Nada Korac-Kakabadse

Cranfield School of Management

Alexander Kouzmin

University of Western Sydney-Nepean

Phillip Reeves Knyght

University of Canberra, Australia


Andrew Korac-Kakabadse

Cranfield School of Management




This paper explores the troublesome and in-escapable fundamental question posed by Socrates: "What ought one do?" in the context of public policy management of change and innovation from an ethical perspective within the emerging "realities" of socio-economic life. The opportunities posed by advances in information technology (IT), thechangingdemandsof the public for improved service delivery and the convergencebetween thecharacteristicsofpublicandprivate sector organizationsand employment create an ethical dilemma for many public sector actors bound by public policies laden with the legacy values andsocio-economicmoralityofthe second millennium (a sense of public duty;loyalty;probity;neutrality;universalism).


The proliferation of "soft-core"crises (crises that do not result in catastrophic, destructive orlife-threateningchangesto the victim's environment); the continuous re-drawing of the boundaries of what constitutes "the public service"; theincreasing demand for "gifted" actors who are confident in their own abilities and are prepared to call ethical judgements dis-passionately against personal interest, even in the absence of an external threat; the "new professionalism"; as well as the need to deliver technological benefits within a framework of social justice, have created a trend towards the codificationofethicalconductwithinboth national and international bodiesofpublic and private sector organizations. Contemporary ethical incidents of public sector praxis and policy design are used to illustrate current dilemmas. It is argued that the achievement of ethical conduct within the new morality of economic liferemainsadifficultproblemforthepublic sector and cannot be overcome by the mere codification of ethical behaviour.




The troublesome, and impossible to escape, question posed by Socrates "Whatoughtonedo?"(Plato, 1984)projectsthe same multitudeofethical dilemmas onto decision makers of today as it may have doneto philosophers in ancient times.For Socrates, the force of his originalquestionliesinthe fact that it demands some sort of account from actors as to why they choose one "good" over another. In fact, at its deeper level, Socrates' question requires actors to articulate some sort of founding vision of what they consider to be "good".


Socrates,Plato, Aristotle and Kant promoted a virtue-based approach which emphasizedthewill,intentionsandcharacterofthe individual. The virtuous actor behaves according to inner conviction and strength, irrespective of the consequences of the action and its impact on any relationship - whether it be based on kinship, professional or friendship ties.This focus on the individual as thepillar of ethics has the advantage that the onus is clearly allocated; but it has the disadvantage of being rigid and presuming, wrongly, that all that is needed to achieve an ethicalsocietyis for its members to act according to subjective notions of virtue.

Ethics is a philosophical term.Germane to effective leadership in organization is the philosophical definition of ethics as derived from the Greek wordethos, meaning character orcustom.It connotes an organizational code conveying moral integrity and consistent values in service to the public. More formally defined, ethical behaviourrepresents thatwhichismorally accepted as "good" and "right" as opposed to "bad" and"wrong"ina particular context (Simms, 1992: 506). The challenge of whatconstitutesethicalbehaviour lies in a "grey zone", where clear-cut right versus wrong and good versus bad dichotomies may not always exist. Ethics is concernednot only with distinguishing between the dichotomies but,also, with the commitment to do what is right or what is good. As such, theconceptofethics is inextricably linked to that of values; enduring beliefs that influence the choices actors make from the available means and ends.While some values (wealth, success) have relatively little direct connection with ethics, others (fairness, honesty) are, in essence, concerned with what is right or good and can be described as ethical values (Kernaghan and Langford, 1990).†† The critical link between ethics and valuesisthatethicalstandardsandprinciples can be applied to the resolution of value conflicts or dilemmas.


Duty Versus End-Point Ethics


Notwithstandingthata numberofethicaltheories have been developed (utilitarianism; justice; rights; cultural relativism), much of contemporary work on ethics is built on two major philosophical perspectives - theology and deontology (Cavanagh, Moberg and Velasquez, 1981; Tsalikis and Fritzsche, 1989). These two philosophieshavebeenpivotalinthe development of numerous theories emanating from these perspectives; leading to other theories aimed at their synthesis - all of which can give rise to moralities (so understood).


The teleological philosophy has its origins in ancient Greece and centres on the final causes of human action (Fulton, 1967). The teleological philosophy of ethics links the moral worth of human actions with their consequences, thus giving rise to consequential or teleological theories (utilitarianism, egoism)(Pettit,1993).†† Hence, behaviour itself has no moral status: moral worth attaches with the consequences.Conversely, the deontological philosophy maintains that the concept of duty islogicallyindependent of the concept of goodand that actions are not justified by the consequences of the actors; insisting on the importance of motivesandcharacteroftheactorratherthan the consequences actuallyproduced by the actor - sparking the non-consequential theories of ethics (Bauchamp and Bowie, 1983).


The Teleological Perspective and Consequential Theories


††††††††††† Thetwo most influential consequential theories to date have been born out of the very nature of the teleological perspective: whether the consequences focus on the outcome of the individual or collective behaviour - egoism and utilitarianism. Egoism focuses on the individual's long-term interests (Reidenbach and Robin, 1990). Philosophers supportingegoism contend that acting against one's own interest is actually contrary to reason. Egoism, as a means to the common good, a view shared by Adam Smith (1976), maintains that under some conditions the best way of promoting the common good is to promoteindividual good and well being. Rational egoism centres around the idea that it is always rational and always right to aim at one's own greater good.Ethicalegoism,derivedfromacceptingthe premise that what is ethicalmustberational,and that since acting out of self interest is rationaland, therefore,alsoethical,holds that conventional morality is tingedwithirrationalsentimentsandindefensibleconstraints on the individual(Beauchmap and Bowie, 1983). Hobbes (1962) implied this to both rational and ethical rationalism. Egoism has no way of solving conflicts of egoisticinterests and,thus,doesnotsatisfythegoalsof ethical philosophy; the development and maintenance conditions that allow actors in asocietyto pursue a stable and happy life (Reidenbuch and Robin, 1990). Ethicalegoism is criticized on the basis that it ignores what most actors would agree are blatant wrongs (Reidenbach and Robin, 1990).


††††††††††† Utilitarianism, like egoism, is teleological in structure with the main difference between the two schools of thought being the subject of the decision.Utilitarianism focuses on a society's long-term interests and is concerned with the consequences of corporate decisions to society at large, in†† economic†† ornon-economicterms,thatmaybeapplicabletoany stockholdersand measured by net costs and benefits (Boal and Perry, 1985; Frederick, Davis and Post, 1988). It is rooted in the thesis that an action is right ifitleads to the greatest good for the greatest number or to the least possible balance of bad consequences (Beauchamp and Bowie, 1983); its telos (purpose or objective) is popularly characterized as the greatest good for thegreatestnumber(Shawand Post, 1993). Utilitarian theory proposes thattheactorshould evaluate all outcomes of an action or inaction and weighit†† againstanother to determine what is best for society in terms of its social consequences (Reidenbach and Robin, 1990).


††††††††††† Initspurestform, the utilitarian standpoint would argue that the actor should calculate the amount of both good and wrong in an action and reach a conclusiononwhether to carry it out. Utilitarianism is further branched intoactandrulemodels.Act utilitarianism deals with each and everyactionapersontakes(no act is wrong initself); Rule utilitarianismdealswiththematter of consistency in the way an actor acts in differentsituations(rulesforwhattodoregardlessof situation).Act utilitarianism holds that in every situation one ought to acttomaximize the total good, even if this means rules are violated. On thecontrary,ruleutilitarianistsdevelop rules they believe are in the public'sinterest (Wiley,1995).Theutilitarianstandpointismost famouslyassociatedwithJeremyBentham (1789)andJohn Stewart Mill (1969),whoarguedthatbusinesses operating in their own self interest would produce the greatest economic good for societythrough an invisible hand metaphor. Fascination with this theory is prominent amongst economic rationalists (Kouzmin, Leivesley and Korac-Kakabadse, 1997) and those interested in cost/benefit analysis - both dogmas rapidly having been accepted by business.


††††††††††† Act utilitarianism focuses on how right anact is in terms of it producing thegreatestratio of good to evil for all concerned; Rule utilitarianism advocates that the actor should try to formulate a set of rules for ethical conductand that those rules should be evaluated according to the ratio of goodversusevil which is produced for all concerned, whether the rule is obeyed or disobeyed. This teleological doctrine differs according to how the conception of good is specified (Neitzsche, 1976; Aristotle, 1982). If good istakenastherealization of human excellence in the various forms of culture,itisperceivedasperfectionism(Rawls,1971). If a good is definedaspleasure,itisperceivedashedonism;ifas happiness, eudaimonism,andsoon;or,inutilitarianterms, the satisfaction of (rational) desire (Rawls, 1971: 25).


††††††††††† Many of the criticisms levelled at utilitarianism comes from deontologists, whoseprimary argument is that some actions are inherently wrong and could neverbejustifiedasameanstohappiness or a good, maximizing end. Utilitarianism has difficulties dealing with the choicebetween actions or ruleswhichprovidemuch good for a few actors or little good for many actors (Abelson and Nielson, 1967). The weakness lies in determining how oneever knows what is, in fact, the greatest good for the greatest number (Hansen,1992);hence,it ignores actions that are wrong in themselves as longas the end justifies the means (Tsalikis and Fritzsche, 1989; Hansen, 1992).Thus, although equality is a key component of utilitarian calculus, the†† focusisontheconsequence or ends - labelled end-point-ethics; ofteninignoranceofthemeans by which these ends were achieved.It couldbeargued that utilitarianism's pre-occupation with maximizing good isoverly focusedwithefficiencyandisindifferent to distribution considerationsinvolvingmeritand need; in some instances favouring the adoptionofactionswhichviolatetheactor'sbasic sense of justice (Abelson and Nielson, 1967).


