Theoretical Bases for Analyzing the Ethics of a DecisionAdapte.docx

Theoretical Bases for Analyzing the Ethics of a Decision
Adapted from a chapter by John R. Deckop, in Vida Scarpello
(ed). The Handbook of Human Resource Management
Education: Promoting and Effective and Efficient Curriculum,
Los Angeles: Sage Publications, 2008.
Philosophers have pondered ethical questions for millennia,
and have developed numerous theoretical perspectives to aid in
ethical decision-making. The range and depth of philosophical
theories on ethical decision-making can be daunting. So much
so that arguably, presenting all the major philosophical
perspectives, and their nuances, is likely to fail from a
pragmatic standpoint because there is no way most students can
absorb, much less apply on a day-to-day level, so much
material.
So this analysis will be restricted to the two “dominant”
(Beauchamp & Bowie, 1997) philosophical perspectives on
ethics: utilitarianism and universalism, and will deal with only
the most general features of these theories. Things will be
complicated a little, in that a third theoretical perspective that is
a subset of utilitarianism will also be discussed: profit
maximization.
The goal is to provide three perspectives (utilitarianism,
profit maximization, and universalism) on ethical decision-
making that can actually be easily remembered, taught, and used
in daily decision-making. Later other perspectives will be
overviewed, including theory that challenges the two dominant
perspectives.
Utilitarianism
The theory. Utilitarianism, developed primarily in the 19th

century, can be understood by the common phrases “The
greatest good for the greatest number” and “The ends justify the
means.” The utilitarian believes that the potential outcomes of
a decision should be analyzed to see who benefits and who is
harmed. The decision that results in the most total benefit
compared to harm is the best decision. The utilitarian is often
portrayed figuratively as holding a scale, with the benefits on
one side being weighed against the harm on the other.
A critical aspect of this theory is that a decision can result in
harm to some individuals and still be the most ethical course of
action. As long as benefit versus harm is maximized, the “ends
justify the means.” From a utilitarian perspective, an
organizational downsizing for example would be ethical as long
as the good that comes from it, perhaps in the form of long-term
company health and shareholder value, outweighs the harm to
dismissed and current employees, and other stakeholders.
Some criticisms of the theory. One criticism of utilitarianism is
that the ends may not always justify the means. Universalism,
the other dominant ethical theory to be discussed below, argues
that humans have inherent worth and thus fundamental rights
that should not be violated under any circumstances. Thus, for
example, while a utilitarian may defend drug testing, a
universalist might argue that drug testing fundamentally
violates an employees right to privacy. Another example relates
to sweatshops – a utilitarian would argue that exceedingly poor
treatment of employees can be justified if the benefits to the
firm and the community it resides in are large enough. A
universalist might disagree, arguing the exposing employees to
extremely dangerous conditions is not justified under any
circumstances.
Another criticism of utilitarianism relates to potential self-
serving biases of the person making the decision. The
utilitarian decision-maker in theory should weigh the benefits

and harm too all affected parties without bias. That may be
difficult to do if the decision-maker has a significant stake in
the decision. Owners of sweatshops often reply that poor
working conditions are necessary to stay competitive and
provide jobs for the community. Is this true, or just what the
owner tells himself as self-justification for getting rich?
Similarly, a supervisor may fire a subordinate with whom she
has a conflict, telling herself that this termination is good for
the company, when in reality the decision may be self-serving.
And even when the decision-maker attempts to be unbiased with
respect to self-interest, a variety of decision-making biases can
nevertheless result in unethical decisions when attempting a
utilitarian solution (e.g., Messick & Bazerman, 1996).
Profit Maximization
The theory. Profit maximization is not the name of a theory,
but rather the ethical prescription of what has been termed
“neoclassical economics” (Hosmer, 2008). The clearest
explanation of profit maximization as an ethical imperative is
probably the article by Milton Friedman (1970), titled “The
Social Responsibility of Business is to Increase Its Profits.”
Profit maximization is actually a subset of utilitarianism,
because Friedman and other neoclassical economists argue that
if all firms strive to maximize profits (subject to certain
conditions, as discussed below) then the overall societal
welfare, in terms of benefit versus harm, will be maximized
(Evan & Freeman, 1988). Why is this so? The explanation of
this requires a detailed economic analysis, which is usually
covered in basic economics courses. As Hosmer (2008)
suggests, it may make sense to simply accept these economic
arguments, as they are rigorously derived given the assumptions
that underly the model.
Profit maximization is a powerful basis for ethical decision-
making because it is so simple to apply. Choose the course of

