Journal of Business Ethics

, Volume 116, Issue 2, pp 233–250 | Cite as

The Dissolution of Ethical Decision-Making in Organizations: A Comprehensive Review and Model

  • Ralph W. Jackson
  • Charles M. Wood
  • James J. Zboja


The purpose of this research is to present the major factors that lead to ethical dissolution in an organization. Specifically, drawing from a wide spectrum of sources, this study explores the impact of organizational, individual, and contextual factors that converge to contribute to ethical dissolution. Acknowledging that ethical decisions are, in the final analysis, made by individuals, this study presents a model of ethical dissolution that gives insight into how a variety of elements coalesce to draw individuals into decisions that result in the ethical undoing of an otherwise healthy organization. ENRON, TYCO and WorldCom did not happen in a vacuum. Nor can such debacles be explained as simply one or two individuals who were morally corrupt. The ethical breakdowns that occurred in these companies happened over a period of time, involved numerous individuals both inside and outside of the organization, and brought about the implosion of viable companies. Seeking to extend the work of previous researchers, this study attempts to tie together a disparate set of factors into a cohesive explanation of ethical breakdowns in organizations.


Corporate ethics Ethical breakdown Ethical decision-making Ethical development Ethical dissolution Organizational networks Organizational leadership 


  1. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.CrossRefGoogle Scholar
  2. Amernic, J. H., & Craig, R. J. (2010). Accounting as a facilitator of extreme narcissism. Journal of Business Ethics, 96, 79–93.CrossRefGoogle Scholar
  3. Andreoli, N., & Lefkowitz, J. (2009). Individual and organizational antecedents of misconduct in organizations. Journal of Business Ethics, 85, 309–332.Google Scholar
  4. Andrews, H., & Furniss, P. (2009). A successful leader or a psychopathic individual? Management Services, 53(4), 22–24.Google Scholar
  5. Argyris, C. (1982). The executive mind and double-loop learning. Organizational Dynamics, 11, 5–22.Google Scholar
  6. Arlow, P., & Ulrich, T. A. (1985). Business ethics and business school graduates: A longitudinal study. Akron Business Review, 16, 13–17.Google Scholar
  7. Bandura, A. (1990). Selective activation and disengagement of moral control. Journal of Social Issues, 46, 27–46.CrossRefGoogle Scholar
  8. Bandura, A. (1999). Moral disengagement in the perpetration of inhumanities. Personality and Social Psychology Review, 3, 193–209.CrossRefGoogle Scholar
  9. Baucus, M. S., & Beck-Dudley, C. L. (2005). Designing ethical organizations: Avoiding the long-term negative effects of rewards and punishments. Journal of Business Ethics, 56, 355–370.CrossRefGoogle Scholar
  10. Baxter, G. D., & Rarick, C. A. (1987). Education and the moral developments of managers: Kohlberg’s stages of moral development and integrative education’. Journal of Business Ethics, 6, 243–248.CrossRefGoogle Scholar
  11. Bay, D. D., & Greenberg, R. R. (2001). The relationship of the DIT and behavior: A replication. Issues in Accounting Education, 16, 367–380.CrossRefGoogle Scholar
  12. Bearden, W. O., Money, R. B., & Nevins, J. L. (2006). A measure of long-term orientation: Development and validation. Journal of the Academy of Marketing Science, 34, 456–467.CrossRefGoogle Scholar
  13. Bebeau, M. J., & Brabeck, M. M. (1987). Integrating care and justice issues in professional moral education: A gender perspective. Journal of Moral Education, 16, 189–203.CrossRefGoogle Scholar
  14. Bebeau, M. J., Rest, J. R., & Yamoor, C. M. (1985). Measuring dental students’ ethical sensitivity. Journal of Dental Education, 49, 225–235.Google Scholar
  15. Blau, P. M., & Scott, W. R. (1962). Formal organizations: A comparative approach. San Francisco: Chandler Publishing Company.Google Scholar
  16. Boddy, C. R. (2005). The implications of corporate psychopaths for business and society: An initial examination and a call to arms. Australasian Journal of Business and Behavioural Sciences, 1, 30–40.Google Scholar
  17. Boddy, C. R. (2011). The corporate psychopaths theory of the global financial crisis. Journal of Business Ethics, 102, 255–259.CrossRefGoogle Scholar
