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understand what causes individuals to act in a Building on these definitions, we provide
manner that we decide are unethical. Ethical a conceptual framework called “Throughput
behavior is a prerequisite for a society to function Modeling,” which enables us to depict the various
in an orderly way (Kahn, 1990). Therefore, it can stages influenced by one’s ethical reasoning. The
be argued that ethics is the glue that binds a importance of this model is that it imports four
society together. The need for ethics in society major concepts (perception, information,
is such an important factor that many commonly judgment and decision choice) that suggest how
held ethical values are incorporated into laws. they interact before making a decision. The
However, many ethical values of a society cannot significance of this model is that it illustrates
be incorporated into law due to the judgmental several different pathways and stages that can
nature of certain values. For example, it is influence a decision. Basic information pro-
impractical to have laws that deal with loyalty, cessing modeling normally involves serial pro-
integrity and caring for others. This does not cessing. Yet, we take this approach one step
imply that these principles are less important further by assuming parallel processing. That is
for an orderly society. Ethics can then be classi- we assume that there are many (often times
fied as a set of moral principles or values. We simultaneous) pathways leading to a decision.
each have such a set of values, although we may One of our main contributions is that individ-
or may not have considered them explicitly. uals, depending upon their philosophical view-
Philosophers, religious institutions, and others point, may weight certain pathways heavier than
have defined in many instances ideal sets of moral others may. Decision-makers can benefit from
principles or values. Examples of prescribed sets understanding that other pathways may improve
of moral principles or values at the implementa- or modify their decisions. Finally, this novel
tion level include laws and regulations, church approach enables us to complement several
doctrine, codes of business ethics for professional philosophical approaches with unique decision-
groups such as notary publics, and a code of making paths leading to a decision. The model
conduct within distinct organizations. Quite a begins with how an individual thinks about
few people distinguish ethics and morality. perceived ethical dilemmas. In the context of
However, in this article, we adopt what other business, an ethical issue has consequences for
philosophers tend to use that is ethics as a general others inside the organization and/or external
term referring to both moral beliefs and ethical to the organization. The intensity of an ethical
theories (Beauchamp and Bowie, 1997). issue relates to the perceived importance of the
While this study provides an overview of issue to the decision-maker (Jones, 1991). Ethical
group and individual decision-making processes, issue intensity, then, can be defined as the per-
it does not prescribe any one philosophy or ceived relevance or importance of an ethical issue
process as best or most ethical. Rather our goal to the individual or group. In our model, the
is to understand how decision-makers’ current perceived importance of “ethical issue intensity”
values and convictions are implemented in their has been found to have a strong impact on
actions. One difference between an ordinary both ethical judgment and choice (Robin,
decision and an ethical one lies in “the point Reidenbach and Forrest, 1996). The more likely
where the accepted rules no longer serve, and the individuals are to perceive the importance of an
decision maker is faced with the responsibility for ethical issue, the less likely they are to engage in
weighting values and reaching a judgment in a questionable or unethical behavior associated
situation which is not quite the same as any he with the issue. Therefore, ethical issue intensity
or she has faced before. The other difference should be considered a key factor in the ethical
relates to the degree of emphasis placed on a decision process as depicted by “perception” in
decision-maker’s values when a process occurs on the Throughput Model.
route to a decision. Hence, values, perceptions Figure 1 illustrates how the process of an indi-
and judgments play a critical role rendering vidual’s decision choice is made. If perceived
ethical decisions (Trevino, 1986). relevance is an important determinant of how
3. 3
Cultural and Ethical Effects on Managerial Decisions 357
information is processed or retrieved from
memory and acted upon by decision rules as
practiced or used in one’s profession (e.g., loan
officers, auditors, medical doctors, lawyers etc.).
These decision rules are encoded in the judgment
stage in the model. These rules provide guidance
in sorting, arranging, ranking and rating infor-
mation before a decision choice or action is
taken.
