■We investigate the influence of governance structures of temporary organizations on the ethical issues faced by its managers, how they respond to these issues, and how that influences trust among stakeholders. A global, web-based survey confirmed earlier research that project managers encounter transparency, optimization, and relationship issues, and identified four additional ethical issue types. Managers' behavior in responding to ethical issues varies by governance structure, their willingness to resolve ethical issues themselves, and the trust between stakeholders. Higher levels of trust are found in stakeholder-oriented governance, which can reduce transaction costs. Implications for practitioners and academics are discussed.

The impact of multilevel level governance on the frequency of ethical issues in temporary organizations (TOs) is investigated. A structural equation model, based on a global survey, showed that behavior control, as a governance mechanism at the temporary organization (TO) level, reduces the frequency of ethical issues. This relationship is partly mediated through corporate governance, which controls ethical issues by following good governance principles. Using institutional and agency theory, we identify a substitution effect, where micro level (TO) governance substitutes for ‘holes’ in the macro level (corporate) governance. Situational contingencies for the synchronization of governance efforts across macro and micro levels are discussed.

This paper explores how moral neutralisation techniques can be employed by business leaders in their moral reasoning. It presents results from leadership training with participants from a Norwegian financial institution. Each participant faced the challenge of being a reference person for an employee who had created social unrest at work. The option of lying about the problems to get rid of the employee initially appeared to conflict with the participants’ moral convictions. Nevertheless, some of them managed to overcome the dissonance by applying moral neutralisation techniques. Focus on moral reasoning of this kind among business leaders is shown to be part of a more general shift in attention from moral character to circumstances in explanations of and countermeasures against moral wrongdoing.

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Business leaders frequently face dilemmas, circumstances where whatever course of action they choose, something of important value will be offended. How can an organisation prepare its decision makers for such situations? This article presents a pedagogical approach to dilemma training for business leaders and managers. It has evolved through ten years of experience with human resource development, where ethics has been an integral part of programs designed to help individuals to become excellent in their professional roles. The core element in our approach is The Navigation Wheel, a figure used to keep track of relevant decision factors. Feedback from participants indicates that dilemma training has helped them to recognise the ethical dimension of leadership. They respond that the tools and concepts are highly relevant in relation to the challenges that occur in the working environment they return to after leadership training.