Ethics in Industrial/Organizational Practice

Ethics has to do with defining what is meant by right and wrong or good and bad, and with justifying according to some rational system what one ought to do or what sort of person one should be. As applied to the practice of industrial-organizational psychology, professional ethics concerns the moral appropriateness of our work activities and the proper treatment of all those with and for whom we work, including employees, clients, client organizations and their various stakeholders, interns, students, and professional colleagues. Many of the moral standards that guide such ethical practice are deontological, or rule-based in nature, having to do with principles such as the fulfillment of duties and obligations, keeping one’s promises, respecting people’s dignity and autonomy, maintaining their trust, and striving for fairness or justice. In some instances, determining the proper thing to do seems better understood from a consequentialist or utilitarian perspective, choosing the action that maximizes the aggregate good or minimizes the net harm resulting from a particular situation.

Most secular ethicists believe neither that there are objectively verifiable moral facts to guide us nor that ethics is merely a matter of one person’s subjective judgment versus someone else’s. Ethical reasoning suggests that the correct ethical choice is the one that is justified by the best arguments. Because it is not possible to specify in advance or to anticipate all of the potential ethical dilemmas one might face, it is advisable to be familiar with some general principles from moral philosophy as well as applicable ethical standards, such as the American Psychological Association’s (APA) Code of Conduct, that can provide guidance when needed.

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The Domain of Moral Action

A problem is generally thought to represent an ethical dilemma if it involves the potential violation of one or more fundamental moral or ethical principles such as those enshrined in formal ethical codes such as the APA’s. They are as follows:

Respect for people. Deontological moral theories emphasize people’s right to be treated with dignity and their rights to privacy or confidentiality, autonomy, freedom, and self-expression. Such rights are universalizable (applicable to all) and so do not extend to the point of infringing on the rights of others.

Beneficence. According to this principle, derived from the empathy-based “ethics of care” in moral philosophy, one is expected to do good and promote human welfare when it is reasonably possible to do so. This concept is especially apt when applied to those to whom one has some special obligation or responsibility or who help further one’s own interests, such as employees, students, clients, and research participants. It is also especially appropriate for professionals who—by virtue of the authority, influence, and rights society bestows on their profession—are assumed to have societal responsibilities that go beyond serving only their paying clients.

Nonmaleficence. Refraining from unjustifiably doing harm is the principle about which there is most agreement among moral philosophers. It is especially fitting with respect to those in vulnerable positions and extends to guarding against the possible misuse of one’s work by others (e.g., misuse of personnel assessments or survey findings). The APA code directs that conflicts among competing obligations be resolved “in a responsible fashion that avoids or minimizes harm” (Principle A).

Fairness and justice. Justice may be defined in a Kantian manner as a balance of rights and obligations. Social justice is generally defined in terms of the fairness by which the benefits and burdens of a social system, such as an organization, are distributed among its members. Industrial/organizational psychology has been more concerned with the empirical microlevel question of perceived justice than with explicating normative standards of distributive social justice.

Moral virtue or character. This subdomain calls attention to the role of personal qualities in the expression of ethical behavior. It concerns issues such as being sensitive to potential ethical dilemmas and being motivated to avoid or resolve them fairly, being trustworthy with those with whom one works, accepting responsibility for one’s actions, honoring one’s commitments, and promoting the accuracy, validity, and integrity of professional work.

An ethical dilemma is a problem that implicates one or more of those moral issues and involves having to make a choice that will have a significant impact on the well-being of others.

Types of Ethical Dilemmas

Despite the multitude of potential ethical dilemmas with which one might be faced, most of them can be characterized as falling in one of the following categories—or as a combination of more than one (the categories are not mutually exclusive, in any event).

Foreknowledge of someone to be harmed by a third party. For example, an industrial/organizational psychologist is asked to participate in a process of developing plans for a major reduction in force (RIF) and learns that management does not plan to announce the RIF to employees who may be terminated until the last minute. Senior managers are concerned about possible adverse effects on productivity if it is announced with too much lead time, and the industrial/ organizational psychologist is expected to comply with this timetable—which will exacerbate the RIF’s harmful effects on those let go.

