Structural support to exercise and develop a moral character A qualitative study into the organisational structure of a Dutch insurance
company to explore its influence on the realisation of a teleological, deliberative and social context and, as such, its support for the exercise and
development of a moral character of employees
Riki Anna Maria de Wit S4327330
June 2020 Version 1
Master’s thesis
Organisational Design & Development Radboud University
Supervisor: Dr D. J. Vriens Second examiner: Dr C. Groß
Preface
In front of you lies the biggest amount of words I’ve ever put together. And for those who know me well, I like to put together many words. Despite the work I’ve put in it, I can barely check any of the ‘Things-that-go-wrong-when-writing-the-Master’s thesis Bingo boxes’. Yes, I’ve lost some of my work due to a computer crash. But maybe that was just a way to remind myself to safe my files frequently. I did not dislike transcribing interviews nor did I have an emotional breakdown. I even did not put secret ‘bad words’ in white colour in my 200-pages long thesis (I dare you to check that ;)).
What I did, was enjoying putting this thesis together. I really liked learning more about ethical behaviour in organisational settings. And I definitely enjoyed the little jokes I could make whenever my thesis supervisor arrived a bit too late at our appointment (if he even was in the country at all). Luckily, I had my spot at the office of ICR where I could work until he came to pick me up.
Speaking of which, I actually just want to thank you, Dirk. You gave me the right amount of motivation and direction to create this bookwork and always responded quickly. I’ve learned a lot over the last year (haleluja, time flies!) and my vision on performing research became even more positive thanks to you. Special thanks also go to Kyon, who had to work his way through my large pieces of information over and over again. I guess I still owe you some cups of coffee at the restaurant of a.s.r! I also want to thank Sebastian, who basically lend out the best spot in his apartment to me during the corona crisis, and Jos, for making it possible to perform this study in the first place. Last, but definitely not least, I want to thank my mom Petra and my Dad Matt (let’s see if you’ll recognise a name further down this thesis) for making it possible to study at university the way I did over the last six years. I wouldn’t have want it any other way. I remember ending my Bachelor’s thesis by stating that I was anxious about writing that thesis, but it made room for joy along the way. I am more than happy that I could extent that feeling throughout the process of writing this thesis. And I really hope that you will experience the same amount of joy reading this thesis as I did while writing it.
Abstract
This study aims to explore whether the current organisational structure of a.s.r. supports employees in exercising and developing their moral character so that the moral behaviour within a.s.r. enhances the ambition of senior management towards CSR. More specifically, this study examines whether there is a potential gap between the desired organisational structure that realises the teleological, deliberative and social context and, as such, supports the exercise and development of a moral character in the organisational context and the discovered organisational structure of a.s.r.
The objective of this research leads to several sub questions to theoretically describe the desired situation in which the organisational structure provides support for the exercise and development of a moral character. In that case, the value of five structural parameters is low which realises a teleological, deliberative and social context that, in turn, support the exercise and development of a moral character. This description is needed to answer the questions: ‘Does
the exploration of the organisational structure indicate a potential structure related gap between the desired situation and the discovered situation?’ and ‘If so, or if not, what does this mean?’. In order to provide an answer to these questions, semi-structured interviews are
conducted and a document analysis is performed.
Several potential structure related gaps between the desired situation and the discovered situation have been indicated. These potential structure related gaps are found with respect to the structural parameters functional concentration, specialisation of operational transformations and specialisation of regulatory transformations. However, the effect of these gaps was mainly shown with regard to the deliberative context and the social context. The influence of the divergent values is implied to be partially outweighed by discovered values that are in line with norm values. Hence, the effect of these potential structure related gaps on the support to exercise and develop a moral character is suggested to be limited. Therefore, for the respondents that are part of this research, the teleological context is realised. The realisation of the deliberative and social context can be improved, but is sufficient. As such, respondents indicated to be supported by the organisational structure in exercising and developing their moral character.
This research is a first attempt to explore the organisational structure of a.s.r. and fits the call for further research on the influence of the organisational structure on the exercise and development of a moral character of employees in organisations. The theoretical findings provide opportunities for future research on exercising and developing a moral character in organisations, whereas the practical implications can serve as a guide for organisations on how to support the exercise and development of a moral character.
Key words: exercising and developing a moral character, teleological context, deliberative context, social context, functional concentration, specialisation of operational transformations, specialisation of regulatory transformations, separation between operational and regulatory transformations, formalisation
Table of Content 1. Introduction p. 11 1.1. Base model p. 14 1.2. Research objective p. 15 1.3. Relevance p. 16
1.4. Outline of this thesis p. 17
2. Theoretical framework p. 18
2.1. Exercising and developing a moral character p. 19
2.1.1. Virtue ethics and Eudaimonia p. 19
2.1.2. Virtues, reason and desire p. 20
2.1.3. Moral virtues, practical wisdom and choice p. 21 2.1.4. Towards exercising and developing a moral character in organisations p. 24 2.2. Three contexts to support the exercise and development of our moral character p. 26
2.2.1. Teleological context p. 26
2.2.1. Deliberative context p. 27
2.2.3. Social context p. 29
2.3. Organisational structure p. 30
2.3.1. Structural parameters and parameter values p. 31
2.3.1.1. Functional concentration p. 32
2.3.1.2. Separation between operational and regulatory transformations p. 34 2.3.1.3. Specialisation of operational transformations p. 35 2.3.1.4. Specialisation of regulatory transformations p. 35
2.3.1.5. Formalisation p. 36
2.4. Parameter values and their influence on the realisation of a teleological, p. 37 deliberative and social context
2.4.1. Low value functional concentration p. 39
2.4.2. Low value of separation between operational and regulatory p. 40 transformations
2.4.3. Low value of specialisation of operational transformations and low p. 41 value of specialisation of regulatory transformations
2.4.4. Low value of formalisation p. 43
3. Method p. 48
3.1. Qualitative approach p. 48
3.2. Semi-structured interviews and document analysis p. 49
3.3. Sample p. 51
3.4. Operationalisation p. 52
3.4.1. Functional concentration p. 53
3.4.1.1. Norm value of functional concentration p. 54 3.4.2. Separation between operational and regulatory transformations p. 54 3.4.2.1. Norm value of separation between operational and p. 56 regulatory transformations
