Unit 7: The Ethics of Job Discrimination | Unit 8: The Individual in the Organization
MODULE IV: BUSINESS AND ITS INTERNAL CONSTITUENCIES

Unit 7: The Ethics of Job Discrimination
Introduction | Objectives | Key Concepts | Study Directory | Assignments | Summary | Self-Test

Introduction

Continuing inequalities of income and occupational status evidence lingering discrimination against women and minorities in the workplace.  This chapter focuses proposed remedies for this, especially controversial Affirmative Action policies.  Proponents of such policies cite the need to remedy enduring inequities due to past discrimination while opponents insist that reverse preferences Affirmative Action involves amount to wrongful reverse discrimination.

Equal Opportunity policies instituted in the nineteen sixties – imposing negative constraints forbidding deliberate discriminatory practices – effectively addressed isolated intentional discrimination but proved to be ineffective remedies for institutional unintentional discrimination.  Hence some perceived a need for further measures to combat these more systemic kinds of discrimination.  Affirmative Action policies – positive measures designed to increase minority opportunities in the workplace – were proposed as remedies for unintentional and institutional discrimination.  These policies have evolved to their current form in the face of political opposition and in response to a series of legal challenges which have led (among other things) to the abolition of explicit quota systems and the curbing of minority set asides.  In its current form, the principle means of enforcing Affirmative Action in the workplace is utilization analysis, which requires employers to periodically review the percentage representation of women and minorities in their workforce across nine job classifications.  Underutilization is deemed to be present where the percentage representation of women or minorities in any job classification is less than that which would reasonably be expected from their percentage representation in the available labor pool.  Where underutilization is found, organizations are required by law to propose and institute “specific and measurable goals and timetables” for remedying it.

With respect to the morality of Affirmative Action, Velasquez argues, on the one hand, that it cannot be justified as compensation for victims of past discrimination because present white males – the parties from whom the compensation is being, in effect, extracted – were not the perpetrators of that discrimination; but neither is it unjust “reverse discrimination,” as its critics say, since it does not discriminate "on the basis of prejudice or some other morally invidious attitude."  Velasquez concludes that Affirmative Action, within appropriate guidelines, is a morally permissible remedy for lingering discrimination; but it is not, he thinks, morally obligatory or practically indispensable.  Nevertheless, since white males represent a rapidly shrinking proportion of the workforce, companies that effectively incorporate and accommodate women and minorities in their workforces, Velasquez thinks, will enjoy increasing competitive advantages, in an increasingly global economy, over those that don’t. 

Learning Objectives   

  1. Understand both the original morally neutral meaning of "discrimination"; its acquired judgmental meaning as deciding against members of a certain class because of a morally unjustified prejudice against that class; and identify historical and current victims of discrimination considering the evidence of provided by average income, lowest income, and desirable occupation comparisons.
  2. Distinguish isolated from institutionalized and intentional from unintentional discrimination and understand the historical shift in emphasis away from identifying and remedying isolated and intentional discrimination by Equal Opportunity policies and toward identifying and remedying institutionalized and unintentional discrimination through Affirmative Action.
  3. Understand the utilitarian argument against discrimination and the liberal and conservative objections to it; the Kantian argument against discrimination; and justice based arguments against discrimination.
  4. Distinguish various practices, including use of seniority and supervisory recommendations, generally recognized as discriminatory in recruitment, screening, promotion, conditions of employment, and discharge: understand the controversies concerning sexual harassment and the extension of protected status to groups not identified by race and sex.
  5. Distinguish affirmative action policies, involving reverse preferences, from equal opportunity policies: understand utilization analysis, the principle means of enforcing affirmative action; the present tangled legal situation including the banned practices of quotas and set-asides; and the principal objection to affirmative action as "reverse discrimination."
  6. Understand the principal justice-based and utility-based arguments in favor of affirmative action; the principal objections to these; utilitarian and justice-based replies to these objections; and Velasquez's overall assessment of these.
  7. Understand the legitimate worries about and suggested guidelines for implementation of affirmative action; the controversy regarding comparable pay for comparable work; and Velasquez's concluding argument, from a self-interested business perspective, for accommodating women and minorities in the workforce.    

Key Terms and Concepts

  1. discrimination: wrongfully distinguishing among people not on the basis of individual merit but on the basis of prejudice or some other morally invidious attitude to the detriment of those discriminated against. (3070
  2. intentional discrimination: individual or institutional pursuit of discrimination as a conscious goal. (307-8)
  3. unintentional discrimination: individual or institutional acts or policies which have discriminatory effects but not deliberately enacted or consciously maintained in order to bring about or continue those effects. (307-8)
  4. isolated discrimination: intentional or unintentional discrimination due to isolated individual acts and decisions. (307-8)
  5. institutional discrimination: intentional or unintentional discrimination due to organizational policy or practices. (307-8)
  6. Equal Opportunity: policies aiming to combat the continuing practice of discrimination by negative means, especially, prohibitions against sexually and racially discriminatory practices, and aiming to ensure that employment decisions are race and sex blind. (330)
  7. Affirmative Action: policies aiming to combat continuing effects of discrimination through positive measures that aim to achieve more representative distributions of women and minorities in the workplace, including, most controversially, application of reverse preferences in favor of individuals belonging to groups previously discriminated against.  (308)
  8. reverse preferences: preferential treatment in hiring , promotion, and dismissal favoring historically disadvantaged groups in an attempt to offset lingering effects of past discrimination and to counteract continuing unintentional and institutional discrimination: called “reverse discrimination” by detractors. (309)
  9. utilization analysis: or review: comparison of the representation of minorities and women in various job classifications in an organization with their representation in the available labor pool which is the principle means of enforcing affirmative action. (308)
  10. underutilization: “having fewer minorities or women in a job classification than would reasonably be expected by their availability.” (308)
  11. set asides: practice by which governmental agencies earmark a percentage of their budget exclusively for hiring minority contractors now legally prohibited "except as a last resort" in "an extreme case." (331)
  12. quota: a fixed percentage of admissions, hires, or promotions reserved for members disadvantaged groups: now prohibited. (330)

Page numbers given are not always the only pages on which the terms are found in the text.  Many of theses terms will appear on the module exams.  You should write a definition of each term as you encounter it in  your reading for use as a convenient review.

 Study Directory

Self-Diagnostic Exam Items

Textbook Pages

Objective

1, 10

307, 318-19

1

2

308

2

6

320

3

5

330

4

3

308

5

7, 8, 9

332, 333-6, 336

6

4

336-7

7

 Assignments

 Summary

Affirmative action is one of the most controversial issues in our society as is illustrated by recent controversy about admission policies at the University of Michigan. In Gratz v. Bollinger in 2005 the U.S. Supreme court ruled U of M's undergraduate admissions policy (which gave a fixed number of points to applicants in targeted groups) illegal, because it was not because it was not "narrowly tailored" and weighed race too heavily.  At the same time, in Grutter v. Bollinger the Court upheld U of M's law school admissions policy as "flexible enough to ensure that each applicant is evaluated as an individual and not in a way that makes race or ethnicity the defining feature of the application."  The majority in this case reasoned that, due to its political and economic utility, "diversity is a compelling state interest that can justify using race in university admissions."  Notably, a "who's who" of U.S. corporations argued, in an amicus curiae brief, that "individuals who have been educated in a diverse setting are more likely to succeed" in business.  Dissenting, Justice Thomas argued "racial classifications are per se harmful and ... almost no amount of benefit in the eye of the beholder can justify such classifications."