The Deontological Perspective and Non-Consequential Theories


††††††††††† Fromadeontologicalperspectivethereis no need to justify duties by showingthattheyareproductiveofgood;thephilosophy focuses on universalstatementsof right and wrong. However, where exceptions exist, philosophershavesuggestedthatprimafacieuniversals†† allow these exceptionsincertainsituations(Robin et al, 1989). The principle is alwaysto act so that everyone, faced with the same situation, should take thesameactions.Fromthedeontological (or duty-bound) philosophical perspective,themoralsystemofthinkingisbasedon the view that particulartypesofaction and/or behaviour are intrinsically ethical or unethical,withinrights and justice principles (Robin and Reidenbach, 1987).†† Forexample,cheatingisalwaysdishonestand,hence,always unethical; the behaviour or action being wrong is not mitigated by how good eitherthemotivebehinditortheconsequences flowing from it are.Deontological assertionsarenotfound in observable phenomena but in a priori laws andreasons (Kant, 1909), "divine law" (St. Augustine and St. Thomas Aquinas, quoted in Nitsch, 1990) and "intuition" (Scheler, 1963). Kant (1909) was the first to develop an unambiguous formulation of a deontological theory of ethics (Olson, 1967a; 1967b). He considered that bothcontextualparameters(Kant'sexternalworld) and human behaviour (Kant'sinternalnature)have to be formed, organized and dominated by rationality (Kantian understanding andreason)as well as rationality-guided volition in order to make them safe (Kant, 1909). The Kantian(1901;1909)categoricalimperative, or the "formalism of moral rights", is theleading example of deontological ethics with an universal approach; where "reason", in Platonic and Kantian traditions, is interlocked withthe notions of truth as correspondence, of knowledge as the discovery of essence and of morality as obedience to principle.


††††††††††† Deontological (non-consequential: duty, justice, Kantian theory) ethics have been criticized for being overly reliant on over-riding moral principles dictated by reason(Abelsonand Nielson, 1967); hence its weakness in explaining away exceptions to universal truths (Tsalikis and Fritzsche,1989).CriticismofKant'stheory (1901; 1909)froma consequentialist perspectivecontendsthat if consequences are dis-regarded, the actor ends up with a blind acceptance of duty regardless of any consequence.Problems inthebusiness arena may centre around conflicting duties and loyalties, as well as the dis-obedience of dutyto overt. unpleasant consequences (whistle†† blowingbeinganexample)(Dancy, 1994; Pence, 1994). Accordingly,the "fundamental moral rule" (Kant, 1909)has a limited capacityfor dealingwith clashes of duties and rights; providing little assistance in situations where the fundamental rules are in conflict or the rights of two different groups, or actors, cannot both be met by any of the actions or rules which might apply.The rights may both be legitimate accordingto deontological ethics.However,the ethics do notaid conflict resolution between them - incising the right of some actors,through the Freedom of Information Act, to have access to information held by government agencies may decrease the rights to privacy of other actors, groups and corporations.


††††††††††† Notwithstanding that ancient and modern approaches to ethics aspire, at least indirectly, towards justice in society, where "justice" is a cover-all term to describe the end-state of those other attempts to perform good, the justice perspective first gained recognition during the social movements of the1960s. The justice perspective has been developed from the writings of Aristotle (1982: 257), who held that "just" means is 'that which is lawful and thatwhichisequal and fair and unjust means that which is illegal andthatwhichisunequalor unfair'. Hence, an actor has been treated justlywhentheactor has been given what is due or owed, what the actor deserves or can legitimately claim (Aristotle, 1982). What is deserved may, however,beeither a benefit or a burden (Beauchamp and Bowie, 1983: 40). Justice in the contemporarycontextisconcernedwiththefair distributionofbenefits (and handicaps) within society; characterized by aneconomicfocusintermsofinteraction (context and relationship). Justiceis embedded into the social landscape; "embeddedness" referring to the fact thateconomicactionand outcome, like all social actions and outcomes,areeffected by the actors' dyadic (pair-wide) relations, by thestructure of the overall network of relationsas well as the context and relationship of the interactions.


††††††††††† Justice components (distributive and procedural) are based on the principle ofequitable distributivemeans;socialbenefits and burdens should be borneby different groups, where the basis of equity may be needs, rights, efforts, contributions, merit or the equal distribution of efforts (to each actoranequal share; to each actor according to individual need; to each actoraccordingtothatactorsrights;toeachactoraccordingto individual effort; to each actor according to societal contribution; and to each actor according to merit) (Beauchamp and Bowie, 1983; Frederick, Davis and Post, 1988; Hansen, 1992). Where the rights principle calls for the prevention of harmorprotectingthe rights of others affected by actions (individual, group,business),proceduraljusticedepends upon the outcomes that may takethreedistinctforms: pure, perfect and imperfect (Reidenbach and Robin, 1990; Hansen, 1992).


††††††††††† Themaincriticismof justice ethics has been byutilitarianists, for overlyfocusingontherightsofthe actor, where the basic needs and rights of actors, as individuals, are more important than the maximization of overallgood(AbelsonandNielson,1967).Righttheoryrests on the assumptionthateveryperson has basic rights in a moral universe. These rightsincludethe right to free consent, the right of privacy, the right of freedom of conscience, the right of freedom of speech and the right to dueprocess (Wiley, 1995). In addition to individual rights, rights can be grantedto certain entities; the state has the right to enforce the law if someonebreaksit. Thus,although rights imply the actor has power all the time, this power can be taken away when bad choices are made (Wiley, 1995).


Theoretical Synthesis: Theories of Multiple Rule Non-Consequentailism


††††††††††† Bothteleological and deontological perspectives and, thus, consequential and non-consequential†† theories†† have†† been†† equallyaccusedof"ethical absolutism":thebeliefthat there is one true ethical code or guide for behaviour(TsalikisandFritzsche,1989), leading to the emergence of a hybrid of the two former perspectives attempting to achieve a theoretical synthesis(Ross'prima facie duties, Rawls'smaximumprinciple of justice, Garrett's principle of proportionality, ethical relativism). Garrett (1966), for example, tries to synthesize consequentialism and non-consequentialism. Heproposestheprincipleofproportionality,postulatingthat moral decisions have three elements: intention, means and ends.


††††††††††† In a similar manner, Ross (1930) attempts to join aspects of utilitarianism and Kantianism in his theory of prima facieduties.Ross (1930) contended that there are duties and obligations (fidelity;gratitude;justice;†† beneficence;†† self†† improvement;and non-injury) which bind actors morally and in making an ethical decision an actor shouldweighupallthedutiesinvolvedandtheiroptions - determining from there which duty is most obligatory or prima facie.


††††††††††† Rawls's(1971)justice-basedtheoryof ethics attempts to use a classic "multi-method" approach†† to ethicaltheory:usingthestrengthsof consequentialistandnon-consequentialistphilosophies whilst avoiding their weaknesses. Rawlsian (1971) social justice (Rawlsian utilitarianism) isbasedon the view that actions which produce the greatest good for the greatestnumberareethicaland are so because the objective measure of goodis more reliable than other approaches, as it is based on realism to ensure an ethical society. He proposes two principles: the equal liberty (impartial and equitable administration of rules which defines a practice) and thejusticeprinciple.ForRawls(1971), a just society is one in which inequalitiescan be justified. Rawls (1971) specified under what conditions the equal liberty principle can be violated.



††††††††††† Ethical relativism maintains that decisions concerning what is ethical are afunctionofaculture or individual and, therefore, no universal rules existthatapply to everyone (Reidenbach and Robin, 1990). The relativist perspectivehasitsrootsinthegreatthinkersofancient Greece; Protagorasinthefifthcentury BC held that moral principles cannot be showntobevalidforeveryoneandthatpeopleought to follow the conventionsoftheirown grouping. Cultural relativism posits that moral standardscannotbeuniversallyvalid,because of value differences in culture. Hence,moralnormsare culture-specific, where each culture and societyhasitsownnorms -moralityisa matter of conforming to the standardsandrules acceptable in one's own culture(Brandt, 1959; 1983; Hansen,1992). Moral views are simply based on how an actor feels or how a cultureaccommodatesthe desires of its actors, not on some deeper set of objectivelyjustifiableprinciples(BeauchampandBowie, 1983). From a relativistperspective,amoralstandard is simply a historical product sanctionedbycustom (Beauchamp and Bowie, 1983; Hansen, 1992). Hence, an actor'sinitial position is bound to be the dialectical situation in which theactorexperiencesin the temporal period in which the actor resides - theproblems oftheactorreflect the truths and virtues the community generally accepts, excluding societal deviants (Dewey, 1930).


††††††††††† Extreme relativism (Robin, 1980) asserts that since there are two sides to everymoraldilemma,and since every individual is entitled to their own systemofvalues,neithersideismorecorrectthanthe othere. The relativistweaknessistheassumption that, deep down, there is no real differencebetweenmoralbeliefs;that if analysis probes deeply enough into the decision-making processes, one would reach a point where the basic rationales were the same; not satisfying ethical philosophy (Reidenbach and Robin, 1990).