3.4.3. Specialisation of operational transformations p. 56 3.4.3.1. Norm value specialisation of operational transformations p. 57 3.4.4. Specialisation of regulatory transformations p. 58 3.4.4.1. Norm value of specialisation of regulatory transformations p. 59
3.4.5. Formalisation p. 59
3.4.5.1. Norm value of formalisation p. 60
3.4.6. Teleological context p. 61
3.4.7. Deliberative context p. 62
3.4.8. Social context p. 63
3.4.9. The exercise and development of a moral character p. 64
3.5. Data analysis p. 66
3.6. Research ethics p. 67
3.7. Qualitative research criteria p. 68
3.7.1. Generalisability p. 69
3.7.2. Internal validity p. 69
3.7.3. Reliability p. 69
4. Results p. 70
4.1. The exercise and development of a moral character p. 72
4.2. Teleological context p. 74
4.3. Deliberative context p. 77
4.5. Level of functional concentration p. 82
4.5.1. Discovered value of functional concentration p. 82 4.5.2. Problems with regard to the discovered level of functional concentration p. 84 4.5.3. Difference in norm value and discovered value p. 85 4.6. Separation between operational and regulatory transformations p. 86 4.6.1. Discovered value separation between operational and regulatory p. 86
transformations
4.6.2. Difference in norm value and discovered value p. 87 4.7. Level of specialisation of operational transformations p. 88 4.7.1. Discovered value specialisation of operational transformations p. 88 4.7.2. Problems with regard to the discovered level of specialisation of p. 89
operational transformations
4.7.3. Difference in norm value and discovered value p. 90 4.8. Level of specialisation of regulatory transformations p. 90 4.8.1. Discovered value specialisation of regulatory transformations p. 91 4.8.2. Problems with regard to the discovered value of specialisation of p. 95
regulatory transformations
4.8.3. Difference in norm value and discovered value p. 95
4.9. Formalisation p. 95
4.9.1. Discovered value formalisation p. 96
4.9.2. Difference in norm value and discovered value p. 97 4.10. Connection between discovered values, contexts and exercising and p. 98 developing a moral character
5. Conclusion p. 104
6. Discussion p. 105
6.1. Practical implications p.105
6.2. Theoretical implications p.105
6.3. Limitations and recommendations for future research p. 106
References p. 111
Appendix 1. First version of the Interview Guide (in Dutch) p. 117 Appendix 2. Final version of the Interview Guide (in Dutch) p. 128 Appendix 3. Interview invitation (in Dutch) p. 136 Appendix 4. Organisational chart of a.s.r. (in Dutch) p. 137
Appendix 5. a.s.r.’s visual view on how to increase the positive impact on society p. 138 and reduce the negative impact on society (in Dutch)
Appendix 6. Code book p. 139
Appendix 7. Initial template and final template p. 215 Appendix 8. Drawings functional concentration p. 220
List of figures and tables
Figure 1. Base model p. 14
Figure 2. Extended base model p. 18
Figure 3. Exercising and developing our virtues p. 23
Figure 4. Example high value functional concentration p. 33 Figure 5. Example low value functional concentration p. 34 Figure 6. Relation between low parameter values, characteristics of the p. 38 organisational structure and realisation of the teleological, deliberative and
social context
Figure 7. Extended base model (repeated) p. 45
Figure 8. Desired relationship between structural parameter values, characteristics of p. 46 the organisational structure, the teleological, deliberative and social context
and exercising and developing a moral character
Table 1. Type of documents and description of the documents p. 51 included in this research
Table 2. Overview of respondents p. 52
Figure 9. Operationalisation functional concentration p. 53 Figure 10. Operationalisation separation operational and regulatory transformations p. 55 Figure 11. Operationalisation specialisation of operational transformations p. 57 Figure 12. Operationalisation specialisation of regulatory transformations p. 58
Figure 13. Operationalisation formalisation p. 60
Figure 14. Operationalisation teleological context p. 61
Figure 15. Operationalisation deliberative context p. 63
Figure 16. Operationalisation social context p. 64
Figure 17. Operationalisation exercising and developing a moral character p. 66 Figure 18. Desired relationship between structural parameter values, characteristics of p. 71
the organisational structure, the teleological, deliberative and social context and exercising and developing a moral character (repeated)
Figure 19. Visual representation of content of section 4.2. to section 4.4. p. 74 Figure 20. Visual representation of content of section 4.5. to section 4.9. p. 82
Table 4. Desired relation between the structural parameters and the teleological, p. 99 deliberative and social context
Table 5. Desired relation between the structural parameters and the teleological, p. 102 deliberative and social context
Figure 21. Discovered relationship between structural parameter values, p. 103 characteristics of the organisational structure, the teleological, deliberative
1. Introduction
While concerns for society by organisations date back centuries, a growing number of organisations has more explicitly tried to contribute to society (rather than harm it) over the past decade. This tendency to ‘do good’ for society is in line with the fact that a growing number of organisations tries to act in a corporate socially responsible manner (Carroll, 1999; Crowther & Seifi, 2018; Lee, 2008). The concept of Corporate Social Responsibility has been explained by early academic studies (e.g. Carroll, 1979; Carroll, 1999; Epstein, 1987) that describe its different components. One important component that has been explicitly highlighted is business
ethics. In addition to its economic and legal responsibilities, an organisation is often perceived
to have ethical responsibilities beyond those stated by law (Carroll, 1979; Carroll, 1991). According to Valentine and Fleischmann (2007), CSR can even be seen as a natural extension of ethical behaviour in organisations. Accordingly, for an organisation to enhance its attention towards CSR, it first needs to address ethical behaviour within the organisation.
An organisation that devotes specific attention to Corporate Social Responsibility (CSR), is the Dutch insurance company a.s.r. a.s.r. states that, as an organisation, it aims to be a “valuable member of society” (asrnl.com, n.d.a.) and it “has a public duty to act as a responsible insurer and investor” (asrnl.com, n.d.a). To act upon this statement, the organisation has signed many national and international standards and agreements with, amongst others, the United Nations and MVO Nederland (the Dutch national sustainability expertise centre). In these agreements, the organisation declares that it will embrace principles with regard to corporate social responsible behaviour. Additionally, senior management of a.s.r. particularly aims to consciously embody CSR throughout all levels of the organisation since a couple of years now (a.s.r., 2018; a.s.r, 2019a). One specific way the organisation tries to accomplish this is by focussing on the important component of CSR: ethical behaviour of employees within the organisation.
a.s.r. tries to address ethical behaviour by implementing principles which form the foundation of the core values of the organisation. These core values (i.e. ‘I am helpful’, ‘I think ahead’, ‘I am thorough in my approach’) are based on intrinsic motivation of employees. These values aim to enhance employees’ ability and motivation to being good, rather than focussing on compliance to rules or consequences that see one as doing good as an employee (a.s.r, 2017; a.s.r., n.d.b).
