Unit 05: How a Poor Ethical Climate at One Organization Can Spark Positive Change at Countless Others

Ethical dilemmas in the workplace are never a good thing but sometimes one comes around that catches the attention of a nation and incites change on a massive scale. Harvey Weinstein is the co-founder of an independent film studio called The Weinstein Company and was the producer and distributor of over 80 Oscar-winning films. At one time, Harvey Weinstein was considered to be one of the most revered figures in modern film making. Things changed drastically in 2017 when the New York Times ran an expose that publicized multiple allegations of sexual misconduct committed by Weinstein. The backlash from the story was major outrage and disgust directed towards the producer. Once the NYT story broke, dozens more women came forward with condemning stories related to Weinstein’s sexual abuse. To date, more than 60 women in the film industry have come forward to accuse Weinstein of sexual harassment, sexual assault, or rape. One of the most shocking aspects of the story was that the leadership team at The Weinstein Company was thought to be complicit in Weinstein’s indiscretions and likely even went to great lengths to cover up his behaviors in some instances. The NYT reported that Weinstein had reached at least eight confidential settlements with various women and the board was aware of at least three of these. Following the scandal, the Weinstein Company board of directors announced that they would be launching an investigation into the claims. Almost immediately after, four of the nine board members resigned. Very shortly after the shakeup of the board, remaining members officially fired Weinstein from the company. In March of 2018, The Weinstein Company filed chapter 11 bankruptcy (Stevens, et al. 2018).

Since a lot of the drama surrounding this scandal unfolded confidentially and behind closed doors, it’s difficult to say exactly what was happening at The Weinstein Company while the alleged indiscretions were taking place. Based on the fact that almost half of the board resigned when an investigation was announced, would lead one to believe that there were some serious unethical behaviors taking place. If this type of behavior was happening and being covered up and excused at the leadership level, it can be assumed that the general culture and climate within the organization was not positive. Within the overall organizational climate, there is a part that focuses on ethics, known as the ethical climate. The definition of ethical climate is the affective, cognitive, and instrumental components of an organization’s culture that focus specifically on ethics (PSU, 2019). A healthy ethical climate can promote and encourage ethical behavior whereas an unhealthy ethical climate can promote and encourage unethical behavior.

Victor and Cullen (1987) proposed a simple definition of ethical work climate stating that it is a combination of organizational members’ perceptions of ethical events, practices, and procedures. Victor and Cullen believed that two dimensions influenced ethical climate: ethical criteria used for organizational decision making and loci of analysis. The ethical criteria they thought to influence ethical criteria consisted of egoism, doing what’s best for oneself, benevolence, doing what is good, and principle, finding a standard to adhere to (PSU, 2019). The loci of analysis they thought to influence ethical climate consisted of individual, perspective of oneself, local, perspective of those directly involved, and cosmopolitan, perspective of society (PSU, 2019). These three criteria and three loci of analysis then formed nine possible ethical climates; self-interest, company profit, efficiency, friendship, team interest, social responsibility, personal morality, company rules and responsibilities, and laws and professional codes. Applying Victor and Cullen’s model to the Weinstein situation, one could assume that the organization was behaving according to the ethical criteria of egoism since it seemed that the leadership team was looking out for themselves only by allowing damaging behavior to happen within the company. Weinstein and the board members involved certainly weren’t acting according to what they believed to be good (benevolence) or adhering to any kind of standard (principle). The loci of analysis in this scenario seems to be local as the board was concerned with protecting Weinstein and keeping his indiscretions secret. The combination of making organizational decisions according to egoism and a local locus indicate an ethical climate focused on company profit and this seems to fit the situation.

The momentum behind the Weinstein scandal didn’t slow down when Harvey was fired from the company and involved board members resigned. In fact, the fallout from the scandal continued to gain momentum in the media and started to take on a life of its own. Actress Alyssa Milano spoke out about the situation saying she was “shocked and disgusted” and in an attempt to highlight the magnitude of this issue across all industries, urged women to speak out about their own experiences with sexual harassment and assault. Milano urged women to post to their social media accounts using the hashtag “MeToo” to indicate they has experienced similar situations. The #MeToo movement took off and within 24 hours over 200,000 #MeToo posts had been made. While the sheer extent of people speaking out with their own stories was horrifying, this movement marked the beginning of a shift with how these situations would be treated in the workplace. People speaking out about their experiences began to shine light on the issue and make it impossible to ignore or tolerate. One of the positive outcomes from the Weinstein scandal and the #MeToo movement is that companies are taking notice and making changes. Organizations are realizing that they need to reexamine their internal and external response strategies to sexual misconduct allegations against senior leadership team members. Companies are now settling complaints quicker and more justly than ever before. Leadership teams are realizing that preventing future episodes of harassment in the workplace will require changing deep-seated behaviors and attitudes and that the culture change needs to start at the top (Katz, 2018). KPMG, a large professional services firm, has increased their focus on diversity and inclusion training and women’s advancement on the heels of the recent unsettling news. KPMG’s diversity team states that they are trying to accomplish change on a deep level by asking their people to think about things differently and to work with people who aren’t like them. The team is also rolling out training on unconscious biases (Gourguechon, 2018). These responses to the #MeToo movement have marked the beginning to an important shift in the ethical climates of countless organizations. These policy and leadership attitude changes will certainly impact ethical climates in a positive way. Many organizations will begin to shift away from egoism as ethical criteria and an individual or local locus from which ethical decisions are made. This will result in the use of benevolence or principle for ethical criteria and a cosmopolitan locus for decision making which will result in positive ethical climate shifts.

While the news of the Harvey Weinstein scandal was shocking and appalling, it was a catalyst for ethical change related to sexual harassment and assault in the workplace; an issue that has been going on for way too long. It’s unfortunate that so many victims suffered under Weinstein’s unethical behavior and it’s also unfortunate that the board of the company was complicit in these actions, but it’s hard to say if these positive ethical changes would be taking place in organizations if it weren’t for this scandal going public.

 

References

Katz, D. (2018, Aug. 7). The Corporate Response to #MeToo. Retrieved from: https://www.kmblegal.com/news/corporate-response-metoo.

Gourguechon, P. (2018, Jul. 29). How One Company Responded Proactively to the #MeToo Backlash. Retrieved from: https://www.forbes.com/sites/prudygourguechon/2018/07/29/one-companys-proactive-response-to-the-metoo-backlash-and-yes-thats-a-real-thing/#339ee405508b.

PSU. (2019). PSY 833: L13 Ethical Climate. Retrieved from: https://psu.instructure.com/courses/1963919/pages/l13-overview?module_item_id=25808544.

Stevens, S., Comen, E., Sauter, M., Stockdale, C. (2018, Feb. 1). America’s Top 20 Most-Hated Companies. Retrieved from: https://www.usatoday.com/story/money/business/2018/02/01/bad-reputation-americas-top-20-most-hated-companies/1058718001/.

 

Victor, B., & Cullen, J. B. (1987). A theory and measure of ethical climate in organizations. Research in Corporate Social Performance and Policy, 9, 51-71.

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