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Answer & Explanation:Ethical Decision MakingAfter reading about Bill Daniels and the story about the insurance company in Chapter 5 of Gonzalez-Padron (2015), answer the following questions in essay form:Which ethical tradition best describes Bill’s decision to pay the client from his own funds?Did he approach the decision using a rules-based, virtue or relationship-based, or outcome-based approach, or a combination of approaches?Bill credits sports coaches for progression to higher stages of moral development. What other factors could motivate someone to develop higher levels of moral reasoning?Can you think of a person who demonstrates principle-based ethics? How do this person’s actions reflect a highly developed moral reasoning?Incorporate key words and phrases from Chapter 5 of the text and at least two additional sources into your responses. Use your own words to define the key words and phrases you incorporate. Be sure to cite all sources in the body of your paper and on the references page.The paperMust be three double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the FSB APA guidance located in the classroom.Must include a separate title page with the following:Title of paperStudent’s nameCourse name and numberInstructor’s nameDate submittedMust use at least two scholarly sources in addition to the course text.Must document all sources in APA style as outlined in the FSB APA guidance located in the classroom.Must end with a conclusion that clearly summarizes what was presented in the paper.Must include a separate references page that is formatted according to APA style as outlined in the FSB APA guidance located in the classroomCHAPTER 5 GONZALEZ-PADRON (2015) IS ATTACHED FOR THIS ASSIGNMENT!!!!05ch_gonzalez_business.pdf
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5
Ethical Decision Making
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Learning Outcomes
After reading this chapter, you should be able to do the following:
• Summarize traditional ethical theories in business terms and explain the value of understanding these
underlying influences in ethical decision making.
• Analyze individual factors that may influence ethical decision making in business.
• Employ an ethical decision-making framework for making ethical decisions in business.
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Introduction
Introduction
Relevance to Business
The senior managers of a defense contractor must attend the annual ethics training program.
Chris and Dave have been with the company for 10 years, and dread listening to top management discuss ethical issues and compliance requirements. The chief executive officer (CEO)
takes the stage and introduces Dr. Sherman, a professor of philosophy, as the facilitator for
the training. Dr. Sherman begins speaking about ethical theory and the philosophies of Aristotle, Kant, and John Stuart Mill. Chris and Dave look at each other and groan. As the most
outspoken of the company managers in the training, Chris asks Dr. Sherman, “All this is very
interesting, but how are these theories relevant to business?” Dr. Sherman ponders the question and smiles.
“Interesting point,” he responds. “Have you ever wondered why a coworker doesn’t agree with
what you would consider an obviously good business decision? Is that person just being stubborn or uncooperative? Think of times when you give clear directions for a task and workers
refuse to perform the task as requested. Are they insubordinate or just difficult employees?”
Chris and others nod in recognition of having these experiences.
Dr. Sherman continues, “You see, people come from different ethical perspectives that can contribute to organizational conflicts or employees disobeying directives. If a manager has a basic
understanding of ethical theories, he or she may be able to recognize when a coworker is looking at an issue from a different view than management. Perhaps the coworker is looking at the
issue from a fairness perspective, whereas you may be looking for the solution that satisfies the
most stakeholders. Instead of arguing, you may be able to guide him or her in making the right
decision for your company that takes multiple ethical perspectives into consideration.”
After the training, Chris agrees that learning about ethical theories may be beneficial; however, he is still not sure how to apply them. Chris says to Dave, “Everyone in my department
will think I’ve lost it if I start talking about egoism, utilitarianism, and ethics of care when
making a decision. There must be a better way to include ethical theories in business.”
It is common for managers to avoid framing a decision in ethical terms (Bird & Waters,
1989). Many consider ethics in business to be intuitive—knowing the right response without
conscious awareness (Faber, 1999; Haidt & Joseph, 2004). How many times has someone
referred to his or her “gut instinct” to determine a course of action? Consider a purchase
decision where a supplier is pressuring the sourcing team to choose its product by offering
extravagant trips and gifts. Intuitively, the sourcing team may feel that it is wrong to accept
the gifts. However, other personal factors may influence an ethical decision such as moral
philosophies, moral development, and social needs.