Employees of a.s.r. are pointed to these core values on a regular basis by senior management of a.s.r. By doing so, senior management wishes to make ethical behaviour a core concept manifested throughout the organisation and consciously embraced by employees (a.s.r., 2017). In the end, for an organisation to behave in an ethically responsible manner (as part of achieving CSR), it needs individuals to act accordingly.
Moral behaviour at an individual level in organisations (i.e. regarding employees rather than the organisation as a whole) can be viewed in different ways. Some regard ethical behaviour in organisations as acting in accordance with rules about right and wrong or good and bad that are widely recognised throughout an organisation (e.g. Pehzman, Javadi, & Shahin, 2013). Others focus on whether actions themselves are fair and honest (e.g. Román & Muneara, 2005) or whether individuals live up to certain social norms (e.g. Tuan, 2015). However, an increasing number of researchers (e.g. Moore, 2005a; Weaver, 2006; Hartman, 2008; Vriens, Achterbergh & Gulpers, 2018; Nicholson, Beadle & Slack, 2019) address ethical behaviour in organisations by turning to a virtue ethics approach that focusses on the so-called moral character of individuals. This approach concentrates on whether individuals are being good, rather than merely doing good. The approach fits well with the approach taken by a.s.r., as employees are told to be good as a person rather than do good as an employee.
The virtue ethics approach is different from other dominant ethical approaches. This approach focusses on how one should live his/her life rather than merely what someone should do (Vriens et al., 2018; Weaver, 2006). This means doing the right things for the right reasons: desiring and choosing the right thing based on a ‘well-developed moral character’. In the context of an organisation, virtue ethics is about living your life in the best possible way in an organisational context rather than merely complying with the organisation’s ethical rules and standards. Despite the focus on a moral character, it does not mean that rules and consequences become irrelevant. These rules and consequences will be weighted with integrity with respect to norms and values in a specific context. However, the moral character of individuals is central in this context. Compared to dominant methods of examining individual (un)ethical actions, this focus on a person’s moral character is believed to be the most promising approach regarding ethical reasoning in relation to societal issues (Humphreys, 2019). As such, for organisations that aim to focus on Corporate Social Responsibility, it becomes more and more relevant to concentrate on exercising and developing a moral character than to concentrate on merely what this person does.
If members of an organisation need a certain moral character in order to act in an ethical manner, it is relevant to examine the conditions supporting the development and exercise of such a moral character. As the virtue ethics approach gradually gained attention in literature, the same applies to such supporting conditions (see e.g. Weaver, 2006; Vriens et al., 2018; Nicholson et al., 2019). To support the realisation of the exercise and development of a moral character, three different contexts must be realised: the ‘teleological’, ‘deliberative’ and ‘social’ context. First of all, briefly put, the ‘teleological context’ enables organisational members to see how the goals and output of their organisation contribute to society and how their personal task is connected to this societal contribution. Secondly, the ‘deliberative context’ aids individuals in reflecting on the consequences of individual’s moral actions and enables them to alter these consequences through conscious deliberation on their actions. Lastly, the ‘social context’ ensures reflective discussions between individuals within a social network about the organisation’s contribution to society and the moral behaviour of individual organisational members that realise this contribution (Vriens et al., 2018). These three contexts can be realised by designing certain organisational structures (Beadle & Knight, 2012; Vriens et al., 2018; Weaver, 2006). So, the structure of an organisation can be (and should be) designed in such a way that it realises the ‘teleological’, ‘deliberative’ and ‘social’ context and, as such, supports the exercise and development of a moral character of the employees in that organisation. The management of a.s.r. changed its organisational structure several years ago. This was a starting point of a bigger organisational shift towards their focus on Corporate Social Responsibility. However, the organisational structure was not designed by consciously taking into account that ethical behaviour is an important component of CSR and that specific types of structures might influence ethical behaviour on an individual level. The organisation did install an Ethical Advisor (EA) within the organisation whose main task is to support employees in exercising and developing their moral awareness and reasoning. During a conversation with this EA, it appeared that his support is based on the notions of virtue ethics, rather than providing employees with strict ethical principles or rules (personal communication, 29 October 2019). The EA argues that is it is more useful for individuals to be intrinsically motivated to act in an ethical manner (i.e. acting well based on a moral character), rather than being driven by rules or consequences (i.e. acting well because you follow rules or because it leads to certain desired consequences) (personal communication, 29 October 2019).
Senior management now asks for a diagnosis of the organisation’s structure to examine whether the current organisational structure actually contributes to the realisation of the desired moral behaviour of employees. The insights of such a study are thought to be helpful to the Ethical Advisor in performing his job and useful for a.s.r.’s focus on CSR. As a result, the purpose of this study is to explore whether the organisational structure of a.s.r. is designed in such a way that it provides support for the exercise and development of of the desired moral character of employees.
Following the reasoning provided above, a base model can be created to visualise the influence of the organisational structure on the exercise and development of a moral character by means of realising the teleological, deliberative and social context. This model will be briefly introduced below and is explained more extensively in Chapter 2.
1.1. Base model
As depicted in Figure 1 (see below), the organisational structure can (indirectly) support the exercise and development of a moral character which is a part of achieving CSR. This support depends on the design of the organisational structure. When the organisational structure is designed appropriately, the chance that the teleological, deliberative and social context are realised is as big as possible given the context (see section 2.3 and 2.4 to learn more about the organisational structure and the relationship with the teleological, deliberative and social context). If the teleological, deliberative and social context are realised, employees will be enabled to exercise and develop a moral character (see section 2.2 to learn more about the teleological, deliberative and social context and their relationship with exercising and developing of a moral character). When more employees can exercise and develop their moral character, the chance that the moral behaviour within the organisation aids in achieving CSR increases.
1.2. Research objective
The objective of this study is to explore whether the current organisational structure of a.s.r. supports employees in exercising and developing their moral character so that the ethical behaviour within a.s.r. enhances their ambition towards CSR. More specifically, this study aims to discover, based on existing literature, whether there is a potential gap between the desired organisational structure that realises the teleological, deliberative and social context and, as such, supports the exercise and development of a moral character in the organisational context and the discovered organisational structure of a.s.r.
Several questions need to be answered to be able to reach this goal:
1. What does it mean to exercise and develop a moral character in an organisational context? 2. What are the teleological, deliberative and social context and how do these contexts support the exercise and development of one’s moral character in the organisational context?
3. What is an organisational structure?
4. How should the organisational structure be designed to realise the teleological, deliberative and social context and, as such, support the exercise and development of a moral character in the organisational context?
5. What are the discovered values of the structural parameters? What could be the influence of these values on the realisation of the teleological, deliberative and social context and, as such, the support for the exercise and development of a moral character in the organisational context?
