Organizational Justice: A Behavioral Science Concept with Critical Implications for Business Ethics and Stakeholder heor!

Author"s#: $a%ue one &osmer and Christian 'iewitz Source: Business Ethics (uarterl!) *ol+ ,-) .o+ , "Jan+) /00-#) pp+ 1234, 5u6lished 6!: 5hilosoph! 7ocumentation Center Sta6le 8%$: http:99www+:stor+org9sta6le9;<-211< Accessed: /=90-9/0,; ,0:0>our use of the JS O% archive indicates !our acceptance of the erms ? Conditions of 8se) availa6le at http:99www+:stor+org9page9info9a6out9policies9terms+:sp JS O% is a not3for3profit service that helps scholars) researchers) and students discover) use) and 6uild upon a wide range of content in a trusted digital archive+ @e use information technolog! and tools to increase productivit! and facilitate new forms of scholarship+ Aor more information a6out JS O%) please contact supportB:stor+org+

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one &osmer and Christian 'iewitz

Abstract: Organizational :ustice is a 6ehavioral science concept that refers

to the perception of fairness of the past treatment of the emplo!ees within an organization held 6! the emplo!ees of that organization+ hese su6:ec +++ tive perceptions of fairness have 6een empiricall! shown to 6e related to I# attitudinal changes in :o6 satisfaction) organizational commitment and managerial trust 6eliefsG 2) 6ehavioral changes in task performance activities and ancillar! eCtra ++t+ask efforts to assist group mem6ers and improve group methodsG 3) numerical changes in the Huantit!) Hualit! and efficienc! of divisional outputsG and3though this is far more tentative3=# eventual changes in the competitive advantage and financial performance of the full organization+ he authors propose that these constructs can 6e applied to all stakeholders) rather than :ust to the current emplo!ees of the firm) and that o6:ective determinations of fairness 6! the managers can 6e related to su6:ective perceptions of fairness 6! the stakehold +++ ers that will result in the seHuential series of attitudinal) 6ehavioral and numerical changes that will lead to performance improvements+ In short) the authors propose a normative stakeholder theor! of the firm) 6ased upon ethical principles) that will have testa6le descriptive h!potheses derived from the 6ehavioral constructs+

rganizational :ustice is a 6ehavioral science concept that refers to the perception of fairness of the past treatment of the emplo!ees within an organization held 6! the emplo!ees of that organization+ It is a su6:ective personal view of :ustice) 6ased upon eCperience) rather than an o6:ective moral determination of :ustice 6ased upon principle+ Still) it is criticall! important for scholars in 6usiness ethics and stakeholder theor!+ @h!I Because literall! hundreds of empirical studies have su6stantiated that there are clear causal relationships 6etween those su6:ective perceptions of organizational :ustice and positive organizational outcomes at the individual) group and divisional levels+ Specificall!) this stream of research has shown that perceived organizational :ustice is related to ,# attitudinal changes in :o6 satisfaction) orga3 nizational commitment and managerial trust 6eliefsG /# 6ehavioral changes in task performance activities and ancillar! eCtra3task efforts to assist group mem6ers and

J /00-+ Business Ethics Quarterly, *olume ,-) Issue ,+ ISS. ,0-/3,-0K+

pp.67-91

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improve group functioningG and ;# numerical changes in the Huantit!) Hualit! and efficienc! of divisional outputs+ Behavioral scientists operate on the assumption that these verifia6le attitudinal) 6ehavioral and productive changes at the individual) group and divisional levels have an eventual positive effect upon the performance of the overall organization as measured 6! competitive advantage and9or financial return+ @e 6elieve that 6usiness ethicists operate3though we are not aware of an! prior literature in which this 6e3 lief has 6een eCplicitl! stated or empiricall! demonstrated3on the assumption that managerial decisions and actions that follow accepted ethical principles) and thus could 6e convincingl! eCplained as 6eing o6:ectivel! fair) would have an eventual positive impact upon their acceptance 6! emplo!ees and other stakeholders) and thus would also 6e viewed as 6eing su6:ectivel! fair+ A logicall! incremental connection 6etween the :ust managerial decisions understood 6! 6usiness ethics and the positive organizational outcomes eCamined 6! 6ehavioral science can thus 6e proposed) as shown in Aigure ,:
Aigure , 5roposed Incremental %elationship in Stages Between Just Danagerial 7ecisions and Beneficial Organizational Outcomes) 7ivided Between the 7isciplines of Business Ethics and Behavioral Science Eroup 6ehavior modifica3 tions3role and eCtra role 6ased Organi3 zational performance advancements 3advantages and profits

Danage3 rial ethical decision3 o6:ective principles

5ersonal Justice perceptions3 su6:ective 6eliefs

attitudinal _., ad:ustments3 satisfaction and trust

Individual

+++++

7ivisional output improvements 3Huantit! and Hualit!

7omain of Business Ethics 3normative theor!

7omain of Behavioral Science 3descriptive theor!

he 6alance of this article will attempt to eCplain that proposed :uncture of the :ust managerial decisions of 6usiness ethics to the positive organizational outcomes of 6ehavioral science) as shown in Aigure ,+ his will 6e done in a series of four sections) to 6e descri6ed 6elow+ Airstl!) however) let us warn readers that the term Ldistri6utive :usticeL when used in the 6ehavioral science literature refers to the perceived fair3 ness of an individualMs rate of pa! and other remuneration) not to the %awls ",42,# principle of logical moral reasoning+ ,+ Conceptual content of organizational :ustice+ his construct has developed gradu3 all! over time3the first eCplicit reference was in Adams ",41-#3and now consists of four distinct elements: a# distri6utive :ustice) which is a su6:ective :udgment of the fairness of an individualMs rate of pa! and additional remuneration relative to other persons and other positionsG 6# procedural :ustice) which is a su6:ective :udgment of the fairness of the procedures 6! which the managerial decision on pa! and9or other outcomes was reachedG c# interactional :ustice) which is a S86:ective:udgment of the fairness of the interpersonal treatment of emplo!ees 6! managers while the decision is 6eing reachedG and d# informational :ustice)

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which is a su6:ective :udgment of the adeHuac! of the eCplanation provided to the emplo!ees 6! the managers after the decision has 6een reached+ /+ Empirical support for organizational :ustice+ Behavioral science is an empiricall! 6ased endeavor+ here have 6een more than =00 studies of o6served relationships 6etween the perceived :ustice or in:ustice of a managerial act 6! the emplo!ees of an organization) and the positive or negative impacts upon the 6eliefs) actions and outputs of that organization+ %epresentative samples of studies reporting those positive or negative impacts will 6e discussed in five su63sections: a# individual changes in attitudesG 6# group changes in 6ehaviorsG c# division changes in outputsG d# com6ined changes in attitudes) 6ehaviors and outputs eCamined through meta anal!sisG and e# organizational changes in performance+ ;+ %esearch difficulties in the social performance to financial performance relation3 ship+ An underl!ing 6elief in 6usiness ethics has 6een the hopeful eCpectation that morall! correct decisions 6! management would lead to improved performance measures for the organization+ his instrumental literature will 6e 6riefl! eCplored in the third section of the articleG for now the su6title of %o6ert SolomonMs recent ",444# 6ook will suffice as support for the claim: A Better Way to Think about Business: Ho Personal !nte"rity #ea$s to Corporate %uccess. his proposed moral to financial relationship has not 6een eCplored empiricall! 6! 6usiness ethics scholars+ It has) however) freHuentl! 6een approached 6! those active in the social responsi6ilit! of 6usiness fieldG for good summaries see 5reston and OMBannon ",442# or Dc@illiams and Siegel "/00,#+ here are measurement pro6lems at 6oth ends of the proposed relationship and directional pro6lems in 6etweenG these pro6lems will 6e discussed within this section+ =+ heor! implications for 6usiness ethics+ he direct moral and9or social perfor3 mance 6! management to strategic and9or financial performance 6! the firm relationship appears to 6e difficult to esta6lish due to measurement pro6lems and directional issues+ his) we 6elieve) has prevented the development of a normative stakeholder or moral36ased theor! of the firm 6ecause the sole test3 a6le h!pothesis3that morall! and9or sociall! oriented management will lead to strategicall! and9or financiall! successful performance3lacks empirical support+ @e 6elieve that the interim varia6les in the 6ehavioral science seHuence leading from S86:ectiveperceptions of :ustice to individual changes in attitude to group improvements in 6ehavior to division eCpansions in efficienc! and effectiveness can generate those testa6le h!potheses+ It will 6e necessar! to appl! those interim varia6les to the full range of corporate stakeholders rather than the limited num6er of compan! emplo!ees+ And) it will 6e necessar! to conceptuall! descri6e and empiricall! test the proposed relationship 6etween the o6:ective determination of :ustice 6! managers "the domain of 6usiness ethics# and the su6:ective percep3 tion of :ustice 6! stakeholders "the province of 6ehavioral science#+ This latter relationship, once establishe$, ill lea$ to a normati&e stakehol$er theory o' the 'irm ith testable $escripti&e hypotheses.