  18. Boddy, C. R., Ladyshewsky, R., & Galvin, P. (2010). Leaders without ethics in global business: Corporate psychopaths. Journal of Public Affairs, 10, 121–138.CrossRefGoogle Scholar
  19. Bommer, M., Gratto, C., Gravander, J., & Tuttle, M. (1987). A behavioral model of ethical and unethical decision making. Journal of Business Ethics, 6, 265–280.CrossRefGoogle Scholar
  20. Bourgeois, L. J., III, & Eisenhardt, K. M. (1988). Strategy decision processes in high velocity environments: Four cases in the microcomputer industry. Management Science, 34, 816–835.CrossRefGoogle Scholar
  21. Brass, D. J., Butterfield, K. D., & Skaggs, B. E. (1998). Relationships and unethical behavior: A social network perspective. Academy of Management Review, 23, 14–31.Google Scholar
  22. Brenner, S. N., & Molander, E. A. (1977). Is the ethics of business changing? Harvard Business Review, 55, 57–71.Google Scholar
  23. Brown, T., Sautter, J., Littvay, L., Sautter, A., & Bearnes, B. (2010). Ethics and personality: Empathy and narcissism as moderators of ethical decision making in business students. Journal of Education for Business, 85, 203–208.CrossRefGoogle Scholar
  24. Butler, J. F., & Baumeister, R. F. (1998). The trouble with friendly faces skilled performance with a supportive audience. Journal of Personality and Social Psychology, 75, 1213–1230.CrossRefGoogle Scholar
  25. Card, R. F. (2005). Individual responsibility within organizational contexts. Journal of Business Ethics, 62, 397–405.CrossRefGoogle Scholar
  26. Carver, C. S., & Scheier, M. F. (1998). On the self-regulation of behavior. New York: Cambridge University Press.CrossRefGoogle Scholar
  27. Chen, S. (2010). The role of ethical leadership versus institutional constraints: A simulation study of financial misreporting by CEOs. Journal of Business Ethics, 93, 33–52.CrossRefGoogle Scholar
  28. Clarkeburn, H. M. (2002). Q test for ethical sensitivity in science. Journal of Moral Education, 31, 439–453.CrossRefGoogle Scholar
  29. Clarkeburn, H. M., Downie, J. R., Gray, C., & Matthew, R. G. S. (2003). Measuring ethical development in life sciences students: A study using Perry’s development model. Studies in Higher Education, 28, 443–456.CrossRefGoogle Scholar
  30. Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA: The Belknap Press of Harvard University.Google Scholar
  31. Covey, S. R. (1989). The seven habits of highly effective people. New York: Simon and Schuster.Google Scholar
  32. Dohmen, T. J. (2008). Do professionals choke under pressure? Journal of Economic Behavior & Organization, 65, 636–653.CrossRefGoogle Scholar
  33. Donaldson, T., & Dunfee, T. W. (1994). Toward a unified conception of business ethics: Integrative social contracts theory. Academy of Management Review, 19, 252–284.Google Scholar
  34. Dubinsky, A. J., & Loken, B. (1989). Analyzing ethical decision making in marketing. Journal of Business Research, 19(2), 83–107.CrossRefGoogle Scholar
  35. Dunfee, T. W., Smith, N. C., & Ross, W. T. (1999). Social contracts and marketing. Journal of Marketing, 63, 14–32.CrossRefGoogle Scholar
  36. Dunning, D. (2007a). Self-image motives and consumer behavior: How sacrosanct self-beliefs sway preferences in the marketplace. Journal of Consumer Psychology, 17(4), 237–249.CrossRefGoogle Scholar
  37. Dunning, D. (2007b). Self-image motives: Further thoughts and reflections. Journal of Consumer Psychology, 17(4), 258–260.CrossRefGoogle Scholar
  38. Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management Journal, 32(3), 543–576.CrossRefGoogle Scholar
  39. Elci, M., & Alpkan, L. (2009). The impact of perceived organizational ethical climate on work satisfaction. Journal of Business Ethics, 84(3), 297–311.CrossRefGoogle Scholar
  40. Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework for understanding ethical decision making in marketing. Journal of Marketing, 49, 87–96.CrossRefGoogle Scholar
  41. Ferrell, O. C., Gresham, L. G., & Fraedrich, J. (1989). A synthesis of ethical decision models for marketing. Journal of Macro-Marketing, 9(2), 55–64.Google Scholar
  42. Ferrell, O. C., & Skinner, S. J. (1988). Ethical behavior and bureaucratic structure in marketing research organizations. Journal of Marketing Research, 25, 103–110.CrossRefGoogle Scholar
