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Journal of Information, Communication and Ethics in SocietyEthical implications of the mediatization of organizations

Michael Litschka Matthias KarmasinArticle in format ion:

To cite this document:Michael Litschka Matthias Karmasin, (2012),"Ethical implications of the mediatization of organizations",Journal of Information, Communication and Ethics in Society, Vol. 10 Iss 4 pp. 222 - 239Permanent link to this document:http://dx.doi.org/10.1108/14779961211285863

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Ethical implications of themediatization of organizations

Michael LitschkaUniversity of Applied Sciences St Polten, St Polten, Austria, and

Matthias KarmasinUniversity of Klagenfurt, Klagenfurt, Austria

Abstract

Purpose The aim of this paper is to give theoretical and empirical arguments for new formsof communication and structure of organizations within the media and information society.Organizations must legitimate their licence to operate through social discourses and stakeholdercommunication. Possibilities to institutionalize ethics within organizations and possible barriers tosuch a programme are analysed.

Design/methodology/approach First, some theoretical arguments as to why mediatisationchallenges organizations to prove ethical commitment are depicted, using a rights-based and socialcontract approach. Second, empirical examples for structural and communicational barriers inAustrian companies show possible practical constraints.

Findings Theoretical findings refer to the usefulness of applying business ethical models(especially rights-based, and social contract models) to reorganize mediatised organizations. Empiricalfindings concern the lack of institutionalized ethics management in companies and the correspondingproblem of PR-style communication instead of stakeholder discourses.

Research limitations/implications The research reported in one section of the paper relies onthe qualitative survey of 14 experts in different branches of the Austrian economy. While interviewscan give a picture on how respondents understand the relevant research question and construct therespective reality, they are far from providing a representative picture of communicative ethicalproblems in mediatised organizations.

Practical implications Practical consequences should be possible, if companies understandthe mediatised and communicative nature of their relationship with society and stakeholders andtherefore react to that challenge by building up reputation through ethics management.

Originality/value The paper gives new insights to the important relationship betweenorganizations and the public and shows how, e.g. enterprises can legitimate their business modelsand secure their long-term existence. New empirical research concerns cases from Austrian companies.

KeywordsMediatization, Organizational communication, Organizational ethics, Ethics management,Communication ethics, Ethics, Austria

Paper typeResearch paper

1. Mediatization within society and of organizations

1.1 The mediatization of communicative actionIn order to grasp the meaning of the current Zeitgeist, many formulations are popularin the humanities and social sciences. For example, we find information society, mediasociety, network society (Castells, 2001, 2002, 2005) or media culture (Karmasin, 2005).In this article we do notwant to reconstruct or discuss the empirical and metaphoric contentof such concepts, but we will follow the included allusions to the relationship of society andorganization. In a society characterized by a general augmentation of communicationpossibilities, communicative complexity, and communication aggregation, in which living

The current issue and full text archive of this journal is available at

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Received 3 February 2012Revised 15 May 2012Accepted 20 July 2012

Journal of Information,

Communication and Ethics in Society

Vol. 10 No. 4, 2012

pp. 222-239

q Emerald Group Publishing Limited

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environments are more and more determined by media, organizations are also subject tothe process of mediatisation. As Silverstone (2005, p. 190) puts it, mediatization can go veryfar, in that politics, like experience, can no longer even be thought outside a media frame.An important societal consequence here is:

In earlier societies, social institutions like family, school and church were the most importantproviders of information, tradition and moral orientation for the individual member ofsociety. Today, these institutions have lost some of their former authority, and the mediahave to some extent taken over their role as providers of information and moral orientation, atthe same time as the media have become societys most important storyteller about societyitself (Hjarvard, 2008, p. 7).

The mediatization of communication (Krotz, 2001, p. 19) changes the characteristicsof reflections on society and on itself[1] as media worlds and living environmentsmerge (Bauer, 1996, p. 2). If social life outside a mediatized context is hardly imaginable,this must be valid for the economy, too. What are some implications for economicorganizations?

1.2 The mediatisation of the organizationFrom an economic perspective the process of mediatisation implies the encroachment ofnew kinds of value added based on media-related structures (proceduralization andstorage of knowledge, selection and processing of information, convergence, etc.). Evenif the information society does not exist spatially inclusive and comprehensive, andthere are still agrarian methods of production, industrial structures, and services in thedeveloping world and in developed countries, the empirical finding of Castells (2002)holds up, as there seems to be a transformation of labor and employment, as well as ofglobal production and marketing. As media economists (Doyle, 2002; Picard, 2002) tellus, technologies like the internet, mobile data communication, data base systems orintelligent interactive analysis tools are used throughout the value-added chain. They

and others in the field claim that these applications can be used to optimize processes(e-procurement, supply chain management), integrate employees more productively(workflow management systems), open new channels to clients and partners (chatapplication, e-service, e-commerce), reduce costs (customer relationship management),and enlarge the knowledge of the organization (e-learning, collaborative development,field-force-automation). Corporate networks change to social networks; Web 2.0 andsocial media applications change the mode of communication between organizationsand stakeholders.