“Discrimination” in its original, morally neutral, sense means "to distinguish one object from another." However, the word has acquired judgmental and morally accusatory connotations in connection with wrongful acts of discrimination historically victimizing African Americans; women; Hispanics, Asians, and Native Americans; and the disabled.  Such morally pernicious discrimination may be defined as "the wrongful act of distinguishing illicitly among people not on the basis of individual merit but on the basis of prejudice or some other morally invidious attitude." Such morally invidious discrimination has three key features:

  1. not being based on individual merit;
  2. deriving from some morally unjustified attitude; and
  3. having a harmful or negative impact on the interests of those against whom it is directed.

Harmful impacts of job discrimination include, most importantly, loss of jobs, promotions, and pay.  Past and present victims include religious groups, ethnic groups, racial groups, and sexual groups.

Distinctions have been drawn between isolated and institutionalized discrimination; and between intentional and unintentional discrimination.  Initial movements against and attempts to remedy job discrimination through Equal Opportunity measures focused principally on instances of isolated intentional discrimination; current Affirmative Action policies attempt to address problems of institutionalized unintentional discrimination.  Equal Opportunity remedies are unable to adequately address these forms of discrimination because it is generally impossible to tell, for a given individual, whether that individual’s loss of the job, raise, or promotion was due to discrimination or random factors.  Statistical measures of what happens to groups in hiring, compensation, and promotion, however, show that institutionalized unintentional discrimination still exists.  Average income comparisons, lowest income group comparisons, and desirable occupation comparisons continue to show differences that are not wholly explainable in terms of educational and other merit-related factors.  Furthermore, rather than being on the decline (as is commonly believed), statistical measures indicate that, for most disadvantaged groups, disparities are actually increasing and current and expected trends also seem unfavorable to women's and minorities’ prospects.  Women continue to be concentrated in traditionally female (and lower paid) occupations, and child-bearing and child-rearing responsibilities continue to interfere with career continuity and advancement, and continue to fall, predominantly, on women.  Minorities' prospects for economic advancement are hampered by declining availability of jobs with relatively low educational requirements together with continued disparities in the quality of educational opportunities afforded to these minorities.  Velasquez concludes, "unless we embark on some major changes, the situation for minorities and women will not improve" (319).

Such enduring inequalities of status, position, power, wealth, and income as those just canvassed seem, on their face, violations of the principle that all "are created equal" and endowed with equal rights to "life, liberty, and the pursuit of happiness.": it is historical violation of this principle – in the form of unequal treatment of minorities and women – which caused the current disadvantaged statuses of minorities and women.  African Americans brought to this country as slaves, for instance, were not recognized as people, and were deemed by the Supreme Court to be "so far inferior that they had no rights that the white man was bound to respect" (Dred Scott v. Sanford: 1857).  A woman, through much of the 19th century, could not vote, serve on juries, or bring suit in her own name; once married she was forbidden to hold property in her own name, and according to the Supreme Court had "no legal existence apart from her husband, who was regarded as her head and representative in the social state."

Discrimination in employment can be argued to be morally wrong on utilitarian grounds, on Kantian grounds, and by appeal to considerations of justice.  The utilitarian argument is as follows:

Liberal critics of this argument respond that there's more to the general welfare than economic efficiency, and that racial and sexual discrimination may be warranted in cases where other factors outweigh whatever losses in productivity they cause.  This may especially be true of the "reverse preferences" employed in affirmative action programs whose social benefits include needs-based distribution and advantageous workplace diversity.  Conservative critics of the utilitarian argument maintain that the division of labor along sexual (and previously, it was argued, racial) lines is most efficient and best promotes the general welfare because the natural (nurturing, sensitive, emotional) abilities of women suit them best to childcare and the natural (aggressive, competitive, rational) abilities of men suit them best to exercise authority and control over business and financial matters.

According to the Kantian argument, discrimination is wrong because it treats people, not as ends, but as means to whatever social purposes the discrimination is supposed to serve; whether these be the racist and sexist ends of bad old fashioned discrimination or the socially progressive ends (of achieving diversity and compensating the disadvantaged) of the "reverse discrimination" involved in Affirmative Action.  Alternately, Kantians may argue that discrimination is a nonuniversalizable practice: those who discriminate would be unwilling to be similarly discriminated against themselves.  Another justice-based argument invokes the fundamental principle of justice – individuals who are equal in all respects relevant to the kind of treatment in question should be treated equally – and maintains that discrimination violates this principle (since race and sex are generally irrelevant to job performance), and is, consequently, unjust.

Effects of discrimination continue to exist and be perpetuated by various practices widely recognized as discriminatory.  These include

Sexual harassment a form a discrimination directed primarily at women and generally recognized as immoral due to its infliction of psychological harm on the harassed individual; its violation of the victim's most basic rights to freedom and dignity; and its unjust use of the unequal power that an employer or supervisor wields over an employee.  Equal Opportunity Commission (EEOC) guidelines enacted in 1978 attempt to define what constitutes sexual harassment and impose strict liability on employers for harassment by their employees.  Controversial aspects of the guidelines include the vagary of the definitions; concern about restricting free speech rights for such atmospheric and subjective reasons; and concerns about "strict liability" being contrary to basic principles of retributive and compensatory justice according to which one may be justly held liable only for harms one knowingly and willingly inflicts.  Against this, in favor of "strict liability," some say that the effects of harassment can be so devastating that it is necessary to dip into the "deeper pockets" of the employer in order to compensate its victims.  Other groups besides women and minorities are liable to be discriminated against and victimized by false stereotypes in the workplace: law currently protects older workers and disabled workers.  As yet unprotected groups who aspire to legal protection include homosexuals and the overweight.

Equal Opportunity policies aim to combat the continuing practice of wrongful discrimination by negative means, namely prohibitions against sexually and racially discriminatory practices, aiming to ensure that employment decisions are blind.  Affirmative Action policies, by contrast, aim to combat continuing effects of discrimination through positive measures that aim to achieve more representative distributions of women and minorities in the workplace, including the application of reverse preferences which discriminate in favor of individuals belonging to groups previously discriminated against.  The principal motivation for Affirmative Action policies is the perceived inability of Equal Opportunity policies to remedy continuing unintentional institutionalized effects of discrimination. The principal means of implementing Affirmative Action is utilization review which compares the representation of minorities and women in an organization with their representation in the available labor pool, across nine categories. Underutilization is deemed to be present when the percentage of minority or female in any given category is less than in the available labor pool.  If underutilization is found, then the firm must establish "specific and measurable goals and timetables" designed to correct this and undertake special efforts to recruit women and minorities so as to meet these goals and timetables.  Acceptable measures, however, must not involve "rigid quotas" (outlawed by California v. Bakke: 1978); nor may seniority be disregarded during layoffs.  Set asides – by which a government or governmental agency earmarks a percentage of its budget exclusively for hiring minority contractors – are also legally prohibited "except as a last resort" in "an extreme case" (Richmond v. J. A. Corson Co.: 1989).  This tangled legal situation reflects the raging moral and political dispute over affirmative action. 