Moral philosophies derive from foundational ethical theories, which provide general guidelines that apply to any moral problem. Individuals use these ethical theories to evaluate right
from wrong. Derry and Green (1989) have identified over 60 ethical theories that offer similar, yet conflicting, solutions for ethical dilemmas. Individuals tend to subscribe to a dominant theory that they may not realize is influencing their moral choices. Yet some people may
feel that a moral philosophy justifies unacceptable behavior in the workplace. Therefore, it is
important for managers to understand the roles that ethical theory and moral development
have on workers’ ethical decision making.
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Section 5.1
Traditional Ethical Theories
This chapter explores the ethical decision making of individuals within organizations. The first
topic describes ethical theories in business terms, as three ethical traditions that guide individuals to determine if a decision is right or wrong. The second section explores the influence of
individual factors on ethical decision making in business, including the stages of moral development, social needs, and ethical decision-making styles. Finally, an ethical decision framework
incorporates the three ethical traditions to allow for reasoning of a business situation.
5.1 Traditional Ethical Theories
In business, ethical theories typically relate to three dimensions of ethical behavior (Wicks,
Freeman, Werhane, & Martin, 2010). The first relates to actions, focusing on what a company
or individual is doing. The next dimension considers the agent by focusing on who, or the
character of the company or person. The final dimension considers the outcome, focusing on
the consequences of a decision (see Figure 5.1 for the three ethical traditions relating to
behavioral dimensions). While one aspect may be more prevalent than another, a typical business decision incorporates all three ethical traditions.
Figure 5.1: Three ethical traditions relating to behavioral dimensions
In business, there tend to be three approaches to determining ethical behavior. These approaches focus
on the actions that are being done, the character of the company or person, and the consequences or
outcomes of the ethical decision. All three approaches are typically incorporated in a decision.
Actions
Rules and
Principles
Standards
of Conduct
Agent
Character
Outcome
Virtues
Consequences
Cost/Benefit
The three dimensions of a business decision relate to main traditions of moral philosophy
that reflect teleological or deontological ethics for answering the question, “What is the
right thing to do?” (de Colle & Werhane, 2008). Teleological derives from the Greek word
telos, meaning purpose or goal, and logos, referring to science or study. Under teleological
ethical theories, the rightness of a decision comes from being a good person (actor) and the
results (outcome). Deontology is the science or study of duty, deriving from the Greek word
deon. Deontological ethical theory determines the ethics of an action in relation to conformity
to rules or laws (“Deontological ethics,” 2014).
The three ethical traditions are complementary. Each approach reveals something different in
diagnosing an ethical problem and coming up with an ethical solution. Two of the traditions,
actions and outcomes, focus more on external aspects of the business decision while agents
focus on internal aspects. Actions relate to regulations imposed by authorities or industry
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Traditional Ethical Theories
Section 5.1
standards, whereas outcomes refer to the effect of the decision on company stakeholders.
The ethical tradition considering the character of the agent requires recognition of the company or individual values. Exploring the underlying moral philosophies of each ethical tradition allows managers to recognize their own ethical style and differences among the ethical
decision-making styles of their employees.
Actions
The ethical tradition that focuses on whether an action is acceptable is often the first step in
ethical decision making. People refer to standards that guide whether a behavior is good or
bad, or right or wrong. Ethical traditions focusing on action represent a deontological approach
to business ethics. For example, if an employee lies about being sick to cover for an absence, a
deontological approach would consider the action unethical as it violates a company policy or
business standard. An action-oriented ethical approach does not consider intent or outcome.
Other terms for action-oriented ethics include rules-based, principle-based, and Kantian. As
Chapter 4 stressed, laws and regulations impose a minimum standard of business actions.
However, other rules and principles influence ethical decision making within an organization.
Determinations of which behaviors are acceptable derive from religious and cultural traditions. Nearly every religion has principles of right or wrong, or their own version of the
Golden Rule of “Do unto others as you would have others do unto you” (Burton & Goldsby,
2005). Research in business ethics has shown that religious beliefs influence ethical behavior,
including the Ten Commandments of Judeo-Christians (Van Buren & Greenwood, 2013), the
rules for business and organizational conduct contained within the Qur’an and the Hadith of
Islam (Sloane-White, 2011), and the guidance of morals and rules of behavior in Hindu scriptures (Richardson, Sinha, & Yaapar, 2013). All companies should understand the religious
foundations of ethical behavior within diverse workforces.
