Journal of Information, Communication and Ethics in Society

Ethical implications of the mediatization of organizations

Michael Litschka Matthias Karmasin

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Journal of Information, Communication and Ethics in Society, Vol. 10 Iss 4 pp. 222 - 239
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JICES
10,4

Ethical implications of the

mediatization of organizations
Michael Litschka

222

University of Applied Sciences St Polten, St Polten, Austria, and

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

University of Klagenfurt, Klagenfurt, Austria

Abstract
Purpose The aim of this paper is to give theoretical and empirical arguments for new forms
of communication and structure of organizations within the media and information society.
Organizations must legitimate their licence to operate through social discourses and stakeholder
communication. Possibilities to institutionalize ethics within organizations and possible barriers to
such a programme are analysed.
Design/methodology/approach First, some theoretical arguments as to why mediatisation
challenges organizations to prove ethical commitment are depicted, using a rights-based and social
contract approach. Second, empirical examples for structural and communicational barriers in
Austrian companies show possible practical constraints.
Findings Theoretical findings refer to the usefulness of applying business ethical models
(especially rights-based, and social contract models) to reorganize mediatised organizations. Empirical
findings concern the lack of institutionalized ethics management in companies and the corresponding
problem of PR-style communication instead of stakeholder discourses.
Research limitations/implications The research reported in one section of the paper relies on
the qualitative survey of 14 experts in different branches of the Austrian economy. While interviews
can give a picture on how respondents understand the relevant research question and construct the
respective reality, they are far from providing a representative picture of communicative ethical
problems in mediatised organizations.
Practical implications Practical consequences should be possible, if companies understand
the mediatised and communicative nature of their relationship with society and stakeholders and
therefore react to that challenge by building up reputation through ethics management.
Originality/value The paper gives new insights to the important relationship between
organizations and the public and shows how, e.g. enterprises can legitimate their business models
and secure their long-term existence. New empirical research concerns cases from Austrian companies.
Keywords Mediatization, Organizational communication, Organizational ethics, Ethics management,
Communication ethics, Ethics, Austria
Paper type Research paper

Journal of Information,
Communication and Ethics in Society
Vol. 10 No. 4, 2012
pp. 222-239
q Emerald Group Publishing Limited
1477-996X
DOI 10.1108/14779961211285863

1. Mediatization within society and of organizations

1.1 The mediatization of communicative action
In order to grasp the meaning of the current Zeitgeist, many formulations are popular
in the humanities and social sciences. For example, we find information society, media
society, network society (Castells, 2001, 2002, 2005) or media culture (Karmasin, 2005).
In this article we do not want to reconstruct or discuss the empirical and metaphoric content
of such concepts, but we will follow the included allusions to the relationship of society and
organization. In a society characterized by a general augmentation of communication
possibilities, communicative complexity, and communication aggregation, in which living

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

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

The mediatization of communication (Krotz, 2001, p. 19) changes the characteristics

of reflections on society and on itself[1] as media worlds and living environments
merge (Bauer, 1996, p. 2). If social life outside a mediatized context is hardly imaginable,
this must be valid for the economy, too. What are some implications for economic
organizations?
1.2 The mediatisation of the organization
From an economic perspective the process of mediatisation implies the encroachment of
new kinds of value added based on media-related structures (proceduralization and
storage of knowledge, selection and processing of information, convergence, etc.). Even
if the information society does not exist spatially inclusive and comprehensive, and
there are still agrarian methods of production, industrial structures, and services in the
developing world and in developed countries, the empirical finding of Castells (2002)
holds up, as there seems to be a transformation of labor and employment, as well as of
global production and marketing. As media economists (Doyle, 2002; Picard, 2002) tell
us, technologies like the internet, mobile data communication, data base systems or
intelligent interactive analysis tools are used throughout the value-added chain. They
and others in the field claim that these applications can be used to optimize processes
(e-procurement, supply chain management), integrate employees more productively
(workflow management systems), open new channels to clients and partners (chat
application, e-service, e-commerce), reduce costs (customer relationship management),
and enlarge the knowledge of the organization (e-learning, collaborative development,
field-force-automation). Corporate networks change to social networks; Web 2.0 and
social media applications change the mode of communication between organizations
and stakeholders.
Dealing with communicative processes in organizational contexts has implications
beyond purely instrumentally rational, strategic dimensions. Organizations using such
processes develop into social contractual and interactive organizations (Section 2), whose
boundaries and functions are not only determined by the allocation of resources, but
also by communicative processes. The organization thereby becomes the coordinator of
a value-chain network; the economization of the public sphere (i.e. commoditization,
marketization of social spheres, economical aspects prevailing in/dominating the social
spheres) corresponds to the publication of the economy, and the commercialization of the
media corresponds to the mediatisation of commerce.
The mediatised organization is a publicly exposed or quasi-public organization
determined by the relationship of a recursive constitution of organization and society.
In this communicative sense there are no private organizations (as the difference

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224

of private and public sphere would suggest), only privately owned means of production
and distribution. Ortmann et al. (1997, p. 19) describe the return of society to
organizational theory in the introduction to their anthology:
Part of this dodginess comes from the fact that organization and modern society relate to one
another in recursive constitution so that organizations produce and reproduce exactly those
social structures and institutions under which they operate sometimes, but not always,
with strategic goals. To take this view, defined by Giddens as duality and recursivity of
structure, into account also when the relationship of organization and society is concerned, we
take as a good panacea against all isms and especially the one way thinking of new
institutionalism [. . .][2].