Finally, the relationship I → J does not imply
Figure 1. Individuals’ decision processes diagram an incorrect learning or memorization of the
where P = perception, I = information, J = individual. However, P → I → J or I → P →
judgment, and D = decision choice. J could lead to a bias judgment. Of course time
pressures, uncertain information, unstable envi-
ronment and the expertise of the decision-maker
an individual represents a problem and uses contribute to whether or how many biases can
the information, it is necessary to know what distort the judgment stage.
determines the perception of relevance in the Since information typically is processed sub-
Throughput Model. The proposed specific relations jectively by decision-makers, it is interdependent
will be explored and developed further in a series with perception in the conceptual model (Alloy
of processes for future research. and Tabachnik, 1984; Anderson, 1985). The
First, perception is the framing of our situational information and the decision-maker’s
environment and how we view information. prior expectations or beliefs about the informa-
Perception discussed in this paper is of a higher tion are relevant to perceiving the degree of
mental activity level that involves categorization covariation between them. Both of these infor-
and classification of management information. mation sources jointly determine covariation per-
Lower levels of perception include how people ception (Alloy and Tabachnik, 1984). Ignoring
pick up or process information through their covariation perception may lead to conceptual
senses, such as vision, touch, hearing, etc. The difficulties in understanding and interpreting
lower level of perception normally involves auto- results (Phelps and Shanteau, 1978). Einhorn et
matic (and sometimes unconscious) reactions or al. (1979) advocated that the execution of an
responses to stimuli (information). An example individual’s decision choice may be made
would be a person experiencing an increase cir- ambiguous and difficult due to redundancy of
culation of blood due to a charging lion. cues (i.e., prior expectation and presented finan-
Since we are examining a much more devel- cial statement information). In particular, the fact
oped cognitive state of mind, perception is often that cues are related not only to perceptions but
termed as classifying and categorizing of events to each other, as well, means that the role of
or information. Since individuals have different interdependency of perception and information
ways of viewing (classifying and categorizing) should be considered in a model. For example,
places, people and things, certain biases and Anderson (1974, p. 236) argued that individuals’
heuristics generally occur in the processing of perceptions result from an integration of diverse
information. pieces of information. The interdependency and
In relationship to I → P, information influ- redundancy of perceptual effects and presented
ences and reshapes an individual’s perception. information have important effects on the kinds
This reshaped perceptual frame provides an indi- of judgment and decision choice strategies indi-
vidual with a modified or new perspective in viduals use (Ebbesen and Konecni, 1975). Finally,
problem solving or decision making. by illustrating a correlation between information
I → J infers no inference from a person per- cues and perception, the Throughput Model is con-
ception. That is, in a problem solving task, the sistent with the Lens Model as modified by
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Waymond Rodgers and Susana Gago
Hammond (e.g., Hammond, McClelland and priate to answer questions about a particular part
Mumpower, 1980; Abelson and Levi, 1985). of reality are all influenced by what we hold as
In the Throughput Model, information (circle valuable.
1 in Figure 1) also affects judgment. For
example, information stored in memory affects
decision makers’ evaluations of framed prospects. Throughput Model’s pathways
Typically, before an individual can make a
decision, that individual encodes the information The decision-making processes of individuals can
and develops a representation for the problem be represented in an organized manner. In order
(Johnson-Laird, 1981). Finally, perception and to study the methods of these decision processes
judgment can affect decision choice. Some it is important to break up all the paths marked
authors, notably Kahneman and Tversky [1982], with arrows in Figure 1 into sets of individual
have suggested that both automatic, perception- pathways. These fragments can then be inde-
like heuristics and more deliberate information pendently analyzed for their contributing prop-
processing strategies (judgment) are involved erties to individuals’ decision processes (Rodgers,
in most decision choices. Errors, biases, and 1997). Further, it is common for decision-makers
context-dependent heuristics may result from to differ in their moral philosophical values. Even
cognitive mechanisms of which decision makers if two individuals agree on the ethical principles
are largely unaware, and these may have a direct that determine ethical behavior, it is unlikely that
impact on decision choice (Rodgers, 1992). The they will agree on the relative importance of each
strategies of judgment that influence decision principle. These differences are highlighted in
choice are under an individual’s deliberate Figure 1, depicting several pathways toward
control. making a decision.