Critics of deontological approaches to ethics find that decisions based on rules are too rigid,
too simplistic, or too reliant on vague principles (Smith & Dubbink, 2011). The main target of criticism is on the categorical imperative of the 18th century German philosopher
Immanuel Kant, who espoused unconditional or absolute moral philosophies. The categorical
imperative states, “Act only according to that maxim whereby you can, at the same time, will
that it should become a universal law” (Kant, 1785/1959, p. 39). For business, this means
that decisions must be suitable for all parties faced with the same dilemma. The challenge is
providing employees with the tools to interpret and apply universal ethical principles.
What are the standards that guide acceptable behavior in a business organization? A minimum
standard for ethical behavior is compliance with laws and regulations. The company can instill
a sense of duty by encouraging business decisions to be in accordance with the company mission. Formal company codes of conduct give guidelines for determining the type of behavior
that is acceptable within an organization. Industry or professional codes of conduct provide
employees with ethical standards for specific business activities. Organizational standards can
augment individual moral principles to encourage ethical behaviors in the workplace.
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Section 5.1
Traditional Ethical Theories
Agents
A branch of ethical thought focuses on the character of the agent (person or company) making
the decision. The premise of the ethical tradition is two-fold: 1) a belief that people of good
character act rightly and ethically, and 2) following rules is secondary to preserving relationships. What is good character? According to Aristotle, a person of good character develops
virtues such as fairness, trustworthiness, honesty, and humility that help identify the right
thing to do in any situation (de Colle & Werhane, 2008). Ethical virtues combined with practical wisdom lead to moral actions. Ethical philosophies that focus on the person and relationships are virtue ethics and ethics of care.
Virtue ethics consider the moral character of individuals in making good decisions and pull
from Aristotelian, Buddhist, and Confucian traditions (Provis, 2010; White & Taft, 2004). In
ethical decision making, a virtue ethical approach draws intuitively on an agent’s experience
and character. A good person chooses to acquire a virtue, whereas the alternative is a vice that
leads to corruption, fraud, and misconduct. Being a virtuous person entails living in moderation, according to Aristotle’s “Golden Mean” (see Table 5.1) or in Buddhism, the “Middle Way.”
An expression of every virtuous trait can be either too weak or too strong. For example, a
manager may be too honest or tactless by telling an employee, “Your work is sloppy and terrible.” However, if the same manager tells a low-performing employee that his or her work is
great, then the manager is being dishonest. The goal is to find the happy medium between the
two extremes. People tend to want to use the golden mean to assess correctness of an action;
however, the focus of virtue ethics is on the person. Remember to ask, “What would an honest
person do in this situation?”
Table 5.1: The golden mean of virtues
Action or Feeling
Deficiency
“Too Weak”
Mean
“Golden Mean”
Excess “Too Strong”
Fear
Cowardice
Courage
Rashness
Honor
Dishonesty
Honesty
Tactless
Pleasure and Pain
Empathy
Getting and Spending
Anger
Self-expression
Conversation
Social Conduct
Shame
Insensibility
Cold
Pettiness/Stinginess
Lack of spirit
Understatement/mock
modesty
Dullness
Surliness
Shamelessness
Temperance
Caring
Generosity
Patience/good temper
Truthfulness
Wittiness
Friendliness
Modesty
Self-indulgence
Smothering
Wastefulness
Irascibility (easily
provoked anger)
Boastfulness
Frivolous
Flattery
Shyness
Source: Aristotle. (1953). The ethics of Aristotle, translated by J.A.K. Thomson. England: Penguin Books. Adapted from Table of
Virtues and Vices, p. 104.
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Section 5.1
Traditional Ethical Theories
As with moral principles, a person’s virtues derive from religious and spiritual traditions. Dahlsgaard, Peterson, and Seligman (2005) identify six core virtues expressed explicitly or thematically in the world religions, which include courage, justice, humanity, temperance, wisdom, and
transcendence (see Table 5.2 for descriptions of each). Thomas Aquinas (1225–1274) describes
seven heavenly virtues and seven deadly sins that build on Greek philosophy. The virtues include
faith, hope, charity (love), fortitude (courage), justice, temperance, and prudence. The seven
deadly sins are pride (vanity), envy, gluttony, lust, anger (wrath), greed (avarice, covetousness),
and sloth. Confucianism encourages the virtues of patience, sincerity, obedience, and knowledge. Buddhism edifies compassion, forgiveness, honesty, generosity, and equanimity.