According to the compensatory justice argument, white males have intentionally and unjustly wronged women and minorities through past discrimination and, consequently, women and minorities are justly entitled to be temporarily accorded reverse preferences in admissions, hiring, and promotions, where they had previously been discriminated against.  Though this disadvantages white males, it is not unjust, since white males benefited from the past discrimination.  Opponents of this argument reply (1) that present white males are not the parties who intentionally and unjustly wronged women and minorities and (2) present women and minorities are not the ones who were intentionally wronged; therefore, no compensation is due.  Against the second point, Judith Jarvis Thomson counters that "even those who were not themselves downgraded have suffered the consequences of the downgrading of other blacks and women" (332); against the first Martin Reddish counters that white males "whether or not . . . [they] have themselves participated in acts of discrimination have been the beneficiaries" (332).  Velasquez's regards Jarvis Thomson's claim that present women minorities and women are victims of past discrimination as strong, but holds Reddish's claim is weak unless it can be shown that present white males are consciously or unconsciously in collusion with past discriminators since, among beneficiaries of injustices, only the perpetrators owe compensation.

According to the utilitarian argument for Affirmative Action, Affirmative Action promotes the general welfare by undoing the harmful effects of past discrimination, especially impoverishment.  Other utilitarians counter that since race and sex are irrelevant selection criteria, having nothing to do with merit, Affirmative Action diminishes the general welfare by decreasing economic productivity.  Utilitarian defenders of Affirmative Action may, in turn, reply that race is highly correlated with need, and distribution according to need is most beneficial.  Other objections to the utilitarian argument cite the social costs of white male frustration and resentment or maintain that race is not an appropriate indicator of need.

The equal justice argument holds that the only criteria relevant to the distribution of benefits and burdens are ability, effort, contribution, and need, agreeing with opponents of Affirmative Action that sex and race are not relevant criteria.  However – the argument continues – statistics show that jobs in our society are still distributed on the basis of sex and race in ways that disadvantage women and minorities due to the continuing effects of unintentional institutionalized discrimination:  Affirmative Action, therefore, serves to counteract the enduring practice of unintentional institutionalized discrimination and actually results in a near "level playing field" as lingering racist and sexist attitudes and preferences are counterbalanced by legally mandated counter preferences.  This is, in Velasquez's eyes, the strongest argument favoring Affirmative Action.  To those who object that affirmative action programs involve unjust discrimination against white males it may be replied – invoking the definition of wrongful discrimination (above) – that reverse discrimination, since it does not discriminate "on the basis of prejudice or some other morally invidious attitudes" is not wrongful or unjust.  To those who argue that preferential treatment violates the principal of equality itself, it may be replied that race and sex, at present, though irrelevant to productivity, are relevant to achieving social justice in the form of equal opportunity by countering the lingering discriminatory injustices.  Velasquez’s final conclusion is twofold: Affirmative Action, is a morally permissible means to achieve social justice; but Affirmative Action it is not morally required as a means to achieve social justice.

Overall morality aside, there are legitimate worries:

Implementation guidelines that address these concerns require minimum levels of competency to insure that tasks are not assigned to unqualified individuals; require that less race or sex should not offset competency differences in critical occupations; require that preferences should be extended to minority and women candidates only to redress underutilization; and require accommodation of the special needs of women and minorities in the workplace to be undertaken along with Affirmative Action based preferences.

Comparable pay for jobs of comparable worth is a radical proposal for redressing sex-based earning differentials: where Affirmative Action tries to get women into higher paid positions, comparable pay proposes to make positions women already hold higher paid.  Implementation would require rating each job for compensation-worthy features such as effort, productivity, and accountability and fixing compensation on the basis of these ratings.  The justification is that employees who are equal in all respects relevant to compensation-worthiness should be equally compensated.  Objectors reply that the labor market is the most appropriate determiner of compensation-worthiness; that assigning points to jobs would be a bureaucratic nightmare; and that women can apply for higher paying "male" jobs if they want, but choose not to based on other advantages associated with traditional female occupations.  Advocates of comparable pay counter that "woman's work" is lower paid because women do it – for historical discrimination-based reasons – not because of impersonal labor market factors of supply and demand.

Morality aside, Velasquez concludes, diversity in the workplace makes good business sense.  Since white males represent a rapidly shrinking proportion of the workforce, women and minorities have to be accommodated to meet staffing needs.  Consequently, firms that effectively accommodate the special needs of women and minorities will, in the future, enjoy increasing competitive advantages in meeting their staffing needs over those which don't.

Self-Test 

The following questions will help you judge your comprehension of the materials covered in Unit 7.  Please remember you are responsible for the glossary terms above.  You need to check your responses against the key included. 

  1. Discriminatory employment decisions, according to Velasquez, are decisions affecting job placement
    1. that are not based on merit.
    2. that derive from negative stereotypes, biases, or other unjustified attitudes.
    3. that have a harmful negative impact on those selected against. 
    4. All of the above.
  2. Which of the following statements about Equal Opportunity as opposed to Affirmative Action policies is true?
    1. Equal opportunity mainly targets isolated intentional discrimination and Affirmative Action institutional unintentional discrimination.
    2. Equal opportunity mainly targets institutional unintentional discrimination Affirmative Action isolated intentional discrimination.
    3. Equal opportunity mainly targets institutional intentional discrimination Affirmative Action isolated unintentional discrimination.
    4. None of the above.
  3. Underutilization is legally defined as
    1. "having more minorities or women in lower job classifications than would reasonably be expected from their availability in the labor pool."
    2. "having fewer minorities or women in higher job classifications than would reasonably be expected from their availability in the labor pool."
    3. "having fewer minorities or women in a particular job classification than would reasonably be expected from their availability in the labor pool."
    4. "having fewer women or minorities on one's payroll than would reasonably be expected from their availability in the labor pool."
  4. Which of the following is among the suggested guidelines for Affirmative Action Velasquez cites?
    1. It should be constrained by minimum competency standards.
    2. It should not expressly target underutilization at specific job levels.
    3. It should be applied equally for all occupations.
    4. All of the above.
  5. Seniority based promotion and lay-off practices, according to Velasquez,
    1. are illegal in most jurisdictions.
    2. being race and sex neutral have no discriminatory effects.
    3. are race neutral but not sex neutral.
    4. tend to perpetuate inequities caused by past discrimination.
  6. The utilitarian argument against job discrimination premises, or holds, which of the following?
    1. Jobs awarded on the basis of race, sex, and religion, are not being awarded solely on the basis of competency or "merit".
    2. Social productivity is optimized, and the general welfare, consequently, best promoted, when jobs are awarded solely on the basis of competency.
    3. Both of the above.
    4. None of the above.
  7. According to Velasquez, which of the following is the strongest objection to would be justifications of reverse preferences as compensatory justice for wrongs due to past discrimination?
    1. Present women and minorities aren't among the parties harmed by past discrimination.
    2. Present white males aren't among the parties benefited by past discrimination.
    3. Present white males are not the perpetrators of past discrimination.
    4. None of the above: reverse preferences are totally justified as compensation for wrongs due to past discrimination.
  8. What is the best argument for affirmative action on Velasquez's view, according to Hauser (above)?
    1. Reverse preferences are just compensation for past discrimination.
    2. Reverse preferences promote social justice: by offsetting lingering remnants of wrongful discrimination they make for truer equal opportunity.
    3. Reverse preferences best promote the public welfare by helping the poor.
    4. None of the above: reverse preferences, according to Velasquez, are unjust and socially counterproductive reverse discrimination.
  9. Which of the following conclusions does Velasquez endorse?
    1. Affirmative Action is morally permissible as a means to achieve social justice.
    2. Affirmative Actions is morally required as a means to achieve social justice.
    3. Both of the above.
    4. None of the above.
  10. Which of the following best describes what Velasquez takes the studies he cites to show about the current job discrimination situation?
    1. No inequities of income and placement due to past discrimination remain.
    2. Inequities of income and placement due to past discrimination remain and continue to be perpetuated despite recent efforts to eradicate them.
    3. Affirmative Action policies are eliminating income and placement inequities quite rapidly.
    4. Some inequities due to past discrimination remain, but these are rapidly disappearing due to the effectiveness of Equal Opportunity policies.