Throughput modeling begins with individuals Based on Figure 1, we can establish six general
stating their philosophical views of what should pathways:
be done. The advantage of this approach is that
it helps decision-makers understand why indi- (1) P → D
viduals have selected some information, which (2) P → J → D
supports their position, and have ignored other (3) I → P → D
information, which does not support their (4) I → J → D
position. This approach helps uncover the obser- (5) P → I → J → D
vations and values on which individuals rely upon (6) I → P → J → D
when taking positions on issues. Also, the model There are many philosophies, which are
is useful in depicting latter stages of processes, complex in nature. We discuss six prominent
such as judgment, that are implemented in sup- approaches depicted in the Throughput Model six
porting individuals’ positions. general pathways. The six philosophies discussed
Throughput Modeling helps us clarify and below are psychological egoism, deontology,
evaluate decision-makers’ responses to contro- relativist, utilitarianism, virtue ethics, and ethics
versial issues. Controversial issues are matters on of care.
which individuals have different philosophical
views of what is right. Controversial issues also (1) P → D represents psychological egoism
involve conflicts between different views of what that stresses individuals are always moti-
is right. Throughput Modeling depicts the most vated to act in their perceived self-
influential pathways employed in arriving at a interest.
decision. That is, what we hold as valuable enters (2) P → J → D depicts the deontology view-
into our perception of the information. Our judg- point that emphasizes the rights of indi-
ments about what the information is, what is viduals and on the judgments associated
acceptable as information, what evidence we will with a particular decision process rather
believe, and what philosophical theory is appro- than on its choices.
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Cultural and Ethical Effects on Managerial Decisions 359
(3) I → P → D highlights the relativist per- A positive sign will imply strong coherence while
spective which assumes that decision- a negative sign will imply a weak one, respec-
makers use themselves or the people tively. In order to give direction to a necessary
around them as their basis for defining pattern, we will assume that any correlation coef-
ethical standards. ficient that is larger than or equal to 0.5, in
(4) I → J → D reflects the utilitarian position absolute value, will be considered supportive of
which is concerned with consequences, as a high coherence and thus will receive a positive
well as the greatest good for the greatest sign, while any correlation coefficient that is
number of people. smaller than 0.5, in absolute value, will receive
(5) P → I → J → D under scores the a negative sign and will imply a weak coherence
virtue ethics outlook which is the classical of the variables associated with that path. Each
Hellenistic tradition represented by Plato path can have a positive (+), negative (–), or zero
and Aristotle, whereby the cultivation of (0) flow going through it that can be represented
virtuous traits of character is viewed as numerically with the data collected by Rodgers’
morality’s primary function. original survey with actual loan officers. The sign
(6) I → P → J → D represents the ethics of the flow is dependent upon the relative impor-
of care philosophy which focuses on a set tance of the use of that pathway for reaching a
of character traits that are deeply valued decision.
in close personal relationships, such In Figure 2 through Figure 7 the missing
as sympathy, compassion, fidelity, love, pathways are either (–) or (0). In other words,
friendship, and the like. all the paths drawn are the pathways with large
absolute value correlation coefficients, thus they
are the ones influencing individuals’ decision
Six dominant throughput modeling pathways choices the most. Since this analysis is not just
a theoretical exercise, we need only find the
These six pathways are viewed as the most combinations that make sense for our specific
dominant and influential for decision making application, i.e., a decision must be made by our
dominated by particular moral perspectives. decision makers. Therefore, all zero pathway
Although, it is important to note that other combinations can be disregarded when they lead
pathways in the Throughput Model also contributes to no decision. Hence, all the pathways drawn
to the above philosophical positions. Our represent logically possible pathways that yield
argument is that the corresponding pathway to decisions. Even with this reduction in number
each particular philosophical view is the most of combinations, it is clear: decision makers’
dominant. processes can involve a series of complicated
Rodgers (1992, 1997) performed a covariance steps. These six pathways are viewed as the most
structural analysis with unobservable variables,
based on a survey of loan officers’ and novices’
decision processes in order to derive covariance
among perception, information, judgment, and
decision. The results of his calculation from his
survey, the coefficients, represent the coherence
between the analyzed variables. A coefficient, r,
is a number such that: –1 ≤ r ≤ +1.
