Southern Business Review

Volume 32 Issue 2 Article 4

How Industrial Relations Informs the Teaching of Ethics in Human Resource

Charles G. Smith Otterbein College

Hugh D. Hindman Appalachian State University

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Recommended Citation Smith, Charles G. and Hindman, Hugh D. () "How Industrial Relations Informs the Teaching of Ethics in Human Resource Management," Southern Business Review: Vol. 32 : Iss. 2 , Article 4. Available at: https://digitalcommons.georgiasouthern.edu/sbr/vol32/iss2/4

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Charles G. Smith and Hugh D. Hindman

Most people want to do also because they directly avoid the historical and the “right thing.” This is true affect people and, so, have the philosophical backdrop that in business as well as in life. It potential to bring significant give texture and substance to is the duty of business good or significant harm to these decisions, an under- educators to provide a both individuals and to standing of the intellectual framework for students and society. To better inform the antecedents of today’s peers to judge the operational, debate over ethicality of HR relationship, and legal, and ethical rigor of practices, the authors suggest their inherent tensions will managerial decisions. This a re-examination human afford business decision article focuses attention on the resource management through makers a framework from human resource management the lens of its historical and which to better judge the function. The importance of philosophical predecessors— significance and the ethics of human resource management the industrial relations school their actions. (HRM) practices to the success of thought. The article presents an of the firm is accepted by Contemporary disputa- industrial relations system scholars and practitioners tions on the nature of the model updated to reflect alike and will be assumed employment relationship are current business exigencies. It here. But human resource at times truncated, uninspired, further offers a brief historical management practices are and lifeless. America is not and philosophical journey into important not only because of one big happy family and America’s experience with the their efficacy for the firm, but neither are business employee–employer relation- . Nor should they ship linking economic with be, as many in the human moral theory and considering Charles G. Smith, Ph.D., is professor of management, in resources field would hold. three alternative moral the Department of Business, Choices need to be made, viewpoints on the industrial Accounting, and , some rooted in history, some relations system. Next is a Otterbein College, novel to the present. Some are review of the treatment of Westerville, OH 43081. operationally sound, some are human resource management not. Some choices are legal, issues in popular collegiate Hugh D. Hindman, Ph.D., is some are not, and some are business ethics texts. The professor of labor & human morally defensible and others article concludes with resources, in the Walker are not. A discussion about implications for teaching College of Business, the appropriate structures and business ethics in human Appalachian State University, polices at work is in order. resource management. The Boone, NC 28608. While business schools often authors’ purpose is not to

16 Spring 2007 Southern Business Review promote their own views, but used to order one’s beliefs, that followed the industrializa- rather to frame the debate attitudes, and behavior about tion of the republic itself. concerning the treatment of the manner in which people Figure 1 presents a revised men and women in their deal with one another at work. industrial relations system working lives. The industrial Its purpose is to provide an model updated to reflect relations model affords understanding of the contemporary realities. As an decision makers enormous development and operation of instructional tool it flexibility with their human structures and processes summarizes the dominant resource practices, work involved in the production of forces at play in the employer- structures and process. The goods and services as they employee relationship. The article identifies questions of relate to the parties involved actors in the system include concern. How they are and to the larger society. employers and their trade answered is idiosyncratic to Kochan, Katz and McKersie associations, employees and the business decision maker define it this way, “…the their unions or professional and, hopefully, rooted in premises, values, laws, associations, and the sound moral reasoning. institutions and practices that government as the govern employment representative of the body The Industrial Relations relationships” (1986). The politic. Additionally, the System classic work on industrial system recognizes the relations system theory posits importance of consumers, Students of business ethics that the role of the system is competitors, suppliers, and rarely focus on America’s the establishment of rules that other interest groups. The industrial relations system, govern the relations between primary actors then develop preferring instead to study its primary actors, labor, rules that govern the macro socio-economic forces management, and the employment relationship by underlying systems of political government. The rules establishing structures and economy such as , themselves and the techniques processes that promote their , or or, for their establishment are respective interests. These alternatively, opting to influenced by three myriad rules tend to coalesce investigate micro socio- environmental forces, around four different models economic concerns such as technology, the market, and of governance– price fixing, product safety, the distribution of power and command and control, false advertising, employment status among the actors within employee , discrimination, or bribery the larger society. Finally, , and (Adler & Bigoness, 1992). what binds the entire system . Here, however, attention is together is the shared ideals The ideas of a command directed to the institution of and beliefs of society, i.e., and control governing the employee - employer ideology (Dunlop, 1958). A structure flows naturally from relationship and the control, stable menu of rules, both the work of such management authority and decision making substantive and procedural, theorists as Fayol, Taylor, and relationships generated. These developed among labor, Weber. Proponents of a considerations are central to management, and government command and control industrial relations system before and after World War II; structure legitimize top down theory and lie on a middle however, today the system is decision making, information stratum of the hierarchy of in flux, undergoing a meta- flow, and authority theoretical abstractions. morphosis perhaps as potent relationships. Work is An industrial relations and far reaching as the one perceived as undesirable, system is a conceptual tool