Self-Test Key

 

Question

Answer

Objective

Pages

1

D
1
307

2

A

2
308

3

C
5
308

4

A
7
336-7

5

D
4
330

6

C
3
320

7

C
6
332

8

B
6
333-6
9
A
6
336

10

B
1
318-19

NOTE:  The questions on the module end examination will be closely based on the self-test you have just taken.  Sometimes the examination will slightly modify the question-part of self-test questions while varying the answers and distracters (A, B, C, D) unchanged.  For example, while keeping the question unchanged, the distracters/answers to item 9 above might be changed to read as follows:

  1. Affirmative Action is morally permissible as a means to achieve social justice.
  2. Affirmative Actions is not morally required as a means to achieve social justice.
  3. In an increasingly global economy with an increasingly diverse labor pool, companies that empower women and minorities in their workforces will enjoy increasing competitive advantages over those who don’t.
  4. All of the above.

This makes “All of the above” (D) the correct answer since (C) is another conclusion Velasquez endorses and (B), which formerly was a false statement, by the addition of not, becomes true.

 CONSEQUENT ADVICE:  The self-test questions can be very useful for studying for the module end examination, but only if used in the right way.  As the example above shows it would not have been fully helpful to have studied for the exam by memorizing that the answer to the one about Velasquez’s conclusions was “Affirmative action is morally permissible as a means to achieve social justice.”  Nevertheless it will have been of some use, since ½ credit will be given for true answers which are not best or “the whole truth.”  The following points are noteworthy in this connection:

In taking the module end examination it is extremely important that you read the examination questions and options carefully: a little word like not or and can make all the difference between a right and a wrong answer, as illustrated by the two version of answer/distracter (B) above.  Pay attention to italicized words and phrases: italics are for emphasis and often provide clues to the questions being asked and the answers being sought.

Unit 8: The Individual in the Organization
Introduction | Objectives | Key Concepts | Study Directory | Assignments | Summary | Self-Test

Introduction  

In this chapter we consider three models of the business organization, the place of individuals in it, and the moral issues pertaining thereto.  The rational structure model, emphasizes formal relations of command and division of labor and highlights issues regarding the duties of employee to firm and firm to employee.  The political model focuses on competing coalitions and informal exercises of power, highlighting issues regarding abuses of power and the rights of employees.  The caring organization model focuses on cooperative nonpower relations, challenging authoritarian and competition-based assumptions about how business organizations do and should work.

The rational structure model defines the business organization as a structure of formal relations, explicitly defined and openly employed, to achieve some technical or economic goal; as a contractually based division of labor and chain of command, as represented by the organizational chart.  The main duty of the employee, on this model, is to be a loyal agent; the main duty of the firm is to provide working conditions and compensation as specified in the employment contract.  Important issues, here, center on the extent to which the parties to the employment contract are or are not “equal adversaries” in contract negotiations and their consent to the contract is “free and informed”.

The political model characterizes business organizations in terms of real power relations including, besides relations based on formal authority, informal “power tactics” exercised by competing power coalitions within the organization.  The principal moral issues arising on the political model, consequently, concern the moral limits to the exercise of power within organizations: employee rights issues concern the moral limits on the power superiors acquire and exercise over subordinates; office politics issues concern the moral limits on the power employees acquire and exercise over one another.

The caring organization model criticizes both political and rational structure models for their overestimation of power issues (of command and conflict) and their neglect of cooperative nonpower relations essential to the functioning of organizations.  According to advocates of this approach such nonpower relations actually do figure quite largely in the workings of organizations, especially in organizations that work well; and they should, figure more largely than they do in most present-day business organizations.

 Learning Objectives

  1. Distinguish the three models of the organization and understand the distinctive emphasis of each: the rational structure model with its emphasis on formal relations of authority and the formal division of labor, or command; the political model with its emphasis on real power relations, including informal “power tactics” exercised by competing coalitions; the caring organization model which emphasizes nonpower relations of cooperation.
  2. Identify the principal moral concerns that are addressed on the rational structure and political models: on the rational structure model duties of the employee to the firm and of the firm to the employee (including fairness of compensation and safe working conditions); on the political model, employee rights and organizational politics.
  3. Understand the rational structure model's characterization of the business organization as a structure of formal relationships that are explicitly defined and openly employed, and how the organizational chart describes the core features of the organization thus characterized in terms of its chain of command and division of labor.
  4. Understand how the law of agency expresses the main duty of the employee, to work towards the goals of the firm and the several ways in which an employee may fail to fulfill this main duty to the firm: by acting on conflicting interests; by theft; and by abuse of the privileges of position (as by insider trading).
  5. Understand the attempt of the political model to provide a more realistic characterization of business organizations in terms dynamic power struggles between competing power coalitions; also, the ways political power and the power of corporate managers are alike, and the controversies concerning their differences.
  6. Identify the principal employee rights and freedoms at issue under the political model and understand issues relating to each: privacy rights, freedom of conscience and whistleblowing rights, participation rights, due process rights, rights relating to plant closings, and rights to organize unions.
  7. Grasp the distinction between formal authority relations and informal power tactics; appreciate the variety of informal power tactics used and the two headings under which they all fall; and recognize how power tactics, due to their informal and frequently covert nature, pose special perils with regard to utility, rights, justice, and care.

