Consider This--Deciding whether an Organization Is Ethical or Not: A Policy Capturing Approach

Abstract

Organizational ethics has been a key topic in the popular media for decades. Research has responded by exploring internal perceptions of ethics and ethical behavior of leaders and others in the organization. The perceptions of external constituencies have remained largely unexamined. In this research, we rely on the ethics literature to identify variables that may be considered by external constituencies when making generalizations about an organization’s ethical behavior. Employing a policy capturing approach, we asked subjects to read a series of organizational profiles that varied in reported level of ethics in leadership, climate, human resources, philanthropy and strategic philanthropy. Our results reveal that external observers of organizations require information on multiple variables to evaluate an organizational as (un)ethical. Further, this information is used in different ways depending on the dependent variable under consideration.