Ethical Moralities


††††††††††† Themoralities(and they are varied) are contextually constructed through thehistoryofthe social landscape. There are a multitude ofcontexts: Christian; Jewish, Islamic;Buddhist;Hindi; Confucian and so on. Each milieuhassomethingdistinctiveto convey, although they may all share certainthings in common. The similarity between ultimate moral principles orKantiancategoricalimperatives (Kant, 1909); between the Confucian ruleofreciprocity - do unto others as they should do unto you; and the Jewish "golden rule"-'what is hateful to you do not do to your neighbour,' areobvious and significant. In a sense, contemporary deontological ethics arecentredon reason and the individual, being a re-statement or "ghost" (MacIntyre,1981)ofthe traditional Judeo-Christian morality founded on the divinely-revealed commandments.However, some common components may alsohavedifferentvaluesattachedtothem; although many culturally differentmilieushavecommonmeaningoftime (for example, mornings, midday, evening,night),theyoftenview time differently. Most western cultures haveapre-occupation with time- to be late for an appointment is regarded asrude,thusunethical.Settinga deadline is quite acceptable and is indicativeoftheurgency of the activity or its relative importance and, thus,consideredethicalbehaviour.However,timetakesondifferent meaningsinotherpartsoftheworld.In many parts of Africa or the Pacific Islands, time is viewed as flexible, not rigid or segmented; people and friendship come ahead of time. If an individual is pressed for time and hurries throughout a meeting, agenda or negotiation, they will generally be suspected of cheating and, thus, unethical behaviour (Hawkins, 1983: 50-51).


††††††††††† Anactor'smorality(moralpersonality) is mediated by their own motive forcethroughduty and obligation (Kant, 1909).Consequently,motives undermine morality, teaching individuals 'to make a better calculation' and in this calculation remain indifferent to the separation of virtue from vice (Kant, 1909: 15:61).Thesocialprocess(organizational decisions) both†† socially†† structuresand conditions the internal psychological processes of individualactorsand,as such, the actor's decisions.However, withinWesternutilitarianism(maximization of self-interest through economic deriving and success) and expressive individualism,or egoism(realizationofindividualitythrougheach person'suniquecoreof feeling, intuition and experience),the actor's choiceis influenced by motivation which is dualistic in origin: empirical (sensibility)andapriori†† (super-sensible) - both sources of feelings(thesubjectiveelementsof an idea) (Kant, 1909: 16; 266). The empiricalprecedestheapriori†† inconsciousness,however,both are concurrentlypresent in the subjectivity of the consciousness when seeking principles of volition to govern the choice of acts.


††††††††††† Thus,whetheranorganizationhas a moral status, an existence or, even, a moralintentindependentofitsmembers,isdebatable(Bower, 1974; Goodpasterand Matthews, 1982; Velasquez, 1983; French, 1984; Ewin, 1991). Ethics,likeculture,maynotbesomethingthat organizations posses (Sinclair,1993), but create and enact. Accordingly, ethics may not be the soleexpressionof an organization's moral personality (Ewin, 1991) but may be alsoareflectionofthe principles of right and wrong which govern actors'interactionswithintheorganizationwhen engaged in organizationalactivities.Inevitably,theseprinciplesareformedby long-standing influences on actors which†† extendfarbeyondthe organizational realm, though it can be argued that some organizations shape the ethics exhibited by organizational members (Sinclair, 1993).


Development of Business Ethics


††††††††††† Societiesareaproductoftheirpast (Dewey, 1930; Cavanagh, 1976; Beauchamp and Bowie, 1983; Hansen, 1992) and 'no matter how rapidly society changes,currentattitudeshave their roots in history' (Cavanagh, 1976: 28).Themoralethosofasocialactor emerges out of the "formative context"(Unger,1987;Korac-KakabadseandKouzmin,1997a),wherethe boundariesof ethical conduct are not static, but contextually defined and varyovertime.It is an ethos most notableforitslack of fixedness - in the wealth of practical affairs in thebusinessworld, 'morality does not emerge from some set of internally heldconvictionsorprinciples†† but,rather, from on-going, albeit changing, relationshipswith and between persons, soce coteria, some social network, somecliquethat matters to a person' (Jackall, 1988: 101).Since these relationshipsandinteractionsarealwaysmultiple, contingent and in flux,†† managerialmoralitiesarealwayssituational,alwaysrelative (Jackall, 1988).


††††††††††† Disenchantedwiththelimitationsofcontrolbymeans of economic or bureaucraticsanction (Kouzmin, 1980a; 1980b; 1983), management theory widely promulgated, through the 1980s, the development of corporate culture as a meansofenhancing managerial control (Peters and Waterman, 1982; Kilmann, Saxton and Serpa,1985;Denision,1990).Thus,theviewthatethical business practicesstemfromanethicalcorporate culture (Murphy, 1989; 8) is widelyechoed,aswereprescriptionsofhow the culture should be cultivatedtothisend.Practitionersandtheorists converting flawed organizationalethicsassertthatitistheculture that needs to be fixed (Redienbach and Robin, 1991).


††††††††††† Whilethemediaportrays business ethics as an oxymoron, which suggests that successful business actors must behave immorally (Murray, 1986), being possessed of a cut-throatmentality (McDonald,1992),somearguethatseparating businessethicsfrom the other spheres or arenas of activity is to create anartificialdistinction between business and the rest of life (Drucker, 1991).Lewis (1985), on the other hand, defines business ethics as a set of rules,standardsorcodeof principles that provide guidelines for the morallyrightbehaviour†† oftruthfulness in a specific social space and time.†† Hence,'actorsdonot behave or decide as atoms outside a social contextnordothey adhere slavishly to a script written for them by the particular†† intersection†† of†† socialcategoriesthattheyhappento occupy' (Granovetter, 1985: 485).


††††††††††† Humancognitionhasaremarkablecapacity to file away the details and, especially,theemotional tone of past relations for long periods of time, sothateven when one has not had dealings with a certain person for many years,a re-activation of the relationship does not start from scratch but fromsomesetofpreviously attained common understandings and feelings (Granovetter,1985). In non-temporal (on-going) relations, actors invoke the schema(baggage)ofpreviousinteractions with each other into each new one.Thus, the philosophical approaches to the issue of ethics needs to be synergizedwith the social interaction approach in order to understand businessethics(government-business,medical,legal, accounting) embedded in the milieu's ethos.


††††††††††† Professionalethics, for example, as distinct from business ethics, centre onparticularprofessions (law;medicine;communications;counselling; journalism;engineering;accountancy)mostprofessionshavea code of ethics(uncodededeontologie)†† which often provides the focus of that profession'sethical behaviour.†† Unlikecorporatecodesofethics, professionalcodesinwesternsocietiesare often legally enforceable.Moreover,entryintoprofessionallife is usually much more uniform and regulated than is entry into a career in business (McDonald, 1992).

††††††††††† Themedical profession, for example, was the first to develop a modern code ofethics,based on the work of a birth physician, Thomas Perciebval, in 1803.Inanattempttoabatethe decline of the status of the medical profession,at the first meeting of the American Medical Association (AMA), in1846,acommitteewas appointed to report on a code of ethics for the organization(Fishbein,1947).Some 60 years later, the legal profession,throughtheAmericanBarAssociation(ABA),adopted its first code of professionalethics (Canons of Ethics),in 1908, based on the work of Judge George Sharswoodand written in 1854. The accountant's desire for professional prestigeledtothe development of a code of professional ethics in 1907 (Backofand Martin, 1991). The development of a market forces ideology was themajorcomponentunderpinning the development of the business code of ethics - priorto1960,businessethicswasprimarilytheological and religious(DeGeorge,1982).The emerging interest in social issues in business,†† during†† the 1960s,correspondstoananti-businessand anti-military movement amongst the youth of the US, although the 1970s saw theriseof business ethics as an emerging field (De George, 1982). While the1980s could be viewed as a period of initial consolidation of business ethics,the1990s may be seen asthe era ofethics codification.


Economic Rationalism and Changing Ethics


††††††††††† Thereis an enormous range of values by which actor's attitudes and actions are influenced, such as social, political, personal and administrative (or organizational) andwherepost-modernismmay be seen to have had an epochal influenceonbusinessethics(Korac-Kakabadseand Kouzmin,1997a; 1997b). The changesbetween1968and1981canbe described as a shift away from a collectivemoralityvalueorientation (utilitarian ethics) to a personal competencevalue orientation (egoistic ethics).Changescausedby socio-economic dynamics had moral and politicalconsequencestoo.There has been an on-going concern about the standardofbehaviourinpolitics,particularly with respect to the emergence ofrecent buzz-words; sleaze, amongst others (Lindsay, 1995). Notwithstanding that a complete conception definingprinciples for societal virtue is a social ideal,avisionofthewayinwhichthe aims and purposes of social interactions are to be understood is required(Rawls, 1971:25).


††††††††††† In the tradition of "genteel traditionalism" (Santayana, 1913), stemming froma combination of Calvinist guilt ("agonized consequence" of Calvinist ancestors)and metaphysicalegoism, Western management also attempts to concurrently retain elements of idealistic metaphysics (human reason or thehumandistinctionbetweengoodand evil). Arguably,this attempt at weavingthreefilaments of thought could be viewed as somewhat illogical, considering the†† transcendental†† successorofthelatterstreamof consciousness(Santayana,1913)represents the love for business and the riseofcorporatism (Murphy, 1939). The period between the World Wars was oneofprophecy†† andmoralleadership - the heroic period of pragmatism (Dewey, 1930); the period since has been one of professionalization.


