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The Impact of Banality, Risky Shift and Escalating Commitment on Ethical Decision Making

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  • Robert Armstrong
  • Robert Williams
  • J. Barrett

Abstract

This paper posits that organizational variables are the factors that lead to the moral decline of companies like Enron and Worldcom. The individuals involved created environments within the organizations that precipitated a spiral of unethical decision-making. It is proposed that at the executive level, it is the organizational factors associated with “power” and decision-making that have the critical influence on moral and ethical behavior. The study has used variables that were deemed to be surrogate measures of the ethical violations (OSHA and EPA violations), the risky shift phenomenon (executive team size), banality of wrong-doing (reputation score for firms) and escalating commitment (tenure with the firm/change in revenue for declining firms). The research found that there were small correlations between ethical violations and the three organizational variables. Copyright Kluwer Academic Publishers 2004

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  • Robert Armstrong & Robert Williams & J. Barrett, 2004. "The Impact of Banality, Risky Shift and Escalating Commitment on Ethical Decision Making," Journal of Business Ethics, Springer, vol. 53(4), pages 365-370, September.
    • Handle: RePEc:kap:jbuset:v:53:y:2004:i:4:p:365-370
    DOI: 10.1023/B:BUSI.0000043491.10007.9a
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    References listed on IDEAS

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    1. Heath, Chip & Gonzalez, Rich, 1995. "Interaction with Others Increases Decision Confidence but Not Decision Quality: Evidence against Information Collection Views of Interactive Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 61(3), pages 305-326, March.
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    Cited by:

    1. Ricardo Leiva & Ignacio Ferrero & Reyes Calderón, 2014. "Corporate Reputation and Corporate Ethics: Looking Good or Doing Well," Faculty Working Papers 05/14, School of Economics and Business Administration, University of Navarra.
    2. Jana Craft, 2013. "A Review of the Empirical Ethical Decision-Making Literature: 2004–2011," Journal of Business Ethics, Springer, vol. 117(2), pages 221-259, October.
    3. Dennis Balch & Robert Armstrong, 2010. "Ethical Marginality: The Icarus Syndrome and Banality of Wrongdoing," Journal of Business Ethics, Springer, vol. 92(2), pages 291-303, March.
    4. Sebastian Goebel & Barbara E. Weißenberger, 2017. "The Relationship Between Informal Controls, Ethical Work Climates, and Organizational Performance," Journal of Business Ethics, Springer, vol. 141(3), pages 505-528, March.
    5. Jana Craft, 2013. "Living in the Gray: Lessons on Ethics from Prison," Journal of Business Ethics, Springer, vol. 115(2), pages 327-339, June.
    6. Niki A. Nieuwenboer & Muel Kaptein, 2008. "Spiraling Down into Corruption: A Dynamic Analysis of the Social Identity Processes that Cause Corruption in Organizations to Grow," Journal of Business Ethics, Springer, vol. 83(2), pages 133-146, December.
    7. Luca Casali, Gian & Perano, Mirko, 2021. "Forty years of research on factors influencing ethical decision making: Establishing a future research agenda," Journal of Business Research, Elsevier, vol. 132(C), pages 614-630.
    8. Kathleen A. Tomlin & Matthew L. Metzger & Jill Bradley-Geist, 2021. "Removing the Blinders: Increasing Students’ Awareness of Self-Perception Biases and Real-World Ethical Challenges Through an Educational Intervention," Journal of Business Ethics, Springer, vol. 169(4), pages 731-746, April.
    9. Matthias Mahlendorf, 2015. "Allowance for failure: reducing dysfunctional behavior by innovating accountability practices," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(3), pages 655-686, August.
    10. Tsutomu Harada, 2021. "Three heads are better than two: Comparing learning properties and performances across individuals, dyads, and triads through a computational approach," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-16, June.
    11. Wen-yeh Huang, 2018. "Influence of Transparency on Employees’ Ethical Judgments: A Case of Russia," Journal of Business Ethics, Springer, vol. 152(4), pages 1177-1189, November.

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