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2006
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Wong, PW 2006, 'A study of business ethical practices in Australian organisations: a multiple case study', PhD thesis, Southern Cross
University, Lismore, NSW.
Copyright PW Wong 2006
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A Study of Business Ethical Practices
in Australian Organisations - A
Multiple Case Study.
Peter W. Wong
March 2006
Volume I
CERTIFCATE
I certify that the work presented in this thesis is, to the best of my knowledge and belief, original
except as acknowledged in the text and that the material has not been submitted, either in whole or
in part, for a degree at this or any other university. I also certify that, to the best of my knowledge,
any assistance and help received in preparing this thesis, and all sources used have been
acknowledged in this thesis.
This thesis has been copy-edited by Gita Sankaran, Justine Bromley and John Psarologos
ACKNOWLEDGEMENTS
I would like to acknowledge the people and organisations who made this research possible.
Firstly, I would like to thank Associate Professor Shankar Sankaran, for his professional advice and
guidance in assisting and supporting this research so that it could be completed within the time
frame. Associate Professor Sankarans professionalism has inspired me to question my approach
throughout this project and indeed provided an opportunity to learn beyond completing this thesis.
Over the past three years, his role as my supervisor has evolved into a long lasting friendship which
I shall treasure for years to come.
Secondly, my special thanks to Gita Sankaran, who diligently proof read and copy-edited the draft.
Justine Bromley, who in spite of her personal issues was able to keep track of my work and John
Psarologos who used his distinguished computer skills to format this thesis.
Thirdly, I am exceedingly grateful to all the participants for their valuable time and the
organisations they represented to agree to a frank, truthful discussion on the subject. Additionally, I
would also like to thank my colleagues for assisting in triangulating the findings. I am especially in
debt to Craig Wyman, who provided sound advice and assistance in conducting the interviews and
later in verifying the coding data to minimise coding bias.
This thesis would not be completed without the help of others-in particular, Brett James, Bill Hegel,
Eddie Ma and Ganesh Natarajan. Ganesh Natarajan, who in my moment of desperation on data
transcription came to the rescue. In addition, I would like to extend my sincere thanks to the
administration and academic staff at Southern Cross University, in particular Sue White. Due to
limited space I am unable to thank everyone involved in this learning journey of mine but please
rest assured that your efforts and concerns are greatly appreciated.
Finally, I would also like to thank my wife Emmy and my children Brandon and Melinda for their
understanding and tolerance throughout this journey.
________________________________________________________________
ABSTRACT
In view of the latest corporate collapses globally, the purpose of this thesis is an attempt to
investigate and to theorise how managers make decisions when faced with an ethical dilemma.
Philosophers over the years have proposed different moral theories. For example, Kantians
Categorical Imperative (ONeil 2001, Peters, 1971) suggests that there are laws that should apply
universally. However, its principles are too abstract to guide action, in that it does not provide a
detailed set of instructions for following them. Others such as Baier, (2001) suggest that people
behave to satisfy their own self-interest. The literature review shows that there is no consensus to
define what constitutes ethical behaviour. Kohlberg (1981) divides childhood moral development
into six stages. He theorises that greater moral development will be related to the highest social
responsibility of an individual. Lagon (2000), Seabright and Moberg (1998), Logsdon and Yuthas
(1997) extrapolate Kohlbergs model to incorporate into organisational and individual moral
development.
Based on the literature review, research questions were developed. The research methodology is
qualitative, based on the realism paradigm using a case research design (Yin 1994). Face to face
interviews were conducted with fourteen participants using critical incidents and the findings were
triangulated using a semi-structured focus group.
The research data analysis is based on grounded theory proposed by Glaser and Strauss (1967). The
findings confirm that there is no single theory or approach to business ethics. The findings indicate
that a persons ethical behaviour changes when his/her self-interest is affected. Whilst participants
believed that business and ethics can be reconciled, most agreed that they can only be reconciled if
the individuals interest or business profit is not affected.
Based on the findings, a new model is proposed in an attempt to theorise an individuals business
ethical behaviour and his/her ethical decision making process.
This research also identifies important areas that require further research. These are:
Conflicts between personal values and business values
Should ethics be taught? And if so how?
Should an ethical programme be developed and incorporated in a companys strategic plan?
Key Words
Business Ethics
Ethical Dilemma
Ethical Decision Making process
Meta-Ethics
Normative Ethics
TABLE OF CONTENTS
CERTIFICATE ....................................................................................................................................ii
ACKNOWLEDGEMENTS.................................................................................................................iii
ABSTRACT ..........................................................................................................................................iv
TABLE OF CONTENTS.....................................................................................................................vi
LISTS OF TABLES .............................................................................................................................x
LIST OF FIGURES .............................................................................................................................xi
CHAPTER ONE: INTRODUCTION ................................................................................................1
1.0 STRUCTURE OF CHAPTER ONE................................................................................2
1.1 Introduction .......................................................................................................................2
1.2 Background information and justification for the research .........................................4
1.3 Research planning and methodology...............................................................................5
1.4 Research issues/questions .................................................................................................5
1.5 Scientific paradigms-Phenomenological paradigm........................................................7
1.6 Survey methodology and analysis ....................................................................................8
1.7 Ethical issues ......................................................................................................................9
1.8 Limitations and importance of research .........................................................................10
1.9 Proposed research structure.............................................................................................10
1.10 Conclusion..........................................................................................................................14
CHAPTER TWO: LITERATURE REVIEW ...................................................................................15
2.0 STRUCTURE OF CHAPTER TWO ..............................................................................16
2.1 Introduction .......................................................................................................................16
2.2 Normative ethical theories................................................................................................17
2.3.2 Relativism.......................................................................................................................26
2.4 Immediate research problems..........................................................................................27
2.4.2.4 From a garbage can model of decision making to the magic punchbowl ..............46
2.5 Corporation ethics.............................................................................................................49
2.6 Individual ethics ................................................................................................................52
2.7 Government ethics.............................................................................................................54
2.8 Dunlop model.....................................................................................................................56
2.9 Conclusion..........................................................................................................................57
CHAPTER THREE: RESEARCH METHODOLOGY...................................................................58
3.0 STRUCTURE OF CHAPTER THREE ..........................................................................59
3.1 Introduction .......................................................................................................................60
3.2 Justification of paradigm used for this research ............................................................61
3.2.2 Constructivism................................................................................................................64
4.4.3 Research question 3: When facing an ethical dilemma, how is the ethical decision
being made? ....................................................................................................................98
5.3.3 When facing an ethical dilemma, how is the ethical decision being made? ..................116
LIST OF TABLES
Table 8 - Three conditions for determining the appropriate type of research method.......................69
LIST OF FIGURES
Figure 2 - The Dunlop model - How all stakeholders interact to advance their own self-interest ......6
Figure 8 - The Dunlop model - How all stakeholders interact to advance their own self-interest ....56
INTRODUCTION
INTEGRITY: We work with customers and prospects openly, honestly, and sincerely.
When we say we will do something, we will do it; when we say we cannot or will not
do something, then we wont do it.
EXCELLENCE: We are satisfied with nothing less than the very best in everything we
do. We will continue to raise the bar for everyone. The great fun here will be for all of
us to discover just how good we can really be.
1.1 Introduction
Despite the many ethical theories that have been developed with a view to guiding our conduct,
and the considerable body of writing on the application of these theories to practical issues, there is
uncertainty about what exactly we are doing-and are justified in doing - when we make ethical
judgements, or engage in ethical argument. Are we trying to get the facts right, as a scientist might
do? Or simply expressing our feelings, or perhaps the feelings of our society as a whole? In what
sense, if any, can moral judgements be true or false? (Singer, 2001, p.xiv)
Chapter 1 1.1
Introduction Introduction
Chapter 2 1.2
Literature Review Background
Chapter 3 1.3
Research Methodology Research Planning
Chapter 4 1.4
Data Analysis Research Issues
Chapter 5 1.5
Conclusion Scientific Paradigms
Chapter 6 1.6
Epilogue Survey Methodology
1.7
Ethical Issues
1.8
Limitations
1.9
Research Structure
1.10
Conclusion
The researchers initial thinking was to investigate if there is such a thing called business ethics in
the current business world. Without thorough understanding of the business research discipline at
the time, the researcher formulated the following view:
That because ones understanding of the business ethics of a company depends upon ones position
and upon ones own perceptions at the time, it is unlikely that everyone is going to agree as to
whether or not a company is acting ethically.
It is suggested that how one views business ethics evolves from the self-interests of the parties
concerned - the business (corporation), the government and the individual/community.
The researcher conducted limited research by discussing the above statement with colleagues at
work. This generated a tremendous response. Indeed, none of the responses were the same - each
person has his/her own view on the subject.
The above statement, whilst encompassing the researchers personal assertion, needs further
qualifications. It is then necessary to break it down into the following research questions:
What is Business Ethics? Can Business and Ethics be reconciled? Is Friedmans view (1970) on
ethics the only ethical view of the capitalist world?
When facing an ethical dilemma, how is the ethical decision made? What is the process?
How does ones view (perception) of the situation determine ones view of ethical behaviour?
These questions provide some guidelines and boundaries to the research project.
In addition, a literature review was conducted to identify what constitutes ethical and unethical
behaviours. For example, Steiner (1971 cited in Mitchell et al., 1996, p.439,) described business
ethics as behaviour that is deemed fair and just, including - and above and beyond - laws and
regulations. Griffin (1993, p.90) defines ethics as an individuals personal beliefs regarding right
and wrong behaviour. Ethical behaviour is also defined by Griffin as behaviour that conforms to
generally accepted social norms. Ethical behaviour is in the eye of the beholder - for example: one
person who finds a twenty-dollar-bill on the ground may believe that it is acceptable to take it,
whereas another will feel compelled to turn it in to the lost-and-found department. This follows the
idea that unethical behaviour is behaviour which does not conform to generally accepted social
norms. When the value changes from twenty dollars to two hundred dollars, the one who felt
compelled to hand it over could change his/her position by pocketing it.
Loucks (1987, p.2) further suggests that ethics is seen as something beyond obedience and
adherence to the law. It implies an understanding of what is the good, or right, thing to do and of an
internal system of beliefs and values that guide those actions. Solomon, (2001) argues that there is
some confusion in defining exactly what constitutes ethical behaviour in an organisation. For
example, there have been numerous discussions about different ethical systems; whether ethics are
situation specific; and the unique situations involving ethics that are encountered in business
settings. It is because of this lack of agreement that this thesis will attempt to explore and stimulate
thoughts on the subject.
After gaining some understanding of the range of the research approaches, it appears that the above
statement cannot be classified as a hypothesis. The approach should be considered as exploratory
theory building, rather than as theory testing research. To say that the above statement is a
hypothesis means that we have an answer - a priori. Therefore, the hypothesis needs to be disproved
by scientific quantitative methods - positivist paradigms. The positivist paradigm takes the view
that the world is external and objective to the researcher, which is similar to the position adopted in
the natural sciencesThe positivist paradigm is also referred to as a scientific experimental
empiricist, quantitative or deductive. (Ticehurst &Veal 2000, p.19-20) Further, it is difficult to
quantify when the subject of investigation involves human behaviour.
Therefore, a critical interpretive paradigm is proposed. The critical interpretive paradigm takes the
view that the world is socially constructed and subjective, and that there is no reality outside
peoples perceptions This approach places more reliance on the people being studied to provide
their own explanation of their situation or behaviour. The interpretive researcher therefore tries to
get inside the minds. (Ticehurst & Veal 2000, p.20)
As business ethical behaviour involves social behaviours, this then becomes a qualitative approach.
A qualitative approach is not concerned with statistical analysis. It involves gathering a great deal of
information about a small number of people or organisations. The information collected is generally
not presentable in numerical form. It is based on the belief that a full and rounded understanding of
the organisational experiences and situations of a few individuals, however unrepresentative they
may be, is of more value than a limited understanding of a large, representative group. (Ticehurst
&Veal 2000, p.21) This approach is also found to be very useful when the research attempts to
identify peoples behaviour and attitude and is appropriate for theory building. At this stage, it is
proposed that the approach will take informal and in-depth interviews, which usually involve
relatively small numbers of individuals being interviewed at length, possibly on more than one
occasion group. (Ticehurst &Veal 2000, p.21)
The researchers initial thinking was to investigate if business ethics is an oxymoron in the current
business environment. Without thorough understanding of the business research discipline at the
time, the researcher formulated the following view:
That because ones understanding of the business ethics of a company depends upon ones position
and upon ones own perceptions at the time, it is unlikely that everyone is going to agree as to
whether or not a company is acting ethically.
Since this study is a study of human behaviour as well as social study, it is therefore more
appropriate to choose case study (critical incident) methods as distinct from quantitative study. As
suggested by (Perry et al.1999 as cited in Carson et al. 2001), The case-based research
methodology usually tends to address research problems within the interpretivist paradigms rather
than the positivist paradigm. Put simply, the research problem is usually a how and why? problem
rather than a what or how should? problem.
It is suggested that how one views business ethics evolves from the self-interest of the parties
concerned - the business (corporation), the government and the individual/community - in terms of
whether cultural background governs each individuals/communitys ethical behaviour.
Through the literature review (Chapter 2, p.15), the following research questions are then
developed:
What is Business Ethics? Can Business and Ethics be reconciled?
When facing an ethical dilemma, how is the ethical decision made? What is the process?
How does ones view (perception) of the situation determine ones view of ethical behaviour?
The researcher introduces The Dunlop model to aid to explain how ethical behaviour is motivated
and interacted because of self- interest.
The Dunlop model (1958) was developed in the industrial arena during the 1950s, in an attempt to
explain the interaction between three groups - employer, employees (unions), and government. The
model suggests that each party behaves to satisfy its own self-interest and that industrial conflicts
evolve around the interests of these parties. (Deery & Plowman, p.15, 1989) In the same vein, the
researcher thought that how one views business ethics evolves around the self-interests of the
parties - the business (corporation), the government and the individual/community. Figure 2
provides an illustration on how these parties interact in order to advance their self-interest.
Figure 2 - The Dunlop model - How all stakeholders interact to advance their own self-interest
GOVERNMENT
INDIVIDUAL
EMPLOYER/
CORPORATION
This proposition was later discarded after extensive literature review. Rather than focusing on the
three parties interaction, the researcher decided to focus on the key research questions outlined in
1.4.
As this research is of qualitative nature, the constructivism and critical theory paradigm appear to be
more appropriate for this research. OLeary (2001), summarises these paradigms (Guba & Lincoln,
1994, Perry, Riege & Brown 1999, Master 1999, Perry, Alizabedah & Riege 1997; Hunt 1993,
Lincoln & Guba 1985) in Table 1 as follows:
As the survey involves studying of human behaviour and is theory-generating, it is not clear-cut as
to which of the above paradigms would suit the researchers purpose. Nevertheless, in order to
avoid being schizophrenic, the realism paradigm is selected for the purpose of this research.
However, in this particular research, the line between the constructivism paradigm and the critical
theory paradigm is very blurred indeed. As suggested by Perry et al. (1999) constructivism
adopts a relativism ontology (p.18) and critical theory assumes apprehensive social realities,
incorporating historically situated structures[it ] aims at critiquing and transforming social,
political. Cultural. Economic, ethnic and gender value. (p.17)
Sampling
The sampling is based on the Dunlop model as presented in Figure 2. As suggested, there are three
parties involved in a business ethical dilemma. Each player will attempt to advance his/her self-
interest. Through interaction among the parties, a compromise will be reached while each partys
self-interest is maintained.
Cross-sectional sampling is selected for this research purpose. Cross-sectional designs usually
involve selecting different organisations, or units in different contexts, and investigating how other
factors vary (integrate) across these units. (Easterby-Smith, Thorpe & Lowe, p. 34, 1991)
The survey would be conducted using case studies (critical incidents). These case studies (critical
incidents) could be developed based on the literature reviews mentioned above.
An in-depth interview would be conducted, based on the structured (critical incidents)-based case
studies developed for this research. In addition, the interviewer would also allow open-ended
questions to encourage the respondent to openly discuss issues at hand. The interview would take
about an hour.
The in-depth interview method is used when the information likely to be obtained from each
subject is expected to vary considerably and in complex ways. (Ticehurst & Veal, p.97, 2000) The
interviewer would be briefed, and a checklist provided, to ensure that all relevant topics are covered
at the interview.
The interview would be taped and, if recording is not possible, then detailed notes taken at the
interview or immediately after the interview. A complete taped interview would be produced
verbatim. In order to maintain confidentiality and anonymity, all the tapes would be coded and
stored in a safe place for auditing purposes.
All of the transcripts should have wide margins so that they could be flagged or annotated. If
necessary, cross tabulation could be used to assist in analysing the data.
As Zikmund (2000, p.71) suggests There is no general agreement among philosophers about the
answers to such a question [ethical question]. And of course, the answer to the question What is
ethical? is not easy - only ones conscience operates to inhibit any questionable practice. (p.83)
Nevertheless, when dealing with research ethics, it is necessary to keep in mind that the the
principles of ethical propriety at the base of most of these guidelines resolve into simple
considerations of fairness, honesty, openness of intent, disclosure of methods, the ends of the
researcher to guarantee unequivocally individual privacy, and an informed willingness on the part
of the subject to participate voluntarily in the research activity.' (Leedy, 1997, p.116)
The study will be conducted purely for research purposes. It is not intended to use the data collected
for another purpose. Confidentiality and anonymity are paramount to the researcher. Although
Zikmund (2000, p.72) suggests that there are three parties to the research, this research involves
only two parties: the researcher, and the respondent. Hence, one can view this research as free of
influence from the sponsoring client.
Further, as a DBA candidate, prior approval from the university to conduct the research will be
sought and its ethical research standards (Code of Research Ethics) will be complied with
particularly: Researchers responsibilities (section 5, 1983), Informed consent (section 7, 1992) and
Storage of data (section 9).
As the study of Ethics is very broad issue, it is necessary to focus on one branch of ethics-business
ethics. The aim of this research is to answer the immediate question as to whether there is such a
thing called Business Ethics. This research is limited to the Australian context with the aim that it
could apply to other countries.
The structure of the thesis is presented in a six chapters based on Perrys (1995, p.15) five chapter
format as follows. The sixth chapter was added for the researcher to express his personal views
which were not covered in the thesis.
Title Page
Signatory Page
Abstract
Acknowledgments
Table of Contents
List of Tables
List of Figures.
Chapter 1 - Introduction
1.1 Introduction
1.2 Background information and justification for the research
1.3 Research planning and methodology
1.4 Research issues/questions
1.5 Scientific paradigms-Phenomenological paradigm
1.6 Survey methodology and analysis
1.7 Ethical issues
2.1 Introduction
2.2 Normative ethical theories
2.3 Meta-ethics
2.4 Immediate research problems
2.5 Corporation ethics
2.6 Individual ethics
2.7 Government ethics
2.8 Dunlop model
2.9 Conclusion
Chapter 3 - Methodology
3.1 Introduction
3.2 Justification of paradigm used for this research
3.3 Justification for qualitative research
3.4 Defining and justifying the use of case study (critical incidents) research
3.5 Criteria for judging quality of case research
3.6 Framework for case study (critical incidents) research
3.7 Limitations of case study methodology
3.8 Ethical Considerations
3.9 Conclusion
4.1 Introduction
4.2 Participant profile
4.3 Method used in data analysis
4.4 Data Analysis relevant to the Research Questions
5.1 Introduction
5.2 Conclusions about each research issues
5.3 Implications
5.4 Further Research on findings not directly related to the research questions
5.5 Limitations
5.6 Conclusion
Chapter 6 Epilogue
Volume II
Reference
Bibliography
Appendices
A schematic diagram outlining how the six chapters are linked together is attached.
Chapter 1
Introduction
Chapter 2 Chapter 3
Literature View Research methodology
Review of the relevant
literatures Justification of the research
Review of the research gaps paradigm and methodology
Formulation of the project Design of the case study
management application model Execution of the research
with research issues
Chapter 5 Chapter 4
Conclusion and implications Analysis of data
Integrating the literature review
with the analysis results Description of the cases
Answering the research issues Analysis of the data patterns
Answering the research
question
Examination of the implication
on theory, practice and policy Chapter 6
Suggestion for further research
Epilogue
Source: Developed for this research from the five-chapter framework of Perry (1995)
1.10 Conclusion
This chapter laid the foundation of the thesis. The concept of if there is a phenomenon called
Business Ethics in the current business environment is presented. This chapter also introduces the
research planning and methodology, briefly discussed the research issues/questions, the scientific
paradigms and the justification of the research is presented.
Chapter 2 will review the literature to identify gaps and to develop research questions through these
gaps.
LITERATURE REVIEW
Recently, three of the worlds top business thinkers-Harvards Robert Simons, McGills Henry
Mintzberg, and Oxfords Kunal Basu-joined forces to pen a manifesto for the corporation.
Capitalism is facing a crisis, they warned. Scandals on Wall Street are merely the tip of the
black iceberg, beneath which lies a culture that is increasingly defined by selfishness and
that threatens to destroy business, the very thing we cherish. CEOs, they say, have learned to
repeat almost mindlessly, like a mantra, that corporations exist to maximize shareholder
value; they are trained to believe self-interest is the first law of business.
Chapter 1
Introduction
Chapter 2 2.1
Literature Review Introduction
Chapter 3 2.2
Research Methodology Normative ethical theories
Chapter 4 2.3
Data Analysis Meta-ethics
Chapter 5 2.4
Conclusion Research problems
Chapter 6 2.5
Epilogue Corporation ethics
2.6
Individual ethics
2.7
Government ethics
2.8
Dunlop Model
2.9
Conclusion
2.1 Introduction
The purpose of this chapter is to review literature currently available in the area of business ethics.
The study of ethics is not new. Since the ancient Greeks, philosophers such as Socrates and Plato
have attempted to define what constitutes morality. The Enlightenment saw philosophers such as
Kant, advancing from the principle of absolute morality to the theory of how one ought to behave.
The latest corporate failures such as HIH, OneTel, and Enron, increase the focus on the question of
ethical behaviours. The profile of current debates on corporate governance has brought new life to
the topic in both the academic and the business world.
Currently, most publicly available Annual Reports carry a small paragraph stating that the
companys corporate governance is transparent, that it operates within the law and is ethical.
There is, however, a difference between corporate governance and ethics.
From the individuals standpoint, how one behaves ethically is contingent upon ones culture and
beliefs. In addition, to a certain extent, the social norms and his/her beliefs in the consequence of
non-conformance govern his/her behaviour.
Generally, there are two main branches of ethics: Normative ethics and meta-ethics. The parent
review focuses on these two main areas. Normative ethics deals with what is morally right or
wrong. It attempts to address the question of how ought I to live?, whilst meta-ethics deals with
the modern day application of ethics. Meta-ethics is not intended to guide conduct and it does not
intend to provide ethical theories; rather it is about ethics. (Singer, 2001)
Normative ethics is concerned with justifying and applying criteria of what is morally right and
wrong, good and bad. The central question of normative ethics is what are the criteria for
determining which actions are morally right and morally wrong? This question is related in various
ways to three other important questions:
The first question deals with moral virtues and vices: what characters of men are morally good and
bad? A morally good man will do what is morally right. Aristotles Nicomachean Ethics has
defined that a persons character is both developed by and exhibited in the corresponding actions.
the virtue or excellence of man, too, will be a characteristic which makes him a good man, and
which causes him to perform his own function well. (Ostwald 1962, p.41)
Another question concerns social institutions: how should society be organised and what specific
policies should its various agencies pursue? the kinds of actions that men perform and the kinds
of character that they acquire are strongly affected by their social environment. On the other hand,
what kind of social environment there ought to be is to be determined by considering what kinds of
action and character ought to be fostered among men. (Gewirth, 1983, p.976-978)
A third traditional question concerns intrinsic values: what things or experiences are worthwhile or
desirable on their own account? This question constitutes the whole subject matter of axiological
(value) ethics and is basic to teleological (consequential) ethics. The most famous answers are that
pleasure and happiness are intrinsic while power, beauty, knowledge, prestige, companionship, love
and many other values are considered as basic or as essential components in the whole spectrum of
values. The distinction is that the intrinsic properties and values are independent of each other. For
one may have worthwhile things without having a morally good character, or vice versa. As Kant
suggests, the only thing that is good without qualification is a morally good will; all other goods
become bad in the absence of this good. (Gewirth, 1983, p.976-978)
As the argument goes, it seems appropriate to suggest that it is better not to try to legislate about
what the true values are but rather to allow people to pursue whatever values they want, so long
as what they do is not morally wrong. This consideration can be made to fit into both a
deontological (on the grounds of justice and equal freedom) and into a teleological framework (on
the grounds of the fullest possible maximisation of values). Hence, the question of what actions are
morally right or wrong retains its centrality and logical priority in normative ethics, because so long
as the grounds or criteria of moral rightness are fulfilled, the question of intrinsic values may not
pose any separate moral issue.
The deontologists argue that people will act morally or that they ought to act morally. This is based
on their acceptance of certain narrowly-defined constraints or rules that govern their behaviours -
right or wrong, good or bad. Those who hold this view believe that there are certain acts/rules
which are wrong in themselves and that it is obligatory for one not to behave unacceptably.
Therefore, one should refrain from doing things that are wrong even though doing so could create
harm as a consequence.
