employees in such organizations are less likely to view business units as “silos”
that operate independently of one another. They learn how their decisions affect others
in the organization.
28 CA S E S T U D I E S I N O R GA N I Z AT I O N A L C O M M U N I CAT I O N

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An up-to-date collection of new case studies spotlighting the integral role of communication in today's workplace, this volume will succeed its highly acclaimed predecessor as a valued reference and teaching text. Based on first-hand observation, in-depth interviews, and survey research, some of the studies highlight creative and positive uses of different communication practices; others demonstrate how communication can hinder organizational functioning.

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