An Identity Theory Approach To

http://hum.sagepub.
com/
Human Relations
http://hum.sagepub.com/content/60/6/851
The online version of this article can be found at:
DOI: 10.1177/0018726707080079
2007 60: 851 Human Relations
Hugh Gunz and Sally Gunz
organizations
understanding the ethical behaviour of professionals in non-professional
Hired professional to hired gun: An identity theory approach to
Published by:
http://www.sagepublications.com
On behalf of:
The Tavistock Institute

can be found at: Human Relations Additional services and information for
http://hum.sagepub.com/cgi/alerts Email Alerts:
http://hum.sagepub.com/subscriptions Subscriptions:
http://www.sagepub.com/journalsReprints.nav Reprints:
http://www.sagepub.com/journalsPermissions.nav Permissions:
http://hum.sagepub.com/content/60/6/851.refs.html Citations:
What is This?
- Jul 10, 2007 Version of Record >>

at Alexandru Ioan Cuza on February 12, 2014 hum.sagepub.com Downloaded from at Alexandru Ioan Cuza on February 12, 2014 hum.sagepub.com Downloaded from
Hired professional to hired gun:
An identity theory approach to
understanding the ethical behaviour of
professionals in non-professional
organizations
Hugh Gunz and Sally Gunz
ABS TRACT Most recent major nancial scandals have come about with the
assistance, tacit or active, of highly trained professionals whose ethical
responsibilities were thereby violated. This article addresses the
question of why this might happen. It argues that the problem may
lie in the adoption of a common prescription, namely that to be
effective, in-house lawyers need to be part of the corporations
strategic decision-making process. But, paradoxically, in so doing, the
lawyers identities might become modied such that the approach
they take to handling ethical dilemmas becomes more like that of
their non-lawyer colleagues, thus losing some of the benets of their
professionalism. The results of a postal survey of Canadian corporate
counsel provide supporting evidence for this conclusion.
KEYWORDS decision-making
ethics
governance
identity theory
lawyer
organizationalprofessional conict
The ethics of business-related professionals have had something of a cloud
of suspicion hanging over them in recent years (Moore et al., 2006). The
lawyers of rms such as Enron have been accused of supporting or, at least,
not inhibiting the questionable actions of their clients (DeMott, 2005;
851
Human Relations
DOI: 10.1177/0018726707080079
Volume 60(6): 851887
Copyright 2007
The Tavistock Institute
SAGE Publications
Los Angeles, London,
New Delhi, Singapore
http://hum.sagepub.com
at Alexandru Ioan Cuza on February 12, 2014 hum.sagepub.com Downloaded from
McLean & Elkind, 2003). Indeed few, if any, of the recent nancial scandals
could have been effected without the active assistance of willing accountants
and lawyers. Yet none of this is supposed to happen. Professionals are highly
educated people who have passed close scrutiny by their professional bodies.
Clients are told to rely on professionals for disinterested advice, free from
the taint of commercial interest. The nature of the relationship between
professional and client should, in theory, have no impact on the advice given
by the professional, even if the relationship is as close as that of employee
and employer.
Are the inappropriate actions we observe those of a few bad apples,
or is there something more systematic at work here? In this article we do not
discount the former possibility, but rather focus on the latter. Using as our
exemplar the legal profession, we argue that what has been said to be the best
practice in the employment of in-house lawyers of the modern era bringing
counsel within the strategic decision-making of the organization rather than
leaving them, comparatively excluded, on the sidelines (Chayes & Chayes,
1985; Gunz, 1991; Heineman, 2004; Liggio, 2002; Morgan, 2004; Rosen,
1989; Wilkinson et al., 2005) may paradoxically result in the loss of some
of the benet of their professional judgement. It is not that these practices
turn them into white-collar criminals, but rather that the kinds of ethical
dilemma that they face in practice typically call for ne judgement concern-
ing the interests to be considered and the actions to be taken. The more they
become embedded in the rms top management team (TMT), the more
likely they are, we argue, to adopt a decision-making style when faced with
these dilemmas that resembles that of a normal, non-professional executive.
We address this issue by briey reviewing the literature on professionals
in organizations, in which it has for many years been argued that such people
should nd themselves in a position of conict, pulled one way by their
profession and the other by their employer. More recently this position has
been modied in the light of ndings that suggest that it is an over-
simplication and ignores the ways in which professionals adapt to their
circumstances. We show how identity theory can be used to understand the
circumstances that might inuence the kind of adaptation that takes place,
and what this could mean for the way in which professionals handle ethical
dilemmas. Finally, we report on the results of a survey of Canadian corpor-
ate counsel, in which we found evidence for these processes of adaptation.
Professionals in organizations
A common way to approach understanding the situation of professionals
employed in non-professional organizations (NPOs: business or public
Human Relations 60(6) 852
corporations that are not professional service organizations [PSOs]; so a
bank is an NPO, a law rm is a PSO), is to consider the problem of control
that theoretically they face. The idealized model of the professions as dened
in Anglo-Saxon societies is of highly trained practitioners providing services
to clients in a disinterested fashion and one that is determined by the
profession itself. But the standards of professional practice may not always
be consonant with those of commercial practice, and if this should happen
the professional presumably must choose: does s/he follow the rules of the
profession and give her or his employer an answer the employer may not
want to hear, or does s/he follow the company line, even if it means not doing
things that the profession may require? Undoubtedly, the majority of such
conicts are addressed by the professional proposing alternative choices that
are compliant with both professional standards and organizational needs.
Problems arise either where such accommodation is not possible, or its result
is not palatable to the NPOs management.
This issue is at the heart of the long-established organizational
professional conict (OPC) literature (Harrell et al., 1986; Sorensen &
Sorensen, 1974) sometimes called professionalbureaucratic conict
(Wallace, 1995b) which addresses the conict that is said to exist between
the professionals role as, for example, lawyer, and his or her role as employee
of an NPO. However, the competing loyalties view is not well supported
by empirical evidence (Benson, 1973; Davies, 1983; Shafer, 2002; Wallace,
1993), as witness the comparatively low levels of OPC found amongst
professional accountants (Aranya & Ferris, 1984; Bamber & Iyer, 2002) or
lawyers (Gunz & Gunz, 1994b). Indeed, there has been a considerable stream
of research, including at least two meta-analyses, which has demonstrated a
positive correlation between the two commitments (Cohen, 2003), albeit a
lower one for professionals in NPOs (corrected r = .202) than in PSOs
(corrected r = .484) (Lee et al., 2000). These studies have led to a search for
a greater understanding of what might explain the empirical observations,
leading to a number of theoretical challenges to the idealized model of the
professions that underpins the OPC literature (Gunz & Gunz, 1994b; Lord
& DeZoort, 2001; Osinsky & Mueller, 2004; Wallace, 1993, 1995a, 1995b).
Essentially, these alternative views argue that the idealized model of the
professions is an oversimplication of what happens in real life, and that
OPC is typically resolved by employed professionals by adapting their
orientation towards their profession (Daniels, 1975).
Wallace (1995b) provides a useful model. She argues that professionals
may deal with the problem of conicting pressures in one of two ways. She
identies two threads in the literature on NPOs she terms the proletarian-
ization and adaptation theses. The proletarianization thesis reects a long
tradition of questioning the likelihood that employed professionals behave
Gunz & Gunz Hired professional to hired gun 853
as they would in private practice (e.g. Benson, 1973; Cohen, 1999; Davies,
1983; Leicht & Fennell, 2001; Scott, 1965), and holds that professionals
departments resemble those of their non-professional colleagues (Wallace,
1995b). The adaptation thesis, by contrast, suggests that professionals work
in departments that attempt to mimic PSOs (Wallace, 1995b). In a study of
Canadian lawyers, she found evidence supporting the adaptation thesis.
Do these different organizational solutions result in different kinds of
behaviour on the part of the professionals in question? Identity theory
provides a useful framework for approaching this issue. The theory seeks:
to answer this quintessential question: Given situations in which there
exist behavioral options aligned with two (or more) sets of role
expectations attached to two (or more) positions in networks of social
relationships, why do persons choose one particular course of action?
(Stryker & Burke, 2000: 286)
The behaviour in which we are interested here, as signalled by the
theme in our opening paragraph, is that of ethical decision-making by
professionals employed in NPOs, here, lawyers.
Employed professionals and ethical dilemmas
Identity, as Sveningsson and Alvesson (2003) point out, is one of the most
popular topics in contemporary organization studies . . . Identity is viewed
as central for issues of meaning and motivation, commitment, loyalty, logics
of action and decision-making, stability and change, leadership, group and
intergroup relations, organizational collaborations, etc. (pp. 11634). Our
interest in identity in this article is simply as a means to an end: it provides
a useful framework for understanding the position of professionals in
organizations.
A recurring concept in the identity literature is of identity as a
relatively stable and enduring constellation of attributes, beliefs, values,
motives, and experiences in terms of which people dene themselves in a
professional role (Ibarra, 1999: 7645, citing Schein, 1978). Any individual
may have multiple identities, organized within self in a salience hierarchy,
where identity salience is dened as the probability that an identity will be
invoked across a variety of situations, or alternatively across persons in a
given situation . . . commitment shapes identity salience shapes role choice
behaviour (Stryker & Burke, 2000: 286).
We assume, following Stryker and Burke (2000), that employed
professionals make their choice of identity manifest through the decisions
they take, here in resolving ethical dilemmas. The denition we use of an
ethical dilemma is of a situation in which the professional must choose
between two or more relevant, but contradictory, ethical directives, or when
every alternative results in an undesirable outcome for one or more persons
(Dolgoff & Skolnik, 1996: 50; see also Davis, 1988). Dilemmas are, by de-
nition, difcult situations in which there is no obviously right course of
action, typically pitting the dictates of the professions ethical code against
the interests of someone else the client, the employer, or the professional
him- or herself.
We posit two ideal-type identities, that we shall call here professional
and organizational, based on the concepts of lawyer and organizational
person suggested by Gunz and Gunz (1994a). The professional identity is
adopted by someone who sees him- or herself as, for example, a lawyer,
accountant or engineer who just happens to be working for the NPO in
question (cf. Gouldners 1957, 1958 cosmopolitan). This identity is likely
to be associated with Wallaces adaptation thesis, which describes a situation
in which professionals have managed to create a kind of PSO within their
employing NPO. The organizational identity is that of a professional who
has taken on some of the characteristics of a non-professional employee of
the NPO, in the limit, seeing him- or herself as an employee who just happens
to have, for example, a law, accounting or engineering degree. This identity
is more likely to be associated with proletarianization, which proposes that
professionals become like other employees of the NPO.
In other words, someone enacting a professional identity will ask him-
or herself: how does my profession require me to deal with this ethical
dilemma? By contrast, someone adopting an organizational identity will ask
him- or herself: how should I, as an employee of this NPO, deal with this
ethical dilemma? In both cases the individual is likely to be inuenced by
thoughts of what is best for the organization. However, the organizational
identity carries with it other consequences of organizational membership, in
particular how the decision might affect the professionals position or career
within the company. This does not necessarily imply Machiavellianism, but
simply the thought that ones career is more bound up with the organization
than would be the case for a pure professional. To use the language of
Marchs (1994) logic of appropriateness, the professional is implicitly asking
him or herself: What does a person like me do in a situation like this? (Weber
et al., 2004: 282). Our position resembles that of the moral seduction theory
of Moore et al. (2006), in that both posit an unconscious process. The
professional is not deliberately adopting a less pure professional approach;
rather, s/he is acting in a way that seems natural to her or him.
Our aim is to understand the ethical decision-making of employed
professionals, and we introduced the concept of organizational or
professional identities because it gives some pointers to the kind of organiz-
ational inuences that might affect this decision-making. In earlier work
(Gunz & Gunz, 2002), we found evidence that corporate counsel (lawyers
employed by NPOs) do appear to adopt professional or organizational
identities. What might result in one or the other identity gaining greater
salience? We rst address the issue of how the nature of the embeddedness
of the role might affect role salience.
Stryker and Burke (2000: 289) suggest that the relative salience of
identities is a consequence of the extent to which the role or set of roles is