Key Terms and Concepts

  1.  rational structure model: model of business organization emphasizing formal relations of authority or command as described by the organizational chart. (351)
  2. political model: model of business organization stressing informal power relations worked out through internal competition. (390-2)
  3. caring organization model: model of business organization emphasizing nonpower relations of cooperation. (395-6)
  4. organizational chart: representation of the formal authority structure of an organization on two axes: a vertical axis (standardly) representing chain of command; a horizontal axis (standardly) representing division of labor. (351-2)
  5. top management: the Vice Presidents, the Chief Executive Officer, and the Directors or the owner of a firm. (351)
  6. middle management: level of management directing the operating layers and being directed in turn by top management. (351)
  7. operating layer: employees who directly produce goods and services that constitute the essential outputs or products of the organization, and their immediate supervisors. (351)
  8. Law of Agency: principle summarizing the principle duty of employees (agents) to their employers (principals) as being “to act solely for the benefit of his principal in matters connected with his agency.” (353)
  9. formal power relations: sanctioned and overt relations of authority, deference, and responsibility expressly stated in job descriptions and contracts that define employee obligations to the firm, and recognized by law: they are characteristically openly employed by superiors and generally acknowledged and accepted by subordinates. (351)
  10. informal power relations: “power tactics” that are not-formally-sanctioned, but used to advance parties’ aims within the organization: power tactics are apt to be covertly employed and may not be generally acknowledged or even known about by those affected by them. (391)
  11. conflict of interest: arising when an employee or officer of a company is engaged to carry out a task in which the employee has a private stake: if they discharge their duties in a way prejudicial to the firm in pursuit of their private interest an actual conflict of interest is present; if they may be tempted to act in ways prejudicial to the firm it’s a potential conflict of interest. (353-4)
  12. commercial bribe: monetary or other consideration given or offered to employees by persons outside the firm with the understanding that, when the employee transacts business with the giver, the giver will be dealt with favorably. (356)
  13. whistleblowing: an attempt by a member or former member of an organization to disclose wrongdoing in or by the organization: disclosure to others in the organization is internal whistleblowing; disclosure to outsiders, such as legal regulators or the press is external whistleblowing. (377)
  14. insider trading: the buying or selling of stock in a corporation on the basis of "inside information" not available to those outside the company which would have a material or significant impact on the price of the company’s stock if known.  (359)

Page numbers given are not always the only pages on which the terms are found in the text.  Many of theses terms will appear on the module exams.  You should write a definition of each term as you encounter it in  your reading for use as a convenient review.

 Study Directory

Self-Diagnostic Exam Items

Textbook Pages

Objective

1

351

1

5

361

2

2, 4

351-2, 351

3

3, 7, 9

353, 356-7, 359-61

4

8

373-4

5

10

380

6

6

371-2

7

Assignments

Summary

This chapter considers three models of the business organization and the place of individuals in it, each bringing different moral issues into focus.  The rational structure model, by its emphasis on formal relations of command and division of labor, highlights issues regarding empolyee-firm and firm-employee duties.  The political model with its focus on competing coalitions and informal exercises of power, highlights issues regarding abuses of power and related employee rights.  The caring organization model, with its focus on nonpower relations of cooperation, challenges authoritarian and competition-based assumptions about how business organizations do and should work.

The rational structure model defines the business organization as a structure of formal relations, explicitly defined and openly employed, to achieve some technical or economic goal, resulting in a rational coordination of the efforts of a number of people through the division of labor and function (standardly represented by the horizontal dimension of an organizational chart), and a hierarchy of authority and responsibility or chain of command (standardly represented by the vertical dimension).  Three main levels of employees are commonly distinguished:

  1. an operating layer of employees who directly produce goods and services that constitute the essential outputs or products of the organization, and their immediate supervisors;
  2. middle management, directing the operating layers and being directed in turn by top management;
  3. top management, consisting of Vice Presidents, the Chief Executive Officer, and the Directors or the owner of the firm. 

General policy is decided at the top, these decisions are passed down the hierarchy and "amplified" as commands ultimately to be implemented at the operating level.  The authority of the higher ups and the responsibilities of underlings, on this conception, are contractually based.  Employees freely and knowingly agree to accept the organization's formal authority and undertake to pursue the goals of the organization.  The organization agrees, in exchange, to pay employees an agreed upon wage, and to supply working conditions that enable the employee to perform assigned tasks.  The voluntary contractual nature of this agreement is held to impose moral duties on the contracting parties to fulfill the terms of the contract, resulting in two reciprocal sets of obligations.  Employees are obliged to obey organizational superiors, to pursue the organization's goals, and not to pursue conflicting goals; employers are obliged to provide employees a fair wage, and fair working conditions.

The main duty of the employee to the firm, on the rational structure model, is to work towards the goals of the firm.  This is understood to imply a duty of obedience to superiors, and a duty of avoidance of activities harmful to or contrary to these goals.  The Law of Agency sums up this main duty so: "an agent is subject of a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency" and not to act for the benefit of "persons whose interests conflict with those of the principal in matters in which the agent is employed."  Employees may fail to discharge their main duty by acting on conflicting interests; by theft; and by abuse of privileges of their position, as in insider trading.

Potential and actual conflicts of interest arise when an employee or officer of a company is engaged to carry out a task in which they have a private interest.  If the employee actually discharges their duties in a way prejudicial to the firm in pursuit of their private interest an actual conflict of interest is present.  Employees with motives that may tempt them to act in ways prejudicial to the firm are held to have potential conflicts of interest. Actual conflicts are morally culpable.  The morality of potential conflicts depends on how likely they are to become actual.  Two practices involving unethical potential conflicts -- even if not actual -- are the acceptance of commercial bribes and extortion.  Commercial bribes are considerations given or offered to employees by persons outside the firm with the understanding that, when the employee transacts business with the giver, the giver will be dealt with favorably.  When the employee demands considerations from an outside agent as a condition for dealing favorably with them, it is extortion.  Commercial gifts are considerations given to employees by outside agents with no understanding that the employee will deal favorably with them in return.  While less culpable than outright bribes and extortion, nevertheless raise similar issues since such gifts are often given in the hope of obtaining favorable treatment.  Factors to be considered when evaluating the morality of accepting such a gift (suggested by Vincent Barry) include the value of the gift; the purpose of the gift; the circumstances of the gift; the position of the recipient; accepted business practice in this connection; company policies regarding acceptance of such gifts; and relevant laws

Workplace theft is the appropriation of one's employer's assets without their consent.  This includes "white collar crime" such as embezzlement, forgery, fraud in the handling of trusts and receiverships, as well as petty theft of small tools, office supplies, etc.  Computer theft – the unauthorized examination, use, or copying of computer information or programs – is held to be theft notwithstanding the intangible nature of the property taken.  Even though the unauthorized "taking" does not deprive the employer of what they possessed it still deprives the employer of their ownership rights to exclusive use of their property.  Trade secrets are "proprietary information" about company activities, plans, policies, records, or technologies, which the company indicates by security measures, explicit directives, or contractual agreements, that it does not wish others outsiders to have.  To divulge trade secrets, consequently, is to act contrary to the goals of the firm.  Skills acquired through working for the firm, however, are considered parts of the employee's person and not property of the employer, and do not count as trade secrets.  Where skills leave off and information begins, however, is not always clear-cut, and companies commonly try to safeguard their interests in this connection through (legally dubious) contract provisions forbidding employees from working for competitors for some specified period after leaving the firm, or through payoffs offered to departing employees on the condition that they not reveal the proprietary information they have.  Insider trading – the buying or selling of stock in a corporation on the basis of "inside information" – is an example of employee abuse of the privileges of position: "inside information" refers to proprietary information about a company, not available to those outside the company, which would have a material or significant impact on the price of the company’s stock if known.  Insider trading is morally dubious, highly tempting, and illegal.  Nevertheless, it has its defenders who claim it modulates stock prices in ways beneficial to the workings of the market; it harms no one because inside traders sell at going market prices; and that the insider's informational advantage is not unfair, it's just one among many ways in which traders may be informationally advantaged.  Critics of the practice maintain the information inside traders use is essentially stolen; and that it reduces market size and increases costs of trading, which is detrimental to the market.  Except for the exact scope of what constitutes "inside information" the illegality of insider trading is well established: notably, in this connection, second parties can be guilty of insider trading if they know the information to have been wrongfully acquired, even if they themselves did not wrongfully acquire it.

