Implementing Business Ethics: Sexual Harassment

Author(s): Karen A. Crain and Kenneth A. Heischmidt

Source: Journal of Business Ethics, Vol. 14, No. 4 (Apr., 1995), pp. 299-308
Published by: Springer
Stable URL: http://www.jstor.org/stable/25072648
Accessed: 24-08-2016 06:03 UTC
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms

Springer is collaborating with JSTOR to digitize, preserve and extend access to Journal of Business
Ethics

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

Implementing Business Ethics: Karm A Cmin

Sexual Harassment Kenneth A. Heischmidt

ABSTRACT. Sexual harassment is a problem for

many organizations. Organizations must understand
that sexual harassment lies within the broader context

of sex discrimination and inequality of opportunity

in the workplace. Sexual harassment is both an illegal
and unethical practice. Companies need to implement

a policy which respects the rights of individual

employees by prohibiting sexual harassment. This
policy need to be clearly stated in the company Code
of Ethics and enforced rigorously.

1992). More women tan ever before were com

pelled to air their complaints about injustices
they have received due to sexual harassment in
the workplace. Many other women were inspired
to take action:

In the nine months [after] Hill's testimony,

inquiries sent to the Equal Employment Oppor
tunity Commission (EEOC) [rose] 150 percent,
and actual charges filed rose 23 percent (Sandroff,

1992).

The EEOC was crated to enforce Title VII

Introduction

of the Civil Rights Act of 1964 which prohibits

The vast coverage the media gave to the Anita

Hill-Clarence Thomas (nominee for the Supreme
Court of the United States) confrontation over
sexual harassment in 1991 put the controversial
issue of sexual harassment into the nation's

spotlight and prompted an immediate and

passionate response by many women. After the

hearings, calls to a hot line sponsored by the

National Association of Working Women

doubled to 2000 a month ("1-800-Sexist Boss",

Karen A. Grain is a Territory Representative for Wyeth

Ayerst Laboratories pharmaceutical company. She

has published in a recent Proceeding of the Inter
national Conference of the Academy of Business
Administration.
Kenneth A. Heischmidt is a Professor of Marketing at
Southeast Missouri State University and has published
in various professional journals and conferences including

Journal of Advertising, Journal of Professional

Services Marketing, Journal of Hospital Marketing,

Health Marketing Quarterly and Journal of

Education for Business. He has received best paper
awards at both the American Marketing Association and
the Academy of Business Administration conferences.

discrimination in employment on the basis of

race, color, sex, national origin, or religion. It
has been over 10 years since the EEOc issued its
Guidelines on Sexual Harassment, but the subject

is still widely misunderstood, trivialized, or

ignored by many people. Firms have both an
ethical and legal obligation to insure that all
company personnel understand this complex

issue so that employees will conduct their

business relationships in an ethical and non

discriminatory manner.

The relevant facts ? what is sexual

harassment? how frequently does it occur?
Understanding what sexual harassment is can be
a problem because there is no simple definition
of sexual harassment. One thing is clear, however,

all forms of sexual harassment are illegal. The

Guidelines on Sexual Harassment published by
the EEOC on November 10, 1980, specify that

sexual harassment is a kind of sex discrimination

under Title VII of the Civil Rights Act of 1964,

and therefore, an unlawful employment practice.
Specifically, the publication states:

Journal of Business Ethics 14: 299-308, 1995.

? 1995 Kluwer Academic Publishers. Printed in the Netherlands.
This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

300 K. A. Grain and K. A. Heischmidt

Unwelcome sexual advances, requests for sexual

ship the two had shared previously disappeared.

favors, and other verbal or physical conduct of a

sexual nature constitute sexual harassment when

The boss employed harassment tactics of a different

(1) submission to such conduct is made either

nature in an attempt to make her resign. Finally,

he suggested outright that she should find another

explicitly or implicitly a term or condition of an

job. The secretary then asked the owner of the

individual's employment, (2) submission to or

company to take action.

rejection of such conduct by an individual is used

as the basis for employment decisions affecting such

individual, or (3) such conduct has the purpose or

effect of substantially interfering with an indi
vidual's work performance or creating an intimi
dating, hostile, or offensive working environment
(Federal Register, 1980).

This type of definition leaves considerable dis

cretion to the court when ruling on the legality
of a behavior questioned in a sexual harassment
lawsuit.

