Resolving ethical conflicts at workthrough cooperative goals and constructive controversy in the People's Republic of China

Resolving ethical conflicts at workthrough cooperative goals and constructivecontroversy in the People’s Republic of China

Robin Stanley Snell & Dean Tjosvold & Sofia Su Fang

Published online: 25 July 2006# Springer Science + Business Media, Inc. 2006

Abstract The idea of constructive controversy and the theory of cooperation andcompetition together suggest the type of interaction that promotes satisfactoryresolution of ethical conflicts and the conditions under which this occurs. A sampleof 101 Chinese mainland employees described and rated a critical incident of anethical conflict at work. Structural equation analyses indicated that when theemployees had goals that were cooperatively related with those of other stake-holders in the conflict, rather than competitive or independent goals, this facilitatedconstructive controversy, i.e., open-minded discussion, which, in turn, led to effectiveoutcomes in terms of substantive ethical impact and interactional justice. Resultsalso indicated that high levels of moral intensity strengthened competitive goals andrendered constructive controversy less likely. Implications are that organizationsshould make it clear to members that conflict avoidance and moral muteness areinappropriate responses to ethically unsound practices and policies, that it isimportant to detect ethically questionable behaviours or policies at an early stage,and that wherever possible these should be discussed promptly, before an un-comfortably high level of moral intensity is reached. Constructive controversy issuggested as a process through which corporate codes of conduct may be developed.

Keywords Cooperation . Competition . Constructive controversy .

Moral intensity . China

Asia Pacific J Manage (2006) 23: 319–343DOI 10.1007/s10490-006-9002-7

R. S. Snell (*) :D. TjosvoldDepartment of Management, Lingnan University, 8, Castle Peak Road, Tuen Mun, NT,Hong Kong SAR, PR Chinae-mail: [email protected]

D. Tjosvolde-mail: [email protected]

F. SuSchool of Finance, Shanghai University of Finance & Economics, 777, Guoding Road,Shanghai 200433, China

F. Sue-mail: [email protected]

Introduction

Ethical conflicts arise in business when moral principles concerning justice, rights, orutility are challenged by decisions, policies or activities (Post, Lawrence, & Weber,2002). Surveys indicate that a majority of organization members have encounteredethical conflicts at work, ranging from company-level issues, such as distributingharmful products, to interpersonal behaviour, such as sexual harassment (Confer-ence Board, 2002, p. 22).

Commentators argue that resolving ethical conflicts through reasoned discussionand open dialogue is preferable to other methods, such as coercion, threats andmanipulation (French & Allbright, 1998; Lampe, 2001; Nielsen, 1996). Researchindicates, however, that when facing ethical conflicts, organizational memberssometimes avoid dialogue (Bird & Waters, 1989), and that when dialogue takesplace, it may not always elicit fair and reasonable responses from others, or achieveethically acceptable outcomes (Bird & Waters, 1989; French & Allbright, 1998;Jackall, 1988; Toffler, 1986). Research is therefore needed to identify the kind ofdialogue that is effective for resolving ethical conflicts, and the conditions underwhich it is likely to take place.

A Model of Conflict Resolution

The current study tests a model of conflict resolution that is based on the theory ofcooperation and competition (Deutsch, 1973; Johnson & Johnson, 1989), along withthe idea of constructive controversy (Tjosvold, Wedley, & Field, 1986). Theseconcepts are well grounded in the study of task-related conflict, but have hitherto notbeen applied to the study of how ethical conflicts at work are resolved. The model infigure 1 posits (1) how moral intensity effects assumptions regarding goal relation-ships between the parties to a conflict; (2) how these assumptions, i.e., whether goalsare cooperatively related, independent or competitively related, effect the extent towhich the parties engage in constructive controversy; and (3) the effect of constructivecontroversy on the outcomes of ethical conflicts, i.e., ethical impact and interactionaljustice. In the following three sections we define the various terms in the model,discuss their interrelationships, and propose five associated hypotheses.

How Goal Relationships May Effect Constructive Controversy

The theory of cooperation and competition proposes that in conflict situations, therelationship that a person assumes to exist between his or her goals and the goals ofother salient stakeholders critically affects the nature and effectiveness of his or herinteractions with those other stakeholders (Johnson, Maruyama, Johnson, Nelson &Skon, 1981; Stanne, Johnson & Johnson 1999).

According to this theory, people may assume three basic types of relationshipbetween their own goals and the goals of other parties, i.e., that their goals are eithercooperatively related, competitively related, or independent. When people assumethat their own goals are cooperatively related with those of another party, theyconsider that they and the other party can succeed together in reaching theirrespective goals, with their own goal attainment helping that of the other party in awin–win partnership. When people assume that their own goals are competitively

320 R. S. Snell, D. Tjosvold, et al.

related with the goals of another party, they believe that progress toward theirrespective goals is negatively correlated, i.e., that their own success means the failureof the other party, and vice versa, and that therefore it is in their interest if theFopponent_ acts ineffectually rather than accomplishes his or her goals. When peopleassume that their own goals are independent of the goals of another party, theybelieve that their success or failure in attaining their own goals is unconnected to theother party’s progress toward goal attainment.

The theory holds that cooperatively related goals, in contrast to competitivelyrelated or independent goals, promote constructive controversy. If the parties to aconflict assume that their goals are cooperatively related, they will want each other toperform effectively in relation to their respective goals, and will therefore welcomeand engage in constructive controversy. When parties to a conflict engage inconstructive controversy (Tjosvold et al., 1986) not only do they openly express theirown ideas and positions, but they also put themselves into one another’s shoes and arethus open to exploring contrary arguments and information. When confronted with acontrary position, they feel uncertain about the adequacy of their own position, stopdefending their own views long enough to indicate interest, and ask for moreinformation and explanation. They take the contrary position seriously, demonstratethat they have understood it, and are willing to adjust and develop their ownperspective in the light of it.

By contrast, the theory predicts that a party to a conflict, who assumescompetitively related goals, will want to Fwin_ while having the other parties Flose_,and will tend either to engage in closed-minded controversy, such as engaging in one-sided advocacy while seeking to discredit or silence the other party or parties, or touse alternatives to discussion, such as proceeding unilaterally. Empirical evidencesuggests that a competitive goal relationship impedes constructive controversy(Argyris, 1985; Bar-Tal, 1998; Carver & Vondra, 1994; De Dreu & Boles, 1998;Mackey & Neal, 2002, p. 12; Tannen, 1998; Tjosvold, 1998).