Consequently, communication science has already argued in a few places (Saxer, 1999;
Schmidt, 2000) that organization is understood as communicative construct. The process
of organizing is therefore a process of communication, of creating and dismissing and
finally of processing its own deconstruction (Ortmann, 2002, p. 106). The result of such
processes is organizations which produce content (and by that also publicity and
attentiveness) with specific intentions, even if their strategic core competence lies in other
areas. The organization becomes the network hub within communication and each
enterprise is also a media enterprise. A media company is not only a producer and
distributor of mass media and mass media specific supplies any more. The output
of media companies within the context of conglomerate concentration, convergence, and
changing ways of refinancing reaches beyond the selection and processing of content,
and is moving towards trade (tele-shopping, e-commerce, merchandising) and services
(consulting, financial services, distance learning, logistics, etc.). This is not only true for
the content industry in the narrow sense of the word. A media enterprise in the sense
of the above-mentioned example is not only a (public or private) broadcasting company,
a publishing house, or any journalistically-orientated firm, but any organization
producing, allocating or providing content. This wider sense of media enterprises takes
into account the fact that in the course of convergence and conglomerate concentration,
the boundaries between industries and economic sectors disappear.
This understanding of the organization reflects the dual role of it as:
.
producer of social capital (economy of attention, organization as part of the
public sphere); and
.
producer of real capital (economics of communication and production,
organization as part of society).
By such thinking we take into account the primary role of the organization as
a principal structuring element in a society of organizations (Perrow, 1996) as well
the role of enterprises as central element of value added (in material and immaterial
points of view)[3]. Organizations determine when, where and for how much time
human beings work, live, love or consume. Organizations like schools, universities,
hospitals, media, production companies, banks, insurances, etc. decide upon the
condition Humana. They decide upon possibilities and conditions of purchase, upon
capital flows that determine winners and losers in professional life, upon pensions and
retirement provisions, they compress time (see just-in-time-production) and expand
time (in the hope for interest payments), they define spaces for gainful employments
and structure networks, they simply construe the world in a complex environment.

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Taking all this into consideration, they also become moral instances with the possibility
of being attributed to ethical responsibility (Ulrich, 2001; Noll, 2002; Gobel, 2006;
Karmasin and Litschka, 2008).
In the rest of this paper the discussion centers on ways of how such responsibility
can be defined and given its place within the organization. This is a task for business
ethics and, where media enterprises are concerned, for media ethics based on economic
ethical concepts.
2. Communication and legitimization of organizations: rights and social
contracts
The public exposure of organizations has led to a global discussion about the nature,
goals, and responsibility of them in the information/knowledge society. Basically, we
can divide the views of the many writers on this topic into two world views[4]: either
the development described above is seen as having bad consequences for society and
being a sign of the problematic implications of capitalism, or it is seen as giving hope
for an integration of organizational and societal preferences. Both viewpoints criticize
the shareholder focus of modern organizations, but while the first group puts an
emphasis on social (and media) policy to keep the possibilities of, e.g. companies within
clear cut borders, the other group believes in the self-restraining power of the
stakeholder approach to organizational management. To manage for stakeholders
(without the need for public intervention) would bring out the positive effects of
self-regulation, and the more stakeholders are included into the firm strategy, the more
societal needs can be accounted for by the organization.
The first group sees the evil implications of organizations (especially firms), in the
form of globalization, conglomerate concentration, new exploitation, loss of flexibility
and puts them under general suspicion (Glotz, 2000; Ferguson, 2001; Soros, 2001;
Forrester, 2001; Mies, 2001). These authors criticize that through concentration and
mediatisation, the power of enterprises grows and is misused, that incentives for
unethical behavior rise, that the possibilities to sanction such behavior decline, and
that the information society degenerates to a global exploitation society under digital
prefixes[5]. Only a strong framework order policy may secure the bonum commune
and organizations can be directed towards social responsibility only through the threat
of enforcement.
The second group mostly sees the benefits of publicly exposed organizations. Public
communication influences politics, consumption, and investment and by that coerces
the return of society into organizations[6]. Concentration exposes them to the public
and makes them the focal point of ethical demands beyond market or state. The process
of dealing with the self-produced public sphere allows them to understand ethical
demands not as an imposition but as an economic necessity and competitive advantage
(Porter and Kramer, 2003). This group hopes for the re-integration of ethics into
the economy[7] for the control and pressure of the media as fourth power, for the
involvement of stakeholders, and for a globalization of not only commerce but also the
public (Karmasin, 2002). The stakeholder approach is one way organizations can
hope to live up to such expectations. As Freeman and Evan (1993, p. 262) put it:
A stakeholder theory of the firm must redefine the purpose of the firm. The stockholder
theory claims that the purpose of the firm is to maximize the welfare of the stockholders,
perhaps subject to some moral or social constraints, either because such maximization leads

