L4

Descriptive Ethical Theories

Learning Outcomes:
- Examine the question of how ethical and unethical decisions get made in the
workplace
- Review prominent ethical decision-making model
- Discuss the individual factors shaping ethical decision-making

Descriptive Business Ethics Theories:

Seek to describe how ethical decisions are actually made in business, and what influences
the process and outcomes of those decisions.
 Tells us what the business people actually do and more importantly why they do it.

Normative VS Descriptive:
• Normative theories - tell us what norms business people should follow in making
decisions

• Descriptive theories - tell us how business people actually make decisions and why
they do it
 practical understanding of how normative theories can be applied
 Help us to manage business ethics (need to know what shapes decision-making
before influencing it)

Recognising Moral Issues:

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

Model of Decision-Making:
Models of decision-making show
- Stages in decision making
- What factors influences the process

Perspectives on Ethical Decision-Making:

Rationalist
• Logical reasoning approach (awareness; judgement; intent; behaviour)
• Most people use this approach
Intuitionist
• Moral intuition is important
• Quick, emotion based
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Framework for Ethical Decision-Making:

 Reaching one stage does not mean you will move to the next

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 eg. General
motors decision to reposition fuel tank
• There are many factors that make individual to make wrong decisions.
• whether and how normative theory is used by an individual decision-maker
depends on a range of different factors that influence the decision-making
process

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
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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 by birth (age, gender..)
• Acquired by experience and socialisation (education, personality,
attitude
• Situational factors - particular features of the context that influence whether the
individual will make an ethical or unethical decision
• Work context (reward systems, job roles, company culture)
• The issue itself (intensity and ethical framing)

Framework for Understanding Ethical Decision-Making (Rest, 1986)

International Perspectives on Ethical Decision-Making:

• Research on individual factors influencing ethical decision-making has a strong US
and Asian bias
Eg. Philip Zimbardo focused on individual differences
• Research on situational factors originated by European authors
Eg. Max Weber spoke of actions of bureaucratic organisations that were
guided by ethics of absolute ends or ethics of responsibility
Eg. Bauman (1991) explained how bureaucratic organisations neutralise
moral impulse of employees
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Individual Influences on Ethical Decision-Making:

Individual factors can tell us why some people get swayed into making the wrong decision

What are the factors?

1. Age and Gender: -

Age --> Research results are contradictory.
However, the experience of an individual may have an impact.
(The older you are the more ethical you may be?)

Gender --> Individual characteristics most often researched.

Results contradictory.
Feminist ethics has shown women act differently when faced with an
ethical dilemma.
(Are you more ethical if you are a woman?)

2. National & Cultural Characteristics: -

People from different cultural backgrounds likely to have different beliefs about right
and wrong
Hofstede (2010) said our ‘mental programming’ can be explained using the following
dimensions:
o Individualism/collectivism
o Power distance (how much power stratification is respected)
o Uncertainty avoidance (preference to abide by laws, codes)
o Masculinity/femininity (valuing money vs people)
o Long-term/short-term orientation
o Indulgence
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Cultural Dimensions:
• Individualism/collectivism – Acting to benefit oneself (eg. North America and
N.Europe) and society that works in groups (eg. Asia, Africa, southern Europe)
• Power distance – people accept hierarchy (eg. Asia, Africa) and where people
question hierarchy (eg. Anglo and Germanic)
• Uncertainty avoidance – people abide by regulation, laws, codes (eg. Latin
America, Japan) and others that accept differing thoughts (eg. Anglo, Nordic)
• Masculinity/femininity – valuing achievement, assertiveness, money (eg.
Japan) and valuing co-operation, caring, modesty (eg. Nordic)
• Long term/short term orientation – long term oriented culture that value
perseverance and thrift (eg. China) and short term orientation values
pragmatic problem solving (eg. US, Europe)
 These cultural dimensions are being weakened due to globalisation.

3. Education & Employment: -

 Type and quality of education may be influential
 E.g. In the past, business students ranked lower in moral development than
others
 The working environment in banking was related to a culture of greed (during
and before the financial crisis)
 Training and education in ethical decision making required for change

4. Psychological Factors: -
 Related to how people think
 Differences in how people think can help to understand ethical decision making
 Most common theory to explain how people think comes from Kohlberg (1969) -
Cognitive moral development (CMD)
 This theory refers to the different levels of reasoning that an individual can apply
to ethical issues and problems, depending on their cognitive capacity.

5. Cognitive Moral Development: -

Three broad levels
Level 1: the individual is self-interested and influenced by rewards and punishments
Level 2: Other people have an influence on their decision-making (expectations)
Level 3: the individual has autonomous decision-making based on rights and justice
 Each level has two stages

Level 1: Pre-conventional morality

Stage 1. Obedience and Punishment Orientation.
 Rules should always be followed because an authority says so or else they can be
punished
Stage 2. Individualism and Exchange.
 At this stage individuals recognize that authorities view is not the only point of
view, different individuals can have different viewpoints depending on their self
interests

Level 2: Conventional morality

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Stage 3. Good Interpersonal Relationships.

 People should live up to the values of family and community. Trust, empathy and
compassion for one another.
 Answers related to the approval of others.
Stage 4. Maintaining the Social Order.
 The individual becomes aware of the wider rules of society so judgments concern
obeying the rules in order to uphold the law and avoid guilt.
 Everyone obeys rules and laws. People always answer that it was wrong to steal
the drug because society will not function properly in an orderly way

Level 3: Post conventional morality

Stage 5. Social Contract and Individual Rights.
 People start to define what the good society is for them. Aware that while
rules/laws might exist for the good of the greatest number, there are times when
they will work against the interest of particular individuals.
 The issues are not always clear.
 Individual judgment is based on self-chosen principles, and moral reasoning is
based on individual rights and justice. Only a minority think through ethical
principles for themselves.
Stage 6. Universal Principles.
 People at this stage have developed their own set of moral guidelines which may
or may not fit the law. The principles apply to everyone.
 Universal principles E.g. human rights, justice and equality.
 The person will be prepared to act to defend these principles even if it means
going against the rest of society in the process and having to pay the
consequences of disapproval and/or imprisonment.

Criticism of Cognitive Moral Development:

• Gender bias
• Implicit value judgements (rights and justice are placed above other moral
values)
• Invariance of stages (assumes we go through these stages of moral
development; in different situations and times, moral reasoning can be
different)

6. Locus of Control: -
 An individual’s locus of control determines the extent to which they believe
that they have control over the events in their life (internal – external)
 A person with a strong internal locus of control will take more responsibility
for their action.
 A person with a strong external focus of control will blame luck or fate etc.

7. Personal values, integrity & moral imagination (direct effects on decision making): -
Personal values
Individual beliefs about desirable behaviours and goals that are stable over time and
which influence decision making
• Persist, influence behaviour, well being
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• Example: Equality, honesty, freedom, self-respect…

Personal integrity
Individuals adherence to a consistent set of moral principles or values – walk the talk
• Plays a role in whistleblowing

Moral imagination (ability to reflect)

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)