Even though we are not interested in the
actual real values of these correlation coefficients
or in their respective signs, we are interested in
their approximate sizes. That is, we will use
negative and positive signs to represent the depth Figure 2. P → D Decision is made based on
of coherence of the variables on a particular path. perception only.
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Waymond Rodgers and Susana Gago
dominant and influential for decision making Therefore, the decision about paying taxes (D)
dominated by particular moral perspectives. was influenced by the perception of the indi-
In statement (1) P → D implies that all vidual about his self-interest (to avoid to be an
information from I is disregarded and decision object of an inspection – perception).
is made without any judgment. Lipshitz and Llorens (1996) analyzed for the clients of cafe-
Strauss (1997) advocated that there are three basic terias and restaurants the relationships among
issues surrounding downplaying data sources, client satisfaction (J), the perception of quality
namely those reflecting incomplete information, (P) and future intention of repeating the service
inadequate understanding, and undifferentiated provided (D). The clients were habitual clients.
alternatives. These basic issues may downplay an He found that (1) the perception of quality influ-
individual’s use of information during the first enced the future intention of buying (P → D),
stage of processing. and (2) that the perception of quality influenced
P → D represents psychological egoism, which the satisfaction of the client (P → J). Since the
indicates that individuals are always motivated to relationship of (1) was stronger than (2), the asso-
act in their perceived self-interest. This theory ciation of P → J → D was not established.
is a subset of the Teleological theories of ethics, In Figure 3, P → J → D depicts the deontology
sometimes called consequentialist theories. These viewpoint that emphasizes the rights of individ-
theories hold that the moral worth of an action uals. This viewpoint examines the judgmental
or practice is determined solely by the conse- effects on decision choices. A basic premise to
quences of the action or practice. Figure 2 this viewpoint is that equal respect must be given
assumes that the decision-maker’s choice is driven to all individuals. Therefore, the judgment stage
by his or her predisposition or framing of the implement decision rules that help guide indi-
problem. In other words, the psychological viduals to a decision. Apart from egotists and
egoism perspective relies heavily upon one’s utilitarians, deontologists advocate that there are
preconceived notions of framing the problem. certain things that we should not engage in, even
Due to the above three basic issues (i.e., incom- to maximize utility. Deontologists also regard the
plete information, inadequate understanding and nature of moral principles as permanent and
undifferentiated alternatives), information may stable, and that compliance with these principles
be very limited or unreliable in contributing to defines ethicalness. Further, they believe that
a decision. Also, time pressures may prevent a individuals have certain absolute rights, which
thorough analysis via the judgment stage. For include (1) freedom of conscience, (2) freedom
example, Housel and Rodgers (1994) reported of consent, (3) freedom of privacy, (4) freedom
that high-analytic loan officers were more likely of speech, and (5) due process.
to go directly from their perception of the loan Statement (2) P → J → D implies that infor-
data to decision choice than low-analytic loan mation from I is disregarded, as above, and a
officers (when the effect of experience level
biases are accounted for). The authors reasoned
that high-analytic loan officers’ abilities allow
them to perform more precise analysis of the loan
data. That is, they are better able to disembed the
meaningful information from the less meaningful.
The low-analytic types are more likely to aggre-
gate data into larger chunks, thus not permit-
ting a finely tuned analysis and more often
requiring the additional analysis of the judgment
stage.
