Organizational Authority Structure

Ethical cultures should guide individuals to take responsibility for their own behavior, question orders to behave unethically, and report misconduct or problems. A strong ethical culture incorporates a structure that emphasizes and supports individual responsibility and accountability at every level. Employees are encouraged to take responsibility for their own actions and to question authority figures if they have concerns. And individuals are held accountable for negative consequences when they occur and for reporting problems they observe. One manager we know created the idea of ‘‘Velcro’’ to convey the importance of responsibility to her direct reports. She tells them, if you know about a problem, it’s yours until you address it. It’s stuck to you like Velcro!

Most modern organizations are bureaucratic, meaning that they have a hierarchy of authority, a division of labor or specialization, standardization of activities, and a stress on competence and efficiency. Bureaucracy provides many advantages, and large organizations require a certain amount of bureaucracy in order to function. For example, ethics and legal compliance offices in organizations signal to everyone that these are important issues worthy of resources, expertise, and staff. However, certain characteristics of bureau-cracy—such as specialization, division of labor, and hierarchy of authority—can present problems for the organization’s ethical culture.

AUTHORITY, RESPONSIBILITY, AND ETHICAL CULTURE

With bureaucracy comes the idea of legitimate authority. Look at any organizational chart. It will tell you who supervises whom—who has authority over whom. These authority figures serve important bureaucratic roles. They direct work, delegate responsibility, conduct performance appraisals, and make decisions about promotions and raises.

This natural tendency toward unquestioning obedience can be a real threat to the organization’s attempt to build individual responsibility into its ethical culture. In attempting to control employee behavior, many firms expect loyalty; and some demand unquestioning obedience from their employees. You might think that’s a good idea—that authority figures have more experience and should know what’s right, and employees should follow their orders. But even the military with its authoritarian structure expects soldiers to question unethical orders. Loyalty is generally a good thing, but you shouldn’t be expected to be loyal or obedient to an unethical boss or organization. Unquestioning obedience to authority means that employees are not expected to think for themselves, to question bad orders, or to take responsibility for problems they observe. Therefore, a ‘‘do as you’re told’’ and ‘‘don’t ask any questions’’ culture that expects unquestioning obedience from employees can become involved in serious ethical problems. Research has found that the more a firm demands unquestioning obedience to authority, the higher the unethical conduct among employees, the lower their tendency to seek advice about ethical issues, and the lower the likelihood that employees would report ethical violations or deliver ‘‘bad news’’ to management.

Some managers create a structure designed to help them avoid blame. Their greatest fear is that when it comes time to blame someone, the finger will point their way, and their job will be at risk. By delegating responsibility to those at lower levels in the organization, the authority figure can often avoid personal blame for mistakes or ethical blunders. When it comes time to blame someone, the finger of blame frequently points down. Underlings, in particular, fear becoming the scapegoat for mistakes made at higher levels. CYA memos proliferate as managers look to blame someone in a relatively powerless position who is considered to be expendable.