Davis (2001) points out the differences between teleologist and deontologist arguments in
normative ethics. Teleologists argue that the right or wrong behaviour is governed by a
comparative assessment of their consequences. (p.205)
A deontology concept, in contrast to teleology, is one that either does not specify the good
independently from the right, or does not interpret the right as maximizing the good (Rawls, 1971,
p.30 as cited in Davis 2001, p.206), and the goodness of the ultimate consequences does not
guarantee the rightness of the actions which produced them. The two realms are not only distinct for
the deontologist, but the right is prior to the good. (Fried 1978, p.9 as cited in Davis 2001, p.206)
It is suggested that, within these narrow constraints, the deontological view is rather absolute - that
it is either good or bad, right or wrong. It is, for example, wrong to lie but not wrong to withhold the
truth. For the deontologists, the consequences are inconsequential. In other words, under their
narrow constraints, it is wrong to lie, even though to lie would yield favourable consequences - e.g.
save lives.
In every case the [deontological] norm has boundaries and what lies outside those boundaries is
not forbidden at all. Thus lying is wrong, while withholding a truth which another needs may be
perfectly permissible-but that is because withholding a truth is not lying (Fried 1978, p.9-10, as
cited in Davis, 2001, p.208)
2. narrowly framed, and bounded-there is no room for misinterpretation. This is important because
different interpretation of the constraints could yield different actions, obligations and
responsibilities.
3. narrowly directed.
Deontological reasons have their full force against your doing something-not just against its
happening. (Nagel, 1986, p.177 as cited in Davis 2001, p.209)
This point is further clarified by distinguishing intentions and foresight. It is argued that the
constraint (you shall do no harm to the innocents) is violated if one intends to harm others.
However, one should not be held responsible for the foreseen consequences of ones action. If
one chooses not to take action to prevent harm, and as long as this action is not a chosen means
or chosen end, then it is not a violation of the constraint.
Therefore, the moral distinction is between the permissible and the impermissible, and it is the
notion of the impermissible that forms the basis of the definition of the obligatory (Davis 2001,
p.209)
In her article, Davis also proposes that there are unanswered questions in the deontologist views:
1) What are the sorts of things that are wrong, and why are they wrong?
The above list could be traced back through common moral intuitions, traditions and hundreds
of years of Hebrew-Christian teaching. Most of these widely held views are being rejected
because they reflect on human nature that is prejudiced, parochial and punitive. (Davis 2001,
p. 212)
If the constraints are so narrowly bounded and framed, then by allowing different variations to
the rule because of different circumstances, why should the constraints be so narrowly defined?
Another point is that the person who lies and the person who withholds the truth may both have
the same motivation in doing so. (Davis 2001, p.212)
Deontological theory also suggests we respect others as rational creatures. If this is the case, then
should we allow five people to be killed by a rockslide rather than harm one person ourselves,
why are we not guilty of failing to respect the five persons? (Davis, 2001, p.213)
2) The deontological view demands that constraints are absolute (categorical) and that one is
obliged to refrain from violating those constraints even if this action yields unfavourable
consequences. If this is true then there should not be any variation to the constraints because of
circumstances. If one outlines the permissible and impermissible then it becomes more a
consequential theory - as the agent would need to value the outcome. Therefore, unless there is a
way of narrowing the scope of deontological constraints then the conflicts of duty will become
the norm.
On the other hand if the categorical constraints are withdrawn, or the constraints expanded, this
will cause serious problems in conflicts of duty, as well as a view that is normatively
implausible. (p.215) Further, this will collapse the deontological view into a form of moral
pluralism.
Davis suggests that this conception of morality is legalistic is obvious, and the conception of law
that it is modelled on is not hard to construct. On such a view, what is required of us by law is that
we refrain from violating the status. (Davis, 2001, p.217)
However, without an easily identifiable and authoritative moral law-giver, we cannot be sure of
knowing just what moral laws (deontological constraints) must constrain our conduct. (Davis, 2001,
p.217)
In conclusion, as Fried (1978, p.13) suggests if we live our life by the demands of the domain of
the right, we must at least acknowledge that that domain is wider than contemporary deontologists
have supposed! (Davis, 2001, p.218)
A board distinction between the deontological and teleological views is summarised as follows:
Deontological Teleological
Doing things because of its principle or Doing things because of its consequences
inherently right
Absolute obligations Conditional obligations
Formal or relational criteria eg equality or Material or substantive criteria, eg pleasure or
impartiality happiness
Distributive criteria-how goods or evils Aggregative criteria concerning the
should be allocated or divided among men maximisation of goods and minimisation of
evils
Plural as well as unitary criteria Only unitary criteria , eg doing the greatest
amount of good
2.2.2 Egoism
The individual egoist holds that the duty of all people is to maximise the good of only one person -
himself. The general egoist holds that the duty of each person is to maximise his own respective
good. (Baier, 2001)
Whilst it could be argued that the egoist is only interested in himself or herself and is self-centred
and inconsiderate, this depends on the situation and that there is nothing wrong about caring for
oneself. For example, there is absolutely nothing wrong if one is interested in caring for ones
health.
General egoism draws much of its support from psychological egoism. The doctrine is an
explanatory theory to the effect that each person is always motivated by concern of his/her best
interest or the greatest good. The support may be merely contingent, or it may be logical. The
implicit premise is that each person ought to pursue what he or she in fact does pursue. This
premise, however, may be interpreted as meaning either (1) that a persons goals, whatever they are,
are always right or (2) that it is impossible for people to pursue anything other than what they in
fact pursue, and each person thus pursues his own self-interest because he cannot pursue anything
else.
Baier (2001) states that the egoist is incapable of degrees and is not restricted to what is morally
objectionable. One is egoistically motivated .even if ones aim is to benefit others in ways
costly to oneself. Ordinarily, an egoist is someone who most wants something much more specific,
namely, to promote his own good, to promote only interest in his self., to promote his own best
interest, to satisfy only self-regarding wants or aims. (Baier 2001, p.199) Psychological egoism
suggests that we are all egoists because we are all motivated to do certain acts, such as making a
donation, because we want to.
From the business perspective, Adam Smith in Wealth of Nations (1776) (as cited in Newbert,
2003, p.251) provides a glimpse into this argument. He states that in a capitalist world an
entrepreneur is entitled to advance his own self-interest in the pursuit of profits. Indeed, Smith
suggests that, in free market environments, an invisible hand guides the economy and that the
capitalist in the pursuit of his/her interest is unhindered i.e. laissez-faire.
Smiths theory is further supported by Friedman: in such an economy [a free economy], there is
one and only one social responsibility of business -to use its resources and engage in activities
designed to increase its profits so long as it stays within the rules of the game, which is to say,
engages in open and free competition without deception or fraud. (Friedman, 1970, and as cited in
Carson, 2003)
Baier (2001) proposes a new concept, which he calls rational and ethical egoism. This suggests
that as a rational person, what one does is to always promote ones own greatest good in accordance
with reason and morality. He further introduces the doctrine of ethical rationalism that if a moral
requirement or recommendation is to be sound or acceptable, complying with it must be in
accordance with reason. (p.201) It is, according to Baier, when one does something not to be in
his/her interest that justification is necessary. There is some truth in this. For example, someone
cheats on their income tax returns and, when asked why, his/her justification could be that
everyone is entitled to minimise paying taxes. This act, regardless of the amount of dollars,
illustrates the point that people rationalise their actions regardless of whether it is ethically right or
wrong, as long as his/her self-interest is served.
2.2.3 Utilitarianism
In contrast to egoism, this theory holds that what an individual ought to do is to promote the
maximum good for everyone i.e. the general good.
Hence, the utilitarians are not concerned whose good is to be promoted, insisting only that good
ought to be maximised in the universe, regardless of who gets it. Further, they insist that the good of
everyone should be taken into account and maximised so far as possible. Thus the first type of
utilitarian would be concerned only with the total amount of good (good aggregative), whereas the
second type would be concerned also or even mainly with how many people get it (locus-
aggregative).
2.3 Meta-Ethics
Meta-ethics deals with how ethics is changing in modern times, as distinct from the theories. As
summarised by Singer (2001, p.xiv), there is uncertainty about what exactly we are doing-and
are justified in doing-when we make ethical judgements, or engage in ethical argument.we are
not engaged in ethics, but are looking at it, and considering what exactly ethics is, what rules of
argument can apply to it, in what way it is possible for ethical judgements to be true or false, and
what (if anything) can provide a grounding for them.
2.3.1 Subjectivism
Rachels (2001) states that ethical subjectivism is a theory which says that in making moral
judgements, people are doing nothing more than expressing their personal desires or feelings.
President Bush, when commenting on the US Supreme Courts decision on abortion in 1973, said
where morality is concerned, there are no facts and no one is right or wrong. Therefore, on
this view, there are no moral facts rather what constitutes morality is based upon ones feeling
not reasons. Hume (1738 in A Treatise of Human Nature as cited in Rachels (2001, p.432) says:
Take any action allowd to be vicious: Wilful murder, for instance. Examine it in
all lights, and see if you can find that matter of fact, or real existence, which you
call viceYou can never find it, till you turn your reflexion into your own breast,
and find a sentiment of disapprobation, which arises in you, toward this action.
Here is a matter of fact; but tis the object of feeling, not reason.
Hence, reason cannot really tell us what to do. Reason merely informs us of the nature and
consequences of our actions, and of the logical relations between propositions. Morality is
determined by sentiment.
However, as Rachels (2001) points out, if we accept that every one is entitled to his/her opinion,
and no one has the right to dictate to others what moral views they must accept, then there is no
truth in an ethical dilemma because there is no right or wrong. It is all a matter of personal feeling.
If one accepts this theory then it follows that committing murder or rape is neither right nor wrong -
it is a matter of personal feeling!
Therefore, a distinction needs to be drawn between moral nihilism and ethical subjectivism. That
when a person says that something is morally good or bad, this means that he or she approves of
that thing, or disapproves of it, and nothing more. (Rachels 2001, p.435) Even ethical subjectivism
itself is too simplified, as it is only concerned with making a statement and that the person making
the statement is infallible.
Stevensons emotivism is then proposed. Emotivisim argues that its position is not concerned with
statements about ones feelings, or true or false, rather it emphasises that there is more than one
way in which people may disagree. According to Stevenson, moral disagreements are
disagreements in attitude. This in itself has problems - it does not account for reasons. Moral
judgements require backing by reasons, and in the absence of such reasons, they are merely
arbitrary. This is a point about the logic of moral judgement. (Rachels 2001, p.438)
Thus formulating the final argument on ethical subjectivism is that the right thing to do is whatever
a perfectly rational, impartial, and benevolent judge would think best. It also has much in common
with Richard Brandts theory (1979 cited in Rachels 2001, p.440). Brandt holds that, in deciding
what is right, the key question is what would a person (perhaps all persons), if rational in the sense
of having made optimal use of all available information, want and choose to do? (Rachels 2001,
p.440)
2.3.2 Relativism
Relativism argues that there is no one rule to ethics. Whether a situation is ethical or not is relative
to the situation and ones belief. Therefore, one should not impose his/her belief onto others. Wong
(1984) Moral relativismoften takes the form of a denial that any single moral code has universal
validity, and an assertion that moral truth and justifiability. This normative moral relativism holds
that it is wrong to pass judgement on others who have substantially different values, or to try to
make them conform to ones values, for the reason that their values are as valid as ones
own.(p.442)
Thus, most of the developed nations condemn bribery. The conviction that bribery is wrong is rule
ethics. It is because of this rule that paying bribes is considered unethical and violates our culture
and rules, which have developed over the past centuries.
For example, in 1977, President Carter signed into law, S.305, the foreign Corrupt Practices Act
(FCPA) forbidding American companies to offer bribes to foreign governments in order to obtain or
retain business. To this date, the general public in the developed world still sees bribery as
unethical. So is it ethical for a Red Cross pilot to pay a bribe to the corrupt official of a Third world
country to gain access to their airport so that he/she can land and deliver aids which would benefit
tens of thousands suffering from starvation? What would happen if this pilot refuses to pay the
bribe, such that he could not land to deliver the aid, with the result that thousands may die? Or if, by
not giving a bribe, a firm was unable to carry on business, which would then result in massive lay-
offs, generating economic and social problems for the parent company and for its employees?
...The fact that our ethics prohibits bribery does not close the case against bribes paid to foreign
officials. Understanding the reasons for this is essential if we are to intelligently apply any code of
ethics and to meet biased ethical attacks. (Pastin, 1986) As Baker (2004, p. 67) rightly points out,
we must also understand that well never be able to impose our system on others-and we probably
ought not to try.
The researchers initial thinking was to investigate if there is such a thing as business ethics in the
current business world. The following view was thus formulated:
That because ones understanding of the business ethics of a company depends upon ones position
and on ones own perceptions at the time, it is unlikely that everyone is going to agree as to whether
or not a company is acting ethically.
It is suggested that how one views business ethics evolves from the self-interests of the parties
concerned - the business (corporation), the government and the individual/community. These three
parties, when facing an ethical dilemma will interact in order to achieve, through negotiation and
compromise, an ethical outcome, which is acceptable to the parties involved.
Despite many theories being developed in order to provide guidance to behaviour, it is unclear as to
what exactly we are supposed to do that is, what constitutes good ethical behaviour?
The review of the literature highlights the fact that, although there are many theories being put
forward by philosophers, there is however no single theory or approach to ethics. The above
concept is then put forward based on the combination of Normative and Meta-ethical theories of
egoism, relativism and pluralism. So this raises the question as to whether the lack of a single
theory on ethics also affects business ethics
Only ten years ago, the subject (of business ethics) was still an awkward amalgam
of a routine review of ethical theories, a few general considerations about the
fairness of capitalism, and a number of already-standard business cases - most of
them disgraces, scandals and disasters displaying the corporate world at its worst
and its most irresponsible. Business ethics was a topic without credentials in
mainstream philosophy, without conceptual subject matter of its ownbusiness
ethics was far too concerned with the vulgar currency of everyday exchange-
money (Solomon, 2001, p.354).
Because life in business is very competitive and is a jungle out there, the Darwinian concept of
survival of the fittest applies. As Velasques (1982, p107) states Whoever survives must be right.
Ethics is an area that encapsulates many concerns: human rights, environmentalism, social policy,
international development, community development and, more importantly, individual beliefs.
the general study of goodness and the general study of right actionconstitute the main
business of ethics. Its principal substantive questions are what ends we ought, as fully rational
human beings, to choose and pursue and what moral principles should govern our choices and
pursuits. (Audi, 1995, p.?)
Steiner (cited in Mitchell et al.1996, p.439) describes business ethics as behaviour that is deemed
fair and just, including, and above and beyond, laws and regulations. Griffin (1993, p.90) defines
ethics as an individuals personal beliefs regarding right and wrong behaviour. Ethical behaviour is
also defined by Griffin as behaviour that conforms to generally accepted social norms. Ethical
behaviour is in the eye of the beholder - for example, one person who finds a twenty-dollar bill on
the ground may believe that it is acceptable to take it, whereas another will feel compelled to hand it
in to the lost-and-found department. This follows the idea that unethical behaviour is behaviour
which does not conform to generally accepted social norms.
Loucks (1987 cited in Mitchell et al.1996) further suggests that ethics is seen as something beyond
obedience and adherence to the law. It implies an understanding of what is the good or right thing to
do, and an internal system of beliefs and values that guide ones actions. Solomon, (2001) argues
that there is some confusion in defining exactly what constitutes ethical behaviour in an
organisation. For example, there have been numerous discussions about different ethical systems,
whether ethics are situation specific, and the unique situations involving ethics that are encountered
in business settings.
Solomon (2001, p.357) proposes three levels of business and business ethics:
Micro - the rules for fair exchange between two individuals, the traditional ethics of promises and
other obligations, the intentions, consequences and other implications of an individuals action, the
grounding and nature of various individual rights.
Macro - the institutional or cultural rules of commerce for an entire society (the business world),
such as justices, legitimacy and the nature of society that constitute social and political philosophy.
It is an attempt to see the big picture; to understand the nature of the business world and its
function as such.
Molar level - concerning the business unit - the corporation. The central questions of business
ethics tend to be unabashedly aimed at the directors and employees of those corporations that rule
so much of commercial life around the world. In particular, questions on the role of the corporation
in society and the role of the individual in the corporation. There are three levels of ethical
discourse, namely: the questions of corporate social responsibility; the role of the corporation in a
larger society; and the role of the individual in the corporation.
It is because of this lack of agreement that this thesis will attempt to explore, and stimulate thoughts
upon, the subject - Business Ethics.
In the current business context, morality is equivalent to legality. A legally binding corporation or
individual is morally correct/right but may not be ethical.
It has been suggested that ethics is the guiding principle of moral behaviours, while corporate
governance is how an organisation operates within the applicable laws. Therefore, what is legal or
lawful may not be ethical. As suggested by Thakor (2003, p.127), the dividing line between law
and ethics is a constantly moving one. What is legal but unethical today may well become illegal
tomorrow.
Smiths view (1965) is that people enter into business in an attempt to make a profit. This view is
further supported by Friedman (1970), who argues that there is one and only one social
responsibility of business-to use its resources and engage in activities designed to increase its profits
so long as it stays within the rules of the game, which is to say, engage in open and free competition
without deception or fraud. (p.126) Solomon (2001) suggests that the pursuit of profits is a very
narrow vision of what business is. the very idea of the profit motive as an end in itself - as
opposed to profits as a means of encouraging and rewarding hard work and investment, building a
better business and serving society better - is a serious obstacle to understanding the rich tapestry of
motives and activities that make up the business world. (p.357)
Cropanzano and Grandey (1998, p.150) explain The term business ethics attempts to subsume two
quite different human endeavours. Business, as it is conducted in a capitalist society, is largely
predicated on the assumption that people will rationally act to maximize their own self-interest.
Ethics, on the other hand, is predicated on the assumption that people will rationally consider the
needs of others. When what is profitable is also helpful (or at least not harmful), then ethical
thinking is largely moot. Ethical dilemmas arise when economic ends threaten to clash with human
concerns (Hosmer, 2002). These clashes are inevitable when a person carries a moral code that
emphasises the needs of others into an environment that emphasises profit. This dilemma will not
be resolved soon. It is evident that there is always a conflict between business and ethics. Whereas
business is in the business of making a profit, whilst ethics is concerned with behaviour and as such
they conflict with each other.
Smith argued that capitalism was a system of economic organization whereby social welfare can
be most effectively created through the pursuit of economic and moral self-interests. His view is
supported by Newbert (2003) who holds that modern economic thinking has become dominated by
the belief that the pursuit of economic self-interest alone will engender the greatest social welfare.
Newberts empirical findings tend to suggest that todays entrepreneurs are not only seeking to
satisfy both selfish and ethical motivations, but in so doing they are also contributing substantially
to the overall welfare of society through job creation, wealth redistribution, and a lack of
discrimination. As such, it appears that the spirit and impact of the capitalist system that Smith
envisioned is being realised through entrepreneurship (p.251).
However, Peterson (2003) contradicts Newberts view. In an early study, Peterson reports that 64
percent of the managers from the private sector and 60 percent of the managers from the public
sector encountered pressure to compromise personal standards in order to achieve organisational
goals.
Others, such as Spence and Rutherfood (2000), agree that Business ethics sits across the
intersection of the social, the political and the economic in the world of business, and that the
Friedman doctrine is no longer sufficient in the current business environment whereby the public as
well as governments are demanding solutions to public problems such as pollution and child labour.
Chatterjee (1998) suggests that as ethical integrity is largely nurtured by societal cultural values
which guide normative ethical beliefs in terms of what is considered morally correct behaviour, the
basic values also need to be relevant to a given context. Values and beliefs in specific contexts are
reflected in common business practice, government regulations and widely held perceptions of
appropriate business conduct. (p.6) Chatterjees view is very close to the researchers proposition
that there are three parties in each ethical scenario and that each interacts with the other two to
advance its own self-interest. In this paper, the author suggests that two of the parties, the
government and the community, are involved in determining what constitutes business ethics.
The paper also mentions that ethical behaviour is relative to the situation. It adds that people and
cultures share some very basic moral values. But to criticise ethical relativism philosophically is not
to deny that some moral values and beliefs differ from society to society. (p.7) The issue of moral
relativism is brought home by drawing a comparison between the West and the East. An integration
of the convergent and divergent in the international business arena is necessary and the need for a
framework to guide individuals, organisations and societies by focusing on the gap between the
global standards and the normative societal conceptualisation of ethical codes is proposed. (p.17)
Henderson (1992) believes that senior executives of an organisation are responsible for
ethical/unethical behaviour. The unsavoury past, as he puts it, is largely the biographies of
prominent business people.
Further, Henderson (1992, p.4) suggests that ethics is a process and that what is ethical in business
is a never-ending process of clarifying, resolving, and stimulating a nobler vision of common
good. As business ethics evolves, governments emerge as a serious contender for the role of
business ethicist. This suggestion is similar to Chatterjees mentioned above.
Furthermore, Henderson examines the role of CEOs and notes that few chief executives lose their
jobs because they mishandle ethical issues (p.19) and that Ive always thought of myself as an
honorable citizen. We didnt do these things for our own behalf[but] for the betterment of the
company. (p.18) statements which resonate both Carsons (2003) and Hongs (2002) views.
Finally, the author suggests that we are unprepared to manage ethically in this new world; that there
is not enough training and education in business ethics; and that we are lucky that corporate
behaviour is as ethical as it is today. (p.33)
Schroeder (2002) identifies three types of ethical business behaviour: 1) the companys social
responsibility to make profits; 2) the integration of social values into day-to-day business activities;
and 3) the production or provision of ethical products. She directs ethical responsibility back to the
CEOs - a view shared by Henderson. Her contention is that top managers are the film directors of
the ethical business world. They plan, design, maintain and steer their creation (p.266)
Bowie (2001) and Lam (2003) provide historical and philosophical background information on
ethics and morality. Although it could be argued that these papers have no direct relationship with
the research questions, they nevertheless provide some background information. Bowie suggests
that when a manager can be both socially responsible and achieve profits, she has behaved
ethically on Kantian grounds. (p.291) Lam discusses in detail the Confucian business ethic, in that
it often relates to the micro consideration of personal ethics and the character of a virtuous person.
Her view could form part of the foundation when individual ethics is being analysed.
The literature reviewed so far shows clearly that there is a lack of agreement about business ethics.
Henderson (1992) and Schroeder (2002) suggest that there is a lack of accountability at senior level
concerning ethical issues. Others, such as Friedman, suggest that business is the pursuit of
maximising profits. While Cropanzano and Grande (1998) suggest that, in a capitalist society,
business is largely predicated on the assumption that people will rationally act to maximise their
own self-interest. Ethics, on the other hand, is predicated on the assumption that people will
rationally consider the needs of others. When what is profitable is also helpful (or at least not
harmful), then ethical thinking is largely moot. Ethical dilemmas arise when economic ends
threaten to clash with human concerns. (Hosmer, 2002).
The review of the literature in Chapter 2.4.1 raises two initial research questions.
The traditional decision process is often referred to as the rational-economic model and is
summarised by Vecchio, Hearn & Southey (1994) in Figure 5. When faced with decision making,
management normally proceeds through a sequence of steps in order to formulate a decision. One
major criticism in this model is that it assumes all steps mentioned in the model are followed and
that all alternatives and their consequences are considered. This is not the case. In reality the
decision-makers rarely consider all alternatives as this could consume too much effort and time. It is
also impractical to consider all the consequences since not all are available for consideration.
This model recognises the shortcoming of the classical view and it acknowledges the real-world
limitations on the decision-maker. Therefore, the theory holds that decision-makers must work
within conditions that provide a bounded rationality. Due to the personal and situational limitations,
the decision-maker tends to make decisions that are good enough rather than ideal for the
situation at hand. This process is summarised in Figure 6. It is important to note that the notion
of bounded discretion suggests that optimum solutions are sometimes not feasible courses of action
because they are ethically improper. (Vecchio, Hearn & Southley, 1994, p.421)
In summary, the rational-economic model provides a useful summary of how decisions should be
made, while the behavioural theory of decision making gives a good description of how decisions
typically are made.
Rossouw & van Vuuren (2003) propose the Modes of Managing Morality to describe how
organisations move through various stages to improve their ability in managing business ethics. The
authors argue that one should not expect a corporation to make ethical decisions as an individual
would. Corporation ethical decisions are the outcomes of complicated group dynamic processes in
which individual members of the organisation participate. (p,390)
The model as shown in Table 3, consists of the modes of (1) immorality, (2) reactivity, (3)
compliance, (4) integrity and (5) total alignment. Each mode is described in terms of (1) its nature,
(2) primary purpose, (3) predominant strategy, and (4) typical challenges. Table 3 also summarises
the changes and how an organisation moves through the stages (forward or backward) when an
organisation realises that they have exhausted the current mode.