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

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

226

The Corporation is an organization engaged in mobilizing resources for productive uses in

order to create wealth and other benefits (and not to intentionally destroy wealth, increase
risk, or cause harm) for its multiple constituents, or stakeholders,

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

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

The stakeholder discussion implies a re-definition and re-conceptualization of

organization or enterprise[8] in the sense of a rights-based and social contractual
value-added community. For both possibilities there are philosophical and business
ethical arguments. These arguments are outlined below.
Starting with a rights-based approach and based on the fact that in an economic
environment characterized by labor division and complex projects we cannot assign
(at least not easily) clear responsibilities to individual persons, we must deal with the
phenomenon of collective action (Lenk and Maring, 1992, p. 154). This phenomenon
can be seen in big projects in companies, strategic actions, complex causal processes,
asymmetric information, or decisions made in common. At the same time, as there is an
individual responsibility of group members, there also seems to be a collective
responsibility of the organization as a whole. Either we can retrace the collective
responsibility to individual members or make a group responsible, irrespective of any
single (or all) members responsibility (Lenk and Maring, 1992, pp. 155-9). Also, before
decisions are made and consequences or motives can be evaluated, a so-called inner
structure of an organization plays a major influencing role (Gobel, 2006, p. 92). These
are decision systems, organizational structures and cultures, certain processes, etc.
which are prior to individual decisions. An inner structure is also a factor to be dealt
with when rights and responsibilities of organizations are at stake.
Werhane (1992, p. 329ff.) gives a philosophical legitimization for the often stated
demand that organizations be responsible for their actions and decisions: she depicts
the case of economic organizations (especially corporations) which very often demand
to be free from external influences (like politics or moral obligations), so that they may
pursue their economic success without constraints. This demand arises from the fact
that they operate within a capitalist framework which supposedly only leads to the
public good if enterprises are allowed to act free from public (or governmental)
influence. Basically, what these organizations claim are legal rights to economic
freedom and autonomy. To legitimize such rights, they must also be constituted as
moral rights. If such moral rights exist, they come together with moral duties and,
therefore, with the corresponding responsibility. If this reasoning is correct, as
Werhane states, organizations like corporations can be made responsible for their
actions and decisions without recurring to the individual members responsibility. Let
us look at these thoughts in more detail.
Persons, according to Werhane, have primary moral rights, some of which are
common to all human beings (like the right to live), whereas others can only be claimed

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by autonomous, rational adults (like the right to freedom), as they are capable of primary
self-dependent actions. It is obvious that the named rights as well as freedom in
general do not have a universally agreed upon meaning (see the discussion in Sen (2009),
on human rights and positive freedoms). Also, even if there were such a consent, they
might be violated quite easily and must therefore be secured by the respective laws.
The actions of a corporation, then, are secondary actions, as they are constituted by
primary actions of such rational adults. Corporations are not identical to the persons
of whom they consist, even though hierarchical structures give some persons more
responsibility and authority than others. That is, also their rights are not identical,
but derived rights from individual persons rights. It follows that corporations (or other
organizations) have secondary moral rights, and if all moral rights are equal, also
secondary moral rights bring with them obligations and duties. One of them would be to
accept the rights of all other persons and corporations as equal; so corporative rights can
imply duties to individuals, too, e.g. to not to claim more freedom for itself than to assign
to its own organizational members. As organizational rights are secondary rights,
derived from individual rights, they cannot claim priority above individual rights.
But even as a secondary moral actor (with secondary moral rights and obligations)
organizations can be made responsible for their actions, and this can be done
independently of individual moral responsibilities, from which their moral obligations
are derived. This is because they must first secure the primary rights of persons
before they can claim their secondary rights, e.g. to freedom (Werhane, 1992, p. 332).
An example would be that organizations cannot deny its workers some basic labor
security measures (primary right) by pointing to the economic (secondary) right to
expand in another country with fewer regulations regarding labor security.
Using another approach often used in business ethics, namely social contract
theory, we find even more compelling arguments for a re-definition of the concept of an
organization. Social contract theory (contractarianism) tries to explain moral actions
as coming from an agreement between individuals, which they commit themselves to,
according to strategic deliberations. As such, this approach is functionalist in nature,
because the arising (mostly implicit) contracts must be advantageous to any of the
participating parties. Starting from an original state, where people have different
knowledge about their status or fortune or talents, they begin to bargain and construct
a society in which their preferences can be best fulfilled (a cooperative surplus can be
reached). This agreement is idealized insofar as it is infeasible to have all members of
a society bargain about such a topic, but nevertheless it is binding because there are
good reasons why everybody could have agreed to the arising norms had he or she
really participated in the bargaining (Kersting, 1996, p. 265). A paradigmatic social
contract approach to a just society came from Rawls (1988, 2006), who conceptualized
society as a fair system of cooperation to reach mutual benefits. Other world views
on the functioning of societies could of course also be used here, e.g. a discourse ethical
or a system theoretic view.
Returning to our problem of legitimizing that organizations have specific obligations
and social responsibilities, which is a demand we have seen coming especially from
stakeholder theory, an application of social contract theory to business and media ethics
seems fit. Why should an organization accept certain stakeholder rights, prioritize some
rights over others, and give itself restrictions which may constrain its own rights?
Donaldson (1989, p. 44ff.) gives a contractarian answer.

