Business Ethics Chapters 5-8

Ethical decision-making process in business includes ethical issue intensity, individual factors, and organizational factors such as corporate culture and opportunity. All these interrelated factor influence the evaluations of and intentions behind the decisions that produce ethical and unethical behavior.

Framework for Ethical Decision Making in Business

Research regarding the link between gender and ethical decision making shows that in many aspects there are no differences between men and women. However when differences are found, women are generally more ethical then men.

Gender

Monists are often characterized by hedonism. Self center philosophy. It ideal that pleasure is the ultimate good.

Hedonism

A moral philosophy that places special value on ideas and ideals as products of the mind.

Idealism

He developed the categorical imperative: "Act as if the maxim of thy action were to become by thy will a universal law of nature". German philosopher.

Immanuel Kant

Opportunity relates to individuals' Immediate job context - where they work, whom they work with and the nature of the work.

Immediate Job Context

Political, economic, and social institutions help organizations determine principles and values for appropriate conduct.

Implementing Principles and Core Values in Ethical Decision Making

Political, Economic and social

3 categories for institutions are:

Workplace, family, religion, legal system, community, and profession

6 spheres of influence

considered praiseworthy b/c it is an achievement that an individual developed through practice and commitment.

A virtue

Considered the father of free-market capitalism. He was a professor of logic and moral philosophy and he believed that survival of the fittest, believed business was and should be guided by the moral of good people.

Adam Smith

Decision making reveals that complicated relationship younger managers are more influenced by organizational culture than are older managers.

Age

Ethical issue intensity, individual factors, Organizational factors and opportunity are the results of business ethics evaluations and decisions. An ethical organization will culture shaped by effective leadership. Without top level support for ethical behavior the opportunity for employees to engage in their own personal approaches to ethical decision making will evolve.

Business ethics evaluations and decisions

Developed by Immanuel Kant. "Act as if the maxim of thy action were to become by thy will a universal law of nature". Act by what you're going to do is going to be done by everybody.

Categorical Imperative

Many people believe individuals advance through stages of moral development as their knowledge and socialization progress.

Cognitive Moral Development and its Problem

Teleological philosophers assess the moral worth of a behavior by looking at its consequences, thus moral philosophers today often refer to these theories of consequentialism

Consequentialism

Defined as a set of values, norms, and artifacts, including ways of solving proles that members of an organization share.

Corporate Culture

Individuals have certain absolute rights, including freedom of conscience, freedom of consent, freedom of privacy, freedom of speech, and due process. The US Constitution.

Deontologists believe:

those who focus on moral rules and those who focus on the nature of the acts themselves.

Deontologists may be divided into:

Refers to moral philosophies that focus on the rights of individuals and the intentions associated with a particular behavior rather than its consequences. Its about how we get there. It's not if you win or lose, it's how you play the game. It's about how we get there.

Deontology

Based on the evaluation of the outcomes or results of a business relationship. Is everyone getting a fair shake?

Distributive Justice

Associated with values quantified by monetary means. Ex: if an act produces more economic value for its effort, then it should be accepted as ethical.

Economic value orientation

Competition affects how a company operates as well as the risks employees take for the good of the firm.

Economical Institutions

Work experience and education both positively correlated with making ethical decision

Education

is the ability to perceive whether a situation or decision has an ethical dimension.

Ethical Awareness

A function of many factors, including corporate policies, top management's leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior.

Ethical Culture

defined as the relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization. Different corporations are going to have different hot button issues. Various state holders, inside or outside the firms will ultimately evaluation what's right or wrong. There's not right or wrong you just need to have an ethically defense answer.

Ethical Issue Intensity

Individuals are subject to 6 spheres of influence and confronted with ethical choices in the work place, family, religion, legal system, community and profession. And the level of each of these influences will vary on how the decision make receives the issue.

Ethical Issue Intensity-2

Those who believe in external control sees themselves as going with the flow b/c that is all then can do.

External Control

To recognize that an ethical issue exists, requiring an individual or work group to choose among several actions that various stakeholders will ultimately evaluate as right or wrong. Hot button issues for your corporation, make sure your people know the hot button issues for your corporations.

First step to Ethical decision making

When people need to resolve issues in their daily lives, they often base their decisions on their own values and principles of right or wrong. They generally learn these values and principles through the socialization process with family members, social groups, religious, and in their formal education. Although an individual's intentions to engage in ethical behavior relates to individual values, organizational and social forces also play a vital role. EX: An individual may intend to report the misconduct of a coworker, but when faced with the social or financial consequences of doing so may decide not to.

Individual Factors

Institutions are important in establishing a foundation for normative values. Organizations face certain normative pressures from different institutions to act a certain way. These institutions can be sorted into 3 categories.

Institutions as the Foundation for Normative Values

Based on the relationship between organizational members, including the way employees and management treat one another.

Interactional Justice

Those who believe in internal control believe they can control the events in their lives by their own effort and skill, viewing themselves as masters of their destinies and trusting in their capacity to influence their environment.

Internal Control

Fair treatment and due reward in accordance with ethical or legal standards, including the disposition to deal with perceived injustice of others.

Justice

The stage of individual instrumental purpose and exchange. Defines right as what serves his or her own needs. Individuals no longer make moral decisions solely on the basis of specific rules or authority figures; they evaluate behavior on the basis of its fairness to them.