††††††††††† Under contemporary circumstances of professionalism, increased interdependencies andvulnerabilities, defining a rational answer calls forthecriticalre-examination of the prevailing notions of management endeavours: conceptual creativity (system or architectural ability); contingentapplicationof knowledge (technical inductive ability) and the speculative negotiation of order (teleological unity - present actuality and thepower by which it becomes a future order). Thus,management theology is definedasthe management of a rationally unified system of techniques in accordance with the conception of an end.


††††††††††† Economicrationalismhas been an influential factor in shaping managerial valuesinbothprivateand public sector organizations (Kouzmin, Leivesley and Korac-Kakabadse, 1997). Manymanagers in private sector organizations, and recently in thepublicsector too, have developed cognitive methodologies, such as the bottom-line-mentalityor scripts, of which they may be quite unaware andthat often foster unethical action (Kouzmin, Korac-Kakabadse and Jarman, 1996).


††††††††††† AsdocumentedbybothHabermas (1975) and Offe (1984), amongst others, thesescripts lead to a transformed rationality by which both private and publicactivities arelegitimizedinsociety.Thus, especially during transitional periods, there are conflicts between forms of rationalityoverwhich actions are seen to be legitimate. The bottom-line-mentalityis ascript thatsupportsfinancialsuccessastheonlyvaluetobe considered; promoting short-term solutions that are immediately financially sound, despite the fact that they may cause problems for otherswithin the organization.An unrealistic beliefispromoted,whereeverythingis just a monetary game; rules of moralityaremerelyobstacles - impediments along the way to bottom-line financial success (Wolfe, 1988; Simms, 1992).


††††††††††† Thebasiclogicofthefree-marketeconomy is competition, where success requires strategies based oncreativity, inequity, manoeuvrability andflexibility.In public sector organizations, the financial-bottom-line mentality is increasingly being coupled with thetraditional political-bottom-line mentality (Simms, 1992); stemming from the unresolved conflict†† overminister-civil†† servant†† and†† Parliament-civil†† servant relationships (Dixon, Kouzmin and Korac-Kakabadse, 1996).Fearandfavourarestillalive and well in the public service†† butin avastlydifferent form. The entanglement of political strategiesfrom the government of the day with the machinery of government hasthrownintoquestion the political independence and integrity of the publicsector (Kouzmin, Dixon and Wilson, 1995).This politicization has gradually seeped down the ranks of thepublicsector,withofficersbeing confused about to whom they are answerable - their political masters of the day or the wider concept of the community (Dixon, Kouzmin and Korac-Kakabadse, 1998).†† Accountability, the buzzword of the past decade of reforms, has given rise†† to†† thequestion:accountabletowhom?(Walsh,1993).Furthermore,openinga window on government operation, exemplified by the Freedomof Information Act, in some instances, made public officers moreunwillingto providewrittenadvice that could be seen as conflicting with the wishes of their ministers (Walsh, 1993).


††††††††††† Thecodificationofethicalconductfor the public sector has received considerableattentionin the last two decades.The models being adopted varyintheirformsandcontext,asexemplified by the United States' ten-part Code of Ethics for Government Service,adopted in 1958 (USA, 1958; American Society For Public Administration,1984) andinaTenCommandmentsapproach(small number of general precepts whichareexpressedinbroadterms with no provision for the code'sadministration).Australia's Guidelines on Official Conduct (Commonwealth of Australia, 1982), takes a Justinial Code approach (comprehensive coverage of ethical rules with guidelines for their implementation) (Kernaghan, 1975), with Canada's Conflict of Interest Code(revised with the Armstrong Memorandum in 1987) being near the middle of this continuum (Canada Treasury Board, 1985).Whetherethical rules, in general, or codes, in particular, take the form of legislativeoradministrative measures varies in each society. The United States,forexample, relies more on legislation to regulate public service ethics than Australia, Britain and Canada.


From a Duty to End-Point Ethics: The Public Sector Dilemma


††††††††††† Inresponseto media attacks and political corruption in the 1980s,many westerngovernmentsdecided to put ethics onto the agenda of their public serviceduringthetransitiontoamarketdiscipline. The Australian governmenthasfollowedthe Canadian situation and introduced a re-vitalized ethical†† code ofpracticeforthepublicsector.However,despite considerableevidencein the corporate world and the lingering reputation of"fallen entrepreneurial†† heroes",†† myths†† of†† market-discipline entrepreneurialismhasbeen tirelessly advocated by the British, Australian, andCanadiangovernments, amongst others, as the means of accountability (Korac-Kakabadse and Kouzmin, 1997a). Thisis un-surprizing considering that ancient writings, exemplified by the Ciceros'(1981:157)works- OnDuties†† Ill ††orAPractical Code of Behaviour†† (addressed to his son who was, at the time, a student in Athens), showthat ancient societies were going through the processes of drawing up guidelines for what was deemed acceptable behaviour.


††††††††††† The merit principle (making appointments andpromotion decisions based on the demonstrable merit) is of in-estimable value in creating a culture of service where ethics is integral to the process. Considering that under the Westminster style of government public servants are employees of ministers, theirdiscretionon merit, in many cases, is non-existent. This raises the questionas to whether the selection, tenure and promotion of public servantsonmerithas diminished?, especially if accountability, in the broad sense, means the accountability of the moral responsibility for actions and decisions in the light of knowledge about the results of those decisions.


††††††††††† Inthecontext of"morals" of western society associated with reason, competence,expertiseand probity, the constitutional model ofpublicadministration,exemplified by the US and Australia, implies a responsiveness††††† to†† broad†† concerns of publicinterest,civic responsibility,law, morality and competence, as well as to the values of politicalleadership.Theresponsivenessofpublicadministrationis fundamentalto the totality of the governmental regime's values. Being the servantsofthegovernmentand servants of the law and the constituency (thepublic),publicservants have traditionally been advised to act in the†† public†† interest;be†† politically†† neutral;guardconfidential information;protecttheprivacyofcitizensandemployees;provide efficient,effectiveandfairservice to thepublic;avoid conflicts of interest; be accountable and so on (Kernaghan and Langford, 1990) which, in thecontemporarycontext,causes manydifficulties stemming from ambiguities and†† contradictions†† inthatadvice.Forexample,being accountableandefficientisratherdifficulttoachieve, as well as maintainingloyalty and confidentiality and, at the same time, acting in the publicinterestwhenthe imperative is to implement what is, in their opinion, misguidedpolicy. Striking a balance between representative public service andanefficientandeffectivepublicserviceremains a considerable challenge.


††††††††††† Thesituationmay further be complicated by the fact that public servants maybesubjectto not only their government's code of ethics but also to codes developed for their profession and codes developed byprofessional associations of public servants (Institute of Public Administration of Canada; American Society of Public Administration). In Britain,cases of AIDS (X. v. Y., 1988) and prisoner release (W. v. Edgell, 1989)litigation,illustratetheproblemsoverpublicprofessionals revealing information concerning private citizens.


††††††††††† Furthermore, there is the question of public servants having justification for leakinggovernment documents to the press. A public official, for example, may,withoutdisclosure,continueto act in a position with a conflict of interest in a fashion which is fair, impartial and high minded. Conversely, forthemost meritorious reasons of sympathy and compassion, the official may actto alleviate the plight of a member of the public by the provision ofa benefit where the applicant, in fact, has no lawful entitlement to that benefit.


††††††††††† Notwithstandingthatinbothcasestheofficersacted unlawfully and significantlyin a manner that puts at risk the very public interest their officebindsthem to serve,the official may hold within their own belief systemthattheactionwasethical and proper. However, for reasons of publicconfidence in the institutions of government in the first case, and becauseoftherisks to the public in allowing an official a dispensing powerontheother,theirconduct cannot be countenanced. Varying, and oftenconflicting,public interests -privacy protection; state interests; the promotion of candour; accountability; and client focus;are of vital significance to the determination being made in a given context.


††††††††††† Furthermore, the proliferation of IT and the associated ease of information sharing;flattening of organizational hierarchies and increasing formal and informal networks, pose additional difficulties for traditional confidentiality.An error in a computerprogram carriedout by a Department of Social Security employee caused the distribution of thousands of social†† benefit payments to be senttothewrongaddressees (Korac-BoisvertandKouzmin, 1994).ITfacilitates influence on policy designandimplementation from background actors who play no direct role inthe observable interaction but are connected through various networks,suchasthe role of consumers in transport policy (Dudley, 1994).


††††††††††† Social, political and technological features of the policy context require thedevelopmentofconditionsforhighlycomplexand inter-dependent decision-making;therulesarethechallengeofjoint action and its implementation.Integrationoften requires input from various government and semi-government agencies, as well as active participation by members of targetgroupsand their representatives in implementation structures. Inmanyinstances, un-anticipated, complex patterns of inter-dependence have resulted, through theadoptionofnewtechnologiesandbottom-line managementmodels,ineffortstore-orient and re-structure patterns of actiononbehalfofpreviouslyneglectedvalues; namely those of the private sector organizations, efficiency and client service. Developing cross-sectorallinks,exemplifiedbya common database of clients, pose challengestothetraditionalpublicsectorstability of sectoral and sub-sectoralstructures and, at the same time, signals an eventual shift in thescaleofnetwork arrays towards many more actors tied across broader policy spaces (community-issue network dimensions), on the one hand, and the shift from public administrators to public managers modelled on the image of private sector managers.