6. Does the exploration of the organisational structure indicate a potential structure related gap between the desired situation (the answer to question 4) and the discovered situation (the answer to question 5)? If so, or if not, what does this mean?
The answers to question 1, 2 and 3 will help understand the key theoretical concepts of this study. The answer to question 4 will result in a set of requirements for the structural parameters and illustrates the desired situation in which structural parameter values realise the teleological, deliberative and social context and, as such, support the exercise and development of a moral character. These requirements can be used to explore the actual structural parameter values within a.s.r. to examine whether the current organisational structure of a.s.r. potentially enables a teleological, deliberative and social context and, hence, potentially supports the realisation of a moral character of the employees of a.s.r. as desired by senior management.
By doing so, a recommendation can be provided to a.s.r. regarding the extent to which its current organisational structure potentially enables the desired moral character of employees and, if applicable, how this could be improved.
1.3. Relevance
Since this research aims specifically at exploring the organisational structure of a.s.r., this study is mainly relevant from a practical point of view. This research can aid the Ethical Advisor of a.s.r. in understanding the organisational structure of the company and its influence on ethical behaviour. This new knowledge can be of assistance with regard to performing his job: if he understands the facilitating or inhibiting influence of the organisational structure, it will be easier to help employees in exercising and developing their moral character.
Seen from a broader perspective, research into organisational structures that support moral behaviour seems beneficial to many members of our society. Ethical scandals are still prevalent and numerous managers were forced to leave their company as a consequence (NOS, 2019). As organisations are believed to play a vital part in our modern society (Achterbergh & Vriens, 2010), the behaviour within these organisations may have a huge impact on various individuals within organisations as well as society at large. Besides, the value of the structural parameters within a.s.r. that are found to support the exercise and development of a moral character might be copied by other organisations that also aim to support their employees in exercising and developing a moral character.
Although this study is intervention-related, it fits the call (by authors such as Craft, 2013; Forte, 2004; Kish-Gephart, Harrison & Treviño, 2010; O’Fallon and Butterfield, 2005), for further research on the influence of the organisational structure on ethical behaviour in organisations in general and on the moral character of employees in organisations (i.e. virtue ethics) in particular (see also e.g. Nicholson et al., 2019; Vriens et al., 2018; Weaver, 2006). Besides, the scientific evidence provided in this study can serve as a practical guide for organisations on how to support the exercise and development of a moral character, rather than solely theoretically describing how to potentially realise such support.
1.4. Outline of this thesis
The following chapters are devoted to answer the six questions provided in section 1.2.
In Chapter 2, the key elements of this study are defined: exercising and developing a moral character (section 2.1.), the teleological, deliberative and social context that support the exercise and development of a moral character (section 2.2.) and organisational structure and structural parameters (section 2.3.). Section 2.4. presents a detailed explanation of parameter values and their influence on the realisation of a teleological, deliberative and social context. A recapitulation of the theoretical framework is provided in section 2.5.
Chapter 3 describes the research method used in this study. The argumentation for a qualitative research approach is provided in section 3.1. and specified by the description of the semi-structured interviews and document analysis that are conducted in section 3.2. Section 3.3. provides information about the sample that was incorporated in this research, while section 3.4. presents the operationalisation of the core concepts of this study. The method for analysing the data gathered in this research is outlined in section 3.5. Section 3.6. is devoted to clarifying how the issue of research ethics has been addressed during this research. The performed actions to safeguard qualitative research criteria are addressed in section 3.7.
Chapter 4 presents the results of this research with respect to exercising and developing a moral character (section 4.1.), the teleological, deliberative and social context (section 4.2., section 4.3. and section 4.4. respectively) and the discovered values of functional concentration, separation between operational and regulatory transformations, specialisation of operational transformations, specialisation of regulatory transformations and formalisation (section 4.5. to section 4.9 respectively). Section 4.10. provides an explanation on what that the potential structure related gaps mean regarding the realisation of the teleological, deliberative and social context and, consequently, the support for exercising and developing a moral character. The conclusion of this study is provided in Chapter 5.
Finally, Chapter 6 contains the practical implications (section 6.1.), the theoretical implications (section 6.2.) and limitations of this study as well as recommendations for future research (section 6.3.).
2. Theoretical framework
This research aims to reach the following goal: explore whether the current organisational structure of a.s.r. potentially supports employees in exercising and developing their moral character so that the ethical behaviour within a.s.r. enhances their ambition towards CSR. In the previous chapter, six questions were stated in order to reach that goal. To provide an answer to these questions, and consequently achieve the goal, several concepts need to be explained first. This chapter is devoted to the explanation of the theoretical concepts and is based on question 1, 2, 3 and 4.
In the previous chapter, a base model was presented to illustrate the relationship between the design of an organisational structure and the exercise and development of the moral character of employees within that organisation. This base model can be extended to fully incorporate the elements that are part of this relationship while applied to the case of a.s.r. (see Figure 2 below).
Figure 2. Extended base model
When comparing Figure 1 to Figure 2, it can be established that the first block differs. Following the reasoning of this extended model, it is possible to examine the design of an organisational structure by looking at so-called structural parameters and the value of these parameters. These values then influence the probability that the teleological, deliberative and social context are realised and, as a consequence, the support of the exercise and development of a moral character as part of achieving CSR. Similar to Figure 1, whether the structural parameters are designed appropriately (or not) influences the probability that the teleological, deliberative and social context are realised.
This extended model will be used to describe the desired design of the organisational structure by a.s.r. that indeed supports the exercise and development of a moral character of employees. By using the methods described in Chapter 3, the model will be applied to a.s.r. to explore whether there is a potential structure related gap between the desired situation and the discovered situation.
To fully grasp the relationship as depicted in figure 2, it is first explained what it actually means to exercise and develop a moral character in section 2.1. After providing this clarification, the contexts that support this exercise and development of a moral character are defined in section 2.2. Then, in section 2.3., the organisational structure including the structural parameters and parameters values are described in detail. Based on the reasoning in sections 2.1., 2.2. and 2.3., a set of requirements for the structural parameters is created that illustrates the desired relationship between parameter values and the three contexts in section 2.4. This chapter ends with a recapitulation in section 2.5
2.1. Exercising and developing a moral character
In order to answer the question ‘What does it mean to exercise and develop a moral character in an organisational context?’, it is necessary to explain what is understood by a moral
character. The exercise and development of a moral character of individuals is central to the virtue ethics approach. This approach is clarified first.
