Identifying ethical issues: The roles of issue characteristics, individual differences, and context in managerial sensemaking

Scholars have argued that the identification of the ethical issue is the first step to ethical behavior, and yet this complicated task has received little attention in the literature. Moreover, research in this area is predicated on an assumption that the ethical issue exists in some objective sense. In contrast, I consider the possibility that ethical issues are to a large extent socially constructed, and in that vein I use a mixed-method approach to examine the factors that lead a manager to label an issue as an ethical issue. In Phase I of this dissertation, I conduct a 7-month ethnographic study of a Fortune 1000 company and identify the primary issue characteristics, individual characteristics, and aspects of the managerial context that lead an individual to label an issue an ethical issue. Then I develop a grounded model of the phenomenon based on those concepts. In Phase II of the dissertation, I test hypotheses that emerged from the grounded model by conducting three studies designed in accordance with traditional experimental design techniques. Results of these studies confirm that ethical issues are identified by two issue characteristics: harm and the violation of a behavioral norm. The results also suggest, however, that because issue characteristics are often ambiguous, individuals rely upon a context created by managerial and organizational stakeholders to understand the meaning and significance of those characteristics. Lastly, the experiments indicate that individuals consider these issue characteristics according to their ethical predispositions (preference for consequence or non-consequence-based approaches to ethics and ethical matters). This research contributes to the literatures on issue labeling, moral intensity, moral awareness, ethical predisposition, and ethical decision-making. More generally, it challenges fundamental assumptions underlying the study of ethics and demonstrates the extent to which ethical issues are socially constructed and individually relevant. Furthermore, since scholars have consistently argued that ethical behavior requires that managers first identify and label the ethical issue, this dissertation can help managers find the path to ethical behavior.