Chapter FiveEthical Decision MakingChapter 5De.docx

Chapter Five
Ethical Decision Making
Chapter 5
Describe individual characteristics that impact ethical beliefs,
sensitivities, intentions, and behaviors
Analyze the processes by which general ethical beliefs and
sensitivities lead to the formation of specific ethical intentions
Apply a systematic rational ethical decision-making framework
to arrive at a moral conclusion
Facilitate a negotiation between competing ethical perspectives
Recognize warning signs that an unethical decision is
approaching
Learning Objectives
Chapter 5: Collins, Business Ethics
Ethical Behavior Model
“Most people do what they think is right, considering the world
they think they live in.”
Business ethicist Marvin Brown
“I know this is wrong but I’m going to do it anyway.”

*
James Rest has developed a four-component
model sequentially showing that an individual
is likely to behave morally if he or she:
Is aware that an ethical dilemma has arisen
Forms a moral judgment
Develops motivation to do something about it and
Is a person of high moral character
*
Exhibit 5.1 Decline from Ethical Belief to Ethical Action
In general, ethical beliefs generate ethical intentions and result
in ethical behaviors. But there is typically a drop off going
from one step to the next.
Insert Exhibit 5.1
Insert Exhibit 5.2

A. Individual Characteristics
Individual factors that have the largest impact
on ethical decision making are:
More education
More work experience
Religion
Reasoning at a higher level of moral development
A higher score for deontology or idealism
A lower score for relativism, teleology, economic orientation,
or Machiavellianism
*
Insert Exhibit 5.3
B. Ethical Beliefs and SensitivitiesA belief is a mental state that
guides behaviorsEthical sensitivity refers to an individual’s
awareness that a particular situation raises ethical
concernsEthical beliefs and sensitivities are the result of a host
of individual characteristics, such as age, education, moral
development level, or work experience

*
Insert Exhibit 5.2
C. Ethical IntuitionsEthical intuition is a quick insight
independent of any reasoning process about right and
wrongProfessor Jonathan Haidt concludes that many ethical
decisions are the result of intuitive reactions rather than deep
reflection
*
Insert Exhibit 5.4
D. Theory of Planned BehaviorAccording to Icek Ajzen’s theory

of planned behavior, formulating an intention to act ethically is
a function of a person’s attitudes toward the behavior,
subjective norms, and perceived behavioral control
*
D. Theory of Planned Behavior (cont’d)We need to decide
whether we should prevent a co-worker from stealing office
supplies.Attitudes: stealing is wrong and my stopping the
stealing is a good thingSubjective norms: other people who I
respect also believe stealing is wrong and I want to comply with
their beliefPerceived behavioral control: I have the ability,
resources, and opportunity to stop the stealing
*
What would you do?
You are a researcher at a local brewing company. One day, your
boss, Emily and four other employees, including you, left to
attend a leadership seminar, about three hours from work. The
seminar starts next day. At dinner before the seminar, Emily
orders three bottles of wine for the five employees. On the way
back to the hotel, Emily and another employee buy an array of

hard liquor. Emily then invites everyone to a party in her hotel
room.
The next morning everyone was scheduled to meet in the hotel
lobby at 7:30 and then leave for the seminar. At 7:40, one
employee says, “we decided to go home instead of attend the
seminar because Emily is very sick.”
After leaving the hotel, Emily apologizes and adds “don’t tell
other employees that we missed the seminar. This trip costs the
company about $5,000.”
The next morning, the president, Deborah, calls you into her
office and asks how the seminar was. What would you say?
Tell Deborah it was very interesting as instructed by Emily.
Tell Deborah what actually happened.
*
Insert Exhibit 5.2
E. Issue’s Moral IntensityMoral intensity refers to issue-related
factors, rather than individual or organizational factors, that are
likely to determine the magnitude of a person’s moral approval
or disapprovalAccording to business ethics scholar Tom Jones,
an issue’s moral intensity is likely to vary based on six factors

The six factors:Magnitude of consequences: the total sum of
harms and benefits generated by an act, such as the number of
people who may be harmedSocial consensus: degree of social
agreement that an act is good or bad, if everyone think bad, then
bad. Probability of effect: probability that an act’s effect will
actually occur or cause the predicted harm.Temporal
immediacy: length of time between an act and the onset of
consequencesProximity: the nearness of an act to its victims
and beneficiaries. City fire vs the south poleConcentration of
effect: the amount of harm an act will create in a concentrated
area.
the most morally intense acts are those with a high likelihood
of causing severe harm to many people in a short period of time
within a close and concentrated area, and where there is strong
social consensus that the act is wrong.
*
Small Group Discussion: Which case has higher moral
intensity?In September, the EPA uncovered that diesel-engine
VW models sold in the United States had software
installed allowing the cars to falsely pass emissions tests. Since
then, VW has admitted to cheating the tests deliberately and
revealed that 11 million cars worldwide were fitted with the so-
called "defeat device."
VS.
Executives sought to drive growth by putting undue pressure on