A body of research supports these predictions in the context of task-relatedconflicts (Tjosvold, 1982, 1998), and it has also been found, albeit for reasons as yetnot fully understood, that people facing a conflict situation who assume anindependent goal relationship with other parties also tend to avoid constructivecontroversy (Johnson et al., 1981). A possible explanation is that people who areconcerned about an issue and who assume that others’ goals are independent mightavoid constructive controversy because they see others as not caring about the issueand as unlikely to provide synergy in discussions about it. In such situations, theconcerned party may prefer alternatives to open discussion, such as withdrawing orproceeding unilaterally.

Applying the Theory of Cooperation and Competition to Business Ethics in China

This section discusses three potential objections to the theory of cooperation andcompetition. Each of these implies that in the contexts of Chinese culture andbusiness ethics, there would be a blanket tendency for organization members toavoid constructive controversy, whereas the theory of cooperation and competitionpredicts that constructive controversy would arise when participants have cooper-atively related goals. We identify rebuttals to each of the potential objections, andargue that the theory of cooperation and competition is likely, after all, to hold inthe specific context of ethical conflicts in Chinese business organizations.

Resolving ethical conflicts at work through cooperative goals and constructive... 321

The first potential objection involves claims within the literature on Chineseculture, that Chinese people prefer to avoid conflict as a means of furtheringcultural values (Cocroft & Ting-Toomey, 1994; Earley, 1997; Graham, Kim, Lin, &Robinson, 1988; Hofstede, 1993; Hwang, 1996; Kirkbride, Tang, & Westwood, 1991;Morris et al., 1998; Tinsley, 2001; Tse, Francis, & Walls, 1994), the foundation ofwhich is harmony (Chinese Culture Connection, 1987).

The second potential objection arises from literature on ethical dilemmas inbusiness, and involves claims that managers and other organization members aremorally mute because they believe that discussing ethics at work carries a high riskof unfavorable consequences and has a low probability of positive ethical impact(Bird & Waters, 1989; Drumwright & Murphy 2004; Jackall, 1988; Lovell, 2003;Toffler, 1986; Waters et al., 1986). It has been argued, for example, that organizationmembers believe that discussing ethical conflicts is likely to cause acute embarrass-ment (Bird & Waters, 1989; Nielsen, 2003) and believe that such discussion mightjeopardize their careers (Jansen & von Glinow, 1985; Lovell, 2003).

The third potential objection is closely related to the second. It entails the claimthat organization members avoid discussing ethics because they believe that it isalmost impossible to persuade others about ethical issues, and because they believealso that failed persuasion attempts are likely to be taken as a sign of weakness andinefficiency (Bird & Waters, 1989; Weiss, 2003, p. 78).

We now put forward rebuttals to these potential objections. The first potentialobjection appears to depend on the implicit assumption that in Chinese culture,harmony is an exclusively instrumental value. Harmony as an instrumental valueentails disintegration avoidance, a conflict style that seeks to maintain the appearanceof agreement and is consistent with the avoidance of controversy (Leung, Koch, & Lu,2002). However, harmony as a terminal value is also consistent with Chinese culture,and entails harmony enhancement, a conflict style that seeks to deepen alignmentbetween people through the use of constructive controversy (Leung et al., 2002;Leung & Tjosvold, 1998).

The second potential objection entails the underlying assumption that business isfree of moral values, i.e., Fthe Myth of Amoral Business_ (De George, 1999, p. 11).From this underlying assumption, it follows that discussing ethics would either beirrelevant to the pursuit of business goals or would interfere with the pursuit ofbusiness goals by wasting valuable time. However, this assumption is challenged bythe stakeholder theory of business, which claims, to the contrary, that managers bearmoral responsibility for the impact of business decisions on affected individuals orgroups (Evan & Freeman, 1988). Furthermore, there is evidence that many businessleaders believe that high ethical standards are conducive to long-term business suc-cess (Bartlett & Preston, 2000). These rebuttals of the Myth of Amoral Businessimply that it is not implausible that organizational members with ethical concernswould regard their goals as cooperatively related to the goals of other stakeholdersin a business context, and that, as predicted by the theory of cooperation andcompetition, co-operative goals would support constructive controversy.

The third objection appears to be based on the implicit assumption thatdiscussing ethical conflicts entails striving to Fwin_ arguments and to prove one’sposition. While this is a characteristic of persuasion-based discussion (Nielsen,1996), constructive controversy is, by contrast, a form of dialogue that entails open-minded consideration of other viewpoints and is not concerned with winningarguments. It follows that if an organization member were to believe that it is


difficult to persuade others, this belief would not, in itself, deter that member fromengaging in constructive controversy.

To summarize, while the dual contexts of business ethics and Chinese culturetogether provide a strong test of the theory of cooperation and competition, thebalance of argumentation suggests that the theory is likely to hold in these contexts,as reflected in the following three hypotheses:

H1. To the extent that parties to an ethical conflict at work assume that their owngoals are cooperatively related to the goals of other stakeholders in theconflict, they will engage in constructive controversy.

H2. To the extent that parties to an ethical conflict at work assume that their owngoals are competitively related to the goals of other stakeholders in theconflict, they will tend not to engage in constructive controversy.

H3. To the extent that parties to an ethical conflict at work assume that their goalsare independent from the goals of other stakeholders in the conflict, they willtend not to engage in constructive controversy.

Hypothesised Outcomes of Constructive Controversy

Research has shown that constructive controversy facilitates effective task relatedproblem solving (Tjosvold & Johnson, 1977; Tjosvold, 1982, 1998). Parties to taskdecisions who engage in constructive controversy have thus been found to achievemutually acceptable, high quality decisions (Tjosvold & Field, 1984; Tjosvold &McNeely, 1988). Constructive controversy has also been found to foster interac-tional justice among the parties involved (Whiteman & Mamen, 2002).