Opportunity or
Problem Situation
Opportunity or
Problem Recognition
Generation of
Alternative
Evaluation
Gather Effectiveness of
Information Alternative
Evaluation
Alternatives
Select One
Alternative
Implement
Selected
Alternative
Opportunity or
Problem Situation
Opportunity or
Problem
Recognition
Criteria for
Satisficing
Alternatives
Evaluation of
Alternatives as Evaluation
They Become Effectiveness of
Known Alternative
Select First
Acceptable
Alternative
Implement
Selected
Alternative
Dimensions of Immoral Mode Reactive Mode Compliance Mode Integrity Mode Totally Aligned
Comparison Organisation (TAO)
Mode
Nature Unethical conduct is good Token gesture of ethical intent Commitment to manage and Internalisation of ethical Seamless integration of
business is shown (a code of ethics) monitor ethics performance values and standards ethics in corporate purpose,
strategy and operations
The business of business is Unethical behaviour is ignored Rule-based approach to Value-based approach to ethics
business, and not ethics and remain unpunished ethics
Disciplining unethical Internal locus of (ethics) Non-negotiable morally
behaviour control; Walking the ethics responsible interaction with
talk stakeholders
Purpose Ethics has no place in the Protection against dangers of Prevention of unethical Raising level of corporate Ethics reinforced as part of
singular pursuit of bottom line unethical behaviour behaviour ethical performance culture and purpose
Unethical behaviour espoused Sceptics and critics are Desire to have a good ethical Pro-active promotion of ethical Ethics entrenched in
as good business silenced (temporarily) by the reputation behaviour discourse and decision-
existence of ethics standards making
Ethics of strategic importance
or a competitive edge
Ethics A Machiavellian orientation Laissez-faire ethics Transactional approach to Transformational approach to Everyone responsible for
management exists that denies the need to management managing ethics managing ethics ethics management
strategy make decisions concerning
ethics
Inability to manage ethics Code clear and Stakeholder engagement Ethics function/office
comprehensive & corporate serves as rudder
ethics management function
exists
No concern for stakeholders Corporate (ethical) values are Ethics talk prevails
words on paper
No ethics management Ethics management systems High-level ethics management Ethical heroes celebrated,
strategy or interventions used functions and systems ethics stories told
Dimensions of Immoral Mode Reactive Mode Compliance Mode Integrity Mode Totally Aligned
Comparison Organisation (TAO)
Mode
punished competence discrepancies between
corporate values and
behaviour
Challenges Financial consequences of Credibility problems with Mentality of what is not Discretion granted is abused Ethical
immorality becomes stakeholders forbidden is allowed complacency/arrogance;
unaffordable moral laxness
Susceptible to ethical scandal Personal moral autonomy Moral autonomy leads to Neglect ethics induction of
and responsibility moral dissidence new employees
undermined
Increased dissonance between Stakeholders convey frustrated Proliferation of ethical rules Powerful leaders undermine Lack of co-ordination in
personal and corporate values expectations and guidelines ethics drive managing ethics
Stakeholders experience Corporate ethical reputation Employees disempowered to Lack of clear corporate
alienation below par use ethical discretion identity undermines integrity
mode
Table 3 - Modes of managing morality
Kohlbergs ethical development model (1981) divides ethical development into six stages. He
theorises that greater moral development will be related to the highest social responsibility of an
individual or firm. Seabright and Moberg (1998, p. 162) summarise each containing two
sequential stages. At the preconventional level, stage 1 is marked by direct obedience and avoidance
of punishment, and stage 2 is guided by instrumental self-interest and basic reciprocity. At the
conventional level, stage 3, focuses on social approval and pleasing and helping others; stage 4
broadens this orientation to include a concern for maintaining social accord for its own stage. At the
postconventional level, stage 5 values the social contract, albeit arbitrarily determined, because it
affords general welfare, and stage 6 is guided by self-chosen moral principles of conscience or
universal appeal.
Source: Adapted from Seabright M.A. , Moberg D.J. (1998); Lagan A. (2000); Logsdon J.M.,
Yuthas K. (1997)
According to Kohlberg, the majority of adults act out of stage fours theory. This means
organisations must track changing social values and stay in tune with these values if they are to
retain public confidence. (Lagan, 2000, p.71)
All of the above models are similar, that is, they all consider the moral development stages and the
decision making process in linear functional stages. All these models base their assumptions on
rational thinking as well as logical reasoning. Lagan (2000, p.71-72) observes that because the
Kohlberg model takes on a masculine role, no consideration was given to feelings, self-control, or
an individuals emotional maturity and self-esteem. Nor does it consider situations
(external/internal environmental factors). Therefore, it is easy to find, for individuals who operate
from different stages, moral reasoning based on one level and his/her behaviour on another; ie one
does not practice what one preaches. This is often because it is easier to put our own interests first
even though we would like to think that we would always consider others and even though we hold
firmly to the principle do unto others as you would have them do unto you. (Lagan 2000, p.71-
72) In addition, Strong and Meyer (1992, p.90) criticise Kohlbergs developmental model as it
makes no absolute judgements about good thoughts or bad thoughts, but only about the ability
to critically evaluate the moral aspects of a decision.
Logsdon and Yuthas (1997) present a model to demonstrate how various forces influence moral
development in organisations. According to the authors, the primary force in determining the level
of moral development is the set of ethical expectations held by top management. This includes
factors such as top managements individual moral development as well as individual personality
characteristics. Environmental factors include societal expectations, industry norms, and laws and
regulations (p. 1218-1219). Table 5 summarises the forces that influence the moral development in
organisations.
To enact these expectations, organisational processes are developed and implemented to deal with
strategic, political, and cultural aspects of the organisation. These in turn affect all individuals
within the organisation: the result is the organisations level of moral development as evidenced by
organisational norms for dealing with ethical issues and dilemmas. Each of these elements as
presented by Logsdon and Yuthas (1997) are summarised as follows:
Individual Factors
There are two types of individual characteristics (see also Individual Ethics,
Chapter 2.6, p.52). One relates to the individual moral development stage and the other to
personality attributes.
Individual moral development-a senior manager who applies high level of moral reasoning in
evaluating personal moral dilemmas is likely to use similar cognitive processes to deal with
dilemmas facing the organisation. In other words, if the manager is at a post-conventional reasoning
level, it follows that h/she would want his/her subordinates to be at the same level when making
similar decisions.
Personality attributes
Attributes such as ego strength, locus of control and field dependence could affect an individuals
moral development stages (backward or forward) when making a decision.
Environment Factors
The expectations of top management regarding the moral development of the organisation are
shaped through a variety of environmental forces, specifically, social expectations of a firms
behaviour, industry norms, and laws and regulations.
Social expectations - senior management is required to attune to public opinion about the firms
behaviour and to protect the firms reputation.
Industry norms-senior management often looks to their peer firms or industrys behaviour for
guidance. It is also very common for a firm to benchmark its performance against its competitors
or in the industry.
Laws and regulations - Societal concerns and industry norms may eventually lead to legally
enforceable standards of corporate behaviour. Senior management face constant pressure and
scrutiny in order to stay within the boundary of the law.
Organisational Processes
These processes require senior management to make their expectation known to other members of
the firm and its stakeholders. These are:
Strategic formulation - Senior management though its mission statement can establish the moral
standard or its philosophy of the firm. Obligations by various groups could be incorporated into the
organisations long-term plans and into those of every functional area.
Distribution of resources and power - Senior management holds the power of allocating resources
in the interest of influencing its formal and informal behavioural expectations.
Employee socialization - Top management utilises formal and informal socialisation channels to
communicate to its employees its moral expectations.
Reward systems - To ensure that managerial expectations are understood and followed by
organisation members, ethical values and guidelines must be reinforced. Reward systems provide a
strong force through which behaviours consistent with top managements expectations are both
motivated and supported.
organizations operating at the pre-conventional level of moral development are not taking
legitimate stakeholder interests into account, and their decisions are often perceived to be
illegitimate, similar to the perception that ethical egoism by individuals is immoral. Further,
Organizations that operate at the conventional level of moral development focus on meeting the
minimum standards for legitimacy by operating according to legal requirements. However, by
equating legal with ethical behavior, they run the risk of lagging behind changing stakeholder
expectations and also forego benefits of meeting stakeholder expectations that are not required by
law. (Jones 1995 cited in Logsdon and Yuthas, 1997)
Finally, Organizations that operate at the post-conventional level have accepted a broader set of
stakeholder relationships and thus are likely to be perceived as being more concerned about their
legitimacy than organizations at the conventional stage of moral development. (Logsdon and
Yuthas, 1997, p.1224. Figure 7 provides a summary of the forces that shape the organisations
moral development.
INDIVIDUAL
FACTORS
Individual Moral
Development
Individual Characteristics
ENVIRONMENT
FACTORS
Societal Expectations
Industry and Local Norms
Laws and Regulations
Schminke (1998) proposes a new concept which he calls the punch bowl ethical decision making
process. He argues that organizations are not rational places. They teem with egos, politics, and
hidden agendas. Under these conditions, it is unreasonable to expect that managers should always
behave like rational decision makers: impartially identifying problems, gathering full information,
and making optimal decisions. In fact, we know that often they do not. (p.197) Schminke
challenges the decision-making models outlined above in that many traditional approaches to
ethical decision making assume that managers engage in a rational linear decision process when
addressing ethical dilemmas. That is, managers first correctly identify ethical dilemmas, then
evaluate alternative solutions to them, and finally, choose the best alternative. But if that process
does not reflect how managers actually make other decisions, it may not accurately describe how
they make ethical decisions either. (p.197)
Schminke based his argument on Trevinos (1986 cited in Schminke, 1998, p.200 and Logsdon and
Yuthas 1997). Trevinos person-situation interactionist approach (in addition to Kohlbergs ethical
development model). This model does not only consider individual attributes but also situational
factors such as those outlined by Logsdon and Yuthas and includes job context, organizational
culture and work characteristics.
The non-rational managerial decision making model is not an irrational decision making model.
This model proposes, as mentioned above, that managers, when facing an ethical dilemma, seldom
adopt the rational decision-making view. Within this non-rational decision making framework, four
issues are identified by Schminke: bounded rationality, incrementalism, biases and heuristics, and
escalation. Further, to make the matter more complicated, decision-makers when facing an
ethical dilemma confront ambiguity not only about what constitutes a correct or moral course of
action but also how to decide what constitutes moral behaviour. (p.205)
Bounded Rationality - This approach suggests that, due to time and cost constraints and limited
perceptual and cognitive abilities, in order for the manager to arrive at optimal solutions, he tends to
satisfice (by selecting the first acceptable solution to a decision that comes along) rather than
optimise (by exploring and evaluating all possible alternatives fully before selecting the best one).
Biases and Heuristics - This is a shortcuts approach. Tversky and Kahneman (1974 cited in
Schminke, 1998, p.205) noted several biases and heuristics in decision making that include
representativeness availability and anchoring and adjustment. These strategies are adopted by
managers in order to simplify the decision-making process, but they can also lead to biased decision
or even serious, systematic errors.
b) Availability - In this situation, managers tend to give greater weight to more recent or more
easily recalled events.
Escalation - Managers often display escalating commitment to even a failing course of action by
throwing good money after bad.
2.4.2.4 From a garbage can model of decision making to the magic punchbowl
Schminke based his magic punchbowl ethical decision making process on the Garbage Can
model as developed by Cohen, March and Olsen (1972). The garbage can concept of decision
making examines how managers make decisions under conditions of high uncertainty - organised
anarchies. (Cohen, March and Olsen 1972, cited in Schminke 1998, p.205) There are three traits:
problematic preference, unclear technologies and fluid participation.
Problematic Preference - this suggests that individuals ethical preference sets are unclear, ill
defined, or inconsistent. Because individuals differ in terms of moral cognitions and moral
frameworks (see also discussion on Normative Ethics, Chapter 2.2 p. 17), we can expect repeated
confusion as to whether, say, utilitarian or formalist reasoning should determine what constitutes
moral behaviour. (Schminke, 1998, p.208). The organisation or decision situation can be described
as a loose collection of ideas than as a coherent structure.
Unclear Technologies - members of the organisation find the decision process ambiguous.
Decisions are made but the process is not well understood. This is due to the fact that most
organisations treat many ethical dilemmas/decisions as secretive and little discussion or
understanding exists between members of the organisation nor are there any clear indications on
how the dilemma/decision should be addressed. Also, there is no single accepted ethical decision-
making process.
Fluid Participation - suggests that participants vary in the amount of time and effort they devote to
various issues. Variation may also exist in the makeup of the decision team itself. Three
components of Rests (1986 cited in Schminke, 1998, p.209) four component model may affect
participation. These are as follows:
Moral Sensitivity - one must be sensitive to the existence of an ethical issue. His/her social,
cultural, economic, organisational and individual effects affect an individual ethical
sensitivity.
Moral Motivation - an individual must be motivated to act on the ethical issue. Moral
motivation largely affects moral intent and this flows from moral evaluations, organisational
culture and opportunity, the ethics of significant others, and other individual-level factors.
(Ferrell et al. 1989; Hunt & Vitell, 1986; Jones,1991, cited in Schminke, 1998, p.209)
Moral Character - the participant must be in a position within the organisation to participate
in an ethical issue. A number of individual-level factors affect moral character, including
ego strength, perseverance and strength of conviction (Rest, 1986 cited in Schminke 1998,
p.209), and these characteristics played a role in several of the ethical decision frameworks
presented earlier.
The punchbowl ingredients (or the process) - These four streams of organisational elements flow
through, mix and swirl over time, but the blending does not follow a rational pattern. Each
ingredient may exist in isolation and sometimes link with one or more other ingredients. The model
views the process as much more random; organizations become collections of choices looking for
problems, issues and feelings looking for decision situations in which they might be aired, solutions
looking for issues to which they might be the answer, and decision makers looking for work
(Cohen et al , 1972,p.2 cited in Schminke, 1998, p.206)
This model suggests that decision making should not be made in stages, rather it should be mixed
up with all the available information to enable a decision. Such a decision allows the decision-
maker(s) to divorce ethical intentions from ethical outcomes. This provides an opportunity for one
to explore issues more meaningfully. The punchbowl concept also accounts for some of the
instability of trying to map an individuals ethical behaviour. If the ethical punch in the bowl is full
of a variety of actors and ethical frameworks, the model suggests that the same actor does not
necessarily always align himself or herself with one particular framework. (Schminke, p.212)
The review of ethical decision making raises the third research question
Much literature has been written about morality, ethics and in particular business ethics. But most
of this is directed towards the fact that one should not behave unethically - not the other way
around.
In corporate ethics, Feltmate (2000) suggests that corporations are behaving ethically by
committing to what he describes as sustainable development- a term coined by the Brundtland
commission in the publication Our Common Future about thirteen years ago. He suggests that such
corporations will benefit from increased sales through sustainable development, by providing
customers who prefer products that have come to be known as green products. Further benefits
accrue to sustainable development practitioners when they strive to increase operational efficiency
and to minimise the production of waste, which is good for both the environment and the bottom
line.
However, it appears that corporations choose to behave in a socially responsible manner because it
affects their profitability. If the society did not demand any change to their current manufacturing
process, would they behave differently? Would Adidas choose to shift its manufacturing of soccer
boots at a higher cost to another country if there was no outcry about child labour? As Santoro
(cited in Plamondon, 1999) suggests, Corporations can become a very important force to promote
human rights, but unless the demands are reasonable, they wont become partners in promoting
human rights. They would only see human rights as contradictory to their interests. (Plamondon,
1999) Also, by shifting its operations to another country, has Adidas denied their child labourers a
chance to make a few dollars to survive in an undeveloped country? Is this not what was taught in
business school: that a business must maximise its profits and minimise its costs?
Or in a free market economy, should the invisible hands guide the objective of a corporation? As
suggested by Friedman In such an economy [a free economy], there is one and only one social
responsibility of business - to use its resources and engage in activities designed to increase its
profits so long as it stays within the rules of the game, which is to say, engages in open and free
competition without deception or fraud. (as cited in Carson, 2003)
This leads further into a stakeholders theory. Kaler (2003) argues that it is necessary to define
clearly what constitutes stakeholders. In the early 90s, it was suggested that the sole responsibility
of a corporation is to its shareholders - thus shareholders value. However, the term stakeholders
should include others who are not direct shareholders. These could include the companys staff,
customers and suppliers.
How about the Oracle dilemma (Ethics and Business, 2001), whereby Oracle Corporation admitted
to hiring a private investigation firm for the purpose of uncovering financial connections between
its arch rival Microsoft and allegedly independent pro-Microsoft advocacy groups. Lawrence
Ellison, Oracles CEO, claimed that such spying was legal. But even so, is it ethical?
Larson and Miller (1995) suggest that most companies often use their corporate codes of behaviour
as public statements of their commitments to ethical business practices. Whilst this is true, the
question remains as to how well they walk the talk. This view is supported by Rossouw & van
Vuuren (2003), who maintain that mere existence of a code of ethics does not guarantee ethical
behaviour, nor provide the context for moral discourse(p.396)
For example, the researchers organisation has implemented a very strict code of ethics for its
employees. In addition, it also openly embraces whistle-blowers, stating that any one who reports
unethical/unlawful behaviour will not be punished.
However, when staff members complained about certain improper behaviours of their managers
through an independent website the use of which in itself says a lot about how much its
employees trust their employer access to that website from workplace computers was immediately
electronically barred by security. One would expect that senior management would at least
investigate the allegations and then openly prove or disprove the allegations. In this context, is
senior management of this organisation behaving ethically? The result of this action is quite
obvious: no one bothers with it anymore. If employees feel that their senior leaders dont care
about ethical behaviour, they will avoid reporting any violations for fear of being rebuked.
(Simpson 2000) or ethically aware employees might demand more pro-active engagement with
ethics. They might specifically demand training in dealing with ethical dilemmas and in moral
decision-making that will assist them in applying the organisations code of ethics. (Rossouw &
van Vuuren, 2003, p.396)
Further, it is expected that employees within the organisation should respect each other at work. But
does this preclude a senior manager from verbally abusing his/her staff?
Often we hear senior management telling the world that human resources is the most important
assets of our company and then bragging about the number of staff they have just reduced in the
pursuit of improved bottom line, to enhance their annual bonus and to satisfy shareholders, while at
the same time knowingly or unknowingly sacrificing quality. The grounding of Ansett Airlines
during Christmas 2000 is a good example.
These corporations, when faced with criticism, will justify their actions by denying that the actions
taken were unethical. It is just too easy for Australian corporations and their senior officers to evade
the consequences of bad decision-making which puts profitability ahead of workers, customers or
the publics safety. Lemon (2000) suggests that when an organisation faces an ethical dilemma,
the decision-makers in the organisation should follow some moral principle in making a choice as
to how they would resolve the dilemma.
Logsdon and Yuthas (1997) advance Kohlbergs model further (see Moral Development/Decision
Making Process, p.45) to demonstrate the relationship between social responsibility to stakeholders
and the organisations moral development. In summary, the authors suggest that, at the pre-
conventional level, decisions are made only to benefit self-interest and that the decision-making
criteria are based on pleasure/pain calculation. At the conventional level, the orientation is on
narrow market-based stakeholder relationships and the decision-making criteria are based on peer
expectations and social controls. The post conventional level allows the firm to consider a broad
range of stakeholders, including market-based relationships and non-market based relationships.
The decision-making criteria are based on universal ethical principles. This is depicted in Figure 7
(page 44).
Family influences - Individuals begin to form ethical standards when they are children. Children
are more likely to adopt high ethical standards if they see that other family members adhere to
these high standards - especially if they receive rewards for conforming, and punishment for not
conforming, to these standards.
Peer Influence - As children grow older, they are influenced by peers with whom they interact
every day. If the childs peers have high ethical standards, the child is more likely to adopt these
standards.
Life experiences - A number of important events shape peoples lives and contribute to their
ethical beliefs and behaviour. Both positive and negative events will shape an individuals
ethics.
Personal Values and Morals - A persons values and morals also contribute to his or her ethical
standards. A person who places financial gain and personal advancement as his/her top priority
will adopt a personal code of ethics that promotes the pursuit of wealth.
Situational Attributes
People behave within a context, and attributes of that situation influence their actions. Sometimes
people find themselves in unexpected situations which cause them to act against their better
judgement. (Mitchell et al., 1996)
External attributes, such as environmental turbulence, complexity, uncertainty and scarcity in
the form of economic conditions.
Organisational attributes, such as organisation size, complexity, growth, resources and
performance.
Structural mechanisms, such as the composition of board of directors, judicial boards and ethics
review committees
Cultural or normative belief systems.
When faced with an ethical dilemma, an individual will behave in a way relying on the above
attributes - ethically or unethically. For example, if one examines a bill in a restaurant and finds that
an item consumed was not charged, one faces a dilemma: should it be drawn to the
waiter/waitresss attention or should the bill be paid as it is? Is it ethical if one breaks the rule in a
football game just to win? Is it ethical if one purchases pirate computer software?
As a manager, should the decisions concerning a labour problem be made based on what is in the
best interests of the employees, or based on what is best for the shareholders who have invested in
the company? The answers to these dilemmas depend on ones individual and situational attributes.
On the other hand, as suggested by Banaji, Bazerman and Chugh (2003), most of us believe that
we are ethical and unbiasedin reality, most of us fall woefully short of our inflated self-
perceptionwhats more, these unconscious, or implicit, biases can be contrary to our consciously
held, explicit beliefs. (p.56) Also, Armed with the same information, different people reach
different conclusions-ones that favor their own interests. (Bazerman, Loewenstein and Moore,
2002, p.98)
Lovell (2002), found that most of the staff members kept silent when they encountered an ethical
dilemma and were reluctant to voice their concerns to management for fear of retribution. Lovells
view is supported by Mudrack and Mason (1996), Carroll (1978), and Lincoln et al. (1982 as cited
in Mudrack and Mason, 1996), who hold that individuals tend to agree that conventional ethical
standards of society need not be upheld if organisational interests appear to demand otherwise.
In Australia, if an employee commits a crime within the scope of his/her employment, the
corporation can be held responsible if it can be proven that the corporations culture directed,
encouraged, tolerated or led to non-compliance with the relevant provision of the law or failed to
create and maintain a culture of compliance. If the act was expressly authorised by the board of
directors or a high managerial agent, the corporation is also liable. (Ethics Centre 2001)
The government creates excellent incentives for a corporation to improve its culture in order to
encourage compliance with ethical values and within the dictates of the law. At the same time, it
does not penalise a corporation merely because one of its employees is at fault. There must always
be an additional element coming directly from the corporation itself for the corporation to be liable.
In that sense, the corporation is held accountable only for faults which could have been avoided had
it been more diligent. (Ethics Centre 2001) The Trade Practices Act via its enforcement agent The
Australian Competition and Consumer Commission (ACCC) is quite effective to this end.
On the other hand, consider individual politicians. Didnt the Prime Minister of Australia, Mr John
Howard, when he first came to power, establish a code of ethics for his ministers, only to side step
it when the going got tough? How about the decision concerning the Badgerys Creek airport? The
decision to delay the airport forever is just pure political expedience. Consider the latest back flip
on GST? Is the government really acting for the people, where difficult decisions must be made
that will benefit many, but impact some negatively? Or is the government acting purely out of self-
interest: to be re-elected for another term? Consider the sale of tobacco, and the licensing of
casinos, the government turns a blind eye on one hand because it reaps benefits by allowing these to
happen and yet on the other hand spends money discouraging people from smoking or gambling.
The ethical ground is very blurred indeed.
Most of the literature reviewed provide exhaustive discussions on business ethics, particularly with
regards to corporations and individuals. Yet there are few documents on role of the government and
its ethics.
The literature reviewed about corporation ethics, individual ethics and Government ethics give rise
to the last two research questions for this thesis:
RQ 4: How does self-interest serve each individual party (Government, Individual and Employer)?
RQ 5: How does ones view (perception) of the situation determine ones view of ethical behaviour?
The Dunlop model is introduced to aid to explain how ethical behaviour is motivated and interacts
based on self-interest.
The Dunlop model was developed in the industrial arena during the 1950s, in an attempt to explain
the interaction between three groups - employers, employees (unions), and government. The model
suggests that each party behaves to satisfy its own self-interest and that industrial conflicts evolve
around the interests of these parties. (Deery & Plowman, 1989) They also acknowledge that each
of the actors in the system may have their own ideology and these ideologies would be
sufficiently compatible and consistent as to permit a common set of ideas which recognize an
acceptable role for each other. (Deery & Plowman 1989, p.15) In the same vein, it is suggested
that how one views business ethics revolves around the self-interest of each party - business
(corporation), government and individual/community, and that each party, because of its self-
interest, compromises to achieve an acceptable ethical outcome.
Figure 8 is provided by the researcher to illustrate how the parties interact to advance their own
self-interest.
Figure 8 - The Dunlop model - How all stakeholders interact to advance their own self-interest
GOVERNMENT
INDIVIDUAL
EMPLOYER/
CORPORATION
2.9 Conclusion
This chapter reviewed the literature on the guiding theories on ethics, particularly Business Ethics.
It further identified different business decision-making processes, which relate to ethical decision
making this corporate conduct is best viewed as a phenomenon of managerial decision making,
and that the managers decisions are restrained by various internal and external factors. (Strong
and Meyer, 1992, p.89) Subsequently, research questions were developed through the literature
review.
RQ3: When facing an ethical dilemma, how is the ethical decision being made? What is the
process?
RQ4: How does self-interest serve each individual party (Government, Individual and Employer)?
RQ5: How does ones view (perception) of the situation determine ones view of ethical behaviour?
Chapter 3 will discuss the research methodology adopted for this research to address these research
questions derived from gaps found in the literature.
RESEARCH METHODOLOGY
You start living that life long enough, if you dont have very strong morals, you lose it fast.
Enron was the kind of company that could spoil you pretty well.
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3 3.1
Research Methodology Introduction
Chapter 4 3.2
Data Analysis Justification of paradigm
Chapter 5 3.3
Conclusion Justification for qualitative
Chapter 6 3.4
Epilogue Defining and justifying
3.5
Criteria
3.6
Framework
3.7
Limitations
3.8
Ethical Considerations
3.9
Conclusion
3.1 Introduction
Chapter 2 reviewed the literature about business ethics that identified the research questions:
These issues were investigated with the case study research methodology that is described in this
chapter. This chapter consists of six major sections. The first section discusses the four research
paradigms and justifies the choice of the realism paradigm using case study for this research. The
next section provides the use of qualitative research method as opposed to quantitative research
method. The third section justifies the use of case research within the realism paradigm followed
by an outline of the reliability and validity checks that were carried out. The remaining three
sections discuss the level of prior theory, the design and use of the case study and the analysis
procedures used respectively. Finally, the limitation and ethical considerations associated with this
research are discussed.
