Moral complexity in organizations

Business ethics is applied ethics, says Velasquez (1992, p. 2). The application of ethics to organizational contexts can take two forms, which are both ‘practical’, but in different ways. The first type of application aims at analysing specific ethical problem types in organizations, in order to provide normative clarification and guidance. Examples of this are advertizing ethics, the ethics of insider trading or the ethics of company restructuring. The knowledge base of this type of application is standard ethical theory, such as justice theory or virtue ethics. Insights from these general theories are applied to specific organizational contexts. The second type of application of ethics to organizations aims at improving the decision-making processes, the procedures and structures in an organization, so that the operations of the organization are more geared towards ethical principles. The knowledge base in this case is organization theory and management science. Here we come across a whole range of ethics-based organizational instruments and tools, ranging from codes of conduct and ethical audits to all embracing methods, sometimes called ‘strategies’, for running an organization the ethical way. When we refer to the first type of applied ethics as ‘organizational ethics’, then the second type is best referred to as ‘ethics management’. The basic question of ethics management is simply: “how do you manage ethics in organizations?” This paper deals with problems of ethics management. The aim of the paper is to bring the discussion on ethics management one or perhaps two steps further, starting from the received and dominant view in ethics management at this moment, that there are basically two approaches to ethics management, namely a rules-based and a values-based approach. I will present a contingency model of ethics management that enlarges this dominant view, by bridging a sort of divide that presently exists between ethics management and stakeholder management. Stakeholder management is generally seen as a tool of corporate social responsibility (CSR), and CSR is often seen as something distinct from ethics management. CSR is supposed to deal more with the external relations of the organization (the impact on stakeholders), whereas ethics management allegedly has more to do with internal relationships (employee conduct). I believe that this is a fruitless distinction, which actually blocks further progress in ethics management. I will show that instruments of ethics management can instead be ordered along a continuum of increased moral complexity. This continuum blurs the existing artificial boundaries between ethics management and CSR. This paper, therefore, can be understood as an attempt to integrate ethics management and CSR, and to contribute to a more unified theory and practice in the field of applied ethics in organizational contexts.