Dealing with communicative processes in organizational contexts has implicationsbeyond purely instrumentally rational, strategic dimensions. Organizations using suchprocesses develop into social contractual and interactive organizations (Section 2), whoseboundaries and functions are not only determined by the allocation of resources, but

also by communicative processes. The organization thereby becomes the coordinator ofa value-chain network; the economization of the public sphere (i.e. commoditization,marketization of social spheres, economical aspects prevailing in/dominating the socialspheres) corresponds to the publication of the economy, and the commercialization of themedia corresponds to the mediatisation of commerce.

The mediatised organization is a publicly exposed or quasi-public organizationdetermined by the relationship of a recursive constitution of organization and society.In this communicative sense there are no private organizations (as the difference

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of private and public sphere would suggest), only privately owned means of productionand distribution. Ortmann et al. (1997, p. 19) describe the return of society toorganizational theory in the introduction to their anthology:

Part of this dodginess comes from the fact that organization and modern society relate to oneanother in recursive constitution so that organizations produce and reproduce exactly thosesocial structures and institutions under which they operate sometimes, but not always,with strategic goals. To take this view, defined by Giddens as duality and recursivity ofstructure, into account also when the relationship of organization and society is concerned, wetake as a good panacea against all isms and especially the one way thinking of newinstitutionalism [. . .][2].

Consequently, communication science has already argued in a few places (Saxer, 1999;Schmidt, 2000) that organization is understood as communicative construct. The processof organizing is therefore a process of communication, of creating and dismissing andfinally of processing its own deconstruction (Ortmann, 2002, p. 106). The result of suchprocesses is organizations which produce content (and by that also publicity and

attentiveness) with specific intentions, even if their strategic core competence lies in otherareas. The organization becomes the network hub within communication and eachenterprise is also a media enterprise. A media company is not only a producer anddistributor of mass media and mass media specific supplies any more. The outputof media companies within the context of conglomerate concentration, convergence, andchanging ways of refinancing reaches beyond the selection and processing of content,and is moving towards trade (tele-shopping, e-commerce, merchandising) and services(consulting, financial services, distance learning, logistics, etc.). This is not only true forthe content industry in the narrow sense of the word. A media enterprise in the senseof the above-mentioned example is not only a (public or private) broadcasting company,a publishing house, or any journalistically-orientated firm, but any organizationproducing, allocating or providing content. This wider sense of media enterprises takesinto account the fact that in the course of convergence and conglomerate concentration,the boundaries between industries and economic sectors disappear.

This understanding of the organization reflects the dual role of it as:

. producer of social capital (economy of attention, organization as part of thepublic sphere); and

. producer of real capital (economics of communication and production,organization as part of society).

By such thinking we take into account the primary role of the organization asa principal structuring element in a society of organizations (Perrow, 1996) as wellthe role of enterprises as central element of value added (in material and immaterial

points of view)[3]. Organizations determine when, where and for how much timehuman beings work, live, love or consume. Organizations like schools, universities,hospitals, media, production companies, banks, insurances, etc. decide upon thecondition Humana. They decide upon possibilities and conditions of purchase, uponcapital flows that determine winners and losers in professional life, upon pensions andretirement provisions, they compress time (see just-in-time-production) and expandtime (in the hope for interest payments), they define spaces for gainful employmentsand structure networks, they simply construe the world in a complex environment.

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Taking all this into consideration, they also become moral instances with the possibilityof being attributed to ethical responsibility (Ulrich, 2001; Noll, 2002; Gobel, 2006;Karmasin and Litschka, 2008).

In the rest of this paper the discussion centers on ways of how such responsibility

can be defined and given its place within the organization. This is a task for businessethics and, where media enterprises are concerned, for media ethics based on economicethical concepts.

2. Communication and legitimization of organizations: rights and socialcontractsThe public exposure of organizations has led to a global discussion about the nature,goals, and responsibility of them in the information/knowledge society. Basically, wecan divide the views of the many writers on this topic into two world views[4]: eitherthe development described above is seen as having bad consequences for society andbeing a sign of the problematic implications of capitalism, or it is seen as giving hope

for an integration of organizational and societal preferences. Both viewpoints criticizethe shareholder focus of modern organizations, but while the first group puts anemphasis on social (and media) policy to keep the possibilities of, e.g. companies withinclear cut borders, the other group believes in the self-restraining power of thestakeholder approach to organizational management. To manage for stakeholders(without the need for public intervention) would bring out the positive effects ofself-regulation, and the more stakeholders are included into the firm strategy, the moresocietal needs can be accounted for by the organization.

The first group sees the evil implications of organizations (especially firms), in theform of globalization, conglomerate concentration, new exploitation, loss of flexibilityand puts them under general suspicion (Glotz, 2000; Ferguson, 2001; Soros, 2001;Forrester, 2001; Mies, 2001). These authors criticize that through concentration and

mediatisation, the power of enterprises grows and is misused, that incentives forunethical behavior rise, that the possibilities to sanction such behavior decline, andthat the information society degenerates to a global exploitation society under digitalprefixes[5]. Only a strong framework order policy may secure the bonum communeand organizations can be directed towards social responsibility only through the threatof enforcement.

