BUSM3199 Ethics and Governance Literature Review, RMIT, Singapore: moral Agents in Organisations? The Significance of Ethical Organisation Culture for Middle Managers

moral Agents in Organisations? The Significance of Ethical Organisation Culture for Middle Managers’ Exercise of Moral Agency in Ethical Problems

Abstract

This paper investigates qualitatively the significance of different dimensions of ethical organisation culture for the exercise of middle managers’ moral agency in ethical problems. The research draws on the social cognitive theory of morality and on the corporate ethical virtues model.

This study broadens understanding of the factors which enable or constrain managers’ potential for moral agency in organisations, and shows that an insufficient ethical organisational culture may contribute to indifference towards ethical issues, the experiencing of moral conflicts, lack of self-efficacy and morally disengaged reasoning. In contrast, a healthy ethical culture can contribute to motivation to tackle ethical problems, an increased capacity for self-regulation and ultimately ethical behaviour.

Keywords

Corporate ethical virtues Ethical culture of organisations Ethical problem Middle manager Moral agency Qualitative research Virtue ethics

Ethics and Ethical Dilemmas – A Practical Approach

Introduction

At present, bankers are faced with a highly challenging environment. They are presently subject to greater scrutiny and high demands from all stakeholders – the government, the customers, the employees, the society, and the regulator. Bankers are required to assume new functions and responsibilities as a result of new norms, laws, and roles.

The challenge of today’s economic scenario and the various ethical lapses that occur in financial institutions call for a more sophisticated approach in managing day to day work in the banks. Managers make decisions on a daily basis and that has an effect on the future of their organisation.

Not only does their decision impact their own jobs and livelihood, it also has consequence (positive or negative) for business as a whole. Similarly, officials engaged in public service need to follow a strict code of ethics. In fact, it is a prerequisite for engendering public trust and fostering good governance. Citizens expect public servants to serve with fairness and to manage public resources ethically.

Management of ethics forms a critical component of safeguarding individual and groups from the potential negative consequences of poor management decision making.