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228

In this view, an enterprise is an organization which arises out of a thought

experiment, because it contributes more value to society (e.g. employees or consumers)
than individuals working for themselves could ever manage to provide. Value in this
instance means that the participating individuals can make themselves better off when
adhering to the (virtual) contract and contributing to organizational goals with their
efforts, because this contribution will yield them something valuable (something that
satisfies their preferences). From a normative and social point of view (where societal
preferences and value judgments are included), we would join such a contract only if it
is secured that fundamental principles of human rights or justice are adhered to by the
enterprise. Which kind of rights or principles of justice arise in the end is not important
as long as they are acceptable to all parties to the contract. Obligations can be derived out
of these rights (similar to Werhanes approach, see above), e.g. that managers have to
carefully administer the money funds of shareholders. As in all of social contract theory,
this arises from an idealized situation, but still it is rational to expect such a result. What
makes this analysis more than a stakeholder analysis, according to Donaldson, is that
obligations coming directly from the social contract are qualitatively different from
those which are derived: the former must be fulfilled before the latter are touched.
He gives an example (Donaldson, 1989, p. 89): it seems a rational result of a social
contract between a corporation and society that rights to secure the subsistence of
employees are established. A derived obligation for the corporation can consist of two
elements; the organization must take care not to violate this right itself (i.e. must not pay,
e.g. lower wages than subsistence would demand), but it must also ensure that
employees are protected from a violation of this right (e.g. must not buy land to use for
coffee production when the land was previously used to provide food). Even if in the
latter case the enterprise did not directly cause a shortage of nutrition, it has still violated
the basic right of employees through lack of care and provision.
We have seen that there are at least two possibilities, a rights-based approach and
a social contract approach, to legitimize the moral responsibility of organizations, a
necessity derived from the mediatisation of organizations and of communicative actions
(Section 1). In either case it is important to secure the contribution of organizations to the
bonum commune. Should public deliberations not suffice to reach this goal, the
legitimization discourse will also be motivated by political framework orders. From
a rational point of view this is unnecessary: the adoption of social responsibility is an
imperative of business integrity (pertaining to communicative rationality) as well as of
ensuring the long-term existence (pertaining to strategic rationality). Even if Peter
Ulrich, the Swiss Business Ethicist, would not completely agree to a social contract
approach to define the moral obligations of organizations, he provides a good summary
of the discussion about stakeholders, moral obligations of organizations and the way
value added is generated in the media society (Ulrich, 2001, p. 443): if we accept the
republican-public legitimization duty of an enterprise, it follows that the stakeholder
approach is the correct encompassing perspective of an organization as a quasi-public
value-added institution. An organization is put in an unlimited public legitimization
discourse in the civil society and this discourse is acknowledged to be the systematic
place of organizational morality. In public deliberation processes between rational
economic citizens, the integrity of an enterprise has to prove itself and only in this
process can it also be legitimized.

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After having given some arguments why the mediatization of organizations leads to
ethical legitimization processes in order to keep the license to operate, we want to
present some empirical findings for Austrian companies. What exactly are structural,
organizational, and political barriers to such processes?
3. Some empirical findings: organizational and communicative barriers for
ethical decision making in Austria
In a project for the Jubilee Fund of the Austrian Central Bank (Project No. 12939) a survey
was conducted on how managers make decisions in ethical dilemma situations. In the
quantitative part of the project, the underlying ethical decision bases in such situations
were analyzed (e.g. fairness criteria, altruism, reciprocity (Litschka et al., 2011)).
The qualitative part consisted of expert interviews with researchers and managers in
order to explore communicative and organizational barriers to these ethical decisions.
For the interpretation of the data we relied on qualitative research methods with an
approach adapted to management science (Glaser and Laudel, 2009; Bogner et al., 2009;
Myers, 2009). The interviews gave a picture of how respondents understand the relevant
research question and construct the respective reality (Cropley, 2005).
Sampling was undertaken with a view to integrate different disciplines and different
industries; five professors from economics, business administration, communication
sciences, and economic history, working in three different Austrian universities, made
up the sample of researchers, while nine managers from banking and finance,
information technology, education, steel industry, airline industry, oil industry,
commerce, and PR (all working in Austrian headquarters, but partly in international
companies) represented the management part of respondents.
The guided interview included the topics, among others (Table I).
The 14 interviews were conducted, recorded, transcribed, and interpreted using
qualitative analysis techniques. We did not follow a hermeneutic-interpretative
approach like in Grondin (2009) or Wernet (2006), but used the research logic of Mayring
(2002, 2008) and Mayring and Glaser-Zikuda (2008). Here are some of the results
concerning structural and communicational problems.
Basically all interviewed organizations were of the opinion that it is sensible to have
written guidelines and codices which can then be anchored in the corporate culture.
While the academic experts (professors) in the survey stressed the importance of giving
ethics a place within enterprises and combining such guidelines with the respective
possibilities to sanction them, managers put their trust more in intrinsic motivations of
employees to follow such guidelines. Also, managers are more prone to use for example
an ethics codex as an instrument of external communication (Section 4), a fact also
exemplified by their understanding of the concept of stakeholder as target group.
Scientists on the other hand see the stakeholder approach as a socially desired strategy
of organizations and want conflicting interests of stakeholders to be ethically analyzed.
In our survey, ethical dilemma situations could be attached to three levels of
analysis: the individual level of management, the organizational level of the enterprise,
Framework order problems
Ethical dilemma situations in management
Structural problems and organization of ethics