Our study sought to test whether constructive controversy was effective in thecontext of the resolution of ethical conflicts, and we posited that two outcomeswould be especially salient in this context. One of these is the extent of ethicalimpact that a party to the conflict perceives to have resulted from his or herinteraction with other parties to the conflict, such as prevention of harm. This isbecause we anticipated that constructive controversy would enable the parties to anethical conflict to develop a more complete awareness and appreciation of thecomplexity of the ethical issues involved, and would motivate and enable them tointegrate each other’s best ideas to create effective solutions that respond to themore complete set of information. The other posited outcome is interactional justice(Bies, 1987; Bies & Moag, 1986; Tyler & Bies, 1990), i.e., being treated in apersonally enhancing and affirming manner, which has been found to be anantecedent to other types of justice (Cohen-Charash & Spector, 2001). This isbecause we expected that the process of constructive controversy, by enabling theparties to express their views fully and to have these considered open-mindedly,would help to build mutual respect and trust in each party’s willingness to considerthe other party’s position fairly and sensitively. Thus:

H4. To the extent that parties to an ethical conflict at work engage in high levels ofconstructive controversy with other stakeholders in the conflict, they developa morally sound resolution and interactional justice.

H1–H4 represent causal relationships that we assumed would apply to the partiesin ethical conflicts, regardless of their particular demographic characteristics, such asgender or educational background, or other individual characteristics, such as


personality traits. We based this assumption on prior research studies, which haveexamined similar causal relationships across a range of dimensions of demographiccharacteristics and other individual differences, and have not identified anyindividual-level dimensions that might alter the predicted causal relationships(Deutsch, 1973; Johnson & Johnson, 1989; Tjosvold & Johnson, 1977; Tjosvold,1982, 1998). Thus we did not consider it necessary to explore the impact ofindividual differences on H1–H4.

Moral Intensity and its Possible Effect on Goal Relationships

Our study also explores the effect of perceived moral intensity on how people, whenfacing an ethical conflict, construe the relationship between their own goals and thegoals of other parties, i.e., the effect of moral intensity on whether people see their goalsand those of others as cooperatively related, competitively related, or independent.

Jones (1991, p. 372) defined moral intensity as Fthe extent of issue-related moralimperative in a situation_, and argued (p. 386) that the higher the moral intensity ofan issue, the more strongly, vividly and saliently the issue would impinge on astakeholder’s moral values of right and wrong, thereby leading to heightenedemotions, feelings and moods. Moral intensity, thus construed, represents the feltacuteness of a need to remove, rectify or prevent prospective or perceived harm orwrongdoing associated with a moral issue (Frey, 2000; Singhapakdi, Vitell, &Franke, 1999). Dukerich, Waller, George, & Huber (2000) found that when peoplefaced an issue that personally involved them and entailed prospective loss, theyexperienced high moral intensity, while Kelly and Elm (2003, p. 143) argued thatmoral intensity was greatest with Fissues that involve a large amount of immediateharm or benefit to someone close to a decision maker who has a relatively clearunderstanding of the right or wrong choice._ It follows that moral intensity isreflected in the extent to which participants experience a moral conflict aspresenting an ethical dilemma, envisage harmful effects, include themselves amongthose who stand to be adversely affected, and empathize with others who could beharmed.

Perceived moral intensity thus appears to be associated not only with the focusingof cognitive attention, but also with strong emotions. In emotional terms, moralintensity may galvanize a person’s desire to act ethically by signalling high stakes(Singhapakdi et al., 1999), and may be felt as an acutely uncomfortable test ofcourage and resilience (May, Chan, Hodges, & Avolio, 2003). We consider that theemotional experience of moral intensity, reflected in heightened arousal and a sensethat stakes are high, is salient in explaining the impact of moral intensity on howorganization members approach the resolution of moral conflicts.

Although prior research has not directly theorized or investigated causalrelationships between moral intensity, goal relationships and constructive contro-versy, prior analyses of similar phenomena point toward a particular pattern ofcausal relationships. Each of these analyses suggests that moral intensity tends tointensify the competitive elements in goal relationships and to depress thecooperative elements in goal relationships and thus has an indirect inhibitory effect,mediated by goal relationships, on constructive controversy.

French and Allbright (1998) thus observed that Fextremely thorny_ issues (i.e.,issues that were high in moral intensity) led parties to adopt a competitive form ofFstrategic goal-oriented interaction_ (i.e., with competitively related goals), where


they sought to impose their will through threats or inducements rather thanengaging in discursive communication (i.e., low levels of constructive controversy).Deutsch (1973) argued that conflicts over issues that the parties considered to bemajor were more likely to lead to the formation of competitively related goals, inturn leading to closed-minded discussion (i.e., low levels of constructive controver-sy), than were conflicts over issues that the parties considered to be minor. Argyris(1990) argued that when people engaged in conflicts about emotionally chargedissues that they felt to be of great importance (i.e., issues that were high inemotional intensity, albeit not necessarily moral intensity), they tended to definegoals unilaterally and assumed the need to Fmaximize winning and minimize losing_(i.e., their goals were competitively related). Consequently they used defensivereasoning, and avoided inquiry-based, evidence-based and open-minded conversa-tion (i.e., low levels of constructive controversy).

The relationship between competitively related goals and constructive contro-versy is already represented in H2 above. To reiterate H2, if the parties to an ethicalconflict at work assume that their goals are competitively related, they are unlikelyto engage in constructive controversy. They may, instead, engage in one-sidedadvocacy, attempt to censor alternative viewpoints, avoid discussion, and/or seek toforce or manipulate decisions that reflect their position. In addition, we propose thefollowing hypothesis:

H5. To the extent that parties to an ethical conflict at work experience a high levelof moral intensity, they develop assumptions that their goals are competitivelyrelated, and not cooperatively related, to the goals of other stakeholders in theconflict.

As Fig. 1 indicates, H5 does not directly impinge upon H1, H2 and H4. Weanticipated that moral intensity would not, of itself, affect the relationship betweengoal relationships and constructive controversy. Thus, while we anticipated that itwould be difficult for the parties involved in an ethical conflict to establishcooperative goals if moral intensity were high, we also anticipated that in the eventthat participants were able to establish cooperative goals, constructive controversywould then be likely to take place, leading to a morally sound resolution andinteractional justice.

