Chapter Five
ETHICAL DECISION
MAKING
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Copyright © 2012 John Wiley & Sons
 Describe individual characteristics
Chapter 5
Learning Objectives
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Chapter 5: Collins, Business Ethics
that impact ethical beliefs,
sensitivities, intentions, and
behaviors
Analyze the processes by which
general ethical beliefs and
sensitivities lead to the formation of
specific ethical intentions
Apply a systematic rational ethical
decision-making framework to
arrive at a moral conclusion
Facilitate a negotiation between
competing ethical perspectives
Recognize warning signs that an
unethical decision is approaching
Ethical Behavior Model
James Rest has developed a four-component
model sequentially showing that an individual
is likely to behave morally if he or she:
1. Is aware that an ethical dilemma has arisen
2. Forms a moral judgment
3. Develops motivation to do something about it and
4. Is a person of high moral character
Chapter 5: Collins, Business Ethics
Exhibit 5.1 Decline from Ethical Belief to Ethical Action
In general, ethical beliefs generate ethical intentions and
result in ethical behaviors. But there is typically a drop
off going from one step to the next.
Insert Exhibit 5.1
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
 The gap between ethical belief and ethical intent in
Exhibit 5.1 can be caused by not wanting to create a
negative relationship with the coworker
 Another big gap exists between “should” and “did”
 Why did a large percentage of managers who
claimed they would report the cheater not follow up
on the ethical intention?
Chapter 5: Collins, Business Ethics
Exhibit 5.2 Ethical Behavior Model
Insert Exhibit 5.2
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Individual Characteristics (A)
Individual factors that have the largest impact
on ethical decision making are:
1. More education
2. More work experience
3. Religion
4. Reasoning at a higher level of moral development
5. A higher score for deontology or idealism
6. A lower score for relativism, teleology, economic
orientation, or Machiavellianism
Chapter 5: Collins, Business Ethics
Exhibit 5.3 Individual Characteristics
Insert Exhibit 5.3
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Ethical Beliefs and Sensitivities (B)
 A belief is a mental state that guides behaviors
 Ethical sensitivity refers to an individual’s awareness
that a particular situation raises ethical concerns
 Ethical beliefs and sensitivities are the result of a
host of individual characteristics, such as age,
education, moral development level, or work
experience
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Ethical Intuitions (C)
 Ethical intuition is a quick insight independent of
any reasoning process about right and wrong
 Professor Jonathan Haidt concludes that many
ethical decisions are the result of intuitive reactions
rather than deep reflection
Chapter 5: Collins, Business Ethics
Exhibit 5.4 Liberal and Conservative Ethical Intuitions-What
Matters Most
Insert Exhibit 5.4
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Theory of Planned Behavior (D)
 According to Icek Ajzen’s theory of planned behavior,
formulating an intention to act ethically is a function of a
person’s attitudes toward the behavior, subjective norms,
and perceived behavioral control
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Issue’s Moral Intensity (E)
 Moral intensity refers to issue-related factors, rather
than individual or organizational factors, that are
likely to determine the magnitude of a person’s
moral approval or disapproval
 According to business ethics scholar Tom Jones, an
issue’s moral intensity is likely to vary based on six
factors
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
The six factors:
1. Magnitude of consequences
2. Social consensus
3. Probability of effect
4. Temporal immediacy
5. Proximity
6. Concentration of effect
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Organization Characteristics (F)
 O’Fallon and Butterfield, in their extensive review
of the business ethics research literature, found
four organizational characteristics associated with
ethical behaviors
Codes of Ethics
 Ethical Climate/Culture
 Organization Size
 Rewards and Sanctions
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Chapter 5: Collins, Business Ethics
Ethical Behavior Model
Ethical Intentions (G)
 An ethical intention is determining mentally
to take some action that is morally
appropriate
 But even if an intention to act ethically is
solidified, an individual still may not follow
through on the ethical intention
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
Rational Ethical Decision Making (H)
 After an initial intention is formed, some people
pause and apply a more rational approach to ethical
decision making
 Rational ethical decision-making frameworks help
individuals analyze the ethical basis of their
decisions and actions
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
Rotary International’s Four-Way Test:
Of the things we think, say, or do,
1. Is it the TRUTH?
2. Is it FAIR to all concerned?
3. Will it build GOODWILL and BETTER
FRIENDSHIPS?
4. Will it be BENEFICIAL to all concerned?
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
Raytheon’s Ethics Quick Test:
 Is the action legal?
 Is it right?
 Who will be affected?
 Does it fit Raytheon’s values?
 How will I feel afterwards?
 How would it look in the newspaper?
 Will it reflect poorly on the company?
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
A Systematic Rational Ethical Decision-Making Framework
Insert Exhibit 5.5
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
The Six Ethical Theories
Insert Exhibit 5.6
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
The “Trolley Problem”: A series of three ethical
dilemmas developed by moral philosophers that
highlight the tension between utilitarianism and
deontology
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
Insert Exhibit 5.7
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
 The six ethical theories parallel Lawrence Kohlberg’s
six levels of moral reasoning
 As shown in Exhibit 5.9 (next slide), moral reasoning
in Stages 1 and 2 reflects egoism, Stage 3 moral
reasoning reflects social group relativism, Stage 4
moral reasoning reflects cultural relativism, stage 5
reflects utilitarianism and deontology, and Stage 6
reflects deontology and virtue ethics
Chapter 5: Collins, Business Ethics
Exhibit 5.9 Kohlberg’s Stages of Moral Development and
Ethical Theories
Insert Exhibit 5.9
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
Rushworth Kidder and his colleagues have found strong
consensus among five values, or virtues, that are common
worldwide
Insert Exhibit 5.10
Chapter 5: Collins, Business Ethics
Rational Ethical Decision Making
 Each ethical theory raises important issues for the
decision maker to consider, and each theory has
strengths and weaknesses
 Applying the seven questions (see next slide) to the
most salient ethical dilemmas will likely reveal that
each decision option has strengths and weaknesses,
and ethical trade-offs might be required
Chapter 5: Collins, Business Ethics
Exhibit 5.11 Critical Thinking Decision-Making
Process Table
Insert Exhibit 5.11
Chapter 5: Collins, Business Ethics
Persuading Others
A manager’s failure to engage employees who apply
different ethical theories can damage employee morale
and result in unethical behaviors and lawsuits
Insert Tips and Techniques “Achieving Ethical Consensus”
Chapter 5: Collins, Business Ethics
Ten “Ethical Hazard Approaching” Signs
Michael Josephson describes 10 common rationalizations
for unethical acts
Insert Exhibit 5.12
Chapter 5: Collins, Business Ethics