Southern Business Review Spring 2007 17 Figure 1 Modified Industrial Relations System

loathsome, and alienating policies of the firm; and 2) A second type of requiring extrinsic reward performance monitoring—the governing structure available mechanisms, subject to market control function—making sure to American business is the pressures, to attract, motivate, intended policies are employee empowerment or and maintain needed implemented. Both of these employee involvement model. employees. Employees cede to tasks have direct and obvious Tracing back to the Human a managerial class control not effects on employees. Relations School (Mayo) and only of their labor, but of the Employees have one main following MacGregor’s (1957) rule-making processes that task—follow the rules. While Theory Y assumptions that govern the nature of how work command and control employees seek challenge and is actually performed. structures are somewhat out of fulfillment in their work, Employees are conceptualized fashion in academic circles, management has experimented as interchangeable parts in the they remain a common with a number of structures machinery of production. prototype for workplace directed at increasing (Braverman, 1974). governance today. Command employee involvement, Management has two main and control regimes continue participation, and commitment tasks: 1) policy to dot the economic landscape at the workplace. redesign, formulation—the command from traditional industrial TQM initiatives, quality circle, function—formulation of the sectors to white collar and self-directed work teams, and strategic and operational service sectors. employee involvement

18 Spring 2007 Southern Business Review committees are examples much of what human resource the collective bargaining type designed to unleash the management addresses with is the grievance/arbitration creative power of the collective bargaining the procedure. This instrument American worker and better instrument used to codify the protects employees from attach them to the employment contract; how- managerial caprice by holding . All of these ever, collective bargaining may certain managerial actions to programs vary in the scope not disturb management’s the judgment of arbitral and depth of employee underlying posture toward review. In this sense, participation (Cotton, 1993). workplace governance. Thus, collective bargaining is a The degree to which where management insists on model of industrial employees influence centralized authority, jurisprudence. Under the managerial decisions can range managerial control of the work collective bargaining governing from a restricted scope process, and the view that structure decision making is involving only quality work is inherently loathsome, shared to some extent with improvements to a broad collective bargain is not likely worker representatives, but scope including such mattes as to displace a command and ultimate authority and control product development, staffing, control regime. Where remain with management. Of scheduling, and stakeholder authority is decentralized, note to this model, however, is relations. Whatever its control over work processes is the existence of contractual incarnation employee diffused, and management restrictions on managerial involvement programs require sees workers as seeking freedom of action and the workers to increase their challenge and fulfillment, institutionalization of commitment, accept more collective bargaining is likely procedures to resolve conflicts responsibility, and join in a to support an employee between employees, partnership with management. empowerment culture. While management, and the union For some an additional goal is collective bargaining may not (Elkouri & Elkouri, 1979). the elimination of alienating fundamentally alter underlying Industrial democracy work. Under these programs, tendencies, the impact of the concludes the taxonomy of control is decentralized, union must not be workplace governance authority is defused, and understated. structures. Its distinguishing decision making is shared. The introduction of a characteristic is that, in one The collective bargaining second power center at work form or another, it involves governance structure can look competing for the support and employee ownership and very much like either the loyalty of the workforce sovereignty over the work command and control model creates a dynamic unique to organization. The preeminent or the employee empowerment the unionized setting. What contemporary example is model. The key distinction is develops is a controlled Mondragon, the Basque the addition of the labor union conflict or an “antagonistic , where worker and the requisite change to cooperation” (Bakke,1946) in sovereignty is manifest in an bilateral decision making in which the parties compete for elected assembly responsible certain defined areas. the rewards of the economic for hiring the management Management no longer has enterprise. From time to time team (Taylor, 1993). sole discretion over “wages, these conflicts surface as Additional examples are the hours, and other terms and strikes, boycotts, or , worker of the conditions of employment” but an underlying tension is nineteenth century in the US (NLRB vs. Wooster Division of always present waiting to and the Israeli Kibbutz. Borg Warner, 1957). The solidify openly when Control and decision making areas under joint conditions are auspicious. A remains with management, determination encompass second mechanism unique to however, ultimate authority

