This document discusses factors that influence the moral development of corporations and proposes a 5-stage model of corporate moral development. The stages progress from immoral organizations that prioritize profits over ethics to ethical organizations that balance profits and principles, making ethical decisions even at the expense of profitability. The moral maturity of an organization's leaders and culture determines its stage of development. Leaders set the moral tone and have great impact on shaping corporate culture and ethics.

1. CORPORATE
MORAL
DEVELOPMENT
Atty. Vivian T. Dabu
Ateneo-Regis, AGSB, Clark

2. Factors in corporate moral development :
the founders,
the top management,
the stakeholders,
its industry,
the environmental factors,
the organization’s history and mission,
and others.

3. • Reidenbach and Robin (1991) - The behaviour of the
corporation is derived mostly from the behaviour of
its leaders. Leaders’ behaviour and character
influenced the lives of many people.
• Edward Aronson (2001) - ethical behaviour and
effective leadership are intertwined and inseparable.
Leaders set the moral tone of the organisation and
have great impact on others.
• Ciulla (1995, 2004) - good leadership refers not only
to competence but also to ethics

4. Moral development of any organization can
start at any stage and move up. Or regress.
Amoral organizations cannot possibly move
from stage 1 to even stage 2 unless
significant structural and cultural change be
implemented.
Stage 5 = Social Enterprises

5. Stage 1.a – The Immoral Organization
survival
Stage 1.b – The Amoral Organization
main thrust is to make profit at any
cost.
concern for ethics is usually on an
after-the-fact basis when caught in
some wrongdoing.
Corporate Moral Development

6. Stage 2 – The Legalistic Organization
dictates obedience to laws, codes, and
regulations but emphasizes on
profitability.
more concerned with adhering to the
legality of an action rather than the
morality of the action.
does only what it is required to do rather
than what it should do.
legal = ethical

7. Stage 3 – The Responsive Organization
 strikes a balance between profits and
doing right.
 more sensitive to the demands of
society
 dominated by reactive mentality
 not a proactive mentality.

8. Stage 4 – The Emerging Ethical
Organization
 seeks a greater balance between profits
and ethics.
 stronger management commitment to
ethical behavior where ethical values
become part of the culture.

9. Stage 5 – The (Developed) Ethical
Organization
total balance between profits and ethics
exist
emphasis on making the “right”
decision, even at the expense of
profitability.
ethical and responsible leadership
principle-driven

10. • The stages of CMD exhibit the morality/
moral maturity of the leader and
organisation through certain behaviours,
attitudes, values, corporate culture,
explicit and implicit artefacts.
• Corporate cultures can be managed to
produce the desired ethical behaviors.

11. • Velasquez, Manuel G., Business Ethics:
Concepts and Cases, 6th edition
• Mari Kooskora, Empirical
Investigation of Corporate Moral
Development, in the context of rapid
and radical changes, case Estonia
References