The second group mostly sees the benefits of publicly exposed organizations. Publiccommunication influences politics, consumption, and investment and by that coercesthe return of society into organizations[6]. Concentration exposes them to the publicand makes them the focal point of ethical demands beyond market or state. The processof dealing with the self-produced public sphere allows them to understand ethicaldemands not as an imposition but as an economic necessity and competitive advantage

(Porter and Kramer, 2003). This group hopes for the re-integration of ethics intothe economy[7] for the control and pressure of the media as fourth power, for theinvolvement of stakeholders, and for a globalization of not only commerce but also thepublic (Karmasin, 2002). The stakeholder approach is one way organizations canhope to live up to such expectations. As Freeman and Evan (1993, p. 262) put it:

A stakeholder theory of the firm must redefine the purpose of the firm. The stockholdertheory claims that the purpose of the firm is to maximize the welfare of the stockholders,perhaps subject to some moral or social constraints, either because such maximization leads


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to the greatest good or because of property right: The purpose of the firm is quite different inour view. [. . .] The very purpose of the firm is, in our view, to serve as a vehicle forcoordinating stakeholder interests.

Post et al. (2002, p. 17) define:

The Corporation is an organization engaged in mobilizing resources for productive uses inorder to create wealth and other benefits (and not to intentionally destroy wealth, increaserisk, or cause harm) for its multiple constituents, or stakeholders,

and (Post et al., 2002, p. 45):

Organizational Wealth is the summary measure of the capacity of an organization to createbenefits for any and all of its stakeholders over the long term.

The stakeholder discussion implies a re-definition and re-conceptualization oforganization or enterprise[8] in the sense of a rights-based and social contractualvalue-added community. For both possibilities there are philosophical and businessethical arguments. These arguments are outlined below.

Starting with a rights-based approach and based on the fact that in an economicenvironment characterized by labor division and complex projects we cannot assign(at least not easily) clear responsibilities to individual persons, we must deal with thephenomenon of collective action (Lenk and Maring, 1992, p. 154). This phenomenoncan be seen in big projects in companies, strategic actions, complex causal processes,asymmetric information, or decisions made in common. At the same time, as there is anindividual responsibility of group members, there also seems to be a collectiveresponsibility of the organization as a whole. Either we can retrace the collectiveresponsibility to individual members or make a group responsible, irrespective of anysingle (or all) members responsibility (Lenk and Maring, 1992, pp. 155-9). Also, beforedecisions are made and consequences or motives can be evaluated, a so-called inner

structure of an organization plays a major influencing role (Gobel, 2006, p. 92). Theseare decision systems, organizational structures and cultures, certain processes, etc.which are prior to individual decisions. An inner structure is also a factor to be dealtwith when rights and responsibilities of organizations are at stake.

Werhane (1992, p. 329ff.) gives a philosophical legitimization for the often stateddemand that organizations be responsible for their actions and decisions: she depictsthe case of economic organizations (especially corporations) which very often demandto be free from external influences (like politics or moral obligations), so that they maypursue their economic success without constraints. This demand arises from the factthat they operate within a capitalist framework which supposedly only leads to thepublic good if enterprises are allowed to act free from public (or governmental)influence. Basically, what these organizations claim are legal rights to economic

freedom and autonomy. To legitimize such rights, they must also be constituted asmoral rights. If such moral rights exist, they come together with moral duties and,therefore, with the corresponding responsibility. If this reasoning is correct, asWerhane states, organizations like corporations can be made responsible for theiractions and decisions without recurring to the individual members responsibility. Letus look at these thoughts in more detail.

Persons, according to Werhane, have primary moral rights, some of which arecommon to all human beings (like the right to live), whereas others can only be claimed

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by autonomous, rational adults (like the right to freedom), as they are capable of primaryself-dependent actions. It is obvious that the named rights as well as freedom ingeneral do not have a universally agreed upon meaning (see the discussion in Sen (2009),on human rights and positive freedoms). Also, even if there were such a consent, they

might be violated quite easily and must therefore be secured by the respective laws.The actions of a corporation, then, are secondary actions, as they are constituted byprimary actions of such rational adults. Corporations are not identical to the personsof whom they consist, even though hierarchical structures give some persons moreresponsibility and authority than others. That is, also their rights are not identical,but derived rights from individual persons rights. It follows that corporations (or otherorganizations) have secondary moral rights, and if all moral rights are equal, alsosecondary moral rights bring with them obligations and duties. One of them would be toaccept the rights of all other persons and corporations as equal; so corporative rights canimply duties to individuals, too, e.g. to not to claim more freedom for itself than to assignto its own organizational members. As organizational rights are secondary rights,derived from individual rights, they cannot claim priority above individual rights.But even as a secondary moral actor (with secondary moral rights and obligations)organizations can be made responsible for their actions, and this can be doneindependently of individual moral responsibilities, from which their moral obligationsare derived. This is because they must first secure the primary rights of personsbefore they can claim their secondary rights, e.g. to freedom (Werhane, 1992, p. 332).An example would be that organizations cannot deny its workers some basic laborsecurity measures (primary right) by pointing to the economic (secondary) right toexpand in another country with fewer regulations regarding labor security.

