Organizational character

Abstract

Business organizations have come to play an increasingly important role in contemporary societies. Some of the large global corporations have revenues that are higher than the GDP of nations. They have a great deal of resources at their disposal and often impact social and economic development significantly. In emerging economies, which have witnessed a phenomenal degree of economic growth, their role in ensuring a sustainable and equitable growth in future is of deep concern. The traditional role of business as a creator of wealth for its shareholders is coming under increasing scrutiny. Examples of Worldcomm, Xerox and Enron critically raise questions about the roles and responsibilities of business organizations. Several writers in the business press refer to the unethical practices of the organizations and exhort organizations to be more socially responsible. Yet in every nation, there are several examples of corporations that have demonstrated high ethical standards. Over centuries, they have also created and perpetuated an ethos where they have voluntarily submitted themselves to public scrutiny on their ethical behaviours. When they have been under the scanner on suspicion for any unethical conduct, they have often set standards for the industry and the society in general. The question that begs an answer is --- what makes for such organizations to consistently demonstrate much higher standards of ethical conduct and integrity than other organizations? How are they able to inculcate this? How do they continuously sustain their ethical capability? The authors argue that such an ethos is created, nurtured and developed by the actions of a critical mass of individuals, acting individually and in collective, along with appropriate ethical systems, structures, policies and processes to build this ethical capability in organizations. This aspect of a collective ethical reasoning capability leading to consistent actions of high integrity by key actors in an organization is being referred to as “Organizational character”.