Institutionalization of Ethics
Institutionalizing Ethics: Why It Matters
Institutionalizing ethics within business environments is essential for sustainable organizational integrity. Transitioning from theory to practice, businesses that embed ethics reduce risk and enhance trust among stakeholders, thereby fostering legitimacy. Without institutional support, even well-intentioned individuals struggle to resist pressure and conflicting interests
A Model for Ethical Decision-Making
A comprehensive ethical decision-making model offers structured steps to guide business leaders. First, one must recognize an ethical issue exists. Next, one gathers relevant facts and identifies stakeholders. This model transparency and aligns with institutional frameworks.
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Institutionalization of Ethics
Ethical Issue Intensity and Institutional Role
Ethical issue intensity — the degree to which an issue is morally significant — affects how decisions are made. Elements like magnitude of consequences, stakeholder proximity, and social consensus drive issue intensity et al., 2020). Institutions influence intensity by shaping climate, expectations, and oversight. Without institutional influence, low-intensity issues are easily overlooked and may lead to incremental unethical conduct.
Values, Morals and Institutional Decision-Making
Morals and values underpin every ethical decision. Institutions play a normative role by establishing shared values through codes, training and leadership modelling Transitioning from individual values to institutional norms, organizations ensure alignment across teams and protect against ethical drift.
References
Al-Amended, S. M. M., & Mirada, M. (2023). The effect of business ethics on happiness, aggression and inconsistency of efforts and rewards. Journal of Risk and Financial Management, 16(3), 195. https://doi.org/10.3390/jrfm16030195
Bag, S., et al. (2024). The effect of corporate ethical responsibility on social and environmental performance. Journal of Business Ethics.
Bahm, S. (2022). Ethics at the center of global and local challenges. Journal of Business Ethics.
Rousselle, E., et al. (2020). Moral intensity, issue characteristics, and ethical decision making. Journal of Business Ethics, 163(2).
Suarez, V. D., et al. (2022). Examination of ethical decision-making models across domains. Frontiers in Psychology.
Torres, M. (1998). Ethical decision-making models (Research Paper No. 358). IESE Business School.