In a study by Prieto (1995), the greater fear
of an audit inspection as compared to a civic Figure 3. P → J → D The decision path is:
duty led to the elimination of the fiscal fraud. Perception to Judgment to Decision.
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Cultural and Ethical Effects on Managerial Decisions 361
decision is reached via judgment. There are at practically null effect on men). The decision
least several reasons for this occurrence. First, to leave employment (D) was based on their
information may be disregarded due to its judgment (J) that marriage, maternity and edu-
unreliability. For example, a pre-medical student cation of the children (P) were not compatible
depiction of a patient illness would not carry the with the work. A major indication of this con-
same weight as an experienced medical doctor. clusion rests with the fact that most women that
Another reason for ignoring information may left employment for these reasons did not return
result from noise interfering with the main signal to work.
or message. In this particular scenario, the In the Spanish administration the system to
decision maker may be confused regarding the contract a person as a public person should
intended message of the information. Finally, follow some steps which tried to guarantee that
conflicting informational signals may obfuscate the access would be free, under equal conditions
a decision-maker from determining the proper and without any kind of discrimination among
weights to place on the information sources. citizens caused by whatever reason (constitutional
For example, to contract a person, a company principles). Hence, the decision-making activity
or to give a subsidy in the Spanish public system related with contracting a person as a public
requires a public offer, which avoids whatever person would be quite dominant in this pathway.
possible kind of discrimination among citizens In Figure 3, an individual forms a perception
caused by whatever reason. During the final without the use of any information, weighs the
campaign election days some politicians were possible outcomes before making any judgment
accused to be involved in illicit situations with and then concludes with a decision. Culbertson
members of their families or friends by the press. and Rodgers (1997), for example, demonstrated
This pressure caused a particular politician to that perceptions influence the interpretation of
renounce his candidacy, even though he was inappropriate sexual behavior (judgments). In
attacked without valid reasons. Evidently the other words, perceptions regarding the organi-
press accused the politician (D) based on their zation’s climate toward sexual harassment influ-
perceptions regarding friendship involvement enced individuals’ decisions regarding satisfaction
with certain people (P), judging that he was at with the organization, whether they would
fault (J). recommend the organization to others, and
De Elizagarate et al. (1996) were interested in their intention to stay with the organization.
why some people purchased merchandise in the Throughput Modeling may assist us in under-
South of France (Aquitania) instead of Spain (Pais standing the important factors that can guide and
Vasco, Guipuzcoa) (D). The economic reasons increase our awareness of improving managerial
were not considered as they found that although effectiveness in the workplace.
most of the interviewees thought that the deval- I → P → D highlights the relativist perspective
uation of the peseta affected them, the majority which assumes that decision-makers use them-
pointed out that they might not buy less than selves or the people around them as their basis
before. Motivations for buying were based upon for defining ethical standards. They observe the
their perceptions of the big shops (which did not actions of members of some relevant group and
exist in Spain) (P) and the consideration that attempt to determine the group consensus on a
they provided an interesting combination of given behavior. Relativism recognizes that people
“leisure and interesting shopping” (J). Hence, the live in a society in which they have varied views
pathway appears to be governed by the following and positions from which to justify decisions as
pathway: P → J → D. right or wrong. Therefore, ethical relativists
Hernández (1997) studied the reasons and maintain that all ethical beliefs and values are
consequences of voluntary renouncing of women relative to one’s own culture, feelings, or religion.
