Ethical Compromises in Organizations

Organizations have their own set of ethical issues. On July 12th, former FBI Director Louis Freeh requested a blistering report about the cover up associated with the Jerry Sandusky case. Freeh’s report found coach Jerry Paterno (now deceased), former president Graham Spanier, athletic director Tim Curley, and vice president Gary Schultz had ‘repeatedly concealed critical facts about Sandusky’s child abuses.” 

The reviewers found handwritten notes and emails in a decision to hide information from child welfare and police authorities. Sandusky is awaiting sentencing after being convicted on 45 criminal counts of abusing 10 boys. 

Freeh noted, “The most saddening findings by the Special Investigative Counsel is the total and consistent disregard by the most senior leaders at Penn State for the safety and welfare of Sandusky’s child victims. The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized.” 

Reports showed Paterno and administrators knew about Sandusky’s child abuse activities as far back as 1998.  However, they attempted to conceal this information for the school’s reputation and perhaps—Coach Paterno’s legacy as a dynamic coach. The blanket cover up went beyond the school. 


The local district attorney when provided with evidence of Sandusky’s child abuse did not prosecute.  Many people in the community were in denial because Coach Paterno was a national icon and local legend.  

For many organizations, it is the proverbial “doing as I say and not as I do” for some managers.  Most managers can get away with this philosophy. As businesses continue to falter and competition begins to bear down on the economy, workers are looking for leadership.  

However, it is virtually impossible to lead an organization if you’re unethical. Why is this true? Well, followers will not respect leaders without integrity. A leader can’t trick them with promotions or bribe them with money. In the long run, character does count in an effective organization.  We will discuss the dangers of empowering unethical leaders.  

Ethics plays a critical role in good leadership. Charles Hill, author of International Business, defined as ‘accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.  It is one situation when an individual makes an unethical decision.  However, it is a very complex matter when an institution or a group of leaders representing an institution acts in an unethical manner.

Richard Daft, an organization management expert, explains that leaders at the highest management levels develop internal moral standards that can often allow them to break laws if necessary. However, managers should be personally connected with their organizations’ values. Sadly, some managers feel they are bigger than their organizations. 

In fact, ‘they are the organization!’ In this scenario, leaders become the problem, not the solution. They become trapped by the “Seven Deadly Sins,” which consist of pride, avarice (greed), envy, wrath, lust, gluttony, and slothfulness.

These attributes are not good leadership qualities. Evidently, these unethical leaders bring about their own demise, shaming their organizations. Penn State was no exception. Unfortunately, it only takes one bad leader to destroy the core values of an organization.  

How does Penn State recovery from this leadership void?

 © 2012 by Daryl D. Green                                    


3 thoughts on “Ethical Compromises in Organizations

  1. Effective and ethical leaders are the cornerstone for sustainability. Dr. Green addreses this issue in his video on sustainablilty. In this case, the unethical behavior of one man should not have been enough to waiver the sustainabiltiy of an organization, but the absence of the moral duty of the organizational leaders to do the right thing was a key aspect in the fall of an iconic collegit football program. This organization has perged itself of these leaders, which is a good start. Now, the organization faces the task of rebuilding it’s reputation, and this will be a legnthy endevour. The new leaders that have been put in place by the Penn State University will be under close scrutiny in years to come. For the time being, it looks as if the sustainability of this organization is in jeopardy pending the harsh punishments sentenced by the NCAA. However, if these leaders will build a culture of placing ethical and moral behavior ahead of the performance of the organization, they will regain the sustainability that was once enjoied by this majestic university.

  2. True and effective leadership is that in which the leader’s behaviour and the
    exercise of the leadership influence process are consistent with ethical and moral values.the leaders at different organizational levels rely on different mechanisms to transmit values and expectations. These mechanisms then influence members practices and expectations, further increase the salience of ethical values and result in the shared perceptions that form the organizations climate.

    There is a study examines the ethical climate and ethical practices of successful managers (n=206 managers) of a large non-profit organization. The influence of different dimensions of ethical climate on perceived ethical practices of successful managers were also investigated. Results show that a majority of the respondents perceive successful managers as ethical. Compared to previous research, managers in our sample were less optimistic about the relationship between success and ethical behavior. Those who believed that their organization had a caring climate perceived a strong positive link between success and ethical behavior. Those who believed that their organization had an instrumental climate perceived a strong negative link between success and ethical behavior.

  3. The recovery at Penn State will be a process that goes far beyond the four year bowl ban and scholarship reductions. The ramifications of this situatuation and ineffectivness of the leaders at Penn State will be felt for at least 10 – 15 years. I believe that this problem is more of a commentary on the economic effects that “major” college football has on its institution and surrounding area. State College is not a big town, but on gameday saturday’s, there are over 106,000 people inside Beaver Stadium. Do not forget the dollars that are brought in from ticket sales as well as the boost that the local businesses receive from these games as well.

    If this “situation” had happened to the baseball team, that coach would have been thrown under the jail as soon as it happened. College football is the cash cow that pays for a lot of things on campus. The leaders of Penn State were not willing to tarnish the name of their university and threaten the cash cow. Penn State will be able to compete at a decent level this season, but its the years to follow that will suffer. As less talented players arrive on campus due to the NCAA sanctions, the quality of play will suffer. There will not be 106,000 people in the stadium. The local businesses will not see as many people around campus. The campus and university as a whole will suffer because of the lack of moral leadership. It was stated during Freeh’s report that the leaders wanted to make sure that Sandusky was treated “humanely”. The leaders lead Penn State astray and the ones left behind are left to suffer the consequenses.

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