action that maximizes firm profit. It is most often cited as a
basis for decision-making in the context of the role of business
in society. Friedman argued that firms are unethical if they, for
example, engage in pollution control beyond the requirements
of the law, if it hurts profits. Of if they hire the hard core
unemployed in order to contribute to the social objective of
reducing poverty. In both cases, Friedman argues, the decision-
maker is spending someone else’s money (e.g., shareholders,
customers) without their consent. Profit maximization can also
be applied to more mundane, every day decisions. Should a
certain employee be terminated? The answer would be yes if, in
the decision-maker’s judgment, the action is in the best interests
of the firm. It would not matter if the employee was only
marginally a subpar performer, or if the termination would
result in severe problems for the employee and his family.
The part about the theory that has not been discussed thus
far is the assumptions. They are critical, because the degree to
which the assumptions are met has direct implication as to
whether profit maximization can be considered an ethical
decision basis. What are these assumptions? Again, these are
covered in a basic economic course. For example, there must be
perfect competition, all information needed for a decision must
be known, all individuals act rationally, all workers are
homogeneous in terms of their labor input, etc. The way
Friedman framed the issue may be more straightforward. A
business should maximize profits, “so long as it stays within the
rules of the game, which is to say, engages in open and free
competition without deception or fraud.” (Friedman, 1970).
Actually, this sounds straightforward, though the most common
criticism of this profit maximization as an ethical decision basis
relates to the interpretation of these assumptions. This and
other criticisms will be discussed next.
Criticisms of profit maximization. Profit maximization is
considered a subset of utilitarianism because, as mentioned, the

theory states that if all firms seek to maximize profit, the
overall welfare of society will be maximized. But the
assumptions that must be met for the theory to apply have
undertones of other ethical perspectives. When Friedman says
“without deception or fraud,” he is sounding like a universalist,
who would claim that some actions (e.g., deception) are
inherently wrong. He also states in his article that profit
maximization should be subject to “the basic rules of society,
both those embodied in law, and those embodied in ethical
custom.” How does one define or identify ethical custom?
Using a common philosophical metaphor, this puts the theory on
a “slippery slope,” because without a clear standard of “ethical”
(which from a tautological perspective puts us back at the
beginning of all this discussion) almost any decision could be
supported or criticized using this theory. Those decision-
making biases discussed above with respect to utilitarianism in
general also apply here. Self-serving and other biases may well
affect whether a decision-maker in a given instance determines
that there is free competition, or no fraud. Another main
criticism of profit maximization is that as a utilitarian theory, it
could support doing significant harm to individuals in the name
of profit (i.e., the ends justify the means).
Universalism
The theory. Universalism is probably most associated
historically with Immanuel Kant, who wrote (primarily) in the
18th century. Two key statements are commonly associated
with it: “Never treat another inappropriately as a means to an
ends,” and “Would you get what you want if everyone did it,
under similar circumstances?” This second statement, which
Kant labeled the “categorical imperative” bears resemblance to
what in Christianity is called the golden rule, or “Do unto
others as you would have them do unto you.” Kant was trying,
among other things, to put “philosophical muscle” on the golden
rule. Interestingly, the golden rule is not a principle limited to