embedded in one or more of a variety of groups that provide context for
the meanings and expectations associated with the role. This, in turn,
affects the individuals commitment to that identity. An important indi-
cation of the nature of the embeddedness of the role played by the
professional is the kind of work he or she does. Professionals working in
NPOs spend at least some of their time on non-professional activities. For
example, it is not uncommon for corporate counsel to be involved in corpor-
ate secretarial or government liaison work (Gunz, 1991), both of which are
important but neither necessarily requires a legal training. The more
involved they become in such activities, the more they are drawn away from
their professional training and experience.
Hypothesis 1: The more time professionals spend on non-professional
activities, the more salient their organizational identities are likely to
be by comparison with their professional identities.
We noted at the beginning of this article that it is increasingly accepted
as good practice that corporations should bring their key corporate
professionals into their strategic decision-making process. In so doing they
become embedded in a different role set, which increases the salience of the
identity associated with that role set (Stryker & Burke, 2000: 289). In other
words, the more the professional becomes part of the TMT, the more salient
his or her organizational identity is likely to be.
Hypothesis 2: The more involved professionals are in the rms
strategic decision-making process, the more salient their organizational
identities are likely to be by comparison with their professional
identities.
Work experience and tenure affect many aspects of an individuals orien-
tation to his or her role (Tesluk & Jacobs, 1998). It can inuence, for
example, performance (McEnrue, 1988; Quinones et al., 1995; Sturman,
2003), and intention to stay (Krecker, 1994). Furthermore there is some
evidence that identities change over time if the individuals social context
changes sufciently (Cassidy & Trew, 2004; Serpe, 1987). So it seems reason-
able to assume that the length of time a professional has spent with their
organization may affect the salience of their organizational identity. The
longer the service of professionals at any given NPO, other things being
equal, the more likely they are to know other members of the management
team and understand their perspective and the commercial aims of the enter-
prise. This is likely to make their organizational identities more salient.
Hypothesis 3: The longer professionals have worked in a given rm,
the more salient their organizational identities are likely to be by
comparison with their professional identities.
It is well established that the orientation of employed professionals is inu-
enced by their relationship with their employers mainstream career system
that typically supplies the organizations top management cadres (Gunz
& Gunz, 1994a; Wallace, 1995b). Careers are an important part of any
organizations reward system, and are likely to inuence the way in which
organizational members view their roles (Gunz & Jalland, 1996; Wallace,
1995a). However, it is by no means uncommon for professionals such as
lawyers to be comparatively isolated from the mainstream career system, in
the sense that their career prospects are often conned to, for example, the
law department (DeMott, 2005; Nelson & Nielsen, 2000).
The extent to which professionals feel themselves part of the organ-
izations mainstream career system, then, is likely to be reected in the extent
to which they see themselves as professionals or employees. The more
isolated they are (because the organization does not include their occu-
pational category amongst those who are promotable to senior executive
positions outside the professional department), the more likely they are to
look to their profession for career possibilities.
Hypothesis 4: The more isolated professionals feel themselves to be
from the organizations mainstream career system, the more salient
their professional identities are likely to be by comparison with their
organizational identities.
The impact on organizational commitment of isolating professionals from
the organizations career mainstream is exacerbated if the professionals
believe that the mainstream career rewards are more attractive than those
available to them as professionals (Gunz & Gunz, 1994b), a construct we
call here reward inequity. In other words, it is all the more frustrating if the
grass is greener on the other side of the fence, and the fence cannot be
climbed. By the same token, it is not unreasonable to expect that this inter-
action might also affect organizational identity, although two implications
can be envisioned. First, it might be that professionals who believe that the
career rewards are better outside their department and that they are
prevented from reaping these rewards respond by retreating to their
professional identities as a way of reducing the dissonance of the situation.
The obverse of this argument draws on the connections established between
organizational justice, organizational commitment and organizational
citizenship behaviour (Latham & Pinder, 2005; Moorman, 1991; Simard et
al., 2005). The more accessible the mainstream, and the less obviously
professionals are discriminated against (in the sense that reward inequity is
low), the more likely they might be to adopt an organizational identity.
Hypothesis 5a: The more that professionals believe that the real
career rewards in the organization go to employees outside their
professional unit, and that they are prevented from gaining access to
these rewards, the more salient their professional identities are likely
to be by comparison with their organizational identities.
Hypothesis 5b: The less that professionals believe that the real career
rewards in the organization go to employees outside their professional
unit, and the more they believe that they are not prevented from gaining
access to these rewards, the more salient their organizational identities
are likely to be by comparison with their professional identities.
An ongoing theme in the lives of employed professionals, which has become
more of an issue of late, is their vulnerability to their work being outsourced
to private practitioners (Knudsen et al., 2003; Rittenberg & Covaleski, 2001;
Zhu et al., 2001). Strategic contingency theory predicts that this potential
substitutability (Hickson et al., 1971) will result in a sense of powerlessness,
in turn lowering counsels perceived ability to resist organizational pressures
and increasing their desire to be seen to be good corporate citizens.
Hypothesis 6: The greater the risk professionals see for their work to
be outsourced, the more salient their organizational identities are likely
to be by comparison with their professional identities.
Identity theory, as we have seen, proposes that identity salience shapes be-
haviour (Stryker & Burke, 2000). In the present study, the behaviour in
which we are interested concerns the choices professionals make when faced
with ethical dilemmas, specically those that pit the formal requirements of
a profession against the business requirements of the NPO employing the
professional. Identity theory suggests that the choice will be affected by the
relative salience of the two identities, professional and organizational.
Hypothesis 7: When faced by situations involving conict between
two sets of ethical dimensions, professional and organizational, pro-
fessionals are more likely to choose a course of action consistent with
the identity, professional or organizational, that is more salient to them.
Finally, if identity shapes behaviour as Hypothesis 6 suggests, then we can
expect that identity to mediate the effect of the independent variables from
Hypotheses 14 and 6 time spent on professional activities, professionals
involvement in the strategic level of the rm, length of experience with the
rm, isolation from the rms mainstream career system, and vulnerability
to outsourcing on the propensity of the professional to choose a course of
action when faced with situations involving conict between two sets of
ethical dimensions.
Methods
Sample
The sample was drawn from the membership of the Canadian Corporate
Counsel Association (CCCA), part of the Canadian Bar Association. All were
lawyers employed as corporate counsel in the law departments of Canadian
NPOs in the public and private sectors; governmental organizations were
excluded from the sample. No corporate counsel in the population sampled
worked for independent law rms.
1
Although the data are Canadian, the
similarities in terms of in-house counsel practice between, for example, the
United States and Canada in most respects that affect this study (Gunz &
Gunz, 1994b) suggest that the source of our data as being from one country
does not prevent the ndings being generalized to other jurisdictions. In order
to avoid the cost and the difcult methodological issues associated with
exploring ethical beliefs across linguistic boundaries, only jurisdictions
whose primary ofcial language was English were included. The question-
naires were sent to all members of the CCCA (excluding government
employees) in Ontario and provinces west of Ontario (2414 counsel). After
two reminders, the number of returned questionnaires totalled 484 (20.1%),
all of which were usable.
The response rate was not high, but was fairly typical of this kind of
study, in which even lower rates are by no means uncommon (Bamber &
Iyer, 2002; Hosseini & Armacost, 1993; Weber, 1992). A further compli-
cation for the present study was that, for reasons connected with the needs
of the sponsoring organization that provided the mailing list, it was necess-
ary to mail the questionnaires during the summer, which undoubtedly
reduced the response rate. In the present study demographic variables (with
the exception of years of professional experience) did not appear to be associ-
ated with the dependent variables under investigation, so it is not possible
to draw any inferences about non-response bias (Colombo, 2000; Rowland
& Forthofer, 1993). Eight key variables (age, sex, years of professional
experience and as corporate counsel, position within law department,
income, business education and professional/organizational identity) were
examined to see whether early responders differed at all from late re-
sponders (Armstrong & Overton, 1977; Datta et al., 2005). The sample was
divided into quartiles, based on the order in which the questionnaires were
received, and the rst and last quartiles were compared using t-tests (Datta
et al., 2005) for all variables except position and sex, for which chi-square
statistics were computed. In each case there were no signicant differences
between early and late responders, reducing (but not removing) concern
about non-response bias.
Instrument
For a study such as this it is important to employ measures that are
sufciently rich to be able to capture the phenomenon under investigation
(Crane, 1999). This issue is of particular importance in ethics research,
because of the need to minimize social desirability bias (Crowne &
Marlowe, 1964; Edwards, 1953). Because of the sensitivity of the issues
addressed in ethics research, the problem of social desirability bias is
particularly marked (Dalton & Metzger, 1992; OFallon & Buttereld,
2005; Randall & Fernandes, 1991; Taylor & Shim, 1993; van der Heijden
et al., 2000). So it is important, when designing a survey instrument to study
ethical decision-making, to anchor the measures in ways that are as close
to real life as possible for the respondents and to ensure that the measures
do not provide a single desirable answer (Crane, 1999).
A widely used technique in ethics research which addresses these issues
is to employ vignettes, short cases describing hypothetical situations involv-
ing ethical dilemmas (e.g. Cavanagh & Fritzsche, 1985; Dukerich et al., 1993;
Greenberg & Eskew, 1993; OFallon & Buttereld, 2005; Vallerand et al.,
1992; Weber, 1990). Perhaps the best-known example is the Dening Issues
Test, measuring values maturity (Rest, 1986). Vignettes have been described
as particularly suitable for reducing social desirability bias (Buttereld et al.,
2000; Robertson, 1993); there is evidence that people are more likely to
describe their real reaction to ethical dilemmas if presented with vignettes than
if asked directly about their views on the ethical acceptability, or otherwise,
of given courses of action (Clark, 1966; Weber, 1992).
In this methodology, the respondent is given a vignette and is typically
asked to choose between a number of pre-coded responses, although some-
times a free-form answer is called for as well (Dolgoff & Skolnik, 1996).
The methodology relies on the assumption that there is a connection
between the persons response to the vignette and the way in which he or
she would behave, were he or she to have experienced the situation in real
life. The essence of the methodology, then, is to devise vignettes that address
the phenomenon under investigation and which respondents will experience
as realistic (Buttereld et al., 2000; OFallon & Buttereld, 2005; Weber,
1992). Next, we describe how we did this.
Development of vignettes
The vignettes, with one exception (Appendix: Vignette 4) which was based
on the notorious Texaco boardroom imbroglio (Mulligan & Kraul, 1996),
were drawn from the experience of senior corporate counsel. The stories as
told by counsel were carefully rewritten to ensure anonymity (a serious issue,
given the sensitive nature of the situations described). They were distilled and
recast so that the reader became the subject of the vignette. For each vignette,
the reader was presented with two possible courses of action developed by
the research team with the advice of senior corporate counsel. Each course
of action was designed to t one of the two identities, professional and
organizational.
2
Essentially, our aim was to devise plausible ways of handling
each vignette, one each for each of the identities, and respondents were asked
to select the course of action they felt most appropriate.
In order to minimize the risk of social desirability bias, three further
safeguards were employed. First, neither the word ethics nor any of its
synonyms were used in the covering letters for the questionnaires, or in the
questionnaires themselves (Buttereld et al., 2000). Second, the options were
not expressed as simple items with overly obvious rationales. Instead, we
tried to devise courses of action that the respondents could imagine them-