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his research opportunit!) and the content of the prior sections on 6ehavioral science constructs that have led to it) have 6een 6riefl! summarized and graphicall! portra!ed in Aigure /) which is a more detailed and eCplicit version of Aigure ,+ he set of relationships at the 6ottom of Aigure / that com6ines constructs from 6usiness ethics and 6ehavioral science constitutes in our view the proposed normative stake3 holder theor! of the firm with testa6le descriptive h!pothesis

Conceptual Content o' (r"ani)ational *ustice

Organizational :ustice has 6een defined in a recent summar! work "Aolger and Cropanzano ,44<: Cii# as Lthe conditions of emplo!ment that lead individuals to 6elieve that the! are treated fairl! or unfairl!+L Justice) those authors continue) Lis a6out how rewards and punishments are distri6uted 6! and within social collectives) and it is also a6out how people govern their relations with one another+ It is a6out who gets what and whether the participants in these transactions 6elieve them to 6e righteousL "Cii#+ LOnce we understand what :ustice is) we can easil! comprehend wh! it is so central to human affairs+ 5eople care deepl! a6out how the! are treated 6! othersL "Cv#+ here is an underl!ing moral content in the 6ehavioral science construct of organizational :ustice) and thus a clear connection to 6usiness ethics) though this underl!ing moral content is viewed descriptivel!: how people actuall! do act within a 6usiness firm+ Aolger and Cropanzano) in another connection to 6usiness ethics) ascri6e the impor3 tance of these 6eliefs a6out fairness in the Lwho gets whatL distri6utions of corporate 6enefits and harms to the need for social cooperation+ LEroup cooperation often en3 hances the a6ilit! to provide for economic needs +++ G people choose to affiliate with others+ 5eople hope that ultimatel! their comrades will help them attain their goals+ 8nfortunatel!) those comrades have man! of the same o6:ectives for themselves+ he! seek colla6oration in order to achieve their goals) which might 6e incompati6le with the goals of others seeking their helpL "Aolger and Cropanzano ,44<: CiC#+ 8ltimatel!) these authors conclude) successful collectives are 6ased upon a grand compromise: all mem6ers of the group agree to keep their personal self3 interests partiall! in check so that adeHuate 6enefits will 6e left for other mem6ers of the group+ his compromise also finds eCpression in the 6ehavioral science construct of a ps!chological contract which in work settings refers to each individualMs eCpectations and 6eliefs a6out the terms and conditions of a reciprocal eCchange agreement 6etween the individual and the emplo!er "%ousseau /00,G %ousseau and Dc$ean 5arks ,44/#+ his Lever!one must keep their personal self3interests at least partiall! in checkL common understanding or ps!chological contract for corporate colla6oration is) of course) almost eCactl! similar to the Social Contract concepts of &o66es (198611651), $ocke (1952/1690), %awls ",42,#) and .ozick ",42=#+ he difference is that scholars in the 6ehavioral sciences ascri6e the moral precepts governing the fair distri6ution of corporate 6enefits to the social norms that develop over time within an organiza3 tion+ hese social norms currentl! are said to fit into four separate categories: ,# distri6utive :ustice) which focuses on the fairness of the compensation received 6!

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an individualG /# procedural :ustice) which concerns the fairness of the method 6! which that compensation is determinedG ;# interactional :ustice) which prescri6es the general attitude of dignit! and respect toward that individual during that determina3 tionG and =# informational :ustice) which is the Hualit! of the eCplanation offered to that individual after that determination+ Distributi&e +ustice. Cropanzano and Ereen6erg ",442: ;/0# trace the origin of the distri6utive :ustice concept to AristotleMs ",4-=9;,/ Be) interest in Lthat which is manifested in distri6utions of honor or mone! or the things that fall to 6e divided among those who have a share in the constitution+L he! also eCplain that concern with the fairness of pa!ments had 6een an issue in non3economic management theor! since the formal initiation ofthat theor! with Barnard ",4;<#) 6ut that &omans ",41,# was the first to set forth a specific rule of this distri6utive form of organizational :ustice+ &omans proposed that the participants in a social eCchange would eCpect that the incomes received 6! each of the parties should 6e proportional to the costs "time and mone!# invested 6! each of the parties+ Adams ",41-# formalized this concept 6ased upon what he termed LeHuit! theor!+L Adams 6elieved that participants in contractual eCchanges within an organization went 6e!ond comparing dollar 6enefits to dollar costsG instead he proposed that the! compared a wide range of input contri6utions made 6! other mem6ers to an eHuall! wide range of outcome rewards received 6! those mem6ers+ hose input contri6utions could take the form of education) intelligence) eCperience) skill) effort and time+ he outcome rewards were thought to include pa!) 6ut also recognition) prestige and acceptance+ Adams eCpressed this 6roadened concept of distri6utive :ustice with the formula 0:1 = 0 :1, where 0 stands for outcome) p p
1

stands for input) p stands for the person making the :udgment of fairness) and stands for all others 6oth within and outside the organization+ 7istri6utive :ustice) then) was defined as an individualMs perception that hislher input9outcome ratio of total compensation was fair relative to the eHuivalent ratio of all others+ his :udgment of fairness was considered to 6e important 6ecause it was h!pothesized that emplo!ees who felt that their input9outcome ratios were unfair relative to all others would attempt to achieve a 6etter 6alance 6! either withholding positive inputs "doing less work or providing fewer ideas# or 6! eCacting negative outcomes "disrupting group activities or harming compan! pro:ects#+ Proce$ural +ustice. Dan! of the earl! empirical studies of distri6utive :ustice did not find the workplace slow downs or organizational disruptions that had 6een pro3 posed as a conseHuence of perceived unfairness+ hi6ault and @alker ",42-# were the first to propose that organizational mem6ers were not so much concerned with the input9outcome ratios of distri6utive decisions as the! were with the legitimate nature of the organizational procedures for reaching those decisions+ 5eople) the authors stated) tended to view compensation outcomes as fair if the! felt that the procedures leading up to those pa!ment decisions were fair) and those procedures were :udged to 6e fair if the! felt the! had the time and opportunit! to present their arguments 6efore the decision was made+ ime and opportunit! were condensed into a single varia6le: voice+ @ere the emplo!ees a6le to eCpress their thoughts and opinions and participate in the decision processI $eventhal ",4<0# later eCtended this eCpression
0