CSR
Ethical problems of new ICT
Ethical conflicts with personnel management

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Table I.
Topics of semi
structured interviews

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230

and the social level of the market and politics. These levels correspond with the
respective concepts used in ethics, namely management ethics, business ethics, and
economic ethics.
On the individual level, role conflicts of managers (i.e. to be another person in the job
than in private life, with corresponding conflicts of ethical norms when their income is
concerned) were cited very often. Experts also called this problem homo oeconomicus
vs homo politicus. It also seems that modern organizations are not fit to guarantee
a certain work-life balance, as their primary goal is concerned with productivity.
The orientations towards bonus payments was also mentioned as problematic, because
sustainable decisions are not to be expected from such short-term incentives.
On the organizational level, the informational advantage (in the sense of asymmetric
information) of enterprises was stressed. According to the respondents not to use
this advantage to the detriment of customers or employees was a demand of fairness,
and clear rules for this behavior were wished for. The short-term necessity of publishing
quarterly reports that might be sugarcoated for the public was seen as a direct
antagonism to the demand of the stakeholder approach, which promotes transparency
and openness towards stakeholders. For such (and other) short-term necessities,
a shareholder-orientated strategy of firms was charged. Some managers were even
forced to dismiss people just because of this dominance of shareholder value. They said
that even when the business administrative sustainability of an organization was
secured, there could still exist a lack of social and ecological sustainability. One
important question on the organizational level was the tasks and moral limits of the new
information and communication technologies (ICTs). While managers deemed it
necessary to have the possibility of observing certain behavior of their employees
(e.g. have access to e-mails if they consent to that), they also were aware of the basic
problem of data protection and private sphere that employees must be able to enjoy.
Professors said that the pressure to legitimize an organizations action has become
harder as the flood of information that could be reported has also increased. So there
might be a dilemma of making organizational decisions transparent to stakeholders and
processing only as much information as is feasible.
On the social level of the market, the competitive pressure in modern market
economies led some organizations to opportunistic behavior in the sense of adapting
for example company goals to only include monetary or shareholder targets. This
framework order might prefer particular interests (of economic organizations) to
collective rationality (demanding also fairness or distributive justice). An example given
by respondents was the social goal of full employment that is contrasted (and impeded)
by the organizational goal of cost cutting and personnel reductions. Therefore, the
economic freedom the market economy can provide is not always concurrent to the
responsibility (communicative and social) the organization should take on.
Both respondent groups have also given some explanations as to why, in their opinion,
such dilemma situations can arise; they identified the following structural reasons.
On the individual level, the very career driven and opportunistic behavior of
managers was ascribed to the problematic incentive of bonus payments according to
short-term decisions (quarterly reports, etc.). From this and the fact that managers do
not get any kind of education concerning ethical reasoning, emerges a role model lacking
competence to decide on ethical matters and leading to bad personnel decisions.

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On the organizational level, we often find hierarchic and centralistic structures,