selves following. It was important to avoid presenting courses of action that
might appear to be caricatures of the identities and therefore potentially
offensive to respondents professionalism. The organizational identity, for
example, could easily have been portrayed as manifesting itself in someone
who completely forgets his or her legal training as soon as it becomes an
impediment. We therefore tried to present the courses of action in such a way
that they brought out the behaviour distinctive of each identity, without
losing professional plausibility. This carried with it a problem of confound-
ing: a complex course of action has within it more cues to which the respon-
dents might react than does a simple one (Gunz & Gunz, 2002). Third, we
did our best to ensure that each of the options for each of the vignettes was
worded as neutrally as possible, so that the choice between them would be
governed by the respondents interpretation of the situation rather than by
any obviously pejorative terminology.
Four vignettes were included in a draft questionnaire with the other
measures to be used in the study, and this was administered to two successive
small pilot groups. The participants in the pilot studies were asked to
comment on the realism of the vignettes and on any difculties they experi-
enced in both understanding them and choosing one of the courses of action.
The vignettes and courses of action were adjusted in the light of these
comments, in order to improve the clarity of the task while retaining the legal
accuracy of the options. The nal versions of the vignettes are reproduced in
the Appendix, which also explains the professional ethical issue raised by each
vignette. Earlier work (Gunz & Gunz, 2002) established that the sample of
Canadian corporate counsel described below saw the vignettes as realistic,
that the more likely they were to have encountered situations of the kind
described in the vignettes the more realistic they felt the vignettes to be,
and that the closer the respondents were to the strategy-making level of
their organizations, the more likely they were to have encountered similar
situations.
A further pilot study was conducted with a group of 28 corporate
counsel. Semi-structured interviews were conducted, during which, inter alia,
interviewees were asked to select their preferred course of action from those
offered. Their verbal protocols were recorded and transcribed. There was an
evident difference between the options (professional and organizational) in
the way in which they expressed their thoughts. When respondents chose the
professional option they more noticeably used language associated with the
profession, for example: . . . I would think as a compliance ofcer you are
also responsible for wider concerns such as duciary duties and all that law
school stuff, or: I guess three is your option here if theres an obligation to
report deviations, you have that obligation. When choosing an organiz-
ational response they were more likely to use organizational language, for
example: I think you have to use common sense here. Youre not trying to
bury anybody. Youre basically just trying to make sure that company policy
is followed, or: I think the politics of working in an organization is if you,
you can overplay your importance in the organization if you take a kind of
holier than thou attitude and you dont necessarily know all of the facts, I
dont think you are going to survive there for too long . . . in the absence of
theft or blatant dishonesty I think you have to be quite circumspect in the
way that you go about handling situations like this.
Choice of course of action
For each vignette, then, respondents chose one of two possible courses of
action, professional or organizational. We totalled the number of times they
chose the professional approach and the number of times they chose the
organizational approach, yielding two scores, professional and organiz-
ational.
3
Possible scores, therefore, ranged on a ve-point scale from 0 (if
that course of action was not chosen by the respondent for any of the
vignettes) to 4 (if that course was chosen for all four of the vignettes).
Other measures
Organizationalprofessional conict (OPC)
Two measures were used (Aranya & Ferris, 1984), each employing a seven-
point Likert-type (strongly agree/strongly disagree) scale in response to the
statements: the type and structure of my employment framework gives me
the opportunity to fully express myself as a professional (reverse scored),
and in this organization, there is a conict between the work standards and
procedures of the organization and my own ability to act according to my
professional judgement.
Proportion of time spent on professional activities
Respondents were asked: In general, what percentage of your time is spent
on all or any of the following? (emphasis in the original) and presented with
a list of 10 items (including other) drawn from Gunzs (1991) work on
corporate counsel. Of the nine pre-coded items, four (routine legal
matters/caseload, legal counselling, handling legal crises, preventative law)
were classied as professional, and the remainder, which do not require
legal qualication (corporate secretarial function, management outside legal
department, government liaison, administration within legal department,
corporate nance), were classied as non-professional. The other category
was classied as non-professional unless the respondent identied a speci-
cally legal activity.
Isolation from rms strategic decision-making process
Three items were used. Respondents were asked how closely involved they
were in their organizations strategic decision-making processes (1 = not
involved; 5 = very closely involved), whether or not their CEO regarded
them as a member of their organizations top management team (TMT), and
how often they were consulted by members of their organizations TMT about
matters of strategic importance to the organization (1 = not consulted at all;
5 = a major part of my responsibilities). The standardized item alpha was
0.86, so their z-scores were combined in a single scale for subsequent analysis.
Salience of professional versus organizational identity
A single item asked the following: Given two basic descriptions of lawyers
in a corporate setting, which best describes you? (Gunz & Gunz, 1994b),
with a ve-point scale (1 = Lawyer with captive client; 3 = Both lawyer
with client and employee with law degree; 5 = Employee of organization
who happens to have law degree). Half of the sample (49.4%) described
themselves as both; a third (33.6%) as lawyers (1 or 2 on the scale), and
17.0 percent as employees (4 or 5 on the scale). We refer to this variable
below as organizational identity salience, in order to indicate the direction
in which it was scored.
Experience with current employer
Respondents were asked when they had rst become corporate counsel for
their present employer; this length of service was used as a proxy for
experience with the rm.
Isolation from rms career system
Two items (Gunz & Gunz, 1994b) (alpha = .63) were used: In this organiz-
ation it is quite feasible for someone with my qualications to join the
mainstream management career structure outside the corporate counsel
department; and A law degree is seen in this organization as a useful quali-
cation for senior management outside the law department (1 = almost
always untrue; 5 = almost always true).
Reward inequity
A single item (Gunz & Gunz, 1994b) was used: The real prestige and
rewards in this organization go to people outside the corporate counsel
department (1 = almost always untrue; 5 = almost always true).
Vulnerability to work being outsourced
Respondents were asked to estimate, on a ve-point scale ranging from very
unlikely to very likely, how likely it was in their organization at present
that their work would be outsourced (i.e. contracted out to private
practitioners) in the near future.
Control variables
Professional experience
All practising lawyers in Canada must be admitted to the bar, so the years
since that date indicate the length of a lawyers professional career and was
used here as a proxy for professional experience. There is some evidence that
experience has an impact on the ethical decision-making style of professionals
(Ponemon, 1990, 1992). Similar observations have been made about business
people (Weeks et al., 1999). There was also evidence from the present study
that the more experienced a professional, the less difcult they found the
vignettes to be. Difculty was measured by asking respondents, after review-
ing each vignette, to rate the difculty they encountered on a ve-point scale
(very little difculty to a lot of difculty). The vignettes varied in difculty
to the respondents (Table 1), so bivariate correlations between difculty and
professional experience were computed for each individual vignette as well as
for the combined difculty. The combined difculty was negatively and signi-
cantly correlated with professional experience (r = .171; p < .01 for two-
tailed test). Three of the four vignettes individually showed the same
signicant negative correlation (Vignette 1: r = .131; Vignette 3: r = .182;
Vignette 4: r = .136; all p < .01), but one, Vignette 2, was not correlated at
all (r = .011). This last was the most difcult overall (Table 1).
Familiarity with ethical dilemmas
It is possible that familiarity with ethical dilemmas (operationalized as the
frequency with which dilemmas are encountered) might affect the way in
Table 1 Difculty in answering vignettes
Mean difculty (standard deviation)
Vignette 1 2.24 (1.10)
Vignette 2 2.94 (1.11)
Vignette 3 2.83 (1.19)
Vignette 4 2.68 (1.08)
which people approach such situations. It was positively correlated, for
example, with respondents strategic involvement and, for reasons that are
not as easy to interpret, their perception of reward inequity (Table 2). Those
respondents who had encountered situations of the kind described in the
vignettes were asked, on a ve-point scale, how common it was for them to
encounter situations of that general kind (very uncommon to very
common) in their present position, and how many they had encountered in
the past two years. Grouping the latter measure into four categories (none,
12, 34, 5 or more) and combining it with the former yielded a scale with
a standardized item alpha of 0.91; the z-scores of the two variables were
combined in the subsequent analysis (dilemma frequency).
Business education
In countries such as Canada or the US it is common often required for
professionals to have completed a degree, or at least to have had some under-
graduate education, before beginning their professional training. It is also
not at all uncommon for them to have had some graduate education in a
discipline other than their profession. If this non-professional education is in
business or management, it is not unreasonable to expect the professional to
be more in tune with the business side of their work if they become employed
in a NPO, and, potentially, more drawn to it than professionals who have
not been so educated. Respondents were asked for their degrees and
professional qualications. Their business education was coded 3 if they had
undergraduate and graduate business degrees, 2 if they had an MBA, and 1
if they had an undergraduate business degree. Most (84%) had neither, but
8.5 percent had undergraduate degrees, 6 percent had MBAs, and 1.5 percent
had both.
Analysis
The sample was largely (79%) drawn from the private sector. Half of the
respondents (51%) were staff lawyers; the remainder were almost evenly split
between sole in-house counsel for the organization (23%) and head of the
law department (25%). Few were under the age of 30; 35 percent were in
their 30s, 44 percent in their 40s, and 19 percent were 50 years or older.
Two-thirds were male. On average it had been 15.5 years (standard devi-
ation of 7.8 years) since they had been admitted to the bar, 10.5 (7.2) years
since they rst became in-house counsel, and 7.9 (6.1) years since they had
become counsel for their present employers.
As with previous studies, OPC was comparatively low. For the two
items (which appear to tap somewhat different constructs and probably do
not belong on the same scale) the mean OPC levels were respectively 2.0
(SD = 1.6) and 2.6 (1.6). These levels are very similar to those from the
studies of Aranya and Ferris (1984) and Gunz and Gunz (1994b); the range
of reported values from the present study and the two cited studies is
2.03.2.
Control variables
Years of professional experience was signicantly related to the salience of
organizational identity (Table 3), but in a direction that seems somewhat
counterintuitive: the longer the professional experience, the more salient the
organizational identity. Although the two forms of experience measured
with the profession and with the current employer were (not surprisingly)
positively correlated (Table 2), standard checks showed that there was no
evidence of multicollinearity when they were both entered into the regression
(Table 3). Not surprisingly, professional experience was very strongly cor-
related with age (r = .82), and substituting age for professional experience in
the regressions did not change any of the other relationships signicantly.
Business education had no effect on organizational identity.
Hypotheses 16 are concerned with variables that are expected to be
related to the relative salience of respondents organizational versus their
professional identities. OLS multiple regression was used to test the
hypotheses (Table 3).
The prediction of Hypothesis 1, that employee identity salience should
be affected by the proportion of time a professional spends on professional
activities, is supported: the more time spent on professional work, the less
salient is the organizational identity.
Hypothesis 2 predicted that the less isolated professionals are from the
rms strategic decision-making process, the more salient their organizational
identity should be by comparison with their professional identity. No such
relationship is evident in the regression results, so Hypothesis 2 is not
supported.
Given that the zero-order correlation between strategic involvement
and organizational identity was positive and signicant (r = .170; p < .001)
but organizational identity is strongly and negatively correlated with time
spent on professional work (r = .542; p < .001), some further analysis was
conducted to see how these three variables were related. Baron and Kennys
(1986) test of mediation was applied. Each pair of variables was signicantly
correlated, but when strategic involvement and proportion of time spent on
T
a
b
l
e