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and participation concept of procedural :ustice into a more eCact form 6! proposing siC specific reHuirements: a# 6# c# d# e#
f)

he procedures had to 6e consistent) with no variations allowed 6etween persons or across times within the organization+ he procedures had to 6e un6iased) with no vested interests permitted on the part of the decision3maker+ he procedures had to 6e accurate) with full and verifia6le information used 6! that decision3maker+ he procedures had to 6e correcta6le) with an appeal mechanism provided for inconsistent) 6iased or inaccurate decisions+ he procedures had to 6e ethical) and conform to prevailing standards of proper 6ehavior within the organization he procedures had to 6e inclusive) and ensure that the opinions of all of the groups affected 6! the decision were taken into account+

It is important to recognize that 5rof+ $eventhal is not using LethicalL in point "e# a6ove in a normative sense) meaning that individuals should decide on what is fair 6! following logical principles as to what is 6est for the overall societ!+ Instead) $eventhal seems) given the reference to the Lprevailing standards of proper 6ehavior within the organizationL a6ove) to 6e using the term is a descriptive sense) meaning that individuals actuall! do decide on what is fair 6! a perceived compliance with personal or organizational standards+ his approach reflects the focused interest of 6ehavioral scientists in the su6:ective nature of human perceptions) and the su6seHuent attitudes and 6ehaviors 6ased upon those perceptions+ 7ifferent definitions of similar terms constitute one of the ma:or pro6lems that will 6e encountered in attempting to interconnect 6usiness ethics and 6ehavioral science in order to form a normative stakeholder theor! of the firm with testa6le descriptive h!potheses+ !nteractional +ustice. Once again) empirical results did not full! support the h!pothesized outcomes of com6ined distri6utive and procedural :ustice concepts+ Something more was clearl! involved) and Bies and Doag ",4<1# soon introduced the concept of interactional :usticeG this referred to the Hualit! of the interpersonal treatment emplo!ees received while the procedures were 6eing implemented and the decisions were 6eing made+ he authors at the time emphasized the negative aspects of this treatment) and proposed three categories of interactional in+ustice that had to 6e avoided: a# derogator! :udgments made a6out a personG 6# deceptive practices conducted towards a personG and c# disrespectful treatments accorded to a person+ Ereen6erg ",440# adopted a much more positive approachG he termed the concept interpersonal :ustice) which he then defined as the eCtent to which participants in the decision process were treated with courtes!) dignit! and respect+ 5ersons active in the stud! of 6usiness ethics will) we assume) Huickl! recognize the close asso3 ciation 6etween the Ldignit! and respectL interpersonal :ustice condition proposed 6! Ereen6erg and the Ltreat others as ends) worth! of dignit! and respect) never as means to personal endsL second formulation of the Categorical Imperative developed 6! 'ant (1998/1785: ,-# as a ver! 6asic moral reasoning principle+ here currentl!

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eCist valid) though infreHuent) theoretical connections 6etween 6usiness ethics and 6ehavioral science !n'ormational +ustice. Sheppard and $ewicki ",4<2# asked a sample of managers within different firms to descri6e critical incidents of fair and unfair treatment 6! their superiors) and the reasons or standards that 6rought them to consider those actions as fair or unfair+ AdamMs ",41-# principle of input9outcome eHuit!) hi6ault and @alkerMs ",42-# proposal for voice) or the time and opportunit! to participate in decisions) and $eventhalMs ",4<0# eCpansion of participation to include siC necessar! conditions of fairness were freHuentl! eCpressed) 6ut a new one was added: the adeHuac! of the eCplanation+ Ereen6erg ",440#) in his summar! of the status of organizational :ustice used the term informational :ustice) which he defined as the credita6ilit! and adeHuac! of the eCplanation given to the participants+ @e will propose) in section I* of this paper) that informational :ustice 6e moved from the credita6ilit! and adeHuac! of an eCplanation 6ased upon the social norms that are prevalent within an organization to the credita6ilit! and adeHuac! of an eCplanation 6ased upon ethical principles that have 6een developed within a societ!+ In essence our recommendation will 6e that the informational determination of organizational :ustice move from 'ohl6ergMs ",421# Stage =: Aollowing other3imposed formal reHuirements in order to remain part of an on3going social s!stem to Stage 1: Aollowing self3chosen ethical principles in order to lead a moral life+ @e recognize that these ethical principles are compleC for the! focus on such ver! 6asic issues as li6ert!) :ustice) eHualit! and respect for the worth of individual human 6eings+ And) we recognize that the historical discussions of the meanings of those terms and of the value of that worth are largel! unknown 6! most mem6ers of societ!+ But) our argument in section I* of this paper will 6e that these concepts and that worth are intuitivel! recognized 6! most mem6ers of societ!) and thus can 6e full! convincing to those mem6ers hen lo"ically e,plaine$. In our view the ultimate function of management is to logicall! eCplain the ethical principles that underlie their decisions and actions in order to achieve wholehearted cooperation) in3 novation and effort among all of the emplo!ees and other stakeholders of the firm+ hese four categories of organizational :ustice perceptions have 6een shown to 6e related) though with steadil! decreasing degrees of statistical relia6ilit!) to the four related outcomes of individual attitudes) group 6ehaviors) divisional outputs and organizational performance measures+ he empirical studies that provide evidence of those relationships) and the research difficulties that impact the relia6ilit! indices) will now 6e discussed for each of the four related outcomes+

Empirical (utcomes o' (r"ani)ational *ustice

Empirical support for the h!potheses that the four forms of perceived organizational :ustice "distri6utive) procedural) interpersonal and informational# that were discussed a6ove do indeed result in related attitudinal) 6ehavioral) operational and performance changes within organizations is ver! eCtensive+ Cohen3Charash and Spector "/00,# in their meta anal!sis of these studies report looking at more than =00 empirical and over ,00 theoretical papers+ he sheer volume of these studies creates a pro6lem in