A self-serving act that will wrong or harm another. The behavior may even be self-serving by proxy— that is, serving the needs of one’s employer—and communicated as company policy. Although most managers want to behave ethically, research has indicated that the threshold for unethical behavior is lower when it is perceived as being on behalf of the organization’s goals and objectives rather than for personal gain only. For example, it might be tempting to allow management to direct employees’ mandatory cooperation with one’s data collection efforts even though it should be presented clearly as voluntary, with no consequences for nonparticipation. One might also be tempted to take on a project that is outside one’s boundaries of professional competence, as determined by one’s education, training, study, and supervised or professional experience.

Competing obligations to two or more entities. Every good supervisor or manager has encountered situations in which it may not be easy to be fair and impartial to all employees in the distribution of organizational rewards or with respect to other personnel decisions affecting subordinates. Industrial/ organizational psychologists often face analogous conflicts by virtue of our simultaneous obligations to both the client organization (or employer) and the individual employees and managers with whom we work. A review by Carolyn Wiley of the codes of conduct of five professional human resources organizations revealed uniform acknowledgment of multiple obligations to the public or society at large, the employer or client organization, employees, and colleagues and to one’s profession and professional association. When working with individuals or teams (e.g., in executive coaching, conducting focus groups, individual assessment, or organizational diagnosis), it is advisable to clarify beforehand and explain to those individuals or groups one’s obligations to the organization, such as any necessary limitations on anonymity or confidentiality.

A situation in which two or more equally important ethical values conflict. For example, if an anonymous survey respondent alleges some serious wrongdoing by a senior manager who is putatively damaging the company, the industrial/organizational psychologist has to choose from among courses of action (which include doing nothing) that balance conflicting obligations to respect employee anonymity, to avoid harming a potential victim of mere gossip, and to prevent possible further damage to the organization. The most appropriate response is likely to be determined by details of the situation.

Pressure to violate ethical principles. Business corporations, and the managers who run them, are not subject to all of the ethical standards that characterize the professional responsibilities of psychologists, who are obliged by the preamble of our ethical (APA) code to use knowledge to better people and organizations. The managers are, in fact, subject to pressures for productivity, efficiency, speed, and profitability, and these aims may at times be at odds with some ethical standards. For example, a senior manager might wish to use, for purposes of making personnel decisions, assessment or survey data that had been obtained confidentially after explaining to all participants that it would be used only for personal development or organizational improvement. Standard 1.03 of the APA code also indicates that if there is conflict between the ethical code and organizational demands, the psychologist must resolve the conflict in accordance with the code.

Determinants of Ethical and Unethical Behavior

The expression of ethical behavior (i.e., its incidence and form) can be explained by four general categories of antecedents:

Cultural influences. These include social, economic, and political factors that influence the development of ethical norms and practices through the institutions of a society. For example, in Western (especially American) free-enterprise capitalist society, social justice or fairness is generally understood in terms of merit, which is defined by the distributive justice criterion of equity, as opposed to equality or need. Moreover, equity itself is conceived within an individualistic perspective, whereas in many other parts of the world a communitarian standard is viewed as right. These ideas consequently shape our values regarding the proper definition and meaning of constructs such as test bias and test fairness. The socialization experiences that shape one’s standards of conduct are initiated and/or mediated by family, schools, peers, religious training, employer organizations, and other institutions.

Individual difference variables. Interdisciplinary research in moral psychology has shown that early cognitive and emotional development (e.g., the development of empathy) underlies moral development. Adults differ in attributes that fall within the conception of moral character or virtue—traits such as honesty, moral values, moral sensitivity, moral imagination, moral motivation, and moral self-identity. One’s values determine, in part, whether one even experiences a particular situation as an ethical dilemma or choice. For example, some psychologists refuse to work for a cigarette manufacturer; others see nothing wrong in furthering the fortunes of a legal enterprise; still others may consider the situation in terms of a balance of benefits and harms.