2
C
o
r
r
e
l
a
t
i
o
n

m
a
t
r
i
x

w
i
t
h

v
a
r
i
a
b
l
e

m
e
a
n
s

(
s
t
a
n
d
a
r
d

d
e
v
i
a
t
i
o
n
s
)
1
2
3
4
5
6
7
8
9
1
0
1
1
1
.
F
r
e
q
u
e
n
c
y

d
i
l
e
m
m
a
s

m
e
t
0
.
0
2

(
0
.
9
4
)
a
2
.
E
x
p
e
r
i
e
n
c
e

a
s

l
a
w
y
e
r
.
0
4
9
1
5
.
5

(
7
.
8
)
3
.
E
x
p
e
r
i
e
n
c
e

w
i
t
h

r
m
.
0
3
7
.
5
5
2
*
*
*
7
.
9

(
6
.
1
)
4
.
M
a
i
n
s
t
r
e
a
m

a
c
c
e
s
s
i
b
i
l
i
t
y
.
0
5
5
.
0
5
4
.
0
7
0
5
.
2

(
2
.
0
)
5
.
R
e
w
a
r
d

i
n
e
q
u
i
t
y
.
1
2
0
*
.
0
4
1
.
0
0
4
.
2
9
1
*
*
*
3
.
4
1

(
1
.
2
8
)
6
.
S
t
r
a
t
e
g
y

i
n
v
o
l
v
e
m
e
n
t
.
1
0
5
*
.
2
8
9
*
*
*
.
0
5
9
.
2
4
5
*
*
*
.
3
1
4
*
*
*
0
.
0
1

(
0
.
8
8
)
7
.
V
u
l
n
e
r
a
b
i
l
i
t
y

t
o

o
u
t
s
o
u
r
c
i
n
g
.
0
5
9
.
0
5
6
.
0
1
8
.
0
0
2
.
0
5
2
.
0
5
8
1
.
8
5

(
1
.
0
4
)
8
.
P
r
o
f
e
s
s
i
o
n
a
l

v
s

o
r
g
.
i
d
e
n
t
i
t
y
.
0
4
4
.
0
9
2
*
.
0
3
3
.
1
6
2
*
*
*
.
1
1
6
*
.
1
7
0
*
*
*
.
0
5
8
2
.
7
2

(
1
.
0
2
)
9
.
T
i
m
e

o
n

p
r
o
f
e
s
s
i
o
n
a
l

w
o
r
k
.
0
8
5
.
2
2
0
*
*
*
.
1
1
5
*
.
2
2
0
*
*
*
.
1
9
0
*
*
*
.
5
4
2
*
*
*
.
0
0
8
.
2
9
5
*
*
*
6
8
.
7
%

(
2
6
.
0
%
)
1
0
.
E
x
t
e
n
t

o
f

b
u
s
i
n
e
s
s

e
d
u
c
a
t
i
o
n
.
0
3
6
.
0
5
5
.
0
1
0
.
0
2
6
.
0
2
3
.
0
2
7
.
0
7
1
.
0
4
4
.
0
3
4
0
.
2
5

(
0
.
6
3
)
1
1
.
O
r
g
a
n
i
z
a
t
i
o
n
a
l

r
e
s
p
o
n
s
e
s
.
0
0
8
.
0
8
6
.
0
8
3
.
0
0
4
.
0
0
5
.
0
3
9
.
1
0
4
*
.
1
5
7
*
*
*
.
0
3
7
.
0
3
3
1
.
3
8

(
1
.
0
2
)
p
<

.
1
.
*
p
<

.
0
5
.
*
*
p
<

.
0
1
.
*
*
*
p
<

.
0
0
1
.
a

M
e
a
n
s

(
w
i
t
h

s
t
a
n
d
a
r
d

d
e
v
i
a
t
i
o
n
s

i
n

p
a
r
e
n
t
h
e
s
e
s
)