Southern Business Review Spring 2007 19 rests in the employees employees. Next, the rewards ment relationship has themselves as owners of the are divided including profits to enormous influence on the enterprise. Even in this model firm owners and compensation Republic’s concern with social of workplace governance, the to firm employees. The exact justice. This includes measures extent to which work is division of the firm’s rewards of unemployment, income intrinsically rewarding as well between owners and distribution, opportunities for as extrinsically satisfying employees and the compen- work, educational accomplish- remains an open question as sation mix will vary by ment, life expectancy, and product markets pressures workplace type. For example, many more. The conundrum of necessitate the need for under collective bargaining sharing the fruits of our industrial efficiency no matter wages and benefits are industrial relations system is who owns the firm. A variant typically higher and profits complicated in the United of industrial democracy lower than similar organiza- States because we insist on common in Northern Europe is tions using the command and using the lexicon of fairness, co-determination, a structure control model. Further, the democracy, and justice. that provides for employee compensation mix in firms The industrial relations representation on corporate emphasizing employee model recognizes the impact of boards of directors often in empowerment will tend to external forces on the system. equal numbers with focus increasingly on systems Economic, political, and management. In theory, firms of pay for individual and technological dimensions all owned by their employees group performance. Whatever influence choices made in the through ESOPs (employee the division of firm rewards industrial relations system. stock ownership plans), could and the specifics of firm Less obvious, but more offer a form of industrial compensation packages, and important to the discussion democracy. As most ESOPs are whatever the type of work- here, are the influence of implemented, however, they place governance employed, values and power. Values may are more a program of the direct result of workplace be defined as some thing, deferred compensation that compensation is the employee person, concept, or belief of provides the firm with an standard of living. importance or worth of a long inexpensive source of capital. Second order outcomes standing nature (Greenberg, While a few ESOPs transfer reflect the combined impact of 2002, p. 307). Societal values real control over the strategic thousands of firm level suc- guide individual decisions and direction of the firm to cesses and failures in attaining choices in the employee– employee owners, most do not first order outcomes. Does the employer relationship and, as and, therefore, should not be system contribute to economic they change, so also does the confused with industrial growth (or recession)? What is industrial relations system. Of democracy. the rate of economic growth? particular are values regarding The immediate result of Is it widely shared or tightly the parties themselves. While these governing structures is concentrated? Market ef- the labor movement has its to support a production ficiency addresses the question adherents, many see organized process that leads to the of what to produce and in how labor as an anachronism. In model’s first order outcomes many numbers and at what part this influenced the choice where the fruits of employee price. It is a question that of workplace types. Others see labor create the benefits the confronts all systems of eco- organized labor as simply firm shares with its nomic organization. The irrelevant. Likewise, in the stakeholders. At its most current system leaves most of wake of corporate scandals, fundamental level the first these decisions to the many have become wary of order of business is survival “invisible hand” of the unfettered corporate for the firm and for market. Finally, the employ- management. Declining trust

20 Spring 2007 Southern Business Review in corporate management, company. Examples include of economic growth, creates a however, does not seem to questions of class and issues satisfying amount of needed have resulted in any surrounding organized labor. goods and services, while corresponding increase in how His observation is applicable promoting an acceptable level organized labor is valued. to many concerns regarding of social justice.” This is The most significant event human resource management represented by second order in the power relationships at including alternatives to the outcomes in Figure 1. work has been the contemporary employment An inherent conflict developed simultaneous increase in sheer relationship. To use Loewen’s between the efficiency needs power accumulated by metaphor, these alternatives of the capitalist and the employers, and the precipitous have dropped “down the security needs of the working decline in the power of memory hole” (Loewen, person (Hills, 1994). Efforts organized labor, over the last 1995). A discussion of the to reconcile the competing thirty years. Corresponding “labor problem” illustrates needs of the system’s actors with this shift in power has this point and links the must not be only economically been the triumph of a right- industrial relations system sound but ethically defensible. center political agenda model, ethical theories, and Further, this concern is not embraced by both Democratic historical context with obviated by current shift to and Republican administra- contemporary employment post-industrial production or tions, and the resulting retreat relationships. the ascendancy of by government as a moderator With its origins in the management as the leading of the employee-employer industrial revolution, the player in the system, and, relationship. One important “labor problem” emerged as a while work settings may shift consequence of the shift in policy concern in America by out of the to home- values and power is the the late 1800s. Labor leaders, work or contingent work and ascendance of the Human owners, managers, government technologies may shift from Resource Management policy makers, clerics, and the drill press to the computer function as the principal academi-cians, grappled with or the robot, the necessity to architect of workplace how best to accommodate the fulfill the needs of all system governance systems. needs of working men/women actors remains. The debate While the industrial as society progressed from pre- surrounding the “labor relations system model industrial to industrial problem” collapses to three presented in Figure 1 is a production. At the firm level, possibilities, each with its useful tool for directing one’s the problem may be stated, philosophical and economic inquiry, a brief historical tour “how to create a set of justifications. of what economic historians employment policies that label “the labor problem” adds provide increasing standards Teleological Perspective context in light of various of living, fair treatment and Utilitarianism is a ethical approaches. adequate for philosophy that embraces an employees, while at the same ethical code characterized by Ethical Theories and the time providing adequate three primary tenets. First, Industrial Relations profits for the firm.” These any action must be directed at are represented by first order creating the greatest possible System outcomes in Figure 1. At the good for the greatest numbers, James Loewen argues that societal level the labor the “ principal.” Americans tend to shy from problem may be stated, “How Second, the greatest good is controversial topics to their to regulate or modify the identified via a cost/benefit detriment; certain things are market economy so that it analysis of the array of just not discussed in polite provides an adequate degree possible choices and their

