by Suzanne Shanahan and Noah Pickus

In recent years, we’ve watched a series of notable public scandals unfold in American society. There was accounting fraud at Enron. The New York Times was accused of plagiarism. Prisoners at Abu Ghraib were tortured. Sexual abuse allegations rocked the Catholic Church. And America’s favorite pastime was identified as a steroid-fueled sport. Is society in an unprecedented moment of ethical decline? Do these ethical crises share a single underlying cause?

In response to these questions, the Kenan Institute for Ethics organized an interdisciplinary group of two dozen faculty and graduate students from across Duke University and the United States to examine ethical crisis and change. Over the past two years this interdisciplinary research consortium, Changing Institutional Cultures, has been investigating how best to understand, assess, and improve the ethical cultures of military, religious, business, and educational institutions.

As we began our work we immediately made two observations. First, there is very little empirical research explaining the nature and origins of ethical crisis, none of which looks across institutional or organizational forms for explanations. Second, while moments of ethical crisis offer opportunities for ethical reflection, there is little consensus about the best strategies to create effective change in these moments. Indeed, organizations often do the very things that we know don’t work in moments of crisis. Two practical and pressing questions arose from these initial findings: How do institutions learn to prepare for, respond to, or recover from ethical crises? And wouldn’t it be helpful to have this information available and accessible to organizations that find themselves in such situations?

To begin answering these questions, we sought to understand ethical dynamics across a range of social institutions and historical periods. We asked, for example, how the introduction of women into higher education institutions at the turn of the century was similar or dissimilar to the racial integration of the military several decades later. Or why contemporary crises seem to affect the Catholic Church more than Islamic institutions.

In gathering and reviewing the existing research on ethical crisis and organizational change and drawing upon a wide range of faculty expertise—including philosophy, religion, law, psychology, business, and public policy—we have collectively developed a novel, interdisciplinary approach to ethical culture and crisis. This approach serves as a framework for understanding why some institutions are more susceptible to crisis or more amenable to redress. It is a framework we expect to be of interest to academics, policy makers, and organizational reformers alike. We’ve identified five key components of organizational structure and purpose that help us to better understand the causes and consequences of ethical crisis: accountability, organizational structure, social contract, identity, and mission.

Accountability refers to how explicitly or implicitly expectations are communicated and enforced within an institution’s hierarchy. Militaries, with their strict, clearly defined chains of command, have explicit accountability regimes while universities, which foster considerable organizational autonomy among faculty and deans, tend toward more implicit accountability regimes.

Organizational Structure ranges from hierarchical to horizontal. The Catholic Church, for example, is a hierarchical organization, while Islam often assumes a more horizontal form. Dissent—political or ideological—is more routine in horizontal forms and may help to diffuse crises before they reach a critical stage. In contrast, a crisis anywhere in a hierarchical organization is a systemic one. Yet hierarchal organizations, like organizations with explicit accountability regimes, are often more amenable to speedy intervention following a crisis.

Social Contract refers to the formal or informal relationship an institution has with its stakeholders. Military and business institutions, for instance, have formal social contracts while those of higher education institutions are more informal. Ethical crises—violations of the social contract—are more readily observed in military and business institutions, and there are formal (if difficult to negotiate) channels for efforts to address such violations. In higher education, the social contract is loosely held amongst a variety of constituencies—students, faculty, parents, alumni, government regulators, civil society—which makes swift identification and remediation of an ethical crisis more difficult. Ethical crises often lead to explicit efforts to clarify the social contract in institutions with either form, as recent calls for greater accountability in higher education indicate.

Identity refers to the emotional sense of belonging that institutions generate and perpetuate. Identity can be a more or less pronounced component of institutional culture and can span the spectrum from strong to weak. Business organizations, for instance, typically have weaker identities than religious organizations. The emotional identity and resulting sense of psychological ownership can also vary significantly within institutions.

Mission refers to either an implicit and diffuse or explicit and detailed statement of being and purpose. What does an institution actually say it does? Business organizations tend to have definitive and detailed mission statements and deviations from the mission are more quickly observed and addressed. Higher education institutions, by contrast, tend to have more general and diffuse mission statements such that while crises may arise less frequently they may also be far more difficult to confront and remediate.

Comparing component combinations both within and between institutions further demonstrates the explanatory value of this framework. For instance, Islamic institutions in the United States represent a strong sense of communal belonging that is coupled with a highly decentralized and diffused organizational structure. This combination of strong identity and weak structure has enabled Islamic institutions to respond well to the tensions and strains of a post-9/11 America and to be relatively more resilient to ethical crises in contrast to mainstream Protestant organizations. As another example, the explicit accountability and formal social contract seen in militaries may make it easier for such institutions to respond to ethical crises.

The case of ethical codes (variously termed honor codes or codes of conduct) provides another interesting example of how these components combine to help us understand crisis and response conditions. The strong sense of mission and identity often associated with militaries—and embodied in their ethical codes—can provide a highly effective tool in responding to certain kinds of ethical crises. In other cases, those codes can serve as significant barriers to change. For example, with the attempt to integrate women, the strong mission and vibrant, well-articulated identity of the military was a significant impediment to necessary change. It is precisely these moments of institutional crisis and change that we hope to explain.

The central task in the coming year is to develop a series of case studies that will employ this framework to further understand how the attributes of institutional ethos create crisis and response conditions. Understanding this relationship will create new knowledge on crisis, organizational culture, and ethical change. Ultimately, we expect it will offer practical guidance for a range of institutional stakeholders seeking to understand and improve their organizational culture.