Using another approach often used in business ethics, namely social contracttheory, we find even more compelling arguments for a re-definition of the concept of anorganization. Social contract theory (contractarianism) tries to explain moral actions

as coming from an agreement between individuals, which they commit themselves to,according to strategic deliberations. As such, this approach is functionalist in nature,because the arising (mostly implicit) contracts must be advantageous to any of theparticipating parties. Starting from an original state, where people have differentknowledge about their status or fortune or talents, they begin to bargain and constructa society in which their preferences can be best fulfilled (a cooperative surplus can bereached). This agreement is idealized insofar as it is infeasible to have all members ofa society bargain about such a topic, but nevertheless it is binding because there aregood reasons why everybody could have agreed to the arising norms had he or shereally participated in the bargaining (Kersting, 1996, p. 265). A paradigmatic socialcontract approach to a just society came from Rawls (1988, 2006), who conceptualizedsociety as a fair system of cooperation to reach mutual benefits. Other world views

on the functioning of societies could of course also be used here, e.g. a discourse ethicalor a system theoretic view.

Returning to our problem of legitimizing that organizations have specific obligationsand social responsibilities, which is a demand we have seen coming especially fromstakeholder theory, an application of social contract theory to business and media ethicsseems fit. Why should an organization accept certain stakeholder rights, prioritize somerights over others, and give itself restrictions which may constrain its own rights?Donaldson (1989, p. 44ff.) gives a contractarian answer.


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In this view, an enterprise is an organization which arises out of a thoughtexperiment, because it contributes more value to society (e.g. employees or consumers)than individuals working for themselves could ever manage to provide. Value in thisinstance means that the participating individuals can make themselves better off when

adhering to the (virtual) contract and contributing to organizational goals with theirefforts, because this contribution will yield them something valuable (something thatsatisfies their preferences). From a normative and social point of view (where societalpreferences and value judgments are included), we would join such a contract only if itis secured that fundamental principles of human rights or justice are adhered to by theenterprise. Which kind of rights or principles of justice arise in the end is not importantas long as they are acceptable to all parties to the contract. Obligations can be derived outof these rights (similar to Werhanes approach, see above), e.g. that managers have tocarefully administer the money funds of shareholders. As in all of social contract theory,this arises from an idealized situation, but still it is rational to expect such a result. Whatmakes this analysis more than a stakeholder analysis, according to Donaldson, is that

obligations coming directly from the social contract are qualitatively different fromthose which are derived: the former must be fulfilled before the latter are touched.He gives an example (Donaldson, 1989, p. 89): it seems a rational result of a socialcontract between a corporation and society that rights to secure the subsistence ofemployees are established. A derived obligation for the corporation can consist of twoelements; the organization must take care not to violate this right itself (i.e. must not pay,e.g. lower wages than subsistence would demand), but it must also ensure thatemployees are protected from a violation of this right (e.g. must not buy land to use forcoffee production when the land was previously used to provide food). Even if in the

latter case the enterprise did not directly cause a shortage of nutrition, it has still violatedthe basic right of employees through lack of care and provision.

We have seen that there are at least two possibilities, a rights-based approach anda social contract approach, to legitimize the moral responsibility of organizations, anecessity derived from the mediatisation of organizations and of communicative actions(Section 1). In either case it is important to secure the contribution of organizations to thebonum commune. Should public deliberations not suffice to reach this goal, thelegitimization discourse will also be motivated by political framework orders. Froma rational point of view this is unnecessary: the adoption of social responsibility is animperative of business integrity (pertaining to communicative rationality) as well as ofensuring the long-term existence (pertaining to strategic rationality). Even if PeterUlrich, the Swiss Business Ethicist, would not completely agree to a social contractapproach to define the moral obligations of organizations, he provides a good summaryof the discussion about stakeholders, moral obligations of organizations and the way

value added is generated in the media society (Ulrich, 2001, p. 443): if we accept therepublican-public legitimization duty of an enterprise, it follows that the stakeholderapproach is the correct encompassing perspective of an organization as a quasi-publicvalue-added institution. An organization is put in an unlimited public legitimizationdiscourse in the civil society and this discourse is acknowledged to be the systematicplace of organizational morality. In public deliberation processes between rational

economic citizens, the integrity of an enterprise has to prove itself and only in thisprocess can it also be legitimized.

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After having given some arguments why the mediatization of organizations leads toethical legitimization processes in order to keep the license to operate, we want topresent some empirical findings for Austrian companies. What exactly are structural,organizational, and political barriers to such processes?

3. Some empirical findings: organizational and communicative barriers forethical decision making in AustriaIn a project for the Jubilee Fund of the Austrian Central Bank (Project No.12939) a surveywas conducted on how managers make decisions in ethical dilemma situations. In thequantitative part of the project, the underlying ethical decision bases in such situationswere analyzed (e.g. fairness criteria, altruism, reciprocity (Litschka et al., 2011)).The qualitative part consisted of expert interviews with researchers and managers inorder to explore communicative and organizational barriers to these ethical decisions.For the interpretation of the data we relied on qualitative research methods with anapproach adapted to management science (Glaser and Laudel, 2009; Bogneret al., 2009;

Myers, 2009). The interviews gave a picture of how respondents understand the relevantresearch question and construct the respective reality (Cropley, 2005).Sampling was undertaken with a view to integrate different disciplines and different

industries; five professors from economics, business administration, communicationsciences, and economic history, working in three different Austrian universities, madeup the sample of researchers, while nine managers from banking and finance,information technology, education, steel industry, airline industry, oil industry,commerce, and PR (all working in Austrian headquarters, but partly in internationalcompanies) represented the management part of respondents.

