The Amplifying and Buffering Effects of Virtuousness in Downsized Organizations David S. Bright Kim S. Cameron Arran Caza ABSTRACT. Virtuousness refers to the pursuit of the highest aspirations in the human condition. It is charac- terized by human impact, moral goodness, and uncon- ditional societal betterment. Several writers have recently argued that corporations, in addition to being concerned with ethics, should also emphasize an ethos of virtuous- ness in corporate action. Virtuousness emphasizes actions that go beyond the ‘‘do no harm’’ assumption embedded in most ethical codes of conduct. Instead, it emphasizes the highest and best of the human condition. This research empirically examines the buffering and amplify- ing effects of virtuousness in organizations. The study hypothesizes that virtuousness has a positive effect on organizations because amplifying dynamics make sub- sequent virtuous action more likely, and buffering dynamics reduce the harmful effects of downsizing. The study reveals that two types of virtuousness – tonic and phasic – are associated with these effects. KEY WORDS: ethics, virtuousness, virtues, downsizing Recent scandals have prompted a growing interest in corporate ethics and social responsibility (Dawkins and Lewis, 2003). Concomitant with this interest, increased attention has also been paid to the issue of virtues and virtuousness in organizations (Cameron et al., 2003). An organizational ethos of virtuousness refers to the pursuit of the highest aspirations in the human condition (MacIntyre, 1984). It is argued to be a useful orientation providing proactive guidance in times of difficulty (Arjoon, 2000; Caza et al., 2004). Virtuousness is suggested to not only help organizations avoid wrongdoing, but to enhance the likelihood that they will pursue higher levels of individual and societal benefit as well (Arjoon, 2000; Bolino et al., 2002). Virtuousness differs from ethics in that choices are made, not only from the standpoint of living within the constraints of ethical rules, but also from the perspective of building personal and communal excellence (Arjoon, 2000; Dobson, 2004). Thus, virtuousness is a different kind of standard that guides individuals to enact excellence in character and moral judgment (Cameron, 2003; Caza et al., 2004). This study identifies indicators of two types of virtuousness, tonic and phasic, and their relationships to effectiveness in downsized organizations. The benefit of research on virtuousness as a com- plement to ethics derives from two basic premises. First, ethical codes cannot predict every possible di- lemma managers will face in the turbulent external environment (Arjoon, 2000; Caza et al., 2004). Most corporate codes of conduct function as a regulatory David S. Bright is a Visiting Assistant Professor in the Department of Organizational Behavior, and Research Fellow in the Center for Business as an Agent of World Benefit at the Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio. His research focuses on how values and virtues relate to employee engagement and organizational change. Kim S. Cameron is Professor of Management and Organization at the University of Michigan Business School and Professor of Higher Education in the School of Education at the University of Michigan. Dr. CameronÕs past research on organizational downsizing, effectiveness, quality culture, virtuousness, and the development of management skills has been published in more than 80 articles and 10 books. His current research focuses on the virtuousness of and in organi- zations and their relationships to organizational success. He is one of the co-founders of the Center for Positive Organiza- tional Scholarship at the University of Michigan. Arran Caza is a doctoral candidate in both the Ross School of Business and the Department of Psychology at the University of Michigan. He is a doctoral fellow of the Social Sciences and Humanities Research Council of Canada. His dissertation focuses on the causes, consequences and nature of managerial discretion. Journal of Business Ethics (2006) 64: 249–269 Ó Springer 2006 DOI 10.1007/s10551-005-5904-4