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understanding their implications+ Another pro6lem in reaching that understanding is that in the social sciences replications of prior findings are not thought to represent advances in knowledge and thus cannot 6e pu6lishedG conseHuentl! each of the em3 pirical papers differs to some eCtent in the input) output and9or modif!ing varia6les under eCamination) or in the methods of that eCamination+ Off3setting these large magnitude and non3replication pro6lems) however) is one ver! positive aspect: there is no Huestion 6ut that man! proposed relationships have 6een ver! firml! esta6lished 6etween the various forms of organizational :ustice and the different t!pes ofh!poth3 esized outcomes+ @e will discuss these different t!pes of h!pothesized outcomes in su6sections dealing with 1) individual attitude ad:ustments) /# group 6ehavior modi3 fications) ;# divisional output improvements) =# com6ined "meta# anal!ses of attitude ad:ustments) 6ehavior modifications and output improvements) and -# organizational performance advancements+ !n$i&i$ual attitu$e a$+ustments. he outcome attitudes that were measured in the series of articles we reviewed included positive feelings of pa! acceptance) :o6 satisfac3 tion) organizational commitment) management trust) departure intention) supervisor approval and negative emotional states such as anger) resentment) discouragement and disgust+ All of these attitudes were not included in all of those articlesG most focused upon a much smaller su6set+ he input actions or policies that were h!pothesized to result in either positive or negative changes in those outcome attitudes included pa! raises) promotion methods) performance evaluations) ar6itration procedures) hiring standards) drug tests and :o6 la!offs+ Again) most articles focused upon a much smaller su6set of this total+ Essentiall!) however) all of the articles found evidence that the perceived :ustice of the managerial actions or organizational policies that were 6eing investigated had impacts upon the dependent varia6les that were 6eing measured+ he degree and direction of those impacts varied with the strength and direction of the perceptions) 6ut also freHuentl! were modified 6! prior conditions or conteCtual factors+ Aor eCample) the attitudes in one stud! on downsizing "Brockner) !ler) and Cooper3Schneider ,44/# were clearl! modified 6! prior feelings of commitment to the organization+ he authors found that negative reactions among la!off survivors "not victimsN# tended to 6e much greater among those emplo!ees who previousl! had felt more highl! committed to the firm+ Another interesting 6ut again somewhat counter3intuitive finding "Brockner et al+ ,44=# also dealt with la!offs+ he authors found that downsized victims) survivors and lame ducks "those who were told the! would 6e discharged 6ut had not !et 6een forced to leave# all had adverse reactions to the :o6 losses) 6ut that when perceptions of procedural :ustice were high the degree of negativit! was much lower) again among all three of the groups+ hat is) even the downsized victims and soon3to36e victims were affected 6! the perceived :ustice of the proceedings+ Another noteworth! stud! "&artman) >rle) and Ealle ,444# focused on academics 6ut is certainl! applica6le to other institutionsG the authors discovered that differential raises at a pu6lic universit! where salar! information had traditionall! 6een made pu6lic resulted in feelings of pa! satisfaction even among mem6ers of the low raise groups as long as the! 6elieved that esta6lished procedures had 6een followed+ A last finding that is relevant to the

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proposed conclusion of this paper came from an article on drug testing+ 'onovski and Cropanzano ",44,# found that all three of the :ustice perceptions concerning imposed drug tests considered in the stud! "outcome) procedural and eCplanator!G the interac3 tional form had not 6een included# significantl! affected all of the emplo!ee attitudes towards the firm and its management) 6ut that eCplanator! :ustice was least important in predicting management trust) 6ut most important in influencing organizational commitment and :o6 satisfaction+ In other words) trust appeared to reHuire something more than ver6al eCplanations+ Acts were evidentl! more important than words+ -roup beha&ioral chan"es. @orkplace 6ehavior usuall! takes place in a group setting) and these group actions have 6een divided 6! 6ehavioral scientists into two distinct t!pes+ he first t!pe is termed Lrole 6asedLG these are activities that are related to the formal operating policies "how a given :o6 should 6e done# and to the control and incentive s!stems "how the performance of that :o6 should 6e measured) and how the performer should then 6e rewarded or punished 6ased upon those measures# of the firm+ he second t!pe is termed LeCtra roleLG these are activities that are outside the operating policies and not covered 6! the control measures and incentive pa!ments+ he! were first identified 6! Organ ",4<<: =# who defined this pattern as Lindividual 6ehavior that is discretionar!) not directl! or eCplicitl! recognized 6! the formal reward s!stem) and that in the aggregate promotes the effective functioning of the organiza3 tion+ B! discretionar!) we mean that the 6ehavior is not an enforcea6le reHuirement of the role or the :o6 description+L hese eCtra role acts in response to individual perceptions of :ustice have 6een termed Lorganizational citizenship 6ehavior)L a term that is freHuentl! shortened to the acron!m OCB+ he! include helping group mem6ers) improving group processes) facilitating group decisions) defending group goals) following group rules) sharing group victories) recognizing group contri6utions) 6oosting group reputations) and enduring without complaint group inconveniences+ Organ ",4<<# shortened this list to acts of altruism) conscientiousness) sportsmanship) courtes! and civic virtueG all are assumed to improve the output productivit! of the group and thus of the firm+ %o63 inson and Bennett ",44-# proposed that there were also eCtra role acts in response to perceptions of in+ustice. the! termed this negative set Lworkplace deviance 6ehavior)L or@7B+ he authors provided the following definition of@7B: Lvoluntar! 6ehavior of organizational mem6ers that violates significant organizational norms and) in so doing) threatens the well36eing of the organization and9or its mem6ersL "%o6inson and Bennett ,44-: ,;/#+ %otundo and Sackett "/00/# termed these same t!pes of acts counterproductive 6ehavior) or C5B+ Both @7B and C5B would include) it can 6e assumed) non3helping) non3improving) non3facilitating) etc+) activities+ As with attitudinal modifications there have 6een literall! hundreds of empirical studies showing the relationships 6etween the various forms of perceived organi3 zational :ustice and the various t!pes of role and eCtra role "6oth positive OCB and negative WDB/CPB) 6ehaviors+ @e will descri6e :ust three of the more compelling studies+ Doorman ",44,# surve!ed 6oth emplo!ees and supervisors at two manufac3 turing firms) got outstanding response rates "4< percent among the workers at one plant# and concluded that there were definite relationships 6etween organizational

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:ustice and organizational citizenship 6ehavior) with the dominant influence coming from the interactional "am I ha6ituall! treated with the respect and dignit! I deserve# form+ Ball) revino) and Sims ",44=# found that emplo!ee Lvoice)L the opportunit! to 6e heard in formal managerial decisions and thus a ma:or component in procedural :ustice perceptions) was associated with organizational citizenship 6ehavior on the part of su6ordinates even following a punishment action+ &endriC) %o66ins) Diller) and Summers ",44<: 1/2# surve!ed ;,0 emplo!ees at two teCtile companies) and concluded) Lensuring positive :ustice perceptions should result in emplo!ees with higher levels of intrinsic :o6 satisfaction and commitment who) in turn) will have a strong desire to perform well within a group) attend work) and remain with the organization+L Di&isional output impro&ements. .umerous authors have complained that not enough work has 6een done to relate attitudinal ad:ustments and 6ehavioral modifi3 cations to output improvements+ Ereen6erg and $ind "/000: 2;# state that there have 6een onl! a few organizational :ustice studies conducted to date that have attempted to demonstrate a practical value to 6usiness firms in terms of performance improve3 ments+ &owever) the! continue) the organizational :ustice literature is ver! rich in implications for such improvements+ Judge) horesen) Bono) and 5atton "/00,# in eCactl! the same vein sa! that the relationship 6etween :o6 satisfaction and workplace performance is one of the most venera6le research traditions in industrial and orga3 nizational ps!cholog!) 6ut admit that little conclusive evidence has 6een pu6lished+ his relationship) the! further eCplain) had earlier 6een descri6ed as the L&ol! ErailL of industrial ps!chologists "$and! ,4<4#) with interest in the link 6etween workplace attitudes and output productivit! going 6ack at least as far as the &awthorne studies of the ,4;0s "%othlis6erger and 7ickson ,4;<#+ As a last eCample) 5odsakoff) Dack3 enzie) 5aine) and Bachrach "/00/: -=1# sa! that) L7espite the intuitive plausi6ilit! of the assumption that OCBMs contri6ute to the effectiveness of work teams and organizations) this issue has received little empirical attention ++++ Indeed) although over ,10 studies have 6een reported in the literature to identif! the antecedents of OCB +++ onl! five studies have attempted to test whether these 6ehaviors influence organizational effectiveness+L here is a reason for the relative paucit! of studies that focused on the impact of organizational :ustice perceptions upon divisional output measures+ here are numerous independent and modif!ing varia6les that could influence that output figure or dependent varia6le within a productive process 6e!ond the four t!pes of :ustice perceptions+ he level of technolog!) the availa6ilit! of capital) the design of eHuipment) the st!le of leadership) the structure of control) varia6ilit! in demand and fleCi6ilit! of response all could 6e eCpected to affect the Huantit!) the Hualit! and the efficienc! of the output+ 7espite these pro6lems) however) there have 6een a num6er of insightful studies+ Cowherd and $evine ",44/# looked at the relationship 6etween output product Huantit! and Hualit! and perceived pa! eHuit! 6etween factor! worker wages and senior eCecutive salaries at ,0/ different production plants for fort!3two different 6usiness firms+ In short) the! looked at whether perceived LinterclassL in:ustice would