  43. Ferrell, O. C., & Weaver, K. M. (1978). Ethical beliefs of marketing managers. Journal of Marketing, 42, 69–73.CrossRefGoogle Scholar
  44. First, M., & Tasman, A. (2004). DSM-IV-TR. West Sussex: Wiley.Google Scholar
  45. Fishbein, M., & Azjen, I. (1975). Belief, attitude, intention, and behavior: An introduction to theory and research. Reading, MA: Addison-Wesley.Google Scholar
  46. Fisher, C., & Lovell, A. (2006). Business ethics and values: Individual, corporate and international perspective’ (2nd ed.). Harlow, England: Prentice Hall.Google Scholar
  47. Fritzsche, D. J., & Becker, H. (1983). Ethical behavior of marketing managers’. Journal of Business Ethics, 2, 291–299.CrossRefGoogle Scholar
  48. Fritzsche, D. J., & Oz, E. (2007). Personal values’ influence on the ethical dimension of decision making. Journal of Business Ethics, 75, 335–343.CrossRefGoogle Scholar
  49. Gentile, M. C. (2009). Business schools: A failing grade on ethics’. Bloomberg: Bloomberg Business Week.Google Scholar
  50. Getz, K. A. (1991). International codes of conduct: An analysis of ethical reasoning. Journal of Business Ethics, 9, 567–577.CrossRefGoogle Scholar
  51. Gibbs, J. C., & Widaman, K. F. (1982). Social intelligence: Measuring the development of sociomoral reflection. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  52. Godkin, L., & Allcorn, S. (2011). Organizational resistance to destructive narcissistic behavior. Journal of Business Ethics, 104, 559–570.CrossRefGoogle Scholar
  53. Goolsby, J. R., & Hunt, S. D. (1992). Cognitive and moral development and marketing. Journal of Marketing, 56, 55–68.CrossRefGoogle Scholar
  54. Gorman, R. O., Wilson, D. S. & Miller, R. R. (2008). An evolved cognitive bias for social norms. Evolution and Human Behavior, 29, 71–78.Google Scholar
  55. Gundlach, G. T., & Murphy, P. E. (1993). Ethical and legal foundations of relational marketing exchanges. Journal of Marketing, 57, 35–46.CrossRefGoogle Scholar
  56. Harris, P. (2010). Machiavelli and the global compass: Ends and means in ethics and leadership. Journal of Business Ethics, 93, 131–138.CrossRefGoogle Scholar
  57. Hartog, D. N. D., & Belschak, F. D. (2012). Work engagement and Machiavellianism in the ethical leadership process. Journal of Business Ethics, 107, 35–47.CrossRefGoogle Scholar
  58. Higgins, E. T. (2002). How self-regulation creates distinct values: The case of promotion and prevention decision making. Journal of Consumer Psychology, 12(3), 177–191.CrossRefGoogle Scholar
  59. Holland, K. (2009). Is it time to retrain b-school? The New York Times. March 15, BU1.Google Scholar
  60. Hollon, C. J., & Ulrich, T. A. (1979). Personal business ethics: Managers vs. managers-to-be. Southern Business Review, 5, 17–22.Google Scholar
  61. Hosmer, L. T. (1988). Adding ethics to business curriculum. Business Horizons, 31, 9–15.CrossRefGoogle Scholar
  62. Hough, J. R., & Ogilvie, D. T. (2005). An empirical test of cognitive style and strategic decision cutcomes. Journal of Management Studies, 42, 417–448.CrossRefGoogle Scholar
  63. Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics. Journal of Macromarketing, 6, 5–16.CrossRefGoogle Scholar
  64. Hunt, S. D., & Vitell, S. (1993). The general theory of marketing ethics: A retrospective and revision. In N. C. Smith & J. A. Quelch (Eds.), Ethics in marketing. Homewood, IL: Irwin.Google Scholar
  65. Hunt, S. D., Wood, V. R., & Chonko, L. B. (1989). Corporate ethical values and organizational commitment in marketing. Journal of Marketing, 53(July), 79–90.CrossRefGoogle Scholar
  66. Iyer, A. (2006). The missing dynamic: Corporations, individuals and contracts. Journal of Business Ethics, 67, 393–406.CrossRefGoogle Scholar
  67. Jackson, R. W., Hisrich, R. D., & Newell, S. J. (2006). Professional selling and sales management. Cleveland, OH: North Coast Publishers Inc.Google Scholar
  68. Jones, T. M. (1991). Ethical decision making by Individuals in organizations: An issue-contingent model. Academy of Management Review, 26(2), 366–395.Google Scholar
  69. Jones, T. M., & Ryan, L. V. (1997). The link between ethical judgment and action in organization approach. Organization Science, 8(6), 663–680.CrossRefGoogle Scholar