††††††††††† Theshiftfromthe old system of operation and ethical beliefs (one that ensuredcontrolandconformity)to new systems often exert considerable emotionalstresson publicsector actors (Dixon and Kouzmin, 1994). The example ofbuilding organizations,reflectingthe abilities of their members, shows there is a shiftfrom the "organizational man" image to "individualized corporations" whichalsosignals theshiftfrom utilitarian ethics towards egoistic ethics(BartlettandGhoshal,1995).Thisshiftis part of a broader re-definitionoftopmanagement's role resulting from the need to replace the†† obsolete†† strategy-structure-systems doctrinewithaleadership philosophybuiltonpurpose,processand people (Bartlett and Ghoshal, 1995;Korac-Kakabadse and Kouzmin, 1997a; 1997b). The shift from systems-driven to people-orientedmanagementispivotalbecauseonlythen can top-level managementbroaden its role from defining strategy to building a corporate purpose†† andframingstructureaswellasdevelopingorganizational processes.


††††††††††† Thus, creating an individualized corporation requires the re-definition of formalsystems,policiesand procedures so that they support, rather than subvert,topmanagement'sabilitytofocus on the organization's actors (BartlettandGhoshal,1995).Thisshift has left many public managers confusedaboutwhatconstitutes ethics for public servants in particular situations.This is particularly prominent in departments where strong elements of commercialization exist†† (Australian†† Department†† of AdministrativeServices;Employment,Education and Training; and Defence) (Dixon, Kouzmin and Korac-Kakabadse, 1996). Often,theassumption is that when anorganization becomes commercial the managerenters the commercial world, dealing with business in the way other players in the field dealwithit(Gaze,1995). This introduces the question of 'gifts, freebies, dinners, mates and favours and a bit of nepotism here and there, because,in business,you are building relationships' (Gaze, 1995:3).Thefrenzyof adopting private sector praxisinbottom-linemanagement,where deals are made with exchange of gratuitiesandgifts,posesanethicaldilemma-what kind of gifts or entertainment (if any) should public servants accept from someone with whom they do business?


††††††††††† Forexample,duringthelaunch of the new software product, Natural New Dimensionsystem for personalcomputers, the software corporation, SPL Worldgroup(Australia),presentedeachattendantwithafree software package.Ofthe210attendants,180werepublic sector employees who attendedthetwo-hourpresentationduringworking hours as part ofa governmentinitiativetokeep abreast of IT developments (SPL Worldgroup Australia,1995).Consideringthatsoftwarelicences were issued under individual†† names,†† not†† organizations,†† andthatindividualswereIT professionals, eachindividual took a package worth AUS$2100 home (SPL Worldgroup Australia, 1995).


††††††††††† The problem is that public servants in the new context of commercialization stillplay a role in public trust and still have to maintain some independence.Thus,they cannottake private benefits from their public role and, therefore,thereis a need to make a distinction (and apply a standard of conduct)forthe whole public service and assist those managers to acquire new capabilities to cope withnew environments.


††††††††††† Theveryconceptofthepublicservicesocial milieu and ethosas the all-embracingfieldwithinwhichdifferenttypesofvalues (ethical, socio-economic,cultural)(Walton,1969:24)arefound,needtobe incorporatedinthetransformation ideology (Korac-Kakabadse and Kouzmin, 1997a; 1997b).Forthisreason, management ethics cannot be treated lightly or in isolationfrominfluentialvariablessuchasculture,beliefsystem (religious or other) and local laws.


Psychological Dilemmas


††††††††††† Itcouldbearguedthatpublicsectororganizations,duetotheir traditionalfocusonsecurityand non-competitiveness, attract more than theirshareofscrutiny for their new focus on money and profits. As the competitive pressures increase and resources become limited, top management (public†† and†† private)†† turn†† to oldfavourites,ThePrince (Machiavelli,1965)andTheArtofWar†† (Sun Tzu, 1976). A review of variousstudiesonMachiavellianism (Robinson and Shaver, 1973) revealed thatdifferingdegreesofMachiavelliansm between generations indicates thatsocialactorsare becoming more manipulative and impersonal. Noting thatthe Machiavellian label hasbecome a negative epithet, indicating at leastanamoral (if not immoral) way of manipulating others to accomplish one'sobjective(HuntandChanko,1984:30),those perceptions are of considerable concern, especially in an information society where technology can be effectively utilized for the manipulation and control of information (Korac-BoisvertandKouzmin,1994;1995).Even standard marketing text booksencouragethemanagerto compete through choosing the best arena -using†† strategic†† thrust,†† analyzing†† defensivecapability,assessing competitorvulnerability,retaliatorybehaviour and offensive strategies (Leavitt,1989).Theconflicting message given to struggling managers is thatthereislittle room for ethical consideration when "battling" in a warzone(Leavitt,1989). Managers forced to make tough decisions during toughtimesneed to be able to draw upon the more creative, philosophical thoughtprocesses in order to balance the hard-line analytical approach to decision-making.


††††††††††† Anindividual'slevel of cognitive moral development strongly influences theperson's decision regarding what is right or wrong - the rights, duties andobligationsinvolved in a particular ethical dilemma (Kohlberg, 1981: 602;Trevino,1986).The intriguing issue which arises, therefore, is the extentofcongruencebetween the ethical dilemmas faced by public sector actorsin their daily practice, their own attitudes towards such dilemmas, theirbehaviourswhenconfronted by those issues and the encoded code of conduct.


Ethics and Praxis


††††††††††† Astudyofretired middle managers in Fortune 500 companies revealed that corporate†† crime†† was†† determinedbytopmanagerswhopushedtheir subordinatessohardthatillegalpracticeswere tacitly necessary to survive(Clinard,1983).Anumberofstudies suggested that corporate culturesareanimportantelementof precipitating events in corporate law-breaking(Werhane, 1991). The operating cultural norms socialize their members into patterns of ethical or unethical behaviour (Clinard, 1983).


††††††††††† Illegalactivitiescan take on an aura of normality amongst those engaged inthem,throughculturaland linguistic techniques of "neutralization", exemplified by the dark-side of networks such as group-thinking,in-groupbiases, collusion and corruption demonstrated by the ExternalAffairsandInternationalTrade of Canada (EAITC) travel fraud (Allen,Fisher and Fulton, 1992; Korac-Boisvert and Kouzmin, 1994), NASA's Challengerdisaster(JarmanandKouzmin, 1990; 1994) and the Australian Stock Exchange's (ASE) insider trading practices (Tomasic, 1991; Korac-Boisvert and Kouzmin, 1994), leading to institutionalized creeping crises (Jarman and Kouzmin, 1994; Korac-Boisvert and Kouzmin, 1994).


††††††††††† TheAustralian Commonwealth Department of Customs, for example, experienced numerousethicaldeficitsand fraudulent activities, where officers were freelyaccepting expensive gifts from clients (Korac-Kakabadse and Kouzmin, 1997b).†† Thepracticewassowidely accepted that it had become normal procedure (Codd, 1995).Furthermore, an information technology consultant, dealing with diesel excise rebates, managed to channel funds into numerous bank accounts over a period of time amounting to A$1.3 million (The Daily TelegraphMirror, 1994: 9).Similarly, thetwolargest Australian social benefits departments, the Department of Social Security (DSS) and the Departmentof Employment, Education and Training (DEET) have encountered similarfinancial embellishments by clients,aswellasemployees,which,aftermedialeaks, led to the adoptionofthe Fraud Control Action Plan (Ives, 1993; Korac-Boisvert and Kouzmin, 1995).


††††††††††† Similarly,officersonoverseaspostingsonbehalfof the Australian Department of Foreign Affairs and Trade have made a healthy second income ontheduty-free luxury carmarket(Walsh, 1993:34). A similar case was reported in the Canadian department of External Affairs and Trade and other societies (Korac-Boisvert and Kouzmin, 1994).Although the majority of public servants are dedicated and honest, there are significant rortsthatarenot publicly disclosed and, in many instances, are protected (Walsh, 1993).


††††††††††† Whensucha culture is embedded in an organization, through evolution, the re-definitionofwhatwas initially considered maleficent behaviouroccurs.Howwidely fraud and disorder spread depends very much on how the network of social relations is structured (Korac-Boisvert and Kouzmin, 1994). Sometimes the most elaborate andblatantschemesofpoliticalcorruptiontakeonthe solidity of established institutions, so thatpublic officials finally brought to accountfortheir actions invariably defend themselves by explaining that they participated in the system as they found it.


††††††††††† Canada'sreputation for a reliable, and neutral, public service has beensteadilyerodedby episodes such as the travel scam by the External Affairsand Tradedepartment,where officers actually used excursion air-fares but full-fare ticket stubs were submitted as expense claims, with the difference being pocketed - inmanycases more than CAN $1,000 per ticket being involved (Allen, Fisher, and Fulton,1992; Korac-Boisvert and Kouzmin, 1994).Insomeinstances, full-fareairline-ticketswerebookedthencancelled, travel†† never being undertakenbut full-farestubsbeingsubmitted for reimbursement-sometimesover CAN $5,000 per ticket being involved. In addition to fraudulent travel claims, theinvestigationturnedupevidence of further illicit activities by a dozenother employees such as 'falsification of exchange-ratereceipts,failuretoreportsalary over-payments,contravention of conflict-of-interest guide-lines and visa fraud and harassment' (Allen, Fisher, and Fulton, 1992: 17; Korac-Boisvcert andKouzmin, 1994).The Canadian Federal Justice Department's latest investigationofthen Prime Minister, Mulroney, concerns allegations that he was party to a scheme in which European aircraft manufacturer Airbus IndustriespaidUS$20million in kickbacks to win a US$1.2 billion order from Air Canada, with a direct benefit of US$5 million (Serrill, 1995).