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influence workplace attitudes) 6ehaviors and conseHuentl! outcomes+ he! found that there was little relationship 6etween perceived pa! eHuit! and output Huantit!) 6ut a ver! strong relationship 6etween pa! eHuit! and output Hualit!+ (ualit!) the! eCplained) was a far su6tler issue than Huantit!G it appeared to 6e much less suscepti6le to operational control 6! managers and much more open to discretionar! 6ehavior 6! emplo!ees+ 5feffer and $angton ",44;# eCamined essentiall! the same issue in an academic setting: the perceived fairness of facult! salaries that did not appear to 6e following esta6lished standards at ;0; different colleges and universities+ heir find3 ings were) L5eople were less satisfied Owith their :o6sP) there was less colla6oration on research) and research productivit! and recent research outputs were 6oth lower the more dispersed the pa! distri6utions wereL "5feffer and $angton ,44;: =0;#+ $astl!) Bowen) Eilliland) and Aolger ",444# found that the perceived fairness of hu3 man resource management practices at a retail chain affected the individual attitudes and group 6ehaviors of the emplo!ees) which in tum positivel! affected the degree of satisfaction and eCtent of lo!alt! among the customers+

Combine$ /meta0 analyses o' attitu$e a$+ustments, beha&ior mo$i'ications an$ output impro&ements. Deta anal!sis is a statistical means of generalizing from a series
of past studies that have independentl! looked at the interrelationships of a range of dependent) independent and mediating varia6les in various organizational settings over differing time periods+ Essentiall!) meta anal!sis is a Huantitative rather than a Hualitative approach to literature review+ hat is) if a num6er of the studies within a stream of literature produce a given correlation as a ke! finding) then advocates of this process "see) e+g+) Aarle! and $ehman ,4<1# sa! that it makes sense to compare those correlations and attempt to eCplain what makes some of them stronger or weaker than others+ Deta anal!sis sets up the findings of the previous empirical studies "correla3 tion coefficients in our eCample) though other statistical measures can also 6e used# as dependent varia6les) treats whatever differed 6etween the studies as independent or moderating varia6les) and then attempts to gauge the relative influence of the independent and moderating varia6les upon the dependent construct using advanced forms of statistical anal!sis+ here is no need within this paper to discuss the methodologies of those advanced forms of statistical anal!sis+ $et us instead eCplain that the earl! methods were applied to epidemiolog! in an attempt to develop 6etter theories of disease cause and control) and at the time were considered to 6e Huite successful despite the o6vious variations 6etween the prior studies+ One of the earl! practitioners "Aorscher ,41;# provided an apt analog!+ &e descri6ed the original social and medical scientists engaged in epidemiological research as skilled 6rick makers+ 8nfortunatel!) he continued) their 6rick!ards had 6ecome too cluttered) with thousands of 6ricks "studies# 6ut ver! few 6uildings "theories#+ Deta anal!sis) he concluded) provided a means of transforming the social and medical scientists from 6rick makers to 6rick la!ers) who then 6egan to craft needed theoretical approaches from underutilized empirical studies+ .umerous academics are uncomforta6le with this 6rick la!ing analog!) and indeed with the legitimac! of meta anal!sis as a form of stud!) 6ecause of a general feeling that research in the social sciences should 6e theor!3driven rather than data3driven)

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6ut there is general agreement "Dullen and %osenthal ,4<-# that meta anal!sis does force researchers to ,# deal more eCactl! with the pro6lems of fundamental categories and 6asic relationshipsG /# eCercise greater concern for the measurement issues in the independent) modif!ing and dependent varia6lesG and ;# conceptualize these more precise varia6les and more 6asic relationships on a much 6roader scale+ @hat are the conclusions that can 6e drawn from the eCisting meta anal!ses of the perceived organizational :ustice forms and the measured organizational :ustice outcomesI It is hard to summarize massive studies of this nature) 6ut we 6elieve that it is safe to sa! that the four forms of organizational :ustice do appear to 6e distinctl! different though closel! interrelated conceptual structures) and that their impacts upon individual attitudes and group 6ehaviors also appear to 6e su6stantial and proven) though varia6le depending upon a multitude of conteCtual factors+ here have not as !et 6een completed an adeHuate num6er of prior independent studies of the impacts of the different forms of organizational :ustice perceptions upon the divisional outputs of Huantit!) Hualit! and efficienc! to permit the use of meta3anal!sis methodolog! in this area of ver! o6vious interest and importance+ But) due to that interest and im3 portance) it is apparent that the num6er of the prior independent studies is currentl! growing and ma! soon reach the reHuired level+ (r"ani)ational per'ormance a$&ancements. 7emonstrated improvements in the competitive or financial performance of complete organizations as a result of organizational :ustice perceptions 6! the emplo!ees of those organizations would) of course) 6e the ideal result of empirical research for most industrial or organizational ps!chologists+ hat is eCactl! what the! would most like to find 6ecause demonstrated improvements in organizational performance would show most clearl! the value of their organizational :ustice concepts+ he pro6lem is that there are numerous other input factors 6e!ond the four t!pes of organizational :ustice that impact the competitive and financial performance of 6usiness firms: economic conditions) industr! structures) competitive forces) market trends) organizational resources) technical capa6ilities) so3 cial changes and legal reHuirements+ 7espite the o6vious pro6lems in research design imposed 6! these modif!ing factors) there have 6een a few ver! insightful studies of the relationship of organizational :ustice to organizational performance+ 'im and Dau6orgne ",44<# started with the twin assumptions that ,# market) industr! and technical knowledge is the critical resource in a modem econom!) and /# that this critical resource had to 6e collectivel! shared to 6e effectivel! used in strategic planning for competitive success+ his sharing) the! continued) went 6e!ond the usual contractual arrangement portra!ed in principal9agent relationships) and had to 6e 6ased upon attitudes of trust and commitment+ rust and commitment) in tum the! proposed) had to 6e 6ased upon perceptions of procedural :ustice "6eing activel! involved in all phases of the strategic planning process up to the final deci3 sion#) eCplanator! :ustice "6eing full! informed a6out the underl!ing rationale after the final decision was made 6! the chairman and mem6ers of the 6oard# and a third construct which the! did not name 6ut might have called evaluative :ustice "know3 ing in advance eCactl! how the! would 6e :udged throughout the various phases of the planning process#+ he authors interviewed fort!3eight senior eCecutives in eight