The first step in research design is to choose the research paradigm that would be most suitable for
this research. Four major research paradigms of positivism, constructivism, critical theory and
realism were reviewed and evaluated with realism being chosen for this research.
A paradigm is an understanding or view of the world and is used to determine what problems are
worthy of research exploration as well as what methods are available to contend with these research
problems. (Perry and Cavaye, 2004, p.2.2) Therefore, as suggested by Guba and Lincoln (1994,
p.105) a paradigm is a basic belief system or worldview that guides the investigator. There are
many paradigms being developed to guide research with most of these paradigms based on
qualitative and quantitative beliefs, while others such as Burrell and Morgan (1979) argue that there
are three levels to the approach: the philosophical level, which reflects basic beliefs about the
world; the social level, which provides guidelines about how the researcher should conduct his or
her endeavour; and the technical level, which involves specifying the methods and techniques
which should ideally be adopted in conducting research . Easterby-Smith, Thorpe & Lowe (1991)
classified paradigms as posititivist and phenomenological based on their deductive and inductive
orientation. Guba and Lincoln (1994), Perry, Riege and Brown (1999) summarised the paradigms
into four categories that could be used to guide research: positivism, constructivism, critical theory
and realism. In the following review, each paradigm will be discussed in terms of its ontology,
epistemology and methodology.
The following table based on OLeary (2001, p.65) summarises the four major scientific research
paradigms;
Source: OLeary (2001) unpublished DBA thesis, who adapted it from Perry, Riege and Brown
(1999); Master (1999); Perry, Alizedeh and Riege (1997); Guba and Lincoln (1994); Hunt (1993);
Lincoln & Guba (1985).
3.2.1 Positivism
The ontology of positivism (Table 6, column 1) holds that that social world exists externally, and
that its properties can be measured through objective methods. It also holds that knowledge is only
of significance if it is based on observations of this external reality. (Easterby-Smith, Thorpe &
Lowe, 1991, p.22). The primary role of the research enquiry is based on theory-testing (deduction).
This paradigm also focuses on measurement and analysis of causal relationships between variables
that are consistent across time and context. (Perry, Riege & Brown, 1999, p.16-17; Easterby-Smith,
Thrope & Lowe, 1991; Ticehurst & Veal, 2000) The primary data collection techniques include
controlled experiments and sample surveys, which are outcome-oriented and assume natural laws
and mechanisms. In other words, the positivists are concerned with the confirmation or
disconfirmation of a theory.
The epistemology perspective requires the researcher to be separated from the research process so
that he/she views the world through a one way mirror (Guba & Lincoln, 1994, p.110) and to
maintain value-free and theory-free. The other advantages of this scientific paradigm include wide
coverage of the range of situations: it can be fast and economical and is statistically orientated so
that credibility is assured. (Easterby-Smith, Thorpe & Lowe, 1991)
The methodology for this paradigm is to achieve its aims through well-structured experiments and
surveys that can be controlled by the researcher and are aimed at verification or negation of
theoretical hypotheses.
The assumptions underlying this paradigm are not suitable for this research. This is due to the fact
that this research is of a theory generating, exploratory nature. The purpose of this study is an
attempt to observe and to understand human behaviour when they are faced with an ethical
dilemma. Whilst the researcher can observe the behaviour, he/she will not be able to capture and
understand the hidden meanings and purposes such as the inner elements that drive the participants
behaviour. (Guba & Lincoln 1994)
Further, the purpose of this study is of inductive nature and is not intended to prove or disprove a
priori.
3.2.2 Constructivism
The ontology of constructivism (Table 6, Column 2) proposes that truth is subjective as opposed to
the positivists singular and objective views. In this paradigm, truth is based on individuals
perceptions of reality - truth is a construction which refers to a particular belief system held in a
particular context.Meaning has more value than measurement, for perception itself is the most
important realityconstructivism enquires about the ideologies and values which lie behind a
finding. Researching this created knowledge depends on the interaction between interviewer and
respondent. (Perry, Riege & Brown, 1999, p.18) The epistemology perspective calls for the
researcher and respondent to create findings jointly. (Lincoln & Guba 1985)
The methodology of this paradigm holds that the researcher must be fervently involved during the
research purpose and requires the researcher to become a passionate participant (Lincoln & Guba
1985, p.17; Perry, Alizadeh & Riege 1997; Perry, Riege & Brown, 1999). The research instrument
used is based on dialogue and consensus. (Lincoln & Guba 1985)
This paradigm is also unsuitable for this research. Whilst this study does require the involvement of
the researcher, the principle aims are to investigate how management make an ethical decision and
how circumstances influence their ethical decision-making process. This requires the researcher to
be objective, as compared to the subjective nature of this paradigm.
Further, as Hunt (cited in Perry, Riege and Brown, 1999, p.18) suggests, this approach may be
suitable for some social science research like that about religion, beauty or prejudice but it is rarely
appropriate for business research because the approach excludes concerns about the clearly real
economic and technological dimensions of business.
The ontology of critical theory (Table 6, column 3) is one of historical realism. This paradigm
assumes apprehensive social realities, incorporating historically situated structures. Within this
paradigm, the researcher aims at critiquing and transforming social, political cultural, economic,
ethnic and gender values. ( Perry, Riege & Brown 1999, p.17)
The epistemology is the researchers ability to interact with the research participants. Research is
based on perceptions held by group of individuals. The process depends on the researchers
expertise, experience and his/her ability, with the aim to transform the ignorance and misconception
into a new, informed perception. (Guba & Lincoln, 1994)
This paradigm is also not suitable for this study. Whilst this research is based on case study of
qualitative nature, it does not intend to transform any of the participants to change their attitude or
current practices. Rather, the aim is to provide an understanding of the implications of the ethical
decision-making process and business ethics in general for consideration.
This is the final paradigm and is most suitable for this study. The ontology of realism suggests that
the external reality is probably true, rather than completely true. It suggests that there is a real
world to be discovered even if it is only imperfectly and probabilistically apprehensible. (Guba &
Lincoln, 1994) Whilst constructivists and critical theorists consider there are many realities,
realists consider that there is only one reality although several perceptions of that reality must be
triangulated to obtain a better picture of it (Perry, Riege & Brown 1999, p.18)
Realism suits this research well, in that this research is to examine human behaviour and to answer
the how and why questions in dealing with business ethics. Information obtained from this
research cannot be claimed as conclusively representing reality, but rather a window through
which this reality may only be imperfectly apprehended. (Perry, Riege & Brown 1999, p.18)
Further, the researcher is neither isolated from the research, as the positivists contend, nor
attempting to be passionate and attempting to transform the findings (like constructivists and critical
theorists). Rather, the researcher is part of the research but remains as objective as possible through
the research process - he or she cannot be completely value-free but can aim to be value-aware.
(Perry, Alizadeh & Riege, 1997)
Within this paradigm process, the researcher uses case studies/convergent interviews based on
qualitative analysis technique, in order to present a fair degree of confidence of its findings to
represent the reality without claiming fully that they are reality. (Perry, Alizadeh & Riege, 1997)
Having decided on the research paradigm, this section provides justification on the choice of
methodology that is part of a paradigm: quantitative and qualitative.
In answering the research questions, quantitative research aims to answer the what, who, how
much and how many questions - explanatory in nature, whilst qualitative research aims to answer
the why and how questions - exploratory in nature.
Further, the key concept of quantitative research is in dealing with variables, so that there is a link
between data and variables. (Punch 1998). On the other hand, qualitative research deals with
subjectively constructed rather than objectively determined. It is not concerned with statistical
analysis. It involves gathering a great deal of information through small numbers of people or
organisations. It is based on the beliefs that a full and rounded understanding of the organisational
experiences and situations of a few individuals, however unrepresentative they may be, is of more
value than a limited understanding of a large, representative group. (Ticehurst & Veal, 2000, p.21)
Qualitative data can be defined as empirical information about the world, not in the form of
numbers. (Punch, 1998, p.59)
Furthermore, unlike the statistical findings of the quantitative methods, the findings of qualitative
research are not to be used to test a theory; rather they are used to build a theory or to identify a
phenomena for further research.
Research designs are about organising research activities, including data collection, in order to
achieve the predefined research aims. Table 7 summarised the five key choices for research design.
As presented above, the selection of qualitative methods for this research is based on two reasons.
Firstly, the study of business ethics is a contemporary issue - given the recent corporation collapses,
so qualitative methods are required to explore this complex issue in depth, in order to gauge
managers behaviour and attitude when faced with an ethical dilemma. Further, the extent of theory
development relevant to this research is considered to be low, hence case study is a suitable
strategy for theory generating. The information obtained could assist in theory building that might
be further examined through quantitative methods.
Secondly, the type of information obtained for the purpose of this research can only be gained from
in-depth detail of the participants attitude and behaviour. the need to delve deep to gain an
understanding of the phenomenon. And the depth and detail of qualitative data can be obtained
only by getting physically and psychologically closer to the phenomena through in-depth
interviews (Perry, Riege & Brown, 1999, p. 20-21)
Having selected the research paradigm and a qualitative research method, it is now necessary to
apply this methodology for data collection and analysis - the qualitative case study methodology
within the realism paradigm.
A case study is a description of a management situation over time that provides a rich description of
the situation. Case study is defined as a research strategy that focuses on understanding the
dynamics present within single settings. (Eisenhardt, 1989,p.534)
Yin (1994), however, focuses on case study research as actual processes and the use of case studies
as a researching tool. He defines case study as:
an empirical inquiry that investigates a contemporary phenomenon within its real-life context;
when the boundaries between phenomenon and context are not clearly evident and in which
multiple sources of evidence are used; and should not only be looked upon as a data collection
tactic or solely as a design feature, but also as part of a comprehensive research strategy. (p.13)
Perry (2001, p.305) synthesises some of the literature and define case research as:
This section justifies the strategies adopt in choosing case study as the research tool. Yin (1994)
proposes that the choice of the right research methodology among the five strategies, namely
histories, experiments, archives, surveys and case study, is dependent on satisfying three situations.
These situations are: the type of research question posed; if the research requires the researcher to
have direct control of the participants behaviour; and the degree of the research focus. Table 8
summarised these three conditions.
Table 8 - Three conditions for determining the appropriate type of research method
Form of research questions posed - the research questions how and why raised from the
literature review (Chapter 2) are better addressed by experiment or the case research method. If
you were studying who participated in riots, and how much damage had been done, you might
survey residentsor conduct a windshield survey of the riot area. In contrast, if you wanted to
know why riots occurred, you would have to conduct [case research] interviews and draw upon a
wider array of documentary information. Yin (1994, p.8)
Further, case research methodology usually addresses research problems within the realism
paradigm (Perry, Riege & Brown, 1999) and tries to explain things (phenomenon) rather than
measure them.
That is, the research problem is a usually a how and why problem, like this research. Also, Yin
(1994, p.18) states that how and why questions [in case research are] exploratory such
questions deal with operational links needing to be traced over time, rather than mere frequencies or
incidence that are used in quantitative research such as surveys. Thus, case study research
usually involves a relatively complex, social science issue about which little is known. (Carson et
al., 2001) Therefore, the purpose of this research is of exploratory nature, with an attempt to
understand and define ethical behaviour in business. The data obtained could be used to develop a
frame of reference and definition of the business ethics phenomenon under study and to engage in
detailed examination of its implications.
As with the positivist, those who require a significant degree of control over behavioural events
should use the experiment method. Those who cannot control events should use the case research or
survey method because these two methods do not allow control over what is going on in the real
world. Case study methodology is most suitable for this research because the researcher attempts to
understand the complex contemporary events in decision making within a business ethical situation,
whereas the researcher has no control over the dynamic behaviour and variable under investigation.
(Bonoma 1985; Yin 1994)
Because this research is focused on the contemporary issue of business ethics, and an attempt to
develop an understanding of the phenomena, the case study research method is appropriate choice
for this research. Further, case research does not only focus on gathering information on
contemporary events but also allows the researcher to obtain in-depth information, as well as
providing tremendous details on the research topic. (Patton 1990)
Therefore, case research is the appropriate choice for this research because it focuses on the
contemporary issue of business ethics, the researcher is unable to control the behaviour and the
research is attempting to answer the how and why questions, as illustrated in Table 8.
The previous section discusses the use of case research for this study. This section discusses the
criteria that are applied to establish reliability and validity. Each of these criteria are described and
applied within the context of this research.
Under the positivist paradigm, the quality of research is usually judged on five criteria: construct
validity, objectivity, internal validity, external validity and reliability. (Eisenhardt, 1989; Yin 1994)
Although six other criteria namely: ontogical appropriateness; contingent validity; multiple
perceptions of participants and of peer researchers; methodological trustworthiness; analytic
generalisation; and construct validity - have recently been built upon the logic of realism paradigm
(Healy & Perry 2000), the most commonly used are those proposed by Yin (1994). Therefore, the
judging criteria chosen for this research is based on Yin. Table 9 provides a summary of the criteria
based on Yin (1994).
In simple terms, construct validity is to establish correct operational measures for the concepts
being studied. (Perry 2001). Construct validity is the ability of a measurement instrument to
measure a construct or concept (Aaker & Day,1980, P.598) The heart of case research involves
construct validity because researchers are always trying to establish agreement or disagreement
about what a construct means. There are three tactics that can be used to increase construct validity
(Table 9 row 1).
Perry (2001) suggests the first, exploratory stage of case research is being flexible from interview to
interview, allowing refined understanding of a construct to occur. Second, use of prior theory before
and during the convergent interviews, that is, checking and cross-checking ideas with previous
researchers in the literature and triangulating the findings as much as possible.
The construct validity of this research is based on the flexibility of introducing appropriate cases
during the interview, to allow the participant to introduce his/her own case scenarios.
Multiple sources of evidence were obtained through a literature review, case research review
protocols, and documents collected from the participants during the interviews.
The triangulation process based on Patton (1990 as cited in Perry 2001,p.319) is used:
A chain of evidence is established for this research as is included either in the main text or as an
appendix to the report. Further, research protocol such as the research interview guide has been
discussed with the supervisor and through pilot research to clarify its ambiguities in order to
increase the construct validity of this research.
External validity is concerned with the generalisability of research findings beyond the scope of the
cases, to the population. (Perry 2001, p.319; Lincoln & Guba 1985).
The participants chosen for this research are very experienced CEOs and managers with a wide
background covering many situations throughout their industry that involved many people. Care is
taken to select the appropriate cases, as well as the participants, to ensure the external validity in
theory building and analytical generalisation are achieved. In analytical generalisation, the
researcher is striving to generalise a particular set of results to some broader theory (Yin 1994,
p.36). For case research must be primarily theory-building, rather than the testing of the
applicability of a theory to a population. (Perry 2001, p.320)
Internal validity is a concern only for causal (explanatory) case studies, in which an experiment is
required to establish a direct cause link between x and y. (Yin 1994; Zikmund 1997; Perry 2001)
This is not appropriate for exploratory studies as these studies are not concerned with making causal
statements. Therefore, with qualitative research, internal validity is not of a major concern.
However, it is still necessary to eliminate or minimise contradiction and ambiguity.
Internal validity is achieved through prior theory, proper probing during the interview, and good in-
depth listening skills. (Perry 2001) Internal validity is enhanced during the data analysis stage to
establish linkages between data collected in the form of inferences, explanations and meanings, to
ensure that conclusions drawn have been systematically explored. (Yin 1994) Further, internal
validity for this research is achieved through within-case analysis, in order to build explanation.
(Yin 1994; Miles & Huberman 1994)
3.5.4 Reliability/dependability
Reliability refers to how consistently a technique measures concepts so that other researchers will
get the same results when the process is replicated. (Perry 2001; Yin 1994) Therefore, it is
necessary to develop case study protocol in the research design stage and use this protocol to collect
data and develop a case database during the data collection stage. The database provides a copy of
all-important documents and evidences used - for example, interview transcripts. In short, all
procedures must be documented so that others can replicate. (Yin 1994)
In order to improve the reliability of this research, the researcher intends to engage a colleague to
assist in conducting interviews, plus the cross-checking of all findings during the data analysis
stage.
Further, the researchers supervisor has followed the whole research process which adds to the
reliability of this research.
With the use of case study research justified and the criteria for judging quality case research
established, this section presents the framework for case study research. Table 10 listed the steps.
Source: adopted from Yin (1994; Carson et al, 2001; Perry, 2001)
Although case research can have elements of theory building and theory testing, there is
controversy about how much theory-building or induction compared to theory-testing or deduction
should occur in the research (Perry 2001, p.307). Esienhardt (1998) argues that case research
should consist of pure induction (theory-building) and therefore no theory should be established
prior and to allow theory to be generated during the field research. Yin (1993) however, is close to
the theory- testing, confirming/disconfirming-deduction.
This research takes a balanced view, which is the blending of the exploratory and
confirmatory/disconfirmatory approaches. For pure induction without prior theory might prevent
the researcher from benefiting from existing theory, just as pure deduction might prevent the
development of new and useful theory (Perry 2001, p.309). The following sections examine the
different views and explain why this research takes the balanced view.
Some researchers (Eisenhardt 1989; Dyer & Wilkins, 1991) believe that case research should
consist of pure induction, which is theory-building. Dyer & Wilkins (1991) focus on the deep
structure of rich descriptions of the context within which social events occur. They downplay
deductions such as investigation of particular constructs and cross-case analysis. They argue that
case studies should be mere stories and not have any theorising associated with them.
Eisenhardt (1989, p.532 as cited in Carson et al, 2001, p.98) describes a process that has inductive
features such as flexible and opportunistic data collection methods that allow additions to
questions in an interview protocol during the series interviews. She further argues that the initial
research problem may shift during the research as data is gathered, and research is begun as close
as possible to the inductive ideal of no theory under consideration and no hypothesis to test. That is
the literature is enfolded around the data after it has been collected literature is used as little as
possible prior to data collection.
The disadvantage of using one inductive stage is that it may run the risk of drifting away and may
even rediscover existing theory and thus not contributing to the research. Also, because of this
unstructured approach, the cases are difficult to compare with hence making data analysis difficult.
Yin (1993) however argues that case research should be well structured with the view of testing,
confirming/disconfirming of prior theory. That is, a very tight structure should be developed prior
to commencing the interview. This can be achieved by the posing of clear [and precise]
questions[and] the use of theory and reviews of previous research to develop hypotheses and
rival hypotheses; the collection of empirical data [is] to test these hypotheses and rival hypotheses.
(cited in Carson et al, 2000, p.98) Yin argues against changes of direction once the interview has
commenced and for a standard, consistent interviewers guide used for all interviews (Yin 1994).
Further, Miles and Huberman (1994, p.17 cited in Carson et al, 2000, p.98) have emphasised the
importance of prestructured research for new qualitative researchers working in areas where some
understanding has already been achieved. As well, Jensen and Jankowski (1991, p.68) warn that
researchers who set out to practise the precepts of grounded theory frequently went aground in
unchartered analytical terrain.
Carson et al (2000) and Perry (2001) propose a blending of these two approaches. As previously
discussed, pure induction without prior theory might prevent the researcher from benefiting from
existing theory, whilst pure deduction might prevent the development of new and useful theory.
Therefore, this research adopts a combination of these two approaches.
Carson et al (2000), suggest that this blending approach can be achieved in three ways. Firstly, an
early stage of convergent interviews with practitioners is incorporated into the research design
while the prior theory from the literature is being reviewed. (Nair and Riege 1995, cited in Carson
et al 2001, p.100). This was achieved in the literature review in Chapter 2. This review highlights
research questions, which were used to focus on case selections and to keep the researcher on track.
In addition, prior to commencing the literature review, the researcher conducted an interview with
his colleagues to gauge their opinion on the theory that Because ones understanding of the
business ethics of a company depends upon ones position and upon ones own perceptions at the
time, it is unlikely that everyone is going to agree as to whether or not a company is acting
ethically.
Secondly, two pilot studies were conducted to fine-tune the interview protocol, before the major
data collection stage. These pilot studies are not a pre-test or full dress rehearsal; they are an
integral part of the whole protocol writing process (Yin 1994, p.74). This was carried out at the
conception stage (prior to the literature review) and before the data collection stage. Two pilot tests
were conducted with the researchers colleagues in middle and senior management level to aid in
the research protocol design.
This section examines the type of case designs available for case selection. It also explains the
conditions which the researcher believes are most suitable for this choice.
Yin (1994) suggests that there are four types of case research designs. These are summarised in
Table 11
A case is considered to be holistic if it contains only one unit of analysis, or embedded if it contains
multiple units of analysis (Perry 1998; Yin 1994). If the research is about what a person can do,
then the unit of analysis is an individual. Sometimes researchers use small cases that are a part of a
big case that is the unit of analysis for a study. These parts of sub-cases are called embedded cases
because they are embedded in the bigger unit of analysis (Carson et al.2001).
The purpose of introducing critical incidents is to analyse individual participants beliefs, attitude
and behaviour towards business ethics. Further, this research is abstract, as it seeks to utilise
convergent interviews from the participants to build a theory. A holistic design is used when the
research requires information at a broad or 'abstract' level or when logical sub -units are not
identifiable (Yin 1994, p.42).
As this research aims to build a theory on business ethics, the researcher has decided to use critical
incidents as a method to obtain information and to gauge participants responses to a particular
ethical situation.
Yin (1994) suggest that one case is acceptable if it meets at least one of the following three criteria
(as cited in Carson et al, 2001, p.103):
the case is a critical one for confirming, challenging or extending a theory because it is the only
one that meets all the conditions of the theory;
the case is rare or extreme and finding other cases is so unlikely that research about the situation
could never be done if the single case was not investigated;
the case provides unusual access for academic research, and unless the case is investigated, an
opportunity to examine a significant social science problem may be lost.
This research undertakes a multiple cases approach. Two core cases were selected to test a
participants individual ethical values and his/her business ethical values. In addition, the
participants were invited to discuss their own business ethical dilemma. Further, additional cases
were introduced as the interviews unfold Eisenhardt (1989).
There are two types of logic underlying the selection of cases: sampling logic and replication logic.
Sampling logic is commonly used in surveys, which is used to assume a represent a large pool of
respondents. Replication logic according to Yin (1994, p.45) is analogous to that used in multiple
experimentssame results are predicted. In other words, selection of the cases should be relevant
and purposive to the situation rather than sampling representative logic. Indeed, random selection
of cases is neither necessary, nor even preferable (Eisenhardt, 1989, p.537).
Also, replication is carried out in multiple case research to achieve literal or theoretical replication.
This research aims to measure individual participants personal and business ethical beliefs. The
two core incidents selected were aimed to measure these criteria resulting in theoretical replication.
Cases were added during the interview to clarify/confront each individuals responses because of
their differences and unique features rather than their similarities.
Number of cases
Selection of the optimal number of cases for this research is a critical decision (Eisenhardt, 1989;
Yin 1994). Eisenhardts view (1989, p.545) is that While there is no ideal number of cases, a
number between four and ten cases often works well. With fewer than four cases, it is often difficult
to generate theory with much complexity, and its empirical grounding is likely to be unconvincing.
Hedges (1985, cited in Carson et al 2001, p.104) suggests an upper limit of twelve because of the
high costs involved in qualitative interviews and the quantity of qualitative data which can be
effectively assimilated. In this research fourteen cases were used.
This research selected two core critical incidents, with more contemporary incidents introduced
during the interview process (four) and other critical incidents introduced by the participants, the
total number of cases were fourteen.
The two cores critical incidents were: the Ford Pinto case (Appendix 1.1, Volume II, p.38); and a
personal test of finding some money on the floor (Appendix 1.2a, Volume II, p.40).
The other critical incidents introduced during the interview process included: James Hardie asbestos
case (Appendix 1.5, Volume II, p.44) ; LJ Hooker (North Ryde) (Appendix 1.3, Volume II, p.41);
Lockheed (Appendix 1.6, Volume II, p.46); Space Shuttle Challenger Disaster (Appendix 1.7
Volume II, p.47, and a personal dilemma in stealing to get the medication for a relative (Appendix
1.2b, Volume II, p.40).
A brief summary of these cases are attached in Appendix 1, Volume II, p.38-47
Number of interviews
In addition to determining how many cases should be included in this research, in turn the number
of interviews needs to be determined. Once again there is no rule to dictate how many interviews
should be conducted. Carson et al. (2001) suggest that thirty or so interviews are required to
provide a creditable picture in a reasonably sized research project. Their rationale is that the
interview could involve about three interviews at different hierarchical levels within ten case
organisations, hence the large number of interviews.
However, given this research is based on convergent interview to formulate theory concerning
ethical decision making, at both personal ethical and business ethical level, the researcher believes
that fourteen interviews suffice. In addition, selection of the participants was across different
business disciplines and job profiles. Hence given that all the interviews involved in-depth
discussions, fourteen interviews are considered appropriate. The validity, meaningfulness and
insights generated from qualitative inquiry have more to do with the information-richness of the
case selected and the observational/analytical capabilities of the researcher than with sample size
Patton (1990, p.185 cited in Carson et al. 2001, p.105). These fourteen participants include five
senior staff from the Government sector, five CEOs of Australian corporations and four
employees/community leaders.
This section outlines the procedures used to collect data: the researchers actions during the case
interviews; the case research protocol used for the interviews; and the source of data collected to
supplement the interviews. (Yin 1994)
Indeed, as suggested by Eisenhardt (1989), all of the interviews undertaken in this research adapted
the approach of being flexible and opportunistic data collection methods that allow additions to
questions in an interview protocol during the series interviews.
