Jan Mikaela L. Ancheta, CPA
Michelle Monique Cleo S. Arizabal, CPA
Divine Word College of Laoag,
Graduate School of Business
Abstract
This study focuses on how power
dynamics influence ethical decision-making and behaviours in organizations. It
highlights that unequal power distribution can significantly influence ethical
practices. Theoretical frameworks like French and Raven's bases of power,
Foucault's power-knowledge theory, power-dependency theory, and Leader-Member
Exchange (LMX) theory provide insights into how power operates in the
workplace. Misuse of power can lead to ethical violations, lower employee
morale, and hostile organizational culture. The study also explores ethical
theories such as deontology, utilitarianism, and virtue ethics, in order to understand
their role in shaping workplace ethics. Deontology focuses on adherence to
moral duties, utilitarianism on the outcomes for the majority, and virtue
ethics on developing moral character. It aims to uncover strategies that
organizations can employ to ensure ethical standards are maintained and power
is exercised appropriately. Additionally, it emphasizes the need for ethical
leadership and accountability, suggesting that addressing power imbalances is
necessary for fostering a positive organizational environment and maintaining
ethical standards.
Keywords: Power dynamics, ethics, power imbalances, ethical leadership,
organizational culture, authority, influence
Introduction
In modern organizations, power dynamics play a
significant role in shaping workplace relationships, influencing
decision-making, and establishing the ethical tone of the company. Power is
often distributed unequally in hierarchical organizations, creating
environments where individuals may leverage authority to sway the actions of
others, sometimes for personal gain (French & Raven, 1959). Understanding
these power relationships is crucial for examining how they impact ethical
boundaries, which are the implicit and explicit rules that define moral
behaviour in the workplace (Trevino & Nelson, 2016).
Power dynamics in the workplace have significant
ethical implications that require careful consideration. When power is misused,
it can have detrimental effects on employee morale, engagement, and the overall
work environment (Campbell, 2023). Imbalances in power can lead to ethical
boundary violations, ranging from subtle pressures to comply with unethical
requests to more overt abuses of authority. For instance, supervisors may exert
undue influence on subordinates, compromising ethical standards through coercion
or manipulation (Lammers et al., 2015). As organizations focus more on
corporate governance, accountability, and ethical leadership, examining the
link between power and ethical boundaries has become essential for fostering
environments where integrity is upheld (Kaptein, 2019).
Power imbalances can blur the lines between acceptable
and unacceptable behaviour in the workplace. Employees in positions of authority
may misuse their power to exploit subordinates, leading to ethical breaches
such as favouritism, harassment, or even financial misconduct. In such
environments, ethical boundaries may become distorted or disregarded,
potentially resulting in a toxic culture that undermines the integrity of the
organization (Lammers et al., 2015). The extent to which power dynamics influence
ethical decision-making and workplace conduct is an area that requires further
investigation.
Understanding the relationship between power and
ethics is critical for organizational leaders, HR professionals, and
policymakers. By identifying how power imbalances contribute to ethical
violations, this study aims to provide insights into creating more ethical,
transparent, and equitable workplaces. These insights are crucial for improving
leadership practices, enhancing corporate governance, and establishing stronger
ethical guidelines that prevent the misuse of power.
Understanding Power Dynamics
Power dynamics refer to how power is
distributed, exercised, and negotiated between individuals, groups, or
institutions within a specific context. This concept explores how power
influences relationships, decision-making processes, and social structures,
often revealing underlying inequalities, hierarchies, and control mechanisms.
Power dynamics are shaped by factors such as social status, economic resources,
cultural norms, and institutional authority, which influence interactions and
outcomes in various settings. (Lukes, 2020)
Power dynamics can shift based on changes in social,
economic, or political conditions. Understanding this concept is vital in
addressing issues of inequality, fostering effective leadership, and promoting
social justice.
Theories on Power Dynamics
Power in the workplace can be understood through several theoretical
lenses. One of the most well-known frameworks is French and Raven's (1959) five
bases of power, which classify power into legitimate, coercive, reward, expert,
and referent forms. Each of these types of power manifests differently in the
workplace, influencing how leaders and employees interact. Legitimate power
stems from a formal position or role within an organization, while coercive
power involves the ability to impose penalties. Reward power enables the
provision of incentives, expert power comes from specialized knowledge, and
referent power arises from personal admiration or respect.