Table 5.2: Core virtues
Virtue
Description
Courage
Emotional strengths that involve the exercise of will to accomplish goals in
the face of opposition, external or internal; examples include bravery, perseverance, and authenticity (honesty)
Justice
Humanity
Temperance
Wisdom
Transcendence
Civic strengths that underlie healthy community life; examples include fairness, leadership, and citizenship or teamwork
Interpersonal strengths that involve tending and befriending others; examples include love and kindness
Strengths that protect against excess; examples include forgiveness, humility,
prudence, and self-control
Cognitive strengths that entail the acquisition and use of knowledge;
examples include creativity, curiosity, judgment, and perspective (providing
counsel to others)
Strengths that forge connections to the larger universe and thereby provide
meaning; examples include gratitude, hope, and spirituality
Source: Dahlsgaard, K., Peterson, C., & Seligman, M.E.P. (2005). Shared virtue: The convergence of valued human strengths across
culture and history. Review of General Psychology, 9(3), 203–213, p. 205.
The ethics of care is a theory encompassing social virtues that focuses on character traits
such as sympathy, compassion, and friendship (French & Weis, 2000). An ethics of care seeks
to discover how people “sustain fragile networks of relations that allow people to grow and
prosper, developing trust, respect, and responsibility for each other” (Gabriel, 2009, p. 383).
A benefit of the ethics of care is its flexibility in allowing for responsiveness to an ethical
dilemma. This theory can create a business environment emphasizing connection, cooperation, and the well-being of others. The attention that ethics of care has on maintaining relationships can alleviate tensions among stakeholders during a crisis (Linsley & Slack, 2013).
Consider how the trust that employees and shareholders have toward company management
encourages resilience during difficult economic times of declining sales.
A disadvantage of an ethics of care is that people with this orientation believe that tailoring
solutions to the situation is normal. They are unlikely to view rules as deterrents, instead
following a more instinctive method of determining if an action is correct. More women than
men adopt an ethics of care philosophy, yet it is not a feminist theory (Borgerson, 2007).
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Traditional Ethical Theories
Section 5.1
Managers with a caring orientation are sensitive to the consequences of a decision on individuals and consider consensus an important part of getting support from all participants.
The aim of virtue ethics and ethics of care is to become an improved person who is more
likely to make better decisions. Companies can develop managers and employees with good
character by creating a values-based ethics program with clear corporate values (Hartman,
1998). For example, the values-based ethics program of United Launch Alliance promotes
employees to base their behaviors on the organization’s core values (see Chapter 1). By stating its values, companies are able to attract employees with virtues that align with company
values. If a company encourages a virtue like honesty, then employees considering whether
to tell a client of delayed shipments would more likely be truthful.
Outcomes
The third ethical tradition focuses on the consequences of a decision or results-oriented ethics. The bases of teleological theories in this ethical tradition seek to do no harm by acting in
a manner that produces the best outcome. Often people adopting a results-oriented approach
will say, “The ends justify the means,” emphasizing not the how or who, but the outcome of an
action. Many results-oriented approaches center on the relationship between ethics and selfinterest of an individual or group. Others focus on the fairness of the outcome on stakeholders. Consequentialism includes ethical philosophies that presume that the value of an action
derives from the value of its outcomes, such as egoism, utilitarianism, and distributive justice.
An egoistic orientation centers on making a decision that provides for the greatest good for
oneself. Ethical egoism considers an action to be morally right when it maximizes one’s
self-interest (Shaver, 2010). The role of self-interest in business ethics links to some extent
to Adam Smith’s theory that society benefits when individuals act in their own self-interest
(James & Rassekh, 2000). Does this mean that a manager can make decisions based on what is
best for him or her regardless of harming others? Some interpretations of Adam Smith incorrectly suggest that self-interest is devoid of ethical considerations. The feeling among many
ethicists is that egoism is synonymous with selfishness and greed (Burnes & By, 2012).
In business, the influence of egoism on ethical decision making has two implications: employees need to be cognizant of self-interest to avoid taking undue advantage of situations while
harming others; and companies should have controls in place, where possible, to prevent
misconduct. Examples of unethical uses of egoism include a CEO selling company stock before
scandals become public or a salesperson pressuring a client for an order to make quotas and
increase commission. Second, the features of self-interest and self-preservation in egoism
can prevent misconduct when combined with principles of honesty and justice. For example,
consider a salesperson told to lie to a customer about product safety. Lying could harm the
customer and thereby harm the salesperson’s long-term sales. In …
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