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The Impact of Banality, Risky Shift and Escalating Commitment on Ethical Decision Making

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Abstract

This paper posits that organizational variables are the factors that lead to the moral decline of companies like Enron and Worldcom. The individuals involved created environments within the organizations that precipitated a spiral of unethical decision-making. It is proposed that at the executive level, it is the organizational factors associated with “power” and decision-making that have the critical influence on moral and ethical behavior. The study has used variables that were deemed to be surrogate measures of the ethical violations (OSHA and EPA violations), the risky shift phenomenon (executive team size), banality of wrong-doing (reputation score for firms) and escalating commitment (tenure with the firm/change in revenue for declining firms). The research found that there were small correlations between ethical violations and the three organizational variables.

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Authors and Affiliations

  1. College of Business, Department of Marketing, University of North Alabama, Florence, Alabama, 35632, U.S.A

    Robert W. Armstrong

  2. Department of Management, Langdale College of Business, Valdosta State University, Valdosta, Georgia, 31698, U.S.A

    Robert J. Williams

  3. College of Business, Department of Economics and Finance, University of North Alabama, Florence, Alabama, 35632, U.S.A

    J. Douglas Barrett

Authors
  1. Robert W. Armstrong
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  2. Robert J. Williams
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  3. J. Douglas Barrett
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Armstrong, R.W., Williams, R.J. & Barrett, J.D. The Impact of Banality, Risky Shift and Escalating Commitment on Ethical Decision Making. J Bus Ethics 53, 365–370 (2004). https://doi.org/10.1023/B:BUSI.0000043491.10007.9a

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  • DOI: https://doi.org/10.1023/B:BUSI.0000043491.10007.9a

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