As with H1–H4, we assumed that H5 would apply across individual differences,and we did not seek to explore the possible impact of particular individual dif-

H2 -

Moral Intensity Independent

Goals

Cooperative Goals

Competitive Goals

Constructive Controversy

Ethical Impact

Interactional Justice

H5 +

H3 -

H1 +

H4 +

H4 +

H5 -

Fig. 1 Hypothesized model


ferences, in view of the absence of indications in prior research that particular in-dividual differences might affect the relationship between moral intensity and goalrelationships. For example, French and Allbright (1998) found that differencesbetween highly principled and less highly principled individuals, as measured by theDefining Issues Test (Rest, 1979), had no impact on the tendency to assume com-petitively related goals when faced with high moral intensity issues.

Materials and Method

Participants

Shanghai based Chinese respondents from a wide range of industries, includingmanufacturing, social services, wholesale, retail, catering, banking and insurancewere recruited to participate in an interview-based study on discussing ethical issues.Of the 101 interviewees, 61 were male and 40 female, 47 were in the age range 20–29, 19 were aged 30–34, 15 were aged 35–39, 15 were aged 40–49, and 5 were aged50–59. Among them, there were 6 senior managers, 30 middle managers, 26 juniormanagers and 39 non-managerial employees. Regarding the highest educationalqualifications obtained, 7 had no high school certificates, 11 had high schoolcertificates, 68 had University degrees, and 15 had postgraduate qualifications.While the sample may be too small and locality-specific to be representative of theChinese mainland as a whole, their responses and accounts represent importantsocial dynamics involved in discussing ethical conflicts there.

Critical Incident Interview Schedule

Numerous investigators, including Goodman, Fichman, Lerch, and Synder (1995),have used structured interviews as vehicles to help respondents to report past eventsfully and accurately. Our study was based on interviews that were structured aroundthe critical incident technique (CIT) (Bitner, Booms, & Tetreault, 1990; Flanagan,1954; Yukl, Kim, & Falbe, 1996, p. 311). The CIT has been found useful whenstudying complex interpersonal phenomena (Walker & Truly, 1992) and ethicalissues (McNeil & Pedigo, 2001). It has been argued that CIT based interviews serveto moderate errors that otherwise arise when subjects are asked to summarize acrossmany incidents as is required by most surveys (Schwartz, 1999). Our intervieweeswere asked to describe in detail a recent, significant incident when they worried thattheir values about what is right might be undermined by what was being proposed,planned, and done or not done by Fthe other_, i.e., by another person at work. Asillustrations, they were advised, FFor example, you might be concerned aboutwhether the truth is being told, people are being treated with respect, people andresources are being used fairly, and whether unnecessary harm is being avoided_.They were told that the critical incident that would form the basis of the interviewcould be one that left them generally satisfied or unsatisfied. The 101 intervieweesreported one incident each. After describing the setting, what occurred, and theconsequences, they answered specific questions during the rest of the interview, toindicate their own codings of various aspects of the incident. The Appendix containsthe items used to elicit their codings.


The interviews were conducted in Chinese Mandarin and lasted 1 hour each. Inaccordance with social expectations in China (Shenkar, 1994, p. 23), and in the lightof the sensitivity of the subject matter (Brannen, 1988), no recording devices wereused other than paper and pen. Interviewees were assured that their responseswould be kept totally confidential, and were informed that the objective of the studywas to investigate how employees discuss values-related issues.

Five items developed for this study indicated the degree of moral intensity thatinterviewees perceived regarding what was at issue. This five-item scale had aCronbach alpha of 0.72. Three items in the form of seven-point Likert scales takenfrom Alper et al. (1998), which are listed under Fassumed goal relationships_ in theAppendix, indicated how interviewees construed the relationship between theirgoals and those of one or more salient other stakeholders during the incident. Thesethree items measured the extent to which interviewees assumed that the relation-ships between their goals and those of the other party were independent,cooperative, and competitive, respectively. Interviewees then responded to fiveitems taken from Tjosvold et al. (1986), using seven-point Likert scales to indicatethe extent of constructive controversy in which they engaged concerning the ethicalissue. This five-item scale had a Cronbach alpha reliability of 0.87. Intervieweeswere asked to assess the consequences of their interaction with the other party. Afour-item ethical impact scale developed for the study, comprising seven-pointLikert items, measured the extent that their interaction with the other party hadserved to protect and enhance their ethical values. This scale had a reliability of0.72. In addition, a three-item scale developed from Moorman (1991), alsocomprising seven-point Likert items, measured perceived interactional justice, andhad a Cronbach alpha of 0.93.

Interviewers

The interviews were conducted by three full-time postgraduate managementstudents in Shanghai, China, who had been trained by a Chinese researcher toadopt a non-suggestive approach while having interviewees describe the interactionand respond to specific questions. For 20 hours over a three-week period, theypracticed interviewing techniques and received feedback so that they could adopt astandardized approach. Careful training and supervision of interviewers, explicitguidelines for conducting the interviews, and the specific Likert-type questions wereall designed to improve the validity of the data collected (Fowler, 1993). Theinterviewers were instructed to record accurately all responses to the pre-codeditems, and to supplement this record with handwritten notes on the qualitativeaccounts. To help reduce the likelihood of demand effects (Orne, 1962), they werenot informed of the hypotheses. They pledged to protect the confidentiality of therespondents.

As the interview schedule was originally written in English, three bi-lingualresearchers translated it into Chinese. To ensure conceptual consistency, thequestionnaires were back-translated into English to check for possible deviation(Brislin, 1970). The translators and back-translators met to examine the differencesand modifications were made to develop the final Chinese version of the instrument.The questions were pre-tested to ensure that respondents would clearly understandthem.


Analysis

Scale Validation

We carried out a series of confirmatory factor analyses using EQS for Windows(Bentler & Wu, 1995), to establish whether the respondents’ ratings would load onperceived moral intensity, constructive controversy, ethical impact and interperson-al justice, as distinct factors. We excluded the three-goal relationship items from theconfirmatory factor analyses, because each was constituted as a single-item scale. Inorder to reduce the number of parameters estimated and to develop parallel testforms (Nunnally, 1978), we further simplified the structural model by reducing thenumber of indicators for the multi-item constructs. Specifically, we combined thoseitems with the highest and lowest loadings by averaging until this yielded threeindicators for each construct. This is a common approach in the literature ofstructural equation analysis (Mathieu & Farr, 1991; Mathieu, Hofmann, & Farr,1993). With four latent constructs, and an effective sample size for the study of 101interviewees, the indicators to sample size ratio was found to be favourable.

