Making Decisions in Business Ethics
Conventional Morality & Ethical Relativism
&
Moral Development and
what influences the Moral Decision
1
Overview
• Examine the question of why ethical and unethical
decisions get made in the workplace.
• Determine what is an ethical decision.
• Examine prominent ethical decision-making models.
• Discuss the importance of differences between
individuals in shaping ethical decision-making.
• Critically evaluate importance of situational influences
on ethical decision-making (issues & context based).
I am there
2
Heinz and the Drug
A woman was near death from cancer. There was one drug doctors thought
might save her. The drug was expensive to make, but the druggist charged ten
times what it cost. He paid $200 for the raw materials and charged $2,000.
The sick woman’s husband, Heinz, went to everyone he knew to borrow the
money but could only come up with $1,000: half the cost. He approached the
druggist and told him that his wife was dying, and asked him to sell it to him for
less or let him pay half now / half later.
But the druggist said, “No, I discovered the drug and I intend to make a profit
from it.” So Heinz got desperate and began to think about breaking into the
man’s store to steel the drug for his wife.
Should Heinz steal the drug? (check one)
___ He should steal it
___ I can’t decide ___ He should not steal it.
3
Heinz and the Drug
1. Whether a community’s laws are going to be upheld.
2. Isn’t it natural for a loving spouse to care so much for his wife that he’d steal?
3. Is Heinz willing to risk getting shot as a burglar or going to jail for the chance that
stealing the drug might help?
4. Whether Heinz is a pro. wrestler, or has lots of influence with pro. wrestlers.
5. Whether Heinz is stealing the drug for himself or doing this for someone else.
6. Whether the researcher’s rights to his invention have to be respected.
7. Whether the essence of living is more encompassing than the termination of dying,
socially and individually.
8. What values will be the basis for governing how people act towards each other.
9. Whether the researcher is going to be allowed to hide behind a worthless law which
only protects the rich anyhow.
10. Whether the law here gets in the way of the most basic claim of a member of society.
11. Whether the researcher deserves to be robbed for being so greedy and cruel.
12. Would stealing in such a case bring about more total good for all of society or not?
4
Conventional Morality and
Ethical Relativism
5
Characteristics of Subjective and
Objective Morality
• Moral judgments are universally applicable. If a
particular action is right or wrong for one person, it is
also right or wrong for all similarly situated people.
• Moral judgments are important. Thus, moral
judgments must override all other considerations.
• Moral praise must accompany morally right actions &
moral blame must accompany immoral behavior (i.e.
there are rewards and punishments).
6
Descriptive Transcultural Relativism
• Describes the differences between cultures
& differences in the way particular languages
define moral terms.
• Recognize that terms such as “right” and
“wrong” are not universally defined in all
cultures or languages.
7
Moral Absolutism
• There are eternal moral values & principles
that are always applicable in all situations.
• This is an alternative to ethical relativism.
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Moral Pluralism
• Radical Moral Pluralism: people hold
mutually irreconcilable views about morality,
including what is “right” or “wrong”.
• Pluralism of moral principles: diversity of
moral principles, but not irreconcilable.
• Pluralism of moral practices: basic
agreement on moral principles, but diversity
of opinion regarding specific actions.
• Pluralism of self-realization: members of
society must adhere to basic moral norms,
but are other-wise free to pursue differing
values and lifestyles.
9
Moral Pluralism and the Law
• The law is a tool for responding to moral pluralism.
• It’s dangerous to equate the legal with the ethical.
– While many laws prohibit immoral or unethical behaviors,
those behaviors were immoral before they were illegal.
• The law is primarily reactive, which results in a lag
between behavior being identified as socially harmful
and legislation being passed to make it illegal.
• Not all laws are morally defensible.
• Not all immoral behavior can be made illegal.
• Behaviors that are not, in themselves, unethical can
become unethical because of laws that are passed.
10
Business and Religious Ethics
• Religion is an important guide for many individuals in
their business lives, but religion cannot provide a
universal moral code for business.
• Different religions have different ethical codes.
• An eye for an eye & a tooth for a tooth is the basis for
individual & equitable justice (the guilty individual must be
found and proportional justice must be meted out).
• ”If we practice an eye for an eye and a tooth for a tooth,
soon the whole world will be blind and toothless.” Gandhi
• On a global level, there are many religions with
varied moral principles. This is also true on a national
level, unless a single religion is enforced by the state.
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Normative Ethical Relativism
• Claims that when any two people or cultures
hold different moral views of an action, both
can be right.
• An action may be right for one person or society,
and the same action, taken in the same way,
may be wrong for another person or society —
and both are equally correct.
12
Ethical Theory
• There’s no single ethical theory upon which all people
or philosophers agree, but two basic approaches to
moral reasoning have prevailed over time.
• The teleological approach argues on the basis of
ends. For example, a particular action is right or
wrong based upon the consequences of the action.
• The deontological (rules based) approach argues
that actions are morally right or wrong independent
of consequences.
• Ethical monists follow a single moral theory and
ethical pluralists are willing to join components of
different ethical theories.