The main duty the employer owes to the employee on the rational structure view is to provide them with the agreed upon compensation in exchange for their services.  The two main issues arising in this connection concern the fairness of the wage and the fairness of the working conditions: at issue is how freely and uncoercedly, and how and knowingly and undeceivedly, the employee agreed to do this job at this wage.  The fairness of wages is a question complicated not only by the conflicting interests of employees and employers, but also to external factors which impact on fairness: these include, public supports available to workers; the freedom and competitiveness of the labor market; worker needs; and the competitive position of the firm.  Factors to be taken into account in determining a fair wage include going pay rates in the industry and the area; the firms ability to pay its workers; the nature of the job; minimum wage laws; salaries within the organization paid to workers doing roughly similar work; and the fairness of the wage negotiations.

Issues regarding the fairness of working conditions arise, principally, concerning health and safety, and job satisfaction.  Statistics show that workplace injuries are frequent and often serious.  Unavoidable risks incurred in some occupations are acceptable so long as workers are well compensated for accepting these risks, and freely and knowingly accept them in exchange.  Morally problematic cases arise when workers incur risks unknowingly because they lack the time or expertise to judge the hazards of a job they accept; where risks are unknown; or where workers accept known risks out of desperation due to uncompetitive labor markets.  As a general guideline, employers need to insure that workers are not being manipulated into accepting risks without their full knowledge and consent, and due compensation.

Job satisfaction issues arise, most especially, due to job specialization inherent in the chain of command and division of labor: vertical specialization restricts the worker’s range of control and decision making over the activity involved in their job; horizontal specialization restricts the range of tasks involved, and increases their repetition.  Even Adam Smith noted the onerousness of job specialization.  The problem of adequately compensating those who do the most limited and highly repetitive "fractionated" work is that the most fractionated work is the most unskilled and, as such, commands the lowest level of compensation on the labor market, since anyone can do it.  This leaves unskilled workers with little choice except to accept the fractionated work, or not work at all.  Work teams are one proposed remedy for dissatisfactions arising from fractionated work.  Teams increase the range of workers’ vertical authority, e.g., in scheduling assignments, breaks, and inspections and the range of their horizontal engagement, e.g., by replacing single workers performing single repetitive tasks with teams jointly responsible for (a certain number of) complete assemblies.

The political model of the organization focuses on real – both official and unofficial – power and authority relations.  In contrast with the rational structure model, which views such relations as static, the political model sees them as constantly shifting, through power struggles and authority clashes.  On the political model, organizations are conceived of as systems of competing power coalitions with formal and informal lines of influence and communication radiating from each.  The direction or "goal" of the organization, on this conception, is not so much dictated by rightful authority as negotiated among more or less powerful coalitions.  The fundamental organizational reality, on this conception, is power, defined as the ability of individuals or groups to modify the behavior or others is desired ways without having to modify their own in undesired ways (i.e., to take without having to give).  While the formal authority relations portrayed by the organizational chart are, generally, major sources of real power, the political model also recognizes informal sources of power and lines of influence completely outside – sometimes even contrary to – these formal lines of authority and communication.  The principal moral issues arising on the political model, consequently, concern the moral limits on the exercise of power within organizations: employee rights issues concern the moral limits on the power superiors acquire and exercise over subordinates; office politics issues concern the moral limits on the power of employees acquire and exercise over one another.

With regard to employee rights, a comparison may be drawn between the defining features of political or governmental authority and of corporate management.  Both involve

On the basis of such comparisons, some maintain that the power corporate managers may rightfully exercise over subordinates are subject to limits analogous to recognized limits on rightful governmental authority; that individuals enjoy rights to privacy, free speech, and assembly as employees similar to those they enjoy as citizens.  Objectors to this analogy point to the different bases of the two kinds of authority.  Political authority, they argue, is based on the consent of the governed (under "the social contract") and civil rights arise from the limited nature of this consent: civil rights are, in effect, negotiated limitations on citizen consent.  Corporate authority, on the other hand, derives from ownership of the business: consequently, owners have rights to impose whatever conditions they choose on employees since, in accepting employment, employees freely and knowingly contract to accept their employers complete workplace authority.  Objectors to employee rights also point out that unions already limit the power of corporate management, while there is no similar countervailing power to protect citizens from government.  Furthermore, objectors maintain, the greater voluntariness of employment compared to citizenship undercuts the idea that employees are owed rights similar to those enjoyed by citizens.  Defenders of employee rights reply that the distributed nature of contemporary corporate ownership undercuts claims to authoritarian privileges based on ownership, since managers do not simply and straightforwardly function as agents of owners; that only a small portion of the workforce is unionized, and that portion is decreasing; and that changing jobs is often nearly as hard and traumatic as changing countries.

Privacy rights are one kind of rights many claim employees are owed: rights not to have employers pry into your private life and to determine the type and extent of information about yourself you disclose to your employer.  Practices allegedly infringing employee privacy include employer monitoring of computer and telephone use and communications; polygraph testing; use of computerized databanks enabling companies to obtain personal information about employees; genetic testing; urine tests and blood tests enabling companies to screen employees for drug use (or even alcohol and tobacco use) at home; and written tests, such as psychological inventories and "honesty tests" enabling employers to pry into employee's personal characteristics.  Two types of privacy may be distinguished: psychological privacy, the right to keep your thoughts to yourself; and physical privacy, the right not to be physically surveilled  The moral importance of privacy derives from its protective and enabling functions.  Protectively, it inhibits others from obtaining information that could be used to harm us or interfere in our plans and pursuits; protects loved ones from being confronted with things about us they might not want to know; and protects us from self-incrimination or involuntarily harm to our reputations.  Things privacy enables include personal relations based on giving and receiving confidences; professional relations based on confidentiality; the maintenance of separation between your private personal and your public professional life; and control over your own self-presentation or image. Like all rights, privacy rights need to be balanced against the rights and needs of others.  In particular, claimed employee privacy rights need to be balanced against employers' needs to know the qualifications and work experience of prospective hires, and their rights to protect themselves against employee theft and fraud.  Three considerations should guide employees in collecting information about employees: the relevance of the information to the purposes claimed to license the employer to obtain it; the consent of the employee to the gathering of such information; the method by which the information is obtained.