The EEOC definition of sexual harassment

distinguishes between two types of sexual harass

ment: quid pro quo (sometimes called sexual

blackmail) and hostile environment sexual harass

ment (Greenlaw and Kohl, 1992). For many

years, employers and the courts directed their
attention primarily toward quid pro quo harass

ment (Fagin and Rumeld, 1991). A case of quid

pro quo sexual harassment is relatively straight
forward: the employee accuses the harasser of
denying job benefits such as promotion, salary

increase, or a favorable assignment; or the

harasser is accused of taking away job benefits

by actions such as demotion or discharge because
sexual favors were not granted (Greenlaw and

Kohl, 1992).

An example of quid pro quo harassment is found

in the following situation:

An executive secretary working for the Senior Vice

President of a midwestern oil company in the

United States was grabbed and kissed by her boss

during work hours. This aggressive behavior

followed months of sexual innuendo by her boss.

The secretary had ignored all inappropriate

behavior previously, but was forced to directly
reject her boss' advance during the "attack".
Unbeknownst to the boss, the secretary advised
upper management of the problem. The secretary
did not want to change jobs, so she advised upper
management that since the boss had apologized,

she would continue to work for him unless

additional problems came uj!>. After the secretary

rejected the boss, the positive working relation

This is clearly a case of quid pro quo harassment

because it is a situation in which the secretary

was faced with possible discharge as a result of
denying sexual favors to her boss.
In 1986, the Supreme Court ruling in the case
o?Meritor Savings Bank, FSB v. Vinson recognized
that the form of harassment known as environ

mental harassment could be actionable even

without a specific job-related detriment or
benefit if the behavior is pervasive to the extent
that it permeates the job atmosphere (Fagin and

Rumeld, 1991). The Supreme Court ruled that

a hostile environment exists when harassment
actions interfere with an employee's performance
or create an intimidating job environment. Court
cases have recognized the following grounds for

suits: unwelcome sexual advances, coercion,

favoritism, indirect harassment, physical conduct,

and visual harassment (Lublin, 1991). A case of

hostile environment sexual harassment can be

more complex than quid pro quo harassment

because it can be unintentional as well as inten
tional (Greenlaw and Kohl, 1992), and the courts

have found several situational definitions of

hostile environment. Generally, in this case the

employee accuses the harasser of creating an

abusive work environment by behaviors such as

sexually vulgar language or the display of sexually
demeaning pictures or other behaviors of that

nature. Courts have held that such behaviors

need not be directed at an individual, but only

need be "disproportionately more offensive or
demeaning to one sex than the other."
Rulings by the courts which expanded the
definition of hostile environment found that
harassment of a co-worker may create a hostile
environment for a woman who is not even the
target of the harasser if the harassment is perva
sive. Also, a hostile environment may exist even
when the harassment has not been overtly sexual
in nature: in McKinney v. Dole, the court ruled
that any harassment or unequal treatment of an
employee that would not occur but for the sex

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

Business Ethics and Sexual Harassment 301

of the employee could be considered sexual

harassment (Greenlaw and Kohl, 1992). These

question was unwelcome. It should be noted that

the determination of the unwelcomeness of an

court rulings indicate there are many situations

advance can include the consideration of the

sexual harassment, thus a simple definition of

of conduct that may be an indication of the

employee's receptiveness to sexual advances
(Fagin and Rumeld, 1991).
In the two examples of sexual harassment

which can be defined as hostile environment

sexual harassment does not exist.

The following situation is an example of

hostile environment sexual harassment:

A woman was hired through a consulting firm to

do drafting work for a Fortune 500 company

which manufactured pulp and paper. When the
woman was hired as a permanent employee by the

company, her new boss denied her work assign

ments; she was told that she could not handle it
the assignments and was forced to perform unnec
essary outdoor work in inclement whether just to
human the boss. The men who did drafting work
in her department were given all the assignments.
In addition, the boss used atrocious language and
constantly told filthy jokes with sexual implications.

He also made sure he brushed against her body

when they passed in hallways and occasionally
patted her behind.

employee's apparel and other more subtle forms

provided earlier,
the harassing behaviors were unwelcome by the
female employees, the employees did not solicit the
unwanted behavior in any way, and in both situa
tions, the harassed employees expressed their rejec
tion of the offensive behavior to management.