The guided interview included the topics, among others (Table I).The 14 interviews were conducted, recorded, transcribed, and interpreted using

qualitative analysis techniques. We did not follow a hermeneutic-interpretative

approach like in Grondin (2009) or Wernet (2006), but used the research logic of Mayring(2002, 2008) and Mayring and Glaser-Zikuda (2008). Here are some of the resultsconcerning structural and communicational problems.

Basically all interviewed organizations were of the opinion that it is sensible to havewritten guidelines and codices which can then be anchored in the corporate culture.While the academic experts (professors) in the survey stressed the importance of givingethics a place within enterprises and combining such guidelines with the respectivepossibilities to sanction them, managers put their trust more in intrinsic motivations ofemployees to follow such guidelines. Also, managers are more prone to use for examplean ethics codex as an instrument of external communication (Section 4), a fact alsoexemplified by their understanding of the concept of stakeholder as target group.Scientists on the other hand see the stakeholder approach as a socially desired strategy

of organizations and want conflicting interests of stakeholders to be ethically analyzed.In our survey, ethical dilemma situations could be attached to three levels of

analysis: the individual level of management, the organizational level of the enterprise,

Framework order problems CSREthical dilemma situations in management Ethical problems of new ICTStructural problems and organization of ethics Ethical conflicts with personnel management

Table I.Topics of semi

structured interviews


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and the social level of the market and politics. These levels correspond with therespective concepts used in ethics, namely management ethics, business ethics, andeconomic ethics.

On the individual level, role conflicts of managers (i.e. to be another person in the job

than in private life, with corresponding conflicts of ethical norms when their income isconcerned) were cited very often. Experts also called this problem homo oeconomicusvs homo politicus. It also seems that modern organizations are not fit to guaranteea certain work-life balance, as their primary goal is concerned with productivity.The orientations towards bonus payments was also mentioned as problematic, becausesustainable decisions are not to be expected from such short-term incentives.

On the organizational level, the informational advantage (in the sense of asymmetricinformation) of enterprises was stressed. According to the respondents not to usethis advantage to the detriment of customers or employees was a demand of fairness,and clear rules for this behavior were wished for. The short-term necessity of publishingquarterly reports that might be sugarcoated for the public was seen as a direct

antagonism to the demand of the stakeholder approach, which promotes transparencyand openness towards stakeholders. For such (and other) short-term necessities,a shareholder-orientated strategy of firms was charged. Some managers were evenforced to dismiss people just because of this dominance of shareholder value. They saidthat even when the business administrative sustainability of an organization wassecured, there could still exist a lack of social and ecological sustainability. Oneimportant question on the organizational level was the tasks and moral limits of the newinformation and communication technologies (ICTs). While managers deemed itnecessary to have the possibility of observing certain behavior of their employees

(e.g. have access to e-mails if they consent to that), they also were aware of the basicproblem of data protection and private sphere that employees must be able to enjoy.Professors said that the pressure to legitimize an organizations action has becomeharder as the flood of information that could be reported has also increased. So theremight be a dilemma of making organizational decisions transparent to stakeholders andprocessing only as much information as is feasible.

On the social level of the market, the competitive pressure in modern marketeconomies led some organizations to opportunistic behavior in the sense of adaptingfor example company goals to only include monetary or shareholder targets. Thisframework order might prefer particular interests (of economic organizations) tocollective rationality (demanding also fairness or distributive justice). An example givenby respondents was the social goal of full employment that is contrasted (and impeded)by the organizational goal of cost cutting and personnel reductions. Therefore, theeconomic freedom the market economy can provide is not always concurrent to the

responsibility (communicative and social) the organization should take on.Both respondent groups have also given some explanations as to why, in their opinion,

such dilemma situations can arise; they identified the following structural reasons.On the individual level, the very career driven and opportunistic behavior of

managers was ascribed to the problematic incentive of bonus payments according toshort-term decisions (quarterly reports, etc.). From this and the fact that managers do

not get any kind of education concerning ethical reasoning, emerges a role model lackingcompetence to decide on ethical matters and leading to bad personnel decisions.

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On the organizational level, we often find hierarchic and centralistic structures,a form of organization, e.g. Steinmann and Lohr (1994) which is deemed detrimental toethical decision matters. Both kinds of experts (researchers and managers) found theshort-term strategy of relying on shareholder value measures problematic (professors

called this a single-goal-orientation), as well as the lack of credible and enforceablerules within the organization. Especially important for the communication and culturalembedding of such rules is the possibility to give ethics a place within an organization,e.g. in the form of an ethics office or a codex (Section 4).

On the level of the framework order and social ethics, respondents named thefollowing impediments to ethical behavior in organizations and of single persons: theculture of capital market orientation in our economy with the pertaining pressure ofcompetition, the lack of a critical public regarding the observance of organizationalbehavior and management decisions, the lack of certain laws limiting the possibleactions of firms, and the lack of educational possibilities for managers to learn ethicalreasoning (as business ethics in Austria is not anchored strongly in business curriculaat schools and universities).

Apart from these three levels of ethics the new ICT were mentioned as a special casein organizational responsibility. The way information is forwarded to the public wasrecognized as an important problem of communication ethics. As more and modern ICTis available to organizations, we wanted to know from the experts how this influencestheir everyday decisions, especially when ethical problems are concerned. Answerscentered around the topics control, private sphere, data protection, information overload,and the possible effects on employees.