Christianity; it is a fundamental tenet in every major religion in
the world (Parliament of the World's Religions, 1993).
Universalism is more than the golden rule, however, and is
arguably more useful for determining ethical decision in a
business context. This is because the golden rule supposes the
decision maker is ethical to begin with (e.g., Trevino & Nelson,
2007). If not, the application of the golden rule may not make
much sense. For example, imagine that you are sitting in a café
looking out the window as you sip your drink. Across the street
you witness a bank robbery, and the man who just robbed the
bank then walks into the café and sits next to you. He asks you
to tell the police when they arrive that he’s been sitting there
for the past hour, thereby providing him an alibi. Now, if
you’re an ethical person (and don’t fear for your life!) you
probably won’t agree to lie. However, what if you’re a bank
robber yourself, and think, “do unto others as you would have
them done unto you.” Well, following the golden rule, you’d
want him to lie for you, so that means that you’d lie for him.
And that’s not ethical!
Universalism directly challenges utilitarianism, in that the
first statement above contradicts the principle that the ends do
not justify the means. It implies that employees have inherent
worth, and that a firm or manager that violates the employee’s
inherent dignity and worth by using them as a means to an end
is acting unethically. For example, most would agree that sexual
harassment violates the victim’s fundamental rights as an
employee, and is universally wrong, no matter what.
When applying this perspective, you should ask yourself if
no amount of good could make up for the harm that you’re
causing the individual. In the sexual harassment example
above, that would be true. And if so, that means that the harm
is fundamentally wrong, and unethical according to
universalism. If not, however, then the action may well be
ethical by universalist thinking. For example, let’s say an
employer decides to downsize its workforce by 20% in order to

avoid bankruptcy. Terminating those employees certainly
causes them harm. However, many do not believe that an
individual has a universal right to work for a particular
organization and never lose his/her job, under any
circumstances. So a universalist may consider this downsizing
ethical.
The categorical imperative (second statement above) gets at
notions of reversibility and hypocrisy (Schumann, 2001).
Consider an action by a manager – lying to an employee about
her chances of promotion in order to avoid her quitting the firm.
The universalist would oppose this because a world where all
firms lied about such things would mean that employees,
including this one, would not believe anything about promotions
in the first place, and as such, the intent of the action (to retain
the employee) would not be realized. In other words, if
everyone did what this manager did, he would not benefit from
his action.
The categorical imperative can be considered a way to test
whether you are correctly applying the “don’t treat employees
as a means” principle (Hosmer, 2008). The categorical
imperative implies that unless an action is morally right for
others to do, then it is not morally right for you to do. As such,
all humans are of equal value. Treating people exclusively as a
means to an ends denies the inherent worth of the individual,
and denies them fundamental rights.
Criticisms of Universalism. A strict application of the
categorical imperative is considered by many to be difficult to
apply in practice (Hosmer, 2008). For example, lying is
prohibited. But probably everyone lies at least occasionally,
and few of us would consider all lies to be unethical.
Supervisors are often trained to provide supportive feedback to
their subordinates, and it may be effective in some
circumstances to restrain brutal honesty when discussing
performance with an employee who has difficulty grasping

something. Most of us would think that the dishonesty is
justified by the outcome – protecting the employee’s feelings of
self-worth. This would be a utilitarian way to look at the issue.
Another criticism relates to the first formulation of
universalism. It’s hard to avoid treating others as a means to an
end. We do it all the time – arguably, professor and student
treat the other as a means to an end. The key in applying the
perspective are the terms “exclusively” and “inappropriately.”
A good guide would be to ask if the treatment violates
fundamental human rights of respect and dignity, such that no
amount of good can make up for it. But drawing this line can
be difficult and introspection and consistency are necessary.
Universalism also suffers from the same potential of self-
serving biases that the other ethical theories face. The
categorical imperative asks the decision-maker to situationalize
the problem. That is, under similar circumstances, would I be
willing to make it a “universal law” for others to do the same?
A universalist decision-maker can be tempted to justify almost
any action by situationalizing the action in restrictive fashion.
For example, a manager might be tempted to skew a
performance evaluation to give an employee a very good raise,
which, let us say, would benefit the manager politically in the
organization. Without situationalizing the problem, the action
would not be justifiable because if all managers biased their
performance evaluation results when it was convenient to them,
performance evaluation would not represent a rational pay
policy for the firm, which is one of its key objectives. So it
would not be used, and this manager could not benefit from her
action. However, she could tell herself that she will do it only
this one time. Thus, she could rationalize that if there were a
world where all managers biased their performance evaluation
results only once in their careers, then the intent of her action
would still be realized. The limited occurrence of the practice
would still mean that employees and firms would trust the
validity of performance evaluation. This may be so, but most of
us would consider her action unethical.

