1. Chapter 6. Ethical Decision Making and Behavior
In recent years a growing number of scholars have
challenged the cognitive approach to ethical decision-
making. One critic is University of Virginia psychologist
Jonathon Haidt.
Haidt calls his approach to ethical decision-making the
Social Intuitionist Model to highlight the role that
intuition and social norms play in moral determinations.
Neuroimaging studies reveal that ethical decision-
making is not localized in one portion of the brain but
involves several different regions.
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2. Ethical Decision Making: A Dual Process Approach
Ethical thinking activates both cognitive and
emotional areas of the brain.
The dual process perspective is based on the premise
that both logic and emotion are essential to making
good ethical choices.
As neuroscientists have discovered, we can’t make
good ethical choices without employing our feelings.
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3. Moral Action
Components of Moral Action
 Business ethics educators Charles Powers and David Vogel
identify six factors or elements that underlie moral
reasoning and behavior and that are particularly relevant in
organizational settings.
 Moral imagination
 Moral identification and ordering
 Moral evaluation
 Tolerating moral disagreement and ambiguity
 Integrate managerial competence with moral competence
 Moral obligation
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4. Components of Moral Action
James Rest of the University of Minnesota developed what
may be the most widely used model of moral behavior.
He started with the end product—moral action—and then
determined the steps that produce such behavior.
He concluded that ethical action is the result of four
psychological subprocesses:
 1. Moral sensitivity (recognition)
 2. Moral judgment
 3. Moral focus (motivation)
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5. Components of Moral Action
Component 1. Moral Sensitivity (Recognition)
 Moral sensitivity (recognizing the presence of an ethical
issue) is the first step in ethical decision making because we
can’t solve a moral problem unless we first know that one
exists.
 Empathy and perspective skills are essential to this
component of moral action.
 We may even deceive ourselves into thinking that we are
acting morally when we are clearly not, a process called
ethical fading.
 We can take steps to enhance our ethical sensitivity.
© 2015 SAGE Publications, Inc.

6. Components of Moral Action
Component 1. Moral Sensitivity (Recognition) cont’d
 Paying attention to our emotions can be an important clue
that we are faced with an ethical dilemma.
 Anger, disgust, and contempt are other-condemning
emotions.
 Shame, embarrassment, and guilt are self-conscious
emotions that encourage us to obey the rules and uphold
the social order.
 Sympathy and compassion are other-suffering emotions.
 Gratitude, awe, and elevation are other-praising (positive)
emotions that open us up to new opportunities and
relationships.
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7. Components of Moral Action
Component 2. Moral Judgment
 Moral judgment has generated more research than the
other components of Rest’s model.
 Harvard psychologist Lawrence Kohlberg argued that
individuals progress through a series of moral stages just
as they do physical ones.
 Kohlberg identified three levels of moral development,
each divided into two stages.
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8. Component 2: Moral Judgment
Kohlberg’s 3 Levels of Moral Development
 Level I: Preconventional Thinking
 Stage 1: Choosing to obey to avoid punishment
 Stage 2: Following the rules in order to meet interests
 Level II: Conventional Thinking
 Stage 3: People want to live up to the expectations of those they
respect
 Stage 4: Looking to society as a whole for direction
 Level III: Postconceptual or Principled Reasoning
 Stage 5: Guided by utilitarian principles
 Stage 6: People operate according to internalized, universal
principles such as justice, equality, and human dignity.
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9. Component 2. Moral Judgment
Rest developed the Defining Issues Test (DIT) to
measure moral development.
Hundreds of studies using the DIT reveal that moral
reasoning generally increases with age and
education.
Principled leaders can boost the moral judgment of a
group by encouraging members to adopt more
sophisticated ethical
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10. Component 2. Moral Judgment
Models of cognitive development provide important
in sights into the process of ethical decision making.
 1. Contextual variables play an important role in shaping
ethical behavior.
 2. Education fosters moral reasoning.
 3. A broader perspective is better. Consider the needs and
viewpoints of others outside your immediate group or
organization.
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11. Component 2. Moral Judgment
Ethical Blind Spots
 1. Overestimating our ethicality.
 2. Forgiving our own unethical behavior.
 3. In-group favoritism.
 4. Implicit prejudice.
 5. Judging based on outcomes, not the process.
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12. Leadership Ethics at the Movies: Margin Call
Discussion Questions:
 What other options did the executive committee have
besides conducting the fire sale?
 Was the bank justified in putting its survival ahead of the
interests of clients, trading partners and the financial
community? Will the bank survive in the aftermath of the
fire sale?
 What made Rogers vulnerable to pressure from his
superiors?
© 2015 SAGE Publications, Inc.