Southern Business Review Spring 2007 21 resulting consequences. for maximum efficiency and teachings and policy positions Finally, temporal values not fair distribution thus leaving related to the labor problem, ideal values govern choice. no “labor problem” to resolve. from well defined codes of (Brady, 1990; De George, Therefore, from the political social justice to complete 1990). A Utilitarian right, “government which silence. Catholicism offers one justification for then existing governs least is best.” This of the more comprehensive work processes and structures, summarizes the attitude of religious policies on work and leading to resolution of the most neoclassical economists workers and will be examined “labor problem,” is found in and much of the business here. Since the late nineteenth the work of Frederick W. community. With respect to century Rome has taken a Taylor and the writings of solving the labor problem they strong position on the neoclassical economists. argue that nothing need be character of work and its Taylor’s Principles of Scientific done because the market will relationship with man. For Management (1911) is a book transform problems into Roman Catholics work is of profound influence, and its solutions. Consistent with a defined as any activity of philosophy of work design and utilitarian ethic, the unfettered human beings, physical or authority has permeated the play of the free market will intellectual, and it American Republic ever since promote social justice through distinguishes humans from its publication. In it, Taylor fair income distribution based other creatures. It is not outlines a scheme for on employee contribution to something to be avoided but organizing the production the system, increase national rather a desirable activity, an process in the factory and wealth by manufacturing more expression of a fundamental creating a social order based goods and services, and condition of human life. Work on the production line. With maximize system efficiency by is the process by which man the utilization of certain using the price system to transforms nature and subdues “principles,” “scientifically” allocate scarce resources. Both the earth as instructed in defined and universally concerted employee action and Genesis, and by so doing administered, efficiency was government intervention are people are fulfilled as human maximized and managerial considered intrusions on the beings. For Catholics ethical control solidified. Work was market and the natural order dilemmas arise when men are considered an undesirable of things. “for work” rather than work activity, to be endured for its for men. That is, it is immoral instrumentality in achieving Deontological Perspective to regard workers as mere other ends; money was Three distinct instruments of production, substituted for fulfilling and philosophical traditions offer a rather labor is not a rewarding work. Kantian or moral rights commodity and workers are to Like Taylor, neoclassical approach to the “labor be regarded as makers and economists view labor as just problem.” First, western creators in their own right. another factor of production, religious traditions as Taken as a group, Papal one if used in a rational illustrated by those of the Encyclicals since Rerum fashion would maximize Catholic Church; second, Novarum impose strict ethical output. Workers are or conduct on the industrial conceptualized as ; and third, the relations system’s three actors. interchangeable parts whose concept of human rights as it Labor, management, and the numbers are needed only to extends to human rights in government are charged with the point where the cost of the employment. A comprehensive the creation and promotion of last person hired does not review of America’s dominant worker dignity, family exceed the benefit of that hire. religious traditions would security, and the increased The “invisible hand” provides reveal a range of ethical common good.