Applying the Theories in Everyday Decision-making
The purpose of ethical training is not to learn the concepts in
order to get questions right on an exam, or to impress others by
dropping the names of impressive sounding theories. It is to
affect everyday decision-making. The three theories presented
above – utilitarianism, profit maximization, and universalism,
are simple enough in their basic principles that they can be
easily remembered after you finish reading this.
Perhaps the next step after reading the theories is to think
about which fits best with one’s moral/religious upbringing and
education. Which of these theories makes the most sense as a
basic rule of organizational life? If one had to pick one to
characterize your concept of what is right, which would it be?
This theory can be the individual’s “home base” theory. It is
the first one to turn to when assessing the ethicality of a
decision. It is applied to the situation, and if what it says to do
makes sense, the decision-maker acts accordingly.
However, its application may not make sense for a variety of
reasons. Many people, in understanding the criticisms of the
various theories, are reluctant to commit to using one theory in
all circumstances. The theory may not provide a clear guide to
action in a given case. Or there might be a competing ethical
principle that makes more sense in a given circumstance.
So it is also fine to be willing to apply other theories in
situations where the home base theory does not make sense.
Philosophers, as proponents of one or another of these theories
might object, but until the philosophers or management theorists
can identify one set of ethical principles we can all agree upon,
each of us has the responsibility to develop an ethical
framework for ourselves, one that we can live with and use.

Next, each theory will be discussed in terms of how it might
be used as a home base theory, and how it might be modified in
given circumstances.
Let’s use utilitarianism is the home base theory. The decision-
maker believes in weighing the consequences of a decision
against all affected stakeholders to the decision. It is
acceptable if decisions cause harm to some, as long as the
benefit that others receives outweighs the harm.
However, in thinking through a particular decision, a
question may be asked along the lines of universalism: “Does
my decision violate an employee’s fundamental rights as a
human?” The answer may be no to this. A termination or
downsizing may be justified, assuming that employees do not
have a fundamental right to continued employment in a firm.
Alternatively, the may answer yes to this question. Perhaps a
firm has decided to downsize a group of employees. This may
be an ethical decision on a utilitarian basis. However, let us say
top management proposes to not notify affected employees
about the downsizing until the day of termination. This action
may also be acceptable from a utilitarian standpoint, if one
believes that the benefit to the firm from this practice will
outweigh the harm to employees. However, one may decide that
this action, given the situation, is inherently wrong, because it
violates fundamental rights of affected employees. In this
instance, it could be recommended that ample notice be
provided to employees of the downsizing, even while the
decision-maker otherwise makes decisions on a utilitarian basis.
Let us say profit maximization is the home base theory. One
believes that the objective of business decision-making should
be to maximize the long-term profitability of the organization.
It can be an easy guide to apply, and it can be argued that it is
an employee’s duty to make decisions that benefit the firm,

subject of course to the assumptions of the theory. But as with
utilitarianism, the question may arise: “Are there instances
where the best interests of the firm should take second place in
my decision-making?” “Are their instances where the harm
caused to employees cannot be outweighed by any amount of
profit?” This issue comes up, for example, when the ethicality
of sweatshops is considered. More and more, production has
shifted to countries in which labor standards afford workers and
their communities little protection from harmful practices, such
as dangerous working conditions and environmental pollution
(e.g., Varley, 1998). Should a U.S. firm operate in another
country using what would clearly be considered inhumane
treatment of workers by U.S. standards? Even if so, should a
firm provide only the absolute minimum in protection to
workers and their communities dictated by the law in that
country (often almost none), in order to maximize profit? Many
who believe in profit maximization as a general principle would
answer no to one or both of these questions. One might instead
argue that the firm should provide treat workers as humanely as
possible, while still allowing for a reasonable profit. This
would be a utilitarian solution, one that does not conform to
strict profit maximization.
At a more mundane level, managers are faced everyday with
issues of employee treatment. Though the best interests of the
firm may be one’s basic orientation, there may be situations
where a more utilitarian solution is appealing, such that the
shareholders of the firm (the ultimate beneficiaries of profit
maximization) are considered but one stakeholder to the
decision. And, from a universalist perspective, there may be
certain actions to employees that one would not be willing to do
under any circumstances, simply because the action is
inherently wrong.
Let us say universalism is the home base theory. One may have
been brought up that certain things are fundamentally wrong,