  70. Jordan, J. (2009). A social cognition framework for examining moral awareness In managers and academics. Journal of Business Ethics, 84(2), 237–258.CrossRefGoogle Scholar
  71. Judge, W. Q., & Miller, A. (1991). Antecedents and outcomes of decision speed in different environmental contexts. Academy of Management Journal, 34, 449–463.CrossRefGoogle Scholar
  72. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263–291.Google Scholar
  73. Knight, H. (2000–2002). The ethical decision making of businesses involved in the Holocaust. Lectures delivered at the University of Tulsa, Tulsa, OK, USA.Google Scholar
  74. Kohlberg, L. (1971). From is to ought: How to commit the naturalistic fallacy and get away with it in the study of moral development. In T. Mischel (Ed.), Cognitive development and epistemology. New York: Academic Press.Google Scholar
  75. Kohlberg, L. (1984). The psychology of moral development. San Francisco: Harper and Row Publishers.Google Scholar
  76. Kohlberg, L., Levine, C., & Hewer, A. (1983). Moral stages: A current formulation and a response to critics. Basel, NY: Karger.Google Scholar
  77. Kruger, J., Galak, J., & Burrus, J. (2007). When consumers’ self-image motives fail. Journal of Consumer Psychology, 17(4), 250–253.CrossRefGoogle Scholar
  78. Lynn, M., & Oldenquist, A. (1986). Egoistic and non-egoistic motives in social dilemmas. American Psychologist, 41(5), 529–534.CrossRefGoogle Scholar
  79. Markus, H., & Narius, P. (1986). Possible selves. American Psychologist, 41(9), 954–969.CrossRefGoogle Scholar
  80. Martin, T. R. (1981–1982). Do courses in ethics improve the ethical judgment of students? Business and Society Review, 20/21, 17–26.Google Scholar
  81. Mascarenhas, O. A. J. (1995). Exonerating unethical marketing executive behaviors: A diagnostic framework. Journal of Marketing, 59, 43–57.CrossRefGoogle Scholar
  82. Milgram, S. (1974). Obedience to authority. New York: Harper and Row.Google Scholar
  83. Minett, S. (2002). B2B marketing: A radically different approach for business-to-business marketers. London: Pearson Education Limited.Google Scholar
  84. Mintzberg, H. (1978). Patterns in strategy formation. Management Science, 24(9), 934–948.CrossRefGoogle Scholar
  85. Muraven, M., & Baumeister, R. F. (2000). Self-regulation and depletion of limited resources: Does self-control resemble a muscle? Psychological Bulletin, 126, 247–259.CrossRefGoogle Scholar
  86. Muraven, M., Tice, D. M., & Baumeister, R. F. (1998). Self-control as a limited resource: Regulatory depletion patterns. Journal of Personality and Social Psychology, 74, 774–789.CrossRefGoogle Scholar
  87. Nevins, J. L., Bearden, W. O., & Money, B. (2007). Ethical values and long-term orientation. Journal of Business Ethics, 71, 261–274.CrossRefGoogle Scholar
  88. Opotow, S. (1990). Moral exclusion and injustice: An introduction. Journal of Social Issues, 46(1), 1–20.CrossRefGoogle Scholar
  89. Paine, L. S. (1994). Managing for organizational integrity. Harvard Business Review, 72(2), 106–117.Google Scholar
  90. Petrof, J. V., Sayegh, E. E., & Vlahopoulos, P. I. (1982). The influence of the school and business on the values of its students. Journal of the Academy of Marketing Science, 10, 500–513.CrossRefGoogle Scholar
  91. Piaget, J. (1929). The child’s conception of the world. London: Routledge and Kegan Paul.Google Scholar
  92. Piaget, J. (1947). The psychology of intelligence. London: Routledge and Kegan Paul.CrossRefGoogle Scholar
  93. Piaget, J. (1948). The moral judgment of the child. Glencoe, IL: Free Press.Google Scholar
  94. Piaget, J. (1952). The origins of intelligence in children. New York: International Universities Press.CrossRefGoogle Scholar
  95. Piaget, J. (1960). The general problems of the psychobiological development of the child. In J. M. Tanner & B. Inhelder (Eds.), Discussions on child development: Proceedings of the world health organization study group on the psychobiological development of the child (Vol. 4). New York: International Universities Press.Google Scholar
  96. Pride, W. M., & Ferrell, O. C. (2009). Foundations of marketing. Boston: Houghton Mifflin Company.Google Scholar
  97. Quinlan, S. L., Jaccard, J., & Blanton, H. (2006). A decision theoretic and prototype conceptualization of possible selves: Implications for the prediction of risk Behavior. Journal of Personality, 74(2), 599–630.CrossRefGoogle Scholar
