Introduction

Practical Theory for Building Ethical, Virtuous Organizations

The work represented in this special issue is important and timely for a number of reasons. First, if as Ghoshal (2005, p. 75) has so strongly argued, “bad management theories” have the potential to “destroy good management practices,” then conversely, good management theories should provide the foundation for the development of good management practices. At the center of Ghoshal’s (2005) indictment of “bad management theory” are a number of important assumptions, including the idea that contemporary management theories are often driven by “negative assumptions about people and institutions” and a “causal determinism” that allows decision makers to deny the “role of human choices and intentions” (p. 76). The summum bonum of such grounding for management theories is that they drive inhumane, narrow choices that create significant, negative repercussions for people and the planet. It logically follows that good management theories should arise from models that have a more optimistic view on the positive potential of people and organizations, and more important, it should allow for and enable virtuous human intentions and roles. These calls are not really new—for example, McGregor’s (1960) identification of Theory-Y over a half-century ago still beckons as a call to explore the foundations of virtuous thought and action in organizational life.

Second, several research efforts over the last decade, which we can generally describe as “positive social science” (Bright, Stansburgy, Alzola, & Stavros, 2011), have specifically focused on an exploration of the factors, dimensions, mechanisms, and processes that are associated with highly functional individuals or organizations. For example, Positive Psychology has helped to develop an understanding of the factors and forces that are in play when people live such that they enact their potential and experience a good, meaningful, and significant life (Peterson & Seligman, 2004). Positive Organizational Scholarship focuses on the dimensions, factors, and enablers of “positive deviance” (Spreitzer & Sonenshein, 2004) or excellence in and/or of organizations (Cameron, Dutton, & Quinn, 2003; Cameron & Spreitzer, 2011). Other similar “positive” movements include Positive Organizational Behavior (Luthans & Youssef, 2007) and Positive Business Ethics (Stansbury & Sonenshein, 2011). All these efforts hold in common the intention to study and highlight those aspects of the human experience that define organizations and people when they are functioning at their highest, ethical, and virtuous potential.

Third, a number of organizational development and change practices have emerged over the past two decades that challenge a paradigm of deficiency in management practice. Bushe and Marshak (2009) have suggested that this shift may be attributed to the evolution in the way we think about how to change or develop organizations: from a paradigm of diagnosis to a paradigm of inquiry, from linear thinking to systems thinking, and from dialectic discourse to analogic dialogue. These changes are found in a number of organizational development practices such as Appreciative Inquiry, Human Systems Dynamics, Open Space Technology, Complex Responsive Systems, among many others (Cooperrider, Whitney, & Stavros, 2008; Owen, 2008. Holman, Devane, & Cady, 2012; Olson & Eoyang, 2001; Shaw, 2002). In many instances, as some scholars have noted (Cameron et al., 2003), the evolution of practice has often outpaced the development of theory, though it seems clear that many practitioners are paying close attention to the emergence of research efforts (e.g., Vogelsang et al., 2012).

Finally, the societal need to understand the factors that enable (or disable) ethics in organizational life is becoming more acute. Attention to business ethics, ethical decision making, corporate citizenship, and the development of value-based leaders and organization cultures have increased dramatically over the past decade. This trend corresponds to a similar increase in the media coverage of corporate scandals, wrong doing, and illegal actions. In contrast to the positive conversation referenced above, the dominant conversation concerning ethics appears to paint a gloomy picture that emphasizes the inescapability of human character flaws, particularly in wealth producing (for profit) institutions.

Taken as a whole, these developments suggest that we are in a moment in which the positive, virtuous dimensions of organizational life warrant greater attention. Simultaneously, the need to develop and disseminate knowledge about how to foster and sustain highly functional, humane, and ethical organizing is increasing.

The Virtuous Human System

To this end, the idea of a virtuous human system seems especially apropos. Neubert (2011, p. 228) argues that the positive turn in social science indicates the emergence of a “virtue-based management and organizational theory.” A key assumption underlying this fast-growing body of work is that a deepened understanding of virtue in general, and specific virtues in particular, reflects and fulfills an intention to explore human flourishing and positive deviance (Spreitzer & Sonenshein, 2004). The “poetic principle,” described in social constructionist critique, suggests that organizations emerge from the images and narratives that dominate the discourse of organizational life (Barrett & Fry, 2005). A line of inquiry around virtuous organizing should help enable a generative form of imaging that encourages the enactment of such organizations.