a
r
e

s
h
o
w
n

i
n

t
h
e

d
i
a
g
o
n
a
l

c
e
l
l
s
.
V
a
r
i
a
b
l
e
s
:
1
.
F
r
e
q
u
e
n
c
y

t
h
a
t

e
t
h
i
c
a
l

d
i
l
e
m
m
a
s

a
r
e

e
n
c
o
u
n
t
e
r
e
d
.
2
.
P
r
o
f
e
s
s
i
o
n
a
l

e
x
p
e
r
i
e
n
c
e

(
y
e
a
r
s

s
i
n
c
e

c
a
l
l
e
d

t
o

b
a
r
)
.
3
.
N
u
m
b
e
r

o
f

y
e
a
r
s

a
s

c
o
r
p
o
r
a
t
e

c
o
u
n
s
e
l

f
o
r

c
u
r
r
e
n
t

e
m
p
l
o
y
e
r
.
4
.
A
c
c
e
s
s
i
b
i
l
i
t
y

o
f

o
r
g
a
n
i
z
a
t
i
o
n
s

c
a
r
e
e
r

m
a
i
n
s
t
r
e
a
m

t
o

l
a
w
y
e
r
s
.
5
.
R
e
w
a
r
d

i
n
e
q
u
i
t
y
.
6
.
I
n
v
o
l
v
e
m
e
n
t

i
n

t
h
e

r
m
s

s
t
r
a
t
e
g
i
c

m
a
n
a
g
e
m
e
n
t
.
7
.
V
u
l
n
e
r
a
b
i
l
i
t
y

o
f

l
a
w

d
e
p
a
r
t
m
e
n
t
s

w
o
r
k

t
o

o
u
t
s
o
u
r
c
i
n
g

i
n

t
h
e

n
e
a
r

f
u
t
u
r
e
.
8
.
E
x
t
e
n
t

t
o

w
h
i
c
h

s
u
b
j
e
c
t

s
e
e
s

h
i
m
/
h
e
r
s
e
l
f

a
s

a
n

e
m
p
l
o
y
e
e

w
h
o

h
a
p
p
e
n
s

t
o

h
a
v
e

l
a
w

d
e
g
r
e
e

(
5
)
,
a
s

o
p
p
o
s
e
d

t
o

a

l
a
w
y
e
r

w
i
t
h

c
a
p
t
i
v
e

c
l
i
e
n
t

(
1
)
.
9
.
P
r
o
p
o
r
t
i
o
n

o
f

t
i
m
e

s
p
e
n
t

o
n

p
r
o
f
e
s
s
i
o
n
a
l

w
o
r
k
.
1
0
.
E
x
t
e
n
t

o
f

u
n
i
v
e
r
s
i
t
y

b
u
s
i
n
e
s
s

e
d
u
c
a
t
i
o
n
.
1
1
.
P
r
o
p
e
n
s
i
t
y

t
o

a
n
s
w
e
r

v
i
g
n
e
t
t
e
s

f
r
o
m

o
r
g
a
n
i
z
a
t
i
o
n
a
l

p
e
r
s
p
e
c
t
i
v
e
.
professional work were regressed on organizational identity, the relationship
between strategic involvement and organizational identity became non-
signicant (Beta = .01) while that between the proportion of time spent on
professional work and organizational identity was unchanged. It appears,
then, that the proportion of time spent on professional work fully mediates
the effect of isolation from the organizations strategic decision-making
processes on organizational identity salience.
There is some indication that the less isolated the respondents felt
themselves to be from the organizations mainstream career system
(mainstream accessibility), the more salient their organizational identity
(Model 2), providing marginal support for Hypothesis 4. Hypotheses 5a/b
proposed an interaction effect, in which respondents sense of what we call
here reward inequity the belief that the real career rewards go to
employees outside the law department (as it is in this case) moderates the
positive relationship between mainstream accessibility and salience of
Table 3 Salience of organizational identity (standardized coefcient Betas);
a
OLS
regression
Model 1 Model 2 Model 3
Control variables:
Professional experience .096* .122* .114*
Frequency dilemmas met .051 .025 .017
Extent of business education .055 .050 .044
Mainstream accessibility .088 .468***
Reward inequity .049 .323**
Experience with rm .123* .128*
Strategy involvement .041 .030
Vulnerability to outsourcing .088 .087
Time on professional work .281*** .279***
Accessibility inequity .479**
F 2.08 6.49*** 7.08***
Adjusted R squared 0.007 0.103 0.124
p < .1.
* p < .05.
** p < .01.
*** p < .001.
a
See Table 2 for key to variables.
organizational identity proposed in Hypothesis 4. Model 3 reveals a signi-
cant interaction term, such that (Figure 1) the positive relationship is only
evident when reward inequity is low. Hypothesis 5a, which suggested that
reward inequity and inaccessibility of the mainstream career system would
be associated with higher salience of the professional identity, then, is not
supported; if anything, there is a slight trend in the opposite direction. On
the other hand Hypothesis 5b, which proposed that low reward inequity and
an accessible mainstream career system would be associated with higher
organizational identity salience, is supported.
The longer the respondents experience with their current employer, the
less salient their organizational identity, which is the opposite effect to that
predicted by Hypothesis 3.
Marginal support is provided for Hypothesis 6, concerning the relation-
ship between the respondents estimate of the likelihood that they felt about
their work being outsourced, and salience of their organizational identity.
Hypothesis 7 proposed a link between professionals organizational
identity and the kind of approach they take to resolving ethical dilemmas.
Specically, it suggested that the more salient their organizational identity by
0
0.5
1
1.5
2
2.5
3
3.5
4
2 10
Mainstream accessibility
O
r
g
a
n
i
z
a
t
i
o
n
a
l

i
d
e
n
t
i
t
y
Reward inequity = 1
Reward inequity = 5
Figure 1 Salience of organizational identity, mainstream accessibility, and reward
inequity interaction
comparison with their professional identity, the more likely it is that they
will choose organizational rather than professional approaches to ethical
dilemmas. These variables were positively and signicantly correlated
(r = .157; p < .001). The converse was also the case: the number of vignettes
they answered from a professional perspective was negatively and signi-
cantly correlated with the organizational identity measure (r = .104;
p < .05). It should, of course, be borne in mind that the indices of how pro-
fessionally or organizationally inclined respondents were in their answers are
not independent; a forced three-way choice was presented for each vignette
(see Notes 2 and 3). That said, Hypothesis 7 is supported.
We also proposed a mediating role for the salience of organizational
identity, between, on the one hand, the independent variables time spent on
professional activities, professionals involvement in the strategic level of the
rm, length of experience with the rm, isolation from the rms mainstream
career system, and vulnerability to outsourcing, and on the other hand the
tendency to select organizational or professional approaches to the vignettes.
Only one of these variables (perceived vulnerability to outsourcing) is directly
correlated with the choice of action in response to the vignettes (Table 2).
However in a Monte Carlo simulation of mediating effects, MacKinnon et
al. (2002) showed that the test for mediation with [t]he best balance of Type
I error and statistical power across all cases is the joint signicance of the
two effects comprising the intervening variable effect (p. 83). This does not
require a signicant relationship between the independent and dependent
variable. Salience of organizational identity is jointly signicantly related
both to the proportion of time spent on professional work and length of
experience with the rm on the one hand, and on the other the choice of
action in response to the vignettes. Isolation from the mainstream career
system and vulnerability to outsourcing are both (when controlled for other
effects) only marginally associated with salience of organizational identity.
The partial mediating role of organizational identity salience between
proportion of time spent on professional work and choice of action
(Figure 2) is therefore supported.
Since we have already established that the proportion of time spent on
professional work fully mediates between isolation from the organizations
strategic decision-making process and the salience of organizational identity,
we also have support for a causal chain (Figure 2) in which isolation affects
the proportion of time spent on professional work, which affects the salience
of the lawyers organizational identity, which in turn affects the type of choice
he or she makes when faced with an ethical dilemma.
As just noted, the one independent variable that was correlated with
the tendency to adopt an organizational approach to the vignettes was