††††††††††† InAustralia,inadditiontofederal government incidents of unethical acts,eachstateisplaguedwithRoyalCommission Inquiries into the activities of public offices with a variety of acts: from Queensland, where theMinisterfor Health and the Deputy Speaker of the House had to resign becausetheyhad been identified by the Criminal Justice Commissioner for mis-using parliamentarytravel allowances; through to the New South Walesinquiryintotheactivitiesofthe Police Service alleged to be involvedina bribery and corruption scandal; to Western Australia, where corruption occurred onvery large scaleconcerning a number of commercial dealsin which the government, its ministers and associates where involved (McMahon, 1995).In1992-1993, for example,the New South Wales (NSW) IndependentCommission Against Corruption (ICAC) received 3,951 complaints ofpotentially unethicalandcorrupt practices of the NSW public sector (Australia, ICAC, 1995).


††††††††††† In responseto a wide-spread ethical crisis, a number of Australian state parliamentsand the Federal government adopted The Public Sector Ethics Act, aiming to declare particularethicsasthe basis of good public administration.Additionally, a number of federal departments supplemented this act with departmental codes of ethics.Following reports by the ElectoralandAdministrativeReviewCommission(Australia, EARC,1992),and its parliamentarycommittee (Australia, PCEAR, 1993), in December 1994, a national Network for Public Sector Ethics was formedto increase public sector ethical awareness.Some of the paradoxes that public service actors have to contend with are summarized in the table below:


Free Market Economy





Freedom of Information





Public Sector Codes



Ministerial Discretion


Public Servant



Political Servant

(utilitarian or egoist)

Information Sharing






Globalizing Ethics


††††††††††† Whileunethical acts are numerous in western societies,exemplified by the resignation of aBritishminister after widespread press allegations of sleaze(Elliott,1994),†† theAustralian Labour Minister for Environment, Sport and Territories, Ros Kelly,resigned over poor administration of an A$ 60 millionprogramofgrantstolocal government and community organizations (analysisoffunddistributionshowedthatgrantsto organizationsin opposition electoral areas rana poor second) (Walsh, 1993). Unethicalacts such as corruption in developing economies and economies in transition(fromplanned-markettofree-market) are even higher. In the formerSovietRepublics,corruptionis not necessarilyorganized, however bribes are takenindependently, making corruption more discretionary (Elliott, 1994).


††††††††††† Thescaleofgraftin economies in transition is so great that it risks causingpoliticalunrestora backlashagainstfree-market reforms. In Venezuela,in 1993, it was discovered that Venezuela's Central Bank had made apayment of US$ 17 million to the then President Perez's "discretionary"fund (Elliott,1994).Argentinean President Carlos Menem accepted a US $100, 000FerrariTestarossafromanItaliancompany bidding for government business(Elliott, 1994). Furthermore,Westernbribestoforeign governments contribute to this practice. For example, it is estimated, that 500to600million Deutsche Marks are deducted from German corporate tax returnsforforeigncorruption,passedoff as "necessary expenditures" (Elliott,1994).AlthoughtheUS has adopted anti-graft codes of ethics (AmericanForeignCorrupt Practice Act), the code does not work very well because nobody else has such a law.


††††††††††† Consideringthatmoralityiseconomically valuable and that the moral characterofasociety's populationisavaluable economic resource, trust, then, provides 'an important lubricant to a socialsystem.It is extremely efficient,saving much trouble by having a fairdegreeofrelianceon other people's word' (Arrow, 1974: 23). Trustinlightof Kantian (1901)formalism of moral rights provides an ethical dimension with an universalistic approach. Notwithstanding that the deontologicalapproachhasbeen increasingly under challenge from social scienceperspectives, less concerned with universal absolutes thanwiththevalueswhichinform behaviour in less macro locations or areas suchasorganizationsandindustries,aswellassocialand professional settings (Trevino, 1986), the "pure" understanding of ethicsas†† independent of contextappearsappropriateintheincreasingly globalizedworldanditsworthis its contribution to the promotion of positivevalues.Enormousresourcecosts could be saved in a 'perfectly honestandopen world that would permit do-it-yourself cash registers and communal lawn mowers' (Okun, 1981: 86).


††††††††††† Notwithstandingthatexpunging unethical behaviour is an impossible task, minimizing such practices is necessary for any organization and society at large.Certainvalues,suchashonesty;respect for the person (which suggests inter alia that officials should avoid patronage and favouritism andexercisepowersfairlyandequitably);integrity (justice appears equallyrespected indeveloped and developing economies alike);Socratic virtues (Plato, 1956) - willingness to talk, to listen to other people, to weigh†† the consequences ofactions on other people, are simplemoral virtueswidelyacclaimed in current leadership literatures (Kakabadse, 1991; Fairholm, 1991; 1993; Korac-Kakabadse and Kouzmin, 1997a).


††††††††††† Identifyingfundamentalinternationalrights,suchastherightfor subsistenceandpolitical participation are defined as international goods (Donaldson,1989).†† There is a requirement that public and private organizations,alike,needtorespectindividualrights as a 'universal objectiveminimum'(Donaldson, 1985: 360) irrespective of culture. In the presence of a conflict, the lower standard (such as consumer safety) of the hostcountrynormsshouldbe rejected. Where fundamental rights are not involved,however,culturaldifferencesmay influence the outcome - some formsofquestionableemployment practices in Saudi Arabia, for example. Indevelopedeconomies,businessbehaviouris regulated by legislation based on broad social consensus. In the global arena, such moral consensus maybelacking, as isregulationanditsenforcement in particular developing societies (Simpson, 1982).


††††††††††† Thus, virtue as the ethical order reflects the individual actor's character sofarasthatcharacter is determined by its natural endowment (Hegel, 1952).When virtue displays itself solely as the actor's simple conformity with the duties of the station to which the actor belongs, then it is rectitude (Hegel, 1952). Ethnic models of ethics are constructions of a group ethos (theguidingbeliefs,standardsor ideas that characterize that group) andaboriginalobservations made by asocial group to keep order and codify interactionrelevant to their particular social timeandplace;assuchthesemodelsarenotcapableof universal application.Theusefulnessofethicalmodelsisintheir interpretative ability concerning†† particular social space and time;thus theyarelearning tools for increasing the awareness and understanding of human diversity and interaction.


††††††††††† Forexample,the ten values shared by American democracy are not so uniquelyAmerican:achievement and success; activity and work; efficiency andpracticality;moralorientation and humanitarianism;freedom; equality; patriotism; material comfort;external conformity and rationality;as well asmeasurement,couldbeappliedtoalmostanyotherWestern-style democracy (Cavanagh, 1976: 19).Classical Greek and Roman writers recorded thatsharpbusinesspracticesexistedinancient times; that business personswhere justaskeenthento make a fast drachma asbusinessactors are today.†† Plutarch (1981: 113) cites Aristidles (520-486 BC)whodescribesThemistoclesas a clever fellow, but apt to be light-fingered.In anotherextract, Plutarch (1981: 181) citedThucydides and members of his partywho denounced Percicles (495-429 BC) for 'squandering publicmoney and letting the national revenue run to waste'. It is no surprizethat thefirstknownlegislative action in Roman criminal law relates to bribery taking place in 432 BC, to extortion in 149 BC and to embezzlement and forgery, both in 81 BC (Cowel, 1956: 202).


††††††††††† Thefieldof organizational ethics can afford to be no less vigilant then otherdisciplines in the pursuit of knowledge concerningthe implications of multi-cultural similarities and differences for successful international professionalpractices.†† Particularlycriticalisthe need to test the assumptions that ethical†† standards†† forprofessionalconductare transportableto other societies.Globalizationoftechnology,in its broadercontext,often lays the groundwork for the transfer of respective values;goals;needs; skills;abilitiesandpraxis - IT technology is not culture free (White and Rhodeback, 1992: 664; Korac-Boisvert, 1992).Although writtenethicalrules,ingeneral, and codes of ethics, in particular,are important elements in building an ethical society, there has been an insufficient means of promoting global ethics.


Aligning Ethics With Social Change


††††††††††† Thetermethicsisoften bandied about in both the popular and specialized press -beingappliedtonearlyevery facet of an actor's life, from the workplacetothelockerroom(Simms,1992). Technological advances in fieldsasdiverseasmedicineandelectronics pose antecedent ethical quandariesto secondaryfields such as sport, cosmetics and communications andlawenforcement. A proliferation of medical end-products pervades modern consumer life, unintentionally testing theethicalstandardsofadministratorsin organizations as diverse as sporting bodies and governmental health departments. Sporting organizations, forexample,havefoundthattechnologicaladvancesintheform of performanceenhancingdrugshasgrowntobea majorissue. Although synthetictestosteronehasbeen available since the 1940s and synthetic derivatives(anabolicsteroids)since1954,theInternational Olympic Committeedid not banthe use of these substances until the mid-sixties (Boothand Tatz, 1993); their use becoming unethical at that point. Interestingly, the American Medical Association (AMA) has, for the pastfifteen years, maintained that anabolic steroids do not affect muscle growthergosportsperformance. Both the IOC and the AMA wouldarguethatthey were acting ethically.However, the contribution to the perceived public good through mis-information again raises issues of end point ethics, somewhat at odds even with the rule utilitarianism from which suchpoliciesspring;analysisis contingent on the public health model adoptedandtheweightgivento individual rights and freedom (Booth and Tatz,1993;Hoberman and Yesalis, 1995). The individual's (athlete's) health isoftenforwardedas a major concern in formulating drug use guidelines and,hence,definingwhat their ethical use is; the AMA and IOC contending thatperformanceenhancing drugs are detrimental to an individual's health (whichis detrimental to the societal good in terms of costs to the health caresystemand lost productivity in rational economic analysis).However, the World Health Organization (WHO) has trialed the use of anabolic steroids as aformofmale contraceptionatadoseexceeding common sport usage (Hoberman and Yesalis, 1995).