13. Component 3. Moral Focus (Motivation)
Psychologists report that self-interest and hypocrisy
undermine moral motivation.
Sometimes individuals want to do the right thing,
but their integrity can be “overpowered.”
Others never intend to follow an ethical course of
action but engage in moral hypocrisy instead.
Both self-interest and hypocrisy encourage leaders to
set their moral principles aside.
© 2015 SAGE Publications, Inc.

14. Component 3. Moral Focus (Motivation)
People are more likely to give ethical values top
priority when rewarded through raises, promotions,
public recognition, and other means for doing so.
Emotions also play a part in moral motivation.
 Sympathy, disgust, guilt, and other moral emotions
prompt us to take action.
 Positive emotions such as joy and happiness make people
more optimistic and more likely to live out their moral
choices and to help others.
© 2015 SAGE Publications, Inc.

15. Component 4. Moral Character
Executing the plan of action takes character.
The positive character traits described in Chapter 3
contribute to ethical follow-through.
 Courage, prudence, integrity, humility, reverence, optimism,
compassion
In addition to virtues, other personal characteristics
contribute to moral action.
 Those with a strong will or internal locus of control
Successful implementation also requires
competence.
© 2015 SAGE Publications, Inc.

16. Giving Voice to Values
Mary Gentile, director of the Giving Voice to Values
outlines seven pillars or foundational concepts that equip
us to act on our ethical choices:
 1. Recognize that certain values are widely shared.
 2. Acknowledge the power of choice.
 3. Treat values conflicts as normal.
 4. Consider your personal and professional purpose.
 5. Play to personal strengths.
 6. Find your unique voice.
 7. Anticipate rationalizations for unethical behavior.
© 2015 SAGE Publications, Inc.

17. Decision-Making Formats
Decision-making guidelines or formats can help us
make better ethical choices.
Taking a systematic approach encourages teams and
individuals to carefully define the problem, gather
information, apply ethical standards and values,
identify and evaluate alternative courses of action,
and follow through on their choices.
© 2015 SAGE Publications, Inc.

18. Decision-Making Formats
Ethicist Rushworth Kidder’s 9 steps that can help
bring order to confusing ethical issues:
 1. Recognize that there is a problem
 2. Determine the actor
 3. Gather the relevant facts
 4. Test for right-versus-wrong issues
 5. Test for right-versus-right values
 6. Apply the ethical standards and perspectives
 7. Look for a third way
 8. Make the decision
 9. Revisit and reflect on the decision
© 2015 SAGE Publications, Inc.

19. Decision-Making Formats
Advantages (Pros) of Kidder’s Theory
 Is thorough
 Considers problem ownership
 Emphasizes the importance of getting the facts straight
 Recognizes that dilemmas can involve right–right as well
as right–wrong choices
 Encourages the search for creative solutions
 Sees ethical decision making as a learning process
© 2015 SAGE Publications, Inc.

20. Decision-Making Formats
Weaknesses (Cons) of Kidder’s Theory
 It is not easy to determine who has the responsibility
for solving a problem
 The facts are not always available, or there may not
be enough time to gather them
 Decisions don’t always lead to action
© 2015 SAGE Publications, Inc.