2.1.1. Virtue ethics and eudaimonia
To discuss ethical behaviour at an individual level, an increasing number of researchers turns to the virtue ethics approach. This turn is mainly due to dissatisfaction with the two-other dominant ethical perspectives: deontology and utilitarianism (Athanassoulis, 2010). However, the virtue ethics approach itself is not new. In fact, while adapted and enriched by others over time, it has been inspired mainly by the work of Aristotle (Crisp, 1996; Hughes, 2001; Statman, 1997). Following Aristotle, everything we as human beings do is devoted to one particular goal (telos). This ultimate goal is perceived as the highest good and is referred to as eudaimonia (Athanassoulis, 2010; Hughes, 2001; MacIntyre, 1985). This highest good is the ultimate end human beings should aim for. So, the ultimate end (i.e. eudaimonia) can be seen as the single end of all the actions we perform and is an end in itself. Additionally, we should want to achieve this end for the sake of itself (Achterbergh & Vriens, 2010; Hughes, 2001; MacIntyre, 1985).
Even though eudaimonia is perceived to be the highest end human beings should aim for, for its own sake, the meaning of eudaimonia has been rather open to discussion. Eudaimonia has been translated in several ways: as “blessedness, happiness and prosperity” (MacIntyre, 1985, p. 148), as “human happiness or flourishing” (Simpson, 1997, p. 246), or as “happiness, contentment and fulfilment” (Athanassoulis, 2020, p. 8). However, Achterbergh & Vriens (2010) found a comprehensive translation of eudaimonia that reviewers (e.g. Hughes, 2001; Nussbaum, 1997) used to encompass the broad meaning of eudaimonia: “living a fulfilled life” (p. 320). Consequently, ‘living a fulfilled life’ becomes the ultimate end human beings should aim for, for the sake of itself.
If ‘living a fulfilled life’ is seen as the highest good for human beings, it becomes relevant to understand what this means and how this ultimate end can be achieved (i.e. how one can ‘live a fulfilled life’). Based on the work of Aristotle (e.g. 1989, I. 4 1095a19-20; 1989, 1177a1-2) and Hughes (2001), ‘living a fulfilled life’ is defined as developing our specifically human
capacities (i.e. the capacity for reason and desire) into virtues and exercising them in the best possible way. This definition includes three notable and important concepts: virtues, reason and desire.
2.1.2. Virtues, reason and desire
To achieve the highest end in human life (i.e. to live a fulfilled life), we should develop our characteristically human capacities into virtues. Summarised by Weaver (2006), the central point of virtue ethics regards the moral character of individuals and, thus, refers to “what a person is or has, rather than merely what a person does” (p. 341). So, virtues express certain qualities of our human character that are exercised in a fulfilled life. Two capacities are characteristically human: our capacity to reason and our capacity to desire (Achterbergh & Vriens, 2010; Athanassoulis, 2010; Hughes, 2001; Simpson, 1997; Vriens et al., 2018). To ‘live a fulfilled life’ entails developing these two capacities into virtues. Put differently, as human beings we have a specific function that sets us aside from other things in our world. This function is to exercise our capacities to reason and desire in the best possible way.
Not only human beings, but everything in our world has a specific function. The good of every specific ‘thing’ lies in the fact whether this ‘thing’ performs its function well. Take, for example, a situation in which you want to light a matchstick. If it does so easily and it remains in flames for a while, you could say that the matchstick performs its function well.
Following Aristotle, we, as human beings, have a ‘distinctive function’ and we can live a fulfilled life by performing this ‘distinctive function’ well (Athanassoulis, 2010). In the case of human beings, the distinctive function is to reason. Reasoning sets us aside from all other species on earth (Achterbergh & Vriens, 2010; Athanassoulis, 2010; Hughes, 2001; Santas, 1997). So, where the function of human beings is to reason, the good of human beings lies in the fact whether humans reason well. To reason well means that one has the capacity to know the truth about things (Achterbergh & Vriens, 2010; Santas, 1997). Thus, to reason well is to have a well-established capacity to know the truth about things.
When ‘living a fulfilled life’, human beings need to perfect a second characteristically human capacity: the capacity to desire. The natural goal of our desire is to aim for something that is perceived as the right thing (Achterbergh & Vriens, 2010) and to aim for something for its own sake (Vriens et al., 2018). So, to perfect the capacity to desire means that one should have the capacity to strive for something because it is perceived as right (i.e. good) and should do so for its own sake.
As this thesis is focussed on ethical conduct in organisations, the development of the characteristically human capacities into two virtues needs particular attention.
2.1.3. Moral virtues, practical wisdom and choice
Two virtues, referred to as moral virtue and practical wisdom, are directly related to doing what is right for the right reasons. Taken together, they can be referred to as a moral character (Sherman, 1989; Vriens et al., 2018). If someone possesses a well-developed moral character, this person desires to do the right thing in a given situations and he/she desires this for its own sake. If we should desire what is right, one might wonder what is perceived as right in a given situation. What is right often lies in a mean between two extreme ends (two vices) of a moral situation with respect to emotions and desires: it is neither too much nor too little (Athanassoulis, 2010; Simpson, 1997; Vriens et al., 2018). Well-developed moral virtues help us to reach this mean between moral excess and moral defect (Achterbergh & Vriens, 2010). So, moral virtues enable us to “appropriately deal with the complexities of our social existence by disposing us to desire what the practically wise would understand as the right thing to do” (Achterbergh & Vriens, 2010, p. 331). To realise our desire to do the right thing, we need to be practically wise. Practical wisdom enables us to “deliberate and judge well about concrete actions instantiating the fulfilled life” (Achterbergh & Vriens, 2010, p. 335).
Without understanding what it means to ‘live a fulfilled life’ (i.e. without being practically wise), one cannot recognise the ‘right’ acts appropriate in this fulfilled life. Based on practical wisdom, we can learn to understand what a fulfilled life means and we can choose to act in the way that realises ‘living a fulfilled life’ in specific situations (Hughes, 2001). Taken together, moral virtues and practical wisdom can be a guide in the moral circumstances we encounter on a daily basis.
We cannot, however, be guided by our moral virtues and practical wisdom without intrinsically choosing to act well. So, we cannot ‘live a fulfilled life’ based on chance or (moral) luck: we need to deliberately choose the right action. Consequently, for an act to be virtuous, conscious choice has to be involved (Achterbergh & Vriens, 2010; Athanassoulis, 2010; Hughes, 2001; Vriens et al., 2018). Aristotle already introduced this idea by viewing a human character both as a state of being as well as a state of doing (Athanassoulis, 2010).