Results of the confirmatory factor analyses are shown in Table 1, which indicatesa good fit between our proposed four-factor measurement model (Model M0) andthe data, with a Comparative Fit Index (CFI) and a Non-Normed Fit Index (NNFI)of 0.92 and 0.88, respectively. The four-factor measurement model was thencompared to three different three-factor models and a one-factor solution model.In order to make these comparisons, each of the three-factor models (M1, M2, andM3) was formed by merging two of the four factors into one aggregate factor, andthe one-factor solution model (M4) was formed by merging all indicators into asingle factor. These four alternative models were selected on the basis of the logicalpossibility that each pair of adjacent variables in the model might not beconceptually distinct, and that instead of there being a causal relationship, theremight instead be a single factor.

Table 1 Scale validation through confirmatory factor analysesa

Models d.f. Model #2 $#2 NFIb NNFI CFI

Baseline four-factor model (M0) keeping

perceived moral intensity, constructive

controversy, ethical impact and

interpersonal justice as distinct factors

48 114.88 0.87 0.88 0.92

Three-factor model (M1) including a

combined perceived moral intensity and

constructive controversy factor

51 159.43 44.55 0.82 0.82 0.86


combined constructive controversy

and ethical impact factor

51 164.59 49.71 0.81 0.81 0.86


combined constructive controversy

and interactional justice factor

51 168.68 53.80 0.80 0.81 0.85

One factor solution (M4) 54 263.63 148.75 0.72 0.72 0.77

a N of cases = 101.b NFI Bentler–Bonnett normed fit index, NNFI Bentler–Bonnett non-normed fit index, CFIcomparative fit index.


Table 1 shows that the model chi-squares of the alternative models (M1, M2, M3,and M4) were all significantly greater than that of the proposed four-factor model(M0). Furthermore, all the alternative models had lower fit index scores. Thesecomparisons suggest that the four factors in the proposed model (M0) were distinctmeasures of the constructs in our study.

Hypotheses Testing

Correlational analysis was performed for initial hypothesis testing. For more rigoroustesting, structural equation analysis was then used through the EQS for Windowsprogram (Bentler & Wu, 1995) to examine the underlying covariance structurebetween moral intensity, assumed goal relationships (i.e., cooperative, competitive orindependent), constructive controversy (open-minded discussion), ethical impact andinteractional justice.

Although the literature review suggested that assumed goal relationships andconstructive controversy mediate the relationship between moral intensity as anantecedent and ethical impact and interactional justice as outcomes, the structuralequation analysis compared models of different forms of mediation, since causalrelationships among the variables could not be firmly hypothesized. Narrative de-scriptions by interviewees of their critical incident were then inspected for their fit withthe resulting model.

Results

Findings from Correlational Analyses

The correlations (see Table 2) lent initial support to the first hypothesis thatcooperative goals and constructive controversy were positively related (r = 0.38, p <0. 01). Consistent with the second and third hypotheses, respectively, competitive (r =j0.40, p < 0.01) and independent (r = j0.29, p < 0.01) goals were negatively relatedto constructive controversy.

Results were also consistent with the fourth hypothesis in that organizationalmembers who engaged in constructive controversy developed a morally soundresolution and interactional justice (r = 0.54, p < 0.01; r = 0.74, p < 0.01). Consistentwith the fifth hypothesis, to the extent that organizational members had a high levelof moral intensity, they developed competitive goals (r = 0.22, p < 0.05), rather thancooperative goals (r = j0.22, p < 0.05), and also had a low level of constructivecontroversy (r = j0.25, p < 0.05).

Findings from Structural Equation Analysis

A nested model test that is commonly adopted in causal model analysis was used(Table 3). Under this, the Indirect Effects Model 1, which proposed the hypothesizedmediating effects of assumed goal relationships (as cooperative, independent orcompetitive), and then constructive controversy, on the relationship between moralintensity and the outcomes of ethical impact and interactional justice, was comparedwith four plausible alternative models. These alternatives were: the Indirect EffectsModel 2 that proposed the mediating effects of only assumed goal relationships, the


Indirect Effects Model 3 that proposed the mediating effects of only constructivecontroversy, the Indirect Effects Model 4 that proposed the mediating effects ofconstructive controversy, and then assumed goal relationships, and the Direct EffectsModel that proposed a direct relationship between moral intensity and the outcomes.

The fit statistics for the hypothesized model and alternative models are displayedin Table 3. The #2 of the Indirect Effects Model 1 was 16.211 (d.f. = 9), the #2 of theIndirect Effects Model 2 was 93.128 (d.f. = 8), the #2 of the Indirect Effects Model 3was 164.97 (d.f. = 17), the #2 of the Indirect Effects Model 4 was 64.56 (d.f. = 7), andthe #2 of the Direct Effects Model was 117.834 (d.f. = 15). The hypothesized modelthus represented substantial improvements in chi-square over the alternativemodels. By typical conventions, the fit statistics indicated that the Indirect EffectsModel 1 fitted the data best (see Fig. 2).

Path coefficients of the accepted model explore the findings more specifically, butshould be interpreted in combination with the correlation analyses from Table 2.Furthermore, the path coefficients involving assumed goal relationships should beinterpreted together, rather than separately, because the assumption that goals arecompetitively related or independently related implies the assumption that goals arenot cooperatively related. Thus although the path from cooperative goals toconstructive controversy (" = 0.09, p < ns) indicates, on the surface, that cooperativegoals may not have impacted on constructive controversy, this result should beinterpreted alongside the coefficients of the other two paths, which indicate, thatboth competitive goals (" = j0.32, p < 0.05) and independent goals (" = j0.26, p <0.01), and hence the relative absence of cooperative goals, had significant negativeeffects on constructive controversy.

