Journal of Business Ethics

, Volume 56, Issue 4, pp 355–370 | Cite as

Designing Ethical Organizations: Avoiding the Long-Term Negative Effects of Rewards and Punishments

  • Melissa S. Baucus
  • Caryn L. Beck-Dudley


Ethics researchers advise managers of organizations to link rewards and punishments to ethical and unethical behavior, respectively. We build on prior research maintaining that organizations operate at Kohlberg’s stages of moral reasoning, and explain how the over-reliance on rewards and punishments encourages employees to operate at Kohlberg’s lowest stages of moral reasoning. We advocate designing organizations as ethical communities and relying on different assumptions about employees in order to foster ethical reasoning at higher levels. Characteristics associated with ethical communities are identified and AES Corporation and Semco S/A serve as examples of corporations exhibiting the design characteristics and assumptions of ethical organizations.


Community ethical organizations ethics Kohlberg moral reasoning organization design rein-forcement theory 


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Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.Xavier UniversityCincinnatiU.S.A
  2. 2.Dean of the College of BusinessUtah State UniversityLoganU.S.A

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