Vriens et al., (2018) combined moral virtues, practical wisdom and choice to describe how individuals exercise and develop a moral character (see Figure 3). They reason that, by perfecting our inner characteristic capacities of reason and desire into moral virtues and practical wisdom, one can envision the right thing to do in a moral situation. This entails that one can see the moral relevance of a particular situation and one is aware of the moral dimensions in that situation. One is able to find the mean between moral excess (too much) and moral defect (too little) in a morally relevant situation. One should desire to do this right thing (i.e. act upon this mean) and should do so for its own sake. Then, one must make the choice of doing this right thing for the right reasons based on his/her practical wisdom which allows him/her to act in a virtuous way. Based on the choice for this ‘right’ action, one experiences and reflects on this experience to adjust the way one deals with moral issues. Besides, this reflection enables one to further shape and perfect his/her moral character. This line of reasoning is summarised in the figure below (see Figure 3).
Figure 3. Exercising and developing our virtues (Vriens et al., 2018, p. 675)
As stated above, by ‘living a fulfilled life’ one develops the specifically human capacities (i.e. the capacity for reason and desire) into virtues and exercises them in the best possible way. What this generally means can be illustrated by the following simple example that is based on the concepts of Figure 3.
Suppose someone named Matt is in a supermarket and finds a little girl who is sitting in a corner and is crying softly. There are many others in the supermarket, but apparently no one is hearing the girl crying. It appears that the girl has lost her mother while doing groceries. Matt has developed his moral character which allows him to act upon moral virtues and practical wisdom. As such, Matt acknowledges the moral relevance of the situation as he sees that the situation has a moral dimension (calling for an act of kindness) and Matt has a desire to help the girl (rather than ignoring her while he heard her crying). Matt’s desire to help is virtuous if Matt feels it for its own sake (Matt values the act of helping the girl) and not for something else (such as finding the mother of the girl to flirt with her). Matt sees the ‘mean’ in the moral dimensions related to this situation by seeing that helping the girl find her mother is going to resolve the problem. Matt can make use of his practical wisdom, experiences and sensitivity to construct, deliberate and judge possible actions. A possible action, such as simply telling the girl to look for her mother, will be insufficient to realise Matt’s desire to do the right thing.
Based on his judgement of multiple options, Matt can select an appropriate moral action that specifies his desire to help the girl in the right way. By acting accordingly, he will gently calm down the girl and offer his help by walking with her throughout the supermarket in order to find the girl’s mother.
Now that the concepts that generally constitute a moral character have been described in detail, it is still necessary to explain how employees can exercise and develop their moral character within the organisational context.
2.1.4. Towards exercising and developing a moral character in organisations
As stated in the previous section, the ultimate goal of human beings is to ‘live a fulfilled life’ by perfecting our two characteristically human capacities in the best possible way. More specifically regarding ethical conduct, we should perfect these capacities into moral virtues and practical wisdom that together make up our moral character. As such, it can be stated that virtue ethics in general is focused on whether individuals are being good by referring to their moral character, rather than merely doing good by referring to actions and consequences. It is important to note that this does not mean that actions, rules and consequences become irrelevant. Instead, rules and consequences will be weighted with integrity in a specific context in which the moral character of individuals is central.
In the context of an organisation, the moral character of a member of that organisation is stressed rather than merely the actions performed by this individual in the context of that organisation. As such, members of an organisation should not, for example, just focus on creating the greatest amount of ‘good’ for the greatest amount of human beings by doing good. They should, in contrast, be good in such a way that contributes to ‘the fulfilled life’ of others, because this is the right thing to do (Athanassoulis, 2010; Vriens et al., 2018; Weaver, 2006). Accordingly, an employee of an organisation should exercise and develop his/her moral character in an organisational context so that other individuals too are supported in ‘living a fulfilled life’.
To shape the right conditions that supports individuals in ‘living a fulfilled life’ (i.e. to become a virtuous organisational member), one should consider two different communities one belongs to. First of all, the individual that works for an organisation is part of the community of the organisation itself.
Secondly, any organisation can contribute to a larger community by its output (whether this output is intended or not and whether this output is positive or not) (Achterbergh & Vriens, 2010; Solomon, 1997; Solomon, 2004; Vriens et al., 2018). As a result, the employee of a certain organisation is also member of a larger, global community the organisation is part of (Solomon, 1997; Solomon, 2004). Employees (indirectly) contribute to this larger, global community by working for a certain organisation. As a virtuous member of an organisation, one should consider both communities (Solomon, 2004; Vriens et al., 2018). Consequently, as a virtuous member of an organisation, one should desire to (1) do the right thing for other members of the organisation he/she is part of and (2) do the right thing for the sake of the well-being of other societal members the organisation’s output (either directly or indirectly) relates to (Solomon 2004; Vriens et al., 2018).
It must be noted that one exercises and develops a moral character in generally similar ways (as described in figure 3) despite a different context. Even though the moral situations one encounters in daily life and within an organisation are different, the moral character of individuals is believed to be relatively stable over time (Athanassoulis, 2010). Hence, individuals that exercise and develop their moral character have a relatively stable moral character within different contexts, but adjust appropriately with regard to the moral issues in a particular situation.
In conclusion, to exercise and develop a moral character in the organisational context means that individuals in organisations develop the characteristically human capacities to reason and
desire into moral virtue and practical wisdom in the best possible way given this particular
context. Because of a moral character, one can “make choices about how to live a fulfilled life in particular circumstances, let it be a guide to our everyday moral life by providing us with a desire to do the right thing for its own sake and the capacity to act in accordance with this desire” (Vriens et al., 2018, p. 674). To exercise our moral character in organisations means that one can envision the right thing to do in a moral situation within the organisational context. This entails that one can identify the mean between moral excess (too much) and moral defect (too little) in a morally relevant situation. One should desire to do this right thing (i.e. act upon this mean) and should do so for its own sake. Then, one must make the choice of doing this right thing for the right reasons based on his/her practical wisdom which allows him/her to act in a virtuous way. One exercises this moral character with respect to other members of the organisation as well as the larger external environment the organisation is part of.
By exercising this moral character, we automatically develop it. Exercising a moral character also means that one should reflect on his/her moral action and the responses of others (Vriens et al., 2018). Using the outcomes of this reflection can help one to adjust the way one deals with moral issues and can help to further shape and perfect his/her moral character.
Now that an answer is provided to the question ‘What does it mean to exercise and develop a
moral character in an organisational context?’ it becomes relevant to turn to conditions that
support this exercise and development of a moral character of individuals in organisations. As the virtue ethics approach with its focus on a moral character increasingly gained attention in current literature, the same applies to conditions supporting the exercise and development of a moral character (e.g. Nicholson et al., 2019; Vriens et al., 2018; Weaver, 2006). The realisation of three contexts conditions the support for employees to exercise and develop their moral character (Vriens et al., 2018). These three contexts are described in the following section which provides an answer to the question ‘What are the teleological, deliberative and social context
and how do these contexts support the exercise and development of one’s moral character in the organisational context?’