Attributes of the dilemma. The relative difficulty and upset caused by an ethical dilemma is a function of its moral complexity, moral intensity, and other factors. Moral complexity pertains to the number of moral values and principles evoked and the relations (e.g., conflict) among them. Moral intensity is determined by the degree of social consensus surrounding the ethical issue, the nature and magnitude of the decision consequences for those affected, and the likelihood of those consequences occurring. Also relevant are who is likely to be benefited or harmed and, in the case of organizational settings, how public the situation is.

Contextual, including organizational, influences. Situational effects on behavior constitute a long-standing topic in social psychology. In this domain, for example, ethical judgments have been shown to be influenced by whether one is primed to identify with the perpetrator or the victim of a moral transgression. In the organizational setting, ethical norms, behavior, and the perception of unethical behavior have been shown to be influenced by one’s position and status in the organization and by the organization’s ethical culture, as reflected in the relative salience of moral standards, its social sanctions and reward structure, and the modeling of senior managers and supervisors (the “tone at the top”), as well as the absence of counter-norms that contradict the ethical culture (e.g., pressure to “do whatever it takes to get the job done”).

Preventing Ethical Problems

Although it is impossible to foresee all the ethical dilemmas one might encounter, some activities can help one to anticipate likely problems and ready oneself for thinking through them when they arise.

  1. Be familiar with the applicable ethical codes such as those of the APA, the Canadian Psychological Association, the Academy of Management, the International Personnel Management Association, and the Society for Human Resource Management. Also know applied sources and articles such as the Society for Industrial and Organizational Psychology’s ethical case book, edited by Rodney Lowman. The introduction of the APA code states explicitly that ignorance of ethical standards is not a defense against ethics charges.
  2. Be familiar with applicable state laws and federal regulations. These include laws regulating the licensing of psychologists and dealing with issues of confidentiality, malpractice, and research with human participants. Especially pertinent are statutes and regulations governing employment practices, such as the Civil Rights Acts of 1964 and 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, and the Uniform Guidelines on Employment Selection Procedures.
  3. Know the rules and regulations of the institution at which you work. This knowledge helps assure competent practice in keeping with the organization’s expectations and can alert one to possible conflicts between organizational norms and professional ethical standards.
  4. Engage in continuing education in ethics by means of attending courses and workshops, reading books on ethics and ethical practice, and subscribing to relevant journals such as Ethics and Behavior, Professional Psychology, Journal of Business Ethics, Business and Society, and Business Ethics Quarterly.
  5. Attempt to identify areas of potential ethical difficulty before a problem arises. That identification will be aided by information gleaned from the preceding four activities.
  6. Maintain a mind-set of ethical watchfulness. In addition to the previous steps, one can exercise one’s moral sensitivity to avoid ethically ambiguous situations or attempt to clarify them before becoming involved.
  7. Learn a systematic approach for analyzing ethical problems in complex situations. Many texts on applied ethics contain decision-making models for this purpose. The one presented by Joel Lefkowitz is in the context of industrial/organizational psychology. Perhaps most important, find a trusted and knowledgeable confidant with whom to share your concerns. Ethical dilemmas can be very stressful; it is best to not go through the process in isolation.


  1. American Psychological Association. (2002). Ethical principles of psychologists and code of conduct. American Psychologist, 57, 1060-1073. Retrieved March 13, 2006, from
  2. Darley, J. M., Messick, D. M., & Tyler, T. R. (2001). Social influences on ethical behavior in organizations. Mahwah, NJ: Lawrence Erlbaum.
  3. Lefkowitz, J. (2003). Ethics and values in industrial-organizational psychology. Mahwah, NJ: Lawrence Erlbaum.
  4. Lowman, R. L. (Ed.). (2005). The ethical practice of psychology in organizations. Washington, DC: American Psychological Association.
  5. Murphy, K. R. (1993). Honesty in the workplace. Pacific Grove, CA: Brooks/Cole.
  6. Wiley, C. (2000). Ethical standards for human resource management professionals: A comparative analysis of five major codes. Journal of Business Ethics, 25, 93-114.

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