Rules and their Discontents

Drawing on real-life examples and the philosophical literature on moral rules, this chapter discusses the problems that can arise because organizations are rule-based structures. From a moral perspective, rules are double-edged: there are good moral reasons to obey them, especially in organizational contexts, but they are blunt tools that can do injustice to the underlying social reality, which is far more fine-grained and complex than rules could ever grasp. In addition, rules have a psychological dimension, especially when they are tied to incentives: they can refocus our attention, and crowd out the intrinsic motivation to do the right thing. To live with the ‘iron cage’ of organizational rules, individuals and organizations need to remain attentive to their double-edged character, and install mechanisms for preventing injustice to atypical cases. This analysis also throws light on the use of ‘codes of ethics’ in organizations.