2.2. Three contexts to support the exercise and development of our moral character
Current literature suggests that there are three requirements that must be met in order to support employees in exercising and developing a moral character. These requirements refer to three different contexts that should be provided to organisational members (Vriens et al., 2018). The three contexts are referred to as “teleological context, deliberative context and social context” (Vriens et al., 2018, p. 676) and are described separately below.
2.2.1. Teleological context
The teleological context offers organisational members the opportunity to become aware of how the goals and output of the organisation contribute to society. Besides, this context enables employees to become aware of how their personal tasks relate to these goals and the output of the organisation. For an employee to decide whether one’s personal tasks contribute to something valuable for or harmful to society, employees should be able to reflect on the organisation’s output and intentions to realise this output (MacIntyre, 1985; Moore, 2005b; Vriens et al., 2018). This can be realised when organisational members closely relate to the stated organisational goals and the output of the organisation.
This enables members to see whether they are contributing to the right thing. Regarding the aspects that the teleological context should provide to organisational members, the teleological context is defined as “the context which enables organisational members to see how the actual goals and output of the organisations are related to the organisational contribution to society and to see how their tasks relate to this contribution” (Vriens et al., 2018, p. 677). In sum, organisational members can exercise and develop their moral character when they are consciously aware of the goals and output of their organisation and how their personal tasks are connected to this societal contribution.
Therefore, to support the exercise and development of a moral character, the organisational structure should be designed in such a way that 1) organisational members can reflect on the organisation’s goals and output and how this is related to the organisation’s contribution to society and 2) organisational members can reflect on the connection between the organisation’s contribution to society and their own personal tasks.
In practice, organisational members should be well aware of the stated organisational goals and output and should interpret these as either harmful or valuable to society. Only when they keep in touch with these goals and outputs, organisational members can deliberate on whether the outputs enable others in ‘living a fulfilled life’ or not. Keeping in touch with organisational goals could be internally organised by, for example, reminding organisational members of the goals via internal magazines or updates from senior management. An awareness of the organisation’s output could be achieved, for example, by establishing market-based teams that increase the awareness of the effect of the organisation’s output on the external environment (Mintzberg, 1983; Nadler & Tushman, 1997; De Sitter, 1994).
2.2.2. Deliberative context
The deliberative context supports employees in learning how to behave virtuously. This context aids individuals in reflecting on the consequences of individual’s moral actions and enables them to alter these consequences through conscious deliberation on their actions. Thus, the deliberative context “enables organisational members to see the (possible and actual) moral consequences of their (potential and actual) actions, and provides them with the opportunity to devise and implement virtuous actions so as to be able to bring about the desired moral consequences” (Vriens et al., 2018, p. 677).
Following this definition, the deliberative context 1) helps organisational members in perceiving the moral consequences of the actions they perform and 2) enables them to think of, implement and adjust the actions performed so that these actions result in the desired moral consequences (i.e. result in supporting others in ‘living a fulfilled life’). The job-related activities of organisational members can have huge consequences for the communities they are part of. For organisational members to decide whether the moral consequences of their activities are harmful or beneficial, they need to be aware of these moral consequences of their actions (Grant, 2007; Luban, Strudler & Wasserman, 1992; Solomon, 2004). This awareness refers to both the possible and the actual moral consequences.
Being aware of the possible moral consequences is part of exercising virtues, because it is necessary to know whether your actions possibly contribute to the fulfilled life of other members of the organisation and society (Bernacchio & Couch, 2015). This also applies to the actual consequences. A context in which organisational members deliberate together about goals and consequences can enhance capacities for moral reasoning (Nicholson et al., 2019). Even though the intention of an action is right, its actual consequences can still inhibit others to live a fulfilled life (Vriens et al., 2018). Reflecting on the moral consequences helps to adjust our desire and our intended actions in case the consequences do not support other in living a fulfilled life. By doing so, humans can develop their moral character (Vriens et al., 2018). Hence, by being aware of both the possible and the actual moral consequences, organisational members can both exercise and develop their moral character.
In addition to being aware of the moral consequences of one’s actions, one should be able to have an influence on these consequences. Based on the possible moral consequences an organisational member is aware of, he/she should perform actions that lead to the moral consequences that support others in living a fulfilled life (Vriens et al., 2018). Afterwards, he/she should reflect on whether the actual consequences indeed support others in living a fulfilled life. Actions that were carried out should be adjusted in the future if the moral consequences did not support others in living a fulfilled life (Vriens et al., 2018). As a consequence, by thinking of, implementing and adjusting virtuous actions, organisational members can both exercise and develop their moral character.
In sum, to support the exercise and development of a moral character, organisational structures should be designed in such a way that 1) members are enabled to perceive the possible and actual internal and external moral consequences of their actions performed within the organisation and 2) members can think of, implement and alter virtuous actions to bring about the moral consequences that support others in living a fulfilled life.
In an organisation, team members can, for instance, help each other in seeing the consequences of moral actions more clearly, as team members can point each other towards such consequences (Cummings, 1997). Individuals need to be able to act and reflect upon their moral character to further develop it (as shown in Figure 3), so it is beneficial to this development if organisational members have the opportunity to reflect on moral experiences together. In addition, organisational members should have sufficient opportunities to actually propose, implement and change moral actions and their consequences within the organisation.
2.2.3. Social context
The social context ensures “reflective discussions about the societal contribution of the organisation and deliberating about actual job-related actions needed to realise this contribution” (Vriens et al., 2018, p. 676). This context can serve as a condition to help individuals become aware and think of, implement and reflect on job-related moral consequences (Butterfield, Treviño, & Weaver, 2000). In addition, other individuals in this social context can serve as a network in which actions and their moral consequences are reflected upon (Solomon, 2004; Vriens et al., 2018; Weaver, 2006). The social connection with others in relevant communities is needed to exercise and develop our moral character (Bernacchio, 2018; Solomon, 2004). It is through the interaction with others that a moral character is truly exercised. Besides, interacting with others helps to reflect on moral consequences and, thus, supports the development of one’s moral character (Vriens et al., 2018). Accordingly, to support the exercise and development of a moral character, the organisational structure should be designed in such a way that 1) it ensures reflective discussions about the organisational contribution to society and 2) it ensures deliberations about actual job-related actions needed to realise the contribution to society.
In organisations, working together (in teams), for example, can act as a stimulus to interact and communicate. This is relevant since it is by means of this interaction and communication that organisational members can experience the results of their moral actions.