Foucault’s theory of power emphasizes the pervasive nature of
power and its role in shaping social relationships. According to Foucault
(1980), power is not only held by individuals but is diffused throughout
organizational structures. His concept of “power-knowledge” suggests that power
is closely linked with knowledge production and dissemination, making it a tool
for controlling behaviour and defining ethical norms.
Power-dependency theory also provides a useful framework for
understanding organizational dynamics. This theory posits that power is a
function of dependency; those who control resources that others depend on wield
power over them (Emerson, 1962). In the workplace, this dependency can manifest
in various forms, such as access to information, decision-making authority, or
control over career progression. Consequently, those in positions of power may
influence ethical decisions by leveraging these dependencies.
Moreover, Casciaro and Piskorski (2005) emphasized that
dependency is not just about resources but also about access to networks and
social capital. Power often lies with those who have strong relationships and
access to critical information, making network dynamics an important
consideration in understanding power relations (Pfeffer, 2013).
Leader-Member Exchange (LMX) theory, introduced by Graen and
Uhl-Bien (1995), explores the relational dynamics between leaders and
subordinates in organizational settings. Unlike traditional leadership models
that treat leader-follower relationships uniformly, LMX emphasizes that leaders
form differentiated relationships with their subordinates, resulting in either
high-quality or low-quality exchanges (Liden, Sparrowe, & Wayne, 1997).
Leaders in high-quality exchanges may exercise greater influence on their
subordinates' behaviour, encouraging ethical conduct through role modelling and
open communication (Mahsud, Yukl, & Prussia, 2010). However, the
differentiated nature of LMX relationships can also create ethical dilemmas.
For instance, employees in high-quality exchanges might receive preferential
treatment, potentially fostering perceptions of favouritism and inequality,
which can erode organizational justice (Scandura, 1999).
From a power dynamics perspective, LMX theory highlights the
unequal distribution of power within organizations. Leaders naturally develop
"in-groups" and "out-groups" based on the quality of
relationships, leading to power imbalances among employees (Dulebohn et al.,
2012). Martin et al. (2016) suggest that in-group members benefit from closer
relationships with leaders, often gaining more leeway in decision-making, which
can sometimes blur ethical boundaries, while out-group members might experience
feelings of marginalization and exclusion from key resources.
Ethical Theories and
Boundaries
Ethical boundaries in the workplace are shaped by the norms
and values that guide behaviour. Deontological ethics, rooted in the philosophy
of Immanuel Kant, focuses on the adherence to duty and moral rules rather than
the consequences of actions (Kant, 1785/1997). Deontology emphasizes that
individuals in the workplace, especially those in positions of power, have a
moral obligation to respect universal ethical principles such as honesty,
fairness, and respect for others' rights, regardless of the outcomes (Alexander
& Moore, 2016). This theory is particularly relevant in contexts of power
dynamics because it stresses that those with authority must act according to
moral duties, ensuring that their decisions are guided by principles like
justice and equality rather than self-interest or utilitarian considerations.
In power-laden environments, deontological ethics can serve
as a safeguard against the abuse of authority, ensuring that power is exercised
responsibly and ethically. Leaders are expected to respect ethical boundaries
that protect the rights and dignity of subordinates, preventing exploitation
and unfair treatment (Bednar & Spiekermann, 2023). The deontological focus
on duty provides a clear ethical framework that promotes accountability, even
when power is unequally distributed. This approach helps maintain ethical
integrity within organizations, ensuring that actions are not justified solely
by their outcomes but by their adherence to moral principles.
In contrast, utilitarianism, a consequentialist theory
primarily associated with philosophers Jeremy Bentham and John Stuart Mill,
evaluates the morality of actions based on their outcomes, aiming to maximize
overall happiness for the greatest number of people (Mill, 2009). In the
workplace, utilitarianism often informs decisions where leaders balance
competing interests, striving for the best aggregate outcome. However, power
dynamics complicate this process, as those in authority may have the capacity
to shape outcomes that disproportionately benefit the majority while
overlooking the ethical treatment of minorities or marginalized groups (Helin
& Sandstrom, 2008). This can lead to ethical tensions when decisions,
though beneficial for many, result in harm or unfair treatment to a few.
