Course Syllabus | LH's Virtual Office | Chapter 8 Outline

Business Ethics: Concepts & Cases: Chapter 8 Objectives and Overview
The Individual in the Organization

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; the political model with its emphasis on real power relations, including informal ways in which power is exercised; and the caring organization model which emphasizes nonpower relations of cooperation, friendship, and respect.
  2. Identify the principal moral concerns that are addressed on the rational structure and political models: duties of the employee to the firm and of the firm to the employee, on the rational structure model; employee rights and organizational politics, on the political model.
  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 one's position (as by insider trading).
  5. Understand the principal duties of the firm on the contract view pertaining to compensation and working conditions; also, the moral issues relating to fairness of compensation, safe working conditions, and job satisfaction.
  6. 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.
  7. 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, and due process rights, rights relating to plant closings, and rights to organize unions.
  8. 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.

Overview

Individuals in business organizations are frequently unhappy campers: workers experience alienation and feelings of oppression; middle managers face estrangement from former comrades and conflicts due to being caught in the middle between upper management and workers; individuals in upper management bear heavy burdens of responsibility, aggravated by cut-throat competition for authority and advancement, and encroachments of business responsibilities on their private personal lives.  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, by its emphasis on formal relations of authority and division of labor, highlights issues regarding the duties of employee to firm and firm to employee.  The political model with its focus on competing coalitions and informal exercises of power, highlights issues regarding abuses of power and the rights of employees.  The caring organization model, with its focus on nonpower relations (such as cooperation, friendship, and respect), 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: 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; middle management, directing the operating layers and being directed in turn by top management; and 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" (or specified) as commands, eventuating in commands directly 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 organizations 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.  Law of Agency provisions that "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 for the benefit of "persons whose interests conflict with those of the principal in matters in which the agent is employed" specify this main duty.  Ways in which employees may fail to discharge their main duty include acting on conflicting interests; theft; and abuse of privileges of one's 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 the employee has a private interest: if an 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 immoral potential if not actual conflicts are acceptance of commercial bribes and extortion. Commercial bribe 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, 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

  1. the value of the gift: the more valuable the gift the more its acceptance becomes morally questionable;
  2. the purpose of the gift: the greater the giver's expectation of gaining favorable treatment the worse the acceptance;
  3. the circumstances of the gift, especially the openness with which it was given: the more openly, the better;
  4. the position of the recipient: the greater recipient's ability to advance the giver's interests, the more acceptance of the gift is morally questionable;
  5. accepted business practice in this connection: the more generally such gift-giving is practiced the less questionable acceptance of the gift;
  6. company policies regarding acceptance of such gifts: if acceptance is contrary to company policy it is morally unacceptable;
  7. relevant laws: where acceptance of such gifts is banned by law, it is morally unacceptable.
Theft -- the appropriation of one's employer's assets without their consent -- includes "white collar crime" such as embezzlement, forgery, and 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, and notwithstanding the fact that the unauthorized "taking" did not deprive the employer of what they possessed, since such unauthorized appropriation of computer data and programs deprives the employer of their ownership rights to exclusive use, to decide whether and how others may use, and to sell or trade or give away, their intangible property. Trade secrets are "proprietary information":  nonpublic information about company activities, plans, policies, records, or technologies developed or purchased by the company for its private use which the company indicates by security measures, explicit directives, or contractual agreements, that it does not wish others outside the company to have.  To divulge trade secrets, consequently, is to act contrary to the goals of the firm. Skills acquired through working for the firm, 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 pay offs 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 their 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 companies 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 in this regard, 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 the following:

  1. going pay rates in the industry and the area, since labor markets provide rough indicators of what's fair (or just) if we assume that competitive labor market prices (determined by supply and demand) are just;
  2. the firms capabilities, since the more successful the firm, the more generously it can afford to pay its workers;
  3. the nature of the job, with higher compensation being warranted for jobs involving greater risks or burdens, less job security, or more required training or experience or effort;
  4. minimum wage laws, which set limits below which wages are deemed unlawful and unfair;
  5. relation to other salaries being paid to workers doing roughly similar work within the organization,
  6. the fairness of the wage negotiations, which relates to how freely and knowingly the parties entered the contract.
Issues regarding the fairness of working conditions arise concerning health and safety, and job satisfaction.  Statistics show that workplace injuries are frequent and often serious, amounting to approximately 3,000,000 serious and 5,000 fatal on the job accidents a year.  The Occupational Safety and Health Administration (OSHA) created by congress in 1970 has the avowed aim of assuring "for every working man and woman in the nation safe and healthful working conditions"; and while it has undeniably produced some good results, its efforts are hampered by inadequate numbers of field inspectors, and inefficient regulation.  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 for such compensation.  Morally problematic cases arise when workers incur risks unknowingly because they lack the time or expertise to ascertain the hazards of a job they accept; where risks are simply 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 not without due compensation.  Specific guidelines pursuant to this general guideline are three:
  1. wages should reflect the risk-premium prevalent for taking similar risks in competitive labor markets;
  2. workers should be provided health insurance benefits suitable to protect against the known hazards;
  3. health risks accompanying each job should be thoroughly researched, and all information discovered made readily available to workers.
Job satisfaction issues arise, most especially, due to job specialization inherent in the chain of command and division of labor: vertical specialization restricts the workers 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.  The onerousness of job specialization was noted even by Adam Smith.  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.  Determinants of job satisfaction (according to Hackman, Oldham, Jansen, & Purdy) include
  1. experienced meaningfulness of the work by the workers according to some system of values they accept;
  2. experienced responsibility by the workers for the outcomes of their efforts;
  3. knowledge of results enabling workers to regularly determine whether the outcomes of their efforts were satisfactory.
Work teams are one proposed remedy for dissatisfactions arising from fractionated work by increasing the range of workers horizontal authority, e.g., in scheduling assignments, breaks, and inspections; and by increasing 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 -- not just official -- power and authority relations.  In contrast with the rational structure model, which views such relations are relatively static (as portrayed by the organizational chart), 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 on the rational structure model) 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 (to take) without having to modify their own in undesired ways (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 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 of employees acquire and exercise over one another.