Lawyers say the number of quid pro quo cases

is leveling off, but the number of hostile envi

ronment complaints has grown in the recent

years (Galen, 1991; Lublin 1991). Moskal (1989)
supports this conclusion and suggests that while
todays style of sexual harassment may be subtler
than in the past it is also more pervasive. One of
the reasons for the rise is many employers do not

This is clearly a case of hostile environment

sexual harassment. In this situation the boss was

not specifically demanding sexual favors in

exchange for job benefits, but instead was

harassing the employee by creating an intimi

dating, hostile, and offensive work environment.
A key factor in determining whether or not a
behavior constitutes sexual harassment concerns

believe employee complaints or their employers

believe they are untouchable if they to harass
someone.

Despite the lack of a clear definition as to w

exactly constitutes sexual harassment, there

large number of women who do underst

what sexual harassment is and what it feels

ment "... if the employee did not solicit or

to be harassed. Female employees filed se

harassment complaints at 90 percent of
nation's largest corporations in 1988 (Mos
1989). The percentage of working women
have encountered sexual harassment has

incite it and the conduct is regarded as undesir

able or offensive" (Fagin and Rumeld, 1991). In
addition, even a long-term consensual relation
ship can give rise to a claim of sexual harassment

estimated at between 42 and 90 percent, an

recent years, sexual harassment has become
of the most frequently litigated issues in em
ment law" (Terpstra and Cook, 1985). A su

the unwelcomeness of the behavior, which is

often difficult to determine. Even voluntary
relationships can result in a claim of sexual harass

if the harasser communicates a treat to the

employee that job benefits or detriments are a

condition of the employee's continuation of the

by Working Woman magazine found tha

percent of respondents reported inciden
harassment and the researchers say that t

relationship (Fagin and Rumeld, 1991). When

results concur with recent polls of fe

attempting to sort out the factors involved in any

chemical engineers, lawyers, and execut

sexual harassment lawsuit, regardless of the type

(Sandroff, 1992).
Nevertheless, it is believed that sexual har

harasser and the victim, a primary factor the

courts will consider when ruling is whether or
not the employee indicated that the behavior in

ment is understated as a social problem and m

incidents remain unreported (Kremer and Ma

of relationship which existed between the

1992). Many respondents to the Work

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

302 K. A. Crain and K. A. Heischmidt

Woman survey believe that filing a complaint

amounts to "career suicide", and this may be one

reason most sexual harassment incidents remain

unreported. Only one out of four women in the

Working Woman survey reported the harassment
and a corresponding Working Woman survey of

Fortune 500 human resource executives found

that most companies receive fewer than five
complaints a month (Sandroff, 1992).

It has been suggested that another possible

explanation for the reluctance of women to
report harassment may be due to the way some
company policies define sexual harassment and
the nature of the dispute-resolution process itself
which may better fit male rather than female

perspectives (Riger, 1991). Also, there is a

tendency for the problem of sexual harassment

to be trivialized, especially from a male view

point (Kremer and Marks, 1992).

Ethical issues
Sexual harassment presents legal, ethical, and

moral issues for companies in the area of

tionships which can harm the company, the

individuals directly involved, and indirectly, other

employees within the company. Companies

which have a high incidence of sexual harassment

often have additional problems within their

organizational relationships. Freada Klein, a

corporate consultant, has found that companies

which have "high rates of sexual harassment also
have high rates of racial harassment, discrimina

tion, and other forms of unfair treatment"

(Sandroff, 1992). This finding indicates that

companies which tolerate sexual harassment tend

to have personnel problems in general.
A lawsuit resulting from unlawful harassment

or discrimination can cause severe monetary

penalties to be imposed on the company which
creates economic and competitive problems for
the company. A lawsuit also alerts society to the

fact that the company is not taking proper

measures to prevent and effectively resolve the
issue of sexual harassment within its organization
which can lead to negative attitudes toward the
company and its products.

organizational relationships, which is defined by

Ferrell and Fraedrich (1991) as "the behavior of

The stakeholders - women and men

organization members toward customers, sup

management

pliers, subordinates, superiors, peers, and others".

employees, firms, shareholders,

These are all relationships in which sexual

Most often it is women who are subjected to

sexual harassment, although harassment also

quently within the relationships that Ferrell and

superiors, peers, and subordinates within the

effects a significant number of men. The 1981

U.S. Merit Systems Protection Board survey of
20000 federal employees found that 73 percent

organization. It has been noted above the sexual

harassment is considered a form of discrimina

been victims of harassment during a specified two

harassment can occur, but it occurs most fre

Fraedrich refer to as "significant others" ?

tion, and as such it is illegal. More important,

perhaps, is the fact that it is unethical for one
employee to use sexual blackmail against another
or for one employee to create a hostile working
environment for another employee.
Both the noted examples of sexual harassment
are situations in which a "significant others", a
superior, was harassing his subordinate.

of the of respondents who reported they had

year period were women; 27 percent were men
(Spann, 1990). The most common scenario is a
female subordinate under the age of 34 being
harassed by a male over the age of 35, according
to both the survey of Working Woman readers
and the survey of human resource executives

conducted by Working Woman. Almost 30

Sexual harassment also presents economic,

percent of the incidents occur among women

who are 18 to 24 years old and "in 83 percent

social, and competitive issues for a company. A

of the cases, the harasser is in a more powerful

successful company requires the existence of

good relations among its employees and the
people with whom the company does business.