Basically the new ICT provide new ways of control to management, an examplewould be the observation of employees. While the observation of mobile phones and thesurveillance of employees by cameras was deemed morally questionable or forbidden,the access to e-mail traffic in organizations was defined as morally correct as long

as employees and works council consent to that action. As the data protection law inAustria does not cover all possible cases (e.g. the handling of private e-mails in firms),managers believe such (restricted) access to e-mail accounts to be acceptable as longas internal discussions about the way this comes about are institutionalized.A disadvantage of new ICT was seen when many persons secure their decisions byincluding everybody as addressees in an e-mail conversation. This would lead to anunmanageable flood of information and be one of the major sources of stress (see above:missing work-life-balance) in organizations. Respondents wish for more transparency asregards this problem and are willing to reach such transparency in public deliberations,as discourse ethics would demand.

The researchers in the survey do not believe ICTto be an ethically neutral topic either.It is always a question of how they are used, e.g. to observe or to secure something.

The usage of instruments is always connected with certain interests. Too muchobservation can be responsible for serious demotivation of employees and is thereforerejected by respondents. Organizations must ensure that they do not exploit any kind ofstrategic advance knowledge and protect the private sphere of their personnel. Thechange of the way organizations communicate with their stakeholders can also bringabout advantages from an ethical point of view. People can write e-mails directly toresponsible functions within an organization, they demand clarification of fact aboutspecific practices by firms, and even when data protection is not taken seriously enough,


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this fact can also be exposed by the media. From an ethical standpoint the medias roleas fourth power has become more meaningful and technical possibilities ofcommunication have increased the legitimization pressure of organizations.

While many of the above-listed problems are seen in a similar way by both managers

and researchers, there are some different views as to possible solutions. Managerssay that incentives to their actions and decisions are predetermined by organizationalculture, whereas professors stress the fact that this culture must be actively influencedin the direction of a positive incentive system. Managers concentrate on the individualand organizational level, scientists rather see the framework order as a central startingpoint for solutions. In addition, professors see a void in the Austrian educational system,as the economic core courses economics and business administration often do not teachethical reflection capabilities (via learning of basic theoretical concepts and solvingcase studies).

Following the theoretical analysis of Chapters 1 and 2 and the empirical examplesof Chapter 3 we now suggest some communicative and organizational measures toincorporate ethics, rules, and incentives into an organization.

4. Ethics needs organization and communication4.1 CSR vs PRThe public legitimization discourses already mentioned in Chapter 1 do not onlychange the relation between organization and public; they change (as we believe) theorganizational structures themselves. Only if responsibility is institutionalized willthere be a solid legitimate basis beyond solely communicating and selling a certainimage. The concept of corporate social responsibility (CSR) tries to encompass some ofthe supposed dichotomies of ethics and economics. Often, the degree of seriousness thistopic is dealt with depends on the moral disposition of managers themselves.According to the success of the current business, they may take CSR seriously or they

may not, which can make the concept one of sunshine value, but not of real andreflected ethics. Activities focusing on sponsoring, contributing, etc. which can all beattributed to charitable motives and the way profits are distributed, but not the wayprofits are earned in the core business, can be called donation ethics (Thielemann andUlrich, 2009); such activities are very easily prone to the suspicion of being pure PRactions, making business ethics the business of ethics.

The central role of institutionalizing ethical questions and problems is to overcomesuch suspicions and not to rely on the individual commitment of single individuals.Such managerial ethics is of course very important within organizations, but very oftennot sufficient to reach systematically reproducible patterns of actions which couldalso survive a change in management. The goal is therefore to install processesof self-governance of ethical reflections, which shows that ethical problems must

be solved collectively, not individually (in the sense of process ethics, see Krainer (2001,p. 229) or Heintel et al. (2006); see also Section 4.3).

4.2 Institutionalizing: some possibilitiesThe ethical transformation of the organization following the above arguments impliesa systematic, structured, and collective handling of moral problems. The success ofsuch an ethics management or integrity management depends on processes ofself-commitment (e.g. management systems), structures (e.g. institutions), and internal

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and external communication of measures (Waxenberger, 2004, p. 139). Of the manypossibilities to let ethical responsibility work not only on the communicative surface,but also deep within organizational structures, Karmasin and Weder (2008) name thefollowing.

A code of ethics writes down the self-commitments and adapts the more generalrules of an industry codex[9] to more firm specific problems. Considering our pluralistsociety it is not to be expected that codes understood as a constitution of anorganization will be very similar content-wise, but their publication makes transparentwhat the values decisions are based on and how conflicting values will be handled.Besides, this is a possibility for smaller firms, which have difficulties to afford morerefined processes of institutionalizing, to prove their ethical commitment beyond theindividual preferences of their owners.

To give ethical problem solving a specific place within organizations, an ethicsofficer or an ethics commission can be installed[10]. A commission very often consistsof an internal and external director and an ethics officer, but might also temporarilyinclude representatives of some stakeholder groups into its decision process (Noll,2002, p. 127). Beneath monitoring the compliance with the stated rules, an ethics officecan also serve as a communication hub for ethically relevant questions.