Illustrative Cases

A total of 101 ethics cases were obtained, one from each interviewee. The threeratings on assumed goal relationships that each interviewee gave for their case

Table 2 Correlations among variablesa

Mean Standard

deviation

(1) (2) (3) (4) (5) (6) (7)

(1) Moral

intensity

4.67 1.13 (0.72)b

(2) Cooperative

goals

3.42 1.87 j0.21*c –

(3) Independent

goals

2.65 1.53 0.07 j0.09 –

(4) Competitive

goals

4.50 1.90 0.22* j0.84** 0.06 –

(5) Constructive

controversy

4.18 1.41 j0.25* 0.38** j0.29** j0.40** (0.87)

(6) Ethical impact 3.81 1.21 j0.20* 0.27** j0.14 j0.30** 0.54** (0.72)

(7) Interactional

justice

3.93 1.70 j0.30** 0.33** j0.36** j0.32** 0.74** 0.72** (0.94)

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indicated that 32 cases rated highest on cooperatively related goals, 54 cases ratedhighest on competitively related goals, and five cases rated highest on independentgoals, with the remaining ten cases involving mixed goal relationships with no onetype being rated higher than the others. Between them, the cases involved a widerange of ethical issues, including fraud, fire hazard, and misrepresentation of in-formation to customers.

In this section, drawing on interviewees’ qualitative accounts and on their quan-titative codings of their incidents, we reconstruct three cases, all of which inter-viewees rated as high in moral intensity. The cases involved predominantlycompetitively related, independent and cooperatively related goals, respectively.Since it is possible that alternative explanations, featuring variables such asindividual attitudes or competencies situated outside our hypothesized model, mayaccount for behavior in particular incidents, our purpose here is not to attemptfurther verification of the hypothesized model, but rather to show how this modelmay operate in complex social encounters where many stakeholders are involved.

Case A illustrates how assumed competitive goals appeared to inhibit theinterviewee from engaging in constructive controversy, allowing escalation of conflict,and resulting in low interactional justice and failure to achieve satisfactory moralresolution. The interviewee, a single male, and an ex-employee of a dot.com company,perceived that his team leader at that company, whose girlfriend was a fellow teammember, unfairly diverted her tasks to him and to other colleagues, i.e., a perceivedbreach of distributive justice (see Weiss, 2003, p. 85). Angry that he and his othercolleagues would be disadvantaged by this (he also indicated high moral intensity),the interviewee assumed that the team leader was seeking to minimize his girlfriend’sworkload at others’ expense, and that he and the team leader had competitive goals,FOur goals were as incompatible as water and fire_. After an initial conflict episodethat the interviewee described as a Fquarrel_, the team leader agreed to reassign thework duties fairly. However, it then turned out that the team leader had merelyshifted the girlfriend’s work to another colleague. This apparent procedural injustice(see Weiss, 2003, p. 85) reinforced the interviewee’s assumption that he and the teamleader had competitive goals. He characterised a second conflict episode, where heFquarrelled_ again with the team leader to represent the viewpoints of his colleagues,as Fa struggle between democracy and rule by force without concern for justice_,

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rating this and the previous quarrel as low in constructive controversy. Although thissecond encounter impressed his colleagues, FI was respected by the other teammembers for speaking up_, it served further to polarise positions, leading to a fistfightbetween himself and the team leader, after which he quit, along with six or sevencolleagues. Although he said that he felt at the time that the fight resolved everything,he realized on reflection that, FI handled the situation very ineffectively,_ and ratedthe outcomes as low in ethical impact and low in interactional justice.

Case B illustrates how assumed independent goals appeared to inhibit construc-tive controversy, resulting in the interviewee’s failure to rectify unethical behaviourand interactional injustice. A single male interviewee from an international tradecompany described how his boss habitually acted abusively towards him and hiscolleagues (see Rowan, 2000; Vredenburgh & Brender, 1998, p. 1339). On oneparticular occasion, the boss, out of the blue, cursed him loudly from behind in thepresence of his colleagues. The interviewee discovered that the immediate reasonfor this outburst was that the boss had attempted to attract his attention, butbecause of background noise the interviewee had not heard him. Rating the issue ashigh in moral intensity, the interviewee reported that the boss’s abusive conductmade him and his colleagues tense and angry. The interviewee said that he believedthat the boss’s goal was to vent his feelings impulsively, owing to Fa volatile moodand unstable character_. Rating goal relationships as independent, the intervieweeexplained that although he and his colleagues would sometimes complain privatelyto one another about the boss’s behaviour, each appeared to him to believe thatthey could get their own tasks done without having anything to do with the boss, andthat by keeping a low profile they could stay out of the firing line, i.e., they allappeared to assume that their goals were independent of those of the boss andindependent of one another. Hence they did not discuss collective action to resolvethe problem (no constructive controversy). The interviewee rated the outcomes aslow in ethical impact and interactional justice, as the boss continued to abuse themall with impunity, hurting them at will.

Case C went against the trend by illustrating how construing goals as cooperativelyrelated, however difficult this is to do in the context of high moral intensity, may be keyto opening up constructive controversy, which then enables satisfactory moraloutcomes and breeds optimism about interactional justice. The interviewee, a femaleproduction superintendent in a state-owned electronic equipment factory, described anoccasion some years prior to the interview, when the company first asked its operativesto work overtime en masse. The factory director telephoned her one afternoon,informing her of an unexpected customer order and instructing her to complete it by thefollowing morning. The interviewee estimated that the operatives would need to work 3to 4 hours overtime that evening, and, since this had never happened before, she re-minded the director about the labour laws and the issue of fair pay (see Rowan, 2000, p.358). The director replied that he would Fconsider_ payment later, but he soundedevasive, abrupt, and defensive. The interviewee was somewhat shocked by hisresponse, and rated the incident high in moral intensity, not because of the prospect ofprosecution, since labour law enforcement tends to be weak in China (Xin, 2004), butbecause she was concerned that overtime payment arrangements needed to be workedout in advance, otherwise goodwill between the workforce and management couldbreak down, causing great harm to the company and its members. She nonethelessassumed that her goals and those of the director were cooperatively related, in thatcompleting the order on time would generate resources for attractive compensation


and the prospect of attractive compensation would provide an incentive for theworkforce to meet the customer’s deadline. The interviewee then used this argument topersuade the director to work out the overtime payment arrangements with her thereand then. The director agreed, and she rated the ensuing discussion with him, throughwhich they negotiated the details of the operatives’ overtime compensation, as high inconstructive controversy. The interviewee’s description of the conflict episodesuggested also that a process of integrative bargaining (Lewicki, Saunders, Barry, &Minton, 2004) or mutual gain negotiation (Nielsen, 1996) took place, as they bothsought to identify and work through all the details of the issue by pooling informationand ideas. She rated the outcomes as high in interactional justice, for she gainedconfidence that the director would treat her respectfully whenever she raised herconcerns, and also as high in ethical impact, since paid overtime became part of thecompany’s culture and subsequently contributed, she believed, to improvements inthe standard of living of the operatives.