The relevance of utilitarianism in power-laden environments
lies in its potential to justify actions that prioritize collective benefit
over individual rights. This is particularly evident when leaders use their
power to make decisions that appear utilitarian but inadvertently perpetuate
power imbalances, such as sacrificing the well-being of lower-level employees
for organizational gains (Bednar & Spiekermann, 2023). Therefore, while
utilitarianism offers a framework for ethical decision-making, it also risks
reinforcing unequal power structures if not critically assessed, making it
crucial to balance utility with fairness and respect for individual rights.
Virtue ethics, which emphasizes the development of moral
character and virtues such as honesty, courage, and empathy, plays a critical
role in navigating power dynamics within the workplace. By focusing on
individual character, virtue ethics encourages leaders and employees to act
with integrity, fairness, and respect, regardless of their position of power.
This ethical framework is highly relevant in addressing the subtle ways power
can influence behaviours and decisions. For example, leaders who embody virtues
like humility and justice are better positioned to foster inclusive and
respectful workplace environments, mitigating the potential for abuses of power
(Markkula Center for Applied Ethics, 2023).
These ethical frameworks guide how individuals perceive and
respond to power dynamics. A utilitarian approach may justify the misuse of
power if it is seen to benefit the majority, while a deontological stance would
reject unethical behaviour regardless of the outcomes. Boundaries are thus
contingent upon the ethical framework that individuals or organizations adopt.
However, when power is concentrated in a few individuals, ethical standards are
often compromised, and ethical breaches become more likely (Lammers et al.,
2015).
Impact on Organizational
Culture
Power dynamics have a reflective impact on organizational
culture, influencing the establishment and maintenance of values, norms, and
behaviours within an organization. The distribution and exercise of power not
only shape the organizational culture but also affect employee behaviour,
decision-making processes, and overall performance.
In the case of Ayala Corporation, the management’s commitment
to ethical business practices and social responsibility has been involved in
shaping a culture that values integrity, inclusivity, and transparency. Ayala's
emphasis on ethical behaviour and social contribution has influenced its
organizational culture positively, promoting a strong sense of corporate
responsibility and community engagement. When those in power prioritize ethical
behaviour, inclusivity, and transparency, these values are more likely to enter
the broader organizational culture. (Schein, 2017).
Likewise, power dynamics have led to hierarchical and
dictatorial cultures that can repress creativity and innovation. In traditional
family-owned businesses, power is concentrated within a small group of top
executives or family members. This concentration of power can create a culture
of compliance where employees may feel pressured to conform to the expectations
of those in authority, even if these expectations conflict with their personal
values. This has been observed in companies like San Miguel Corporation, where
a strong hierarchical structure can sometimes limit employee input and
innovation (Monteiro & Joseph, 2023).
Decision-making processes within an organization are
similarly affected by power dynamics. When power is concentrated among a few
individuals, decisions are often made unilaterally, with limited input from
other employees. Some government-owned and controlled corporations in the
Philippines have been criticized for their centralized decision-making
processes, which can lead to inefficiencies and a lack of employee engagement.
This can result in a culture of compliance where orders are followed without question,
potentially suppressing creativity and innovation. In contrast, organizations
that practice inclusive decision-making, where power is shared, tend to create
a culture of engagement and accountability. This approach not only enhances the
quality of decisions but also contributes to better organizational outcomes
(Treviño et al., 2014).
Power imbalances can also contribute to or mitigate conflict
within an organization. One prominent example is NutriAsia, a major food
manufacturing company in the Philippines. In 2018, NutriAsia faced intense
labour disputes and employee protests over issues of unfair treatment and poor
working conditions. Workers raised concerns about power imbalances, citing
favouritism and lack of transparency in management practices. These issues led
to strikes and a negative public image, illustrating how power imbalances can
destroy trust and create a hostile working environment. When employees perceive
that power is being used unfairly it can lead to conflict in an organizational
culture marked by fear and resentment. Addressing power imbalances and
promoting fairness can help build a culture of trust and mutual respect,
thereby reducing the potential for conflict and improving overall employee
morale (Foldy & Ospina, 2023).