22 Spring 2007 Southern Business Review Marxist ethics, by right to equal pay for capital. Second, work is contrast, flow from the equal work; conceptualized as a natural following. Because economics expression of the human is seminal to man’s actions • Everyone who works has condition. And finally, the and therefore the unfolding of the right to just and labor problem will be resolved history, man’s nature is favorable remuneration through deliberate rational discovered in his/her labor. insuring for himself and and concerted action by Work then, is not only the his family an existence government, union, church, or principal cause of man’s worthy of human dignity, political party to better control happiness but also the and supplemented, if the market. It is a sobering principal cause of all other necessary, by other means reality, that although values in life. Therefore all of social protection; and discordant in ontologies, other values are contingent on Marxist ethics have common human labor in production • Everyone has the right to features with religious (Hampsch, 1965); however, form and to join trade teachings inspiring at times man is denied his true nature unions for the protection similar behaviors (Christiano, in work under a capitalist of his interests. 1988). system as “surplus value” from his/her labor is Since then, numerous An American Perspective expropriated by the owning international human rights This final approach to class. In addition the early accords have embraced worker resolving the “labor problem” Marx stressed the dislocations rights, including the lies between the extremes of caused by worker alienation International Covenant on unfettered capitalism and and the inevitability of the Civil and Political Rights and scientific socialism and reflects class struggle and the the International Covenant on a pragmatic democratic overthrow of capitalism and Economic, Social, and Cultural American tradition which its eventual replacement with Rights of 1966. More rejects the abuses of both and a communist order (Marx, recently, in 1998 the charts a course of evolutionary 1948). International Labor reform. Two streams of In the twentieth century, Organization adopted its American intellectual thought conceptions of human rights Declaration on Fundamental offer guidance. The first comes began to be extended to the Principles and Rights at Work, out of the philosophy of employment arena. A major with which all member nations “social justice” and the second milestone was the adoption of are obligated to conform. This from the views of institutional the United Nations Universal declaration asserts human economists. Although Declaration of Human Rights rights to freedom from slavery, considered a teleological in 1948. Article 23 addresses freedom from child labor, ethicist, John Rawls focuses on human rights in employment: freedom from discrimination, the significance of an and the positive rights to immediate decision and its • Everyone has the right to and implications for increasing work, to free choice of collective bargaining. social justice. For Rawls an employment, to just and From a deontological ethical decision is one that favorable conditions of perspective, Catholic social distributes the obligations and work and to protections teaching, Marxist ethical rewards of society in a fair against unemployment; theory, and universal human manner. Specifically, short rights, share some common- term decisions promoting • Everyone, without any alities. First, they all posit the apparent inequalities of discrimination, has the supremacy of labor over outcomes are tolerated when

Southern Business Review Spring 2007 23 they result in increased long market interventions originate the class struggle. term benefits to everyone in from one or both of two Unfortunately, many actions society including the institutions, the government taken in the name of the disadvantaged. Rawls is through various public policies working class are unable to concerned with institutions and the labor union through meet the simplest norms of and policies that distribute collective bargaining.(Perlman, common decency. American burdens and benefits across 1949). The philosophy institutionalist thinkers society in a just manner and underpinning America’s New observed first that the market for him activities are desirable Deal labor policy was the was not providing the greatest if they result in increased elimination of inequality of good for the greatest number social justice. And while Rawls bargaining power by or at least not much happiness favors social cooperation over encouraging and supporting for millions of American conflict his focus on justifiable unions in their efforts to workers and second that inequalities and institutions is organize workers in order to socialism of any coloring was similar to the view of the represent their interests in the unworkable in the United institutional economists collective bargaining process. States. (Rawls, 1998). With the decline in union The New Deal, the Great For economists of the power, and the simultaneous Society, and the American Wisconsin School on rise in management power, labor movement are examples institutional economics, there is a danger that worker of institutions developed to conflict is unavoidable as labor interests will, once again, be mitigate the abuses of a totally and management compete for inadequately represented free market. These, and others, their legitimate share of within the industrial relations are America’s response to the economic rewards. Thus, an system. “labor problem.” Institutional inherent conflict of interest Summarizing the three economists envision a between workers and basic approaches to the labor “pluralism” of power created at management pervades the problem, we compare their both the industry and political employment relationship. To respective views on political levels. To the extent possible the extent forces of supply and economy. Utilitarian/free they preferred to allow the demand promote economic marketers sanction little market to operate, however, growth and a fair distribution government involvement when necessary they created of society’s wealth the market under the belief that free rules through government should be left alone. But in market forces will result in regulation and/or collective those instances where it is not ethical behavior by creating bargaining to improve the functioning properly, well the greatest good for the distribution of society’s defined and limited greatest number. From a moral rewards, i.e., social justice. interventions into its operating rights perspective, Catholic This approach recognizes that are warranted. According to social teaching and the human the pursuit of social justice may institutional economists, a rights approach argue that not always coincide with common source of market actions to promote human maximizing economic growth or failure is inequality of dignity are consistent with market efficiencies. bargaining power. The market “universal” truths and the works well when the parties promotion of worker welfare is Current Business Ethics are able to meet each other as an imperative. On the other Instruction in Human relative equals. But when one hand, Marxists eschew side is powerful and the other bourgeois values as an artifact Resource Management is weak, market distortions of the capitalist mode of The question arises, to occur that exacerbate the labor production directing attention what extent do current texts in problem. When necessary, to those actions that promote business ethics address

