Making Decisions in Business Ethics Descriptive Ethical Theories

1. Making Decisions in Business EthicsDescriptive Ethical Theories

2. 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.

3. What is an ethical decision?

4. 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

5. Models of ethical decision-making

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

7. 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

8. 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

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

10. 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

11. 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 situationalfactors originated by European authors • Consistent with concern for constraints themselves

12. Individual influences on ethical decision-making

13. Individual influences on ethical decision-making

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

15. 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

16. 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

17. 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

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

19. Stages of cognitive moral development (II)

20. 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 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)

21. Situational influences on decision-making

22. Situational influences on ethical decision-making

23. 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

24. 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

25. How ethical decisions are justified: rationalization tactics

26. 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)

27. Authority and Bureaucracy 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 Authority • 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

28. Work roles and organizational norms and culture Work roles • 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 • Group norms delineate acceptable standards of behaviour within the work community • E.g. ways of talking, acting, dressing or thinking Organizational norms and culture

29. 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