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Making Decisions in Business Ethics
Moral Development and
what influences the Moral Decision
14
Relationship with normative theory
• The role of normative theory in the stages of
ethical decision-making is primarily in relation
to moral judgement
– Moral judgements can be made according to
considerations of rights, duty, consequences, etc.
• Commercial managers tend to rely on
consequentialist thinking.
• Yet, the issue of whether and how normative
theory is used by an individual decision-maker
depends on a range of different factors that
influence the decision-making process.
15
Can we teach ethics?
By exposure to the topic we can enhance the ability
of business students to recognize ethical issues.
As a developmental
attribute Kohlberg
would argue we
could.
Rick Gautschi & Tom Jones,
Enhancing the Ability of Business
Students to Recognize Ethical
Issues…, Journal of Business
Ethics, 1998, 17(2): 205-216.
Should we teach ethics?
Is not there an inherent tension
between business & ethics?
• Is not there a special ethics for business?
• Is ethics ‘practical’ in the ruthless world of business?
• What’s the cost of being unethical in business?
16
Influences on ethical decision-making
• Individual factors - unique characteristics of
the individual making the relevant decision
(Trevino, 1986).
• Situational factors - particular features of the
context that influence whether the individual
will make an ethical or unethical decision.
17
Individual Influences on ethical
decision-making 1/5
Individual factors include:
• Age and gender
• National & cultural characteristics
• Education and employment
• Psychological factors:
– Cognitive moral development
– Locus of control
• Personal Values
• Personal integrity
• Moral imagination
18
Individual Influences on ethical
decision-making 2/5
• Age
– Results contradictory.
– However experiences
may have impact.
• Gender
– Individual characteristic
most often researched.
– Results contradictory.
19
Individual Influences on ethical
decision-making 3/5
National and cultural characteristics
•People from different cultural backgrounds are likely to
have different values / beliefs about right & wrong.
– This will inevitably lead to variations in ethical decisionmaking across nations, religions & cultures.
•Our ‘mental programming’ is influential in shaping our
understanding of differences - Hofstede (1980; 1994)
–
–
–
–
Individualism / collectivism
Power distance
Uncertainty avoidance
Masculinity / femininity
20
Individual Influences on ethical
decision-making 4/5
Basic Questions Society must Address (Kluckholm)
a.What is the innate nature of people
(evil, neutral, good).
b. What are People’s Relation to Nature
(subjugation, harmony, mastery).
c. People’s Time Orientation
(past, present, future).
d. Nature of Human Activity
(being, becoming, doing).
e. Peoples Relationship with one Another
(lineal, collateral, individual).
21
Individual Influences on ethical
decision-making 5/5
Education and employment
•Type and quality of education may be influential.
•E.g. business students rank lower in moral
development than others and more likely to cheat.
– ‘Amoral’ business ed. reinforces myth of amoral business.
– And Lawyers rank high?
22
Psychological factors
• Cognitive moral development (CMD) refers
to different levels of reasoning that individuals
can apply to ethical issues and problems
– Criticisms of CMD
• Gender bias
• Implicit value judgements
• Invariance of stages
• An individual’s locus of control determines
the extent to which they believe that they have
control over the events in their life
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Psychological factors
Stages of cognitive moral development1/3
I
Preconventional
Level
Stage
Explanation
Illustration
Individuals define right and
1 Obedience wrong according to
and
expected rewards and
punishment punishments from
authority figures
Whilst this type of moral reasoning
is usually associated with small
kids, we can also see that business
people frequently make unethical
decisions because they think their
company would either reward it or
let it go unpunished (Gellerman '86).
Individuals are concerned
2 Instrumental with their own immediate
purpose and interests and define right
exchange
according to whether there
is fairness in exchanges or
deals they make to achieve
those interests.
An employee might cover for the
absence of a co-worker so that their
own absences might subsequently
be covered for in return – a “you
scratch yours”
yours”
scratch my back, I’ll scratch
reciprocity (Treviño & Nelson 1999).
1999).
24
Psychological factors
Stages of cognitive moral development2/3
Level
Stage
Explanation
Illustration
An employee might decide that using
accord,
what is expected of them company resources such as the
conformity by their immediate peers phone, the internet and email for
and mutual and those close to them personal use whilst at work is
expectations
acceptable because everyone else in
their office does it.
Conventional
II
Conventional
3 Interpersonal Individuals live up to
Individuals’ consideration
of the expectations of
accord and others broadens to social
system
accord more generally,
maintenance rather than just the
specific people around
them.
4 Social
A factory manager may decide to
provide employee benefits and
salaries above the industry minimum
in order to ensure that employees
receive wages and conditions deemed
acceptable by consumers, pressure
groups and other social groups.
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Psychological factors
Stages of cognitive moral development3/3
III
Postconventional
Level
Stage
Explanation
Illustration
5 Social
contract
and
individual
rights
Individuals go beyond
identifying with others’
expectations, and assesses
right and wrong according to
the upholding of basic rights,
values and contracts of
society.
The public affairs manager of a food
manufacturer may decide to reveal
which of the firm’s products contain
genetically modified ingredients out of
respect for consumers’ rights to know,
even though they are not obliged to by
law, and have not been pressurised
into by consumers or anyone else.