Discussion

The general model of cooperation and competition (Deutsch, 1973) predicts thatwhen parties to a conflict assume that their goals are cooperatively related withthose of the other parties, rather than competitively related or independent, thisprovides a supportive context for engaging in constructive controversy, which inturn results in satisfactory outcomes. Qualified support for H1 and unequivocalsupport for H2–H4 indicates that this overall model holds in the context of ethicalconflicts.

That we have found constructive controversy to be a valuable means of discussingethical conflicts lends support to the view (Leung, 1996, 1997; Leung et al., 2002)that Chinese culture allows for the management of conflict through opendisagreement and debate, and to Bird and Waters’ (1989) assumptions about thebenefits of moral dialogue. While Case B provides an example of conflict avoidance,constructive discussion of opposing views within a cooperative context can helpChinese organizational members resolve ethical conflicts, even if this involveschallenging a superior’s point of view, as illustrated in Case C.

However, our findings also support H5, indicating that issues that are high inmoral intensity, such as those involving substantial potential harm and/or threatento violate dearly held principles, appear to foreground the competitive elements ofgoal relationships, thereby increasing the likelihood that people will assume thattheir goals are competitively related to those of other parties. Support for H2indicates that with competitively related goals, members are unlikely to engage inconstructive controversy and are more likely to engage instead in closed-mindedcontroversy or alternatives to discussion, such as force. Support for H4 indicates thatwithout constructive controversy, members are unlikely to develop morally soundresolutions and interactional justice.

Practical Implications

The model given in Fig. 1 has been tested and largely supported in this research. Itimplies that if organizations are to enable their members to resolve ethical conflictssuccessfully, they need to take account of the problem that high moral intensity


strengthens competitive rather than cooperative goals and is a context in whichconstructive controversy, while possible, may not readily take place.

An additional consideration is that ethical disasters tend to develop over time,beginning with questionable but minor activities that go unchallenged, and graduallyescalating until practices are profoundly unethical. This pattern of escalation hasbeen identified in many cases, including Enron (Cohan, 2002), Barings (Hunt &Heinrich, 1996), and various other financial services companies (Crawlier, 2000;Huang & Snell, 2003; Tschoegl, 2005).

The findings of our research, considered along with this typical pattern ofescalation, suggests that it is advisable for members to capitalize on opportunities todiscuss ethical conflicts on those occasions when moral intensity is low, where thereis a greater likelihood that they would assume cooperative goals and wouldtherefore engage more readily in constructive controversy about ethical conflicts,with a view to preventing ethical conflicts from arising or from escalating. Inrelation to this, organizations may consider adopting two complementary strategies.

One strategy would be to institute low moral intensity forums where constructivecontroversy is encouraged as a process for developing a formal code of ethics(Business Roundtable, 1988; Collins & O’Rourke, 1993), which could subsequentlyprovide all members with a shared tool to guide and review ethical decisions. Acode of conduct based on constructive controversy is likely to be more effective inpreventing and resolving ethical conflicts than one imposed top-down (Lere &Gaumnitz, 2003; Snell & Herndon, 2000). A related strategy would be to promotethe use of constructive controversy as a preventative tool for Fnipping_ questionablepractices Fin the bud_, thus encouraging members to discuss ethical conflicts as soonas these are recognized, when moral intensity is more likely to be low and beforequestionable practices escalate and are seen to become profoundly unethical.

In order to support these two strategies, organizations may train members in theskills of constructive controversy (Tjosvold & Tjosvold, 1995), and may encouragethe assumption that goals are cooperatively related by emphasizing the philosophythat good ethics is good business, and is therefore in the common interest (Cohen,1999). Case studies of organizations that adopt these strategies and measuresrigorously, with regard to the local cultural context, would reveal whether the modelstands up to testing in the field of practice.

Limitations

We acknowledge that the composition of the sample of interviewees may limit thegeneralisability of the results of this study, that how individuals view and resolveethical issues in a Chinese work context may reflect factors other than thoseinvestigated in the study, such as personality or attitudinal differences, and that interms of internal validity, the data are subject to biases associated with self-reporting,and may not accurately or completely represent the incidents that were referred to.

Regarding internal validity, however, a body of research suggests that self-reported data are reasonably valid, in that people tend accurately to perceive andreport their social environment when the purpose is for research rather than fortheir evaluation (Balzer & Sulsky, 1992; Crampton & Wagner, 1994; Murphy, Jako,& Anhalt, 1992; Shrauger & Osberg, 1986; Spector, 1992; Sudman, Bradburn, &Schwarz, 1996). Furthermore, that the interviewees recounted their case examplewhile also answering specific rating questions about it may have given rise to less


distortion and bias than in studies that ask for generalizations across events(Podsakoff & Organ, 1986; Sudman et al., 1996; Schwartz, 1999). Although ourstudy was potentially limited by common method problems, some work suggeststhat common method variance may not be as much of an artifact as commonlyassumed (Spector, 1987; Avolio, Yammarino, & Bass, 1991). In further mitigation,as reported in the scale validation subsection, confirmatory factor analyses tested aone-factor solution and found it to be a relatively poor fit with the data.

Another limitation is that we were able only to investigate the perceptions andaccounts of one party in relation to each of the ethical conflict incidents. It ispossible that other parties to these incidents might have made different assumptionsabout goal relationships, might have had different perceptions about the extent ofconstructive controversy, and might have perceived different outcomes.

Directions for Further Research

Additional research studies, preferably using triangulated methods, are needed tofurther test and refine the propositions argued here (Spector & Brannick, 1995). Forexample, it would be desirable to provide direct experimental verification of the roleof cooperative goals and constructive controversy in resolving ethical conflicts, withdata gathered from two or more parties to each conflict.

Case C illustrates that it is possible for there to be cooperative goals andproductive, open-minded discussion of diverse viewpoints in relation to morallyintense ethical conflicts, but further research is needed to explore how anenvironment can be created where this is more likely to happen, and to cast morelight on why people with moral intense issues tend instead to assume competitivegoal relationships, thus reducing the likelihood of constructive controversy.