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

  1. a centralized body of decision-making officials (top management in the case of corporations);
  2. having the power and recognized authority to enforce their decisions on subordinates;
  3. making decisions determining the distribution of benefits (e.g., compensation) and burdens (e.g., tasks);
  4. and having a monopoly on such power.
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 protecting citizen's from government; and, 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.

One right, it is claimed, that employees are specifically owed is the right to privacy.  This right, broadly speaking, to be left alone, is more narrowly at issue in the workplace under the guise of rights not to have employers pry into your private life, and the related right to determine the type and extent of information about yourself you disclose to your employer.  Practices, policies, and technologies which threaten employee privacy include employer monitoring of computer use and computer and telephone communications; polygraph testing (which may be legally used in some circumstances in most industries, and more widely in "exempt industries"); computerized databanks enabling companies to obtain personal information -- even including supposedly "confidential 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.  In discussing such issues two types are privacy may be distinguished: psychological privacy, the right to keep your thoughts to yourself; and physical privacy, the right not to be physically surveiled, which is partly valued for its own sake, and partly for the protection of psychological privacy it avails.  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 which provides the basis for trust and intimacy; 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: in these connections three considerations should guide employees in collecting information about employees:

  1. the relevance of the information to the purposes claimed to license the employer to obtain it;
  2. the consent of the employee to the gathering of such information;
  3. the method by which the information is obtained -- whether it is ordinary and reasonable or extraordinary and unreasonable.
With respect to relevance, inquiry into matters unconnected with job performance may be held to be wrongful invasion of privacy: potentially damaging information unconnected with job performance, if discovered, should be destroyed, not kept, and certainly not revealed or "leaked".  In general, in this connection, less scrutiny of lower-level employees is warranted than of top-level managers who are called on to represent the company to others.  With regard to consent, employees should be given the opportunity to consent or refuse to consent to 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 ordinary 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 measure may be warranted, providing
  1. the firm has a problem that seems solvable by no other means;
  2. the problem is serious and the firm has good reason to think the extraordinary surveillance methods will solve it;
  3. the use of the extraordinary means is not continued beyond the time needed to solve the problem or the time at which it becomes apparent that the use of these means will not solve the problem;
  4. all immaterial information obtained is discarded and destroyed;
  5. failure rates of extraordinary devices (e.g., polygraphs, personality inventories, and drug tests) are taken into account and "information" from such fallible sources is verified by more reliable means.
Freedom of conscience issues arise in the workplace, most especially, when -- in the course of doing their job -- employees discover that the firm is doing something they think is wrong or injurious to society.  Commonly insiders are the first to become aware of such matters as defective products, polluting practices, and unsafe working conditions; but their options are limited.  Bringing the matter to the attention of supervisors may be ineffective or even precluded due to supervisors not wanting to know, or already knowing and not wanting to do anything about the problem.  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: in many cases 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 deemed 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 an egregious violation of the employee's contractual obligation to be loyal to their employers and to keep inside information confidential and, consequently, 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 is morally entitled or morally required to prevent; or if necessary to bring about a good one is morally entitled or morally required to bring about; subject, however, to the following provisions:
  1. there is clear, substantiated, and reasonably comprehensive evidence of harmful activity or wrongdoing on the part of the firm;
  2. reasonable attempts to stop the activity by internal whistleblowing have failed;
  3. it is reasonable certain that the external whistleblowing will stop the activity;
  4. the wrong or harm the whistleblowing will prevent outweighs the harm it the whistleblowing will cause to others parties such as stockholders, superiors, and fellow employees.
Justified occurrences of external whistleblowing can be seen as indications of failure of an organizations internal communications and oversight systems.  Companies should have clear policies and procedures enabling employees to voice their moral concerns outside the standard chain of command, e.g., through an "ethics hotline" or a company "ethics officer"; enabling employees to voice concerns anonymously, if they choose, and which result in employee concerns being taken seriously.  Without such policies and procedures in place, concerned employees are often left with just two options: quitting and external whistleblowing.