H
7

H
4
H
5
a
/
b

H
1

H
3

H
6
F
i
g
u
r
e

2
M
e
d
i
a
t
i
n
g

r
o
l
e

o
f

o
r
g
a
n
i
z
a
t
i
o
n
a
l

i
d
e
n
t
i
t
y

s
a
l
i
e
n
c
e
perceived vulnerability to outsourcing. A separate analysis of the organiz-
ational response (Gunz & Gunz, 2002) suggested evidence for two distinct
types of organizational identity. The rst (which we shall label here O
1
) is
one in which the lawyer warns his or her colleagues of the legal risks of their
course of action without any implication that he or she will follow through
as an ofcer of the court (all lawyers who have been called to the bar have
this role). It is, in other words, similar to the professional response, except
that he or she stops short of his or her full professional responsibilities, acting
as a kind of inside expert advisor. The second type of response (O
2
) is one
in which the respondent adopts a minimalist reaction, maintaining, so to
speak, a watching brief over events but not intervening unless he or she really
has to. It seems to be O
2
that was responsible for the positive relationship
between perceived vulnerability to outsourcing and organizational identity
(r = .134; p < .01). There was no signicant relationship between the O
1
response and perceptions about outsourcing.
Discussion
In this article we have been investigating possible reasons for professionals
employed in non-professional organizations (NPOs) abandoning, at least
partially, their professional ethical standards when faced with ethical
dilemmas. We opened with the well-documented observation that many if
not most of the corporate scandals that have been shaking countries such
as the US recently have involved the complicity of professionals acting in
ways that their professional training and bodies should prevent. We took as
our point of departure the now well-established nding that, although one
might expect professionals employed by NPOs to have difculty reconciling
their duties as independent professionals with their responsibilities as
employees (so-called organizationalprofessional conict: OPC), apparently
they do not. A number of empirical studies designed to examine this question
have established that the degree of OPC experienced by professionals such
as accountants and in-house lawyers (corporate counsel) is comparatively
low, and it is now well established that organizational commitment and
professional commitment can be positively correlated.
Building on the work of Wallace (1995b), we explored the possibility
that this lack of internal conict can be explained using Stryker and Burkes
(2000) concept of identities. Our primary interest is not identity theory itself;
we are merely using it as a means to the end of understanding the ethical
behaviour of employed professionals. Wallace showed how professionals
employed by NPOs seem to adopt one of two organizational responses she
named proletarianization and adaptation. We argued that these could
appear at the individual level of analysis as the identities organizational and
professional, and we put forward a number of suggestions for the contextual
factors that might inuence the relative salience of these two identities.
Because identity is believed to be linked to behaviour, we proposed that the
relative salience of the identity adopted by a professional would inuence his
or her approach to handling an ethical dilemma.
We did indeed nd evidence that identity shapes intended behaviour.
The more salient the organizational identities of our respondents, all lawyers
employed in NPOs, the more likely it was that, when presented with a
vignette containing an ethical dilemma, they would choose a pre-coded
course of action that was more to be expected of an ordinary, non-
professional employee of the company than of a lawyer. In other words, our
respondents did not automatically always choose the professionally correct
response. The less they saw themselves as lawyers, the more their judgement
appeared to resemble that of non-lawyers.
What might differentiate a lawyer who behaves like a lawyer from one
who does not? Identity theory predicts that identity salience is a consequence
of the embeddedness of the role in question in groups that provide context
for that role. Indeed we found that the less time our respondents spent on
professional work, the more salient their organizational identities. Their
involvement at the strategic level of the organization for example, the
extent to which they felt themselves to be members of the rms TMT
appeared to have no effect on identity. However, secondary analysis showed
that this was because the relationship was mediated by the time they spent
on non-professional work. The more a corporate counsel worked as a
member of the TMT, the less time he or she had for professional work, and
the more salient his or her organizational identity by comparison with his or
her professional identity.
We also found some evidence that isolation from the organizations
career mainstream enhanced the salience of a professional identity, as did a
feeling of vulnerability to having ones work outsourced. Both relationships
were marginally signicant. However, the relationship between isolation from
the mainstream career system and organizational identity was moderated by
perceptions of reward inequity. As organizational justice theory predicts, a
combination of an accessible mainstream career system and a sense that the
real rewards in the organization were not limited to people outside the law
department (i.e. that the lawyers were not penalized in organizational career
terms for being lawyers) was associated with greater organizational role
salience.
One variable perceived vulnerability to outsourcing differed from
the others. Secondary analysis suggested that it was most closely related with
a subset of the organizational responses that describe a kind of hands-off
behaviour: of keeping ones head below the parapet if at all possible, and
only taking professional action if one really has to.
Finally, we found unexpected relationships between professional
experience (or age), length of experience with the current employer, and
identity salience. The longer the respondents professional life, the more
salient was his or her organizational identity. By contrast, the longer their
association with their employer, the more salient their professional identity.
We can only guess at the reasons for these ndings. Age and professional
experience are, not surprisingly, very closely correlated in the sample, and it
is known that age is positively associated with organizational commitment
(Smeenk et al., 2006) and organizational citizenship behaviour (Wanxian &
Weiwu, 2007). So the former association may simply be an age effect. The
second association the effect of length of experience with the rm is more
puzzling. Possibly someone who is well established within a company has
the condence to adopt a professional identity in the way that someone who
is relatively new and comparatively lacking in condence does not.
Perhaps, then, we are beginning to uncover possible explanations for
the behaviour of the professionals such as lawyers and accountants in the
Enron-style scandals of turn-of-the-century western capitalism. The kinds
of behaviour specied in the vignettes, of course, are not the egregiously
unprofessional conduct to which we referred at the beginning of this article,
nor are we suggesting that our respondents were anything other than well-
trained and highly professional in their work. Nevertheless, although they
were hired as professionals, it seems that the context in which they worked
their proximity to the top management team, the nature of the reward
system and the accessibility of non-professional career structures did affect
the way they responded to ethical dilemmas. And the secondary analysis
which suggested that the more vulnerable someone feels to their work being
outsourced, the less likely they were to take a position on ethical issues, is
worrying, too.
This suggests a troubling dilemma. As we pointed out at the beginning
of this article, it is often argued that corporate counsel should be brought
into the TMT, so that they are best placed to give professional advice as issues
arise. But the implication of our ndings is that this might have the un-
intended and undesirable consequence of tempering the professionalism of
the advice, of shading it in the direction of what the TMT would like to hear,
rather than what it should be hearing. In other words, the more corporate
lawyers are brought into the strategic counsels of the company, the greater
the risk that they will no longer be acting exactly like the lawyers the
company thought it had hired. And that, in turn, potentially poses grave risks
for corporate governance.
The solution, presumably, is a mixture of being aware of the risks of
professionals being co-opted by top management rationalities (Whitley,
1987), and of ensuring that legal advice is taken from more than one source.
Interestingly, while, as we have seen, many have argued that corporate
counsel should be brought into the strategic decision-making of the rm,
others have argued the opposite. They maintain that lawyers are there to do
law (Gunz, 1991), that counsel are hired, often at a considerable premium,
for their legal expertise rather than their managerial expertise and as such it
is a misuse of a valuable resource to distract them from their primary
function of delivering legal services. But if so, the employed lawyer is at risk
of becoming indistinguishable from the outside lawyer and the value added
that comes from close interactions with management at early stages in
decision-making when paths of action might be changed, is lost.
This study does have limitations, of course. Most obviously, it is a
study of ethical intentions rather than of ethical behaviour, a feature shared,
as noted above, by much if not most work in this area. We can never know
whether a person would do as he or she says he or she would when review-
ing a hypothetical case, even though the indications are that this is likely
(OFallon & Buttereld, 2005; Weber, 1992). Furthermore the vignettes
described hypothetical situations that were unrelated (apart from being
about corporate counsel) to the respondents actual positions, so intro-
ducing a question of external validity. However, we did indeed nd evidence
that respondents positions affected their responses, suggesting that at least
some of the relative salience of the respondents professional and organ-
izational identities was carrying over to the vignette responses.
Using closed-ended vignettes introduces another issue: asking re-
spondents to check one of three responses to necessarily relatively complex
vignettes means that they may well nd themselves giving answers which do
not reect their real feelings about the situation (Buttereld et al., 2000).
Qualitative interviews briey reported on above suggested that the pre-coded
responses were indeed relatively representative of practising counsels
reactions to the cases. The response rate, as is usually the case in this type of
research, was low. Although the normal checks showed no evidence of a non-
response bias this cannot be dismissed as a possibility. Finally, we have no
way of knowing whether the relationships we observed were a result of the
inuence of the environment in which the professional was working as we
hypothesized, or whether a selection effect was at work such that the counsel
who were closest to their rms TMTs were those whose natural inclination
was to favour an organizational, rather than a professional, response. More
generally, we have suggested a direction of causality in Figure 2 for the
relationships between the phenomena we studied, but because the study was
cross-sectional we cannot know for sure that we are right.
As ever, these limitations point to the need for future research. More
work is clearly needed to explore the extent to which intentions are carried
over to action. An obvious implication is that it is important to move beyond,
if at all possible, self-report studies with hypothetical vignettes. But ethical
dilemmas are both comparatively rare events (the respondents overall said
that they had met, on average, 1.2 situations of the kind described in the
vignettes within the previous two years), and also very sensitive. So a eld
study would have difculty both nding such incidents, and getting people
to talk about them if it did. However, retrospective studies may be possible.
These ndings have brought us a little closer to understanding how
employed professionals handle ethical dilemmas, and what inuences might
be at work to draw them away from the approach that their professional
training dictates. They raise the equally important question: can one general-
ize the ndings from employed professionals to the behaviour of self-
employed professionals, when the latter have a particularly close and
dependent relationship with a particular client? Is there much of a difference
in practice between a rms in-house law department and a law rm that has
a very large retainer from a very large client? Recently, the term client
capture has been used to describe the situation in which a powerful client
controls the behaviour of its professional advisors. It has been used to explain
many of the recent high-prole governance failures in which legal and
accounting advisors from professional service rms were prominent (Coffee,
2003; Leicht & Fennell, 2001; Macey, 2004; Macey & Sale, 2003; Prakash,
2004). Perhaps the most spectacular recent example was the capture of
Arthur Andersen by Enron (Ley Tofer, 2003).