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participating firms a6out their compan!Ms processes of strategic planning+ he ma:or finding was that these three forms were critical to those processes 6ecause collec3 tivel! the! recognized the Lintellectual and emotional worthL of the managers "'im and Dau6orgne ,44<: ;;;#+ @ithout that :ust treatment) the interviewed managers admitted) the! would not have shared their knowledge) 6ut would have hoarded their 6est thoughts and most creative ideas+ 'o!s "/00,# looked at three human resource outcomes3emplo!ment satisfaction) citizenship 6ehavior) and :o6 turnover3of the four organizational :ustice precepts and eCamined the relationships 6etween unit3level measures of those outcome factors in !ear LnL and unit level measures of customer lo!alt! and divisional profita6ilit! in !ear LnQ ,L over different time periods and at multiple locations of a regional restaurant chain+ %egression anal!ses showed changes in emplo!ee attitudes and 6ehaviors at time , were indeed related to changes in organizational effectiveness at time /+ 'im and Dau6orgne ",44<# and 'o!s "/00,# are indicative of the t!pe of work that can 6e done to relate all four current t!pes of organizational :ustice concepts to organizational performance measures that are market and9or finance 6ased+ @e as3 sume that studies of this advanced nature will 6ecome increasingl! common in the future in the disciplines of 6oth strategic management and organizational 6ehavior+ he Huestion is how 6usiness ethics and stakeholder theor!) which have ha6ituall! predicted a time dela!ed relationship 6etween morall! correct managerial decisions and competitivel! effective organizational actions) can not onl! 6e passivel! part of 6ut activel! take the lead in this anticipated 6od! of work+ his will reHuire a norma3 tive theor! of the firm that leads from moral managerial decisions to personal :ustice perceptions to individual attitude ad:ustments to group 6ehavior modifications) etc+) with testa6le h!potheses at each stage of that seHuence) all applied to a wide range of stakeholders) not :ust emplo!ees+ 1esearch Di''iculties in the Direct %ocial Per'ormance Per'ormance 1elationship to 2inancial

Before moving on to the proposed normative theor! of the firm that will com3 6ine moral managerial decisions and personal :ustice perceptions though seHuential stages of development for all organizational stakeholders) let us review) ver! 6riefl!) an eCisting 6od! of empirical work that has attempted to relate corporate social performance3which does have a moral orientation and does consider most stake3 holders3directl! to corporate financial performance+ here are) it is acknowledged) three ma:or pro6lems with this 6od! of work that essentiall! attempts to skip the intervening stages+ he first ma:or pro6lem in attempting to empiricall! esta6lish a direct causal linkage 6etween social performance and financial performance comes in the measurement of the social performance of the firm+ Earl! unidimensional gauges considered onl! such factors as involvement in South Africa) generation of atomic energ! or participation in defense contracting+ Dore recentl! multidimensional scales have 6een used+ he first comes from Aortune magazineMS annual ranking of the reputation of American

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6usiness firms regarding3among other more economic issues3their perceived so3 cial concerns for communities) emplo!ees) customers and the natural environment+ Companies are ranked 6! industr!) 6ut the persons doing the ranking are other eC3 ecutives within that industr!) not residents) emplo!ees) customers) etc+) which does raise Huestions concerning validit!+ he second scale comes from a consulting firm) 'inder) $!den6erg and 7omini) that ranks companies in terms of their suita6ilit! for inclusion in social issue mutual funds+ his '$7 indeC uses five criteria: communit! involvement) diversit! programs) emplo!ee relations) natural environment and product safet! and Hualit!+ he data points here are more o6:ective) 6ased originall! upon compan! codes) news stories) legal claims) etc+) 6ut the final measures are unfortunatel! rough) ranging onl! from minus two to plus two) and reflect once again the opinions of a limited num6er of evaluators+ $astl!) it is necessar! to recall) as eCpressed 6! @addock and Eraves ",442: ;0=#) that the companies 6eing evaluated come from La wide range of industries with significantl! different characteristics) histories and performances in the different CS5 OCorporate Social 5erformanceP domains+L hese different characteristics) histories and performance reHuirements can easil! confuse the rankingsG it is hard to legitimatel! compare a forest products firm that makes 6ulk paper rolls and a consumer products compan! that converts that 6ulk paper material to retail paper towels and tissues on their environmental preservation records+ A second ma:or pro6lem in attempting to esta6lish an empirical linkage 6etween the social performance and financial performance records of different firms concerns the direction of the linkage+ It is possi6le to claim that companies with good records of social performance have the helpful support of appreciative customers) emplo!ees) mem6ers of the pu6lic and officials in the government) and that this support translates into improved financial results+ It is also possi6le to claim) however) that companies with good records of financial performance have the surplus funds that come from their successful operations) and that those funds can 6e invested in various methods to improve their social reputations with those customers) emplo!ees) pu6lic mem6ers and government officials+ A third ma:or pro6lem is the lack of an eCplicit rationale to eCplain the linkage 6etween social responsi6ilit! and financial performance) assuming that the direction trul! is from social concerns to financial returns+ Berman) @icks) 'otha) and Jones ",444# provide detailed eCplanations wh! positive attention to each of the five '$7 criteria3emplo!ee policies) natural environment) workplace diversit!) customer9 product safet! and communit! involvement3should assist the firm) 6ut even the! admit that man! of these findings are 6ased upon case studies) and that conceptual generalizations from case studies are highl! de6ata6le+ Aor readers who are interested in statistical anal!ses of the proposed linkage 6e3 tween corporate social responsi6ilit! and corporate financial performance there have 6een a num6er of solid empirical studies and one eCcellent literature review pu6lished in the past few !ears+ @addock and Eraves ",442# used the '$7 indeC) controlled for compan! size) industr! effect and market risk) and found that financial performance did impact social responsi6ilit! "the Lslack resourcesL theor!# and that3simultane3 ousl!3social responsi6ilit! did impact financial performance "the Lgood managersL

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approach#+ he authors termed this dual finding "@addock and Eraves ,442: ;02# a Lvirtuous circle+L Berman) @icks) 'otha) and Jones ",444# used longitudinal data over fort!3five !ears for the top ,00 firms on the ,441 Aortune -00 list "corrected for acHuisitions) mergers) etc+#+ Social responsi6ilit! was evaluated using the '$7 criteriaG strategic3not financial3performance was evaluated using cost efficienc!) product differentiationG asset parsimon! and scale9scope advantage+ he results were said to support LstrategicL stakeholder theor! "attention to the set of stakeholders who can affect corporate o6:ectives#) 6ut onl! two of the five '$7 varia6les had strong) direct effects: emplo!ee relations and product safet!9Hualit!+ he results showed no support for LintrinsicL stakeholder theor! "attention to the set of stakeholders who are affected 6! corporate o6:ectives) 6ut una6le in turn to affect those goals#+ hese two well3designed studies came to two at least partiall! contradictor! results+ At least partiall! contradictor! results seem to 6e a hallmark of empirical research studies into proposed direct relationships 6etween the social performance and the fi3 nancial9strategic performance of 6usiness firms+ Dargolis and @alsh "/00,# surve!ed all of the empirical studies that have looked at that proposed relationship from ,42/ to /000) a total of ninet!3five articles during those twent!3eight !ears+ In eight! of the articles corporate social performance was designated as the independent varia6le) taken to predict or causall! precede financial performanceG the other fifteen studied the opposite causal path+ heir conclusionI L@hen treated as an independent varia6le) corporate social performance was found to have a positive relationship to financial performance in fort!3two studies "-; percent#G no relationship in nineteen studies "/= percent#G a negative relationship in four studies "- percent#G and a miCed rela3 tionship in fifteen studies ",4 percent#L "Dargolis and @alsh /00,: ,0#+ he authors added "Dargolis and @alsh /00,: Aig+ 1# that the more recent studies ",44, to /000# showed onl! generall!) certainl! not totall!) more positive results+ Clearl! something 6etter3more eCplicit and more eCplanator!3is needed+ Dargolis and @alsh "/00,: ,,# suggest that what is needed for that something 6etter is the Lcausal mechanism that would link social performance and financial performance+L Berman et al+ ",444: -0/# sa! that what is needed is to gather surve! data Lcapturing managerial motivations and intentions pertaining to strateg! decisions and stakeholder orientationL in order to eliminate the confusion 6etween their strategic and intrinsic findings+ Both of those causal mechanisms and managerial intentions) we 6elieve) can 6e found in an integrative theor! of the firm with an eCplicit norma3 tive content 6ased upon the principles of 6usiness ethics and testa6le descriptive h!potheses 6ased upon the constructs of 6ehavioral science+ he proposal of such an integrative theor! has alwa!s 6een) as was eCplained earlier in the introductor! section) the ultimate goal of this paper+ &ere it is+ A Propose$ 3ormati&e %takehol$er Theory o' the 2irm Descripti&e Hypotheses ith Testable