Power dynamics define organizational culture by influencing
norms and values, employee behaviour, decision-making processes, conflict
levels, and long-term cultural changes. Understanding and managing these
dynamics effectively is essential for creating a positive and productive
organizational environment. Over time, how power is exercised
within an organization can lead to significant cultural shifts. Leaders who use
their power to implement changes in policies, practices, and norms can reshape
the organizational culture in various ways. (Monteiro & Joseph, 2023).
Influence on Ethical
Decision-Making
Ethical decision-making involves understanding how various
factors influence the choices individuals or organizations make when confronted
with moral dilemmas. Key influences include personal values, cultural norms,
organizational culture, and situational pressures. Leaders and employees often
face conflicting interests, such as balancing personal gain, social pressures,
and organizational objectives, which can challenge ethical standards (Treviño
et al., 2014).
An organizational culture that prioritizes ethical behaviour
promotes consistent and principled decision-making. In contrast, cultures that
emphasize profit over ethics may compromise those standards (Kaptein, 2011).
Individual differences, such as levels of moral development, also play a
significant role in shaping ethical choices (Jones, 1991).
Organizational culture, shaped by shared values, beliefs, and
practices, dictates the ethical climate of a company (Schein, 2017). Power
structures within organizations influence the flow of information,
decision-making processes, and the enforcement of ethical standards. Cultures
that encourage open dialogue and distribute power more evenly across levels are
more likely to foster ethical behaviour (Kaptein, 2011).
Power dynamics are crucial in ethical decision-making.
Individuals in authority can either enforce ethical norms or encourage
unethical behaviour. Organizations can mitigate the risk of unethical decisions
by implementing procedures that ensure accountability, transparency, and checks
and balances. (Treviño et al., 2014).
The style of leadership significantly affects the ethical decisions
made by employees. Transformational leaders inspire ethical behaviour by
promoting shared values and motivating employees to act in the organization's
best interest (Bass & Avolio, 1993). On the other hand, authoritarian
leaders who concentrate power at the top often create environments where
ethical boundaries are distorted, and subordinates may feel pressured to comply
with unethical directives to protect their positions (Brown & Treviño, 2006).
Ethical Boundaries and
Hierarchy
The hierarchy of power dynamics and ethical boundaries are
intertwined, influencing how decisions are made and how power is exercised
within organizations. Ethical boundaries refer to the limits of acceptable
behaviour that are guided by moral principles, organizational policies, and
legal standards. When these boundaries are clearly established and upheld, they
contribute to the way that power is used responsibly and fairly (Kaptein,
2011).
Power dynamics can significantly impact the enforcement of
ethical boundaries in hierarchical structures. Individuals at higher levels of
the hierarchy often have more authority and control, which can either sustain
or challenge ethical standards depending on how power is exercised. Leaders who
prioritize ethical behaviour can set a positive tone for the organization,
promoting a culture of integrity and accountability (Treviño et al., 2014).
Conversely, when power is concentrated and unrestricted, there is a greater
risk of ethical boundaries being crossed, as those in power may exploit their
position for personal gain or to further organizational objectives at the
expense of ethical considerations (Jones, 1991).
The hierarchy of power dynamics also affects the ability of
subordinates to challenge unethical behaviour. In organizations with rigid
hierarchies, lower-level employees may feel disempowered or fear retaliation if
they speak out against unethical practices. This can create a culture of
silence, where unethical behaviour goes unreported and unchecked, leading to
potential abuses of power and deviations in ethical standards (Kaptein, 2011).
Peer Influence and Group
Dynamics
Peer influence refers to how individuals affect
each other’s behaviours, attitudes, and decision-making processes, particularly
in group settings. Group dynamics involve the interactions among group members,
which can significantly influence how power is distributed and exercised within
the group.
Recent research highlights that peer influence can be a
powerful driver of behavior within organizations. Peers can apply pressure on
individuals to conform to group norms, which may include both ethical and
unethical practices (Yu et al., 2021). When group norms support ethical
behaviour, peer influence can strengthen adherence to ethical standards and
create a collective commitment to integrity. On the other hand, when norms are
unethical, peer influence can lead to the perpetuation of dangerous practices,
even among individuals who might otherwise act ethically.