21. The SAD Formula
Media ethicist Louis Alvin Day of Louisiana State
University developed the SAD formula in order to
build important elements of critical thinking into
moral reasoning.
It begins with an understanding of the subject to be
evaluated; moves to identifying the issues,
information, and assumptions surrounding the
problem; and then concludes with evaluating
alternatives and reaching a conclusion.
3 Stages of SAD: situation definition, analysis of the
situation, decision
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22. The SAD Formula
Situation Definition
 Description of facts
 Identification of principles and values
 Statement of ethical issue or question
Analysis
 Weighing of competing principles and values
 Consideration of external factors
 Examination of duties to various parties
 Discussion of applicable ethical theories
Decision
 Rendering of moral agent’s decision
 Defense of that decision based on moral theory
© 2015 SAGE Publications, Inc.

23. The SAD Formula
Advantages (Pros) to SAD Formula
 Encourages orderly, systematic reasoning
 Incorporates situation definition, duties, and moral
theories
Disadvantages (Cons) to SAD Formula
 Failure to reach consensus
 Limits creativity
 Ignores implementation
© 2015 SAGE Publications, Inc.

24. Nash’s 12 Questions
Ethics consultant Laura Nash offers 12 questions
that can help businesses and other groups identify
the responsibilities involved in making moral
choices.
 Question 1: Have you defined the problem accurately?
 Question 2: How would you define the problem if you stood
on the other side of the fence?
 Question 3: How did this situation occur in the first place?
 Question 4: To whom and to what do you give your
loyalties as a person or group and as a member of the
organization?
© 2015 SAGE Publications, Inc.

25. Nash’s 12 Questions
 Question 5: What is your intention in making this
decision?
 Question 6: How does this intention compare with the
likely results?
 Question 7: Whom could your decision or action injure?
 Question 8: Can you engage the affected parties in a
discussion of the problem before you make your
decision?
© 2015 SAGE Publications, Inc.

26. Nash’s 12 Questions
 Question 9: Are you confident that your position will be
as valid over a long period of time as it seems now?
 Question 10: Could you disclose without qualm your
decision or action to your boss, your CEO, the board of
directors, you family, or society as a whole?
 Question 11: What is the symbolic potential of your
action if understood? Misunderstood?
 Question 12: Under what conditions would you allow
exceptions to your stand?
© 2015 SAGE Publications, Inc.

27. Nash’s 12 Questions
Pros (Advantages) of Nash’s 12 Questions
 Highlights the importance of gathering facts
 Encourages perspective taking
 Forecasts results and consequences over time
Disadvantages (Cons) of Nash’s 12 Questions
 Is extremely time consuming
 May not always reach a conclusion
 Ignores implementation
© 2015 SAGE Publications, Inc.

28. Focus on Follower Ethics: Private Manning
Based on the case of Private Manning, as discussed
in the text, answer the following Discussion
Question:
 Should Private Manning be considered a villain or
a hero for his actions? Why?
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29. The Case Study Method
Medical ethicist and communication scholar David
H. Smith argues that the case-based approach is a
powerful technique because it is based on narrative
or story.
When decision makers describe cases, they are
telling stories. These narratives say as much about
the storyteller as they do about the reality of the case.
© 2015 SAGE Publications, Inc.

30. The Case Study Method
Smith’s steps for case-based decision making:
 Foster storytelling. Framing the discussion as a storytelling
session invokes a different set of evaluation criteria than is
generally used in decision making.
 Encourage elaboration of essential events and characters.
Additional details make it easier to draw comparisons with
other examples.
 Encourage the sharing of stories by everyone with an
interest in the problem. Bringing more perspectives to bear
on the problem reveals more details.
 Offer alternative meanings.
© 2015 SAGE Publications, Inc.

31. The Case Study Method
Advantages (Pros) of the Case Study Method
 Is unique
 Harnesses the power of narrative and analogical reasoning
 Avoids ethical polarization; allows for ethical middle ground
Disadvantages (Cons) of the Case Study Method
 Downplays the importance of objective reality
 Details are not always available to decision makers
 Consensus on the right course of action is not always
possible
© 2015 SAGE Publications, Inc.