There is clearly still a great deal more that needs doing to explore this
important eld. Complex societies such as those in western-style economies
rely heavily on the conduct of practitioners of what we call professions, so
that betrayal of this trust is typically deeply felt and has sweeping impli-
cations. The better we understand what is happening, and the more we are
able to separate myth from reality, the more secure the complex economic
systems on which we depend are likely to be.
Acknowledgements
We are most grateful to Robert V. Jones and his colleagues at the Canadian
Corporate Counsel Association for their extensive help in designing and carrying
out the survey described in this article, and to the Social Science and Humanities
Research Council of Canada for funding support. Many colleagues have helped
us by commenting on earlier versions of the article, including Martin Evans,
Jegoo Lee, Mark Weber, participants at a number of seminars and conference
sessions, and several anonymous reviewers.
Notes
1 The denition of corporate counsel in Canada is not precise and lawyers in govern-
ment, quasi-governmental bodies, and non-governmental organizations (NGOs)
sometimes call themselves corporate counsel and often do not. For this study a
conservative approach was taken towards the decision as to whether or not to
include counsel in the sample, erring in favour of exclusion where any doubt existed
about whether the person could reasonably be thought of as a corporate counsel.
2 A third identity was included, the technician, derived from the model of Gunz and
Gunz (1994a). The technician becomes fascinated with the technicalities of the
problem to the exclusion of any wider issues, including ethical ones. It proved
difcult to distinguish from the other two and, perhaps for this reason, was rarely
chosen by the respondents. It was not included in the analysis, and is not shown in
the vignettes (Appendix).
3 It was necessary to total each separately because, in fact, respondents had a three-
way choice (see Note 2; the third choice [technician] is not included in this analysis
for reasons explained in that endnote).
References
Aranya, N. & Ferris, K.R. A reexamination of accountants organizationalprofessional
conict. The Accounting Review, 1984, 59(1), 115.
Armstrong, S.J. & Overton, T.S. Estimating nonreponse bias in mail surveys. Journal of
Marketing Research, 1977, 14, 396402.
Bamber, E.M. & Iyer, V.M. Big 5 auditors professional and organizational identication:
Consistency or conict? Auditing A Journal of Practice & Theory, 2002, 21(2), 2138.
Baron, R.M. & Kenny, D.A. The moderator mediator variable distinction in social psycho-
logical research conceptual, strategic and statistical considerations. Journal of Person-
ality and Social Psychology, 1986, 51(6), 117382.
Benson, J.K. The analysis of bureaucraticprofessional conict: Functional versus dialectic
approaches. Sociological Quarterly, 1973, 14, 37694.
Buttereld, K.D., Trevino, L.K. & Weaver, G.R. Moral awareness in business organizations:
Inuences of issue-related and social context factors. Human Relations, 2000, 53(7),
9811018.
Cassidy, C. & Trew, K. Identity change in Northern Ireland: A longitudinal study of
students transition to university. Journal of Social Issues, 2004, 60(3), 52340.
Cavanagh, G.F. & Fritzsche, D.J. Using vignettes in business ethics research. In L.E. Preston
(Ed.), Research in corporate social performance and policy, vol. 7. Greenwich, CT: JAI
Press, 1985, pp. 27993.
Chayes, A. & Chayes, A.H. Corporate counsel and the elite law rm. Stanford Law Review,
1985, 37, 277300.
Clark, J.C. Religion and moral standards of American business. Cincinnati, OH: South-
western Publishing, 1966.
Coffee, J.C., Jr. The attorney as gatekeeper: An agenda for the SEC. Columbia Law Review,
2003, 103(5), 1293316.
Cohen, A. Turnover among professionals: A longitudinal study of American lawyers.
Human Resource Management, 1999, 38(1), 6176.
Cohen, A. Multiple commitments in the workplace: An integrative approach. Mahway, NJ:
Lawrence Erlbaum, 2003.
Colombo, R. A model for diagnosing and reducing nonresponse bias. Journal of Advertis-
ing Research, 2000, 40(1/2), 8593.
Crane, A. Are you ethical? Please tick yes or no : On researching ethics in business
organizations. Journal of Business Ethics, 1999, 20(3), 23748.
Crowne, D.P. & Marlowe, D. The approval motive. New York: Wiley, 1964.
Dalton, D.R. & Metzger, M.B. Towards candor, cooperation and privacy in applied
business ethics research: The randomized response technique (RRT). Business Ethics
Quarterly, 1992, 2(2), 20721.
Daniels, A.K. Professionalism in formal organizations. In J.B. McKinlay (Ed.), Processing
people. New York: Holt, Rinehart and Winston, 1975, pp. 30338.
Datta, D.K., Guthrie, J.P. & Wright, P.M. Human resource management and labor pro-
ductivity: Does industry matter? Academy of Management Journal, 2005, 48(1), 13545.
Davies, C. Professionals in bureaucracies: The conict thesis revisited. In R. Dingwall &
P. Lewis (Eds), The sociology of the professions: Lawyers, doctors and others. London:
Macmillan, 1983, pp. 17794.
Davis, M. The special role of professionals in business ethics. Business and Professional
Ethics Journal, 1988, 7(Summer), 5162.
DeMott, D.A. The discreet roles of general counsel. Dule Law School Legal Studies
Research Paper Series, 2005, 79, 143.
Dolgoff, R. & Skolnik, L. Ethical decision-making in social work with groups: An empirical
study. Social Work with Groups, 1996, 19(2), 4965.
Dukerich, J.M., Waller, M.J., George, E. & Huber, G.P. Moral intensity in group problem
solving. Paper presented at the Annual Academy of Management Meeting, Atlanta, GA,
1993.
Edwards, A. The relationship between the judged desirability of a trait and the probability
that the trait will be endorsed. Journal of Applied Psychology, 1953, 37, 903.
Gouldner, A.W. Cosmopolitans and locals: Toward an analysis of latent social roles I.
Administrative Science Quarterly, 1957, 2(3), 281306.
Gouldner, A.W. Cosmopolitans and locals: Toward an analysis of latent social roles II.
Greenberg, J. & Eskew, D.E. The role of role playing in organizational research. Journal
of Management, 1993, 19(2), 22141.
Gunz, H.P. & Gunz, S.P. Ethical implications of the employment relationship for
professional lawyers. University of British Columbia Law Review, 1994a, 28(1),
12339.
Gunz, H.P. & Gunz, S.P. Professional/organizational commitment and job satisfaction for
employed lawyers. Human Relations, 1994b, 47(7), 80128.
Gunz, H.P. & Gunz, S.P. The lawyers response to organizational professional conict: An
empirical study of the ethical decision making of in-house counsel. American Business
Law Journal, 2002, 39(2), 24187.
Gunz, H.P. & Jalland, R.M. Managerial careers and business strategies. Academy of
Management Review, 1996, 21(3), 71856.
Gunz, S.P. The new corporate counsel. Canada: Carswell, 1991.
Harrell, A., Chewning, E. & Taylor, M. Organizationalprofessional conict and the job
satisfaction and turnover intentions of internal auditors. Auditing: A Journal of Practice
& Theory, 1986, 5(2), 10921.
Heineman, B. Wheres the lawyer? The Economist, 20 March 2004, p. 73.
Hickson, D.J., Hinings, C.R., Lee, C.A., Schneck, R.E. & Pennings, J. A strategic con-
tingencies theory of intraorganizational power. Administrative Science Quarterly,
1971, 16(2), 21629.
Hosseini, J.C. & Armacost, R.L. Gathering sensitive data in organizations. American
Behavioral Scientist, 1993, 36, 44371.
Ibarra, H. Provisional selves: Experimenting with image and identity in professional
adaptation. Administrative Science Quarterly, 1999, 44(4), 76491.
Knudsen, H.K., Johnson, J.A., Martin, J.K. & Roman, P.M. Downsizing survival: The
experience of work and organizational commitment. Sociological Inquiry, 2003, 73(2),
26583.
Krecker, M.L. Work careers and organizational careers the effects of age and tenure on
work attachment to the employment relationship. Work and Occupations, 1994, 21(3),
25183.
Latham, G.P. & Pinder, C.C. Work motivation theory and research at the dawn of the 21st
century. Annual Review of Psychology, 2005, 56, 485516.
Lee, K., Carswell, J.J. & Allen, J.N. A meta-analytic review of occupational commitment:
Relations with person- and work-related variables. Journal of Applied Psychology,
2000, 85(5), 799811.
Leicht, K.T. & Fennell, M.L. Professional work: A sociological approach. Malden, MA:
Blackwell, 2001.
Ley Tofer, B. Final accounting: Ambition, greed and the fall of Arthur Andersen. New
York: Broadway Books, 2003.
Liggio, C.D. A look at the role of corporate counsel: Back to the future or is it the past?
Arizona Law Review, 2002, 44, 62135.
Lord, A.T. & DeZoort, F.T. The impact of commitment and moral reasoning on auditors
responses to social inuence pressure. Accounting, Organizations and Society, 2001,
26(3), 21535.
Macey, J.R. Efcient capital markets, corporate disclosure, and Enron. Cornell Law
Review, 2004, 89(2), 394422.
Macey, J.R. & Sale, H.A. Observations on the role of commodication, independence, and
governance in the accounting industry. Villanova Law Review, 2003, 48(4), 116787.
MacKinnon, D.P., Lockwood, C.M., Hoffman, J.M., West, S.G. & Sheets, V. A compari-
son of methods to test mediation and other intervening variable effects. Psychological
Methods, 2002, 7(1), 83104.
March, J.G. A primer on decision-making: How decisions happen. New York: Free Press,
1994.
McEnrue, M.P. Length of experience and the performance of managers in the establish-
ment phase of their careers. Academy of Management Journal, 1988, 31(1), 17585.
McLean, B. & Elkind, P. The smartest guys in the room: The amazing rise and scandalous
fall of Enron. London: Penguin, 2003.
Moore, D.A., Tetlock, P.E., Tanlu, L. & Bazerman, M.H. Conicts of interest and the case
of auditor independence: Moral seduction and strategic issue cycling. Academy of
Management Review, 2006, 31(1), 1029.
Moorman, R.H. The relationship between organizational justice and organizational citizen-
ship: Do fairness perceptions inuence employee citizenship. Journal of Applied
Psychology, 1991, 76(6), 84555.
Morgan, T.D. National symposium on the role of a corporate lawyer the client(s) of a
corporate lawyer. Capital University Law Review, 2004, 33, 1747.
Mulligan, T. & Kraul, C. Texaco settles race bias suit for $176 million. Los Angeles Times,
16 November 1996, p. 11.
Nelson, R.L. & Nielsen, L.B. Cops, counsel and entrepreneurs: Constructing the role of
inside counsel in large corporations. Law & Society Review, 2000, 34(2), 45794.
OFallon, M.J. & Buttereld, K.D. A review of the empirical ethical decision-making
literature: 19962003. Journal of Business Ethics, 2005, 59(4), 375413.
Osinsky, P. & Mueller, C.W. Professional commitment of Russian provincial specialists.
Work and Occupations, 2004, 31(2), 193224.
Ponemon, L.A. Ethical judgments in accounting: A cognitive-developmental perspective.
Critical Perspectives on Accounting, 1990, pp. 191215.
Ponemon, L.A. Ethical reasoning and selection-socialization in accounting. Accounting,
Organizations and Society, 1992, 17(34), 23958.
Prakash, R. Understanding professional behavior in organizational settings: Evidence from
Enron and Arthur Andersen. Unpublished manuscript, 2004.
Quinones, M.A., Ford, J.K. & Teachout, M.S. The relationship between work experience
and job performance: A conceptual and meta-analytic review. Personnel Psychology,
1995, 48(4), 887910.
Randall, D.M. & Fernandes, M.F. The social desirability response bias in ethics research.
Journal of Business Ethics, 1991, 10(11), 80517.
Rest, J.R. Moral development: Advances in research and theory. New York: Praeger,
1986.
Rittenberg, L. & Covaleski, M.A. Internalization versus externalization of the internal
audit function: An examination of professional and organizational imperatives.
Accounting, Organizations and Society, 2001, 26(78), 61741.
Robertson, D.C. Empiricism in business ethics: Suggested research directions. Journal of
Business Ethics, 1993, 12(8), 58599.
Rosen, R. The inside counsel movement, professional judgment, and organizational repre-
sentation. Indiana Law Journal, 1989, 64, 479553.
Rowland, M.L. & Forthofer, R.N. Adjusting for nonresponse bias in a health examination
survey. Public Health Report, 1993, 108(3), 3806.
Schein, E.H. Career dynamics: Matching individual and organizational needs. Reading,
MA: Addison-Wesley, 1978.
Scott, W.R. Reactions to supervision in a heteronomous professional organization.
Serpe, R.T. Stability and change in self: A structural symbolic interactionist explanation.
Social Psychological Quarterly, 1987, 50(1), 4455.
Shafer, W. Ethical pressure, organizational-professional conict, and related work
outcomes among management accountants. Journal of Business Ethics, 2002, 38(3),
26375.
Simard, G., Doucet, O. & Bernard, S. HRM practices and employee commitment: The role
of justice. Relations Industrielles Industrial Relations, 2005, 60(2), 296319.
Smeenk, S.G.A., Eisinga, R.N., Teelken, J.C. & Doorewaard, J.A.C.M. The effects of HRM
practices and antecedents on organizational commitment among university employees.
International Journal of Human Resource Management, 2006, 17(12), 203554.
Sorensen, J.E. & Sorensen, T.C. The conict of professionals in bureaucratic organizations.
Administrative Science Quarterly, 1974, 19, 98106.
Stryker, S. & Burke, P.J. The past, present, and future of an identity theory. Social Psy-
chology Quarterly, 2000, 63(4), 28497.
Sturman, M.C. Searching for the inverted U-shaped relationship between time and perform-
ance: Meta-analyses of the experience/performance, tenure/performance, and
age/performance relationships. Journal of Management, 2003, 29(5), 60940.