to work. He found that marriage, maternity and That is, individuals’ knowledge structures are
education of children were reasons for them to influenced by their education, religion, books
leave work (nevertheless, these reasons had a they reads, and their environmental setting. What
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Waymond Rodgers and Susana Gago
one person accepts could be rejected by another Navy’s policy makers have believed that Navy
one, in both cases being not rejected by the social morale, welfare, and recreation programs does
group. contribute to performance. The use of this model
A recent study concerning Galician Business demonstrated that fitness use does impact on
Directors (Gago et al., 1997a, 1997b), reported one’s intentions to remain in the Navy. The
that their strategies in decision-making (D) were modeling approach demonstrates how complex
mainly negotiation and political agreement. The relationships between morale, welfare, and recre-
informal information was considered very prim- ation programs and important outcomes variables
itive in aiding their decisions. The directors men- can be combined into a single model that can
tioned, amongst other things, telephone calls, assist Navy leaders help when facing hard funding
conversations and casual meetings, and pointed choices regarding quality of life programs for
out their interest in providing information for Navy personnel.
day to day activities and the renovation of oper- I → J → D pathway reflects the utilitarian
ative functions. The fellowship between members position, which is similar to psychological egoism in
of business schools permits easier exchange of that it is concerned with consequences, as well
information. Their perception of informal infor- as the greatest good for the greatest number of
mation (P) was what they implemented for people. Utilitarianism is generally traced to
decision choice (D). Jeremy Bentham (1748–1832) who sought an
Díaz de Rada (1996) studied people who pur- objective basis for making value judgments that
chased clothes and shoes during discount periods would provide a common and publicly accept-
(D). The purpose of this study analyzed how able norm for determining social policy and
many people purchasing behavior was motivated social legislation (Velasquez, 1998). This position
by locating a bargain without considering the is committed to the maximization of the good
utility of the product (J). Further, it was found and the minimization of harm and evil. Further,
that 49.1% of people perceives the bargain (P) this theory advocates that society should always
based on the information about the discount (I) produce the greatest possible balance of positive
and decided to buy (D). value or the minimum balance of negative
In Figure 4, a decision maker reads the infor- value for all individuals affected. Therefore, the
mation presented and without any consideration utilitarian principle infers that quantities of
of the alternatives makes a decision based on the benefits produced by an action can be measured
perception he or she formulated from the infor- and added and the quantities of harm can be
mation presented earlier. In a study conducted measured and subtracted. This will determine
by Rodgers, Culbertson, Olmsted and Thomas which action produces the greatest total benefits
(1998), enlisted navy personnel’s maturity and sex or the lowest total costs.
influenced their perception of fitness use, which Figure 5, for example could represent a
in turn influenced their quality judgments. Many
Figure 4. I → P → D The decision process goes Figure 5. I → J → D Decision path: Information
from Information to Perception and to Decision. to Judgment to Decision.
9. 9
Cultural and Ethical Effects on Managerial Decisions 363
manager whose decisions evolve around a struc- viewed as morality’s primary function. Aristotle
tured environment offering very little change. argued that virtuous character is cultivated and
For example, a cost accountant determining the is part of an individual, similar to language or
total costs of a company manufactured product, tradition. The virtue ethics outlook not only
may select this pathway if the costs involved are assumes a disposition to act fairly but also a
fixed due to contractual relationships with his morally appropriate desire to do so. Figure 6
suppliers. The manager’s judgment regarding implies that an individual’s perceptions or framing
future costing of the product will probably be of the problem will influence the selection and
based upon the past supplier cost sheets (Rodgers type of information to be employed in judgment.
and Thomas, 1998). That is, an individual is motivated to act appro-
In this approach the “egoist” concern about priately (perception), which influences the infor-
consequences is supported by an utility function mation set (I) used to be analyzed (judgment)
which allows individuals to establish a judgment before a decision is made. This perspective
based on the benefits and cost of their decisions. suggests that a morally bound individual with
To collect information about the consequences good motivations is more likely to understand
is necessary in this approach. what task should be performed more so than a
Gago (1999) concluded in a decision making morally bad individual. In other words, trust is
study that profits were the primary factors the moral cement of the business community.
involving ecological innovations in Galicia (D). Beauchamp and Bowie (1997, p. 39) advocated
That is, most Companies’ Directors felt that that “A person who simply follows rules of oblig-
the main interest for introducing co-operation ation and who otherwise exhibits no special
with environmental concerns (J) involved the moral character may not be trustworthy.”
economic interest (mainly cost savings) (I) of A point of clarification regarding the interde-
the company. Only one Director felt that the pendence between perception and judgment is
company actions were guided mainly by ecolog- that the pathway shown as P → I is a contin-
ical concerns (reducing waste products). uous forward and backward path (see Figure 1).