A standard, consistent interviewers guide was developed and was used for all interviews.
(Appendix 2, Volume II, p, 49). This guide was provided to the participants and briefly discussed
prior to commencing the interviews. Any questions concerning the research could be raised at this
point and would be fully answered prior to commencement. This approach conforms to Yins
(1994) suggestion that all interviews be standardised and that there be no change of direction (with
the exception of introducing cases as the interview progressed) once the interview has commenced.
The case study protocol is the most important tactic in achieving reliability. This protocol should
provide guidance for another researcher who might attempt to repeat the case study. (Yin 1994,
p.63). The protocol contains the instrument but also contains the procedures, instruments and
general rules that should be followed.
The interview protocol provided an overview and background of the project as well as the interview
procedures. The participants details, such as names, job titles and organisations were documented
and included in the interview transcripts. Finally, it outlined the ethical procedures followed by the
researcher - that is, that the participant had the right to confidentiality and to terminate the interview
at any time if he/she decided not to proceed. The procedure also explained to the participant that the
interview would be taped for analysis purposes. These details were communicated to all participants
through e-mails and were explained again to the participant prior to the commencement of the
interview. A consent form confirming the above was signed by each of the participants prior to the
commencement of the interview (Appendix 4, Volume II, p. 55).
The analysis of the data collected forms the basis of theory building. It also aims at
confirming/disconfirming prior theory. Unlike qualitative research analysis, there are no guidelines
established for analysing qualitative data. However, Patton (1990) and Yin (1994) provide some
guidance in this respect.
The aim of this section is to examine these guidelines and procedural suggestions and how they
affected the data analysis in Chapter 4.
Patton (1990), Miles and Huberman (1994 cited in Perry 2001, p.316), suggest that once the data is
gathered, it is customary for case analysis to always precede cross-case analysis, because it provides
the data for the cross-case analysis.
Perry (2001, p.316) suggests that the description of each case near the beginning of the data
analysis part of the report is restricted to less than half a page per case, with other descriptive
material relegated to appendixes or the database.
In the cross-case analysis, the report emphasises reasons why differences occur, with an explanation
of why a difference was found, frequently using quotations obtained from the interviews to justify
conclusions about differences between cases in the cross-case analysis.
Data analysis for this research is based on coding the data and by clustering the data so that a theme
or hypothesis can be identified. For cross-case analysis, most qualitative researchers use some form
of content analysis initially to analyse their data, that is, they code groups of words in their
transcripts into categories. These categories usually determined by the research issues that were the
starting point for the research. These codes are retrieval and organising devices that allow the
analyst to spot quickly, pull out, then cluster all the segments relating to a particular question,
hypothesis, concept, or theme (Miles and Huberman 1984, p.56, Carson et al, 2001, p. 106-107).
In summary, prior theory from the literature review, pilot cases and convergent interviews are
linked to the cases through practices of data collection and analysis that include:
Although case research is considered a distinctive form of empirical inquiry which is rigorous,
coherent, and based on a justifiable philosophical position (Perry 1998a), the unique characteristics
of case study research that produce these strengths may also produce weaknesses (Eisenhardt, 1989;
Easterby-Smith, Thorpe & Lowe, 1991). This section discusses the three major limitations of the
case research and how these limitations are overcome in this research.
Firstly, there is an argument on case research that there is a lack of rigour and bias (Eisenhardt
1993; Easterby-Smith, Thorpe & Lowe, 1991, Yin 1994). This research followed the techniques
suggested in each stage of the case study research as discussed in Chapter 3.5 to minimise the lack
of rigour and bias.
Secondly, it is argued that case study is not easily open to generalisation (Eisenhardt 1993;
Easterby-Smith, Thorpe & Lowe, 1991, Yin 1994). As discussed previously, the case study research
within the realism paradigm aims to generate theories (analytic generalisation) and not to enumerate
frequencies (statistical generalisation). That is, this research does not use sampling units as
measurement; rather it is selected as a laboratory investigator selects the topic of a new experiment
(Yin, 1994, p.31).
Thirdly, case studies are difficult to conduct because of potential logistical and operational problem
(Eisenhardt 1993; Easterby-Smith, Thorpe & Lowe, 1991, Yin 1994). This research overcomes this
criticism through detailed planning of the investigation, design of a research protocol, preparation
of an interview guide and systematic collection of data during the interviews.
As Zikmund (2000, p.71) suggests, There is no general agreement among philosophers about the
answers to such a question [ethical question]. And Of course, the answer to the question What is
ethical? is not easy - only ones conscience operates to inhibit any questionable practice (p.83).
Nevertheless, when dealing with research ethics it is necessary to keep in mind the The principles
of ethical propriety at the base of most of these guidelines resolve into simple considerations of
fairness, honesty, openness of intent, disclosure of methods, the ends of the researcher to guarantee
unequivocally individual privacy, and an informed willingness on the part of the subject to
participate voluntarily in the research activity' (Leedy, 1997, p.116).
This study is conducted purely for research purposes. It is not intended to use the data collected for
any other purpose. Confidentiality and anonymity are paramount to the researcher. Although
Zikmund (2000, p.72) suggests that there are three parties to the research, this research only
involves two parties - the researcher and the respondent. Hence, one can view the DBA research as
free of influence from any sponsoring client.
Further, as a DBA candidate, prior approval from the university to conduct the research was sought
and obtained an approval number (ECN-04-139). The universitys ethical research standards (Code
of Research Ethics) were complied with - particularly Researchers responsibilities (section 5,
1983), Informed consent (section 7, 1992) and Storage of data (section 9).
3.9 Conclusion
This chapter provides details of the selection and justification of using case study research within
the realism paradigm. It also discussed how to use case study research to build theory and how to
incorporate prior theory by blending of the induction and deduction methodologies. This chapter
also explained how quality of case research can be assured through construct validity and reliability
criterion.
A framework of the case study research was presented to demonstrate how the researcher decided
on the number of cases as well as the number of interviews. It further explained how the data is
going to be analysed and demonstrated how the limitations were overcome.
The next chapter analyses the data obtained from this research.
DATA ANALYSIS
I never thought that you had to say to people. We want to grow aggressively - and dont forget
not to break the law.
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3
Research Methodology
Chapter 4 4.1
Data Analysis Introduction
Chapter 5 4.2
Conclusion Participant profile
Chapter 6 4.3
Epilogue Method used in data analysis
4.4
Data analysis relevant to this research
4.5
Data not directly related to this research
4.6
Conclusion
4.1 Introduction
Chapter 3 discussed the research methodology employed for this research. This chapter will present
the information gathered and discuss the analysis process. It will further discuss the data collected
to address the research questions outlined in Chapter 3. Being qualitative research, preconceived
ideas should not be forced on the data by looking for evidence to support established ideasjust
analyse the data in front of you and write what you see. (Glaser and Strauss, 1967 as cited in Allan
2003, p.1) Chapter 5 will compare the findings from this chapter and conclude with its their
implications.
The next section will provide a brief summary of the participants and their backgrounds. A
summary of the critical incidents used during the interviews are provided in Appendix 1, (Volume
II, p.38-47). This will be followed by Section 4.2, which discusses the methods employed in
analysing the data collected. Section 4.3 will present the data analysis relevant to the research
questions. Section 4.4 presents a discussion on conclusions from data which were collected but
were not related to the research questions. This has produced some extra insights into the issue of
business ethics in general.
To protect the confidentiality of the participants, each participant is identified by a code. The details
of the organisations they worked for are not identified to further protect their confidentiality as this
was a concern raised by the Human Research Ethics Committee while securing ethics approval for
conducting this research.
This research is based on a traditional research design relying on literature review which leads to
formulating of research questions. As explained earlier that because this is a qualitative research
and the data collected were based on interviews the research objective was not intended to test a
hypothesis but to explore the issues raised in the research to formulate an emerging theory.
Therefore using techniques used in Grounded Theory as a method of data (content) analysis (Glaser
and Strauss 1967 cited in Allan 2003, p.1) was deemed appropriate.
The approach to the data analysis is based on the model proposed by Dick (2002, p.2). This is
summarised graphically as follows:
data-collection
note-taking
coding
memoing
sorting
writing
As discussed in Chapter 3, each interview was taped and transcribed for coding. Additional notes
were also taken during the interview. An external consultant was engaged to assist in the interview
process.
4.3.1 Coding
According to Douglas (2003, p.43), Coding is the result of raising questions and giving provisional
answers about categories and their relations. The coding methodology follows part of the process
suggested by Douglas (2003). Further, to avoid personal bias in coding, an external consultant who
assisted in the data collecting process was asked to review a sample of the coding.
The interview transcripts were coded using open coding first. This involves close scrutiny of the
data by reviewing the transcripts word for word, line-by-line and phrase-by-phase (Douglas, 2003,
p.49-50) and also comparing it with notes taken at the interviews. The aim of open coding is to
begin the unrestricted labelling of all data and to assign representational and conceptual codes to
each and every incident highlighted within the data (Douglas, 2003, p.50). For example, the
response from a participant on a critical incident introduced at the interview is coded as rational
ethical decision. The following table provides an illustration of this process:
Further, during the coding stage, some data were coded for a number of categories to emphasise
various facets of an event or comment (Douglas, 2003, p.50). For example, a comment from
participant G that When making unethical decisions, no one questions and there is no
accountability was coded under Ethical Decision Making Process, The Role of Self-interest
and Circumstances that influence that behaviour.
Furthermore, each code is assigned a number as a key point coding (Allan, 2003, p.2), which can be
linked back to the original transcript for reference purposes. A sample of the initial coding is
provided below in Table 15 and a full coding document is in Appendix 5, Volume II, p. 60-126.
In addition, a focus group, comprising five of the researchers colleagues in managerial positions
and an external member who is the Director of a software company, was conducted to triangulate
the findings. There were three female and three male participants altogether. Five of these
participants are Business Development Managers, their responsibilities include identifying and
developing new business opportunities and maintaining excellent business relationships with major
customers of the organisation. The focus group was facilitated by Associate Professor Shankar
Sankaran based on the Structured Focus Groups method recommended in
http://www.scu.edu.au/schools/gsm/ar/arp/focus.html.
Whilst the focus group was structured to test the findings in relation to the research questions, it
also allowed the participants to express their opinions freely at the end. The structure and format of
the focus group was based on Dick (1998). The reason for the focus group and the confidentiality of
data integrity were explained to the participants. In addition, the ground rule of not to convince
or impose a personal view on others was explained and was accepted by the participants. The
findings were analysed and were grouped under data analysis for each individual research question.
Once the open coding is done, the data were then regrouped for the purpose of developing the core
code. Major (core) codes emerge as aggregates of the most closely interrelated (or overlapping)
open codes for which supporting evidence is strong (Strauss, 1987; Strauss and Corbin, 1998 as
cited in Douglas, 2003, p.50)
4.3.1.3 Memoing
Data are interpreted as mentioned above and subsequently linked to emerge as a core category. In
this approach, the data are grouped into each category and the core categories are linked. Table 16
provides an example of the memo that summarised the data. A full detailed memo is in Appendix 6,
Volume II, p. 142.
As mentioned previously, each participant is identified by a letter and his/her comments are
assigned a number as a key point coding (Allan, 2003, p.2), so that it can be linked back to the
original transcript for reference purposes.
Whilst participants G (3), J (1) and K (3) stated that honesty is the key to business ethics, other
participants such as D (10) and M (1-2) suggested transparency and the 3Cs Communication,
Core competency and Compassion form the backbone of business ethics. Participant E said I
strongly believe (business) ethics exist; it is not (an) oxymoron and I think ethics is in the head,
not in the heart.
Participant L suggested that business ethics is understanding what you promise, do[ing] the right
thing by the customers, while participant N said I would say it is doing what is right. What is
morally and legally right
Participant As (1-5) comments on business ethics being integrity, observing the law and
maintaining public relations (reputation) are shared by Participant B (112), J (1) and H (19). In
contrast, participant C (5) stated, we are here to make money not friends.
Interestingly all participants, including participants C and G, responded positively to the question:
Do you believe you are an ethical person? They considered themselves to be ethical persons.
Participant B (59) said: There are four groups - shareholders, customers, employees and
community causing companies to reflect more on ethicstalk about integrity and trust more than
ethics. And, There is no doubt that society is switching into an area where ethics is becoming
more important because of the pressures of these four groups B (58).
The data analysis reveals that there is no single approach to define what business ethics is. It is
difficult to define what constitutes business ethics as every participant has his/her interpretation.
Triangulated Findings: The data obtained from the group agreed with the above findings. In that,
there is no consensus in defining what constitutes business ethics. Further, participants suggested
that the term business ethics is difficult to define and what constitutes of ethics is dependent on
situation, interpretation, training, policy and governance, upbringing and reputation. In addition,
participants agreed that it is difficult to detect ethical behaviour because it once again depends on
background information, status, and individual perception.
In summary, although participants identified keywords on what business ethics should be, these
keywords were not in agreement and depended on the individuals perception. There appears to be a
lack of consensus in defining what business ethics is. All the participants appear to have their own
interpretation of business ethics and the definitions varied considerably. The triangulated findings,
although in agreement with the collected data, indicated that it is difficult to detect ethical behaviour
because it depends on background information, status, and individual perception.
Most of the participants believe that there is no conflict between business and ethics and that
business and ethics can be reconciled.
Some comments from participants are quoted below to illustrate this point:
Participants C and G however disagreed. C said I do not think you ever get reconciliation (68);
What is considered ethical in business is a never ending process of clarifying, resolving and
stimulating a noble vision of common goodfundamentally organisations want their consumers to
think that they are heading in that direction (being ethical) (64-65); But at the end of the day, if
there is a $7.1 million opportunity, providing we can get away with itI think it is OK (79); and
Yes! There is a conflict. Business is there to make moneyBusiness and Ethics are two different
agendas G (14), G(22).
Further, participant C explained an incident that occurred within his company to justify his
reasoning. (This incident is summarised and some information disguised to protect confidentiality)
Cs company has been recognised as a very reputable company and has been considered as the
brand that is getting it right, according to the external Eye on Australia survey. (Lloyd, 2004) The
company is conducting a business selling lottery tickets to an overseas country. As far as this
particular country is concerned, it is illegal for its citizens to buy or conduct a lottery. This business
is worth a few million dollars. Senior management knows that it is illegal but has turned a blind eye
to it because they are hungry for the business. C (14)-C(19) this company is not behaving up to
the level of standards C (82). Further, participant C is of the view that At the end of the day you
can say all that and do all of that and even if you make it a legislative requirement.business
would leverage that for everything that its worth from a commercial standpoint to make sure or
recognise all the so called ethical behaviour C (84).
Although, it appears that most of the participants agreed that business and ethics can be reconciled,
there are doubts at what level this reconciliation should take place.
Triangulated Findings: Whilst participants agreed that both business and ethics can be reconciled,
there were some doubts as to what level that reconciliation reaches. One participant commented that
there are crossovers., whilst another said depends on circumstances.
In summary, based on the data analysis from the interview and the triangulated findings, it appears
that business and ethics could co-exist to a point and this point is dependent on the circumstances.
4.4.3 Research question 3: When facing an ethical dilemma, how is the ethical decision being
made?
For the purpose of answering this research question, a sub code z is used to identify female
participants.
When approaching decision making, there appears to be a difference between male and female
participants. Men took a more direct cost-benefits approach whilst women, although relying on
cost-benefit analysis, also considered the human aspects.
When facing an ethical dilemma, most of the participants (Az, B, C, D, F, I, Jz, Lz, M and N) also
used personal experiences, stating their own critical incidents in addition to the sample incidents
used during the interview.
At the business level, when facing an ethical dilemma, there was enough evidence to suggest that
nearly all the participants undertake a rational decision-making process that included a cost-benefit
analysis.
For example, participant Az (64) would attempt to obtain all available information, arm yourself
with as much information as you canmake the right and appropriate decision. In the process,
however, she would also consider the public relations element, and discuss with her staff (79) prior
to making the decision. However, the bottom line is still, as she put it, pure cost/benefit (67). N
would consider Does it justify spending $10,000 investigating something that is only involving
$100? (36). This does not appear to be an isolated incident. Participants Jz and Lz also considered
When dealing with business issues it has to be a rational decision. But with human relations, it is
an irrational decision Jz (27). Commenting on an employee stealing from the shop, Lz (7) states It
is not acceptable but (one) needs to understand whyif (it was) emotional then there is an
excuse Perhaps Participant N sums it up best in saying that my impression is that males are
far more focussed on process, policy and procedures and women are more focussed on human
feelings and those sorts of issues and that it is supposedly typical in most aspects of male and
female behaviour(female approach is by) resolving the problem sort of approach whereas men
are more likely to say the person is not performing, sack them (59-60). However, Participant F
(15), although agreeing on cost/benefit analysis, stated that The Tylenol incident was not cost
benefit - it was safety issue.
Whilst B was critical of poor government and university ethics, his attitude changed when the LJ
Hooker incident was introduced. He strongly suggested that the agent had done nothing wrong. It is
purely a incident of let the buyer beware(104). There is no duty to discloseI would not call it
unethical because the standard of the behaviour is that you dont tell B (105-107). Other
participants Lz, E, F agreed that the LJ Hooker incident was unethical and unfortunate F (36).
When the James Hardie incident was discussed, participants B, H and M were not quick to pass
judgement, We dont know how they made that decisionso probably they behaved badly but I
cant be sure B (102). Other participants F, I, Jz and K believed that James Hardie behaved
unethically and should be held responsible.
Participant G, however, believes that James Hardie, as a business, is safeguarding itself. If I were
on the board, first of all is to save the company and then the people (18). Then look at ways to get
out of it without paying or paying minimum damages (19). It maximises the benefits for the
company and its shareholders (20) and for the long term, you just re-brand your product (21).
Participant F urged every obligation to protect the interests of those people (30)
When the Pinto incident was introduced (Appendix 1.1, Volume II, p.38), most participants agreed
that the introduction of the unsafe vehicle was wrong: It is the sum of cost-benefit analysis K
(22), You cannot hide the truth Lz (16) and How can you put a price to human life? J (10).
Participants C and G dissented, I have to make a return on the investment and that investment is
significantI can see them making a decision that is potentially not in favour of those hundred
lives (but) they feel they could adequately cover themselves legally C (35), C (39), and that is the
point, if they can get away with it they will do it C (40); the agenda here is to make money and
how they can maximise profitabilityto safeguard their social interest and social motives require
moneyYou should look at the short term not long term. Long term you just re-brand the product
G (23).
Most of the participants, approached these incidents in a rational, cost-benefit analysis based
approach. It is observed that the female participants, although relying on the rational decision-
making model, took a boarder approach prior to making a decision. The interview data suggested
that the decision-making process is very complex. Although most decisions were made based on
cost-benefit analysis, there is evidence to suggest that The fact that an organisation has pursuit of
profit' as an absolute priority or not, does not play an important role in the evaluation of decision
processes of the organisation by employees. The ethical attitude of employees depends upon the
company they work in Roozen, Pelsmacker and Bostyn (2001, p.97).
Triangulated Findings: The findings agree with the interview data. It is observed that nearly all
participants undertook a rational decision making approach - analyse the bottom line and
shareholders values. The three female participants tend to undertake a boarder analysis of the
situation before making a decision, future of the companycost to the reputation of the
companymedical legacylegal implication. One male participant suggested engaging a public
relations firm to manage the (James Hardie) situation.
In summary, there is evidence to suggest that when facing an ethical dilemma, people tend to take a
rational decision-making approach as proposed by Vecchio, Hearn and Southey (1994, p.417). This
rational decision-making process also takes cost-benefit analysis into account. However, some of
the decisions were made based on perceived consequences.
Research question 5: How does ones view (perception) of the situation determine ones
view of ethical behaviour?
As mentioned before, some data are coded under more than one category; the data gathered suggest
that ethical decisions based on self-interest are also related to the circumstances. Therefore, the
researcher feels that it is more appropriate to combine the research questions 4 and 5 together.
Research Qestion2 investigates how the ethical decision-making process is conducted. The
intention of this question is to explore and to identify how, if at all, self-interest affects the ethical
decision-making process.
Research question 2 used the Pinto incident to assess the participants decision-making process and
their views on this particular incident. Extending the discussion, the researcher posted the following
additional questions:
Q1: Assuming you were the chief of engineering and are aware of the defects, what would you do?
Q2: If your directors are fully aware of the defects and direct you to carry out launching the
product, what would you do?
In answering Q1, most participants undertook to make amends to the situation by either
remodifying the design of the vehicle (C, K and L), or to present an argument/advice to the board
(C, D and G ), of the defects and try to convince the board to delay the launch until the problem was
rectified: I would try to present a rational argument; a situation about people will lose their
lives C (41).
Most of the participants would choose to resign when pressured by management (Q2); I think I
would resigneven if it means it affects me financially J (11-12). I could not work for an
organisation that did not have the highest standardsI would have said this is not right, it has to
change N (46). I just saw there was a culture in that division that went along with itit was a
case of cultural decision and everyone went along with it I (30-34), and I would quit even though
I have heavy financial commitment. It is just a matter of losing that post, I would not work on
something I do not agree L (15).
If you were someone like me with a sizeable mortgage, you just want to keep your powder dry,
your head low and you get on with itit is a very complex situation essentially you are looking out
for number one C (44), C(46). If all avenues are exhausted, being loyal to the company, I go
along with its decision K (14); Except resigning, on principle, it is not going to help K (15). I
would provide advice to the company but if they still decide to go ahead then go ahead(even
though it is unethical) I probably carry it out because decision is made and this is business G (31-
34).
Self-interest becomes more evident when a real business situation occurs. Participant L
maintained that she was a very ethical person and would never do anything unethical. However, as
the interview progressed, she admitted that she had to pay a bribe to a foreign authority in order to
have her goods released: I had no choice but to pay the bribe to get through the customs. I had no
choice because they held up about $20,000 of my stock. It is part of the business deal (cost) L (24-
26). Participants B, F and I strongly argued against paying bribes to overseas government officials;
they would, however, donate money to charity or consultation to smooth things out. If I can
find a way to win that contract and pay someone some money perhaps facilitating that and he/she
does it through a management consulting company then I think I can live with that B (70); When
doing business in Asia, you will be encouraged to donate to a particular fundwhere the money
ends up I do not knowsome agents can help on import classification but want 10% of the saving.
I know how he did this but I do not want to know F (17-F21); and Corruption in Asia does not
coincide with Australia. If I wish to carry on business in China that is fine (for me to pay a
bribe) I (27-28).
Furthermore, participant E relates a critical incident, which is of significant interest. When fulfilling
a job-inserting pamphlet into an envelope for mailing, he stopped the production because it
contained unethical material (pornography). The job was worth about $10,000. However, he
admitted that he would have had second thoughts if the job had been worth $100,000 E (15-17).
On the Lottery tickets critical incident described earlier, C would go with whatever the manager
saidWhen I come in here I keep my head down, do what I have to do, do what I am told to do and
I just get on with it because there are other people at stake who rely on me; so ethically I believe I
am doing the right thing C (28), C(57), and Just the sheer embarrassment of losing my job and
having to go back and explain why we dont have food to eat tonightIts not what I want to do.
C (56)
Participant N, when confronted with a funding cut from headquarters, took the matter into his own
hands because he felt that he owed loyalty to his subordinates. His ethical dilemma was whether he
should obey the order, or support his staff to obtain the appropriate funding. He decided to remain
loyal to his staff. As a result, he provided a lot of information to his staff as to why the situation
occurred and unofficially assisted them to write to the parliamentarians asking various questions.
When they received the response from their superior, he unofficially told them that the response
was incorrect. He was basically providing information to his staff to ask their superior the right
questions and told his staff what information to expect N (57). This incident was summarised by the
researcher to protect confidentiality.
When another more personal incident - concerning money on the floor was introduced (Appendix
1.2a, Volume II, p.40), most of the participants approached the situation with qualified comments:
I would probably stand on it. If I could see that nobody around was honestly attached to that
$80 I would probably stick it in my pocket, as discreetly as possible. I might feel bad about it
for a second at some pointbut I would take it any way C (47-48).
I will pick it up and give it to the organisation. I will not pocket the money even [if] I need the
money at the time G (39-40).
I will give it to the staff. If it is $20 on the streetI will pocket it K (32).
I will pick it up and buy drinks...I do not think I will give it to the guys in the bar. If there were
$1,000 I dont know. What would you do? I [would] file a reportand if no one claims [it] then
it is mine I will pocket it L (20-22).
If nobody was around, I would pick it up and keep it. I mean how anybody could justify to me
that it was their $100 note? N (42).
I will pick it up and claim that E (58); I have also [been] in the situation where I found
property in the street and taken it to the police E (59).
$100 vs $1,000 (it has) different consequence, it is hard to resist temptation M (9).
Pick it up and take it to the office; even if it is $1,000 I will not take it. I will not. It would be
my ethical dilemma to accept a separate ruling H (17-18).
It is not my money, I dont want it A (39).
Other participants also made comments related to their personal experience, for example:
When commenting on purchasing goods made overseas under sweatshop conditions, participant A,
who came across as a very principle orientated person said:
I do buy goods and services that sometimes may be produced in a sweatshop. At least they are
getting paymaybe that is my rational mind coming into play rather than my value system.I
dont agree with it (sweatshop) but one person is not going to change that sort of behaviour A (56-
58); I will buy the cheaper pair (made overseas against Australian made) but I am not harming
anyone A (60).