a form of organization, e.g. Steinmann and Lohr (1994) which is deemed detrimental to
ethical decision matters. Both kinds of experts (researchers and managers) found the
short-term strategy of relying on shareholder value measures problematic (professors
called this a single-goal-orientation), as well as the lack of credible and enforceable
rules within the organization. Especially important for the communication and cultural
embedding of such rules is the possibility to give ethics a place within an organization,
e.g. in the form of an ethics office or a codex (Section 4).
On the level of the framework order and social ethics, respondents named the
following impediments to ethical behavior in organizations and of single persons: the
culture of capital market orientation in our economy with the pertaining pressure of
competition, the lack of a critical public regarding the observance of organizational
behavior and management decisions, the lack of certain laws limiting the possible
actions of firms, and the lack of educational possibilities for managers to learn ethical
reasoning (as business ethics in Austria is not anchored strongly in business curricula
at schools and universities).
Apart from these three levels of ethics the new ICT were mentioned as a special case
in organizational responsibility. The way information is forwarded to the public was
recognized as an important problem of communication ethics. As more and modern ICT
is available to organizations, we wanted to know from the experts how this influences
their everyday decisions, especially when ethical problems are concerned. Answers
centered around the topics control, private sphere, data protection, information overload,
and the possible effects on employees.
Basically the new ICT provide new ways of control to management, an example
would be the observation of employees. While the observation of mobile phones and the
surveillance of employees by cameras was deemed morally questionable or forbidden,
the access to e-mail traffic in organizations was defined as morally correct as long
as employees and works council consent to that action. As the data protection law in
Austria does not cover all possible cases (e.g. the handling of private e-mails in firms),
managers believe such (restricted) access to e-mail accounts to be acceptable as long
as internal discussions about the way this comes about are institutionalized.
A disadvantage of new ICT was seen when many persons secure their decisions by
including everybody as addressees in an e-mail conversation. This would lead to an
unmanageable flood of information and be one of the major sources of stress (see above:
missing work-life-balance) in organizations. Respondents wish for more transparency as
regards this problem and are willing to reach such transparency in public deliberations,
as discourse ethics would demand.
The researchers in the survey do not believe ICT to be an ethically neutral topic either.
It is always a question of how they are used, e.g. to observe or to secure something.
The usage of instruments is always connected with certain interests. Too much
observation can be responsible for serious demotivation of employees and is therefore
rejected by respondents. Organizations must ensure that they do not exploit any kind of
strategic advance knowledge and protect the private sphere of their personnel. The
change of the way organizations communicate with their stakeholders can also bring
about advantages from an ethical point of view. People can write e-mails directly to
responsible functions within an organization, they demand clarification of fact about
specific practices by firms, and even when data protection is not taken seriously enough,

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this fact can also be exposed by the media. From an ethical standpoint the medias role
as fourth power has become more meaningful and technical possibilities of
communication have increased the legitimization pressure of organizations.
While many of the above-listed problems are seen in a similar way by both managers
and researchers, there are some different views as to possible solutions. Managers
say that incentives to their actions and decisions are predetermined by organizational
culture, whereas professors stress the fact that this culture must be actively influenced
in the direction of a positive incentive system. Managers concentrate on the individual
and organizational level, scientists rather see the framework order as a central starting
point for solutions. In addition, professors see a void in the Austrian educational system,
as the economic core courses economics and business administration often do not teach
ethical reflection capabilities (via learning of basic theoretical concepts and solving
case studies).
Following the theoretical analysis of Chapters 1 and 2 and the empirical examples
of Chapter 3 we now suggest some communicative and organizational measures to
incorporate ethics, rules, and incentives into an organization.
4. Ethics needs organization and communication
4.1 CSR vs PR
The public legitimization discourses already mentioned in Chapter 1 do not only
change the relation between organization and public; they change (as we believe) the
organizational structures themselves. Only if responsibility is institutionalized will
there be a solid legitimate basis beyond solely communicating and selling a certain
image. The concept of corporate social responsibility (CSR) tries to encompass some of
the supposed dichotomies of ethics and economics. Often, the degree of seriousness this
topic is dealt with depends on the moral disposition of managers themselves.
According to the success of the current business, they may take CSR seriously or they
may not, which can make the concept one of sunshine value, but not of real and
reflected ethics. Activities focusing on sponsoring, contributing, etc. which can all be
attributed to charitable motives and the way profits are distributed, but not the way
profits are earned in the core business, can be called donation ethics (Thielemann and
Ulrich, 2009); such activities are very easily prone to the suspicion of being pure PR
actions, making business ethics the business of ethics.
The central role of institutionalizing ethical questions and problems is to overcome
such suspicions and not to rely on the individual commitment of single individuals.
Such managerial ethics is of course very important within organizations, but very often
not sufficient to reach systematically reproducible patterns of actions which could
also survive a change in management. The goal is therefore to install processes
of self-governance of ethical reflections, which shows that ethical problems must
be solved collectively, not individually (in the sense of process ethics, see Krainer (2001,
p. 229) or Heintel et al. (2006); see also Section 4.3).
4.2 Institutionalizing: some possibilities
The ethical transformation of the organization following the above arguments implies
a systematic, structured, and collective handling of moral problems. The success of
such an ethics management or integrity management depends on processes of
self-commitment (e.g. management systems), structures (e.g. institutions), and internal

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and external communication of measures (Waxenberger, 2004, p. 139). Of the many