  98. Rest, J. R. (1979). Development in judging moral issues. Minneapolis, MN: University of Minnesota Press.Google Scholar
  99. Rest, J. R. (1984). The major components of morality. In W. M. Kurtines & J. L. Gerwitz (Eds.), Morality, moral behavior, and moral development. New York: John Wiley and Sons.Google Scholar
  100. Rest, J. R. (1986). Programs and interventions. In J. R. Rest (Ed.), Moral development: Advances in research and theory. New York: Praeger.Google Scholar
  101. Rest, J. R., Bebeau, M., & Volker, J. (1986). An overview of the psychology of morality. In J. R. Rest (Ed.), Moral development: Advances in research and theory. New York: Praeger.Google Scholar
  102. Rest, J. R., & Deemer, D. (1986). Life experiences and developmental pathways. In J. R. Rest (Ed.), Moral development: Advances in research and theory. New York: Praeger.Google Scholar
  103. Robertson, D. C., & Anderson, E. (1993). Control system and task environment effects of ethical judgment: An exploratory study of industrial salespeople. Organization Science, 4(4), 617–644.CrossRefGoogle Scholar
  104. Schweitzer, M. E., & Gibson, D. E. (2008). Fairness, feelings, and ethical decision-making: Consequences of violating community standards of fairness. Journal of Business Ethics, 77(3), 287–301.CrossRefGoogle Scholar
  105. Seligman, M. E. P. (1975). Helpless: On depression, development and death. San Francisco: W. H. Freeman.Google Scholar
  106. Siegel, J. (1973). Machiavellianism, MBAs and manager’s leadership correlated and socialization effects. Academy of Management Journal, 16, 404–411.CrossRefGoogle Scholar
  107. Smith, D. E., Skalnik, J. R., & Skalnik, P. C. (1999). Ethical behavior of marketing managers and MBA students: A comparative study’. Teaching Business Ethics, 3, 323–337.CrossRefGoogle Scholar
  108. Sparks, J. R., & Hunt, S. D. (1998). Marketing research ethical sensitivity: Conceptualization, measurement and exploratory investigation. Journal of Marketing, 62, 92–109.CrossRefGoogle Scholar
  109. Stephens, C. U., & Lewin, A. Y. (1992). A cross-level model of the determinants of ethical choice in organizations. In D. Ludwig & K. Paul (Eds.), Contemporary issues in the business environment. Wales: Edwin Mellen Press.Google Scholar
  110. Stevens, G. W., Deuling, J. K., & Armenakis, A. A. (2012). Successful psychopaths: Are they unethical decision-makers and why? Journal of Business Ethics, 105, 139–149.CrossRefGoogle Scholar
  111. Strauss, B. (1998). Choking under pressure: When positive public expectancies lead to suboptimal performance. Paper presented at the international congress of applied psychology, August 9–14, San Francisco, CA, USA.Google Scholar
  112. Thoma, S. J., & Rest, J. R. (1999). The relationship between moral decision making and patterns of consolidation and transition in moral judgment development. Developmental Psychology, 35(2), 323–334.CrossRefGoogle Scholar
  113. Trevino, L. K. (1986). Ethical decision making in organizations: A person-situation interactionist model. Academy of Management Review, 11(3), 601–617.Google Scholar
  114. Victor, B., & Cullen, J. B. (1988). The organizational bases of ethical work climates. Administrative Science Quarterly, 33, 101–125.CrossRefGoogle Scholar
  115. Weber, J. (1995). Influences upon organizational ethical subclimates: A multi-departmental analysis of a single firm. Organization Science, 6(5), 509–523.CrossRefGoogle Scholar
  116. Winter, D. G., McClelland, D. C., & Steward, A. J. (1983). A new case for the liberal arts. San Francisco: Jossey-Bass.Google Scholar
  117. Wolin, S. (1960). Politics and vision. Boston: Little, Brown, & Co.Google Scholar
  118. Yadav, M. S. (2010). The decline of conceptual articles and implications for knowledge development. Journal of Marketing, 74, 1–19.CrossRefGoogle Scholar
  119. Zey-Ferrell, M., & Ferrell, O. C. (1982). Role-set configuration and opportunity as predictors of unethical behavior in organizations. Human Relations, 3(7), 587–604.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  • Ralph W. Jackson
    • 1
  • Charles M. Wood
    • 1
  • James J. Zboja
    • 1
  1. 1.Collins College of BusinessUniversity of TulsaTulsaUSA

Personalised recommendations