its employees to hit sales quotas, and many employees
responded by fraudulently opening customer accounts. In most
cases these accounts were closed before customers noticed, but
in other cases consumers were hit with associated fees or took
hits to their credit ratings.
*
F. Organization CharacteristicsO’Fallon and Butterfield, in their
extensive review of the business ethics research literature,
found four organizational characteristics associated with ethical
behaviorsCodes of EthicsEthical Climate/CultureOrganization
SizeRewards and Sanctions
*
Insert Exhibit 5.2
G. Ethical Intentions An ethical intention is determining

mentally to take some action that is morally appropriateBut
even if an intention to act ethically is solidified, an individual
still may not follow through on the ethical intentionObstacles:
second doubts, weakness of will or lack of moral courage, and
old habits
*
Insert Exhibit 5.2
Rational Ethical Decision Making
H. Rational Ethical Decision MakingAfter an initial intention is
formed, some people pause and apply a more rational approach
to ethical decision making
Rational ethical decision-making frameworks help individuals
analyze the ethical basis of their decisions and actions
*

Rotary International’s Four-Way Test:
Of the things we think, say, or do,
Is it the TRUTH?
Is it FAIR to all concerned?
Will it build GOODWILL and BETTER FRIENDSHIPS?
Will it be BENEFICIAL to all concerned?
*
Raytheon’s Ethics Quick Test:Is the action legal?Is it
right?Who will be affected?Does it fit Raytheon’s values?How
will I feel afterwards?How would it look in the newspaper?Will
it reflect poorly on the company?
*
Insert Exhibit 5.5

*
Insert Exhibit 5.6
*
Assume you are a bartender. A very pregnant 35 year old
woman and her group of friends, previously served by another
bartender, requests another beer. You realize this is an ethical
dilemma. You learned in school that “there is no safe level of
alcohol use during pregnancy. Women who are pregnant or plan
on becoming pregnant should refrain from drinking alcohol,”
which is when the baby’s brain is being developed.
Alcohol consumption can cause miscarriage, stillbirth, and a
range of fetal alcohol spectrum disorders (FASDs) following
birth, which includes physical, behavioral, and learning
problems.
But the woman is an adult capable of making her own decisions
and has already been served by another bartender, which has
happened before. Amid the loud bar noises you find yourself
pouring her another beer. Then you stop and reflect for a
moment.
Would it be ethical to serve her a beer?
*

EgoismHow does the action relate to me? If the action furthers
my interests, then it is right. If it conflicts with my interests,
then it is wrong.People by nature are egoists – Adam Smith
Would it be ethical to serve her a beer from the perspective of
egoism?
*
Social Group RelativismIf the action conforms to the social
group’s norms, then it is right. If it is contrary to the social
group’s norms, then it is wrong.When problems arise, a manager
might ask other managers what they have done in the past when
faced with a similar problem.Would it be ethical to serve her a
beer from the perspective of social group relativism?
*

Cultural RelativismHow does the action relate to the national
culture, particularly its laws? If the action conforms to the law,
then it is right. If it is contrary to the law, then it is wrong.A
common saying among cultural relativists is “When in Rome do
as the Romans do.” Would it be ethical to serve her a beer from
the perspective of cultural relativism?California law
*
UtilitarianismHow does the action relate to everyone who is
affected by it? If the action is beneficial to the greatest number
of people affected by it, then it is right. Democracy is utilitarian
as the best policy is that which the majority desires.Orgs need
utilitarian managers who are looking after what is best for the
org But the minority’s interest can be ignoredWould it be
ethical to serve her a beer from the perspective of
utilitarianism?
*
DeontologyDoes the action treat every stakeholder with respect
and dignity in all situations? Is the action something that
everyone should do? If yes, then it is right. If no, then it is
wrong.Deontologists advocate universal human rights which

respect the dignity and autonomy of every human beingBut it is
not always achievable, practical or desirable to respect every
stakeholderWould it be ethical to serve her a beer from the
perspective of deontology?
*
Virtue EthicsHow would a virtuous person act in this situation?
If the act strengthens moral character, then it is right. If it is
contrary to moral character building, then it is wrong.Virtue
refers to achieving excellence in moralsVirtue ethics is based on
cultivating good habitsBut different virtues generate different
requirements Would it be ethical to serve her a beer from the
perspective of virtue ethics?
*
Reaching a Moral ConclusionEach ethical theory raises
important issues for the decision maker to consider, and each
theory has strengths and weaknessesApplying the seven
questions to the most salient ethical dilemmas will likely reveal
that each decision option has strengths and weaknesses, and
ethical trade-offs might be required

Insert Exhibit 5.11
Persuading Others
A manager’s failure to engage employees who apply different
ethical theories can damage employee morale and result in
unethical behaviors and lawsuits
Insert Tips and Techniques “Achieving Ethical Consensus”
*
Ten “Ethical Hazard Approaching” Signs
Michael Josephson describes 10 common rationalizations for
unethical acts
*
from the SAGE Social Science Collections. All Rights
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