Ethics training can serve as a vehicle to make the rules known to organizationalmembers, by teaching some basic reflection models on ethics and solving typicaldilemma situations. Awareness raising, discursive abilities, moral competences,intersubjective agreements, and personnel development are in the center of suchprogrammes. In the long run, this can also lead to a better personnel selection (think ofassessment centers) and career planning in organizations.

The goal of an ethics hotline, used particularly in the USA, is to give stakeholders avoice when moral or legal asymmetries come to light, and to consult them in conflictsituations. It should encourage discourse on such topics and give ethics officers an

additional tool to get information.A very process-orientated measure would be an enlargement of reporting activities.A management strategy including all stakeholder interests, not only those of shareholders,should take into account more reporting initiatives than the usual instruments(balance sheet, profit and loss account, etc.). Differing legal and ethical issues need variousdecision models, reflected in more informative reports based on new (ethically based)standards; examples would be the EU Standard CSR Communication and Reporting(www.csreurope.org/matrix), or some evaluation standards like the SIGMA-Guidelines,the program Account Ability 1000 (AA 1000), the Business Conduct ManagementSystem Standard (developed by the Ethics Officer Association), and the programSocial Accountability 8000 (SA 8000). Such standards are applied within so-calledethics audits, comparable to financial audits in the business world.

We conclude our paper by referring to some implications of the above-said toorganizational communication.

4.3 Organizational communication as (process-) ethical projectBeneath the institutional and process-orientated implementation of ethics, thecommunication of these measures (in the sense of taking responsibility seriously bycommunication) is very relevant. Even after implementing a stakeholder managementsystem (see above), there still needs to be secured stakeholder commitment and


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the motivation to participate in organizational decisions. This is mainly a communicativetask and a combination of direct and indirect communicative measures seems most fitto reach that goal: stakeholder dialogues taking place in so-called stakeholder assemblies,very similar to annual general meetings of corporations, are an important communication

(and legitimization) tool. The feedback of stakeholder interests with demoscopicmethods (e.g. stakeholder panels) and the usage of social media and wikis (Rochlin andFarrar, 2008) are methods to maintain dialogue and interaction with stakeholders.

Besides offering stakeholders modern communication possibilities, organizationswanting stakeholders to permanently participate in these processes must provideincentives to them. Should they get the impression that their participation serves onlyto generate data which management can use for economic purposes, or to show thelegitimizing efforts of an organization without any controlling of the underlying valuebase, the demand for communication will be reduced. Freeman and Evan (1993)suggest the institutionalizing of the stakeholder approach in the form of a stakeholderboard of directors, consisting of different stakeholder groups:

These directors will be vested with the duty of care to manage the affairs of the corporation inconcert with the interests of its stakeholders. Such a board would ensure that the rights of

each group would have a forum, and by involving a director for the corporation, would ensure

that the corporation itself would not be unduly harmed for the benefit of a particular group. Inaddition, by vesting each director with the duty of care for all stakeholders, we ensure that

positive resolutions of conflicts would occur (Freeman and Evan, 1993, p. 264).

This board of directors should, according to Freeman and Evan (1993), adhere to somegeneral stakeholder management principles, written down in the codex:

P1: The corporation should be managed for the benefit of its stakeholders, its customers,suppliers, owners, employees, and local communities: The rights of these groups must be

ensured, and, further, the groups must participate, in some sense, in decisions that

substantially affect their welfare.

P2: Management bears a fiduciary relationship to stakeholders and to the corporation as an

abstract entity. It must act in the interests of the stakeholders as their agent, and it must act inthe interests of the corporation to ensure the survival of the firm, safeguarding the long-term

stakes of each group (Freeman and Evan, 1993, p. 262).

Of course these groups are not homogenous, but we can define certain basic rightspertaining to all individual members of each group, e.g. the right of not being violatedphysically. The respective representatives in the board can also act according to aspecific stakeholder bill of rights, building the basis of a stakeholder assembly, thecontent of which Freeman and Evan (1993, p. 264) circumscribe as follows:

Each stakeholder group would have the right to elect representatives and to recallrepresentatives to boards. [. . .] Each stakeholder group would have the right to free speech,

the right to grievance procedures inside the corporation and if necessary in the courts, the

right to civil disobedience, and other basic political rights.

Karmasin and Weder (2008) describe the path from visibility to transparency any firmmust take if it wants to include a stakeholder approach on all levels of the organization,not only in strategic management, but also in all other functions (marketing,controlling, personnel, reporting, etc.). Communication of measures is an integral part

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of that path, at least as important as the adoption of certain management principles,certification, and auditing.

Organizations institutionalizing and communicating ethical demands as describedabove have another advantage: they evade the philosophical difficulties of setting general

moral principles (like, e.g. truthfulness, fairness, right to privacy, objectivity) above othersand therefore focusing too much on material principles. The process-orientated approachsuggested in this paper is more in line with the discourse ethical principle of having moralnorms evaluated by other persons concerned. It is not sensible in a pluralist world to setmaterial principles not everybody would agree to under specific circumstances. Discourseethics (and its application to organizations process ethics (Krainer, 2002, p. 164f.))stresses the self-determination of rational individuals and, by analogy, lets organizationsdecide on moral matters by having formal principles (and a process) at work,guaranteeing equal participation and discussion rights for example.