Participant K states Making products overseas using slave labour is unethical but if it is
complying with the local laws then it is OK. and in a sense it was self-interest. As we
discussed earlier, sometimes you cannot make a rational decision. Sometimes you cannot end a lie
saying cost-benefit or whateverpeople sacrifice for their mightI do not think they do cost
analysisI think it is just a reaction where people do what is realistic K (35-36).
In relation to personal financial gain, participant B said I suppose ethically you should not pay
your gardener cashbut I think you are allowed to minimise tax B (56-57).
The researcher, during the interview also observed a sour note from participant D expressing his
disappointment about the companys decision on a prize he won from a business trade fair. D
attended a trade fair and put his business card in for a draw, he was hoping to win a laptop computer
but at the end he won a digital camera, valued at around $200. He duly reported this to his senior
management as per the companys guidelines on reporting gifts of more than $50. A couple of
weeks later, he received a letter from his superior stating that he could keep the camera on the
condition that he returned it to the company when he left his employment. No company is going to
give you something for nothing! D (35).
Triangulated findings: The findings agreed totally with data collected and analysed above. Three
participants chose to resign if they were directed by senior management to act unethically (Pinto).
Yet, one participant commented that (it is easy for you to say) but when push comes to shove (how
many of you would really resign?) Nearly all participants changed their position when the situation
changed; as observed by one participant, sometimes you need to put personal value aside.
In summary, there is evidence to suggest that people, when facing an ethical dilemma, are
motivated by self-interest in making a decision. This is further influenced by the situation or
circumstances at hand.
This research identifies an important area, which was not addressed by the research questions raised
from a review of the literature. Throughou
the interview, a pattern emerged that most of the participants carry two sets of values, namely,
Personal and Business. It appears that there is a conflict/contradiction between these two values.
Comments from the participants below will illustrate these points:
Participant G, when commenting on the Pinto incident raised earlier, suggested strongly that it was
business and that the company should proceed with launching the vehicle. When asked would he
purchase the vehicle for his family, knowing it was not safe, his comment was I would not buy a
Pinto and put my family in it (as against selling one)(this is) coming back to human behaviour
that is your life, your family G (28). And, There are total different needs, organisation needs
versus personal needs G (31).
Participant D presented a strong view on business ethics and stated how his organisation, through
his leadership, maintains a high ethical standard of not compromising its business values to win
business from its competitors. Yet, he was disappointed when he found out that he had to return the
camera he won when he left the organisation.
Participant A made a valid comment: Decisions are (more) complex in a corporate environment
than they are at an individual levelI m not sure in terms of how you act or reactI think there is a
blurring of the lines. I think it depends on your personal value (71-74).
Participant B drew a difference between personal value and business value using an actual incident.
The person involved was a well-known CEO and is currently in jail. Bs comment was he was
wonderful and I met his wife and kids and he was the most wonderful father and husbandbut at
work he was a s. He could lie, cheat, drop his peoplelack integrity B (8-10). This sentiment is
echoed by participant K, I will not tell my children to lie and cheat. I might tell my children not to
lie because lying is not acceptablemaybe when I come to work I lie 4 to 5 times a day. It also
depends on the liesometimes lying is OK K (16-18). He further acknowledged that there are
two sets of value - personal and business (K34).
Participant N demonstrated he possesses high business and personal values, yet when there is a
conflict on funding, he chose to become, to a certain extent a whistleblower.
Participants B, F and I expressed their concerns about the high salary being earned by CEOs. In
their view they are overpaid. You have people out there, their job is only $100,000and an
identical job they [get] paid $200,000.
Participant E was concerned with the changes in tight corporate governance. Directors of public
[companies] were [earlier] there to formulate policiesnow you are responsible for things that are
completely not under your control.
A few of the participants, however, believed there were no conflicts between business values and
personal values;
I do not see any conflict between business and personal ethics. A lot of people build their
organisation they say reflect their personal ethics I (41-42).
There is a common ground between personal and business value F (32).
At the moment, I have no conflict with company value and personal value J (29).
The data suggest that most of the participants believe there is a conflict between personal values and
business values. Most of the participants believe it is difficult to reconcile these differences, albeit
some did not believe there is a conflict.
Triangulated Finding: The group confirms the fact that there is a conflict between business values
and personal values. One participant believed that even though personal values can coexist with
business values, it will differ depending on circumstances. Another participant believed that
personal values and business values can co-exist through compromise and negotiation, and they are
situational.
In summary, there appears to be a conflict between personal values and business values and it is
difficult to reconcile the differences.
As stated in Chapter 3.6.4.1, p.82, it was the researchers intention to conduct a cross-cases
analysis. This is because in the cross-case analysis, the report emphasises reasons why differences
occur, with an explanation of why a difference was found, frequently using quotations obtained
from the interviews to justify conclusions about differences between cases in the cross-case
analysis. However, the data collected did not indicate that there were significant differences
between cases. For example, participants N s (CEO) comment that Does it justify spending
$10,000 investigating something that is only involving $100?(36) was similar to participant A
(Individual) arm yourself with as much information as you canmake the right and appropriate
decision (64) and these were similar to participant Fs comment (Government) that I would
evaluate the pros and cons, from my personal point of view and business point of view. (34)
Therefore, cross-case analysis was deemed unnecessary.
A summary comparing the interview findings and the triangulated findings is provided in
Table 17.
This chapter discussed data collected in relation to the research questions identified in Chapters 2
and 3. There is evidence to suggest there is no one approach to business ethics. Everyone seems to
have his/her own views on what constitutes business ethics. Further, there is evidence to suggest
that ethical decision or ethical behaviour is very complex. Even nearly all of the participants, when
faced with an ethical dilemma makes his /her decision based on a rational, cost-benefit analysis
model and yet some of their decisions were also governed by the circumstances and self-interest.
The decision on what is ethical or unethical appears to switch depending on the individuals
personal values and his/her perception of the event. Chapter 5 will conclude with the findings and
their implications.
CONCLUSIONS
Throughout the economy today, the regulatory system often fails because of lax regulations
and ineffective enforcement. Until that changes, we shall continue to suffer unnecessary
disasters and harm to people, communities, and the environment. That is the price we all pay for
Chapter 1
Introduction
Chapter 2
Literature Review
Chapter 3
Research Methodology
Chapter 4
Data Analysis
Chapter 5 5.1
Conclusion Introduction
Chapter 6 5.2
Epilogue Summary of Research Contribution
5.3
Conclusions about each issue
5.4
Implications
5.5
Further Research
5.6
Limitations
5.7
Conclusion
5.1 Introduction
Chapter 1 - provides the background to the research and also lays the foundations of this research.
The research purpose and justification for the research were discussed in board terms.
Chapter 3 - discussed the research methodology. It provides justifications on why the Realism
paradigm was chosen for this research. The sample sizes, research methods, case study (critical
incidents) and research ethical issues were also discussed.
Chapter 4 - presented a profile of the participants invited for this research. This chapter also
discusses using grounded theory as the method chosen for data analysis and how the data analysis
related to the research questions developed in Chapter 2.
Chapter 5 - is the final chapter (Chapter 6 is an Epilogue). The purpose of this chapter is to link the
findings from the data analysis to the literature review (Chapter 2) and draw conclusions related to
the research questions. A new ethical decision making model is proposed based on the findings.
This chapter also discusses the implications of the findings to theory and practice and identifies
areas for further research. The limitations of the study are also discussed.
Table 18 provides a summary of the research contribution. The findings from this research have
been discussed in Chapter 4 and this section is to summarise the findings relating to this study and
the literature.
The literature review highlights the fact that, although there are many theories being put forward by
philosophers, there is however no single theory or single approach to business ethics. The findings,
as presented in Chapter 4, identified that people have different interpretations and perceptions to
business ethics. This seems to indicate that what constitutes good ethical behaviour is a personal
perception of the event - business ethics is in the eye of the beholder.
As discussed in Chapter 4, there was no uniform opinion or approach from the participants in
dealing with the James Hardie and the Ford Pinto as critical incidents in ethical dealings. Even
when armed with reasonable data, participants were not prepared to condemn or exonerate these
companies ethical practises. This appears to support the researchers original notion that because
ones understanding of the business ethics of a company depends upon ones position and on ones
own perceptions at the time, it is unlikely that everyone is going to agree as to whether or not a
company is acting ethically.
As discussed in Chapter 2, there are conflicting views regarding this question. For example, authors
such as Henderson (1992), Schroeder (2002) and Solomon (2001) suggest that although business is
in pursuit of profit, it bears the responsibility to act ethically. On the other hand, Adam Smith
(1965) and Friedman (1970) argue that business is in pursuit of its self-interest and therefore its
social responsibility is to maximise its profit. Kelly (2001, cited in Bakan 2004, p.39) states that
the rule that corporations exist solely to maximize returns to their shareholders is the law of the
land this is universally accepted as a kind of divine, unchallengeable truth. Today, even the
most inspired leaders of the corporate social responsibility movement obey it.
Although most participants believed that business and ethics can be reconciled, it is evident that this
reconciliation can only be achieved to a point. For example, participant E relates a critical incident,
which is of significant interest. When carrying a job inserting pamphlet into an envelope for
mailing, he stopped the production because it contained unethical material (pornography). The job
was worth about $10,000. However, he admitted that he would have turned a blind eye if the job
had been worth $100,000. A similar situation existed for participant L, in that she had to pay a bribe
to have her stock released. (Chapter 4, p102.)
Further, Bakan (2004) when commenting on British Petroleum (BP) CEO John Browne, who holds
a strong view on environmental issues, says he has to compromise when there is a conflict between
BPs interest and his personal belief. So, if the coastal plain is opened to drilling, BP will surely be
there, as long as drilling is profitable. Browne really has no choice in the matter. Regardless of how
deep and sincere his personal commitment to the environment is, as a CEO he must put his
company and its shareholders interests above all others. (Bakan, 2004, p. 45)
The data analysed thus far suggests that business and ethics can be reconciled as long as the
circumstances do not affect the participants self-interest and/or business profit.
The data analysis also indicated that although there is conflict between personal value and business
value, most of the participants believed that at the end of the day they are doing what they are
employed to do, even though they perceived it to be unethical. For example, when questioned if
they were asked to do an unethical thing on behalf of the company, most of the participants said
they would rather resign than do it. The answer however changed when their self-interest was
threatened, when they were told that if they did not do as told they would lose their job.
Perhaps Hosmer (2002) summarises this by stating that ethical dilemmas arise when economic ends
threaten to clash with human concerns. This then leads to the next research question.
5.3.3 RQ3: When facing an ethical dilemma, how is the ethical decision made?
What governs the ethical decision-making process depends on ones view on ethics. Roozen,
Pelsmacker and Bostyn (2001) suggest that ethical decision making seems to be what may be called
a stage in the career of the employee, that is The egoism line of thinking states that an action is
ethical if it promotes the individuals long-term interest. There is evidence from the data to support
this view. For example, participant (C44) states .if you were someone like me that has a sizeable
mortgage, you just want to keep your powder dry, your head low and you get on with it but you try
and make a decision to cover your arse to the best advantage and essentially you are looking out
for number one (C46)
All of the participants interviewed use the Classical Rational Decision Making Model as suggested
in Chapter 2, by Vecchio, Hearn & Southey (1994, p.417). All participants considered gathering
relevant information as much as possible, conducting a cost-benefit analysis, evaluating
alternatives, selecting an alternative and implementing the chosen alternative when making an
ethical decisions. This decision-making model is similar to various decision models available in the
literature, such as The American Accounting Association; Nash (1981); Rion (1990); Guy (1990);
Hodgson (1992); Cottell and Perlin (1990); Mathison (1998) and Paganzo (1987) models suggested
by Grace and Cohen (2001, p.210-217). All of these models, although different in approach, are still
based on a rational approach explained before.
This rational decision approach appears to ignore Trevinos suggestion (1986 cited in Schminke,
1998, p.200) and Logsdon and Yuthas (1997) that apart from Kohlbergs Cognitive Model
Development model, it is necessary to consider Trevinos person-situation interactionist approach.
This model not only considers individual attributes but also situational factors such as job context,
organisational culture and work characteristics as suggested by Logsdon and Yuthas (Chapter 2,
p.40).
Even within the context of a rational decision-making process, three of the female participants and
other female participants of the focus group indicated that they would also consider other human
factors apart from strict cost/benefit analysis. This appears to confirm Gilligan (1982) and Lagan
(2000)s observations that, as distinct from Kohlbergs male-orientated view, (Chapter 2, p. 39)
females tend to see themselves as part of a web of relationships with family and friends; when
females encounter moral issues, they are concerned with sustaining these relationships, avoiding
hurt to others in these relationships, and caring for their well-being. One female participant made it
very clear that she would talk to her staff to correct unethical behaviour before considering firing
them. For women, morality is primarily a matter of caring and being responsible.
Hunt, Rawls and Horn (2003) suggest that most people in most ethical decision situations rely on
both deontological and teleological moral reasoning. This is evident in the data collected and is
supported by the triangulated findings. Some participants, after assessing the facts, based his/her
decision on if such action had any legal consequence. Ignorance of the law is no excuse
Participant H (18). However, others relied on satisfying their own self-interest.
Further, the data analysis confirms that ethical decision making is based on following a linear
functional progression of defined stages, i.e. it is based on their assumptions of rational thinking as
well as logical reasoning.
RQ5: How does ones view (perception) of the situation determine ones view of ethical
behaviour?
Based on the data collected, most participants initial response was to make amends to the situation
or advise management what corrective action should be undertaken. Some would even resign if
pressured by senior management to do what they perceived to be the wrong thing. On this basis, it
appears their decision agrees with Roozen, Pelsmacker and Bostyn (2001, p.97), who state that
The fact that an organisation has pursuit of profit as an absolute priority or not, does not play an
important role in the evaluation of decision processes of the organisation by employees. The ethical
attitude of employees depends upon the company they work in. As Peterson (2003, p.569)
summarises regardless of whether or not the employees perceptions are accurate, the
employees attitudes and work behaviours are based on their perceptions and not on the actual
intentions of upper management.
However, when pressed, nearly all participants changed their position to satisfy their own self-
interest, that is when the situation starts affecting their own interest, participants chose to behave in
stage one and stage two of the Kohlberg moral development model (Chapter 2, p. 39). This appears
to contradict Kohlbergs assumption as well as Logsdon and Yuthas (1997) that the majority of
adults and organisations act out of stages three or four.
In particular, Participant Cs comment on the companys unethical treatment of the Lottery Ticket
incident, that Just the sheer embarrassment of losing my job and having to go back and explain
why we dont have food to eat tonightIts not what I want to do. C (56). (Chapter 4, p.103)
Participants B, F and I strongly argued against paying bribes to overseas government officials,
however, they would donate money to charity or consultation to smooth things out. (Chapter 4,
p. 102) If I can find a way to win that contract and pay someone some money perhaps facilitating
that and he/she does it through a management consulting company then I think I can live with that.
B (70); When doing business in Asia, you will be encouraged to donate to a particular
fundwhere the money ends up I do not knowsome agents can help on import classification but
want 10% of the saving. I know how he did this but I do not want to know. (F17-F21), and
Corruption in Asia does not coincide with Australia. If I wish to carry on business in China that is
fine (for me to pay a bribe) I (27-28) confirms the notion as explained by Lagan (2000, p. 68-
72):
Stage 1 - P.T.B. (Please the boss) - Individuals at this stage are seen to act out of self-interest to
avoid punishment because they want to please people who are important to them.
Stage 2 - You scratch my back - Individuals located here are still mainly operating out of self-
interest. They may consider others needs but their action is driven by self-interest and by a
belief that reasons: Ill help you because I need you to help me
In summary, the findings concurred with the similar findings of Mudrack and Mason (1996
abstract) that conventional ethical standards of society need not be upheld if organizational
interests appear to demand otherwise. And Clear support was obtained for the predication that
individuals inclined toward self-interest and behaviour counter to conventional standards. As
Peterson (2003, p.569) says how employees cope with ethical pressure is likely to be determined
by their ethical orientation. Employees who view ethics as relative or dependent on the situation are
apparently able to more successfully cope with the ethical conflict, at least in terms of their reported
commitment to the organization and intentions to stay with the organizations. (Peterson, 2003,
p.569) Finally, to quote Strong and Meyer (1992, p.93), The environment restraints and internal
rational restraints may be more strongly linked to managers decision making behaviour and
suppress an individuals reliance on moral judgement.
This research identified some other issues which were not included or considered at the onset. In
particular, personal values, personal culture (upbringing) and organisational values and
expectations. The literature review touched on moral development of organisations as well as
stakeholders (or stakeholder) theory (Logsdon and Yuthas, 1997) but did not fully evaluate these.
The following areas are worthy of future research.
conflicts between personal values and business values
should ethics be taught? And if so how?
should an ethical programme be developed and incorporated in a companys strategic plan?
Most American companies operating overseas have introduced ethical guidelines. One such
guideline states that an employee must declare gifts worth over $50.00 and in some cases
employees are not allowed to accept gifts worth more than $50.00. Some NSW government
departments have also introduced similar guidelines. So much so, some public employees are
reluctant even to have a cup of coffee with their business counterparts in fear of breaching the
guidelines. Whilst this may be considered as an extreme reaction, the question remains as to
whether such guidelines are too rigid. For example, during an interview, one participant (a CEO)
received a promotional digital camera valued at $200. He duly reported this to his superior. A week
later he received a letter stating that he could keep the item as long as he was still employed but
must hand it over should he leave his employment. The participant expressed his disappointment
with such an action. Whilst this was not an outcome expected from the interview, it did illustrate the
fact that bureaucracy has gone mad. This incident also highlights the participants self- interest to
a certain extent.
This episode begs the question as to why there are different rules for different people. For example,
if it is not acceptable for an employee to accept gifts worth over $50 then why can senior
management accept gifts/grafts for more than thousands of dollars? Or, if it is not acceptable for an
employee to tell a lie; then how could senior management gets away with lying about its financial
dealings to the extent that their organisation is facing insolvency?
Section 40-110 of the Public Sector Governance-Australia (Bartos, 2004) acknowledges that where
an employee identifies unethical behaviour, he/she can report it to his/her supervisor or CEO. If the
concern is at a senior level, then the CEO should be involved. But If, however, the (unethical)
concern is about the Chief Executive, then the employees options are more limited.
The research data suggest that nearly all participants use rational, cost/benefit analysis for decision
making. The data also suggest that an individuals ethical position may shift, depending on the
situations. One participant throughout her interview maintained that she was a very ethical person
and that she would never do anything unethical. However, as the interview progressed, she admitted
that she had to pay a bribe to a foreign authority in order to have her goods released. Another
participant stated that he stopped a production job because it contained unethical material
(pornography). The job was worth about $10,000. He indicated he would turn a blind eye if the job
was worth $100,000. These were not isolated examples. One participant (a CEO) stated that he
would never pay a bribe to a foreign authority to do business. However, he would make a
contribution to a government-owned charity to smooth things out. When asked how would he know
that the money would be used properly, his comment was I do not want to know!.
This information prompts one to question Lagan (2000), Seabright and Moberg (1998), Logsdon
and Yuthas (1997)s extrapolation of Kohlbergs moral development model to organisational and
individual moral development. (Chapter 2, p.38-40)
This moral development model was based on Kohlbergs linear moral stage development as
mentioned previously and was acknowledged that most of the people will behave in stage 3 or stage
4. The researcher wonders whether Schminkes garbage can model (Chapter 2, p.46) should be
considered when a manager is making an ethical decision. This begs the question as to whether a
linear model of ethical decision making should be replaced by a circular model where ethical
decisions are influenced by ones feelings and on the circumstances of the context at the time. As
suggested by Brenner (1999, p.7), there is a very strong (though less than perfect) correlation
between ethical perceptions and decision-making, but this relationship is weakened in situations in
which the decision-maker is faced by major financial pressures and believes that these can be
alleviated by taking an unethical option.
A new ethical decision-making model is proposed (Figure 13) to illustrate this theory. This theory
uses Kohlbergs moral development stages as a circular core - but not at linear development stages.
How an individual chooses to behave (and at what stage) is influenced by Schminkes four streams
and is further influenced by the situation/environment of the decision maker at the time. For
example, one might choose to please ones boss because of ones self-interest (stage 1 or stage 2).
This decision is influenced by the four streams indicated by Schminke, such as the individuals
ethical preference or a solution available to him/her. The individuals situation or environment
e.g. his/her financial situation at the time - further influences the individuals decision.
Another example is the L J Hooker incident (Appendix 1.3, Volume II, p. 41). The decision on
whether or not to lie was dependent on, firstly, what one could gain from lying about the case (self-
interest). Secondly, the decision was influenced by the opportunities that were available (to make
the sales at a price which the vendor sought). The third factor could be the companys current
internal situation/environment (the company is desperate for a sales).
5.5 Further research on findings not directly related to the research questions
Nearly all participants in this research acknowledged that there are two approaches to ethics. One is
based on personal values and the other on business values. The data analysis suggested that the two
may be in conflict, depending on situations. Bakan (2004, p.56) draws this distinction: despite
the fact that executives must often manipulate and harm others in pursuit of their corporations
objectivesthat is because they can function normally outside the corporation-they go home, they
have a warm and loving relationship with their families, and they love their children, they love their
wife, and in fact their friends are friends rather than things to be used. Her view was confirmed in
the data, especially by participant (B9): I worked for someone who should remain nameless who
you probably know, a big fish in Australiaat home with his family he was wonderful and I met
his wife and kids and he was the most wonderful father and husband but at work he was a s---. He
could lie, cheat, drop his people in it and thought nothing of it
Unethical events from previous years makes one wonder whether ethical training in a business
environment would help to reduce such events. The following observations highlight further
research is needed to address the question Can business ethics be taught? As George (2004),
Lisman (1996) and Piper et al (1993) suggest, most of the MBA graduates have little understanding
or are reluctant to learn or to practice business ethics. George (2004) cited from a survey conducted
by the University of Michigan that chief executives listed ethics as the second most important skill
for young managers to have, behind business strategy. But when asked about the skills that had
been most critical for their own careers, CEOs left ethics off the list completely. George (2004)
further states Clearly, ethics are learned and not instinctive. We learn from parents, teachers, films,
friends, bosses, books and colleagues. What is less clear is if attitudes and behaviour patterns can be
easily altered when someone undertakes postgraduate education. When posed the question,
participant C (83) stated Of course ethics should be taught, but at the end of the day it has to be
reality.
Currently, the CPA (Certified Public Accountants) programme, at The St. James Ethics Centre,
University of New South Wales and some big accounting firms and consultants are offering ethical
training programmes. If ethics should be taught then the challenge is at what level? Should ethics be
taught at home, at primary school, high school, university or at the workplace? Should ethics be
taught in such a way that business ethics and personal ethics can be reconciled? There appears to be
little debates or research done in this area at this point.
Should a company behaving unethically such as marketing its harmful products or breaking the law
to make a profit then contribute a portion of its profit to charity to further enhance (leverage) its
image (ends to the means)? Or as a matter of being a good corporate citizen (means to an end) by
insisting on behaving ethically (including philanthropy) regardless of the outcome? As participant C
commented, We are out here advocating a certain number of reductions in greenhouse
emissionat the same time we are generating hundreds and hundreds of fresh direct mailthere is
an ethical dilemma. If management does not provide us with directionthen there will be 37,000
people out of work. C86. This is another area where research needs to be conducted.
Currently because of the ASIC CLERP9 (Australian Securities and Investments Commission-
Corporation Law Economic Reform Program) disclosure requirements, public corporations make
disclosures in their annual reports to satisfy these requirements. There is little evidence to suggest
that corporations have considered business ethics as part of their strategic planning process. Further,
there appears to be some confusion (or lack of understanding) between Corporate Social
Responsibility and Business Ethics. Perhaps more research in an attempt to clarify these two terms
is warranted.
5.6 Limitations
The limitations of the scope of this research is discussed and justified in Chapter 1.8 (p.10) The
selection of Case Study (Critical Incidents) as a research methodology is also discussed in Chapter
3.7 (p.83)
As a convergent study, the sampling size is very small in order to focus on the research questions at
hand. Further, the study is limited to business ethics as it applies to Australian businesses. It is
recognised that ethical behaviour, whether it is based on the individual, corporation or government,
is heavily influenced by culture. Since the subject of ethics is so broad, it was necessary to exclude
the cultural influence on ethical behaviour for the purpose of this research.
5.7 Conclusion
The findings although not conclusive, nevertheless highlight several issues. There is a lack of
consensus on what defines business ethics. When faced with an ethical dilemma, there is agreement
that the participants undertake a rational decision-making process to help them to come to a
decision. However, the decision-making appears to be strongly influenced by self-interest. Further,
whilst most participants believe business and ethics can be reconciled, they also agree that it is
difficult to identify at what level the reconciliation should take place. Moreover, through the
interview observation, it appears that most participants tend to put profits before ethics.
This research also identified other issues such as: Should business ethics be taught? and Should
there be an ethical audit programme be incorporated into a corporations strategic plan? These and
other issues identified in this research could have an impact on business and require further
research.
EPILOGUE
The implication here is that without an adequate public language, ethical commitments tend to
remain a matter of personal (or privatized) morality and are thus rendered impotent for social
This chapter is an addition to the five-chapter approach mentioned in Chapter 1 (p.13) The purpose
of this chapter is to present some of the researchers personal views which were not covered in
these five chapters.
Prior to commencing the DBA programme, the researcher attained an undergraduate degree (B.
Bus. Studies) and a postgraduate degree (MBA) in the business discipline. During these studies, the
researcher never had the opportunity to be exposed to philosophy.