The feedback provided within teams enables discussion and reflection on moral issues potentially resulting in improving one’s moral character (Cummings, 1997). Besides, teams may decrease the social distance between organisational members. Being more socially related to one another can increase virtuous behaviour (Luban et al., 1992; Treviño & Nelson, 2007). As such, being more socially close may enhance one’s moral behaviour towards others. In sum, the teleological, deliberative and social context should be realised in order to support organisational members to exercise and develop their moral character. This means that organisational members 1) are closely related to organisational goals and output, 2) are able to reflect on the consequences of individual’s moral actions and alter these consequences through conscious deliberation on their actions and 3) are part of a social network in which the organisation’s contribution to society and the job-related actions that realise this contribution are discussed. The organisational structure can be designed in such a way that the probability that the teleological, deliberative and social context are realised increases. Consequently, certain designed structures may positively condition organisational members in exercising and developing their moral character. The next section is devoted to answer the question ‘What is
an organisational structure?’ from an organisational design perspective. 2.3. Organisational structure
From an organisational design perspective, an organisation can be considered by regarding its infrastructure. The infrastructure of an organisation consists of three (related) parts: the structure of the organisation, the human resources of the organisation and the technologies used within the organisation (Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019). While all three parts have a potential impact on moral behaviour in organisations (e.g. Loe, Ferrel & Mansfield, 2000; Román & Munuera, 2005; Stead, Worrel & Stead, 1990), the influence of the organisational structure is said to be greater than the influence of human resources and technology (Achterbergh & Vriens, 2010; Vriens et al., 2018). This is mainly due to the fact that the organisational structures can be seen as “a point of departure for thinking about the design of systems for human resources management and technology (Achterbergh & Vriens, 2010, p. 22).
Moreover, specifically regarding virtue ethics, the structure of an organisation is believed to “make a difference with respect to the prospect of exercising and developing virtues in organisations” (Vriens, et al., 2018, p. 672). An organisational structure is “the sum total of the ways in which its labour is divided into distinct tasks and then its coordination is achieved among these tasks” (Mintzberg, 1983, p. 2). Accordingly, an organisational structure has two central requirements, the division of labour into distinct tasks and the coordination among these tasks resulting in a network of related tasks. Tasks are performed to transform a begin state into an end state by performing particular activities during the transformation process (Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019). Tasks are performed by so-called capacities. A capacity can refer to individual organisational members, but also to teams, departments or business units. As such, tasks can be specified on different levels of the organisation (Achterbergh & Vriens, 2010). At the lowest level are the ‘jobs’ of individual organisational members and at the highest level is the main transformation of the organisation as a whole. In between we find tasks of larger organisational capacities such as groups, departments and business units.
This division of labour into tasks and the coordination among tasks can be (and should be) designed in such a way that it realises the teleological, deliberative and social context and, as such, supports the realisation of a moral character of individuals in organisations (Vriens et al., 2018). Whether an organisational structure is actually designed in such a way, can be assessed based on the value of so-called ‘structural parameters’.
2.3.1. Structural parameters and parameter values
To design and describe how labour is divided into distinct tasks and how coordination is achieved among these tasks, so-called structural parameters have been developed. Structural parameters capture specific characteristics of the organisational structure (Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019). Each of the parameters can have different ‘values’, which has an effect on the characteristics of the organisation. Some of these characteristics are related to the (lack of) support for organisational members to exercise and develop their moral character (Vriens et al., 2018). This relationship has been described by Vriens et al., (2018). Their reasoning is based on four basic structural parameters that different authors (e.g. Galbraith, 1977; Mintzberg, 1983; De Sitter, 1994) have agreed on. However, it is possible to address this relationship in a similar vein by only using structural parameters as presented by De Sitter (1994).
As these parameters make up one well-developed design theory that includes most of the parameters presented in similar ways by others (rather than being put together based on different authors), this thesis focusses on structural parameters of De Sitter (1994).
The structural parameters presented by De Sitter (1994) present a clear relation between structural characteristics and behaviour of organisational members (Achterbergh & Vriens, 2019). More specifically, some parameters can be directly related to the (lack of) support for organisational members to exercise and develop their moral character. These refer to two different levels of an organisation. The organisational structure can be described and designed on these different, equally important levels, referred to as the ‘enterprise level’ and ‘job level’. The ‘enterprise level’ refers to business units, departments and groups that make up the whole organisation (Nadler & Tushman, 1997). The ‘job level’ refers to the individual jobs of individual organisational members (Nadler & Tushman, 1997). Different parameter values taken together result in different organisational structures. These organisational structures in turn have different effects on the realisation of the teleological, deliberative and social context and, subsequently, on the support to exercise and develop a moral in the organisational context. To further elaborate this, the parameters that relate to the (lack of) support for organisational members to exercise and develop their moral character will first be described separately. 2.3.1.1. Functional concentration
The first parameter relevant for the ‘enterprise level’ of an organisation is functional
concentration. This parameter refers to “the grouping of operations with respect to orders” and
can have ‘high’ and ‘low’ values as extreme values (De Sitter, 1994, p. 98; see also Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019; De Sitter & den Hertog, 1997). If the value of the parameter functional concentration is at a maximum (i.e. has a ‘high’ value), operational activities are performed with regard to all potential order types. If the value of the parameter functional concentration is at a minimum (i.e. has a ‘low’ value), operational activities are performed with regard to specific order types (Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019; De Sitter, 1994; De Sitter & den Hertog, 1997).
Usually, organisations with high levels of functional concentration have functional departments in which similar operational activities are clustered. The tasks within these functional departments are performed with regard to all potential order types.
When the level of functional concentration is low, the organisation typically consists of parallel production flows. In this case, different operational activities that are needed to produce an output are clustered in a production flow and are performed with regard to specific order types (Achterbergh & Vriens, 2010; Achterbergh & Vriens, 2019; De Sitter, 1994).
For example, an organisation that sells different types of insurances has different departments that perform activities such as a marketing department, a sales department and a finance department. Different order types, in this case, are different types of insurances such as life insurances, health insurances, retirement insurances, travel insurances and disability insurances that customers demand. In case the value of functional concentration is high, the different departments each perform distinct operational activities with regard to all the (potential) order types (see Figure 4 below).
Figure 4. Example high value functional concentration (based on Achterbergh & Vriens, 2019; De Sitter, 1994). If, on the other hand, the value of unit grouping is low, the different departments are grouped into a unit with respect to one specific order type. Then, this unit performs different operational activities with regard to one particular type of order (see Figure 5 below). These production activities take place in a relatively independent ‘flow’ (De Sitter, 1994; De Sitter & den Hertog, 1997).