Sexual harassment creates poor working rela

position than the harassed" (Sandroff, 1992).

These findings are consistent with other studies
which indicate that most often the harasser is a
man who is in a supervisory capacity in relation

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

Business Ethics and Sexual Harassment 303

to the harassed victim, who is a woman. For

example, a study by Kremer and Marks (1992)
found that "without exception", harassers were

of the women who had actually tried to report

harassment, nothing happened to the harasser

men who "were normally in positions of

human resource executives believe that most

authority over the person harassed". However,

this is not to say that women in powerful posi

complaints are given justice (Sandroff, 1992).

tions are not subjected to harassment. Harassment

believe that the only results they will get if they

report harassment are additional negative conse
quences, and personnel managers don't seem to

becomes much more common when women

reach upper management which is typically

male-dominated (Sandroff, 1992). As might be

expected, it has also been found that harassment

is much more common when a woman is

working in a predominantly male workplace.

Note that both examples of sexual harassment

given above are situations in which a young

female employee is harassed by an older male
employee. In addition, in the example of hostile

environment sexual harassment, the woman

worked in a predominantly male workplace.

For female employees who experience sexual

harassment, the short and long-term conse

quences are often considerable. A common

finding is that the majority of those who expe

rience sexual harassment are victimized twice,
either by being forced to leave work as a direct
result of the harassment or by being fired for
failure to comply with the harasser's requests

(Kremer, 1992). The Working Woman survey

found that 25 percent of respondents were fired

or forced to quit their jobs (Sandroff, 1992).

Twenty-seven percent of the respondents felt
their self-confidence had been seriously under

mined, 13 percent suffered long-t^rm career

damage, and 12 percent had impaired health
problems such as headaches, chronic fatigue,
nausea, sleep and appetite disturbances and more

frequent colds and urinary-tract infections.

Harassment victims also suffer emotional turmoil

because they often feel their professional life is

at stake if they don't submit to the harassment.
Impaired self-esteem and feelings of exploitation
are also common (Sandroff, 1992).
If a woman chooses to fight sexual harassment
she may have little success. Only one out of five
respondents to the Working Woman survey be
lieve that most complaints are given justice, and
over 60 percent believe that charges are either

completely ignored or the harassers are given

only "token" reprimands. For fifty-five percent

(Sandroff, 1992). Interestingly, 70 percent of the

Obviously, a large percentage of women

be aware of this problem. The human resource

management of firms would be well advised to
take a deeper look into the problem of sexual
harassment because it is an important issue with
many women. More than 90 percent of the re
spondents to the Working Woman survey believe
their companies can and must do more to prevent

and stop harassment. Seventy-five percent of the

respondents also feel that sexual harassment is an
issue just as important as salary inequities, prej
udice against promoting women, and problems
with inadequate child care (Sandroff, 1992).
The fact that the vast majority of employees
who suffer from sexual harassment are women

and the fact that harassment victims suffer

extremely negative consequences due to harass

ment, indicate that women are the most impor

tant stakeholders in this issue. However, the

harassers themselves, most often men as noted

earlier, are also obvious stakeholdersMn the past,
harassment has been found to eventually result in
dismissal for two out often harassers while others

are given written or oral warnings (Moskal,

1989). In the future, as companies continue to
become more aware of the cost associated with
sexual harassment, which is projected to reach
$1 billion over the next five years, prompt firing
of harassers will most likely become more com

monplace (Sandroff, 1992).