According to H5, which our study supported, and which previous research haspointed towards (Argyris, 1990; Deutsch, 1973; French & Allbright, 1998), moralintensity is antecedent to competitive goal relationships and thus is likely indirectlyto lead to less constructive controversy. However, this finding may be regarded asinconsistent with expectancy theory (Van Eerde & Thierry, 1996). Expectancytheory, along with other traditional motivation perspectives (Tung, 1981), assumesthat people tackle issues rationally, by calculating the balance of incentives overdisincentives when contemplating action. Controlled experiments might examine analternative model, where high moral intensity moderates, i.e., magnifies, the impactof goal relationships on constructive controversy. In line with a view of people asrational decision makers, this alternative model would predict that when an ethicallyconcerned actor construes goal relationships as cooperative, high moral intensityprovides further motivation to engage in constructive controversy in order to betterassess the available options. It would predict also that when an ethically concernedactor construes goal relationships as independent or competitive, high moralintensity would serve to increase the actor’s feeling that his or her goals wereunrelated to or opposed to the goals of others involved in the conflict, and thuswould further discourage constructive controversy.

Although prior research has not provided evidence that any particular individual-level factors affect the relationship between moral intensity and goal relationships, orimpact directly upon an organization member’s inclination to engage in constructivecontroversy in relation to ethical conflicts, further research might select particular


variables to explore. For example, Frepressors_ tend to avoid or ignore psychologicalthreats and unpleasant events, whereas Fsensitizers_ seek to investigate, explore andexplain these (Fiske & Taylor, 1984, quoted in Jones, 1991, p. 382). Research mighttherefore investigate whether sensitizers with high moral intensity ethical conflicts aremore inclined to engage in constructive controversy than are repressors. Also, peoplehigher in need for closure have been found to be less open to opposing information(Webster & Kruglanski, 1994; Frederico, Golec, & Dial, 2005). Need for closure mightthus affect open-mindedness and hence reduce the likelihood of engaging inconstructive controversy.

Further research could also explore the impact of perceived similarity of moralvalues between self and others involved in the conflict on the likelihood ofcooperative goals and hence constructive controversy. This would indicate whethera strong common culture supportive of ethical values serves to encourage constructivecontroversy about ethical issues.

Conclusions

The research makes two main contributions. First, it has established that, even in thecontext of ethical conflicts at work in China, a situation where constructivecontroversy might be considered especially unlikely, constructive controversy takesplace and has positive outcomes, i.e., ethical impact and interactive justice. Second, ithas identified that when ethical conflicts are encountered, cooperative goal relation-ships are antecedent to constructive controversy, but are inhibited by moral intensity.

Organizations are thus challenged to create internal environments where membersunderstand that constructive controversy about ethical issues, including those withhigh moral intensity, is an integral means of furthering organizational goals. Inpractical terms, organizations may prevent the escalation of unethical activities bytraining members to engage in constructive controversy, by arranging for them to usethis as a means of developing codes of conduct, and by reminding members about theneed for constructive controversy as soon as they detect potential code violations.

Acknowledgements The authors thank the editor and two anonymous referees for their commentson previous manuscripts. Thanks also go to their research assistants from Shanghai University ofScience & Technology and from the Institute of Psychology, Chinese Academy of Science inBeijing, for able assistance. This work was supported by the Research Grants Council of the HongKong Special Administrative Region, China, (Project No: LU3013/01H) to the second author.

Appendix

Perceived Moral Intensity

& To what extent did this situation present you with an ethical dilemma?& To what extent did you feel what was happening or about to happen was morally

wrong?& To what extent did you feel that there was a strong likelihood that someone

would be harmed?& To what extent did you empathize for the people who might be harmed?& To what extent did feel that there was a risk that you yourself might be harmed?


Assumed Goal Relationships

& In your mind, how related was your reaching your objectives with the other partyreaching his/her objectives? (Reversed scored, measuring assumed independent-ly related goals)

& How much would your reaching your objectives help the other party reach his/her objectives? (Measuring assumed co-operatively related goals)

& How much would your accomplishing your objectives interfere with his/herobjectives? (Measuring assumed competitively related goals)


& How much did you and the other party work together for the benefit of both of you?& How much did you and the other party express your views fully?& How much did you and the other party consider each other’s views open-

mindedly?& How much did you and the other party try to understand each other’s concerns?& How much did you and the other party try to use each other’s ideas?

Ethical Impact

& To what extent did this interaction help you resolve your ethical dilemma?& To what extent did this interaction help you conclude that what would happen

was morally acceptable?& To what extent did this interaction help you conclude that there was less

likelihood that someone would be harmed?& To what extent did this interaction help you empathize with the people who

might have been harmed?


& How much did this interaction help you believe that the other party will consideryour viewpoint?

& How much did this interaction help you believe that the other party treats youwith kindness and consideration?

& How much did this interaction help you believe that the other party provides fairinterpersonal treatment?

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Dr. Robin Snell is Director of Business Programmes and Professor of Management atLingnan University, Hong Kong. Prior to this, he worked at City University of HongKong, where he coordinated the M.B.A. programme and edited the journal, ManagementLearning. He has also worked at Lancaster University, U.K., where he obtained his PhD.His main research interests are business ethics, qualitative methods, and organizationallearning. He has published in many journals, including British Journal of Management,Human Relations, Journal of Business Ethics, Journal of Management Studies, andOrganization Studies.

Prof. Dean Tjosvold is Chair Professor of Management at Lingnan University, HongKong, and Director of the Cooperative Learning Center there. Simon Fraser Universityawarded him a University Professorship for his research contributions. He has publishedover 200 articles and 15 books on cooperation and competition, managing conflict,leadership and power. He is past president of the International Association of ConflictManagement and has served on several editorial boards, including the Academy ofManagement Review and Journal of Organizational Behavior. He is a partner in his familyhealth care business in Minnesota.

Dr. Sofia Su Fang is an Associate Professor in the Finance School, Shanghai University ofFinance and Economics, where she earned a PhD in Economics. She also worked in theCooperative Learning Centre at Lingnan University. She has published around 20 articlesabout management and finance.


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Resolving ethical conflicts at workthrough cooperative goals and constructive controversy in the People's Republic of China