Huerta and Sánchez (1998) analyzed the Also, this pathway suggests that perception
reasons for introducing Information Technology dominate information. Thus, when the path
in four Spanish companies’ (D). They argued that direction is P → I, we suggest that P dominates
in two companies the judgment about the con- I in an individual’s actions toward reaching a
venience of introducing Information Technology decision. When the direction of the arrow is
(J) was based on financial aspects (I). And in one reversed: P ← I implies that I dominates P and
company, judgment was based on costs and effi- an individual’s primary method of decision
ciency (I) and in another company on strategic making is via information (Rodgers, 1997).
aspect (I). In the P → I → J → D pathway, Rodgers
Sánchez and Gil (1997) studied the structure (1997) argued that auditors’ perceptions domi-
of preferences about red wine pertaining to
“denominación de origen” (which is similar to
a government guarantee for the quality and the
origin of the wine). They found that preferences
about the wine (D) were influenced in a non-
significant way by the price, the origin of the
wine (I), and the kind of wine (I). These were
the critical attributes contributing to judgment
(J).
P → I → J → D under scores the virtue ethics
outlook which is the classical Hellenistic tradition
represented by Plato and Aristotle, whereby the Figure 6. P → I → J → D Perception to
cultivation of virtuous traits of character is Information to Judgment to Decision.
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Waymond Rodgers and Susana Gago
nate the information that would be used to con- budget of 750.000.000 pesetas (about 4.500.000
struct a judgment to decide on. The individual’s euros) (D).
perception will determine the information that I → P → J → D represents the ethics of care
he will consider at the time of forming a philosophy which focuses on a set of character
judgment. Such judgment will determine the traits that are deeply valued in close personal
decision-making. The “utilitarims” will be relationships, such as sympathy, compassion,
dominated by the perception in the sense that fidelity, love, friendship, and the like. Figure 7
will be the perception that determines the rules represents the last possible fragmented way for
of the play. individuals’ cognitive processes. In this sequence,
Blanco and Gago (1993) discussed students’ an individual studies the given information,
perceptions pertaining to the need of introducing frames the problem, and then proceeds to analyze
an ethic subject on accounting in the curriculum. the problem before rendering a decision.
Most students (82,7%) considered that the system Information helps guides an individual’s percep-
of values provided by the family (P) could be tual perspective. That is, the ethics of care phi-
reoriented or continued by an adequate educa- losophy incorporates a willingness to listen to
tion (I). In addition, only 28,2% of the students distinct and previously ignored or unaccustomed
defended that the educational system promoted viewpoints.
ethical lines of behavior. Finally, 81,2% of the In the I → P → J → D pathway, informa-
students defended the necessity of an ethics tion dominates the perception in an “open-
subject in accounting as a way to influence the minded” individual. The judgments used to
way in which decision-making is developed decide on will be the result of the perceptions
(J), resulting in perhaps more ethical decisions that the individual produced as a result of the
(D). information. The “altruism” is modeled in this
Canay and Gago (1999) studied the strategic model by the information available to decide
plan for Information Technology (i.e., internet, on.
intranet and centralized telephone service) in the Rodgers (1999) found that managers received
University of Santiago de Compostela. During valuable information (I) from internal auditors’
Rector Pajares’ term of office in 1987, a recommendations. Bank managers’ often times
preliminary strategic plan was developed for formed personal relations with their customers.
