Ethical standards are a normal part of conducting business, because organizational communication is addressed to an audience, whose beliefs, biases, goals, and perceptions of the communicators impose constraints on their action and employees are expected to submit to these constraints. Organizations make value judgments about what constitutes appropriate behavior to meet their goals. In the case of government contracting, the ethical standards for reporting and billing are imposed on the contractor’s existing standards.
For key Sundstrand employees, what was “acceptable” behavior ultimately differed from the government’s standard and was labeled fraudulent activity. There were several reasons for misconduct. First, competitive pressures to make a profit can cause steps to be taken to avoid “giving away the store,” even though ethical boundaries may be. Second, government standards were sufficiently ambiguous to allow contractors latitude in completing a project. Third, a cozy relationship between government regulators and contractor representatives allowed Sundstrand employees to violate the spirit if not the letter of several ethical standards.
Specifically, ethics and ethical decision making must be defined. Ethics refers to the rules or principles that define right and wrong conduct. Many of these rules are applied when an individual is required to make a decision. Hence, ethical decision making has become an area of research interest. The moral base or rules that are applied to determine right and wrong are often developed from one’s cognitive moral development, value base, or moral philosophies. Therefore, ethical decision making is the process by which individuals use their moral base to determine whether a certain issue is right or wrong.
Thus, governmental unrealistic guidelines must be integrated into the corporate culture to ensure compliance. Culture may be defined as written and unwritten expectations of behavior (rules and norms) that influence the members of the organization. But more important than simple rules promulgated by leaders, “Meanings evolve through social interaction and sense-making activities of people . . . creating and recreating the social structure that makes an organization”.
An organization’s ethical orientation within its corporate culture seeks to determine what decisions will be made, and yet member decisions have a powerful effect on the reshaping of those same standards. If a prohibited practice thrives in the organization without consequence, the practice becomes a real expectation of organization members, undermining the constraining influence of official unrealistic policy, as was demonstrated in the Sundstrand incident. Public exposure of ethical violations ushers in an organizational crisis.
Since culture represents not what an organization has but what it is the misbehaving corporation must attempt to redefine itself to the public, its clients, and its members in a way that will rebuild its credibility. Sundstrand suddenly appeared wayward and unprincipled, selling out ethically for filthy lucre; it had violated traditional unrealistic guidelines such as avoiding harm to others, exhibiting respect for agreements beyond courtesy and protocol, and preserving the company’s reputation. When an organization faces a crisis of public trust, there are predictable stages it will follow.
In this stage, there are warning signs that corporate behavior may be introducing conflict. The crisis becomes acute when controversy erupts in a public forum, with a chronic period of apology and compensation to offended parties to follow. At last, the organization may seek final resolution when the apologies are accepted and the future brightens. However, current crisis management literature focuses only on transmission of accurate and timely information without meeting the audience’s psychological needs during a crisis.
The typical framework for crisis communication makes the assumption that crisis communication is important and influences opinions of internal and external constituents only during a crisis. Further, one must determine how communication will affect opinions regarding the organization after the termination of a crisis’s life cycle. The Sundstrand case demonstrates that strategic communication which modifies cultural expectations within the organization can be effective during an ethical crisis resolution.
When leaders make visible attempts to manage their organization’s images (e. g. General Motors’ investigation of Ralph Nader after his criticism of the Corvair) risk being viewed as manipulative and as “protesting too much. Such efforts can backfire and reduce legitimacy when organizations are viewed as “clumsy” (unethical, heavy-handed, or insensitive), “nervous” (dogmatic, intolerant, or evasive), or “overacting” (exaggerating strengths or reacting too strongly to faults).