The researcher commenced the journey on literature review based on a notion that what constitutes
ethics is a matter of interaction between three parties-the government, the individual and the
community and that because ones understanding of the business ethics of a company depended
upon ones position and upon ones own perceptions at the time, it is unlikely that everyone is
going to agree as to whether or not a company is acting ethically.
Through the literature review, the researcher identified that business ethics does exist and is not an
oxymoron. Philosophers over the years have taken many different approaches to moral (ethical)
reasoning. Whilst not abandoning the proposition of the Dunlop model (Chapter 2.8, p.56)
completely, the researcher felt that it would be more beneficial if this research was conducted based
on the research questions developed.
Philosophers over the years have proposed various moral theories attempting to undertake a
unifying approach to ethics. The literature review confirms that this is obviously not the case. As
discussed in Chapter 2, there are so many different schools of thought on ethics, as summarised by
Roozen, Pelsmacker and Bostyn (2001, p.87) The deontology philosophy focuses upon universal
principles of right and wrong. What is important is the values and motives underlying actions, and
not the means that could justify the end. The egoism line of thinking states that an action is ethical
if it promotes the individuals long-term interest. The utilitarian point of view claims that an action
is right if it leads to the greatest good for the greatest number of people. Relativism claims that there
are no universal rules of good and bad, but that they depend upon cultural characteristics and
individual differences. Justice emphasizes the concept of fairness; equals should be treated equally
and unequals unequally. Objectivism claims that discussing about what is right or wrong, and what
is not, is not very useful. One should focus upon the avoidance of unethical behaviour, for instance
by imposing rules of conduct or ethical codes.
Although the researchers view has departed from his original notion, nevertheless he has decided
to test if ones business ethical practise is governed by circumstances and self-interest (egoism).
Hofstede (1994) undertook a study on cultural dimensions and classified broadly Eastern culture as
collectivism and Western culture as individualism. As previously stated in Chapter 1 (p.10) that this
research was conducted within the Australian context and ignored the cultural influence on ethical
development.
Nevertheless, this research identifies that ethical decision-making process in Australia is based on
rational, cost-benefit and self-interest. This is a typical example of Individualism. Collectivism on
the other hand is cohesive group based. Ethical decision-making process is based on group value. A
comparative study between Eastern ethical value on decision-making process and Western ethical
value on decision-making process would be of significant interest. As Hansen (2001, p.69) suggests
Our (Western culture) inherited Greek psychology divides the ego into the rational and the
emotional. It explains all human mental processing via belief and desire. Our concept of morality
involves reference to the human faculty of reason. Chinese thinkers view human action in a
different way. They appeal to no such faculty nor to beliefs and desires as reasons for action. The
Chinese approach is initially more social. Humanity is social. A social dao (way) guides us.
Chinese ethical thinkers reflect on how to preserve, transmit or change this way-the public, guiding
discourse.
Since commencing this research on business ethics, the researcher has been seconded by his
company to assist in developing an assessment profile to identify ethical behaviours of future
employees. It is pleasing to note that future recruitment within the researchers organisation,
regardless of what levels, will include business ethics as part of the selection criteria.
At one of the sessions conducted at the Assessment Centre, six potential leaders were selected for
interview to identify their potential in advancing their career path into management. Six ethical
dilemmas obtained from St James Ethics Centre were used to identify their leadership decision-
making skills. As expected, their assessments to the situations were no different than the data
collected from the interview nor did they differ from the triangulated findings - that is, individual
applicants responded differently depending on their interpretation of the event, the situation and
his/her beliefs.
Over the past few years, very often when discussing ethics in various meetings and symposiums,
the researcher was confronted by audiences seeking for a single and simple, cause-effect answer - a
yes/no or right/wrong answer. The study of business ethics is a study of human behaviour and the
answer cannot be quantified using the positivist paradigm (such as using a doubleblind study).
What makes studying of ethics interesting is the fact that it really does not have a single answer.
What is right or wrong, good or bad is contingent upon circumstances and personal values - that is,
whether one is a deontologist, teleologist, relativist, or objectivist.
Therefore, it would appear that discussion of business ethics is a circular discussion. It is suggested
that further research into business ethics could be based on Action Research.
At one of the MBA Refreshers seminars held by the University of Technology Sydney (UTS)
Business Network on 6 October 2005, anecdotal evidence showed that only two people among an
audience of 48 wished to become a director due to the stringent requirements of CLERP9
(Corporate Law Economic Reform Program-Review of Corporate Reporting and Disclosure Laws).
The Gerard Affair as reported in the Australian Financial Review (30 November 2005) also
illustrated the lack of diligent checks on appointing directors. Whether CLERP9 needs further
strengthening could be a subject for future debate.
Meanwhile, the current debate on Corporate Social Responsibility (CSR) remains a hot topic.
Whilst there appears to be a demand for CSR for the long-term benefit of organisations, the
Business Council of Australia believes that CSR will compromise their bottom line and [they] are
therefore not interested. Hewson (2004). In their submission to the Parliamentary Joint Committee,
the Business Council of Australia (2005, p.48) drew the distinction between shareholders and
stakeholders. It states It is important to remember, however, that a companys paramount
obligation is to its shareholdersthere are limits to the extent that corporations can and should have
regard to interests other than those of shareholders.
quantitative evidence of links between company corporate governance and investment performance
indicators such as share price, consensus earnings trends and return on equity trends. It is the
researchers belief that this debate will linger on for sometime and that further research in this area
would contribute further to the betterment of business and the community.
This thesis thus far confirms that ethical behaviour is very complex in that the individuals ethical
behaviour is mainly based on circumstances and egoism. However, this does not mean that
individual upbringing, or culture, does not play a part in his/her moral development. Perhaps, as
Ross (2005, pp.10-11) puts it, the ethical leader is like a tree (Figure 14), comprised of three major
parts, his/her deontological beliefs as its roots, the virtuous trunk and the teleological foliage.
Finally, whilst the researcher is not an ethicist, he has learnt and gained substantial knowledge in
this area. It is hoped that armed with this knowledge and coupled with further research in this area
he can contribute to a better business environment and ultimately benefit the community as a whole.
Peter W Wong
March 2006
Volume II
TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................. II
REFERENCES ...................................................................................................................................1
BIBLIOGRAPHY ............................................................................................................................17
APPENDIX 1 ....................................................................................................................................38
1.1 Ford Pinto..........................................................................................................................39
1.2 Personal Challenges..........................................................................................................41
1.3 LJ Hooker Case Study .......................................................................................................42
1.4 HIH Insurance Case Study ................................................................................................43
1.5 James Hardie Case Study ..................................................................................................45
1.6 Lockheed Scandal Case Study ...........................................................................................47
1.7 Space Shuttle Challenger Disaster Case Study .................................................................48
APPENDIX 2 ....................................................................................................................................49
2. Interview Guide.....................................................................................................................50
APPENDIX 3 ....................................................................................................................................52
3. Email Introduction ................................................................................................................53
APPENDIX 4 ....................................................................................................................................55
4. Informed Consent..................................................................................................................56
APPENDIX 5 ....................................................................................................................................60
5.1 Interview List A..................................................................................................................61
5.2 Interview List B..................................................................................................................68
5.3 Interview List C .................................................................................................................79
5.4 Interview List D .................................................................................................................87
5.5 Interview List E..................................................................................................................90
5.6 Interview List F..................................................................................................................96
5.7 Interview List G ...............................................................................................................101
5.8 Interview List H ...............................................................................................................107
5.9 Interview List I.................................................................................................................110
5.10 Interview List J ................................................................................................................114
5.11 Interview List K ...............................................................................................................117
5.12 Interview List L................................................................................................................121
5.13 Interview List M...............................................................................................................125
5.14 Interview List N ...............................................................................................................127
APPENDIX 6 ..................................................................................................................................142
6. Data for Memo Preparation ...............................................................................................143
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In the early 1960s, Fords marketing position in the automobile industry was being eroded by
competition from foreign automakers, particularly from Japanese companies making compact, fuel-
efficient cars. Lee Iaccoca, president of Ford at that time, was desperately trying to regain Fords
share of the automobile market. His strategy centered on quickly designing, manufacturing, and
marketing a new car to be called Pinto. The Pinto was to be a low-cost subcompact that would
weigh less than 2000 pounds, cost less than $2000, and be brought to market in 2 years instead of
the normal 4. Because Pinto was a rush project, styling considerations dictated engineering design
to a greater degree than usual. In particular, the Pintos styling required that the gas tank be placed
behind the rear axle, where it was more vulnerable to being punctured in case of a rear-end
collision. When an early model of the Pinto was crash-tested, it was found that, when struck from
the rear at 20 miles per hour or more, the gas tank would sometimes rupture and gas would spray
out and into the passenger compartment. In a real accident, stray sparks might explosively ignite the
spraying gasoline and possibly burn any trapped occupants.
Ford managers decided, nonetheless, to go ahead with production of the Pinto for several reasons.
First, the design met all the applicable legal and government standards then in effect. At the time,
government regulations required that a gas tank only remain intact in a rear-end collision of less
than 20 miles per hour. Second, Ford managers felt that the car was comparable in safety to several
other cars then being produced by the other auto companies. Third, according to an internal cost-
benefit study that Ford carried out, the costs of modifying the Pinto would not be balanced by the
benefits. The study showed that modifying the gas tank of the 12.5 million autos that would
eventually be built would cost about $11 a unit for $137 million:
However, statistical data showed that the modification would prevent the loss of about 180 burn
deaths, 180 serious burn injuries, and 2100 burned vehicles. At the time, the government officially
valued a human life at $200,000, insurance companies valued a serious burn injury at $67,000, and
the average residual value on subcompacts was $700. So in monetary terms, the modification would
have the benefit of preventing losses with a total value of only $ 49.15 million:
Thus, a modification that would ultimately cost customers $137 million (because the costs of the
modification would be added to the price of the car) would result in the prevention of customer
losses valued at only $49.15 million. It was not right, the study argued, to spend $137 million of
societys money to provide a benefit society valued at only $49.15 million.
Ford subsequently went ahead with production of the unmodified Pinto. It is estimated that in the
decade that followed at least 60 persons died in fiery accidents involving Pintos and that at least
twice that many suffered severe burns over large areas of their bodies, many requiring years of
painful skin grafts. Ford eventually phased out the Pinto model.
If the situation now changed to finding two hundred dollars, would you behave differently?
In August 2004, LJ Hooker North Ryde sold the Gonzales home for $800,000 without informing the
Asian buyers about the gruesome events that had taken place-a murder of three people which was
committed resulting in the owners son being in jail for the crime. When the buyers discovered the
facts, they refused to proceed with the sale. In terminating the contract, they faced the loss of their
$80,000 deposit.
North Ryde LJ Hooker refused to concede that it had done anything wrong. They based their
argument on caveat emptor (let the buyer beware) and blamed the buyers for not asking more
questions. After weeks of publicity and widespread community outrage, the head office of LJ
Hooker finally refunded the deposit to the buyers.
On December 17 2005 the NSW Department of Fair Trading announced the result of its
investigation into the sale. The agent was fined $20,900 for misleading behaviour. A salesperson
from LJ Hooker North Ryde, Sturt Hinton, reportedly said the matter was a joke and the agency
will appeal the decision. Hinton reportedly said that the Department of Fair Trading should leave
honest hard-working agents alone. Rowen Kelly from the Real Estate Institute of NSW said that
99.9 per cent of agents do the right thing and that the LJ Hooker North Ryde agency had a solid
reputation. (Jenman 2004)
The case may leave vendors and agents who have failed to disclose defects that could influence a
purchaser's decision is now open to legal claims. Previously, most lawyers and industry leaders had
thought the agents who sold the Gonzales home might have breached ethical standards, but not legal
ones Garnaut (2004).
The president of the NSW Real Estate Institute, Rowen Kelly, conceded estate agents would require
new training to comply with the ruling. Terry Ryder, author of Real Estate Without Agents, said the
case set an important precedent that agents could not get away with silence. "It's not just a matter of
what you say, it can be a matter of what you don't say," he said. Ms Meagher said she would press
ahead with plans to tighten misleading and deceptive conduct laws and increase penalties, also in
response to the Gonzales case. Garnaut (2004)
When HIH collapsed in 2002, it represented the largest corporate collapse in Australian Corporate
history. The fundamental problem was that HIH had been offering insurance at too low a price, and
had not set aside enough capital to cover its future liabilities. This was exacerbated by management
and due diligence failures, which led HIH to acquire other troubled insurance businesses at too high
a price. (Elias 2001)
Many of HIHs difficulties can be attributed to its aggressive acquisition strategy and the creation of
more than 200 subsidiaries. The strategy had the effect of increasing HIHs size with premium
growth averaging 26 per cent per annum in insurance markets that were already overcrowded and
competitive. (Robertson 2001)
Adler responded to allegations that the purchase price of his company (FAI) was too high .It has
emerged that HIH did not conduct due diligence on FAI, and instead relied on FAIs recently
completed accounts. The acquisition of FAI was not HIHs only questionable business decision but
also partly blamed on its international operations, particularly those in England and the US. The
company chose a sector that has proved problematic for many market participants and that, as an
emerging insurance sector, involved HIH in business practices and legal risks it did not fully
understand. Therefore HIH get their pricing and reserving wrong in sectors that exhibit long tails of
risk, such as workers compensation and professional indemnity. (Robertson 2001).
Often the true price of risk in such markets is affected by social and legal trends. Companies are
tempted to price keenly to gain market share, only to find that long-term tail risks hit them with
unexpected liabilities when it is too late to do much about it. The picture is complicated even further
by reinsurance strategies. Reinsurance contracts can be used not only to reshape liabilities but to
reshape cash flows and company accounts by altering premium payment timing and loss coverage.
(Robertson 2001)
The role of the external auditor, Arthur Andersen, has already proved interesting to commentators.
The HIH Groups externally audited accounts for the year to June 2000 showed net assets of nearly
A$1 billion, and solvency at almost double the statutory required level. (Sharon 2001)
The companys subsequent collapse spotlighted the fact that three of HIHs board members in 2000
were previously employed by Arthur Andersen. No evidence has been presented to suggest that
Between 1995 and 2000, James Hardie Industries Limited sought to separate the Hardie Groups
operating assets from its asbestos liabilities. Asbestos-producing subsidiaries were stripped off
assets but left with the bulk of Hardies asbestos liabilities. This action potentially placed assets
generated through the production and sale of asbestos beyond the legal reach of asbestos victims. In
October 2001 James Hardie gained NSW Supreme Court approval and 98% shareholders support
for a Scheme of Arrangement which established a new Netherlands-based parent company, James
Hardie Industries NV(Netherlands). A sum of $1.9 billion was transferred out of Australian-based
James Hardie companies into this new entity. James Hardie solicitors assured the Supreme Court
that Australian asbestos victims would suffer no prejudice as a result of these arrangements.
Despite the assurances given to the NSW Supreme Court in 2001, Hardie did not alert the Court,
the NSW Government or the Australian Stock Exchange that Australian James Hardie entities
would no longer be able to call on the $1.9 billion from James Hardie Industries NV to meet
asbestos claims. As a result of these actions the funds available to the Medical Research and
Compensation Foundation (MRCF) to compensate James Hardie asbestos victims will only last for
a further three or four years. This will result in a significant shortfall given that claims are expected
for at least the next 15 years and compensation owing to Australian asbestos victims of James
Hardie has been estimated to reach almost $2 billion. The actions of James Hardie in this matter
will if successful have the effect of preventing Australian victims of its asbestos products
successfully prosecuting claims against the assets of the company responsible for their illness.
(Pearce 2004)
While unions attacked James Hardie's proposal, NSW Labor Premier Bob Carr, although reserving
his judgement until the inquiry hands down its findings, described the proposal as a massive
vindication of our government's decision to set up this inquiry. Ironically, while Carr wants to take
credit for James Hardie's flawed compromise, it was his government that gave the go-ahead for the
company's relocation to the Netherlands.
According to a July 30 report by David Hardaker on PM, ALP-linked PR firm Hawker Britton was
retained by James Hardie to sell the concept it called `separation from legacy' in other words,
cutting financial ties with asbestos compensation claims still in the pipeline. Hawker Britton
lobbied Carr's government to allow the relocation of James Hardie to the Netherlands. The statutory
scheme proposed by James Hardie has already been rejected by the Labor governments in Victoria,
Queensland, Tasmania and the ACT. (Hester 2005)
Sue Bolton, a Socialist Alliance Senate candidate in Victoria and a co-convenor of Socialist
Alliance's national trade union committee, told Green Left Weekly that this If you or I killed an
individual we'd land in jail, but if a corporation knowingly causes death or injury to workers or
customers, they get a fine at most.
She also mentioned that Bosses who kill should be jailed. In the case of James Hardie executives,
they have known since the 1930s that asbestos is a killer and they didn't stop producing asbestos
products until 1985. James Hardie's executives decision to continue producing asbestos for more
than 50 years after discovering that asbestos is a killer means that they should be prosecuted for
manslaughter. They are mass murderers.
We're also dealing with a pretty clear-cut case of executives trying to rip off the corporation's
victims and their families by restructuring their company in an attempt to avoid their responsibility
to provide compensation. There should be pretty severe penalties for that sort of conduct. Hester
(2005)
Melbourne lawyer Rob Stary, told Green Left Weekly: There is an absolute capacity to prosecute
those people because you can be charged with reckless conduct endangering life, and all you have
to have is the foresight to the probable consequences of your action. Pearce (2004) So, when they
knew that asbestos was likely to cause fatal injuries and it's documented, and it's now said to be
proved over all those years, there's no statute of limitations. Those directors should have been
charged and still should be charged. Hester (2005)
An SEC investigation in 1976 revealed that up to that time over 450 American companies had paid
bribes to foreign government officials or made other "questionable payments." Although there were
federal laws that addressed corporate bribery to domestic politicians and public officials, no law
directly prohibited bribery overseas. One of the incidents that spurred the enactment of a law
(FCPA) in 1976 to make such payments illegal was the Lockheed incident.
In1970 Lockheed had only narrowly averted bankruptcy and in the following year had secured a
government loan of $250 million under controversial conditions. In 1972 and 1973, A. Carl
Kotchian, President of Lockheed, authorised secret payments of $22 million to representatives of
the Japanese Prime Minister, Kukeo Tanaka and other political figures in the course of trying to sell
its aircraft. In February 1976 a Lockheed executive revealed that the company had paid bribes to
Japanese government officials. In June of that year the Lockheed incident led to the arrest of former
Prime Minister Kakuei Tanaka on charges of accepting a portion of those bribes.
Kotchian claimed he was concerned with Lockheeds survival, and the fate of thousands of
employees. According to Kotchian, circumstances all but dictated a strong push for sales in the
biggest untapped market Japan. The result would be a huge cash inflow that would go a long
way towards helping to restore Lockheeds fiscal health, and it would save the jobs of thousands of
the firms employees. He further defended his actions by stating that the payments were in keeping
with local business practices and were not contrary to American law. Moreover, the payments were
initiated not from Lockheed, but from its Japanese contacts. In any case, Kotchian was forced to
resign.
On January 28, 1986, seven astronauts were killed when the space shuttle they were piloting, the
Challenger, exploded just over a minute into the flight. The failure of the solid rocket booster O-
rings to seat properly allowed hot combustion gases to leak from the side of the booster and burn
through the external fuel tank. The failure of the O-ring was attributed to several factors, including
faulty design of the solid rocket boosters, insufficient low- temperature testing of the O-ring
material and the joints that the O-ring sealed, and lack of proper communication between different
levels of NASA management.
NASA managers were anxious to launch the Challenger for several reasons, including economic
considerations, political pressures, and scheduling backlogs. Unforeseen competition from the
European Space Agency put NASA in a position where it would have to fly the shuttle dependably
on a very ambitious schedule in order to prove the Space Transportation System's cost effectiveness
and potential for commercialization. This prompted NASA to schedule a record number of missions
in 1986 to make a case for its budget requests. The shuttle mission just prior to the Challenger had
been delayed a record number of times due to inclement weather and mechanical factors. NASA
wanted to launch the Challenger without any delays so the launch pad could be refurbished in time
for the next mission, which would be carrying a probe that would examine Halley's Comet. If
launched on time, this probe would have collected data a few days before a similar Russian probe
would be launched. There was probably also pressure to launch Challenger so it could be in space
when President Reagan gave his State of the Union address. Reagan's main topic was to be
education, and he was expected to mention the shuttle and the first teacher in space, Christa
McAuliffe.
2. Interview Guide
Explain reasons for us being here and remind them about the informed consent
About your organisation
Your history (briefly)
About your position A Day In The Life Of
What does business ethics mean to you? (Standard definition from each person prior to
discussion)
Do you consider yourself to be an ethical person? What constitutes your ethical position? What
makes you so (or not)?
What is your modus operandi when it comes to making (potentially controversial) business
decisions?
Have you in the past encountered any ethical dilemma? If so, would you like to discuss it?
What was the nature of the issues you faced?
What parties were involved (or potentially involved)?
What was at stake?
What were the implications of any given course of action?
Having had this discussion, once again what does business ethics mean to you? Do you care to
revise your earlier definition/perspective in any way?
Few CEOs lose their jobs because they mishandle ethical issues
Do you agree? If so, why?
3. Email Introduction
-----Original Message-----
From: XXX
Sent: Thursday, 26 August 2004 17:32
To: 'Wong, Peter'
Subject: RE: Survey Participation
Hi Peter,
Sorry I couldn't make it the other Day to the meeting. Happy to help with
DBA in anyway I can.
Regards,
XXX
-----Original Message-----
From: Wong, Peter [<mailto:Peter.Wong@auspost.com.au>]
Sent: Tuesday, August 24, 2004 2:41 PM
To: XXX
Subject: Survey Participation
Sorry I missed you at the last mentoring meeting. The purpose of this e-mail
is to invite you to participate in a research on Business Ethics. This
research is part of my Doctor of Business Administration study at the
Southern Cross University.
Peter Wong
4. Informed Consent
You are invited to participate in a study of Business Ethics. This study is part of the Doctor of
Business Administration programme (DBA) conducted by the Southern Cross University. We hope
to learn how ethical decisions are made by managers when facing an ethical dilemma; to investigate
if business and ethics can be reconciled.
We would appreciate your participation in this research project. The following gives an outline of
this project.
Procedures to be followed:
A face to face interview is conducted at a mutually agreed venue and time. A copy of the
questionnaire will be provided to you in advance. The interview will be taped and if recording is not
possible then detailed notes will be taken. A complete taped interview will be reproduced verbatim.
The interview will take between one to two hours. This interview is on a voluntary basis; hence no
monetary compensation is involved.
At the data collection stage, it is the researchers intention to keep the data at 20 Talinga Street
CARLINGFORD NSW 2118. This is to avoid any loss of data in transit and to ensure data security.
Upon completion of the thesis, the collected data will be transferred to the DBA Coordinator at the
Tweed Heads campus of the Southern Cross University to be kept in a secure place for five years as
required by the Human Research Ethics Committee of the university...
Freedom of Consent:
You are free to discontinue participation at any time during this research.
Inquiries:
We welcome any questions regarding this research at any time. Please communicate these questions
to:
Supervisor Details
A/Prof. Shankar Sankaran
Graduate College of Management-Tweed Heads
Southern Cross University
Phone: (07) 5506 9323
E-mail: ssankara@scu.edu.au
Researcher Details
Peter W Wong
DBA Candidate
Graduate College of Management-Tweed Heads
Southern Cross University
PO Box 42
TWEED HEADS NSW 2485
OR if you have any problems associated with this project, please contact:
Mr J. Russell
Ethics Complaints Officer
Graduate Research College
Southern Cross University
PO Box 157
LISMORE NSW 2480
Phone: (02) 6626 3705
Email: jrussell@scu.edu.au
I have read the information above, or contained in a separate information sheet entitled
Name of Subject:
I certify that the terms of the form have been verbally explained to the subject, that the subject
appears to understand the terms prior to signing the form, and that proper arrangements have been
made for an interpreter where English is not the subject's first language. I asked the subject if she/he
needed to discuss the project with an independent person before signing and she/he declined (or has
done so).
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances - Comments
(e.g. Common (number) Business Decision Ethics be role of influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
A1 integrity Business Ethics A1a Y
A15 Personal ethics plays a part of Personal Value P1c Y Personal Value leads
leading people down the path of to Business ethics
business ethics
A16 Personal value both at work and at Personal Value P1d Y Personal Value leads
home to Business ethics
A17 Brought up right you have the right Personal Value P1e Y Personal Value leads
set of values and morals to Business ethics
A18 It is not right or wrong, it is a bit Personal Value P1f Y Personal Value-Can
like nature and nuture ethics be taught?