Virtue refers to moral and intellectual excellences of human character and action in the pursuit of the highest good of human beings, the most ennobling behaviors, and the essence of humankind when at its best (Cameron & Winn, 2011). Virtue-based theories have evolved substantially over the past three decades, not only in the philosophical domain of virtue ethics (e.g., MacIntyre, 2007) but also in organizational scholarship (Cameron & Winn, 2011). In particular, the idea of excellence-as-virtue has been used to characterize the properties of highly functional, positively deviant organizational systems and the relationship with various organizational outcomes (Cameron, Mora, Leutscher, & Calarco, 2011; Manz, Manz, Adams, & Shipper, 2011). The evidence suggests that when organizations promote a virtuous, ethical environment, they tend to generate value, and over time, they move beyond ordinary levels of performance (Bright, Cameron, & Caza, 2006; Cameron, 2003; Cameron et al., 2011).

Thus, in soliciting contributions for this special issue, we sought to receive articles that would extend our understanding of virtuous organizing and inform practical theories that would serve as a basis for increasing ethical and virtuous practices in organizations. Each of the five articles selected for this special issue provide distinct perspectives on the conditions or capacities that are enabled when an organization or people are in a virtuous state. We have also asked all authors to provide practical suggestions about how to establish these conditions. We have ordered the articles to begin with a macro-level theory of organizational virtuousness (Sadler-Smith, this issue), move next to more meso-level theories of organizational healing (Powley, this issue) and the role of middle managers (Sharma & Good, this issue), and end with an examination of high-quality connections in relationships as a building block of ethical, virtuous organizational systems (Stephens, Heaphy, Carmeli, Spreitzer, & Dutton, this issue) and the intrapersonal cognitive processes of moral reasoning that are associated with ethical decision making (Bagozzi, Sekerka, Hill, & Squera, this issue).

Dimensions of and Implications for Ethical, Virtuous Organizations

Sadler-Smith (this issue), a thought-leader in the field of virtue ethics, sets the stage for this special issue by providing a brief review of the core ideas associated with organizational virtuousness and environmental virtue ethics. By integrating the two domains, he lays a logical framework for a new notion of “organizational environmental virtuousness” (p. xxx), an ethical concern for doing right by the natural environment. His review provides at least one important illustration as to why it is important to focus attention, not just on solving environmental problems as is typical of efforts to establish and enforce standards and policies but to promote a “collective ethical disposition that habitually motivates, guides, and corrects moral behavior in organizational behavior in positively deviant ways” (p. xxx), especially as related to environmental issues.

These arguments invite us to consider practices that have the potential to elevate the level of thought among the members of an organizational system such that the people within them develop virtuous intent toward collective-level concerns and policies. He briefly highlights how this has been in organizations such as Green Mountain Coffee Roasters, which has used an Appreciative Inquiry model to engage employees. These efforts have paid big dividends for Green Mountain Coffee Roasters, which has consistently maintained its profitability, even during this particularly dismal current economic period.

This contribution suggests a bold idea. The strategic pursuit of sustainability (social and environmental benefit along with profitability) both demands and fosters a mindset and mindfulness in the direction of virtuousness, because increased attention to the external wholeness of one’s world brings forth a more holistic (mind and heart) personal being.

Next, Powley (this issue) describes how an organization may heal in the aftermath of tragedy or crisis. By likening organizational healing to physiological healing, he identifies three processes and several mechanisms that organizational leaders can tap into, so as to not only enable organizational healing but also to deepen the virtuous capacity of an organizational system and its people. The applied implications of this model suggest interventions that specifically aid the crisis response. For example, the mobilization of resources to support organizational members as they recover from the immediate effects of crisis is a way to enable “protective inflammation,” and it demonstrates genuine concern and compassion for the well-being of those who are suffering. As the healing process continues, organizational leaders might foster interventions that enable “relational proliferation” or the establishment of new connections and relationships among organizational members to repair damaged or severed connections. A variety of dialogically based methods such as Open-Space Technology (Owen, 2008) or Appreciative Inquiry (Cooperrider et al., 2008) may be particularly helpful or relevant during such moments.