It is apparent that women and men employees

are the most obvious stakeholders in the issue of

sexual harassment, but firms and their share

holders are also important stakeholders. Once a

sexual harassment lawsuit is filed against a

company, the court will decide if the company

has any liability in the case. Liability will always
exist if the employer knows about the harassment
and does not take "prompt and effective measures

to remedy the situation" (Fagin and Rumeld,

1991). In addition, firms are frequently held

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

304 K. A. Crain and K. A. Heischmidt

liable for acts of harassment committed in the

increased absenteeism, and increased turnover as

workplace even when they were not aware that

such acts were taking place (Fagin and Rumeld,
1991). A general consensus has developed among

Stress-related claims resulting from sexual harass

ment must not be taken lightly because such

the courts as to the principles that apply in

claims "draw on average twice as much monetary

determining employer liability for sexual harass

ment by one of its employees. In the case of quid
pro quo harassment, liability depends mainly on
whether or not the harasser is viewed as an agent

damages as physical-injury claims" (Ferrell and

Fraedrich, 1991).

of the employer. If the harasser has real or

apparent authority to make employment-related
decisions, the employer will most likely be held
liable for acts of quid pro quo harassment even if
the employer was unaware that the harassment

was occurring and even if procedures were in

place for preventing, detecting and remedying

sexual harassment. In the case of hostile envi

ronment sexual harassment, the employer will

most likely be held liable if the complainant can
establish that the employer knew or should have

known the harassment was occurring. Courts

will focus on whether or not a reasonable system

existed for the victim to file a complaint about
the harassment and whether or not the employer
had in place suitable methods to remedy a harass
ment situation (Fagin and Rumeld, 1991).
In the example of quid pro quo harassment, the

company would have most certainly been found

liable because the harasser was clearly acting as
an agent for the employer with capacity to make
employment related decisions for the victim.
Further, the company had no policy regarding
sexual harassment and no means for reporting
complains of any kind.
In the example of hostile environment sexual
harassment, the company would have been liable
after it failed to act upon the original complaint
in accordance with stated company policy which
prohibited harassment and provided for discipli
nary action to be taken in cases of harassment.

If the company is found liable in a sexual

harassment lawsuit the monetary penalties can be

extensive, which is why the company's share

holders are also stakeholders in the sexual harass

ment issue. A typical Fortune 500 company loses

$6.7 million a year because of harassment - not

counting lawsuit costs. Much of this cost is

associated with decreased work effectiveness,
increased stress [and related health problems],

a result of sexual harassment (Moskal, 1989).

The direct costs of litigation can also be

substantial. In 1981, Ford Motor Company was

assessed damage fees amounting to $187023 as a
result of a sexual harassment claim. In 1978,
Johns-Manville Corporation agreed to pay an
out-of-court settlement of $100000 to settle a

sexual harassment charge, Montana Power

Company was forced to pay $73 390 in damages
in a claim against its company in 1983 (Terpstra

and Cook, 1985), and AT&T has $2 million

award against it for actions taken by an ex
personnel manager in Los Angeles (Lublin,
1991). Such damage awards can be expected to

climb even higher in the future. With the passage

of the 1991 Civil Rights Act, harassment victims

were given the right to a jury trial and com

pensatory and punitive damages for financial and
emotional harms, with awards based on company

size. In addition, Congress is expected to pass

an amendment that would lift the current cap on

awards (Sandroff, 1992).
Management is another important stakeholder

in the sexual harassment issue. Two-thirds of

sexual-harassment complaints at the nations

largest corporations were made against immediate
supervisors and upper management. This finding

raises a very serious concern because it is the

responsibility of management to implement
programs designed to reduce the occurrence of
sexual harassment. How effective can a company's

sexual harassment prevention policy be if a

majority of sexual harassment complaints accuse
the managers themselves of being harassers? To
help remedy this situation, the company presi

dent must make it clear that the company's

management is committed to enforcing the
company's policy and disciplinary measures
regarding sexual harassment - even when it
applies to management.

Please note once again that both the noted

examples of harassment involved a harasser who

was a member of management.

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

Business Ethics and Sexual Harassment 305

The various sides of the issue - why does

sexual harassment occur?
One of the most significant factors as to why
sexual harassment occurs may be the fact that

women and men often perceive the issue of

sexual harassment differently, according to psy
chologists. For men, it is usually strictly an issue
of sexuality; for women it is an issue of power
(Shellhardt, 1991). The Working Woman survey
found that one out of two women believe that

1991). There is another type of power that comes

into play during sexual harassment which may be

an even bigger factor than role power, and is

considered to be a fundamental aspect of sexual
harassment. This is a power known as gender
power - the power men and women have simply
because of their particular sex. "Virtually all
research indicates that [our] culture attributes
more power to men [than to women]. . . ." In
the work environment, men are seen as "more
competent, responsible, committed and valuable

most men harass due to a desire to "bully and

than women." Because of this natural male

humiliate women" and that harassment has little

to do with flirtatiousness or sexual desire

gender power, it is difficult for a woman to resist

or report harassment; the man's story will usually

(Sandroff, 1992). These women appear to be

be believed over the woman's story (Stringer et

desire by the harasser to use his power to decrease

al, 1991). This conclusion is supported by the

results of the Working woman survey which
found that for the majority of women who

the power of the victim by embarrassing or

reported harassment, no action was taken against

correct in their belief, for it has been suggested

that a common cause for sexual harassment is a

intimidating the victim. In this case the harasser

rarely expects or demands a sexual relationship at

the harasser, as noted above (Sandroff, 1992).