With respect to relevance, inquiry into matters unconnected with job performance may be held to be wrongful invasion of privacy: information unconnected with job performance, if discovered, should be destroyed, not kept, and certainly not revealed or "leaked"; and, in general, less scrutiny of lower-level employees is warranted than of top-level managers, who represent the company to others.  With regard to consent, employees should be given the opportunity to consent to or refuse investigation.  Consent is often regarded as a condition of taking a job (on the grounds that one is otherwise free to refuse it): nevertheless, employees should be informed of surveillance measures in effect.  Concerning method, while normal supervisory oversight is considered ordinary and reasonable surveillance, hidden microphones and cameras, wiretaps, use of spies, and personality tests and polygraphs, are generally considered extraordinary and unreasonable.  In extraordinary circumstances use of such extraordinary measures may, however, be warranted.

Freedom of conscience issues arise in the workplace, most especially, when – in the course of doing their job – an employee discovers that the firm is doing something the employee thinks is wrong or injurious to society.  Commonly, “insiders” are the first to know of product defects, polluting practices, and unsafe working conditions; but their options are limited.  Bringing the matter to the attention of supervisors may be ineffective or ruled out: supervisors might not want to know to avoid complicity, or already know and be be complicit.  On the other hand, if the employee goes public with the information, this is legally considered just cause for termination as a breech of the employee's duties of loyalty and confidentiality to the firm.  Often employers will put the matter on the employees record and attempt to see to it that they are "black-balled" throughout the industry.  Many argue that this situation is in violation of individuals' rights of conscience, i.e., their right to adhere to their moral and religious convictions without being forced to cooperate in activities they believe are wrong.  Whistleblowing is an attempt by a member or former member of an organization to disclose wrongdoing in or by the organization: disclosure to superiors is internal whistleblowing; external whistleblowing involves disclosure to outsiders, such as legal regulators or the press.  Studies show external whistleblowers are always fired and commonly black-balled.  Those who commend such harsh treatment maintain that external whistle blowing is a blatant violation of the employee's contractual obligation to be loyal to their employer, and to keep inside information confidential.  Consequently, they argue, external whistleblowing is always, seriously, morally wrong.  Defenders of whistleblowing reply that contractual obligations are not unqualified and, in particular, that contracts requiring parties to do something illegal or immoral are void.  Consequently, they hold, external whistleblowing is morally permissible and may even be obligatory if it is necessary to prevent a wrong one morally ought to prevent or to bring about a good one morally ought to bring about; provided

  1. there is clear, substantiated, and reasonably comprehensive evidence of harmful activity or wrongdoing;
  2. that reasonable attempts at internal whistleblowing have failed;
  3. that it is reasonably sure that the external whistleblowing will stop the activity; and
  4. that the wrong or harm the whistleblowing will prevent outweighs the harm it will cause to parties such as stockholders, superiors, and fellow employees. 

Justified occurrences of external whistleblowing, Velasquez thinks, can always be seen as indications that an organizations internal communications and oversight systems have failed.  Companies should have clear policies and procedures enabling employees to voice their moral concerns anonymously (if they choose) outside the standard chain of command, e.g., through a company "ethics officer

The right to participate in workplace decision-making – to a more democratic workplace – is a controversial right sometimes claimed for employees.  Democracies characteristically feature majority rule and freedom of discussion; features business organizations characteristically lack.  Three levels of proposed democratization in the workplace may be distinguished:

  1. granting workers rights of consultation on decisions directly affecting them;
  2. granting workers decision making powers on decisions directly affecting them;
  3. allowing workers to participate in major policy decisions either through consultation or decision making.

Such democratization proposals are unpopular with management: lack of employee enthusiasm, and ideological appeals to the different bases of governmental and managerial authority are urged against such proposals.  Since governmental authority is based on the consent of the governed, workplace democracy opponents grant, it should be democratic; but business authority, being based on property ownership rights, they assert, may be – even should be – more authoritarian.  On the other side, advocates of workplace democracy point out that, as business organizations come to play greater and greater roles in our lives, so long as our workplaces are undemocratic, democratic values, practices, and attitudes will become more and more peripheral to the actual conduct of our lives.  Participatory leadership/management is an attempt by management of implement democratic elements "top down": on this approach (similar to level one, above) management still dictates, but more benevolently and consultatively than has traditionally been the case.  Evidence that such participatory style management increases productivity, as some claim, seems inconclusive.

Another claimed employee right, to due process, is opposed to the long standing traditional "employment-at-will" principle according to which employees "may dismiss their employees at will . . . without being thereby guilty of legal wrong" whether it be "for good cause, for no cause, or even for causes morally wrong" (383).  This principle is held to follow as one of the prerogatives of property ownership, from which employers' authority derives.  Objections to this principle are threefold.

  1. It falsely assumes that employees "freely" accept employment and are "free" to find employment elsewhere when, in reality, critics urge, heavy costs to workers in job searches, while going unpaid, seriously limits their freedom.
  2. Considerations of reciprocity support workers' rights to fair treatment: workers generally make conscientious efforts to serve the firm with an implicit expectation that the firm will deal fairly with them in return, creating a quasicontractual right to fair treatment based on this implicit reciprocity.
  3. Workers have a right to be treated with the respect due to free persons, which implies a right to nonarbitrary treatment, and not to be harmed unfairly.

Perhaps due the weight of these three considerations, recent years have seen increased recognition of employee rights to "due process," i.e., not to be treated arbitrarily, capriciously, or maliciously, in business decisions affecting them.  Employee grievance procedures are a particularly important area in which due process guarantees find application.

Employee rights with regard to plant closings are another controversial area.  Such closings are sometimes unavoidable in a market economy and can seriously harm employees and communities in ways that cause ethical concerns.  Workers' rights to be treated only as they freely and knowingly consent to be treated, for instance, seem to imply employee rights to information about impending shutdowns that will effect them.  Such rights are legally recognized in many countries.  Furthermore, utility requires that harms be borne by the parties who will suffer least, and corporations or owners usually have greater resources than workers; this seem to entail that corporations should bear many of the costs of plant closure.  Finally, considerations of justice suggest that, where workers and communities that have made substantial contributions to a business, that business should not abandon abruptly and unexpectedly, terminating health and retirement plans and corporate contributions to the local economy.

A final claimed employee right is the right to organize or join labor unions.  According to its defenders, the general right of free association specifically implies the right to associate with fellow workers in pursuit of common interests.  Further, it is maintained, the right to be treated as a free and equal person implies a right to countervailing organization, which workers need in order to defend their interests against the organized corporate might of management.  With regard to the further, crucial, right to strike, proponents argue that the right of each worker to quit his or her job implies their collective right to strike; so long, at least, as this violates no prior agreements nor the rights of other citizens.  Recent history shows a marked decline in both the percent of the workforce which is unionized, and in the success of attempts to organize: this may be due, in part to declining public confidence in unions, and is surely due in part to intense and widespread management opposition to unions and unionization, some legal (e.g., propagandizing against unions, and lobbying for laws impeding unions), and some illegal (interference with external organizers and reprisals against employee-organizers).  Consequences associated with the decline of labor unions include increasing reliance on governmental means to provide protections formerly afforded by unionization.

