The Hierarchy of Ethical Values in Nonprofit Organizations: A Framework for an Ethical, Self-Actualized Organizational Culture

Abstract

Using Maslow's theory of human psychological development as a framework, a model based on the hierarchy of values is proposed to explain how not-for-profit organizations develop an ethical culture. As with individual values, the five levels of ethical behavior-financial competence, accountability, reciprocity, respect, integrity-are attained successively and one at a time. Thus ethical values are a foundation for achieving integrity, defined herein not only as incorruptibility but as a total commitment to the highest standards of behavior. External controls stimulate ethical behavior primarily at the lower levels; internal controls must be present to achieve an ethical organizational culture. Maslow (1943) formulated an enduring and provocative theory of human motivation. Scholars have both venerated and disparaged his theory, but it is continually cited and tested more than six decades after his initial contention that individuals act based upon a hierarchy of needs. Not only does Maslow's work have mainstream appeal-with references in the popular press ranging from the Wall Street Journal and Forbes to Sports Illustrated-but his hierarchy is utilized extensively in scholarly work. Research employing the theory has been published in numerous academic journals, including

Incidence and perceptions of “qualified” accounts filed by small charities

“…It is debateable whether not-for-profit organisations genuinely believe that they have a responsibility to create trust by accounting to stakeholders through public discourse (Dhanani andConnolly 2012, Strickland andVaughan 2008), or whether organisations require support of "definitive" stakeholders to gain resources in order to survive (Connolly and Hyndman 2013b). However, both interpretations of these stakeholder models support the notion that good accounting means disclosing information that meets stakeholder need.…”

The trickle‐down effect of ethical leadership in nonprofit soccer clubs

“…Here, this type of phenomenon refers to a leadership style that contains a broad common basis together with certain differences that relate to (a mix of) (a) sectoral and cultural characteristics, (b) the extent of publicness, and (c) prevailing organizational challenges (Heres & Lasthuizen, ). In the nonprofit sector, most ethical issues and challenges appear when the sector's core values—namely, financial competence, accountability, reciprocity, respect, and integrity—are endangered (Jeavons, ; Strickland & Vaughan, ). More precisely, nonprofit organizations are continuously seeking a balance between ensuring internal organizational stability on the one hand and being sufficiently accountable, respectful, and open toward the external public on the other hand (BoardSource, ).…”

“…In addition, nonprofit organizations are increasingly asked to be more efficient (Allen, Winston, Tatone, & Crowson, ; Miragaia, Brito, & Ferreira, ). In general, leaders in nonprofit organizations are confronted with strong competition for, and a dependency on, (scarce) external funding (Allen et al, ; Jurkiewicz & Massey Jr, ; Strickland & Vaughan, ). Besides that, they are also dependent on the confidence of the public to enable effective organizational functioning (Jeavons, ).…”

“…Hence, this creates a complex situation in which ethical decision‐making and credible ethical leadership are strict prerequisites to convince the broader public, as well as the funders, that ethical values are honored within the organization and that providing public support and financial resources is appropriate (Jeavons, ; Jurkiewicz & Massey Jr, ). In fact, a culture of reciprocal trust is essential in this regard (Strickland & Vaughan, ).…”

Testing APS Ethics: Where's the Integrity?

“…Integrity systems are a form of social capital – they are there to make government work better. Studies have shown that organisational culture is one of the most important factors influencing organisational behaviour, especially with regard to integrity (Strickland and Vaughan 2008). It is therefore important that APS leaders drive cultures consistent with the APS Values and the code.…”