A19 I'm not going to sit in judgement. Personal Value P1g Y Y Y No one definition on
Everyone has their own definition what is right or not-
of what is right or wrong each individual has
his/her own
interpretation
A20 One was the bottom-line, other Ethical Dilemma Ed1a Y
higher ethical position
A21 Pragmatic-return to shareholder is Ethical Dilemma Ed1b Y
a very high priority
A22 It does not look good for an Ethical Dilemma Ed1c Y
organisation to be that ruthless
A23 Sound practice that you operate Reconciliation R1a Y Y Public Relations View
appropriately
A24 Senior management made the Ethical Decision D1a Y
decision
A25 Always try to make the right Ethical Decision D1b Y Y
decision
A26 Best possible outcomes so I think Ethical Decision D1c Y
morally we do do that
A27 Global environment-outsourcing IT Ethical Decision D1f Y Y we need to
to Asia resulting in loosing jobs outsource-but in
Australia I try to build
a bit more meat in
their job
A28 A lot of what we are out-sourcing Ethical Decision D1g Y Y Business
is not really the highest skilled set environmental
roles in my teamadd more value impact-rationalising
to the business requirements out source decision
A29 Economic scale; they never have Ethical Decision D1h Y Y Y Rational Decision
to worry about sick leave, annual Cost-benefit analysis
leavelocally I have all these
issues to deal with
A30 I look after my people (local) by Ethical Decision D1i Y Y
making their job more interesting
A31 I am freeing myself up to go and Ethical Decision D1j Y Y Y Rational Decision
look for other opportunities whilst I Cost-benefit analysis
might have down size
A32 I might have down sized in some Ethical Decision D1k Y Y Rational Decision
areas I am actually up sizing in Cost-benefit analysis
othersso I think it is fair to say
that it is not all one way traffic
A33 I have to balance Reconciliation R1b Y
A34 I am giving my guys more Self-Interest SI1a Y To look after my
intellectual stimulationthat people for a win-win
makes them much more market situation
worthy
A35 In a human nature sense (bring in Self-Interest SI1b Y
new systems) a level of
uncertainty for myself and the staff
A42 I have never had to steal, I found a Personal Value P1m Y Y Personally principle
way to cope based but could be
situational for others
A43 I think it depends on what you Situational S1a Y Y
canyour own resources to get
through a situation or crisis
A44 I think it depends on the person in Situational S1b Y Y Depends on
the organisation and their value individual value
system that sometimes drives the
outcomes that the organisation
makes.
A45 The higher people are the further Consequence C1a Y
they fall when they do unethical
thing
A46 I would not say that few CEOs Consequence C1b Consequence for
lose their job because of ethical unethical behaviour
situations
A47 Doing things that are not ethical Consequence C1c Consequence for
then that behaviour is not tolerated unethical behaviour
no matter what level you are in the
organisation
A48 Someone is going to have to pay Consequence C1d Consequence for
the pricethe higher you are the unethical behaviour
harder you fall
A49 If you are on my watch and do Consequence C1e Consequence for
something that is an unacceptable unethical behaviour
practise then you pay the price
A50 There is no one set of rules for us Personal Value P1n Y Principled based
and another sets for someone
higher
A51 I would not do unethical thing even Personal Value P1o Y Principled based
asked by the Managing Director
A52 I encourage everyone, it does not Ethical Decision D1l Y Principled based
matter how high up in the
organisation someone is, if they
ask you to do something youor
are not comfortable with or you
would not do it yourself, do not do
it!
A53 They might put your career on hold Consequence C1f Y Y Principled based
for a while and give you a tough
time but they are not going to fire
you because they don't have any
grounds in reality
A54 I will survive no natter where I Consequence C1g Y Principled based
goeven if I have to work at
Woolies
A55 I can do a job and I do not care Personal Value P1p Y Principled based
what it is but if I had to
compromise my values system I
could not do that
A56 You do not pay me to be a Personal Value P1q Y Principled based
different person, to change my
personality or compromise my
integrity
A57 I do buy goods and services that Ethical Decision D1l Y Y
sometimes may be produced in a
sweat shop
A58 At least they are getting pay, may Ethical Decision D1m Y Y Y
be that is my rational mind coming
into play rather than my value
system.
A59 I don't agree with it (sweat shop) Ethical Decision D1n Y Y Y Rationalised
but one person is not going to unethical behaviour
change that sort of behaviour
A60 I will buy the cheaper pairbut I Self-interest SI1d Y Y Cheaper-rationalised
am not harming anyone by not harming
anyone
A77 Give and take and it's about the Reconciliation R1d Y Y
balance
A78 I don't tend to ask their permission. Ethical Decision D1i Y Y Y
I tend to do what works best for
meas long as I am not
compromising the organisation,
breaking any rules or
compromising my staff.
A79 I am not breaking any rules Self-Interest SI1e Y Y It is just my values
technicallyI just want to be
flexible
A80 Accepting gifts should be Business Ethics A1g Y
transparent
A81 Staff accountable for their actions Business Ethics A1h Y
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances Comments
(e.g. Common (number) Business Decision Ethics be role of - influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
B34 Then you get your employees, their Personal P1c Y Y Y Personal value
values, environmental values value
B35 Do they want me to have an Business Bih Y Y Y
environmental or do they want me to Value
optimise my financial returns? It's a
good question
B36 and then you have your customers, Business B1i Y Y Y
brand Value
B37 Boards have a legal responsibility to Business B1j Y Y Y
look after the shareholders' interests Value
B38 If the employees are not happy then I Business B1k Y Y Y Y CEO Ethical dilemma
am not going to satisfy the Value (B35-B38)
shareholders returns
not?
B49 John Howard gives all these jobs to his Personal P1j Y Y Personal Principle
mates, is it unethical? Depends where value
your values are
B50 Businesses are reflectors they are not Personal P1k Personal Principle
originators of values and ethics value
because they reflect the law
B51 ASX companies behave more ethically Consequence C1a Y Y Consequence
than any other groupbecause they
are more transparent and the penalties
are huge-goal
B52 AWA directors should be in goals for Consequence C1b Consequence
three months
B53 Peter Costello would be in goal now Consequence C1c Consequence
because he lost $6 billion of our money
and he did not know this for 3 years!
B54 Small businesses are different, they Personal P1l Y
are up against very tough survival value
mode. I think their ethics and values
and approaches would be different
because they re more like individuals,
to beat the tax system would be
considered fair game
B55 If you are a one man business, if you Business A1r Y Y Y Unethical behaviour
lost your reputation you could change Ethics
to another different town and you are
fine
B56 I think you are allowed to minimise it Business A1s Y Y Y
(tax) Do I pay cash to my gardener? Ethics
B57 I suppose ethically you shouldn't pay Business A1t Y Y Y
cash, whether he declares it Ethics
B87 If they are doing it for the right reason Business A1z Y
then that's good but you need Ethics
transparency
B88 Company's ethics have to reflect those Business A2a Y
four groups, its not an individual thing Ethics
but a collective of what is right for the
company and what are those four
constituents telling me
B89 The bottom line is not to break the law Ethical D1j Y Principle
Decision
B90 If you break the law I will fire you Consequence C1d Y Consequence
B91 (About Fred lost his job due to Ethical D1k Y Rational,
outsourcing) Off-shoring is beneficial to Decision Cost/Benefit
all countries economically, I will deal
with Fred sensitively but proceed
because I am ticking more boxes on
the plus than the negatives
B92 It is a balancing act. We are moving Ethical D1l Y Rational,
globally and can't be out of itAnd if Decision Cost/Benefit
you treat your people will and
sensitively. Its for the better good
B93 CEO (Telstra) is very decent, highly Personal P1p
principled in what is right. value
B94 Ito balance all these thingsIt is a Reconciliation R1b Y Rational
balance
B95 As soon as there is a 10% Situational S1e Y Y
unemployment then everyone will say
forget about the forest we want jobs.
We are starving
B96 We have to change with the Situational S1f Y Rational
communityto optimise my
shareholders returns I have got to
have happy employees
B97 The ethical question is when they set Situational S1g Y Rational
up the fund (James Hardie) did they
know they were under-funding it?
B98 If they funded it to the best of their Ethical D1m Y Y Rational
ability and then subsequently Decision
restructured, for good reasons then
they behaved ethically
B99 If they knew they had under-funded it Ethical D1n Y Y Rational
and they've got those people dying Decision
and not getting the compensation that
they legally and ethically deserve, then
they behaved appallingly
B100 The NSW government also involved in Situational S1h Government
this. They used those products in their involvement
buildings, where is your (their)
responsibility?
B101 Also they (NSW government) set the situational S1i Government
standards, they are accountablethey involvement
are involved too
B102 We don't know how they made that Ethical D1o Y Y Require more facts
decision (James Hardie)so probably Decision
they behaved badly but I can't be sure
B103 It is very difficult because legally Ethical D1p Y Y Legal but unethical
they've done nothing wrong Decision
B104 I mean its buyer beware when you buy Ethical D1q Y Y Y Legal but unethical
a house (LJ Hooker case) Decision
B105 There is no duty to discloseI would Personal P1q Y Y Legal but unethical
not call it unethical value
B106 It is not lying, that didn't come up. Personal P1r Y Y Y Legal but unethical
value
B107 So if you are never told why is it Personal P1s Y Y Legal but unethical
unethical? value
B108 It's not unethical because the standard Personal P1t Y Y Legal but unethical
of the behaviour is that you don't tell. value
B109 Business ethics I think is a very Business A2b Y Y
complicated thing Ethics
B110 It is becoming more important and I Reconciliation R1c Y
think businesses are becoming more
interested in the complexities of these
competing society's values and ethics
and being correct and honest and
transparent..
B111 If the values are absolute then there is Business A2c Y
no conflict Ethics
B112 The only absolute thing is when you Business A2d Y Principle
break the law and then that is very cut Ethics
and dried
B113 In fact most employees are the same if Personal P1u Y
you support them and encourage value
them-is that lying? Well yeah it
probably is. Is that wrong? No
definitely not
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The role 5. Comments
(e.g. Commo (number) Business Decision Ethics be of self- Circumstances -
A1) n Ethics? Making reconciled? interest influence on
Thread Process ethical
behaviour
C1 Individual level is sort of a moral fibre that Business A1a Y
makes up the individual Ethics
C2 This comes down to their work ethic, their Business A1b Y
belief, their values how they are as a Ethics
person
C3 True and honest which are reflected in the Business A1c Y
way they conduct themselves in the work Ethics
place
C4 Individual to fit in to some degree with the
Business A1d Y Business value and
company culture Ethics personal value
C5 We are here to make money not friends Business A1e Y Y
Ethics
C6 We (the company) conduct ourselves quite Business B1a Business Value
ethically Value
C7 As a government business enterprise we Business A1f Y
would be in a very difficult to explain our Ethics
position if we didn't actually behave
ethically
C8 You are in the business to make money Business A1g Y Y
but do not disclose everything Ethics
C9 Whether this is ethical or not is another Business B1b Y Y Y Situational
thing Value
C10 We do not rip people off Business A1h Y
Ethics
C11 Ethically once again comes down to I Business A1i Y
guess not doing the wrong thing obviously Ethics
not breaking the law
C12 Having said that there are some laws that Business A1j Y Y Illegal but ethical
could be broken and still deem to be Ethics
ethical
C13 The individual might just get on with their Ethical D1a Y Y
day .. Decision
C14 As an organisation, it turns a blind eye- Ethical D1b Y Y
there is a particular business we make Decision
million and millions of dollars and it is to do
with lottery tickets in Japan and selling
lottery tickets from here into Japan.
C15 To the best of my knowledge, it is illegal. Ethical D1c Y Y
Decision
C16 This "illegal' business represents quite a Ethical D1d Y Y Business self-interest
sizeable lump of our international business Decision even it is illegal
C17 Well some of us look into it but decided to Ethical D1e Y Y
turn a blind eye-what is inside of the Decision
envelope is not our business
C18 I would say I would not get involve in this Personal P1a Y Y Individual value
value
C19 Senior Management is aware of this but Ethical D1f Y Y Y
they are hungry for business Decision
C20 That was a situational factor Ethical D1g Y Y Y Situational
Decision
C21 Cost Benefit as well. Ethical D1h Y Y Cost-benefit analysis
Decision
C22 It could come down to an individual level Ethical D1i Y Y
cause a sale of that size would have Decision
implications for the sales representative
C23 How are you going to explain if you have a Business B1c Y Y Y Business self-interest
billion dollar target and you missed out of Value even it is illegal
,say 10 million
C24 The board has demanded a 6% growth Business B1d Y Y Y Senior management
and we are going backward Value demand
C25 I could then weighted it up (if I were the Ethical D1j Y
account manager for the lottery tickets) Decision
against the facts
C26 But they probably told me it is OK and Ethical D1k Y Y
someone would have to do it anyway Decision
C27 I would then discuss this with senior Ethical D1l Y Y Rational decision
management Decision making c25-c27)
C28 I would go with whatever the manager Ethical D1m Y Y Y
said. Decision
C42 I would try to present a rational argument, Personal P1e Y Rational situation
a situation about people will loose their value analysis
livesand present a solution
C43 If I can cover my arse, that would be Personal P1f Y Y
important to me now value
C44 If you were someone like me with a Personal P1g Y Y Self interest to protect
sizeable mortgage, you just want to keep value one's financial position
your powder dry, your head low and you
get on with it.
C45 But you try and make a decision to cover Ethical D1t Y Y
your arse to the best advantage but Decision
hopefully helps out the customer or the
person you believe you were acting
ethically for. It is not in every single case
C46 It is a very complex situation essentially Personal P1h Y Y
you are looking out for number one value
C47 I would probably stand on it ($80 on the Ethical D1u Y
floor) Decision
C48 If I could see that no body around was Ethical D1v Y Y
honestly attached to that $80 I would Decision
probably stick it in my pocket, as discretely
as possible
C49 I might feel bad about it for a second at Personal P1i Y Y
some pointbut I would take it anyway value
C50 Avoiding risk Consequ C1a Y Y
ence
C51 If for example there's some old guy who is Ethical D1w Y Y Situation might
down at the bar.I could quite clearly see Decision change if
that he dropped a pack of cigarettes, $80 circumstance changes
and quite clearly that he is missing his
pocketsI would probably return it
C52 When you are from the country you tend to Personal P1j
help others out value
C53 The guy had lost his wallet and to me it Personal P1k Personal value-
was just the right thing to do to chase him value intuition
C54 I would have to make a decision (If I lost Situation S1a Y Y Y
the job and found a wallet with cash) about al/Perso
whether to keep a penalty or not because it nal value
was quite easy to say look I found this but
there was no money in it
C85 Our business is to move paper around and Business B1p Y Contradiction
people have to cut down trees to write Value
letters
C86 We are out here advocating a certain Business B1q Y Y Y Corporate
number of reductions in greenhouse Value responsibility is to
emissionat the same time we are make a profit
generating hundreds and hundreds of
fresh direct mail there is an ethical
dilemma. If management does not provide
us with those ideas and that
direction...then there will be 37,000 people
out of work
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances Comments
(e.g. Common (number) Business Decision Ethics be role of - influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances Commetns
(e.g. Common (number) Business Decision Ethics be role of - influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
E55 community
E56 (stealing) This is difficult because I Personal P1u Y Y Principle
am scrupulously honest in those Value
situations
E57 ..Would do whatever it takes I Ethical D1w Y Y Y Situational changes
supposeI would not hold them up Decision / influence behaviour
situational
E58 ..(money on the floor)I will pick that Situational S1a Y Y Y Self-interest
up and I will claim that
E59 .I have also in the situation where I S1b Y Y Y
found property in the street and
taken it to the police
E60 Neither you can use that amount Situational S1c Y Y Y
but if I find a lot of money in the bag
or something like that I would take
that to the police
E61 I strongly believe ethics exist; it is Business A1k Y Y
not oxymoron Ethics
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances Comments
(e.g. Common (number) Business Decision Ethics be role of - influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
F11 This needs to be handled in the Ethical D1e Y Balance short term vs
right way Decision Long term
F12 Johnson and Johnson would never Business A1g Y Y
have to go through this state Ethics
F13 Strong Reputationfine set of Business A1h Y Y
values Ethics
F14 I was a person in the chain Personal P1a Y Personal value
Value/Busi
ness Value
F15 The Tylenol incident was not cost Ethical D1f Y Y Competitor did not take
benefit -it was safety issue Decision advantage of the
situation
F16 Everyone got behind the company Ethical D1g Y Personal Value, situation
Decision demands action.
F22 He was a professional and was Ethical D1k Y Y Y Business profit (Interest)
respected, he provided Decision/B
usiness
Value
F22 us with an opportunity to save
money, a 33% vs 10% duty
F23 Overseas Political Situational S1b Y Y Y Business Value-
interferencethe family had fingers connection
in
F23 every thing, it was not necessarily
trying anybody but which is
F23 knowing some body
F24 You had to pay more to get it Ethical D1l Y Y Cost of doing business
Decision/Si
tuational
F25 I would not in that case (pays to get Ethical D1m Y Personal value
something done) Decision/P
ersonal
value
F26 Business is charged with making a Business D1n Y
profit but making a profit is nothing Ethics /
unethical Business
Value
F27 I promise to maximise profit but as Business D1o Y
long as I do not do Ethics /
Business
Value
F27 the things that someone says it is
unethical
F28 I have no problems of loosing jobs Ethical D1p Y Personal value
overseas Decision
F29 My company does not Ethical D1q Y Business Decision
manufacturing anything in Australia Decision
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The 5. Circumstances Comments
(e.g. Common (number) Business Decision Ethics be role of - influence on
A1) Thread Ethics? Making reconciled? self- ethical behaviour
Process interest
management
I24 Many people are good on their Personal P1a Y Y Personal principle value
wordsand will operate in Value
I24 an ethical manner
I25 in a government organisation Business B1c Y
where we used to have a huge Value
I25 influence on behaviour
I26 Most of the organisations lose the Business B1d Y
best guy beyond the Value
I26 cash register
I27 Corruption in Aus does not Ethical E1g Y Y Business value
coincide with Australia Decision
I28 If I wish to carry on business in Self interest Se3 Y Y Y
China that is fine (to pay a bribe)
I28 but not in Australia
I29 I do not see there has been ethical Self interest Se4 Y Y Y
conflict at all on paying
I29 bribe or paying a government
official
I30 I see an ethical dilemma if you Personal P1b Y Personal value vs
involve activities that have a Value business value
I30 negative impact on society
I31 It seems to be the modern Ethical E1h Y Business Value/Culture
countries tend to have more Decision
corruption
I32 (Pinto) I just saw there was a Ethical E1i Y Y Business Value/Culture
culture in that division that went Decision
I32 along with it and become sort of
locked
I33 (Pinto) was a case of cultural Ethical E1j Y Y Business Value/culture
decision rather than my own Decision
decision
I34 (Pinto) It is the culture that Ethical E1k Y Y Y Business Culture/Group
everyone is doing it. also like Decision Pressure
I34 the Hardie case, whereas every
one know but go along with it
I35 Looking after himself not the Self interest Se5 Y
company
I36 I think that is terrific that Indonesia Business B1c Y Y Business Culture
operate to Australian value influence
I37 safety standards
I38 You need to improve the image, Business B1d Y
improve the company so that Value
I38 they will sort the issue with the cost
I39 (Will you resign?) pool the idea Self interest Se6 Y Did not answer the
question directly-self
interest?
I40 to determine behaviour, personal Business B1e Y Y Business Value/
values or ethics no doubt Value Personal Value
I41 I do not see any unnecessary Reconciliation R1e Y See no conflict
conflict between business and
personal
I41 ethics
I42 I lot of people build their Business B1f Y Y
organisation they say reflect their Value
Personal ethics
I43 ,,,did that by successful business Reconciliation R1f Y
and sound ethical value
I44 (Male vs female decision) You Ethical E1l Y Male vs female
need to get the whole picture Decision
J29 values
J30 (On the Challenger) I will put some Ethical D1h Y
pressure on management Decision
J31 We make a decision we do not consider Ethical D1i Y Rational vs Feminine
emotion and Decision Decision
J31 emotional effect. I do not think many make
decisions
J31 where they consider emotional effects
J32 (When during with staff emotional issue) Ethical D1j Y Feminine Decision vs
in this particular Decision Rational
J32 case, I was moved with my emotion even
though it was
J32 not conforming with the rules
ID Words Code / Code 1. What is 2. Ethical 3. Can Bus. 4. The role 5. Comments
(e.g. Common (number) Business Decision Ethics be of self- Circumstances -
A1) Thread Ethics? Making reconciled? interest influence on
Process ethical
behaviour
K1 Look after corporate entity, how the Business A1a Y
organisation conducted Ethics
K1 in terms of customers and
competition. You are not trying
K1 to cheat the customer
K2 (When making a purchase) I felt Business A1b Y Y Unethical behaviour in
cheated and am not going back Ethics the participant's view
K2 It is unethical
K3 He betrayed my trust if he had met Business A1c Y Consequence due to
my need and I was prepared Ethics unethical behaviour
K3 to pay.
K4 Be honesty, be honest Business A1d Y
Ethics
K5 (on a particular change programme) Ethical D1a Y Y Rational Decision
we look a t a range of implications Decision
K6 When I make a decision, I consider Ethical D1b Y Y Feminine?
the individual well-being Decision
K7 I also look at the cost value-how Ethical D1c Y Y Rational Decision
much money we can save Decision
K8 (In moving all staff into one building) Ethical D1d Y Feminine Decision-
sometimes we make Decision hidden benefits
K8 a loss but he benefit could be a
better working conditions
K8 better accommodation, improving
morale and attitude and
K8 reducing workplace injury
K9 I will comply with the organisation Ethical D1e Y Principle
has rules and regulations Decision
K28 This decision was not based on the Business B1c Y Consequence/Personal
situation at the time Value value
K28 rather it was risk management
K29 (James Hardie) is not ethical Ethical D1k Y Y Y
Decision
K30 Compensate and they have to fix Personal P1g Y Y Y Consequence
the problem Value
K31 Management mishandled the Personal P1h Y Y Y Consequence
situationhe was (MD) was Value
competent
K31 enough to do what was right for the
organisationbehave
K31 ethicallythat could result in criminal
charges
K32 (if money on the floor) I will give it to Ethical D1l Y Personal value
the staff Decision
K33 If it is $20 on the street. I will pocket Ethical D1j Y Y Y
it Decision
K34 There are two sets of value-personal Business B1d Y Y Y Personal value
and business Value
K35 (Making products overseas using Business B1e Y What is legal may not be
slave labour) It is unethical Value ethical
K35 but if it is complying with the local
law
K36 (Further comments) ..in a sense it Situational S1c Y Ethical decision is not
was self interest. As we discussed necessary
earlier, sometimes you cannot make governed by cost benefit
a rational decision.
Sometimes you can not end a lie it could be intuition
saying cost benefit or
whatever people sacrifice for their
mightI do not think
they do cost analysisI think it is
just a reaction where people
do what is realistic
L27 I knew this beforehand. I knew this is Ethical D1f Y Y Y Personal Value vs
the way to bring the goods Decision Business Value
Circumstance
L27 to this country, you pay someone, and
everyone knows this
L27 is the answerbut you are not happy
L28 (Immigration officials in Russia) they Ethical D1g Y Y Y Ethical Dilemma,
blackmail you. Decision Personal Value
L28 .,..if you want I can give you a receipt
but you may not be going on the
L28 same airlinethat is what we do in
Russia
L29 Sometimes lying or breaking a promise Situational S1b Y Circumstances.
may be a good thing Exception to the rules
N59 (Female Commander) I could not put Personal P1j Y Can't distinguish
my hand on my heart Value
N59 and say that I have noticed any
difference at all. ..People are
N59 selected on the basis that they are
highly confident..
N59 I don't think there is much a difference
like there is in civilian
N59 organisationsMy impression is that
the males are far more focussed
N59 on process, policy and procedures and
women are more focussed on
N59 human feelings and those sorts of
issues and that is supposedly typical
N59 in most aspects of male and female
behaviour
N60 Resolve the problem sort of approach Personal P1k Y Male vs female
(female) whereas men are more Value behaviour
N60 likely to say the person is not
performing, sack them
N61 We go through ethics training in the Business B1i
army and that is everybody from Value
N61 Private through to GeneralSo there
is huge awareness of ethics
N61 and it is part of our culture, in particular
in officer ranks that ethics is
N61 part and parcel of every commissioned
officer. So it is ingrained in us
A1d (C4) [1....] Business Ethics Individual fo fit in to some degree with the company culture
Business value and
personal value
A1e (C5) [12...] Business Ethics We are here to make money not friends
A1f (C7) [1....] Business Ethics As a government business enterprise we would be in a very difficult to explain our position if we
didn't actually behave ethically
A1g (C8) [12...] Business Ethics You are in the business to make money but do not disclose everything
A1a (D1) [1....] Business Ethics different lives governed by nature, the people and the work
A1j (D10) [1....] Business Ethics Transparency
A1k (D11) [12...] Business Ethics Our costs are higher than the Private sector because many
Regulatory
requirements
(D12) [.....] Business Ethics Imposed our professional standard to other developing countries
A1m (D13) [1....] Business Ethics There are still no International accepted standard
A1n (D14) [12..5] Business Ethics It is heartbreaking because of costs we have to take chances
Cost Benefit, Risk
Management
A1o (D15) [1....] Business Ethics We have been commercialized and needed to compete in
Ethical Dilemma
A1b (D2) [1....] Business Ethics Medical ethics, medical obligation for professionals
A1c (D3) [1....] Business Ethics Develop code of conduct for our staff
A1p (D33) [1....] Business Ethics Declare gift
A1d (D4) [1....] Business Ethics Undergo formal induction program
A1e (D5) [12...] Business Ethics Staff discussion on codes, education, professional obligations
Ethical 1Education
A1f (D6) [1....] Business Ethics Breached conditions are sanctions
Consequence
A1g (D7) [1..45] Business Ethics the Pathology business was a shame, people went to jail
Unethical practice,
consequence
A1h (D8) [1....] Business Ethics Stringent requirements to meet legislative requirements
A1i (D9) [12...] Business Ethics Conduct ourselves as ethical and went with the business
A1a (E1) [1....] Business Ethics Business ethics is what is in your mind..
A1b (E2) [1....] Business Ethics Able to withstand any "Why you decided to go ahead?"
A1c (E3) [1....] Business Ethics Something innate
A1d (E4) [1....] Business Ethics Background, family values and experience you had in work
Value
A1g (E46) [12.4.] Business Ethics (Pinto) It gets back to ethics versus company profitability