We have come full circle now, referring to the arguments of the first part of the paper.The change of thepublic sphereand themediatisation of the organization, call fora changein the relationship of the public and the organization. Public pressure causes theinstitutionalizing of ethics in organizational structures. Organizations get the license tooperate for the public good through appropriate communication and a changing strategicself-conception. Process and structural organization become network hubs of productionand communication, and by consequence they are networkings of networks (Castells,2001, p. 191f.). The goal of organizational communication is not to communicate thequality of goods and services, to communicate about the organizational members, and togovern the public any more[11] but to produce socialcapital (trust and reputation) that canlegitimize the organizations actions. This is a communicative restructuring of theorganization and a reorganizing of communication. The main dichotomy of concepts islegitimate vs illegitimate, and not legal vs illegal or profitable vs not profitable.While there are certainly connections between legal and legitimate claims (it might be said

that many laws incorporate moral and ethical beliefs of a certain society), there are alsoclear differences (many claims are legitimate, but not yet incorporated into law, many lawscan be questioned from an ethical standpoint). To get philosophical validity, claims (e.g.from stakeholders or organizations) must be argued for, using also moral arguments.External effects of organizational behavior are to be accounted for, and this is done in(partly) public legitimizing discourses (before legal questions come to light, and before thequestion of profits is asked). The convergence of organization and public implies notonly that organizations gain social influence, but also that this influence is now public andorganizations are at the center of ethical discourses.

Notes

1. As Krotz (2001) puts it, mediatisation in this framework means, that during social

developments communication differentiates itself through ever new media into many forms.To be more exact, it is not the media who play the active part, but people and their dealingwith media; they constitute these changes by including ever more media into ever moreeveryday actions and processes, and for them these ever new media present ever morecommunicative possibilities and potentials which can be realized or not realized.

2. Our translation.

3. We do not differentiate here between the concepts organization, enterprise (for profit/notfor profit) for spatial reasons.


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4. Of course we could include here a third view, ala Friedman (1970): companies have no othergoal and no other responsibility as to make profits and respect shareholder interests; thisview will not be dealt with in the following.

5. See for different sectors: www.bankwatch.org; www.genewatch.org; www.corpwatch.org.

For single companies, e.g.: www.essentialaction.org/shell; www.saigon.com/,nike; www.monsantos.com; www.mcspotlight.org. For consumption: www.ethicalconsumer.org. ForCSR in Europe: www.csreurope.org; www.accountability.org.uk. For organizations:Transparency International (www.transparency.de), The Institute for Business andProfessional Ethics (http://condor.depaul.edu/ethics), Center for Corporate Citizenship e.V.(www.corporatecitizen.de), International Labour Organization (www.ilo.org), etc.

6. This is also demanded by the European Commission who stated the goal of making Europe aworldwide leader in the realm of CSR (http://ec.europa.eu/enterprise/csr/index_de.htm).

7. See www.business-ethics.com, practical organizations such as www.eoa.org, www.synethos.org/ISBEE, the European Business Ethics Network (www. eben.org), the German networkbusiness ethics (www.dnwe.de), the Wittenberg-Center for Global Ethics (www.wcge.org),the European Ethics Network (www.kuleuven.ac.be/een), the Ethical Trading Initiative

(www.ethicaltrade.org), the Institute for Global Ethics (http://globalethics.org), the Instituteof Business Ethics (www.ibe.org.uk), the Social Venture Network Europe (http://213.206.79.171/svn/home/home.php), the International Business Ethics Institute (www.business-ethics.org), the network for a socially responsible economy (www.nsw-rse.ch/d/verein/ueber_uns.html), the New Academy of Business (www.new-academy.ac.uk), the Centre for AppliedEthics (www.ethics.ubc.ca), etc.

8. A recent anthology depicting the history of the stakeholder approach is Zakhemet al.(2008);the stakeholder approach strictly seen as organizational ethics is argued for in Phillips(2003).

9. Like, e.g. the standards of the Global Reporting Initiative, the UN Global Compact (ethicalstandards for companies including human rights, labor rights, and environmental rights),the International Labour Organization-Convention, the OECD-principles for multinational

enterprises, etc.10. For example, Vodafone does not consider corporate responsibility (CR) as a mere

philanthropic gesture or add-on. It is part of our core business. Our CR management mirrorsthe way we manage our business, with a global team of CR managers working across thebusiness with a presence in each local operating company, in www.vodafone.com/start/responsibility.html; Vodafone 2007/2008.

11. That is, the governance of indicators like awareness levels (impact values, brand awareness),the influencing of public opinions, the creation of images, the establishing of investorrelations, the supply of differentiation, etc.

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About the authorsDr Michael Litschka is Professor at the University of Applied Sciences St Polten, Austria. He hasa PhD in Economic and Social Sciences and teaches media ethics, media economics, and businessethics. His main research interests are in economic and organizational ethics, business ethics ofmedia enterprises, and management ethics. Michael Litschka is the corresponding author andcan be contacted at: [email protected]

Matthias Karmasin is Full Professor at the University of Klagenfurt, Austria. He has a PhDin Communication Sciences and a PhD in Economic and Social Sciences and teaches mediamanagement, media ethics, and communication sciences. His main research interests are inorganizational communication, business ethics of media enterprises, and philosophy ofcommunication.


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