In Philippine workplaces, the "barkada" (peer
group) culture significantly influences employee behaviours and work ethics.
Employees may feel inclined to conform to group norms, such as working late
hours or participating in after-work social gatherings. Although positive peer
influence can create a supportive environment, negative dynamics may lead to
toxic behaviours. Additionally, the other culture that is prevalent in many
Filipino workplaces is the emphasis on group harmony and consensus, often
allowing the opinions of more senior or influential members to carry more
weight in decision-making processes (Reyes, 2022).
On that note, peer influence can have both positive and
negative impacts on power dynamics. Individuals may conform to group norms due
to peer pressure, even when those norms contradict their personal beliefs or
ethical standards (Cialdini & Goldstein, 2004). The collective behaviours
that may result from this conformity may not be morally righteous because it
may serve to perpetuate power dynamics or distribute responsibility.
Strategies for Maintaining
Ethical Standards
Maintaining ethical standards within power dynamics requires
implementing strategies that promote integrity, transparency, and
accountability across all levels of an organization. Recent research highlights
several effective strategies.
Establishing clear ethical guidelines is essential for
setting clear expectations regarding acceptable behaviour. Developing and
enforcing a code of ethics that reflects the organization's core values and
ethical principles is necessary. This code should be well-communicated
throughout the organization, and regular training sessions should be conducted
to employees to internalize these guidelines and understand their importance
(Kaptein, 2011).
Encouraging ethical leadership is another fundamental
strategy. Ethical leadership involves modelling ethical behaviour, making
decisions that align with ethical standards, and holding others accountable.
Leaders who demonstrate ethical conduct set a standard for the rest of the
organization (Brown & Treviño, 2006). Leaders should also be approachable
and open to feedback to create an environment where ethical concerns can be
raised without fear of retaliation.
Setting up a system for accountability is essential for
maintaining ethical standards, particularly within power dynamics. Establishing
clear reporting structures, whistleblowing channels, and regular audits can
help ensure that power is not abused and that unethical behaviour is addressed.
Organizations should provide safe and anonymous ways for employees to report
unethical behaviour, ensuring these reports are taken seriously and investigated
promptly.
Promoting an open communication culture is also integral in
identifying and addressing early signs of unethical practices. This can be
achieved by fostering an inclusive environment where diverse perspectives are
valued, and employees are encouraged to voice their concerns (Mayer et al.,
2012). This culture helps prevent ethical issues from escalating and reinforces
a collective commitment to ethical conduct.
Conducting regular ethical audits and assessments provides an
additional layer of protection by continuously monitoring the organization's
ethical climate. These audits can involve surveys, interviews, and focus groups
to gather insights from employees about the effectiveness of current ethical
practices and identify areas for improvement (Treviño et al., 2014).
Organizations can create a culture where ethical standards
are maintained, and integrity is upheld at all levels by adopting these
strategies.
Addressing Power Imbalances
A fair and equitable environment can only be achieved by
addressing power imbalances within organizations and social groups. These
imbalances can lead to unethical behavior, discrimination, and conflict, making
it essential to implement strategies that promote balance and accountability.
Empowering lower-level employees or group members by
providing them with more autonomy and decision-making authority is an effective
way of addressing power imbalances. Decentralized decision-making processes,
participative leadership, and access to resources and opportunities for
professional growth are all strategies that can help redistribute power more
evenly. Jollibee Foods Corporation is an example of a company that has embraced
decentralized decision-making and participative leadership. Jollibee’s leadership
style encourages input from employees at various levels, allowing for a more
collaborative approach to decision-making. The company’s success is partly
attributed to its emphasis on empowering employees through training and
development programs, which provide staff with the skills and autonomy to
contribute to the company’s growth. This inclusive approach helps in
redistributing power and adopting a culture of mutual respect and
collaboration. Organizations can reduce the risks associated with concentrated
power and promote a more balanced distribution of authority by empowering
subordinates (Li & Tang, 2022).
Promoting open communication is another key strategy.
