Organizational Moral Distress
Ann E. Mills and Patricia H. Werhane
Moral distress has been identified at the individual level and defined as the anguish a person may experience faced with a situation in which the individual knows the right thing to do but is prevented from doing it by institutional constraints (Jameton, 1984: 81). In this article, we take a broader approach and apply the idea of moral distress to the organizational level. We call this concept ‘‘organizational moral distress.’’
Most organizations suffer some form of dis tress at some time in their lives as they make decisions pursuant to their goals. We distinguish organizational moral distress from organizational distress by noting that organizational moral distress arises because of a situation characterized by a ‘‘values misalignment’’ as opposed to the distress that organizations commonly face as they negotiate competitive markets.
Organizational moral distress is the distress one or more organization stakeholders or stake holder groups experience because of a misalignment of values between the operationalized values of the organization and the values the organization says it endorses, or between the organization’s values and its internal or external stakeholders, or because its stakeholders perceive the organization’s mission and values differently. Thus, organizational moral distress can occur in at least four ways – and they can overlap in specific cases. We look more closely at these four situations and present a case to illustrate each form of organizational moral distress.
Organizational moral distress will occur when the mission of the organization is not operationalized in practice. In this case, there is a gap between what the organization does and what the organization says it does.
Organizations generally have mission statements that include the values they deem import ant for the success of their enterprise – and it is this self proclaimed standard that is intended to guide the organization and its stakeholders through difficult or complex decision making. In addition, it is a standard for accountability and judgment about the organization as well as the systems and structures it creates to perform its mission. These systems and structures can reinforce the organization’s mission and support its values or they may not, but in both cases they represent the operationalized values of the organization.
Perhaps the most famous case of an organization employing systems and structures to support values different than its stated values is that of Enron. Enron’s mission statement prided itself on four key values: respect, integrity, communication, and excellence. However, the values that actually guided decision making seemed to rest on greed and arrogance. Not only were greed and arrogance apparent in Enron’s business and accounting practices, they were also apparent in the systems and structures Enron created to fulfill its mission. For example, the usual checks and balances designed to handle corporate conflicts of interest were ignored. For instance, those that stood to gain from a proposed project conducted the evaluations to determine their worth to the company. Another example is the notorious ‘‘rank and yank’’ performance reviews, in which bonuses could only be distributed if reviewers were unanimous in their decisions concerning themselves and others. Reviewers, however, reported to those that were being evaluated. The result was incentives that created ‘‘a mercenary, cut throat culture’’ that treated its workers like ‘‘dog meat’’ (Hassell, 2001).
Organizational moral distress will occur when the values of the organization and the values of its internal stakeholders are misaligned.
All individual stakeholders and stakeholder groups bring to the organization their own values. Often, the values of the individual or group will conflict with the organization values and it is generally up to the organization to accommodate (or not) these values. For instance, outside legally prescribed limits, it is up to the organization to decide whether or not it can accommodate an individual’s family values. In these cases, organizational moral distress can often be avoided by the organization being clear about its values in the hiring process. Processes of self selection or mediation can also resolve potential or actual conflict. In extreme cases, conflict between values of the individual or group and the organization can be resolved through strikes or termination of the individual or group, or even through organization demise.
Another potential source of this sort of organizational moral distress occurs when the organization employs or contracts with professionals. An organization may employ lawyers, or engineers, or accountants. Other organizations may employ physicians, or chemists, or nurses. Professional individuals or groups are often as sociated with professional bodies, such as the American Institute of Certified Public Account ants, that subscribe to specific values deemed important to the profession. Generally, the employing organization will incorporate, at least in part, those values with its own. For instance, the mission and values statements of legal, medical, and accounting organizations reflect similar values as those associated with their specific professional associations. Yet the employing organization will often also endorse other values and these may potentially conflict with professional values. For instance, the mission statement of Deloitte and Touche reads: ‘‘To help our clients and our people excel’’ (http://careers.deloitte.com/crs/missionstate ment.asp.). Yet the American Institute of Certified Public Accountants proclaims that the highest duty of certified public accountants is to the public (http://www.aicpa.org/about/ vision.htm.). Thus, organizational moral dis tress can occur as a result of conflict between the individual’s and/or group’s professional values and the organization’s values.
The more easily identifiable cases of this sort of organizational moral distress are often associated with whistleblowers. Consider the role of Sherron Wadkins in the Enron case, in which she tried to warn her bosses that the company would implode in accounting scandals and was ignored. But the AOL Time Warner case also belongs in this category, in that it can be regarded as a failure of leadership to align in ternal stakeholder values to organization values.
On January 10, 2000 Gerald Levin, CEO of Time Warner, and Steve Case, chairman of America Online, announced a $350 billion merger. The merger was envisioned as a partnership of equals. AOL Time Warner’s mission statement is ‘‘To become the world’s most respected and valued company by connecting, informing, and entertaining people everywhere in innovative ways that will enrich their lives.’’ Its values include creativity, agility, teamwork, integrity, and responsibility. AOL Time Warner proclaims, ‘‘We treat one another with respect – creating value by working together within and across our businesses’’ (http://www.aoltime warner.com/corporate information/mission and values.adp). Yet less then two years later Levin had abruptly retired and three years later Steve Case, having survived an attempt to oust him, had floated the idea of AOL spinning off from the Time Warner group. Stock prices for the combined company peaked at $56.60 in May of 2001 and hit bottom in July 2002 at $8.70. Currently, it is trading at around $14.00.