Morgenson (1989) has suggested that as more and
more women assert their power and succeed on

constant sexual jokes or stories or by making

their own merits, sexual harassment will become

comments about the victims body. This form of

harassment is common for women working in
non-traditional jobs (Stringer et al, 1991).
Most literature on the subject agrees with the
female perception that sexual harassment is an
issue of power by characterizing it as an abuse
of either role or sexual power with the two major

less of a serious problem in the future.

all, but instead harasses through the use of

motivators being the obtainment of sexual

activity or increased power or both (Stringer et

al., 1991). It is easy to understand how role

power, the power associated with one's title or

position in a company, could give one employee
the ability to sexually harass another. In this case,
the harasser may believe he has legitimate power,

which is defined by Ferrell and Fraedrich (1991)

as a power which "stems from the belief that (one

has) the right to exert influence and that certain

others have an obligation to accept it."
What may not be as clearly understood is the
observation that men may not be intentionally
trying to use their role power. Men often believe
they can step out of their role in the workplace

when they want to behave in a sexual manner.

Women, on the other hand, do not see a sepa
ration in roles and as a result, feel intimidated and

threatened by sexual behaviors (Schellhardt,

Examples of actions companies can take

Many small companies have been slow to react
to the growing problem of sexual harassment by
failing to take preventive measures and failing to
set up procedures for handling a harassment com
plaint. In small companies with a "family" atmos
phere, managers often assume they are "immune
from the federal civil rights act that prohibits
sexual harassment since their company has so few

employees" (Levin, 1992). These companies risk

significant financial loss in the event of a sexual
harassment lawsuit.

Most large corporations, however, have

responded to the potential threat that a sexual

harassment lawsuit poses by implementing

policies designed to prevent harassment from

occurring and establishing procedures for com
plaints that may arise. For example, Fortune 500
corporations are likely to annually distribute to
all employees a memorandum reaffirming the

company's commitment to equal employment

opportunity. A portion of the memorandum
specifically stresses the respect that the company

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

306 K. A. Crain and K. A. Heischmidt

places on the rights and dignity of individuals,
and states that accordingly, sexual or other harass

ment is forbidden. Employees are reminded that

company policy strictly prohibits unwelcome

sexual advances, physical or verbal conduct of a
sexual nature or any other conduct tending to
create a hostile work environment and that strict
sanctions will be imposed for any violation of this

policy. Employees are also reminded that they

have clear procedures for reporting sexual harass
ment, that they may do so without having to go
through their supervisor, that their complaint will

be kept confidential to the extent possible, that

companies are proactive and educating their

employees about what actions could be consid
ered sexual harassment, investigating allegations
fast, protecting victims, and penalizing offenders
(Deutschman, 1991). McCalla (1991) suggest that
a strong antiharasment policy which is supported
by planned preventive and corrective action go

a long way in eliminating the presence and

impact of unethical sexual harassment. In the

event harassment does take place, the company

must immediately act to resolve the problem.

This alternative recognizes the individual rights
of employees and thus employs the deontological

prompt steps will be taken to investigate the

moral philosophy. Deontological approaches to

complaint and enforce remedial action if deemed

necessary, and that they will be safe from retali
ation of any kind if they have a complaint.

business ethics are derived from perceived duties

Many companies have taken even further

action to prevent harassment by conducting
training sessions on the issue. Eight-one percent

of the Fortune 500 companies surveyed by

Working Woman have training programs on

sexual harassment (Sandroff, 1992). Susan L.
Webb, a consultant to companies which include
Burger King and Coca-Cola, recommends annual
training programs for all employees, introductory

programs for new employees, and refresher

programs for newly appointed managers (Washer,

1992).

Alternative solutions and ethical

consequences
Companies are indeed struggling over how best

to halt sexual harassment on the job (Liblin,

1991). There are two choices a company can

or obligations of one individual for another.