Encouraging transparent dialogue allows employees to express their concerns,
share ideas, and provide feedback without fear of retaliation. Globe Telecom is
known for its commitment to open communication and employee engagement. The
company has developed several platforms to facilitate transparent dialogue,
including regular meetings, online feedback channels, and employee engagement
surveys. Globe Telecom’s leadership actively encourages employees to share
their ideas and concerns, ensuring that feedback is considered in
decision-making processes. These steps are to ensure that voices from all
levels of the organization are heard and considered, contributing to a more
equitable environment (Monteiro & Joseph, 2023).
Implementing checks and balances within the organizational
structure is essential to prevent the abuse of power. Oversight committees,
regular audits, and transparent decision-making processes involving multiple
stakeholders are critical in holding those in power accountable. Ayala
Corporation has established several checks and balances to ensure responsible
management and decision-making. The company has an Audit Committee that
oversees the financial reporting process, internal controls, and compliance with
legal and regulatory requirements. This committee is part of the Board of
Directors and plays a crucial role in reviewing the company's financial
statements and audit reports. Additionally, Ayala Corporation has a Code of
Conduct and a Whistleblower Policy that allow employees to report unethical
behaviour or misconduct anonymously, further ensuring transparency and
accountability. These are necessary to set boundaries in exercising power sensibly
and that decisions are made in the best interest of the organization and its
members (Treviño et al., 2014).
Promoting inclusive leadership practices is also necessary
for mitigating power imbalances. Leaders who promote inclusivity seek out and
incorporate diverse perspectives in decision-making processes. BPI has taken
steps to ensure that inclusive leadership practices are embedded in its
organizational culture. Their leadership style is committed to diversity and
inclusion, and this commitment is reflected in its recruitment, training, and
promotion practices. BPI’s inclusive leadership approach includes mentorship
programs, diversity training, and policies that support the advancement of
employees from underrepresented groups.
By ensuring that underrepresented groups have a voice, leaders can help
level the playing field and reduce the marginalization of certain employees or
group members. An environment where the concerns of those with less power are
more likely to be addressed contributes to a more equitable organizational
culture (Li & Tang, 2022).
Encouraging collective action among employees can also shift
power dynamics. PLDT employees have engaged in collective action to address
concerns about labor practices and working conditions. Employees, represented
by labor unions, have collectively negotiated with management for better
benefits, job security, and fair treatment. These collective bargaining efforts
have led to improvements in labor conditions and reinforced the importance of
employee voices in shaping company policies. The collective action of PLDT
employees demonstrates how organized efforts can shift power dynamics and lead
to positive changes. When employees work together, they can collectively
negotiate for better working conditions, challenge unethical practices, and
advocate for their rights. Collective action increases the bargaining power of
employees relative to management and can be an effective way to address power
imbalances within organizations (Foldy & Ospina, 2023).
Conclusion
The
findings of this study illustrate that power dynamics profoundly influence
ethical boundaries in the workplace. Power, when concentrated and unchecked,
can lead to ethical violations, fostering environments where moral behavior may
be compromised. Hierarchical structures often exacerbate these issues by
restricting open communication and promoting compliance over integrity,
especially in environments where authority figures exert undue influence on
subordinates.
Conversely,
organizations that distribute power more equitably and promote ethical
leadership cultivate healthier workplace cultures. Clear ethical guidelines,
decentralized decision-making, and open communication are critical in
mitigating the risks of power imbalances. To mitigate
the negative effects of power dynamics and maintain a positive organizational
culture, it is essential to implement strategies that promote transparency,
accountability, inclusivity, ethical leadership and integrity across all levels of the organization. Establishing clear ethical
guidelines, encouraging open communication, and conducting regular ethical
audits are key practices that can help ensure power is used appropriately.
Addressing
power imbalances and reinforcing ethical boundaries requires a concerted effort
from leadership, HR, and all organizational members. Implementing the
strategies outlined in this research can help mitigate ethical risks associated
with power dynamics, leading to more equitable and ethical workplaces.
Overall,
understanding and effectively managing power dynamics is essential for
cultivating an inclusive, fair, and ethical workplace. Organizations that
prioritize these aspects will be better positioned to navigate challenges,
build trust, and achieve sustainable success.
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