and certain actions never justifiable. Do not lie. Do not break
promises. Do not steal company property. Good treatment of
employees is not necessarily a means to benefit the company or
other stakeholders in this view, but fundamentally the right
thing to do. Universalism is the home base theory, but as with
the others, it may not be possible or practical to apply it in all
circumstances.
To exercise universalist principles, one must either the
choose to work in a firm that has similar values, or one must be
willing to constantly challenge HRM policies or actions that are
considered wrong. It may be difficult to consistently practice
universalistic principles in the workplace. We all have different
value systems, and honest assessments of a business policy even
by two universalists might contradict. For example, Grossman
(2001), in applying universalistic principles, suggests that
incentive pay is a basic individual right. Conversely, Heery
(1999) argues that incentive pay, and the risk it imparts to
employees, can represent a fundamental injustice.
It may be difficult for an employee to find a firm to work for
that has exactly the same universal values. One cannot quit
every time the firm does something, or asks one to do
something, that is inconsistent with one’s principles. Though
one’s home base theory is universalism, it may be necessary to
search for a utilitarianism or profit maximization solution in
some circumstances.
Drawing Lines
As mentioned above, universalists cannot fight every fight,
every time they see something in their firm that they consider
unethical. This same argument applies to other ethical theories.
We cannot try to change things, or quit, every time our ethical
principles are violated. Thus, living up to one’s ethical
principles at work is also about learning where to draw the line

– how bad things must get to speak out, or quit.
And, most importantly, it is important to think about where
these lines should be drawn ahead of time - as in an educational
environment versus the real world. Otherwise, the pressure of
the situation may result in drawing a line in a place looks
reasonable at the time, but later is perceived as unethical (e.g.,
McCoy, 1997). The single-minded pursuit of a goal, say getting
a project accomplished, can blind individuals to the ethical
consequences of some of the decisions made along the way.
Sometimes decisions must be made within a very short time
frame, maybe even a split second. Maybe financial or family
pressures make it extremely difficult to do what ethical
principles dictate. In all these situations, it is helpful to have
thought through ethical principles ahead of time. Each of the
three ethical theories discussed above share one common
criticism: all can easily be misapplied if the decision-maker
engages in self-deception. The pressures of a situation may
cause one to apply self-serving biases that while in the short-
run appear acceptable, in the long-run result in damage to one’s
firm, career, or self in terms staying true to ethical principles.
Other Ethical Perspectives
There are numerous other ethical perspectives that can be
used as conceptual tools for ethical decision-making. Some
challenge the dominant perspectives discussed above, and other
complement these perspectives. Two categories will be
discussed below: justice theories and the theories related to the
duty to care.
Justice
The goal of justice theories is to analyze whether a
procedure, outcome, or both, is inherently fair (Thorne, Ferrell,
& Ferrell, 2003). Note that theories of procedural and

distributive justice are frequently discussed in textbooks, and
are often based on philosophical concepts of justice. However,
the use of these theories in textbooks, as well as in academic
research, is mainly as a means to the ends of employee
productivity (Greenwood, 2002). Justice, as a principle worthy
of realization in its own right in decision-making, has not
received significant attention in texts.
Many justice theories relate to the distribution of wealth in
society. For example, John Rawls’ theory of distributive justice
asks the decision-maker, when thinking about what is right, to
wear a “veil of ignorance” with respect to personal
characteristics, such as race, family background, special talents,
etc. Then, one should make a decision that reflects this
impartiality to personal circumstances. Rawls argues that if we
do this, our decisions would be to distribute economic goods
and services equally, unless an unequal distribution would work
to everyone’s advantage (Beauchamp & Bowie, 1997). The
focus of this perspective is often on the disadvantaged in
society, and many of its implications imply the need for a more
egalitarian distribution of wealth both in society and within
firms. However, Rawls does not argue for complete equality.
For example, differential compensation practices, such as
incentive systems for entrepreneurs, would be acceptable as
long as the result was improved job opportunities for the least
advantaged members of society (Beauchamp & Bowie, 1997).
Another justice theory can be termed “contributive liberty”
(Hosmer, 2008). In contrast to theories of distributive justice,
such as Rawls’ theory, this theory, developed by Robert Nozick,
focuses on an individual’s right to liberty in the process of
decision-making. As such, it relates to procedural, not
distributive justice. From a resource allocation perspective, this
theory emphasizes the role of free markets, which, it argues,
result in the fairest allocation of resources. This theory
represents a companion of sorts to profit maximization. While

