Crane and Matten

Business Ethics (3rd Edition)

Chapter 4

Descriptive Ethical Theories

Descriptive business ethics theories seek to

describe how ethics decisions are actually
made in business, and what influences the
process and outcomes of those decisions.

What is an ethical decision?

Main factors in deciding the moral

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

Models of ethical decision-making

Stages in ethical decision-making

Ethical decision-making process
Recognise
moral
issue

Make
moral
judgement

Establish
moral
intent

Engage in
moral
behaviour

Source: Derived from Rest (1986), as cited in Jones (1991).

Relationship with normative theory

The role of normative theory in the stages of
ethical decision-making is primarily in relation to
moral judgement
Moral judgements can be made according to
considerations of rights, duty, consequences, etc.
Commercial managers tend to rely on consequentialist
thinking
However, the issue of whether and how normative theory
is used by an individual decision-maker depends on a
range of different factors that influence the decisionmaking process

Influences on ethical decision-making

Two broad categories: individual and situational
(Ford and Richardson 1994)

Individual factors - unique characteristics of the

individual making the relevant decision
Given at birth
Acquired by experience and socialisation

Situational factors - particular features of the context

that influence whether the individual will make an
ethical or unethical decision
Work context
The issue itself including
Intensity
ethical framing

Framework for understanding ethical

decision-making
Individual factors

Recognise
moral issue

Make moral
judgement

Establish
moral intent

Situational factors

Engage in
moral
behaviour

Limitations of ethical decision-making

models
Models useful for structuring discussion and
seeing the different elements that come into play
Limitations
Not straightforward or sensible to break model
down into discrete units
Various stages related or interdependent
National or cultural bias

Model is intended not as a definitive

representation of ethical decision-making, but as
a relatively simple way to present a complex
process

International perspectives on ethical

decision-making
Research on individual factors influencing
ethical decision-making has a strong US and
Asian bias
Consistent with choice within constraints

Research on situational factors originated

by European authors
Consistent with concern for constraints
themselves

Individual influences on ethical decisionmaking

Individual influences on ethical decision-making

Age and gender

Age
Results contradictory
However experiences may have impact

Gender
Individual characteristic most often researched
Results contradictory

These categories too simplistic

National and cultural characteristics

People from different cultural backgrounds likely
to have different beliefs about right and wrong,
different values, etc. and this will inevitably lead
to variations in ethical decision-making across
nations, religions and cultures
Hofstede (1980; 1994) influential in shaping our
understanding of these differences our mental
programming:

Individualism/collectivism
Power distance
Uncertainty avoidance
Masculinity/femininity
Long-term/short-term orientation

Education and employment

Type and quality of education may be
influential
E.g. business students rank lower in moral
development than others and more likely to cheat

Amoral business education reinforces myth

of business as amoral

Psychological factors
Cognitive moral development (CMD) refers to
the different levels of reasoning that an individual
can apply to ethical issues and problems
3 levels (details over the next two slides)
Criticisms of CMD
Gender bias
Implicit value judgements
Invariance of stages

An individuals locus of control determines the

extent to which they believe that they have
control over the events in their life

Stages of cognitive moral

development (I)
Level

Stage
1

Preconventional
2

3
II Conventional
4

Obedience
and
punishment
Instrumental
purpose and
exchange

Interpersonal
accord,
conformity
and mutual
expectations
Social accord
and system
maintenance

Explanation
Individuals define right and
wrong according to expected
rewards and punishments from
authority figures

Illustration
Whilst this type of moral reasoning is usually
associated with small children, we can also
see that businesspeople frequently make
unethical decisions because they think their
company would either reward it or let it go
unpunished (see Gellerman 1986).
Individuals are concerned with
An employee might cover for the absence of
their own immediate interests and a co-worker so that their own absences might
define right according to whether subsequently be covered for in return a
there is fairness in the exchanges you scratch my back, Ill scratch yours
or deals they make to achieve
reciprocity (Trevio and Nelson 1999).
those interests.
Individuals live up to what is
An employee might decide that using
expected of them by their
company resources such as the telephone, the
immediate peers and those close
internet and email for personal use whilst at
to them
work is acceptable because everyone else in
their office does it.
Individuals consideration of the A factory manager may decide to provide
expectations of others broadens to employee benefits and salaries above the
social accord more generally,
industry minimum in order to ensure that
rather than just the specific
employees receive wages and conditions
people around them.
deemed acceptable by consumers, pressure
groups and other social groups.

Source: Adapted from Ferrell et al. (2002); Kohlberg (1969); Trevino and Nelson (1999)

Stages of cognitive moral

development (II)
Level

III

Stage

Explanation

Illustration

Social
contract
and
individual
rights

Individuals go beyond identifying

with others expectations, and
assesses right and wrong
according to the upholding of
basic rights, values and contracts
of society.

The public affairs manager of a food

manufacturer may decide to reveal which of
the firms products contain genetically
modified ingredients out of respect for
consumers rights to know, even though they
are not obliged to by law, and have not been
pressurised into by consumers or anyone else.

Universal
ethical
principles

Individuals will make decisions

autonomously based on selfchosen universal ethical
principles, such as justice,
equality, and rights, which they
believe everyone should follow.

A purchasing manager may decide that it

would be wrong to continue to buy products
or ingredients that were tested on animals
because he believes this doesnt respect
animal rights to be free from suffering.

Postconventional

Personal values, integrity & moral

imagination
Personal values

an enduring belief that a specific mode of conduct or

end-state of existence is personally or socially preferable
to an opposite or converse mode of conduct or endstate (Rokeach 1973:5)

Personal integrity
Defined as an adherence to moral principles or values

Moral imagination

Concerned with whether one has a sense of the variety

of possibilities and moral consequences of their
decisions, the ability to imagine a wide range of possible
issues, consequences, and solutions (Werhane, 1998:76)

Situational influences on
decision-making

Situational influences on ethical

decision-making

Moral Intensity
Jones (1991:374-8) proposes that the intensity of
an issue will vary according to six factors:

Magnitude of consequences
Social consensus
Probability of effect
Temporal immediacy
Proximity
Concentration of effect

Moral framing
The same problem or dilemma can be perceived
very differently according to the way that the
issue is framed
Language important aspect of moral framing (using
moral language likely to trigger moral thinking)

Moral muteness (Bird & Walters 1989) because

of concerns regarding perceived threats to:
Harmony
Efficiency
Image of power and effectiveness

How ethical decisions are justified:

rationalization tactics

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

Authority and Bureaucracy

Authority
People do what they are told
to do or what they think
theyre being told to do
Recent survey of government
employees (Ethics Resource
Center, 2008: 9):
20% think top leadership is
not held accountable
25% believe top leadership
tolerates retaliation against
those reporting ethical
misconduct
30% dont believe their
leaders keep promises

Bureaucracy

Jackall (1988), Bauman

(1989, 1993) and ten Bos
(1997) argue bureaucracy
has a number of negative
effects on ethical decisionmaking
Suppression of moral
autonomy
Instrumental morality
Distancing
Denial of moral status

Work roles and organizational norms

and culture
Work roles
Work roles can
encapsulate a whole set
of expectations about
what to value, how to
relate to others, and
how to behave
Can be either functional
or hierarchical

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

National and cultural context

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

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