An underl!ing hope of man!3not all3scholars active in 6usiness ethics teach3 ing and research is that morall! correct managerial decisions will lead) over time) to

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competitivel! effective organizational actions+ Areeman ",4<=: =1# laid the ground work here when he defined stakeholders as Lan! group who can affect or is affected 6! the achievement of the organizationMs o6:ectives+L he Lcan affectL portion meant that the rights and interests of those groups had to 6e considered 6! the management of the firm+ hat consideration could 6e eCtended either 6! direct negotiation "AreemanMs original proposal# or 6! moral evaluation "the course endorsed 6! most of his fol3 lowers#+ his pragmatic approach has 6een amplified over time 6! numerous other authors+ &osmer ",44=) ,44-# claimed that morall! correct decisions 6! management would engender feelings of trust) commitment and effort among stakeholders) and that those positive feelings in tum would lead to cooperative and innovative 6ehaviors of definite 6enefit to the firm+ Jones ",44-# eCplained that morall! correct decisions 6! management would generate organizations that would ,# make good agents in principal9agent relationships 6ecause the! would reHuire little monitoringG /# make good partners in transaction cost situations 6ecause the! would not act opportunisti3 call!G and ;# make good participants in :oint ventures 6ecause the! would not shirk or free ride on the efforts of others) and thus generate su6stantial 6enefits+ Solomon ",444# was less eCplanator! and more direct: managerial integrit! would lead directl! to corporate success+ Sen ",44;: =<# shared this direct and 6asic approachG he stated that Leconomic institutions operate on the 6asis of common 6ehavior patterns) shared trust and a mutual confidence on the ethics of the different parties+L 7espite this apparent agreement on the 6eneficial effects of morall! correct deci3 sions and actions 6! mem6ers of corporate management) there remained a trou6ling pro6lem+ he seemingl! simple and succinct definition of the stakeholder population proposed 6! Areeman as those persons and institutions who could affect or would 6e affected 6! operations of the firm can refer to two ver! different groups: the af3 fecting and the affected+ hese two groups were redefined 6! Clarkson ",44-# into Lprimar!L stakeholders who had the financial or material resources) the political or social positions) or the functional or technical skills that made them essential for the survival of the firm) and Lsecondar!L stakeholders who3Huite frankl!3ma! have aroused s!mpathetic regard 6ut had little in the wa! of resources) lacked power and possessed onl! routine) readil! availa6le skills+ his dualit! among the stakeholder groups has greatl! complicated the search to find a stakeholder theor! of the firm to replace the dominant stockholder theor!+ .umerous t!pes of stakeholder theories appeared+ 7onaldson and 5reston ",44-# divided these t!pes into normative) instrumental and descriptive) and then descri6ed the advantages) disadvantages and :ustifications of each+ Areeman ",444# felt that this division into t!pes created confusion rather than clarit!) and proposed instead a series of su63theories which he termed Lnarratives+L Jones and @icks ",444a# followed with a specific form of narrative which the! termed convergentG it was intended to merge the normative and instrumental elements+ heir argument "Jones and @icks ,444a: /,=# was as follows:
If the goal of good stakeholder narrative accounts is to help human 6eings lead morall! meaningful lives in the conteCt of via6le) productive organizations) there is no point in creating accounts that ,# do not allow people to survive in

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such organizations or /# hinder the organizationsM Huest to perform an essential mission3profita6l! producing goods or services in a market econom!+ A persuasive narrative account) then) would have a strong normative core) would 6e 6ased in credi6le conteCts "not in utopian organizations# and would have a theoreticall! and "perhaps# empiricall! sound means3end chain+ hat is) the instrumental path 6etween the 6ehavior called for 6! the normative impera3 tive must credi6l! lead to desira6le outcomes+ he normative core has to 6e eCplicitl! and una6ashedl! moral) and has to 6e eCplicitl! defined in moral terms+ Its instrumental means3end chain has to 6e persuasivel! argued) and demonstrate the practicalit! of the 6ehavior called for in the normative core+

revino and @eaver ",444a and ,4446# o6:ected strongl!+ he! mentioned the eCperiences of their own DBA students whose managers apparentl! eCpected them to engage in 6ehaviors that went counter to the legitimate interests of customers) emplo!ees and other stakeholders who had no 6argaining position) and the! cited an earlier "Ditchell) Agle) and @ood) ,442# paper that showed managers would almost inevita6l! forsake low powerlhigh legitimac! stakeholders in favor of high power9low legitimac! ones+ he! feared) revino and @eaver concluded) that stakeholder theories were 6eginning to look more like the economic theories of resource dependence and negotiating power the! had 6een intended to replace+ Jones and @icks ",4446# admitted in repl! that their approach was descriptivel! inaccurate "managers did not) it was true) at the time of their article address the rights and well 6eing of all stakeholders as 6eing of eHual relevance and importance# 6ut remained adamant that it was normativel! possi6le for them to do so) with instrumen3 tall! 6eneficial results for the firm if the! did+ Support for this normative possi6ilit! with instrumental 6enefits could have come3though the authors did not cite this source3from the organizational :ustice construct of a Lfairness heuristicL "Brockner /00/# in which the perceived distri6utive) procedural and interactional :ustice of all other persons serves as a shortcut for evaluating the pro6a6le treatment of the indi3 vidual+ In short) individuals are seen as 6eing 6oth self3interested and other3interested concurrentl!G an idea which is) after all) one of the underl!ing 6eliefs of the ethical rather than economic approach to management "Sen ,4<2#+ $et us propose an unHuestiona6l! moral normative theor!) with empiricall! testa6le predictive h!potheses) that will relate the moral decisions of managers immediatel! to the attitudes) 6ehaviors) and outputs of the stakeholders and eventuall! to the competi3 tive advantages and financial successes of the firm through the causal mechanisms of distri6utive :ustice) procedural :ustice) interactional :ustice) and eCplanator! :ustice: Danagers should address the moral claims of all corporate stakeholders "6oth Lprimar!L an$ Lsecondar!L# with attention to %aw lsian ",42,# concepts of :ustice) 'antian ",44<9,2<-# concepts of dut!) and Artistotelean (1954/312 Be) concepts of virtue in order to o6tain the commitment) cooperation and innovation of the stakeholders) and thus the strategic and financial success of the firm+ R &!pothesis ,+ If managers logicall! eCplain the ethical /not the instrumen4 tal0 6asis of their decisions "informational :ustice#) then stakeholders will more likel! 6elieve that the! have 6een fairl! rewarded "distri6utive :ustice#)