From our perspective, one of the key contributions of Powley’s (this issue) article is its relevance to the development of an ethical, virtuous organization in the face of severe adversity. It is during the moment of crisis that the character of an organization and its leaders is most evident. Many leaders may see moments of adversity—for example, a severe economic crisis—as reason to temporarily suspend a focus on a firm’s social responsibilities. Yet the organizational choices made during such moments tend to communicate either that ethical, virtuous considerations are core to the organization—even when pushed to extreme—or that they are merely superficial and shallow ideas that are not really practiced or embraced when the organization is challenged. We are reminded that virtuous organizing is not the absence of mistakes, trauma, illegalities, or offense; rather, it is at these moments that virtuous/ethical acts can be possible and apparent.

Sharma and Good’s (this issue) article focuses on the critical role of the middle-managers as agents of virtuous organizing and on the tensions that they face when striving to implement socially responsible initiatives, on the one hand, while also maintaining a responsible focus on profitability. The result is an analysis of the micro processes wherein these key organizational actors struggle with the competing logics of social and profit outcomes. Their work suggests specific conditions in which this struggle can transform stakeholder and organization practice such that the competing logics are sustained and the social benefit initiatives are implemented along with profitable business practices. As a contribution to practical theory, they suggest that there are three sensemaking competencies that need to be developed or activated among middle managers if they are to have the capacity to manage these tensions in a generative fashion: emotional complexity, integrative complexity, and behavioral complexity. They offer several strategies for selection, training, top management development, and socialization to develop these sensemaking capacities among middle managers.

Stephens et al. (this issue) describe a pair of studies that examine the importance of high-quality relationships as a context for organizational virtuousness. In particular, they examine emotional carrying capacity as a dimension of resilience in interpersonal relationships and link this to trust and team resilience. They explore how emotional carrying capacity acts as a resource to enable virtues such as hope, kindness, and fosters an ability to engage in constructive conflict, demonstrate courage, or display integrity during difficult moments in organizational life. Similar to Powley (this issue), Stephen et al. (this issue) argue that moments of adversity provide an opportunity for individual learning and growing and that people are more likely to benefit from such moments when they are supported by strong relationships. However, in contrast to Powley’s (this issue) focus on crisis, this work is relevant to everyday opportunities to demonstrate virtue in the face of adversity. When people have access to a strong set of interpersonal workplace relationships to draw on a source of resilience, they are much more likely to face and overcome adversity, thereby contributing at a higher level as organization members. The practical implication of their findings suggests the need for interventions that nurture and strengthen interpersonal relationships among members of an organization as a means to establish the foundation for organizational virtuousness.

This article addresses an interesting and important dilemma in exploring ethical or virtuous organizing. Although professions continuously seek to enforce ethical standards of action and we lament the “absence of professionalism” in many of the abuses and unethical situations popularized in the media these days, Stephens et al. (this issue) remind us that professionalism must include the expression of emotions, not deny or censor them as is often the interpretation. The so-called sticking to the facts and influencing through logical rationale, if it implies withholding emotions, is not conducive to resilience in the face of crises, breakdowns, or mistakes and, therefore, not conducive to virtuous organizing over the long run. This finding supports the importance of helping leaders and managers to develop emotional intelligence. Thus, to encourage virtuous organizing, leaders need to find creative ways to enable effective expression and understanding of positive and negative emotions, especially in situations where it may be difficult to perceive what others are actually feeling.

Bagozzi, Sekerka, Hill, and Squera (this issue) seek to understand the moral codes that people carry within them—as shaped by their institutional experiences and personal values—and how these moral codes actually translate into decision-making. They provide an innovative methodology (ladering and network analysis) as they uncover the process and patterns of cognitive reasoning in people when they are confronted with a life-or-death ethical dilemma.

One insight from this work is the mapping of value linkages, showing how one value (virtue) idea links to and informs other values to create justifications for particular courses of action. In addition, the research shows how certain value linkages are activated in context. By implication, this work provides insight about the patterns of thought, behavior, and action an organization might shape to reinforce an ethical, virtuous decision-making climate. Furthermore, the Bagozzi et al. (this issue) methodology might be used as part of a management or organizational development intervention to help people become more aware of how they translate values into action, thereby making them more cognizant of their capacity to exemplify ethics or virtue, lessening the distance between espoused and enacted ethical behavior. Indeed, another contribution of this work is the authors’ demonstration that active inquiry into actual ethical choices and reasons for them makes it possible to generate guiding principles for further training, selection, or organization value declarations.

We believe that the work featured in this special issue expands our thinking about the dimensions, processes, and practices that are associated with ethical, virtuous organizing. We hope that this special issue provokes new questions and ideas that will lead to more intentional work on the enablers of good, ethical, and virtuous human systems.