possibilities to let ethical responsibility work not only on the communicative surface,
but also deep within organizational structures, Karmasin and Weder (2008) name the
following.
A code of ethics writes down the self-commitments and adapts the more general
rules of an industry codex[9] to more firm specific problems. Considering our pluralist
society it is not to be expected that codes understood as a constitution of an
organization will be very similar content-wise, but their publication makes transparent
what the values decisions are based on and how conflicting values will be handled.
Besides, this is a possibility for smaller firms, which have difficulties to afford more
refined processes of institutionalizing, to prove their ethical commitment beyond the
individual preferences of their owners.
To give ethical problem solving a specific place within organizations, an ethics
officer or an ethics commission can be installed[10]. A commission very often consists
of an internal and external director and an ethics officer, but might also temporarily
include representatives of some stakeholder groups into its decision process (Noll,
2002, p. 127). Beneath monitoring the compliance with the stated rules, an ethics office
can also serve as a communication hub for ethically relevant questions.
Ethics training can serve as a vehicle to make the rules known to organizational
members, by teaching some basic reflection models on ethics and solving typical
dilemma situations. Awareness raising, discursive abilities, moral competences,
intersubjective agreements, and personnel development are in the center of such
programmes. In the long run, this can also lead to a better personnel selection (think of
assessment centers) and career planning in organizations.
The goal of an ethics hotline, used particularly in the USA, is to give stakeholders a
voice when moral or legal asymmetries come to light, and to consult them in conflict
situations. It should encourage discourse on such topics and give ethics officers an
additional tool to get information.
A very process-orientated measure would be an enlargement of reporting activities.
A management strategy including all stakeholder interests, not only those of shareholders,
should take into account more reporting initiatives than the usual instruments
(balance sheet, profit and loss account, etc.). Differing legal and ethical issues need various
decision models, reflected in more informative reports based on new (ethically based)
standards; examples would be the EU Standard CSR Communication and Reporting
(www.csreurope.org/matrix), or some evaluation standards like the SIGMA-Guidelines,
the program Account Ability 1000 (AA 1000), the Business Conduct Management
System Standard (developed by the Ethics Officer Association), and the program
Social Accountability 8000 (SA 8000). Such standards are applied within so-called
ethics audits, comparable to financial audits in the business world.
We conclude our paper by referring to some implications of the above-said to
organizational communication.
4.3 Organizational communication as (process-) ethical project
Beneath the institutional and process-orientated implementation of ethics, the
communication of these measures (in the sense of taking responsibility seriously by
communication) is very relevant. Even after implementing a stakeholder management
system (see above), there still needs to be secured stakeholder commitment and

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the motivation to participate in organizational decisions. This is mainly a communicative

task and a combination of direct and indirect communicative measures seems most fit
to reach that goal: stakeholder dialogues taking place in so-called stakeholder assemblies,
very similar to annual general meetings of corporations, are an important communication
(and legitimization) tool. The feedback of stakeholder interests with demoscopic
methods (e.g. stakeholder panels) and the usage of social media and wikis (Rochlin and
Farrar, 2008) are methods to maintain dialogue and interaction with stakeholders.
Besides offering stakeholders modern communication possibilities, organizations
wanting stakeholders to permanently participate in these processes must provide
incentives to them. Should they get the impression that their participation serves only
to generate data which management can use for economic purposes, or to show the
legitimizing efforts of an organization without any controlling of the underlying value
base, the demand for communication will be reduced. Freeman and Evan (1993)
suggest the institutionalizing of the stakeholder approach in the form of a stakeholder
board of directors, consisting of different stakeholder groups:
These directors will be vested with the duty of care to manage the affairs of the corporation in
concert with the interests of its stakeholders. Such a board would ensure that the rights of
each group would have a forum, and by involving a director for the corporation, would ensure
that the corporation itself would not be unduly harmed for the benefit of a particular group. In
addition, by vesting each director with the duty of care for all stakeholders, we ensure that
positive resolutions of conflicts would occur (Freeman and Evan, 1993, p. 264).

This board of directors should, according to Freeman and Evan (1993), adhere to some
general stakeholder management principles, written down in the codex:
P1: The corporation should be managed for the benefit of its stakeholders, its customers,
suppliers, owners, employees, and local communities: The rights of these groups must be
ensured, and, further, the groups must participate, in some sense, in decisions that
substantially affect their welfare.
P2: Management bears a fiduciary relationship to stakeholders and to the corporation as an
abstract entity. It must act in the interests of the stakeholders as their agent, and it must act in
the interests of the corporation to ensure the survival of the firm, safeguarding the long-term
stakes of each group (Freeman and Evan, 1993, p. 262).

Of course these groups are not homogenous, but we can define certain basic rights
pertaining to all individual members of each group, e.g. the right of not being violated
physically. The respective representatives in the board can also act according to a
specific stakeholder bill of rights, building the basis of a stakeholder assembly, the
content of which Freeman and Evan (1993, p. 264) circumscribe as follows:
Each stakeholder group would have the right to elect representatives and to recall
representatives to boards. [. . .] Each stakeholder group would have the right to free speech,
the right to grievance procedures inside the corporation and if necessary in the courts, the
right to civil disobedience, and other basic political rights.

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

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of that path, at least as important as the adoption of certain management principles,