Newsweek analyst Johnnie Roberts suggests that easy answers – the end of the dot com boom and the events of September 11, 2001 – aren’t sufficient to explain why the company went into such a tailspin. He suggests that the real answer lies in the incompatibility of the two men involved. The results were power struggles, ill defined duties, and lack of collaboration and communication between the two men and their subordinates. AOL executives behaved as if they and no one else had a stake in the marriage. For instance, AOL’s Michael Kelly, who became AOL Time Warner’s financial chief, in an ad dress to senior executives of both companies, recalled that when AOL purchased Netscape, AOL fired everyone. Another example was the propensity of AOL executives to aggressively forecast earnings and profits. Time Warner’s Joan Nicolais preferred to offer Wall Street what she considered to be more accurate numbers and furiously opposed this aggressive ness. She was eventually replaced as the head of AOL Time Warner Investment Communications Officer (Roberts, 2002).
Organizational moral distress will also occur when stakeholder individuals or groups perceive the organization’s mission and values differently.
All organizations balance competing goals, for instance quarterly returns and future investment. Equally, many organizations balance competing values, for instance community welfare and employee welfare. Individual stakeholders or groups may agree upon the values of the organization, but they may prioritize them differently or they may misunderstand their application. This kind of organizational moral distress can occur as a result of the differing functions of individuals or groups, which will influence their perceptions and priorities.
For instance, consider the recent American Airlines controversy. The corporate vision of AMR, the parent group of American Airlines, is to be the world’s leading airline by focusing on industry leadership in the areas of safety, service, product, network, technology, and culture. Its mission statement reads in part: ‘‘AMR fosters an inclusive environment that allows all employees to contribute to the overall success of the company by: balancing the needs of the company with the needs of employees’’ (http://www.amrcorp.com/corpinfo.htm). No distinction in the mission statement is made between different groups of employees.
AMR, facing bankruptcy, after a continual slowdown of air traffic after the September 11 attack, won concessions from its unions totaling $1.8 billion. Concessions included pay cuts, benefits and contract changes, as well as allowing the airline to lay off 7,000 employees. Almost simultaneously with the announcement of an agreed package of concessions, came the news that AMR had arranged for special accounts to ensure funding of executive retirement benefits and protect these funds in the event of a bankruptcy. In the face of a furious reaction from its unions, as well as an impending public relations disaster, Donald Carty, CEO, resigned.
Organizational moral distress will also occur when the organization is prevented from doing what it perceives as the right thing to do by external stakeholders. In this example, the organization knows or believes it knows the right action to take in a particular circumstance, but is prevented from doing so by one or more external stakeholders.
Perhaps no other industry has generated more controversy in the last few years than the biotech industry, with its discovery and exploration of new technologies like stem cell research. The mostly small companies that make up this industry believe passionately in the potential of stem cell research to develop regenerative technologies that can eventually be used against diseases like Parkinson’s, Alzheimer’s, and cancers. Yet their research depends on the use of cells obtained from days old embryos, which has raised profound ethical and moral questions. The result of the controversy is a ban on any research that ‘‘harms or destroys’’ embryos and a complete ban on the use of any stem cell line developed after August 9, 2001 for any organization that receives federal funding for such research. These injunctions have had consequences for those organizations that believe in the potential of such research – and that rely on public funding to conduct their research. An example is the University of California.
The biology department at the University of California, San Francisco (UCSF), formerly headed by Roger Pedersen, is a leader, along with John Hopkins and the University of Wisconsin, in stem cell research. Although biotechnology company Genron has always funded stem cell research at UCSF, Pedersen and his col leagues worried that the ban might also affect indirect costs.
The university, determined to make sure that its researchers stayed at the top of the field, and aware that of the 78 cell lines identified before the August ban only 7 were possibly viable, decided to set up a privately funded laboratory off campus where its researchers can work on new cell lines. The program was moved off campus and Pedersen himself resigned to re locate to Cambridge University in England, where the government actively supports stem cell research. He retains a faculty position at the UCSF and is actively recruiting other United States’ scientists to work in England (Perez Pena, 2003).
Bibliography
Hassell, G. (2001). The fall of Enron: Pressure cooker finally exploded. Houston Chronicle, December 9.
Jameton A. (1984). Nursing Practice: The Ethical Issues. Englewood Cliffs, NJ: Prentice-Hall.
Perez-Pena, R. (2003). Broad movement is backing embryo stem cell research. New York Times, March 16, 20.
Roberts J. (2002). How it all fell apart: Steve Case and Jerry Levin created AOL Time Warner in a marriage of convenience. The inside story of what went wrong. Newsweek, December 9, 52.