Kohlberg's CMD #2 Stage

The stage of mutual interpersonal expectations, relationships, and conformity. Individuals in this stage emphasize the interests of others rather than simply those of themselves, although ethical motivation is still derived from obedience to rules.

Kohlberg's CMD #3 Stage

The stage of social system and conscience maintenance. Individuals in stage 4 determine what is right by considering their duty to society, not just to certain other people. Duty, respect for authority, and maintenance of the social order become the focal points at this state.

Kohlberg's CMD #4 Stage

The stage of prior rights, social contract, or utility. In stage 5, individuals are concerned with upholding the basic rights, values, and legal contracts of society. Individuals in this stage feel a sense of obligation or commitment to other groups- they feel, in other words, that they are part of a social contract-and recognize that in some cases legal and moral points of view may conflict.

Kohlberg's CMD #5 Stage

The stage of universal ethical principles. A person in this stage believes right is determined by universal ethical principles everyone should follow. Stage 6 individuals believe certain inalienable rights exist that are universal in nature and consequence.

Kohlberg's CMD #6 Stage

The stage of punishment and obedience. Defines right as literal obedience to rules and authority. A person in this stage responds to rules and labels of "good" and "bad" in terms of the physical power of those who determine such rules. Stage 1 usually associate with children but signs are also evident in adults behavior

Kohlberg's cognitive moral dev (CMD)#1 Stage

people pass through 6 cognitive moral development stages.

Kohlberg's model of cognitive moral development (CMD)

Relates to individual differences in relation to a generalized belief about how you are affected by internal versus external events or reinforcements.

Locus of control

The market will reward or punish companies for unethical conduct without the need for government regulation.

Milton Friedman

Believe only one thing is intrinsically good.

Monists

relates to individual's perceptions of social pressure and the harm they believe their decision will have on others.

Moral intensity

Are person-specific, while business ethics is based on decisions made by groups or when carrying out tasks to meet business objectives. Moral philosophies are guidelines for "determining how conflicts in human interests are to be settled and for optimizing mutual benefit of people living together in groups.

Moral philosophies

People's moral philosophies ( if they have one or like one) something you want to identify early in an interview. Ex: Ask - How did you solve the last conflict you have with a coworker? how did you resolve it? What steps did you take? Get a feel how people resolve things.

Moral philosophies during an interview

Refers to the specific principles or values people use to decide what is right or wrong.

Moral philosophy

The legal relationship between a person and the country in which he or she is born.

Nationality

A system of ethics based on respect for persons.

Nonconsequentialism

This is how organizational decision makes should approach an issue. This is different from an descriptive approach that examines how organizational decision makers approach ethical decision making. Concepts like fairness and justice are highly important in a normative structure.

Normative Approaches

Helps explain why many employees resolve business ethics issues by simply following the directives of a superior.

Obedience to authority

Growing problem around the world. B/c many companies rely on advanced technology systems, anyone with the ability to hack a system can access the highly sensitive info necessary to commit WCC.

Online WCC

Describes the conditions in an organization that limit or permit ethical or unethical behavior.

Opportunity

No one operates in a vacuum.

Organizational Factors

Believe two or more things are intrinsically good. Referred to a non-hedonists.

Pluralist

Influence the development of values as organizations must comply with these types of institutional norms led systems to succeed. Normative ethics takes into account the political realities outside the legal realm in the form of industry standards.

Political Institutions

The processes and activities that produce a particular outcome.

Procedural Justice

developed 6-stage model of cognitive development.

Psychologist Lawrence Kohlberg

The view that an external world exists independent of our perceptions.

Realism

Believe conformity to general moral principles based on logic determines ethicalness

Rule deontologists

Those who have influence in a work group, including peers, managers, coworkers, and subordinates.

Significant Others

They include religion, education, and individuals, such as the family unit. There are laws meant to ensure an organization acts fairly, but there is no law saying people should do to others as they would prefer to have done to them.

Social Institutions

Companies take basic principles and translate them into core values. Core values provide the abstract ideals that are distinct from individual values and daily operational procedures Value practices evolve and are translated into normative definitions of ethical or unethical. Individual and organizational values can differ significantly because of ethical diversity among individuals.

Some core values in ethical decision making

Refers to moral philosophies in which an act is considered morally right or acceptable if it produces some desired result. You're going to end up where you want to be. About where you end up. Means justifies the means.

Teleology

The ethical decision making model presented cannot tell you if a business decision is ethical or unethical. It is unlikely that an organization unethical problem will solve through knowledge of how ethical decisions are made, ethical decision making with in an organization does not rely on the personal values and the morals of an individual.

Using the ethical decision making model to improve ethical decision

Argues that ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person with a "good" moral character would deem appropriate in a given situation. Pulls it all together. What would a good mature person do? Good moral person

Virtue ethics

WCC previously originate in top organizations are now being able to control it at lower levels. Advocates of organizations previously respected

WCC

Does more damage in monetary and emotional loss in one year than violent crimes do over several years combined. WCC is a non violent criminal act that involves deceit, concealment, subterfuge and other fraudulent activity. WCC criminals tend to be highly educated, who are in positions of power, trust, respectability, responsibility in business organization.

White collar Crime (WCC)