††††††††††† Thelegalandmedical professions have made no change in their codes of ethics foralong time - 54 years for law (from 1908 to 1961) and 110 years for medicine(from1847to1957).Whenthecodeswere changed it was in responsetoacrisisfacedbythe profession. In sharp contrast, the accountingprofession,from1928through1988,did not have one decade withoutasignificantjournalarticle,committeestatement of need or proposalregardingprofessional ethics (Backof and Martin, 1991). Perhaps publicpolicyshouldadopttheaccountingphilosophyofcontinually updatingitscodeof ethics instead of waiting for a crisis.Ethicalissuesneedto become a vital component in the process of policy development;policiesand procedures need to reflect a genuine commitment tobuildingaculturein which important values are explicitly acknowledged. Only†† continuous†† generative†† (double-loop)learning(Argyris,1982), reflectionand adjustment can accommodate this requirement (Korac-Kakabadse and Kouzmin, 1997a; 1997b).


††††††††††† Complexproblems,newtechnologiesanduncertaintycaused by them are increasing, suggesting that there is a need for aligning ethics withanew societal modus operandi.Society needs to deal with difficult andcomplexproblemssuchasDNA-basedtesting for breast cancer, the safetyof genetically- engineered food or risks of cancer from living close topetrol stations and power lines. Each problem is complex with uncertain outcomes;riskstolife are inherent to new developments in many fields, urgentlyrequiringsystematicstrategies for assessing and communicating theserisks.Risk communication requiresadvancing knowledgeabout risk andiscentraltomanagingtheimpactofnewtechnologies such as biotechnology and food irradiation.


††††††††††† TheBritishgovernment's handling of the Bovine Spongiform Encephalophaty (BSC)or"MadCow Disease", is the latest result of a cultural denial that hasmis-managedhazard in Britain -from asbestos to lead in petrol,fromradiationtoacidrain, from pesticides to threats to the ozonelayer(Lean, 1996). The long,outright denial of danger that the BSC istransmissibletopeople,the reliance on a limited range of selected scientificevidence, the marginalization and ridicule of experts who issued warnings,thedemandfor proof, the reluctant half-measures and, finally, afterthedamagewaslongdone,thehurriedandhumiliatingU-turn highlight†† the need for code of ethics in politics as well as for the need for supplying scientific information to the public (Lean, 1996:1).


††††††††††† Anactor'sabilitytorespond to environmental hazards (food, drugs) is determined,inpart,by their understanding of the processes that govern theircreationandcontrol. Lacking scientific evidence, actors often have to make an educated guess based on whatever they know about a hazard.This mayleadtomis-perception and confusion.†† Information is particularly susceptibletomodificationbyactorswith different values, with some groupspresentingargumentsfor,whileothersemphasize arguments against - exemplifiedbyconsumergroupsandindustryspokespersons.Typically,groupsforward carefully selected evidence to support oppositesidesofthesame argument, avoiding the assessment of all available evidenceandmakingitpublic.Thetoxicologicalevaluationofthe carcinogenicityofnewcompounds(manyalreadyinuse)needsto be presented to the public through information that is easily understood.


††††††††††† Similarly, explaining ideas that are difficult to understand (that wholesome foodsmaycontainnaturalcarcinogensathigherlevelsthan humanly produced carcinogenic pesticide residues) may prevent mis-understandings and mis-interpretationoftheriskinformationas well as assist society in adoptingnewvalues. Accurate knowledge about new food technologies, such asfoodirradiation,translates into greater acceptance. Information and scientificevidenceneedtobepresentedin a manner which explicitly conveys uncertainty and limits in knowledge. A range of complex ideas (some signifyingreal,andsomeonlynominal,essences), as well as "simple ideas"or"passivelyreceived intuitions", conveying positive attributes andobjections(eitheras a woven element of argument or as an addendum), canbegintolookacceptable if communicated well. The latest example of Britishgovernment's mis-handling of the BSC crisis highlights the need for establishingamethod for delivering scientific information to the public untaintedbythesuspicion of political and commercial calculations (The Economist, 1996: 28). Scientific evidence and advice to theconsumers need to be delivered by scientists, not politicians (The Economist, 1996: 28).


††††††††††† Althoughethical issues in bio-technology capture the popular imagination, ethnologydevelopment in other areas give rise to equally pressing issues. Theuseandpotential abuse of information and communications technology has to radicallyaffectthe nature of society (Longstaff, 1995: 5). New formsof surveillance may limit an actor's effectivezone of privacy while genetic-engineering gives size to new life-forms which, as commodities, may save commercial interests while defying nature's laws of evolution.


Towards An Ethical Society


††††††††††† Notwithstandingthatpromotingethicstakestime,the widespreadinterestinethicsisthebestmeans of promoting ethical behaviourandencouragingageneralsense of civic virtue (Elliott and Raghavan,1994).Thenotionthatallgovernment must be in the public interestand its corollary, that the interest of the government of the day does not exhaust the public interest, needs continual reiteration, leadership andpublicdiscussion.Cicero (1971: 120) held that if, 'we firmly adopt moralgoodness as our guide - in each and every one of its forms - it will follow automatically what our practical duties or obligations must be'. His moralgoodnessconsistedofthree themes: an ability to distinguish the truthfromfalsity;anabilitytorestrainthe passions and make the appetitesamenable to reason; and the capacity to behave considerately and understandingly in our associations with other actors.


††††††††††† Cicero(1981: 161) also observed that 'to every one who proposes to have a goodcareer,moralphilosophyisindispensable'. Professionalism, like pragmatism,isa synthesis of the theory and practice of enlarging human freedomin a precarious and tragic world by the art of intelligent social control (Hook,1974).Perhaps this synthesis is a lost cause, however,theremaynotbe a better one. This cause is contingent on the formulation of moral principles and moral education which, in turn, require choosinganddefendinga cause.AsPlato (1987) argued, "political and socialgood"isbroughtaboutbythe"virtue of the citizens",not by wealth,powerandamusement,and that virtue and virtuous citizens can onlybebroughtaboutbya carefully constructed education system.


††††††††††† Codesofethicsare probably the most visible signs of an organizational ethical philosophy. However, codes are not an absolute guarantee of ethical behaviourwithinanorganization -theyaremerely a set of guidelines available to be followed (Alderson and Kakabadse, 1994). Organizational codes have been viewed as the major organizationalmechanismfor implementingethical policies. These codes commonly address issues such as conflictofinterests,privacyandthereceiving and giving of gifts (Wiley, 1995). However, simply developing codes is not sufficient, the code must be tailored to focus on its major line of business. Furthermore, codes should be specific; public(available to the whole constituency to determine the organization's commitment to fair and ethical practice); clear and practical (realistic and to the point about what happens to violators); revisable(leaving documentopentorevision); and auditable (regular social or moral audit).


††††††††††† The purpose of an ethics audit is to determine if changes are needed in the environment of codesandthe enforcement of ethics policy.Such auditsrequire a careful analysisof the existingstate of ethical behaviour in the organization, includingthe validation ofcurrent practices, as well as determining questionable external ethical issues (offers of kickbacks from clients)andinternalissues(whether the organization'sowncompensation system hinders the performance of certain qualityprocedures).Furthermore, implementing an ethical policy requires supportin the form of an ethics training program for all employees. These programsneed to interpret the underlying ethical and legal principles and presentpractical aspects of carrying out procedural guidelines (Drake and Drake, 1988).


††††††††††† Mostactors(whether consciously, or not)develop heuristicsfor dealing with organizational issues anddilemmas (Frell and Gresham, 1985). Newstrom and Ruch (1975: 32) found topexecutives to be a key reference group in providing an important source of the manager's ethical standards. A survey, by Weaver and Ferrell (1977), of marketingpractitioners reached a similar conclusion -finding that the existence of an enforceablecorporateethics policy influences beliefs toward various ethical behaviours. A cross-cultural study of Irish, British and US managers (Alderson and Kakabadse, 1994: 439) highlights that the impact of top management influence on the behaviour and attitudes of personnel lower down the organization varies according to national culture and identity. The study emphasized that British and Irish top management needto behave according to the ethical standards they set. The whole ofthe executive team needs to constantly display a behaviour pattern that accenttheircommitment to their organizations ethical code (Alderson and Kakabadse, 1994).The studyconcluded that codes of ethics, in whatever form(lengthydocuments to a briefsectionin the mission statement),requiretheclearcommunicationof the organizational values which they espouse and that this 'responsibility falls inexorably on top management' (Alderson andKakabadse, 1994: 439).Thus, although socialization and culturaldifferences shape one's ethicalbeliefs (Preble and Miesing, 1984), learning and reinforcement processes are instrumental in re-learning and substituting†† newly desired behaviour for existing inappropriate ones(Mathews, 1988).Managers need courage, fortitude and wisdom, as well as an ethical infrastructure (regulations, law, code of ethics) to lead organizations forward in achieving organizational and social good.