24 Spring 2007 Southern Business Review American’s industrial relations costs; however, while this is and theoretical antecedents of system as opposed to micro interesting in itself, the idea the model will add greatly to level or macro level topics? that managers, labor, and the classroom instruction. Table 2 Table 1 illustrates coverage of public have alternative work frames the discussion by human resource issues by structures from which to examining the nature of major business ethics texts. To choose is not addressed. control, authority, and say there is a paucity of Further, the question of decision making for each coverage of America’s unionization is conspicuously workplace governance type as industrial relations system in absent. This is a notable justified by the three these commonly used texts exclusion given that collective philosophical/economic would be generous. None offer bargaining is the only approaches identified above. a direct presentation of the alternative to the dominant The implications for various choices available to command and control type business ethics education are the system’s actors for which has a long and rich numerous. First, those structuring the employee – history in the American responsible for designing and employer relationship at work, experience and which is the delivering business ethics although the Weiss text offers only alternative sanctioned education need not limit a well presented chapter on and protected by federal law. themselves to only presenta- employee responsibilities and But why is it significant that tions of micro level or macro rights at work. The industrial relations does not level concerns. The American Donaldson, Werhane, and currently inform the teaching experience supports a middle Cording text does allude to a of ethics in human resource level analysis of the exact middle road at the macro management? structures and process for the level, industrial relation’s system Implications for itself. While questions of (W)e should remind Instruction whistle blowing, drug testing, ourselves that the discrimination, and sexual Appropriately, significance immediate question harassment are real and is found in discussions of confronting most require inspired managerial control, authority, and people in the western actions, the exact nature of the decision making as they relate world is probably not industrial relations system has to human resource whether to adopt a a more far-reaching impact on management practices affect purely communistic or employees and the public. both employee wellbeing and purely free-market Further, debates about happiness at work and economy (p. 135). political systems are promote attainment of interesting in themselves, and organizational goals. The Nothing more is offered, how- in some lands relevant, but major conclusion of this study ever. From time to time one they are less germane to the is that business ethics texts might discover a discussion American experience. What is (and perhaps business which is tangential to the germane to American education in general) is industrial relations system, for employees is the manner of noticeably silent on these example, the Hartman text control, authority, and matters, and yet a framing of includes a reading on Pinnacle decision making experienced human resource management Brands and their efforts to in their working lives. practices based on modified avoid downsizing through Another implication from this systems model with an employee initiatives to create presentation is that there appreciation for the historical new products and reduce

Southern Business Review Spring 2007 25 Table 1 Human Resource Coverage in Major Business Ethics Texts

Text Author(s) Issues Covered The Ethics of Management LaRue Tone Hosmer Small text with short cases at end of each chapter. Business functional areas not covered. Ethical Issues in Business A Thomas Donaldson, A 613 page compilation of classic Philosophical Approach Patricia H. Werhane, and recent articles on business ethics Margaret Cording along with short case studies. Smith Marx readings are provided. There is coverage of employment at will, and whistleblowing. Business Ethics: A Global and David J. Fritzsche Small text with short cases at end of Managerial Perspective book, One case on a plant fire and another on a plant closing. Perspectives in Business Ethics Laura P. Hartman Almost 800 page work including editor classic and contemporary readings with an occasional case. Chapters are devoted to functional areas of business including HR. Topics include downsizing, whistleblowing, drug testing, discrimination, and child labor. Taking Sides: Classic Views on Lisa H. Newton and A 371 page offering organized by Controversial Issues in Business Maureen M. Ford Eds issue with pro and con articles. One Ethics and Society debate on the merits of Capitalism vs. Communism and four debates on HR including whistle-blowing, drug abuse, executive pay, and sweatshops. Business Ethics: Ethical Decision O.C. Ferrell A 245 page text with 150 pages of Making and Cases John Fraedrich medium sized cases at the end Linda Ferrell including one on sex discrimination. Business Ethics: Case Studies and Marianne M. Jennings A 490 page volume whose issues Selected Readings include due process, employee screening, privacy, sexual harassment, diversity, whistleblowing, employee rights, safety, and plant closings. Wake-Up Calls: Classic Cases in Lisa H. Newton A 210 page offering of cases with a Business Ethics David P. Schmidt 25 page introduction to the field of Business Ethics. The introduction includes a three page overview of Smith vs. Marx. The book offers classic cases such as Nestle, Love Canal, and Bhopal. There is a case on