Deontologists hold that certain actions are right

not because of some benefit to ourselves or

others, but due to the nature of the actions.

Employees should be respected as individuals and

should be able to have positive working rela

tionships with other employees.

Following the proactive alternative also ensures
that the greatest good is achieved for the greatest

number because it benefits the employees, the

company, and the shareholders of the company.

The employees are protected from harassment;

the company is protected from legal, competi

tive, and social consequences; and the share

holders are protected from the possibility of
financial loss. In this regard, the utilitarian moral
philosophy is followed. Utilitarianism is a teleo
logical approach to business ethics. Teleological

approaches place complete emphasis upon the

outcome, not the intent of the actions (Boatright,

1993; Hosmer, 1991).

make regarding the issue of sexual harassment.

One choice is to ignore the problem. If the

management of a company chooses this alterna

tive, they are acting in an immoral and, possibly,

illegal manner. In this situation, the company

would permit harassers to freely operate under
the teleology moral philosophy of egoism by
allowing them to increase their power by sexually
harassing other employees.

The second choice a company can make,

regarding the issue of sexual harassment, is to be

proactive and do everything within its power to

prevent harassment from occurring. Smart

Recommended action and guiding moral

philosophy
The most logical action a company can take to
deal with the problem of sexual harassment is to
implement a broad program designed to prevent

harassment, and set up a clear procedure for

remedying any harassment complaints. This type

of action offers the best possible outcome for all
employees of the company, the company itself,
and anyone with an interest in the company. The
utilitarian moral philosophy is followed in this

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

Business Ethics and Sexual Harassment 307

case - the greatest good for all concerned is

achieved. The deontological moral philosophy is
also followed by protecting the individual rights

of employees. So, by acting to prevent sexual

harassment, a company is employing both the
deontological and utilitarian moral philosophies.
Ignoring the problem and failing to take any
action at all implies that a company condones the

unethical and illegal behavior of sexual harass

ment. This type of attitude results in increased
incidence of sexual harassment and exposes the
company to tremendous risk in the event of a
sexual harassment lawsuit. Employers who take
the recommended action have less risk of liability,

and in cases involving hostile environment sexual

harassment, they may have no liability at all

(Fagin and Rumeld, 1991).
For a company considering the steps it should

6. Procedures to follow when investigating

harassment complaints.
7. Assurances of confidentiality, unless in
appropriate under the circumstances.

8. An appeals process.
9. A commitment to investigate harassment
claims promptly and thoroughly, coupled

with a requirement that employees co

operate in investigations of harassment
claims.

10. A statement that disciplinary measures

will be imposed against those shown to
have harassed or retaliated against others.
11. Protection against retaliation for making
a harassment claim.

12. Recognition that maliciously or recklessly

false accusations of sexual harassment will
not be tolerated.

a procedure for handling complaints, a timetable

13. Wide publication and distribution of the

policy to those affected by it.
14. Investigation of complaints will be made
on a thorough and prompt basis. The best
action an employee can take in the event

for handling complaints so they are resolved

they are sexually harassed is to firmly

quickly, training programs, and follow-up in the

protest the behavior when it occurs. One

out of three women who protested in the
Working Woman survey got the harasser
to stop, compared to one out of four who

take to effectively deal with the sexual harassment

issue, corporate consultant Susan L. Webb

suggests there ar six necessary factors: top man

agement's support, a written policy that is posted,

form of additional training and semi-annual

memos regarding company policy on harassment

(Washer, 1992). In Levins' (1992) article entitled
"Best Policy is to Ban Harassment" he states that
a written policy must include several factors:

tried to ignore or avoid the harasser.

Trying to ignore the problem is a

common tactic, however. This method of

handling the problem was employed by

46 percent of the women in the survey

1. A strong, positive statement that sexual

and other harassment will not be tolerated.

2. A statement of what constitutes sexual

and other harassment, with examples of
the type of offensive behavior which will
not be tolerated.

3. A list of those the policy covers ? for

who had been harassed (Standroff, 1992).

Practical constraints of recommended

action

example, employees, clients, and vendors

- and benefits.

