Part Three

The Decision
Making Process
Chapter 6
Individual
Factors: Moral
Philosophies And
Values
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Learning Objectives
• Understand how moral philosophies and values influence
individual and group ethical decision making in business
• Compare and contrast the teleological, deontological,
virtue, and justice perspectives of moral philosophy
• Discuss the impact of philosophies on business ethics
• Recognize the stages of cognitive moral development and
its shortcomings
• Introduce white-collar crime as it relates to moral
philosophies, values, and corporate culture

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Concept Definitions (1 of 4)
• Moral philosophy: Specific principles or values
people use to decide what is right and wrong.
Guidelines for “determining how conflicts in
human interests are to be settled and for
optimizing mutual benefit of people living
together in groups.”
• Economic value orientation: Associated with
values quantified by monetary means. If an act
produces more economic value for its effort, then
it should be accepted as ethical.

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Concept Definitions (2 of 4)
• Idealism: Efforts required to account for all
objects in nature and experience and to assign
them a higher order of existence.
• Realism: An external world exists independent of
our perceptions. It assumes humankind is not
naturally benevolent and kind, but instead
inherently self-centered and competitive.

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Concept Definitions (3 of 4)
• Relativist perspective: Evaluates ethicalness
subjectively on the basis of individual and group
experiences.
• Descriptive relativism: Relates to observations
of other cultures. Different cultures exhibit
different norms, customs, and values, but these
observations say nothing about the higher
questions of ethical justification.

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Concept Definitions (4 of 4)
• Meta-ethical relativism: People naturally see
situations from their own perspectives, meaning
there is no objective way of resolving ethical
disputes between different value systems and
individuals.
• Normative relativism: Assumes one person’s
opinion is as good as another’s.

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Moral Philosophies and Terms

(1 of 3)

• Monists: Believe only one thing is intrinsically

good.
• Hedonism: The idea that pleasure is the ultimate
good, or the best moral end involves the greatest
balance of pleasure over pain. Hedonism defines
right or acceptable behavior as that which
maximizes personal pleasure.
• Quantitative hedonists: More pleasure is better.
• Qualitative hedonists: It is possible to get too
much of a good thing (such as pleasure).

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Moral Philosophies and Terms

(2 of 3)

• Pluralists: Believe two or more things are

intrinsically good.
• Plato: The good life is a mixture of moderation
and fitness, proportion and beauty, intelligence
and wisdom, sciences and arts, and pure
pleasures of the soul.

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Moral Philosophies and Terms

(3 of 3)

• Instrumentalists: Reject the ends/means argument

and argue ends, purposes, or outcomes are
intrinsically good in and of themselves (John Dewey:
Almost any action can be an end or a mean).
• Goodness theories: Focus on the end result of
actions and the goodness or happiness created by
them.
• Obligation theories: Emphasize the means and
motives by which actions are justified (Teleology and
Deontology).

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Obligation Theories: Teleology

(1 of 2)

• Teleology: Acts are morally right or acceptable if

they produce some desired result, such as
realization of self-interest or utility.
• Egoism: Defines right or acceptable actions as
those that maximize a particular person’s self-
interest as defined by the individual.
• Enlightened egoism: Take a long-range
perspective and allow for the well-being of others
although their own self-interest remains
paramount.

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Obligation Theories: Teleology

(2 of 2)

• Teleology
• Utilitarianism: Defines right or acceptable actions as
those that maximize total utility, or the greatest good
for the greatest number of people.
• Rule utilitarianism: Determines behavior on the basis
of principles or rules designed to promote the greatest
utility, rather than on individual examinations of each
situation they encounter.
• Act utilitarianism: Examine specific actions, rather
than the general rules governing them, to assess
whether they will result in the greatest utility.

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Obligation Theories:
Deontology (1 of 2)
• Deontology: Focuses on the preservation of
individual rights and on the intentions associated with
a particular behavior rather than on its
consequences.
• Regard certain behaviors as inherently right as
defined by self or extraterrestrial.
• Nonconsequentialism: A system of ethics based on
respect for persons. (Another reference for
deontology.)

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Obligation Theories:
Deontology (2 of 2)
• Categorical imperative: “Act as if the maxim of thy
action were to become by thy will a universal law of
nature.”
• Rule deontologists: Believe conformity to general
moral principles based on logic determines
ethicalness.
• Act deontologists: Actions are the proper basis to
judge morality or ethicalness and requires a person
use equity, fairness, and impartiality when making
and enforcing decisions.