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6een fairl! considered "procedural :ustice# and fairl! treated "interactional :ustice#+ R &!pothesis /+ If stakeholders 6elieve that the! have 6een fairl! rewarded) fairl! considered) and fairl! treated) then their attitudes towards the orga3 nization will 6e more positive) with greater :o6 satisfaction) organizational commitment) management trust and general approval+ &!pothesis ;+ If stakeholders attitudes towards the organization are more positive) with greater satisfaction) commitment) trust and approval) then their 6ehavior in 6oth role 6ased "what needs to 6e done# and eCtra role 6ased "going 6e!ond what needs to 6e done# activities will 6e more positive+ &!pothesis =+ If stakeholder 6ehaviors in 6oth role and eCtra role 6ased activities are more positive) then divisional outputs "products) services and the respectful treatment of customers) suppliers) distri6utors) etc+# will 6e more positive in measura6le terms of Huantit!) Hualit!) efficienc! and ef3 fectiveness+ &!pothesis -+ If divisional outputs "products) services and the respectful treatment of customers) suppliers) distri6utors) etc# are more positive in measura6le terms of Hualit!) Huantit! and efficienc!) then organizational performance ratios will 6e more positive in measura6le terms of competitive position "industr! position) market share and customer lo!alt!# and financial profit "return on sales and return on investment#+ &!pothesis 1+ he more positive organizational outcomes in terms of strategic position and financial return will continue onl! as long as managers simul3 taneousl! attempt to 6alance the moral claims of all corporate stakeholders "6oth Lprimar!L and Lsecondar!L# with attention to %awlsian ",42,# concepts of :ustice) 'antian ",44<9,2<-# concepts of dut!) and Artistotelean ",4-=9;,/ 6e# concepts of virtue+ In short) the @addock and Eraves ",442# 6elief in a virtuous circle is a distinct and empiricall! verifia6le possi6ilit!+

<-

O6viousl! all of the terms in this normative moral theor! of the firm will eventuall! have to 6e ver! precisel! defined with measura6le increments+ his will have to 6e the topic of a su6seHuent articleG there is simpl! not enough space here to accomplish that o6:ective+ But) let us indicate the preliminar! direction of those definitions+ @e view the Lmoral claimsL of the stakeholders as the respective demands of each of those groups to 6e treated fairl! in the distri6ution of the 6enefits) the allocation of harms) and the recognition of rights+ @e also view) for eCample) the L%awlsian ",42,# concepts of :usticeL as comprising the 6asic precepts that the least among us should not 6e harmed) and that none of us should 6e denied eHual access to the common goods3education) health care) etc+3of our societ! 6! the actions of a 6usiness firm+ hose 6asic precepts) along with others) will help to define the essential conditions of the proposed Lfair treatmentL 6! the managers of that firm+ he relationships proposed in &!potheses / and ; have alread! 6een solidl! esta63 lished in the 6ehavioral science literature) as was descri6ed earlier+ he relationships proposed in &!pothesis = are in the process of 6eing esta6lished in that literature) as was also discussed previousl!+ he relationships proposed in &!pothesis - have !et to 6e disproved in the strategic management literature) though clearl!3due to the

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multitude of independent and modif!ing varia6les and the compleCit! of measurement instruments3much more effort is needed here+ he relationships proposed in &!pothesis 1 will 6e the most difficult to support+ .ot onl! will there 6e the large num6er of modif!ing varia6les needed to account for the impact of different industr! level and countr! level factors) there will also 6e the pro6lem of measuring the proposed L6alance of the moral claims of all corpo3 rate stakeholders "6oth Mprimar!M and Msecondar!M#+L his 6alance can 6e measured onl! through the su6:ective perceptions of :ustice of those stakeholders) the topic of &!pothesis ,+ &!pothesis , trul! is the critical one+ his proposed relationship has 6een mentioned 6ut not eCamined within 6ehavioral science+ 'onovsk! "/000: =4/# confirms that organizational :ustice researchers look onl! at su6:ective or perceived :ustice and its effects) while the link 6etween o6:ective and S86:ective:ustice has remained largel! uneCplored+ hat link should3in our view36e the focus of com6ined normative and descriptive theor!) and :oint theoretical and empirical research) 6! persons active in the stud! of 6usiness ethics and 6ehavioral science+ It will 6e necessar! to develop a measure of the informational or eCplanator! form of organizational :ustice+ Behavioral scientists have developed measures for the distri6utive) procedural and interactional forms+ Joint work will 6e essential for the ethicall! 6ased informational one+ %ummary @e have reviewed a su6stantial 6od! of Behavioral Science literature) much of which3we assume3was not overl! familiar to readers far more active in Business Ethics research+ $et us attempt) therefore) to ver! 6riefl! summarize that literature) and the conclusions that we draw from it) in a series of four statements: ,+ Behavioral Scientists have proposed that perceptions of :ust treatment among the emplo!ees of an organization result in positive changes in the individual attitudes) group 6ehaviors and productive outputs of the emplo!ees within that organization+ .umerous empirical studies "over =00 6! one estimation# have demonstrated these positive changes can) with unusuall! high relia6ilit!) 6e eCpected to occur+ /+ Behavioral Scientists 6elieve that these perceptions of :ust treatment are 6ased upon individual 6eliefs that a# the distri6ution of wages and other awards was fair and related to contri6utionG 6# the process 6! which those wages and awards were determined was open and encouraged participationG c# the treatment of the emplo!ees during that process was respectful and courteousG and d# the informa3 tion provided to the emplo!ees was accurate and convincing Corporate Social %esponsi6ilit! theorists and man! Business Ethicists have proposed that the :ust treatment of all stakeholders would result in positive or3 ganizational outcomes in strategic position and financial profit+ he difficult! is that there are man! measurement and directional issues3what constitutes :ust treatment) and do :ust treatments result in increased profits) or do increased profits permit :ust treatments3that empirical support has 6een difficult to demonstrate+

;+

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=+

<2

Our proposal) eCpressed in a series of siC h!pothesis) is that the ob+ecti&e :ustice decisions of Business Ethics can) hen rationally e,plaine$, lead to the sub+ec4 ti&e :ustice perceptions of Behavioral Science) and the currentl! demonstrated positive outcomes in attitudes) 6ehaviors and outputs) which can 6e assumed) over time) to have positive influences upon the corporate position and profit+ In short) the Behavioral Science construct of Organizational Justice provides an esta6lished structure for valid empirical research upon the organizational impact of managerial decisions that are ethical in a normative) not instrumental) sense+

Conclusion
@e 6elieve that a su6stantial opportunit! eCists for scholars in 6usiness ethics and 6ehavioral science to conceptuall! descri6e and empiricall! test the proposed normative relationships 6etween the o6:ective determination of :ustice 6! managers and the su6:ective) perception of :ustice 6! stakeholders) together with the attitudinal) 6ehavioral and numerical conseHuences that have 6een descriptivel! predicted and empiricall! demonstrated to flow from that relationship+ @e should like to conclude with a statement "&arrison and Areeman ,444: =<=# that provides support for this com6ined normative and descriptive approach to theor! development: his research forum Othe topic of a special issue of the Aca$emy o' 5ana"ement in ,444P su6tl! calls into Huestion two of the foundational assumptions of research in management theor!+ he first assumption is that normative research can 6e separated from descriptive research+ he second) similar) assumption is that theoretical and empirical research are distinct "or even that theor! and prac3 tice are distinct#+ Calling attention to stakeholders rather than stockholders alone and giving ethics a prominent place in the management literature raise Huestions as to whether research can 6e so easil! divided+ hese ver! terms suggest that the wa! we choose to frame issues of organizational research has normative and descriptive conseHuences and is at once 6oth theoretical and empirical+ Calling these assumptions into Huestion does not undermine the logic and rigor of the methods used in these studiesG rather it creates more openness and more diversit! with respect to 6oth theor! and method+ B! pa!ing more attention to constructs like stakeholders and ethics and 6! 6uilding and testing rigorous and relevant theories using these ideas) scholars conducting organizational studies will have a 6right future+
1e&ie

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