4. The designation of specific persons or

classes of persons to whom instances of
sexual and other harassment should be

Establishing a program to prevent sexual harass

ment and setting up procedures for resolving

complaints requires a company to commit

resources in the form of personnel and their time

reported. Workers must be able to report

harassment claims to someone other than

which could be used for more direct and

their immediate supervisors.

such, presents a cost to the company. This

obviously represents a constraint upon the

5. To reduce workers' discomfort about

reporting incidents to one sex or the
other, designate both males and females.

immediate obtainment of company goals and as

company. However, it is clear that by failing to

commit such resources, a company risks far

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

308 K. A. Grain and K. A. Heischmidt

greater loss from potential sexual harassment

lawsuits.
The attempt to change attitudes and behaviors

among employees is another constraint in a

policy to prevent sexual harassment. Attitudes are

generally resistant to change. A company may

have more success by focusing on actions

designed to change behavior (Washer, 1992).

Strict sanctions against harassment, such as imme

diate dismissal, are probably the best motivation
for employees to change their behavior.

Conclusion

Business is Getting the Message', Business Week,

March 18, 98-100.

Greenlaw, P. S. and J. P. Kohl: 1992, 'Proving Title

VII Sexual Harassment: The Courts' View', Labor
Law Journal, Mar., 164-171.
Hosmer, LaRue T: 1991, The Ethics of Management
(Irwin, Homewood, IL).

Kremer, J. M. D. and J. Marks: 1992, 'Sexual

Harassment: The Response of Management and

Trade Unions', Journal of Occupational and

Organizational Psychology 5(15).

Levin, L.: 1992, 'Best Policy is to Ban Harassment',

PIMA, Sept, 38.
Lublin, J. S.: 1991, 'Companies Try a Variety of
Approaches to Halt Sexual Harassment on the Job',
The Wall Street Journal, Oct. 11.

Sexual harassment represents a large problem for

organizations within the area of organizational
relationships. In order for the problem of sexual

harassment in the workplace to be reduced, or

preferably eliminated, it is important for com

McCalla, R.K.: 1991, 'Stopping Sexual Harassment

Before It Begins', Management Review, Apr. 1991.

Morgenson, G.: 1989, 'Watch That Leer, Stifle That

Joke', Forbes, May 15.
Moskal, B. S.: 1989, 'Sexual Harassment '80s Style',
Industry Week, July.

panies to understand that sexual harassment is an

issue which lies within the broader context of sex

Riger, S.: 1991, 'Gender Dilemmas in Sexual

discrimination and inequality of opportunity in

the workplace. In this regard, sexual harassment
is both an illegal and unethical practice which
must not be tolerated. Companies should adopt
a policy which respects the rights of individual
employees by prohibiting sexual harassment. This
policy should be clearly stated in the company
Code of Ethics and was enforced rigorously.

Psychologist, May, 497-505.

Standroff, R.: 1992, 'Sexual Harassment ? The Inside
Story', Working Woman, June, 47-51.

References

Harassment Policies and Procedures', American

Schellhardt, T. D: 1991, 'Experts Explain Sexuality

vs. Power', The Wall Street Journal, Oct. 10, B-l.

Spann, J.: 1990, 'Dealing Effectively With Sexual

Harassment: Some Practical Lessons From One
City's Experience', Public Personnel Management,

Spring, 53-69.
Stringer, D M., H. Remick, J. Salisbury and A. B.
Ginorio: 1990, 'The Power and Reasons Behind

Sexual Harassment: An Employer's Guide to

Boatright, J. R.: 1993, Ethics and the Conduct of

Business (Prentice-Hall, Inc., Englewood Cliffs,

NJ).

Deutschman, A.: 1991, 'Dealing With Sexual

Harassment', Fortune, Nov. 4.

Fagin, A. I. and M. D. Rumeld: 1991, 'Employer

Liability for Sexual Harassment', Legal Report Fall

1(4).

Federal Register. 1980, 'Equal Employment

Opportunity Guidelines on Sexual Harassment',

45(72), 25025.

Ferrell, O. C. and J. Fraedrich: 1991, Business Ethics

(Houghton Mifflin Co., Boston).

Galen, M.: 1991, 'Ending Sexual Harassment:

Solutions', Public Personnel Management, Spring,

43-52.

Terpstra, D. E. and S. E. Cook: 1985, 'Complainant

Characteristics and Reported Behaviors and

Consequences Associated with Formal Sexual
Harassment Charges', Personnel Psychology,
559-573.

Washer, L.: 1992, '6 Steps to Stopping Harassment',

Working Woman, June, 51, 78.
'1-800-Sexist Boss': 1992, Glamour, July, 72.

Department of Marketing,
Southeast Missouri State University,

Cape Girardeau, MO 63701,

This content downloaded from 61.12.40.177 on Wed, 24 Aug 2016 06:03:41 UTC
All use subject to http://about.jstor.org/terms

U.S.A.