Ethics in Organizations: The Case of Tata Steel

Abstract

The concern for ethical decision-making among the regulators, social groups and managers has substantially increased since failure of some of the prominent business organizations like Shell and Enron owing to strong social condemn of some of their business practices. This paper reviews literature to address this concern by examining and discussing significant issues of ethical decision making in organizations. Literature shows that authors have frequently used ethics, morality and values interchangeably in the context of organizational behavior. Simultaneously, the research to examine the linkage of ethical decision-making with other organizational construct is inadequate. This paper tries to fill these gaps by distinguishing ethics, morality and values in organizational context and by developing a comprehensive framework of organizational ethical decision-making and behavior in organizations. The framework identifies three groups of variables, which significantly influence the ethical decision-making and behavior of individuals in organizations: a) moral intensity, b) intrinsic factors and c) extrinsic factors. The framework is used to analyze the implementation of Code of Conduct at Tata Steel. Based on the case and literature review few propositions are suggested. They explain the linkages of these variables with ethical decision-making could guide future research in this field. The framework will also help practicing managers to concentrate on key organizational issues to sustain long-term interests of the organizations.