profit maximization argues that market mechanisms produce the
most societal welfare, contributive liberty argues for the
inherent justice of free markets.
All the theories up till this point focus on the individual –
her rights, and the duties of the decision-maker with respect to
these rights. Another justice-based theory, communitarian
theory, focuses instead on the community. Rather than discuss
the rights of the individual versus the government or the firm,
communitarian theory stresses the development of communal
values, and how those communal values should affect the
individual (Beauchamp & Bowie, 1997). One aspect of this
theory is that too much focus on individual rights obscures the
responsibility the individual has to the collective. As a member
of a community (the firm), an employee thus has the
responsibility to be, among other things, part of establishing a
workplace that is fair and just (Barrett, 1999).
The Duty to Care
Most well-known and established ethical theories, including
all the theories discussed thus far, focus on the development of
an abstract set of ethical principles upon based on rights and
justice. There is no role for sensitivity to others, emotion, and
relationships for their own sake in these theories. Even
universalism, with its focus on “doing unto others” emphasizes
the development of abstract principles not specifically related to
particular individuals.
The duty to care is a label for several theories developed
from a feminist tradition that emphasize character traits that are
valued in close personal relationships, such as sympathy and
compassion (Beauchamp & Bowie, 1997). One aspect of this
work is to address societal inequality of women, and how laws,
and even ethical theories developed by men, have contributed to
this (Grimshaw, 1986).

Another focus is to advocate a basis for ethical decision-
making based on care. One prominent example is the work of
Carol Gilligan (e.g., Gilligan, 1982). She asserts a framework
of care and compassion, traits often associated with women, as
underlying moral reasoning and ethical duty. Gilligan argues
that a decision based on caring and concern for others can be as
ethical, or more ethical, than a decision based on adherence to a
set of abstract principles.
This relates to duties in a variety of areas in the workplace
(Beauchamp & Bowie, 1997). Managers should exhibit
sensitivity to employees’ personal problems not because it may
result in a more productive employee or protect against a
lawsuit, but because it is the right thing to do. We have the
duty be sensitive to the points of view of others. When there
are conflicting rights, this sensitivity can help in finding
solutions where all party’s voices and perspectives are heard.
Feminist thinking and the duty to care also involve metaphors in
the workplace. Metaphors more commonly associated with
men, such as sports and war, often reflect competition and
conflict. Metaphors more commonly associated with women,
such as relationships and family, are often seen as “soft” and
not as important, despite the fact that these orientations may be
correct (Beauchamp & Bowie, 1997).
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Power, Ethics, and the Subject at Work. London: Sage
Publications.
Varley, P. (1998). The Sweatshop Quandary: Corporate
Responsibility on the Global Frontier. New York: Investor
Responsibility Research Center.
Winstanley, D. & Woodall, J. (2000). Ethical Issues in
Contemporary Human Resource Management. New York: St.
Martin’s Press.
Quiz #2
Define and explain one of the five barriers to an ethical
organization, also known as “ethical breakdowns” experienced
by companies.
What is the “new perspective on organizational wrongdoing”?
How does it differ from the older perspective?

*
Moral/Ethical problems in business:
A conflict between financial performance (revenues, costs, &
profits) and social performance (obligations to all stakeholders)
Ethical Principles/Perspectives
Profit Maximization/Individualism Approach
Utilitarian Approach
Universalist/Categorical Imperative Approach
Rights/Rule of Law Approach
Justice Approach
Golden Rule Approach
Might = Right Approach
Duty to Care Approach
Organization Ethic Approach
Intuition Approach
Revelation Approach
Hedonistic Approach
Virtue Approach
*
Ethical Principles
People can compare their anticipated actions and decisions with
certain principles or belief sets that they hold to be true; most
of us tend to pick and choose which principle to we abide,
depending on the situation.
Utilitarianism one day, justice the next…depending on to whom
we are speaking or what we are doing
It would take an entire philosophy course to fully explain all the

