Ethical decision making in times of organizational crisis: A framework for analysis

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Bob, Bozana, Koen, Tobias Lensker

Authors: S.L. Christensen, J. Kohls

Publication Year: 2003


Journal: Business and Society Review

Volume: 42

Issue: 3

Categories: Organizational Change, Crisis, Qualitative


The article describes a framework that identifies event, organizational, and individual factors that threaten ethical decision making in organizations facing discrete crises or in an ongoing crisis environment. Nine propositions are stated that predict threats to ethical decision making during crisis. A comparison between predictions from our model and from Jones’s (1991) model is made. Suggestions for research to test and refine the framework are proposed.

Modern organizations, whether for-profit, nonprofit, or governmental, are characterized by a pluralistic nature and operate within internal and external environments of continuous change. We argue that these characteristics make crisis events more and more likely as organizations seem less able to understand and meet the demands of multiple stakeholders within ever more complex and turbulent environments. Any review of the business press in recent years cannot miss the many articles detailing one crisis or another facing organizations of all types that have all too many times led to organizational decisions that are seen by the

Critical Reflection

The focus of this article, threats to ethical decisionmakin g incrisis situations, requires a definition of an ethical decision (as opposed to an unethical decision). An ethical decision is defined as a decision in which all stakeholders have been accorded intrinsic value by the decision maker. This is a process definition of ethics. There are some advantages to using this definition: (a) When it is extremely difficult to get consensus on specific outcomes required by ethics (e.g., level of pay, benefits, and safety for employees), it is easier to get consensus on process (e.g., what should be considered in determining level of pay and other factors, and how that consideration should take place). There will be controversy here as well, but it is more manageable. (In Jones’s [1980] discussion of a parallel problem with identifying corporate social responsibility, he observed that “it is virtually impossible to define social responsibility in terms of specific decisions” [p. 65] and asserted that corporate behavior should be judged not by actual decisions made, but by the process that led to those decisions.) (b) Ethics principles, codes, and training cannot anticipate most, and certainly cannot anticipate all, ethical questions. They can, however, provide processes for ethical decision making. (c) It is easier to monitor and sanction processes than it is to evaluate the ethics of the resulting decisions. A focus on process makes the institutionalization of a commitment to ethics more promising than does an attempt to list the decisions that should be made.We believe that this process definition of ethical decision making is practical and defensible. 1) . . . consider the interests of all the affected stakeholders in any decision made; 2) . . . get in put from all the affected stakeholders; 3) the interests of one stakeholder [should not always] take priority; and 4) . . . establish procedures to insure that relations among the stakeholders are governed by rules of justice. (p. 47; also see Wicks, 1998)


Crisis is defined variously in the literature, but Pearson and Clair
(1998) provided a good general definition:
An organizational crisis is a low-probability, high-impact event that threatens
the viability of the organization and is characterized by ambiguity of
cause, effect, and means of resolution, as well as by a belief that decisions
must be made swiftly. (p. 60)
The urgency aspect of crisis is not accepted by all in the field. Some argue
that crisis issues can be ongoing (Ashmos, Duchon, & Bodensteiner,
1997) or can be anticipated and planned for (Billings, Milburn, &
Schaalman, 1980) and therefore should not be defined temporally. There
is, however, widespread acknowledgment that under conditions of crisis,
swift decisions are perceived to be a necessity (Billings et al., 1980;
Dutton, 1986; Greening & Johnson, 1997).
Most of thework in the field of organizational crisis has looked at crisis
as the single event described by Pearson and Clair (1998). Some have categorized
crises into discrete crises (sudden, low-probability or high-impact
events) and continuous crises (situations that evolve over a long period
and the impact of which appears at a later time) (Siomkos, 1992), but both categories refer to a single event. These events may originate in the natural
environment or be induced by humans (Pearson & Mitroff, 1993). Such
crises may be typed along two dimensions (Pearson & Mitroff, 1993): (a)
They may be perceived as technical/economic in origin, or human/social;
and (b) they may originate through relatively normal everyday events, or
have aberrant or deviant causes (p. 51). Examples of such crises are the
Exxon/Valdez oil spill, the Bhopal Union Carbide plant disaster, and the
Tylenol product-tampering incident. Crises may also be categorized as
internal or external, depending on whether they arise from within the organization
or without (Mitroff et al., 1987). An example of an internal
human/social crisis might be the Texaco or Denny’s sexual harassment
cases. Ane xample of ane xternal human/social crisis is terrorism—something
Americans are all far more familiar with after 9/11. An internal technical/
economic crisis might be the Three Mile Island or Chernobyl accident,
whereas an external technical/economic crisis would be the fire at
MaldenMills. (See Mitroff et al., 1987, for detailed descriptions of these
crisis types.) These crisis typologies canbe used to help explainthe
stresses that crisis brings to organizations and individuals.


Bob, Bozana, Koen, Tobias Lensker