The document discusses various moral philosophies and individual factors that influence ethical decision making. It covers topics like moral philosophy defined, economic systems, value orientations, goodness and obligation theories (including teleology, deontology, utilitarianism, and relativism), virtue ethics, justice, Kohlberg's model of moral development, and white collar crime. The key ideas are that individuals use different moral philosophies depending on the context, and that corporate culture and performance goals are major drivers of ethical behavior.

1. Chapter 6:
Individual Factors: Moral
Philosophies and Values
Part Three:
The Decision Making Process
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2. Moral Philosophy Defined
The specific principles or rules that people
use to decide what is right or wrong
 Person-specific
 Guidelines for determining how to settle
conflicts and optimize mutual benefit
 Direct businesspeople in formulating strategies
and resolving ethical issues
No single moral philosophy is accepted by
everyone
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3. Economic Systems
 Adam Smith
 The father of free market capitalism
 Developed the idea of the invisible hand
 Milton Friedman
 Markets will reward/punish companies for
unethical behavior
 No need for government regulation
 Currently the dominant form of capitalism; is being
questioned
The U.S. has sought to export free market
capitalism to other countries
• Free market system is not a panacea
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4. Value Orientation
 Economic value orientation: Associated with
values that can be quantified by monetary
means
 Idealism: A moral philosophy that places
special value on ideas and ideals as products of
the mind
 Realism: The view that an external world exists
independently of our perception of it
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5. Goodness Theories
 Monists believe that only one thing is intrinsically
good
 Exemplified by hedonism: One’s pleasure is the ultimate
good
 Qualitative hedonism
 Quantitative hedonism
 Pluralists believe that no one thing is intrinsically
good
 Instrumentalists reject the idea that
 Ends can be separated from the means that produce
them
 Ends, purposes, or outcomes are intrinsically good in
themselves
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6. Obligation Theories
 Goodness theories: Typically focus on the end
result of actions and the goodness/happiness
created
 Obligation theories: Emphasize the means and
motives by which actions are justified
 Teleology and Deontology
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7. Teleology
Considers acts as morally right or
acceptable if they produce a desired result
 Pleasure, knowledge, career growth, the realization
of a self interest, utility
 Consequentialism: Assesses moral worth by
looking at the consequences for the individual
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8. Egoism
Right or acceptable behavior defined in
terms of consequences to the individual
 Maximizes personal interests
Enlightened egoists: Take a long-term
perspective and allow for the well-being of
others
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9. Utilitarianism
Seeks the greatest good for the greatest
number of people
 Rule utilitarians: Determine behavior based on
principles designed to promote the greatest
utility
 Act utilitarians: Examine a specific action itself;
not the rules governing it
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10. Deontology
Moral philosophies that focus on the rights
of individuals and on the intentions
associated with a particular behavior
 Believe that individuals have absolute rights
 Regard the nature of moral principles as stable and
believe that compliance with these principles
defines ethicalness
 Sometimes referred to as nonconsequentialism,
based on respect for persons
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11. Deontology (continued)
 Categorical Imperative: If you feel comfortable
allowing the entire world to see your actions,
and your rationale is suitable to become a
universal principle, then the act is ethical
 Immanuel Kant
 Rule deontologists: Conformity to general
moral principles determines ethicalness
 Act deontologists: Actions are the proper basis
on which to judge morality
© 2013 Cengage Learning. All Rights Reserved. 11

12. Relativist Perspective
Individuals and groups derive definitions of
ethical behavior subjectively from
experience
 Descriptive relativism: Relates to observing
cultures
 Metaethical relativists: Understand that
people see situations from their own
perspectives
 No objective way of resolving ethical disputes
between cultures
 Normative relativists: Assume that one
person’s opinion is as good as another’s
© 2013 Cengage Learning. All Rights Reserved. 12

13. Virtue Ethics
Ethical behavior involves adhering to
conventional moral standards and considering
what a mature person with “good” moral
character would deem appropriate
 Can be summarized as
 Good corporate ethics programs encourage individual
virtue and integrity
 The virtues associated with appropriate conduct form a
good person
 The ultimate purpose is to serve the public good
 The well-being of the community goes together with
individual excellence
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14. Justice
Fair treatment and due reward in
accordance with ethical or legal standards
 Distributive justice: An evaluation of the
results of a business relationship
 Procedural justice: Considers the processes
and activities that produce outcomes or results
 Interactional justice: Based on the
relationships between organizational
members, including the way employees and
management treat one another
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15. Moral Philosophy and Ethical
Decision making
Individuals use different moral philosophies
depending on whether they are making a
personal decision or a work-related decision
 Behavior in business can be explained two
ways
 Pressures for workplace success differ from the
goals and pressures in outside life
 The corporate culture where individuals work
Moral philosophies must be assessed on a
continuum
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16. Kohlberg’s Model of Cognitive
Moral Development
Consists of six stages
1. Punishment and obedience
2. Individual instrumental purpose and exchange
3. Mutual interpersonal expectations,
relationships, and conformity
4. Social system and conscience maintenance
5. Prior rights, social contract, or utility
6. Universal ethical principles
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17. Kohlberg’s Model
Can be reduced to three levels of ethical
concern
1. With immediate interests and with rewards
and punishments
2. Concern with right as expected by the larger
society or some significant reference group
3. Seeing beyond norms, laws, and the authority
of groups or individuals
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18. Importance of Kohlberg’s Theory
 Shows that individuals can change or improve
their moral development
 Supports management’s development of
employee’s moral principles
The best way to improve employees’ business
ethics is to provide training for cognitive moral
development
© 2013 Cengage Learning. All Rights Reserved. 18

19. White Collar Crime
“Crimes of the suite” are more damaging
than violent “crimes of the street”
 White collar criminals tend to be educated people
in positions of power and respectability
 The financial sector has a high level of WCCs
 WCCs are increasing
 Technology allows WCCs to be committed at lower
levels
 Peer influence is a cause of WCC
 Increased government efforts to detect and punish
WCCs
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20. Reasons for White Collar Crime
 Patterns of activities associated with corporate
cultures become institutionalized–may
encourage unethical behaviors
 Peer influence from acquaintances within an
organization
 WCCs increase after economic recessions
Some businesspeople may have inherently
criminal personalities
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21. Top Internet Fraud Complaints
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22. Common Justifications for White Collar
Crimes
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23. Individual Factors
Most unethical behavior is to meet
performance goals
 Not related to personal gain
 Rewards for performance goals and corporate
culture–most important drivers of ethical
decision making
 Personal moral compass not sufficient to prevent
misconduct
Equipping employees with skills that allow
them to understand/resolve ethical dilemmas
will help them make good decisions
© 2013 Cengage Learning. All Rights Reserved. 23