Sveningsson, S. & Alvesson, M. Managing managerial identities: Organizational
fragmentation, discourse and identity struggle. Human Relations, 2003, 56(10),
116393.
Taylor, G.S. & Shim, J.P. A comparative examination of attitudes toward software piracy
among business professors and executives. Human Relations, 1993, 46(4), 41933.
Tesluk, P.E. & Jacobs, R.R. Toward an integrated model of work experience. Personnel
Psychology, 1998, 51(2), 32155.
Vallerand, R.J., Deshaies, P. & Cuerrier, J.P. Ajzen and Fishbeins theory of reasoned action
as applied to moral behavior: A conrmatory analysis. Journal of Personality and Social
Psychology, 1992, 62, 98109.
van der Heijden, P., van Gils, G., Bouts, J. & Hox, J. A comparison of randomized response,
computer-assisted self-interview, and face-to-face direct questioning Eliciting sensitive
information in the context of welfare and unemployment benet. Sociological Methods
and Research, 2000, 28(4), 50537.
Wallace, J.E. Professional and organizational commitment: Compatible or incompatible.
Journal of Vocational Behavior, 1993, 42(3), 33349.
Wallace, J.E. Corporatist control and organizational commitment among professionals
the case of lawyers working in law rms. Social Forces, 1995a, 73(3), 81140.
Wallace, J.E. Organizational and professional commitment in professional and non-
professional organizations. Administrative Science Quarterly, 1995b, 40(2), 22855.
Wanxian, L. & Weiwu, W. A demographic study on citizenship behavior as in-role orien-
tation. Personality and Individual Differences, 2007, 42(2), 22534.
Weber, J. Managers moral reasoning: Assessing their responses to three moral dilemmas.
Human Relations, 1990, 43(7), 687702.
Weber, J. Scenarios in business ethics research: Review, critical assessment, and recom-
mendations. Business Ethics Quarterly, 1992, 2(2), 13760.
Weber, J.M., Kopelman, S. & Messick, D.M. A conceptual review of decision making in
social dilemmas: Applying a logic of appropriateness. Personality and Social Psy-
chology Review, 2004, 8(3), 281307.
Weeks, W.A., Moore, C.W., McKinney, J.A. & Longenecker, J.G. The effects of gender and
career stage on ethical judgment. Journal of Business Ethics, 1999, 20(4), 30113.
Whitley, R.D. Taking rms seriously as economic actors: Towards a sociology of rm
behaviour. Organization Studies, 1987, 8(2), 12547.
Wilkinson, M.A., Walker, C. & Mercer, P. Testing theory and debunking stereotypes:
Lawyers views on the practice of law. The Canadian Journal of Law & Jurisprudence,
2005, 18(1), 165e201.
Zhu, Z., Hsu, K. & Lillie, J. Outsourcing a strategic move: The process and the in-
gredients for success. Management Decision, 2001, 39(5/6), 3738.
Appendix
The four vignettes are reproduced below with, in parentheses following each
option, the identity (professional or organizational) the option represents. As
explained in the main body of the text, a third option (technician) was
dropped from the analysis and is not shown here. The professional ethics
issue that each vignette raises is described, where it is not obvious, in italics.
Vignette 1
Several years ago your company formed a legal department and appointed
you as one of three staff lawyers. Before this, the companys legal work was
done by an outside counsel. This counsel has developed close relations with
the senior ofcers of the company, and he has been on the board for many
years. He has a particularly close relationship with the CEO, to whom you
report. His rm continues to provide specialized legal services to the
company and the accounts are passed directly to you for signature. However,
you have good reason to believe that he is overcharging your company for
his work, and your discussions with him on this matter have had little
impact.
The client should pay a reasonable sum for legal services and the
lawyer should be responsive to a clients concerns. In this case it is
arguable that the client, the corporation, is being over-charged and
there is an inappropriate response to the questioning of these fees
because of a lack of independence between the CEO and the outside
lawyer. There are also issues of the outside lawyer/board members
possible conicts of interest.
You believe that you should (please circle one only):
a. Do a proper comparative fee study using rms of equivalent quality,
conrm that these fees are too high, request proposals, and bring the issue
with recommendations for alternative suppliers to the attention of the CEO
(to whom you report), and the Board if necessary. (P)
Here counsel sees it as her/his responsibility to pursue the clients
interests to those ultimately responsible for them, namely the Board.
b. Find an opportunity to raise with the CEO (to whom you report)
the question of whether he would like you to review the sources of supply
of legal services to the company, just to make sure that the company is getting
best value for money. If he reacts negatively, you can let the matter lie. (O)
In this case counsel is prepared to allow the CEO, who arguably
her/himself is in a conict of interest, to make the nal decision.
Vignette 2
You are general counsel, and senior ofcer with responsibility for regulatory
matters, for a Canadian business that was recently bought by a US company.
You are also now Canadian counsel for the US company. The attraction to
the new owner was your companys portfolio of patents which had emerged
from its R&D efforts. At the time of the takeover, you were primary nego-
tiator on behalf of the US company with the Canadian government for
formal approval of the takeover. Final approval was subject to the newly
acquired subsidiarys continued investment in R&D in Canada, and an obli-
gation was placed upon the purchaser to report to the Competition Bureau
on a timely basis deviations from the meeting of these conditions.
You have become aware that, for all intents and purposes, the
Canadian R&D effort has shut down and has been transferred to the parent
location. You are worried because this appears to violate the agreement. You
believe it may also have an impact on your credibility with the regulatory
arm of the government. On the other hand, it is possible that the govern-
ment would take no action if this were to be reported since it may sense,
accurately in your view, that if it forced the issue, the Americans would close
the subsidiary and Canadian jobs would be lost.
The company has an ethical and legal responsibility to report to the
regulator. Counsel, as legal representative of the company, should
ensure that the company is advised of its responsibilities and under-
stands that they must be fullled. In the qualitative pilot interviews,
issues of maintaining condentiality led some respondents to be
concerned about the correctness of answer b, but for reasons other
than those mentioned above. In this case, the correct answer might well
be to resign rather than to be associated with improper actions.
a. In view of the possible government response and your knowledge
that senior management is aware of its obligations, maintain a watching brief
and take no action for the moment. (O)
b. Advise senior management of the Canadian and parent companies
of your concerns. If no changes ensue, you have the responsibility to notify
the Canadian regulator. (P)
Vignette 3
You are general counsel and compliance ofcer for a distribution company.
You report to a Vice President who has been a key gure in the revival of
the company in the last ve years. In the course of your duties you have
discovered that the VP is breaking company policy by suggesting to one of
the companys customers that it deal directly with your companys suppliers.
You have established that your company is missing out on substantial
amounts of business and prots as a result. You have been told that there is
no evidence that the VP is receiving any direct nancial benets from the
customer, but she does get wined and dined a lot by the customer and is often
invited to golf games.
The VP is breaking company policy, has cost the company a consider-
able amount of money, and will continue to do so if not stopped. If the matter
comes to light subsequently, people might also discover that you knew about
it earlier but did nothing. On the other hand, the VP has been a key gure
in the revival of the company in the last ve years and is a very powerful
member of the top management team. You are concerned that you might
make an enemy of the VP, to whom you report, if you were to raise the
problem with her. In any event, you are not sure what impact your word
alone might have.
Counsels responsibilities include issues of compliance and s/he must
ensure these are fullled irrespective of self-interest. Counsel must serve
the client company and not second-guess what those ultimately respon-
sible for policy compliance might do. The responsibility is to report
infractions irrespective of personal self-interest.
a. Have a quiet word with the VP, tactfully suggesting that you think
that it would be in the best interests of both the company and herself if she
were to desist. (O)
Here there is no indication counsel will pursue the matter should the
infractions persist.
b. Go to the VP to discuss what you know. Advise the VP that you are
obliged to report this to her superior, the CEO. You would prefer that she
and you go to the CEO together to discuss the matter but, if necessary, you
will go alone. (P)
This would generally be considered the appropriate ethical stance.
Vignette 4
You are general counsel and compliance ofcer for a large corporation with
a major public prole. The ethnic composition of the top management team
(TMT) is almost uniformly WASP (White Anglo-Saxon Protestant). It is
common for these senior colleagues to inject racist comments into their
conversation. You know that if the media became aware of these comments
it would not only be a public relations disaster, but many employees and
would-be employees would have prima facie cases under various
equity/human rights statutes against the corporation. You are worried about
the possibility of a disaffected employee somehow making the issue public,
perhaps using surreptitious recordings of your colleagues conversations.
On the other hand, the TMT members are your close colleagues and
friends. You are also worried about their reaction if you were to challenge
their basic behaviours. Already your discreet suggestions to them that their
behaviour should be modied have been met with mild derision.
In each of the courses of action below it is assumed that appropriate
steps have been taken to preserve solicitor/client privilege.
The ethical responsibility of legal counsel is to ensure that all parties
are advised of the inappropriateness/illegality of the actions. Should the
behaviour persist even following an appropriate message being given,
the lawyer would likely need to resign or risk being associated them-
selves with the behaviour.
a. At the next meeting of the TMT, plan to initiate a non-minuted, in
camera discussion in which you explain to the team your concerns about the
potential harm to the company if knowledge of these habits/practices
becomes public. Suggest to them that they relax only when they are meeting
with colleagues in whom they have great trust. (O)
While it is possible this might be an adequate precursor to b, the clear
implication in the nal sentence is that counsel is advising them they
may persist with the inappropriate behaviour so long as they are
discreet.
b. Ask for this issue to be put on the agenda for the next TMT meeting.
Prepare a memorandum for discussion at the meeting explaining the legal
risks to the corporation and individuals, and advise the TMT that, if there
is a failure to change existing habits/practices, you are obligated to report
your concerns to the Board of Directors. (P)
While counsel might initially select a less formal approach, this
ultimately will be the type of action required to ensure the client/
corporation is adequately protected.
Hugh Gunz has PhDs in Chemistry and Organizational Behaviour. He
is currently Professor of Organizational Behaviour at the Rotman School
of Management, University of Toronto and Chair of the Department of
Management at the University of Toronto Mississauga, having previously
taught at the University of Manchester. He has published articles on the
careers of managers, professionals and others, the management of tech-
nical professionals, and management education, is the author of the book
Careers and corporate cultures (1989), and the co-editor of the Handbook
of career studies (2007). He is Associate Editor of M@n@gement, and
serves on the editorial boards of Academy of Management Journal, Journal
of Managerial Psychology, and Emergence.
[E-mail: hugh.gunz@utoronto.ca]
Sally Gunz is a Professor of Business Law and Accounting Ethics and is
Director of the Centre for Accounting Ethics, School of Accountancy,
University of Waterloo. She is the author of the book The new corporate
counsel and has published articles on ethical decision-making by
professional accountants and lawyers and legal issues for accountants. She
is a section editor (accounting and nance) for The Journal of Business
Ethics and is a staff editor for Journal of Legal Studies Education. She is a
former president of the Academy of Legal Studies in Business.
[E-mail: sgunz@uwaterloo.ca]

An Identity Theory Approach To

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

An Identity Theory Approach To

Hochgeladen von

Copyright:

Verfügbare Formate

http://hum.sagepub.

The Tavistock Institute

http://hum.sagepub.com/cgi/alerts Email Alerts:

- Jul 10, 2007 Version of Record >>

Das könnte Ihnen auch gefallen