How Do Organizational Approaches to Ethics Influence Individual Decision-Making? Designing an Online Experiment to Evaluate Ethics Management

• In Event: Strategic management

Abstract

Nonprofit organizations rely on public trust and support to pursue their missions (Russell, et al., 2023). A key aspect of cultivating and retaining this support is through the alignment of organizational behaviors with their stated mission and values. While some have referred to the nonprofit sector as “the benevolent sector” (White, 2010), implying that nonprofits are inherently “ethical” or “good,” ethical breaches in the form of very public scandals continue to arise in third-sector organizations around the world (De Bruin Cardoso, et al., 2023; Chapman, et al., 2022). Thus, there is a clear argument for a continued focus on ethics for nonprofit management. However, while many have advanced the importance of administrative ethics and offered recommendations for cultivating more ethical organizations (Svara, 2022; MacQuillan & Sargeant, 2019; Handy & Russell, 2018), empirical research examining the effectiveness of these efforts remains limited. Moreover, the studies that have been conducted tend to focus on the business sector, rather than on nonprofits, and typically only examine codes of ethics, excluding other types of interventions and policies that organizations might develop to promote more ethical behaviors (e.g., Kotzian, et al., 2021; Kaptein, 2011). This study will address these gaps by investigating the effectiveness of different organizational approaches to ethics management in nonprofits.

In their conceptual paper, Zhang and colleagues (2014) advance an integrative approach to organizational ethics that combines both values-oriented and structure-oriented approaches, suggesting a promising strategy for nonprofit organizations to pursue. Based on Zhang and colleagues’ (2014) conceptual framework, this study will test the effectiveness of values-oriented and structure-oriented approaches to ethics in nonprofit organizations, addressing the following research questions: Do organizational strategies positively influence individuals’ decision-making when faced with an ethical dilemma? Which approach (values-oriented, structure-oriented, or integrated) is most effective?

Using a sample of working adults in the U.S., we will conduct a randomized online experiment to examine participants’ decision-making when faced with an ethical dilemma in a hypothetical nonprofit organization to see whether the organization’s ethics management strategies influence their decisions. With the vignette-based experiment, we will randomly assign participants to four treatment groups: no ethics management strategy (control); ethics management focused on values-oriented approach; ethics management focused on structure-oriented approach; and ethics management encompassing an integrated approach. The study will also collect information about individuals’ current employment, including whether they work or have worked in the nonprofit sector, and their overall attitudes toward nonprofit organizations, to serve as control variables.

As one of the first experimental studies on organizational ethics in the nonprofit context, this study will contribute to our understanding of administrative ethics in nonprofit organizations. It will provide a means to examine different organizational strategies and determine whether and how such strategies influence individual behaviors, yielding insights for management and supporting organizations’ efforts to foster public trust and accountability. Additionally, this presentation will also create opportunities for valuable discussion about the use of online experiments in third sector research, contributing to methodological improvements for the field.

References

Chapman, C.M., Hornsey, M.J., Gillespie, N., and Lockey, S. (2022). Nonprofit scandals: A systematic review and conceptual framework. Nonprofit and Voluntary Sector Quarterly, 52(1).

De Bruin Cardoso, I., Russell, A.R., Kaptein, M., and Meijs, L. (2023). How moral goodness drives unethical behavior: Empirical evidence for the NGO halo effect. Nonprofit and Voluntary Sector Quarterly. DOI: 10.1177/08997640231179751

Handy, F., and Russell, A.R. (2018). Ethics for Social Impact: Ethical Decision-Making in Nonprofit Organizations. Palgrave-Macmillan.

Kaptein, M. (2010). Toward effective codes: Testing the relationship with unethical behavior. Jounral of Business Ethics. DOI: 10.1007/s10551-010-0652-5.

Kotzian, P., Stober, T., Weisenberger, B.E., and Hoos, F. (2021). Effective, but not all the time: Experimental evidence on the effectiveness of a code of ethics’ design. Business and Society Review, 126, 107-134.

MacQuillan, I., and Sargeant, A. (2019). Fundraising ethics: A rights-balancing approach. Journal of Business Ethics, 160(1), 239-259.

Russell, A.R., Frisone, M., and Frumkin, P. (2023). Layoffs during a pandemic: Results from an experiment on the management practices of nonprofit organizations and business firms. Nonprofit Management & Leadership. DOI: 10.1002/nml.21593

Svara, J. (2022). The Ethics Primer for Public Administrators in Government and Nonprofit Organizations (3rd Edition). Jones and Bartlett Publishers.

White, D. (2010). The Nonprofit Challenge: Integrating Ethics into the Purpose and Promise of Our Nation’s Charities. Springer Link.

Zhang, T., Gino, F., and Bazerman, M.H. (2014). Morality rebooted: Exploring simple fixes to our moral bugs. Research in Organizational Behavior, 34, 63-79.

Authors

• Allison Russell, University of Texas at Dallas

• Minjung Kim, University of Pennsylvania, Center for Social Impact Strategy