††††††††††† Whileno one is likely to learn morality in training programs, such causescanimprove ethicalbehaviour by sensitising participants to the importanceof enduring ethical principles and facilitating the development of skillsforanalyzingtheapplicationof such principles to ethical and valueissues.Trainingprogramscan foster an understanding of what the adopted code of ethics means in praxis, possibly stimulating formal changes tounrealisticrules.Thevalueoftrainingprograms is particularly evidentinorganizationalchangeswhereactors need support to adjust. Furthermore,trainingprograms provide an intellectual basis and stimulus foracontinuingdialogueonethicalissues.Given the complexity of ethicalissues,combinedwiththe need for exemplary role models in the executiveranksofthepublicservice, training courses are especially importantfor top-level officials. Training programs can provide formalopportunities for executive officers to articulate their values and assesstheextenttowhich their values are shared by their colleagues. AldersonandKakabadse(1994) argue that the training and development of non-executivedirectorsalsoneedtobeincludedinbusiness ethics programs.Recentspectacularincidents of mis-government, moral confusion andmis-administrationsuggest that the need for more open discussion and focused†† programsmaybegreaterthanever.Furthermore 'deliberate educationalattempts(formal curriculum) to influence awareness of real problems and to influence the reasoning/judgementprocesscanbe demonstratedtobeeffectivein the long-term' (Rest, 1988: 23). Public sectoractorsneed training to understand and develop sensitivities to thenuancesandambiguitiesofethicalsituations,recognize ethical problems,appreciatethe ethical dimensions in decision making and accept the multiple and sometimes conflicting obligations of the management role.


††††††††††† Leadership is the locus of ethical responsibility; executives, managers and professionals at the strategic and operationallevels(Mathews,1988;Amba-Rao,1993). The executive role modelprovidesthe attitudes, values, behaviourand cues for performance (Vitell and Fastervan, 1987; Mathews, 1988; Amba-Rao, 1993). Communication ofthevaluesoftheorganizationisreallydisplayedthroughtop managementbehaviourandnot through written and spoken words (Alderson andKakabadse,1994: 439). Furthermore, executives acculturate levels by reinforcementthroughorganizationalmeanssuchastraining, reviews, audits,rewardsand sanctions (Mathews, 1988); exercising an importantinfluenceontheethical(orunethical)behaviour of their immediatesubordinates,whocan,inturn,passthemessagedownthe hierarchy.Theefficacyof a code of ethics can be promoted by executives wholivebyits precepts and who translate precepts into action. The influenceofanadministrativeexecutive,bothin public and business organizations,isextremely important in promoting ethical behaviour. For example,ifanexecutiveserviceshis friend's car in the departmental garage(asinthecaseof the Department of Administrative Services,in Australia)thenthepraxisbecome endemic as other staff adopt the same practice (Gaze, 1995).


††††††††††† Onthe other hand, setting an example of ethical conduct as did Sir Edward (laterLordBridges),itwassaidofhimthat his personal code of professionalethicswas a very serious matter for him.His standards and hisrulesbecome known by example, not by precept (Winnifrith, quoted in Burnard and Chapman, 1988: 30-38) and had a positive effect. In an Aristotelian tradition, the goodforman was to be sought in a community or polis that recognized and honouredsuchcharactertraits (virtues) as liberality, magnificence and pride.In contemporary times,a "propensity to excellence" and keeping with the traditions of public spirit, generosity and compassion could define the ideals of "good characters" (Solomon, 1992).


††††††††††† However, setting an example is not sufficient - ethical behaviours need to becommunicatedthroughtheorganization as well.Oftenthereis a differencebetweentheethosofanorganization articulated by senior managementandthestaff†† perceptionofwhat is right and wrong - the ethicalcultureontheground(Gaze,1995).Thus, there is a need to conduct ethical audits to determine existing staff and management attitudes andlevelsofawareness.Shiftingtonewvalueswill have long-term consequenceswhichcanbeviewedthroughconcurrentunderstanding and ideologywithregardto the praxis of corporate philanthropy undertaken withprudence. However, it is unrealistictoexpectthatthe executive role model or champion can serve as the sole means for promoting ethical behaviour; a code of ethics andethicalleadership are necessary,but insufficient,for building an ethicalorganization. There is a need forcommitmentfrom all actors alike toupholdthosecodesandtoactethically.Judgementsanddecision-makinghavelong-termconsequences.Howevertheymay also be enhanced or clouded by subjective ethical views, morals and values of decision makers.




††††††††††† Theexplorationofthecentralthesis - how is one to build an ethical organization or workplace culture? - has been canvassed. This question needs toberaisedinanyprogramofethicsforthe public sector.It is axiomatic that ethical behaviour is not improved by education or a code of ethics alone.†† Thedesirability of institutionalizingethicsinan unsatisfactory, undemocratic, hierarchicalwork-culture is certainly questionable.Attempts to raise the profile of ethics in organizations withoutsupportive regulatory measures and a re-inforcing workplace culture maybefutileand counter-productive, giving credence to the view that a codeofethicsanditsassociated measures are but a public relations exercise or that they border on moral authoritarianism. Without open discussionwithinanorganizationthereis a distinct possibility that ethicswill become just another managerial tool.There is a need to audit the ethics of an organization, the ethical expectations of particular roles and what is meant by an official or public conscience.More basically, the debateneeds to centre on institutional purposes. A fundamental feature of aninstitutional ethics program is the clarification and exposition of the particular values justifying an institution's existence, the starting point and the on-going reference point for ethics in public life (Preston, 1995).


††††††††††† Policies and procedures need to reflect current social realities and a genuinecommitmenttobuildingan organization in which irreversible values are explicitly acknowledged (Longstaff,1995:6).Thismeans going beyond a commitmentto short-termcommercial values ofprofit maximization, allowing a full appreciation of what underlies such commitment. Only then will other legitimate concerns be weighed in balance.Publicsector organizations need to adopt policies that reflect current societal realities and needs before they can resolve many of their ethical dilemmas.




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Biographical Sketches


Nada Korac-Kakabadse is currently a Senior Research Fellow at the Cranfield School of Management. Previously, she was employed as a Senior Information Technology Officer with the Australian Public Serviceís Department of Employment, Education and Training. She has worked for international organizations in Scandinavia, the Middle East and North Africa, as well as for the Canadian Federal Government. Her research interests include the strategic use of information resources and related organizational decision processes; information system dynamics; management best practice; organizational design; strategic decision support systems; and crisis management. She has a BSc in Mathematics and Computing, a Graduate Diploma in Management Sciences, a Masterís Degree in Public Administration and a PhD in Management.She has published in the Administrative Theory and Praxis; Information Infra-structure and Policy; Journal of Contingencies and Crisis Management; Risk Decision and Policy; Science Communication; and Women in Management Review. She is currently co-editor of the Journal of Management Development.


Alexander Kouzmin holds the Foundation Chair in Management in the School of Management at the University of Western Sydney - Nepean, Australia. His research interests include organizational design; technological change; project management; comparative management; administrative reform; and crisis management. He has published eight volumes of commissioned work. Among these are his edited Public Sector Administration: Newer Perspectives (Longman Cheshire, 1983); his co-edited (with Scott, N) Dynamics in Australian Public Management: Selected Essays (Macmillan, 1990); (with Still, L and Clarke, P) New Directions in Management (McGraw Hill, 1994); (with Garnett, J) Handbook of Administrative Communication (Marcel Dekker, 1997); and (with Hayne, A) Essays in Economic Globalization, Transnational Policies and Vulnerability (IIAS, 1999, forthcoming). He has contributed chapters to many national and international volumes and has published some 150 papers, including scholarly and review articles in more than 40 leading international refereed journals. He is on the editorial board of Administration and Society; Administrative Theory and Praxis; Journal of Management Development; Journal of Management History; Journal of Public Affairs Education; Public Policy and Administration; Public Productivity and Management Review; Public Voicesand Public Administration and Management: An Interactive Journal and is a founding co-editor of the international Journal of Contingencies and Crisis Management, published quarterly since 1993.


Phillip Reeves Knyght is currently a postgraduate student of Law at the University of Canberra.He has a BSc in Psychology and a Graduate Diploma in Law.His research interests include equity and social justice; modernity and the legal system; impact of IT on the legal system; and modernity and self identity.He has co-authored a number of papers and presented at international conferences.


Andrew Korac-Kakabadse is Professor of International Management Development at the Cranfield School of Management. He has worked in the health and social services field and then undertook various consultancy assignments concerned with local government re-organization and large capital projects in developing countries. He is currently a consultant to numerous organizations, ranging from banks, motor manufacturers, high-tech companies, oil companies, police and other public sector organizations and numerous multi-national corporations. He has consulted and lectured in the UK, Europe, USA, South-East Asia, Gulf States and Australia. His current areas of interest focus on improving the performance of top executives and top executive teams, excellence in consultancy practice and the politics of decision making. He recently completed a major world study of chief executives and top executive teams. His data base covered nine European nations and over 3,000 business organizations. The study of the strategic skills of top management has now extended into Japan, China, Hong Kong and the USA. He is also the Director of the Cranfield Centre for International Management Development. He has published 15 books, 11 monographs and 92 articles, includingthe best selling books - Politics of Management; Working in Organizations; and The Wealth Creators. He is a co-editor of the Journal of Management Development, is the out-going editor of the Journal of Managerial Psychology and is the associate editor of the Leadership and Organization Development Journal.