1. Crane and Matten Business Ethics (3rd Edition)
Chapter 4

2. Making Decisions in Business Ethics Descriptive Ethical Theories
Lecture 4

3. Overview
Examine the question of why ethical and unethical decisions get made in the workplace
Determine what an ethical decision is
Review prominent ethical decision-making models
Discuss the importance of differences between individuals in shaping ethical decision-making
Critically evaluate the importance of situational influences on ethical decision-making (issues and context based)
Identify points of leverage for managing and improving ethical decision-making in business

4. Descriptive Ethical Theories
Descriptive business ethics theories seek to describe how ethics decisions are actually made in business, and what influences the process and outcomes of those decisions.
Why do some business people make what appear to be the right ethical choices, whilst some do things that are unscrupulous or even illegal?
Are people who make these unethical decisions inherently bad, or are there other reasons that can explain the incidence of ethics problems in business?
Do people have different ethical beliefs and values at work from those they have at home?
This lecture provides a way of addressing these questions by examining what are called descriptive ethical theories.
Descriptive ethical theories provide an important addition to the normative theories covered in the previous chapter: rather than telling us that business people should do (normative theory), descriptive theories seek to tell us what business people actually do – and more importantly, why they do it

5. What is an ethical decision?

6. Main factors in deciding the moral status of a situation
Decision likely to have significant effects on others
Decision likely to be characterised by choice, in that alternative courses of action are open
Decision is perceived as ethically relevant by one or more parties

7. Models of ethical decision-making

8. Stages in ethical decision-making
Ethical decision-making process
Recognise moral issue
Make moral judgement
Establish moral intent
Engage in moral behaviour
Source: Derived from Rest (1986), as cited in Jones (1991).

9. 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
However, 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

10. Influences on ethical decision-making
Two broad categories: individual and situational (Ford and Richardson 1994)
Individual factors - unique characteristics of the individual making the relevant decision
Given at birth
Acquired by experience and socialisation
Situational factors - particular features of the context that influence whether the individual will make an ethical or unethical decision
Work context
The issue itself including
Intensity
ethical framing

11. Framework for understanding ethical decision-making
Recognise moral issue
Make moral judgement
Establish moral intent
Engage in moral behaviour
Situational factors
Individual factors

12. Limitations of ethical decision-making models
Models useful for structuring discussion and seeing the different elements that come into play
Limitations
Not straightforward or sensible to break model down into discrete units
Various stages related or interdependent
National or cultural bias
Model is intended not as a definitive representation of ethical decision-making, but as a relatively simple way to present a complex process

13. International perspectives on ethical decision-making
Research on individual factors influencing ethical decision-making has a strong US and Asian bias
Consistent with choice within constraints
Research on situational factors originated by European authors
Consistent with concern for constraints themselves

14. Individual influences on ethical decision-making

15. Individual influences on ethical decision-making

16. Age and gender Age Gender These categories too simplistic
Results contradictory
However experiences may have impact
Gender
Individual characteristic most often researched
These categories too simplistic

17. National and cultural characteristics
People from different cultural backgrounds likely to have different beliefs about right and wrong, different values, etc. and this will inevitably lead to variations in ethical decision-making across nations, religions and cultures
Hofstede (1980; 1994) influential in shaping our understanding of these differences – our ‘mental programming’:
Individualism/collectivism
Power distance
Uncertainty avoidance
Masculinity/femininity
Long-term/short-term orientation

18. 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 education reinforces myth of business as amoral

19. Psychological factors
Cognitive moral development (CMD) refers to the different levels of reasoning that an individual can apply to ethical issues and problems
3 levels (details over the next two slides)
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

20. Stages of cognitive moral development (I)
Source: Adapted from Ferrell et al. (2002); Kohlberg (1969); Trevino and Nelson (1999)

21. Stages of cognitive moral development (II)
Level
Stage
Explanation
Illustration
III
Postconventional 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 ethical principles
Individuals will make decisions autonomously 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.

22. Personal values, integrity & moral imagination
‘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 or 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” (Werhane, 1998:76)

23. Situational influences on decision-making

24. Situational influences on ethical decision-making

25. Moral Intensity
Jones (1991:374-8) proposes that the intensity of an issue will vary according to six factors:
Magnitude of consequences
Social consensus
Probability of effect
Temporal immediacy
Proximity
Concentration of effect

26. Moral framing
The same problem or dilemma can be perceived very differently according to the way that the issue is framed
Language important aspect of moral framing (using moral language likely to trigger moral thinking)
Moral muteness (Bird & Walters 1989) because of concerns regarding perceived threats to:
Harmony
Efficiency
Image of power and effectiveness

27. How ethical decisions are justified: rationalization tactics

28. Systems of reward
Adherence to ethical principles and standards stands less chance of being repeated and spread throughout a company when it goes unnoticed and unrewarded
“What is right in the corporation is not what is right in a man’s home or in his church. What is right in the corporation is what the guy above you wants from you. That’s what morality is in the corporation” (Jackall, 1988:6)

29. Authority and Bureaucracy
People do what they are told to do – or what they think they’re being told to do
Recent survey of government employees (Ethics Resource Center, 2008: 9):
20% think top leadership is not held accountable
25% believe top leadership tolerates retaliation against those reporting ethical misconduct
30% don’t believe their leaders keep promises
Bureaucracy
Jackall (1988), Bauman (1989, 1993) and ten Bos (1997) argue bureaucracy has a number of negative effects on ethical decision-making
Suppression of moral autonomy
Instrumental morality
Distancing
Denial of moral status

30. Work roles and organizational norms and culture
Work roles can encapsulate a whole set of expectations about what to value, how to relate to others, and how to behave
Can be either functional or hierarchical
Organizational norms and culture
Group norms delineate acceptable standards of behaviour within the work community
E.g. ways of talking, acting, dressing or thinking

31. National and cultural context
Instead of looking at the nationality of the individual making the decision; now we are considering the nation in which the decision is actually taking place, regardless of the decision-maker’s nationality
Different cultures still to some extent maintain different views of what is right and wrong

32. Summary In this lecture we have:
Discussed the various stages of and influences on ethical decision-making in business
Presented basic model of decision-making
Outlined individual and situational influences on ethical decision-making
Suggested that some individual factors – such as cognitive moral development, nationality and personal integrity – are clearly influential
Suggested that in terms of recognising ethical problems and actually doing something in response to them, it is situational factors that appear to be most influential