Employee rights would limit the exercise of formal powers based on the contracted relations described by the organizational chart.  Such relations of authority, deference, and responsibility are sanctioned and overt: they are expressly stated in job descriptions and contracts that define employee obligations to the firm, and are recognized by law.  They are characteristically openly employed by superiors and generally acknowledged and accepted by subordinates.  Informal power relations or "power tactics" by definition, tactics that are not-formally-sanctioned, but used to advance one's aims within the organization: power tactics are apt to be covertly employed and may not be generally acknowledged or even known about by those affected by them.  Consequently – since wherever power is used informally or covertly there is increased potential for abuse – power tactics pose special perils within organizations.  Power tactics frequently result in power struggles between individuals or factions with competing interests or agendas, often to the detriment of the organization.  Some of the most common power tactics include blaming or attacking others; controlling information (gossip is a special case); developing a base of support for one's ideas; image building; ingratiation ("kissing up"); association with the influential ("schmoozing"); forming power coalitions and alliances (perhaps involving tradeoffs); and creating obligations.  All these tactics work either to gaining control over scarce resources desired by others, or by establishing favorable relations.  While “power tactics” by definition serve the purposes of those who employ them and may conflict with overall organizational aims, such tactics needn’t conflict with the overall aims of the organization: for instance, if one faction has a better plan, then it is in the interest of the organization (not just that faction) to adopt it.

Ethical questions about the use of power tactics arise on a number of fronts.  With regard to utility, since society is well-served by efficiently functioning organizations, and organizational function is impaired by factional pursuit of aims in conflict with the best interests of the firm, the use of power tactics in pursuit of such aims would seem to be immoral on utilitarian grounds.  With regard to rights, deceptive and manipulative tactics are generally morally wrong because they violate individuals' rights to have things done to and through them only with their informed consent.  As for justice, power tactics would seem to be wrong when used to bring about an unjust distribution of benefits, or of burdens, on the basis of irrelevant considerations.  Power tactics are also morally suspect when they undermine worker bonds of friendship, respect, and cooperation: gossip, backbiting, and backstabbing do not a caring organization make.

The caring organization approach represents a striking break from the power orientations of both the "rational structure" and the "political" views of the organizations.  Where the "rational structure" model emphasizes formal authority, or command; and the "political" model emphasizes real power relations in competition; the "caring organization" picture allots a far more central place to non-power relations of cooperation such as friendship, respect, and loyalty.  Advocates of this approach say such nonpower relations actually do figure quite largely in the workings of organizations, especially in organizations that work well; and they should, consequently, figure more largely than they do in most present-day business organizations.  Organizations should rely more on cooperation and sharing, and less on compulsion and competition.  Potential competitive benefits which advocates of this approach claim it will produce include increased productivity due to reduced friction in the organization; recruitment advantages due to the more desirable working conditions caring organizations afford; and better customer relations due to the habit of caring carrying over into the organization's relations with its customers.

Self-Test

 The following questions will help you judge your comprehension of the materials covered in Unit 8. Please remember you are responsible for the glossary terms above. You need to check your responses against the key included.

  1.   Which of the following statements contrasting the rational structure, political, and caring organization models are true?
    1. The rational structure model stresses command, the political  competition, and the caring cooperation.
    2. The rational structure model stresses competition, the political command, and the caring cooperation.
    3. The rational structure model stresses competition, the political cooperation, and the caring command.
    4. The rational structure model stresses cooperation, the political competition, and the caring command.
  2. The standard organizational chart
    1. depicts the informal power relations in an organization.
    2. depicts the formal chain of command and division of labor in an organization.
    3. Both the above.
    4. None of the above.
  3. The law of agency
    1. expresses the main duty of employer to employee.
    2. expresses the main duty of employee to employer.
    3. Both the above.
    4. None of the above.
  4. A line foreman who immediately supervises workers would be categorized as belonging to
    1. the operating layer
    2. middle management.
    3. top management. 
    4. None of the above.
  5.   Principle duties of the firm to the employee on the rational structure view, according to Velasquez, include which of the following?
    1. Fair compensation.
    2. Fair working conditions.
    3. Both A and B.
    4. None of the above.
  6. Which of the following statements about informal power tactics is true?
    1. They always apply top down being essentially forms of control that superiors exercise over underlings.
    2. They pose special perils due to their covert nature.
    3. They never serve organizational goals, only the private goals of individuals or factions within the organization. 
    4. All of the above.
  7. Theft
    1. is appropriation of another's property without their consent.
    2. invariably deprives the individual whose property has been appropriated of the use of their property.
    3. seldom occurs in the workplace according to studies Velasquez cites.
    4. All of the above.
  8. Which of the following statements is true?
    1. Those opposed to employee rights emphasize the similarities between political and business authority.
    2. Those opposed to employee rights emphasize the different bases of political and business authority.
    3. Those supporting employee rights emphasize the different bases of political and business authority.
    4. None of the above.
  9. Insider trading
    1. is uncontroversially immoral.
    2. is legal as long as you yourself did not wrongfully obtain the inside information.
    3. is cited by Velasquez as an example of employee abuse of position.
    4. All of the above.
  10. According to Velasquez,
    1. external whistleblowers who have exhausted internal channels first are seldom fired.
    2. external whistleblowers who have exhausted internal channels first are legally protected.
    3. justified occurrences of whistleblowing can be viewed as failures of internal communication and oversight.
    4. All of the above.

Self-Test Key

Question

Answer

Objective

Pages

1

A
1
351

2

B
3
351-2

3

B
4
353

4

A
3
351

5

C
2
361

6

B
7
371-2

7

A
3
356-7

8

B
5
373-4
9
C
4
359-61

10

C
6
380

NOTE:  The questions on the module end examination will be closely based on the self-test you have just taken.  Sometimes the examination will slightly modify the question-part of self-test questions while varying the answers and distracters (A, B, C, D) unchanged.  For example, while keeping the question unchanged, the distracters/answers to item 9 above might be changed to read as follows:

  1. external whistleblowers who have exhausted internal channels first are seldom fired.
  2. external whistleblowers who have exhausted internal channels first are legally protected.
  3. effective internal whistleblowing policies do not permit anonymous complaints and require all complaints to make their way, step by step, up the organizational chain of command.
  4. None of the above.

This makes “None of the above” (D) the correct answer since a distracter (or false answer) has replaced the original correct answer (C).

CONSEQUENT ADVICE:  The self-test questions can be very useful for studying for the module end examination, but only if used in the right way.  As the example above shows, in the absence of background understanding, (from reading the text, and the study materials) it would not have been helpful to have studied for the exam by memorizing that the answer to the one about whistleblowing was “it shows defects in internal organizational communication structures” since that answer no longer appears.  In the absence of background understanding, from reading the text, and the study materials, you would have no way of telling whether (C) above was true or untrue, and hence no way of knowing whether (C) or “None of the above” (D) was correct.  Note, however, that it would have been helpful to remembered (from the self-test item) that it’s false that whistleblowers who attempt internal whistleblowing first are “seldom fired” or “legally protected,” since these distracters reappear, enabling you to eliminate these as possible answers.  The following points are noteworthy in this connection:

In taking the module end examination it is extremely important that you read the examination questions and options carefully: a little word like not or and can make all the difference between a right and a wrong answer, as illustrated by the two version of answer/distracter (B) above.  Pay attention to italicized words and phrases: italics are for emphasis and often provide clues to the questions being asked and the answers being sought.