certification, and auditing.
Organizations institutionalizing and communicating ethical demands as described
above have another advantage: they evade the philosophical difficulties of setting general
moral principles (like, e.g. truthfulness, fairness, right to privacy, objectivity) above others
and therefore focusing too much on material principles. The process-orientated approach
suggested in this paper is more in line with the discourse ethical principle of having moral
norms evaluated by other persons concerned. It is not sensible in a pluralist world to set
material principles not everybody would agree to under specific circumstances. Discourse
ethics (and its application to organizations process ethics (Krainer, 2002, p. 164f.))
stresses the self-determination of rational individuals and, by analogy, lets organizations
decide on moral matters by having formal principles (and a process) at work,
guaranteeing equal participation and discussion rights for example.
We have come full circle now, referring to the arguments of the first part of the paper.
The change of the public sphere and the mediatisation of the organization, call for a change
in the relationship of the public and the organization. Public pressure causes the
institutionalizing of ethics in organizational structures. Organizations get the license to
operate for the public good through appropriate communication and a changing strategic
self-conception. Process and structural organization become network hubs of production
and communication, and by consequence they are networkings of networks (Castells,
2001, p. 191f.). The goal of organizational communication is not to communicate the
quality of goods and services, to communicate about the organizational members, and to
govern the public any more[11] but to produce social capital (trust and reputation) that can
legitimize the organizations actions. This is a communicative restructuring of the
organization and a reorganizing of communication. The main dichotomy of concepts is
legitimate vs illegitimate, and not legal vs illegal or profitable vs not profitable.
While there are certainly connections between legal and legitimate claims (it might be said
that many laws incorporate moral and ethical beliefs of a certain society), there are also
clear differences (many claims are legitimate, but not yet incorporated into law, many laws
can be questioned from an ethical standpoint). To get philosophical validity, claims (e.g.
from stakeholders or organizations) must be argued for, using also moral arguments.
External effects of organizational behavior are to be accounted for, and this is done in
(partly) public legitimizing discourses (before legal questions come to light, and before the
question of profits is asked). The convergence of organization and public implies not
only that organizations gain social influence, but also that this influence is now public and
organizations are at the center of ethical discourses.
Notes
1. As Krotz (2001) puts it, mediatisation in this framework means, that during social
developments communication differentiates itself through ever new media into many forms.
To be more exact, it is not the media who play the active part, but people and their dealing
with media; they constitute these changes by including ever more media into ever more
everyday actions and processes, and for them these ever new media present ever more
communicative possibilities and potentials which can be realized or not realized.
2. Our translation.
3. We do not differentiate here between the concepts organization, enterprise (for profit/not
for profit) for spatial reasons.

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

236

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

For single companies, e.g.: www.essentialaction.org/shell; www.saigon.com/, nike; www.
monsantos.com; www.mcspotlight.org. For consumption: www.ethicalconsumer.org. For
CSR in Europe: www.csreurope.org; www.accountability.org.uk. For organizations:
Transparency International (www.transparency.de), The Institute for Business and
Professional Ethics (http://condor.depaul.edu/ethics), Center for Corporate Citizenship e.V.
(www.corporatecitizen.de), International Labour Organization (www.ilo.org), etc.
6. This is also demanded by the European Commission who stated the goal of making Europe a
worldwide leader in the realm of CSR (http://ec.europa.eu/enterprise/csr/index_de.htm).
7. See www.business-ethics.com, practical organizations such as www.eoa.org, www.synethos.
org/ISBEE, the European Business Ethics Network (www. eben.org), the German network
business ethics (www.dnwe.de), the Wittenberg-Center for Global Ethics (www.wcge.org),
the European Ethics Network (www.kuleuven.ac.be/een), the Ethical Trading Initiative
(www.ethicaltrade.org), the Institute for Global Ethics (http://globalethics.org), the Institute
of Business Ethics (www.ibe.org.uk), the Social Venture Network Europe (http://213.206.79.
171/svn/home/home.php), the International Business Ethics Institute (www.business-ethics.
org), the network for a socially responsible economy (www.nsw-rse.ch/d/verein/ueber_uns.
html), the New Academy of Business (www.new-academy.ac.uk), the Centre for Applied
Ethics (www.ethics.ubc.ca), etc.
8. A recent anthology depicting the history of the stakeholder approach is Zakhem et al. (2008);
the stakeholder approach strictly seen as organizational ethics is argued for in Phillips
(2003).
9. Like, e.g. the standards of the Global Reporting Initiative, the UN Global Compact (ethical
standards for companies including human rights, labor rights, and environmental rights),
the International Labour Organization-Convention, the OECD-principles for multinational
enterprises, etc.
10. For example, Vodafone does not consider corporate responsibility (CR) as a mere
philanthropic gesture or add-on. It is part of our core business. Our CR management mirrors
the way we manage our business, with a global team of CR managers working across the
business with a presence in each local operating company, in www.vodafone.com/start/
responsibility.html; Vodafone 2007/2008.
11. That is, the governance of indicators like awareness levels (impact values, brand awareness),
the influencing of public opinions, the creation of images, the establishing of investor
relations, the supply of differentiation, etc.
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About the authors
Dr Michael Litschka is Professor at the University of Applied Sciences St Polten, Austria. He has
a PhD in Economic and Social Sciences and teaches media ethics, media economics, and business
ethics. His main research interests are in economic and organizational ethics, business ethics of
media enterprises, and management ethics. Michael Litschka is the corresponding author and
can be contacted at: michael.litschka@fhstp.ac.at
Matthias Karmasin is Full Professor at the University of Klagenfurt, Austria. He has a PhD
in Communication Sciences and a PhD in Economic and Social Sciences and teaches media
management, media ethics, and communication sciences. His main research interests are in
organizational communication, business ethics of media enterprises, and philosophy of
communication.

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