Information Technology. This plan was based on the The internal auditors’ recommendations were
advantages that Information Technology could instrumental in help guiding managers’ assess-
provide for the scientific community (P). After ments of expenses. This information influenced
the successful development of a single switch- managers’ perceptions (P) regarding controlling
board for the whole Southern Campus (P), the their expenses. Their perception (P), included
Rector approved a preliminary survey for exam- non-financial information related to customers’
ining the viability of providing the University
with a more effective communications service to
an external consultancy (I). Even though this
project was never executed, the decision on the
Strategic Plan (D) was made during the Rector
Villares’ term of office in 1990. That is, from
other sources he approved the contracting of an
external-consulting agency to make an invest-
ment plan (I). This process involved the
University’s information technology experts, as
consultants they aided in its development. Once
technical and economic viability had been con-
firmed (J), the strategic plan was adopted for the Figure 7. I → P → J → D Information to
academic year 1992/1993 and provided with a Perception to Judgment to Decision.
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Cultural and Ethical Effects on Managerial Decisions 365
satisfaction, influenced their judgment (J) before efficient and profitable procedures and outcomes.
a decision (D) was made. Global business is continually bringing people
Blanco and Gago (1993) asked students about and countries together that have different
how they could regulate the ethical conduct of cultures, values, and ethical standards. Com-
the accountant. 39,1% pointed out rules, 39,1% munication and information flow may be
pointed out recommendations, 10% both and improved by the development of a model that
2,7% no regulation. The students made recom- captures and integrates decision-making processes
mendations (I), argued that (a) ethics could not along with ethical reasoning.
and should have not been imposed on accoun- Psychological egoism, deontology, relativist,
tants, (b) the need for society and the individual utilitarianism, virtue ethics, and ethics of
to be conscious about the behavior ethical reper- care represent six prominent philosophies of
cussions, and (c) individuals have the responsi- ethics. Understanding these six prominent ethical
bility to act in an ethical way. These assertions philosophies may aid in financial and managerial
assume that accountants’ judgments (J) were decisions across cultures. These philosophical
based on their perceptions of what is ethical (P), positions were embedded in a decision-making
as well as what can be influenced by informa- paradigm called the Throughput Model.
tion via recommendations (I). The Throughput Model described in this paper
Rodríguez (1998) studied the informational may help assist decision-makers in their finan-
variables that exerted an influence over the cial and managerial tasks. This approach is one
decision of eliminating a product. She affirmed way to relate major ethical philosophies in one
that companies observed the same variables model. However, decision making modeling
related to the profitability of the product (I), approach emphasizing ethical philosophies is
which allows the company to detect the per- strengthen by considering the following:
ceived weakness of the product (P). The
(1) an analysis of decision makers’ framing of
company then evaluated whether to eliminate
the information (i.e., perception);
certain products based upon its weaknesses (e.g.,
(2) an analysis of the framing effects have on
existence of a substitute product, pressure from
their judgments;
external groups, profitability of alternative
(3) the decisions that decision makers make;
products, etc.), before arriving at a decision (D).
and
In relation to the periodic supervision of the
(4) feedback designed to help decision makers
products (or the influence of the weakness detec-
understand the effects of their accounting
tion and the detailed evaluation), she demon-
information processing on their decisions.
strated that there exist a positive correlation
among the existence of a periodic supervision Future research can test and validate decision
and the number of products eliminated. makers’ processes with the Throughput Model.
Assisting individuals to make improve moral deci-
sions is one of the most important components
Conclusions of any decision making model incorporating
ethical processes. The approach suggested here
Tolerance and respect for cultural diversity is an may help solve ethical dilemmas, and thereby
ongoing challenge in the international business improve the overall decision-making processes of
community. We believe a framework addressing individuals. This research article moves toward a
major ethical positions can help guide decision vision of business ethics research that will help
making on not only a domestic level but also on move the field through its current developmental
an international level. A model that can highlight stage.
the various pathways in which ethical reasoning
can affect a decision may be helpful for our
future decisions. Understanding individuals’
ethical reasoning processes may lead to more
12. 366
12
Waymond Rodgers and Susana Gago
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