© 2013 Cengage Learning. All Rights Reserved. 1 Part Three: The Decision Making Process Chapter 6: Individual Factors: Moral Philosophies and Values Chapter.

© 2013 Cengage Learning. All Rights Reserved. 1

Part Three: The Decision Making Process

Chapter 6: Individual Factors: Moral Philosophies and Values

Moral Philosophy Defined

The specific principles or rules that people use to decide what is right or wrong Person-specific Guidelines for determining how to settle

conflicts and optimize mutual benefit Direct businesspeople in formulating strategies

and resolving ethical issuesNo single moral philosophy is accepted by everyone


Economic Systems Adam Smith

The father of free market capitalism Developed the idea of the invisible hand

Milton Friedman Markets will reward/punish companies for unethical

behavior No need for government regulation Currently the dominant form of capitalism; is being

questioned

The U.S. has sought to export free market capitalism to other countries• Free market system is not a panacea


Value Orientation

Economic value orientation: Associated with values that can be quantified by monetary means

Idealism: A moral philosophy that places special value on ideas and ideals as products of the mind

Realism: The view that an external world exists independently of our perception of it


Goodness Theories Monists believe that only one thing is

intrinsically good Exemplified by hedonism: One’s pleasure is the

ultimate good Qualitative hedonism Quantitative hedonism

Pluralists believe that no one thing is intrinsically good

Instrumentalists reject the idea that Ends can be separated from the means that produce

them Ends, purposes, or outcomes are intrinsically good in

themselves© 2013 Cengage Learning. All Rights Reserved. 5

Obligation Theories

Goodness theories: Typically focus on the end result of actions and the goodness/happiness created

Obligation theories: Emphasize the means and motives by which actions are justified Teleology and Deontology


Teleology

Considers acts as morally right or acceptable if they produce a desired result

Pleasure, knowledge, career growth, the realization of a self interest, utility

Consequentialism: Assesses moral worth by looking at the consequences for the individual


Egoism

Right or acceptable behavior defined in terms of consequences to the individual

Maximizes personal interests

Enlightened egoists: Take a long-term perspective and allow for the well-being of others


Utilitarianism

Seeks the greatest good for the greatest number of people Rule utilitarians: Determine behavior based on

principles designed to promote the greatest utility

Act utilitarians: Examine a specific action itself; not the rules governing it


Deontology

Moral philosophies that focus on the rights of individuals and on the intentions associated with a particular behavior

Believe that individuals have absolute rights Regard the nature of moral principles as stable and

believe that compliance with these principles defines ethicalness

Sometimes referred to as nonconsequentialism, based on respect for persons


Deontology (continued)

Categorical Imperative: If you feel comfortable allowing the entire world to see your actions, and your rationale is suitable to become a universal principle, then the act is ethical Immanuel Kant

Rule deontologists: Conformity to general moral principles determines ethicalness

Act deontologists: Actions are the proper basis on which to judge morality


Relativist Perspective

Individuals and groups derive definitions of ethical behavior subjectively from experience Descriptive relativism: Relates to observing

cultures Metaethical relativists: Understand that people

see situations from their own perspectives No objective way of resolving ethical disputes

between cultures Normative relativists: Assume that one person’s

opinion is as good as another’s


Virtue Ethics

Ethical behavior involves adhering to conventional moral standards and considering what a mature person with “good” moral character would deem appropriate Can be summarized as

Good corporate ethics programs encourage individual virtue and integrity

The virtues associated with appropriate conduct form a good person

The ultimate purpose is to serve the public good The well-being of the community goes together with

individual excellence© 2013 Cengage Learning. All Rights Reserved. 13

Justice

Fair treatment and due reward in accordance with ethical or legal standards Distributive justice: An evaluation of the

results of a business relationship Procedural justice: Considers the processes

and activities that produce outcomes or results Interactional justice: Based on the

relationships between organizational members, including the way employees and management treat one another


Moral Philosophy and Ethical Decision making

Individuals use different moral philosophies depending on whether they are making a personal decision or a work-related decision Behavior in business can be explained two

ways Pressures for workplace success differ from the

goals and pressures in outside life The corporate culture where individuals work

Moral philosophies must be assessed on a continuum


Kohlberg’s Model of Cognitive Moral Development

Consists of six stages1. Punishment and obedience2. Individual instrumental purpose and exchange3. Mutual interpersonal expectations,

relationships, and conformity4. Social system and conscience maintenance5. Prior rights, social contract, or utility6. Universal ethical principles


Kohlberg’s Model

Can be reduced to three levels of ethical concern1. With immediate interests and with rewards

and punishments2. Concern with right as expected by the larger

society or some significant reference group3. Seeing beyond norms, laws, and the authority

of groups or individuals


Importance of Kohlberg’s Theory

Shows that individuals can change or improve their moral development

Supports management’s development of employee’s moral principles

The best way to improve employees’ business ethics is to provide training for cognitive moral development


White Collar Crime

“Crimes of the suite” are more damaging than violent “crimes of the street”

White collar criminals tend to be educated people in positions of power and respectability

The financial sector has a high level of WCCs WCCs are increasing

Technology allows WCCs to be committed at lower levels

Peer influence is a cause of WCC Increased government efforts to detect and punish

WCCs


Reasons for White Collar Crime

Patterns of activities associated with corporate cultures become institutionalized–may encourage unethical behaviors

Peer influence from acquaintances within an organization

WCCs increase after economic recessions

Some businesspeople may have inherently criminal personalities



Top Internet Fraud Complaints


Common Justifications for White Collar Crimes

Individual Factors

Most unethical behavior is to meet performance goals

Not related to personal gain Rewards for performance goals and corporate

culture–most important drivers of ethical decision making Personal moral compass not sufficient to prevent

misconduct

Equipping employees with skills that allow them to understand/resolve ethical dilemmas will help them make good decisions


© 2013 Cengage Learning. All Rights Reserved. 1 Part Three: The Decision Making Process Chapter 6: Individual Factors: Moral Philosophies and Values Chapter.

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rights of individuals

absolute rights

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deontology moral philosophies

single moral philosophy

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acceptable behavior