26 Spring 2007 Southern Business Review Text Author(s) Issues Covered sexual harassment. Business Ethics: Mistakes and Robert F. Hartley A collection of recent and classic Successes cases in business ethics including Union Carbide, Wal-Mart, and Johnson & Johnson. No discussion of the Industrial Relation’s System although the case on Nike addresses child labor. Business and Society: A Strategic Debbie Thorne This work has 390 pages of text Approach to Social Responsibility McAlister framing corporate governance, public O. C. Ferrell policy, and ethics in terms of a firm’s Linda Ferrell social responsibility. A one half page presentation of the Collective Bargaining Type is presented. Business Ethics 05/06 John E. Richardson A 202 page collection of 46 editor previously published articles on an array of business ethics issues. The usual discussion of micro level employee issues on discrimination, downsizing, diversity, and whistleblowing. One contribution on anti-union tactics at Wal-Mart. Business Ethics: A Stakeholder and Joseph W. Weiss An edition with 334 pages of text Issues Management Approach and 120 pages of cases with one on women and the professions. The text covers traditional areas of business ethics with a stakeholder bent. Includes a lengthy chapter on employee rights and responsibilities at work. This includes the usual micro-level topics and even lists a number of rights not usually identified. However, the mechanisms or workplace governance which would guarantee these rights are absent. Discussions of political economy are restricted to a taxonomy of various types of capitalism in a framework for considering globalization.

Southern Business Review Spring 2007 27 Table 2 Workplace Governance and Philosophical Underpinnings

Utilitarianism Moral Rights Justice Command and Control, authority, and Control, authority, and Focus on system Control decision making decision making by a success despite mechanisms are rooted in a managerial class as a unequal distribution of managerial class charged representative of the rewards and benefits with profit maximization. firm owners is to system actors and Work is conceptualized as sanctioned with a focus providing a social undesirable and employees on property. The right safety net such as find extrinsic rewards of contract may be unemployment paramount.. All are not extended to the insurance and welfare protected, but in the long employment programs are available run society will be the relationship.. to help the better for any local disadvantaged. dislocations. Employee Control, authority, and EI plans empower Sanctions EI programs Involvement decision making are defused employees in various to the extent they in one degree or another aspects of their better distribute the depending on the specific working lives and so burdens and rewards type of EI plan. These new are used to restore of the economic work structures are workplace dignity and system. conceptualized as a means eliminate alienating to the creation of profits work. This is where authority remains in exemplified by with management. autonomous work groups used in Swedish auto industry. Collective Certain substantive issues Recognizes that certain Recognizes the Bargaining over pay, hours, and decisions are legitimate concerns of working conditions are appropriate for joint labor, and management jointly created by labor and labor management with government’s role management. However, day negotiations, stress as that of mediator. to day operational control, employees as ends in The concept of authority, and decision themselves. For pluralism is extended making remain in the hands Marxists this is from the societal level of management subject to subordinate to the to the industrial level. outside review by the party and in Europe grievance arbitration collective bargaining procedure. Work remains often is secondary to alienating substituting government extrinsic rewards for interventions. intrinsic satisfaction. (Work is not quite as alienating for the skilled trades.)

28 Spring 2007 Southern Business Review Utilitarianism Moral Rights Justice Industrial Control and decision An extension of Conceptualized as Democracy making reside in hired democratic principles another instrument managers who are and sovereignty to the available to mitigate responsible to an elected workplace. In the case the severities of a assembly of employees. of the Kibbutz this competitive market Ultimate authority resides extends beyond the and distribute societal in the employee as owner. workplace to obligations and The firm must remain communal living. benefits. competitive in order to maximize success for the collective as a whole. Work itself may still be alienating.