6 Universal Individuals will make
ethical
decisions autonomously
principles based on self-chosen
universal ethical principles,
such as justice, equality, and
rights, which they believe
everyone should follow.
A purchasing manager may decide that
it would be wrong to continue to buy
products or ingredients that were
tested on animals because he believes
this doesn’t respect animal rights to be
free from suffering.
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Psychological factors
• Rest: Components of Moral Action
Taking a moral
act depends on more than just
your stage of Moral development
Lawrence Kohlberg, Jim Rest, 1982 at the
Moral Ed. Conference in Fribourg, Switzerland
Wk. 7-27
Psychological factors
Personal values, integrity & moral imagination
•Personal values
– ‘an enduring belief that a specific mode of conduct or
end-state of existence is personally or socially
preferable to an opposite or converse mode of conduct
or end state’ (Rokeach 1973:5)
•Personal integrity
– Defined as an adherence to moral principles/values
•Moral imagination
– Concerned with whether one has “a sense of the
variety of possibilities and moral consequences of their
decisions, the ability to imagine a wide range of
possible issues, consequences, and solutions”
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(Werhane, 1998:76)
Situational influences on ethical
decision-making
Issue Related Situations 1/2
• Jones: Moral Intensity:
– Magnitude of Consequences
– Social Consensus
– Probability of Effect
– Temporal Immediacy
– Concentration of Effect
– Proximity
29
Situational influences on ethical
decision-making
Issue Related Situations 2/2
Moral framing:
• The same problem/dilemma can be perceived very
differently according to the way the issue is framed
– Language is an important aspect of moral framing
Moral muteness (Bird & Walters 1989) because of:
• Harmony
• Efficiency
• Image of power
& effectiveness
30
Situational influences on ethical
decision-making
Context Related Situations 1/4
Rewards
Strong evidence of relationship between rewards,
punishments & ethical behaviour.
Authority
Great influence from immediate superiors & top
management on ethical decision-making.
Bureaucracy
Significant influence on ethical decision-making is
well documented.
Work roles
Some learning differences evident (quant. vs. non).
Organizational Strong influence implies relationship between
Culture
culture & ethical decision-making contested.
31
Situational influences on ethical
decision-making
Context Related Situations 2/4
•Systems of reward
•Adherence to ethical principles & standards stands
less chance of being repeated & spread throughout a
company when it goes unnoticed & unrewarded
– “What is right in the corp. is not what is right in a man’s
home or in his church. What is right in the corp. is what
the guy above you wants from you. That’s what morality
is in the corporation” (Jackall, 1988:6)
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Situational influences on ethical
decision-making
Context Related Situations 3/4
Authority
Bureaucracy
• Jackall (1988), Bauman (1989,
• People do what
they are told to do
1993) & ten Bos (1997) argue
– or what they
bureaucracy has a number of
think they’re being
negative effects on ethical
told to do (Milgram).
decision-making.
–
–
–
–
Suppression of moral autonomy
Instrumental morality
Distancing
Denial of moral status
33
Situational influences on ethical
decision-making
Context Related Situations 4/4
Work roles
• Work roles can capture
a whole set of
expectations about
what to value, how to
relate to others, and
how to behave.
• Can be either
functional or
hierarchical.
Organisational
culture and norms
• Group norms
delineate acceptable
standards of
behaviour within
the work community.
• E.g. ways of talking,
acting, dressing or
thinking etc.
34
How ethical decisions are justified:
Rationalization tactics 1/2
Strategy
Description
Denial of
Actors engaged in corrupt acts
responsibility perceive they have no other choice
than to participate in such activities.
Denial of
Actors are convinced that no one is
injury
harmed by their actions; hence the
actions are not really corrupt.
Denial of
Actors counter any blame for their
victim
actions by arguing that the violated
party deserved whatever happened.
Examples
“What can I do? My arm’s being
twisted.” / “It is none of my business if
the corp. uses bribery overseas.”
“No one was really harmed”
“It could have been worse.”
“They deserved it.”
“They chose to participate.”
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How ethical decisions are justified:
Rationalization tactics 2/2
Strategy
Social
weighting
Description
Actors moderate the salience of act:
1. Condemn the condemner,
2. Selective social comparison.
Appeal to
The actors argue that their violation
higher
of norms is due to their attempt to
loyalties
realize a higher-order value.
Metaphor of Actors argue that they’re entitled to
the ledger indulge in deviant behaviours due to
time and effort in their jobs.
Examples
“You have no right to criticise us.”
“Others are worse than we are.”
“We answered to a more important
cause.” / “I would not report it
because of my loyalty to my boss.”
“It’s all right for me to use the internet
for personal reasons at work. After all,
I do work overtime.”
36
Summary
• In this lecture we have:
– Discussed various stages
of and influences on ethical
decision-making in business.
– Presented basic model of ethical decision-making.
– Outlined individual and situational influences on
ethical decision-making.
– Suggested that some individual factors – such as
cognitive moral development, nationality & personal
integrity – are clearly influential.
– Suggested that in terms of recognising ethical
problems & actually doing something in response
to them, it is situational factors are influential. end 37