The right to participate in workplace decision making -- to a more democratic workplace -- is a more controversial right sometimes claimed for employees.  Democracies characteristically feature majority rule and freedom of discussion; features characteristically lacking in business organizations wherein a single individual or small group rule, not by consent of the governed (employees), but by right of ownership or appointment by ownership.  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
    1. through consultation
    2. through decision-making.
Such organizational democratization proposals are generally unpopular with management, who cite lack of employee enthusiasm, and who make ideological appeals to the different bases of governmental and managerical authority against it.  Since governmental authority is based on the the consent of the governed, they grant, it should be democratic; but business authority, being based on property ownership rights, may be -- and should be, they assert -- more authoritarian.  On the other side, advocates of workplace democratization 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 leadershipmanagement 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" (p. 461).  This principle is held to follow as one of the prerogatives of property ownership, from which employers' authority derives.  Objectors to this principle argue that it is based on the false assumption that employees "freely" accept employment and are "free" to find employment elsewhere: in reality, critics urge, heavy costs to workers in job searches and in going unpaid while doing so, seriously impair their freedom.  Secondly, objectors appeal to considerations of reciprocity to 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, and workers consequently have a quasicontractual right to fair treatment based on this implicit reciprocity.  Thirdly, it is said, that 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 -- such as those outlined in Trotta & Guddenberg's suggested five elements of an effective grievance procedure -- find application.  According to Trotta & Guddenberg an effective grievance procedure incorporates the following:

  1. three to five steps of appeal depending on organization size;
  2. a written account of grievances past the first level;
  3. alternate routes of appeal enabling employees to bypass their immediate supervisors if necessary;
  4. a time limit at each step of the appeal to assure prompt consideration;
  5. a right of employees to be accompanied by (1-2) coworkers at each interview or hearing.
Employee rights with regard to plant closings are another controversial area.  While such closings are sometimes unavoidable in a market economy, they can seriously negatively impact employees and communities in ways that occasion 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, considerations of utility supporting the claim that harm should be borne by the party who will suffer least, together with the fact that corporations or owners usually have greater resources than workers, seem to entail that corporations should bear many of the costs of plant closure.  Finally, considerations of justice suggest that workers and communities that have made substantial contributions to the business should, in all fairness, be assured that  companies will not abandon them by abruptly and unexpectedly terminating health and retirement plans and corporate contributions to the local economy.  The following ethical recommendations regarding plant closure have been proposed (by William Diehl) as fair and reasonable:
  1. 12-18 months advance notice;
  2. severance pay = 1 week's pay per year of service;
  3. health benefits to extend at least one year beyond the employee's date of dismissal;
  4. early retirement benefits providing full benefits to workers within three years of their normal date of retirement at the time of dismissal;
  5. transfer opportunities at no loss of pay and with moving expenses paid by the employer;
  6. company sponsored job retraining and counseling;
  7. an employee purchase opportunity offering the workers and community the chance to assume ownership and operation of the plant under an employee stock ownership plan;
  8. phasing out of local tax payments over a five year period.
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 (e.g., in better pay working conditions).  Furthermore, 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 the right them all, collectively, to strike; at least, so long as this violates no prior agreements (e.g., nonstrike clauses previously agreed to), nor the rights of other citizens (e.g., to police and fire protection).  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, and lobbying for laws impeding unions), and some illegal (interference with would-be external organizers and reprisals against employee-organizers).  Consequences associated with the decline of labor unions include increasing reliance on governmental means -- whether legislative, regulative, and litigative -- to provide protections formerly afforded by unionization.

Employee rights such as those just considered 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: essentially such relations are expressly stated in job descriptions and contracts that define employee obligations to the firm, and are recognized by law; additionally, they are characteristically openly employed by superiors and generally acknowledged and accepted by subordinates.  Informal power relations or "power tactics" by definition, are not-formally-sanctioned tactics used to advance one's aims within the organization.  Additionally, power tactics are apt to be 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 the following:

  1. blaming or attacking others;
  2. controlling information (gossip is a special case of this);
  3. developing a base of support for one's ideas;
  4. image building;
  5. ingratiation ("kissing up");
  6. association with the influential ("schmoozing");
  7. forming power coalitions and alliances (perhaps involving tradeoffs);
  8. creating obligations.
All these tactics work either to gaining control over scarce resources desired by others, or by establishing favorable relations.

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 employee and factional pursuit of individual or group 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 like career advancement and credit for initiatives, or of burdens such as blame for failed projects, on the basis of irrelevant considerations.  Finally, with respect to care, power tactics are 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 relations, and the "political" model emphasizes real power relations, the "caring organization" picture allots a far more central place to non-power relations such as friendship, respect, and cooperation, in the working 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, consequently, figure more largely than they do in most present-day 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.


Course Syllabus | LH's Virtual Office | Chapter 8 Outline