is no one right way to the integration and the framework accommodates structure the employment synergies with the larger both and also recognizes that relationship, in fact, there are whole, potentially culminating the question is not so easily alternatives available. There in injury to all system actors. answered. Not all first order may be conditions that make For example, an employer’s outcomes are pursued with one type more advisable than insistence on drug testing equal intensity and their another, but depending on expresses one approach to influence will vary with both environmental factors, all control and authority which environmental forces and types offered in Figure 1 can may reflect an overall workforce governance type. be structured so as to meet the corporate culture anathema to Yet by examining the degree of three criteria of effective the realization of the system’s second order outcomes and decision making, including the first order outcomes. That is, considering the efficacy of first moral imperative. And by the independent minded computer order outcomes in creating same reasoning, any system geeks may be persuaded more economic growth, market may be deficient in meeting by a system of employee efficiency and social justice these requirements, including involvement than a command the question is answerable, or moral defensibility. What we and control type of at least debatable. hope is that this paper will organization. The proper stimulate a debate beyond the construction of control, Conclusion parochial to substantive issues authority, and decision making Every business decision of control, authority, and relationships will improve must succeed along three decision making at the chances of success for all dimensions— it must be workplace. system actors. operationally effective, legally While management Finally, one question gets compliant, and morally education is helped by ethical to the heart of it all, “what defensible. In this paper we discussions of micro level does business owe society?” have raised questions issues, it is incomplete Some believe a shareholder concerning the last dimension without an appreciation of the focus exemplified by Exxon as it relates to human resource larger industrial relations Mobil is appropriate while management. To evaluate the system. Studying only parts of others accept the stakeholder moral defensibility of human the industrial relations system theory of the firm popularized resource management on a piece-meal basis misses by Johnson and Johnson. Our practices today one must ask

Southern Business Review Spring 2007 29 the right questions and frame all, what is a fair wage, and Bakke, E. W. (1946). Mutual responses in terms of both who in society should be survival :The goal of union economic and ethical theory. entitled to decent work --- if and management. New Moral defensibility is more anyone? Current business York: Harper. likely when one has an ethics education is for the appreciation for the historical most part silent on these and Brady, F. N. (1990). Ethical backdrop of contemporary similar questions. Yet, all of managing rules and results. human resource practices these questions are answerable New York: MacMillan along with an appreciation of within our current system of Publishing Co. the impact of both theory and political economy, but they history on perceptions of require discussion and Braverman, H. (1974). Labor appropriate control, authority, at a significantly and monopoly capital. New and decision making higher level than that York: Monthly Review mechanisms at the workplace. surrounding whistle blowing, Press. This paper offers a workplace theft, or email pedagogy for examining the abuse. Adopting an industrial Cava, A. (1990). Teaching moral dimension of human relations perspective of human ethics: A moral model. resource management resource management will Business and Economic practices based on an direct and give texture to the Review 36, 3, 101-13. industrial relations system discussion. framework, and while no It is the extreme character Christiano, K. J. (1988). particular ethical system or of current turbulence in our Religion and radical labor any particular workplace industrial relation’s system unionism: American states governance type is advocated, which demands a in the 1920’s. Journal for the historical and philo- reexamination of moral the Scientific Study of sophical structure upon which decision making as threats Religion 27, 3, 378-388. to frame the debate over the never imagined thirty years appropriate type or types of ago are forcing policy makers Cotton, J. (1993). Employee is to act in unimagined ways. involvement: Methods for offered. The challenge is to respond to Improving performance While it is true that shifts in econ-mic, and work attitudes. American business has technological, political, and Newbury Park, CA: Sage experimented with a number cultural adjustments in an Publications Inc.. of alternate work structures, effective yet ethical fashion. they tend to be evaluated on While the vicissitudes vary in DeGeorge, R. T. (1990). for their efficiency. Ethicality intensity, today’s being Business ethics. New York: of the structures is rarely extremely volatile, the need to MacMillan Publishing Co.. addressed, leaving many adapt is not new and has been important questions a constant imperative for Derry, R. & Green, R. M. unanswered, or even unasked. decision makers since the (1989). Ethical theory in For example, to what extent exodus from farms to business ethics: A critical should joint governance be . assessment. Journal of promoted at the workplace, Business Ethics 8, 521- what mechanisms are References 533. appropriate for resolving Adler, R. S. & Bigoness, W. J. conflicts of interest, what (1992). Contemporary Donaldson, H., Werhane, T. rights do employees bring with ethical issues in labor P., & Cording, M. (2002). them to the modern business management relations. Ethical issues in business: firm, are people entitled to Journal of Business Ethics A philosophical approach. humanizing work—or a job at 11, 351-360.

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