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Virtue Ethics (1 of 2)
• Virtue ethics: What is moral in a given situation is
not only what conventional morality requires but what
a person with a “good” moral character deems
appropriate.

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Virtue Ethics (2 of 2)
• Virtue ethics approach to business:
1. Good corporate ethics programs encourage individual
virtue and integrity.
2. By the employee’s role in the community
(organization), these virtues form a good person.
3. An individual’s ultimate purpose is to serve society’s
demands and the public good and be rewarded in his
or her career.
4. The well-being of the community goes hand in hand
with individual excellence.

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Justice Theories
• Justice: Fair treatment and due reward in
accordance with ethical or legal standards,
including the disposition to deal with perceived
injustices of others.
• Based on the perceived rights of individuals and
on the intentions of the people involved in a
business interaction.
• Evaluates ethicalness on the basis of fairness.

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TABLE 6-3 Types of Justice

Justice Type Areas of Emphasis

Distributive justice: Based on the
evaluation of outcomes or results
of the business relationship
Procedural justice: Based on
the processes and activities that
produce the outcome or results
Interactional justice: Based on
relationships and the treatment of
others
Benefits derived
Equity in rewards
Decision making process
Level of access, openness, and
participation
Accuracy of information
Truthfulness, respect, and courtesy
in the process

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Cognitive Moral Development

and Limitations (1 of 4)
• Stage 1: Punishment and obedience: Right
and wrong are not connected with any higher
order or philosophy but rather with a person who
has power.
• Stage 2: Individual instrumental purpose and
exchange: Right is what serves his or her own
needs. Individuals evaluate behavior on the basis
of its fairness to them.

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Cognitive Moral Development

and Limitations (2 of 4)
• Stage 3: Mutual interpersonal expectations,
relationships, and conformity: Emphasize the
interests of others rather than simply those of
themselves, although ethical motivation is still derived
from obedience to rules.
• Stage 4: Social system and conscience
maintenance: Determine what is right by considering
their duty to society, not just to certain other people.
Duty, respect for authority, and the maintenance of
the social order become the focal points at this stage.

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Cognitive Moral Development

and Limitations (3 of 4)
• Stage 5: Prior rights, social contract, or utility:
Individuals are concerned with upholding the basic
rights, values, and legal contracts of society.
Individuals feel a sense of obligation or commitment
to other groups and recognize that in some cases
legal and moral points of view may conflict.

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Cognitive Moral Development

and Limitations (4 of 4)
• Stage 6: Universal ethical principles: Right is
determined by universal ethical principles everyone
should follow. People have certain inalienable rights
that are universal in nature and consequence. These
rights, laws, or social agreements are valid not
because of a particular society’s laws or customs, but
because they rest on the premise of universality.

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White-Collar Crime (WCC) (1 of 3)

• Does more damage in monetary and emotional
loss in one year than violent crimes do over
several years combined.
• Tend to be highly educated, in positions of power,
trust, respectability, and responsibility.
• The corporate culture can transcend the
individuals beliefs.
• With time, patterns become institutionalized
sometimes encouraging unethical behaviors.

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White-Collar Crime (WCC) (2 of 3)

• The views and behaviors of an individual’s
acquaintances within an organization can affect
crime.
• For companies with a high number of ethical or
unethical employees, people who are undecided
about their behavior (about 40 percent of
businesspeople) are more likely go along with
their coworkers.

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White-Collar Crime (WCC) (3 of 3)

• Some businesspeople may have inherently
criminal personalities. Corporate psychopaths, or
managers who are nonviolent, selfish, and
remorseless, exist in many large corporations.

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TABLE 6-6 Common Justifications

for White Collar Crime
TABLE 6–6 Common Justifications for White-Collar Crime
1. Denial of responsibility. (Everyone can, with varying degrees of plausibility, point the finger at
someone else.)
2. Denial of injury. (White-collar criminals often never meet or interact with those who are
harmed by their actions.)
3. Denial of the victim. (The offender is playing tit-for-tat and claims to be responding to a prior
offense inflicted by the supposed victim.)
4. Condemnation of the condemners. (Executives dispute the legitimacy of the laws under which
they are charged, or impugn the motives of the prosecutors who enforce them.)
5. Appeal to a higher authority. (“l did it for my family” remains a popular excuse.)
6. Everyone else is doing it. (Because of the highly competitive marketplace, certain pressures
exist to perform that may drive people to break the law.)
7. Entitlement. (Criminals simply deny the authority of the laws they have broken.)
Source: Based on Daniel J. Curran and Claire M. Renzetti, Theories of Crime (Needham Heights, MA: Allyn & Bacon, 1994).

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