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mental values), but that one level generally predominates. By completing this instrument you will identify
your predominant level of values maturity. To determine your maturity level, refer to the self-scoring
instructions in Appendix 1. An exercise in the Skill
Practice section will help you develop or refine principles at the stage 5 and stage 6 levels of maturity.

ETHICAL DECISION MAKING

AND VALUES
In addition to its benefits for self-understanding, awareness of your own level of values maturity also has important practical implications for ethical decision making.
The American public rates the honesty, integrity, and concern for moral values of American business executives as
abysmal. A large majority of the public indicate that they
think executives are dishonest, overly profit-oriented, and
willing to step on other people to get what they want
(Harris & Sutton, 1995; Lozano, 1996). Although 9 out of
10 companies have a written code of ethics, evidence
exists to support public perceptions that these documents
are not influential in assuring high moral conduct.
In December 2001, Enron, the seventh largest
U.S. corporation, declared bankruptcy. Tragically, a
once great company has become a synonym for managerial greed and corporate fraud. The Enron debacle
spawned over 30 major pieces of federal legislation,
designed to clamp down on financial loopholes
exploited by Enron executives, as well as numerous
books and articles criticizing Enron-like unethical business practices (How Companies Lie: Why Enron is
Just the Tip of the Iceberg, Elliott & Schroth (2002);
Corporate Irresponsibility: Americas Newest Export,
Mitchell (2002)).
While Enron was arguably one of the largest corporate scandals in U.S. history, it is hardly the only
lapse of ethical judgment staining the image of business. Ford Motor Company refused to alter the dangerous gas tank on the Pinto in order to save $11 per
car. It cost Ford millions of dollars in lawsuits and cost
many people their lives. Equity Funding tried to hide
64,000 phony insurance claims, but went bankrupt
when the truth came out. Firestone denied that its
500-series tire was defective, but eventually took
losses in the millions when the accident reports were
publicized. A. H. Robbins knew of problems with its
Dalkon Shield for years before informing the public.
The billion dollars set aside for lawsuits against the
company was dwarfed by the actual claims, and the
company filed Chapter 11. E. F. Hutton, General
Dynamics, General Electric, Rockwell, Martin

Marietta, Lockheed, Bank of Boston, Dow Corning,

and a host of other firms have also been in the news
for violating ethical principles. One cartoon that seems
to summarize these goings-on shows a group of executives sitting at a conference table. The leader remarks,
Of course, honesty is one of the better policies.
Corporate behavior that exemplifies unethical
decision making is not our principal concern here.
More to the point is a study by the American
Management Association that included 3,000 managers in the United States. It reported that most individual managers felt they were under pressure to compromise personal standards to meet company goals
(Harris & Sutton, 1995). As an illustration, consider the
following true incident (names have been changed).
How would you respond? Why?
Dale Monson, a top manufacturing manager
at Satellite Telecommunications, walked into
the office of Al Lake, the head of quality control. Dale was carrying an assembled part that
was to be shipped to a customer on the West
Coast. Dale handed Al the part and said,
Look Al, this part is in perfect shape electronically, but the case has a gouge in it. Ive
seen engineering and they say that the mark
doesnt affect form, fit, or function. Marketing
says the customer wont mind because they
are just going to bury the unit anyway. We
cant rework it, and it would cost $75,000 to
make new cases. We will only do 23 units,
and theyre already made. The parts are due
to be shipped at the end of the week. Al
responded, Well, what do you want from
me? Just sign off so we can move forward,
said Dale. Since youre the one who needs to
certify acceptable quality, I thought Id better
get this straightened out now rather than
waiting until the last minute before shipping.
Would you ship the part or not? Discuss this with
class members. Generate a recommendation for Al.
This case exemplifies the major values conflict
faced repeatedly by managers. It is a conflict between
maximizing the economic performance of the organization (as indicated by revenues, costs, profits, and so
forth) and the social performance of the organization
(as indicated by obligations to customers, employees,
suppliers, and so forth). Most ethical trade-offs are conflicts between these two desirable ends: economic versus social performance (Hosmer, 2003). Making these
kinds of decisions effectively is not merely a matter of
DEVELOPING SELF-AWARENESS CHAPTER 1

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