various ethical principles and their respective founding
philosophers, and so here is an overly-simplified list of some of
the more commonly used principles:
Utilitarianism: * seek the greatest good for the greatest number
of people
* does the good in this action outweigh the harm?
* if the consequences are good, the action is good
* focus is on the ends, not the means
Individualism: * an act is moral when it promotes the
individual's long term interests
* individual’s long-term interests ultimately lead to greater
good
Rights: * all individuals have fundamental rights - claims or
entitlements
* take an action or make a decision by vowing to respect
the rights of others (free consent, privacy, freedom of
conscience, free speech, due process, life & safety)
Justice: * individuals must be given what they are due, what
they deserve
* act or make a decision that is fair to others (distributive,
procedural, interactional, compensatory)
Golden Rule: * "Do unto others as you would have them do
unto you"
* rooted in many religious traditions
Might=Right: * what is ethical is what an individual or
company has the power to accomplish
Categorical Imperative (Immanuel Kant):
* take an action only if it can be consistently adopted by
everyone else
* an action is morally right only when it can be considered
a unversal law (can everyone do it?)
Organization Ethic: * the needs of inidividuals should be
subordinated to the greater good of the organization
(whatever that may be - business, church, school, state)
* this is the age of the large organization - individuals
should take actions conistent with the goals of the

organization
Intuition: * follow your gut feeling when making moral
decisions
Revelation: * prayer or appeal to higher beings will reveal
the right thing to do
Hedonistic: * "If it feels good, do it"
Choice of
Ethical
Perspective
Balancing work & familyPoor internal communicationsPoor
leadershipWork hours, work loadTechnology and constant
accessNeed to meet sales, profit, or budget goalsLittle or no
recognition of achievementsCompany politicsPersonal financial
worriesInsufficient resources
Sources of pressure in today's workplace:
Management Pressures
“I am sometimes subject to pressure to compromise personal
standards to achieve organizational goals”
All Management Levels: 64% agree Top
Management: 50% agree Middle Management:
65% agree Lower Management: 85%
agree

*
Consequences of Pressure60% of workers feel “substantial”
amount of job pressure57% of workers feel more pressure than 5
years ago40% of workers feel that pressure has increased in the
past yearNearly half (48% of workers) reported that they had
engaged in one or more unethical or illegal activities during the
past year, resulting from job pressure
*
Top five types of unethical or illegal behaviors in response to
pressure:
Cutting corners on quality Covering up incidents Abusing or
lying about sick days Lying or deceiving customers Putting
inappropriate pressure on others
*
Percentage of type of observed misconduct at work:
Unsafe working conditions 56%

Deceptive sales practices 56%
Mishandling proprietary/confidential information
50%
Violations of privacy rights 38%
Shipping low-quality or unsafe products 37%
Employment discrimination
36%
Sexual harassment 34%
Altering product quality or safety test results
32%
Antitrust violations or unfair competitive practices
32%
Environmental breaches 31%
The New Perspective on Organizational Wrongdoing
Wrongdoing as a “normal phenomenon”Treats wrongdoing as
prevalent rather than rareViews wrongful behavior as not much
different than rightdoingConsiders wrongdoers to be ordinary
people rather than “bad apples”Assumes the causes arise from a
plethora of structures, systems and processes
What gives rise to wrongdoing?Power structuresAdministrative
systemsSituational social influenceAccidental wrongdoing and
technological systems
Choice of
Ethical
Perspective
“Biases”
individual differences
power structures,
administrative systems,

social influence,
technology =
“ethical breakdowns”
Individual influences on ethical decision-making
https://www.youtube.com/watch?v=2AotV8XNO_I
https://www.washingtonpost.com/posteverything/wp/2016/10/21
/how-can-you-tell-if-someone-is-kind-ask-how-rich-they-
are/?noredirect=on&utm_term=.a0587e26dd13
Factor
Influence on ethical decision-making
Age and gender
Very mixed evidence leading to unclear associations with
ethical decision-making.
National and cultural characteristics
Appear to have a significant effect on ethical beliefs, as well as
views of what is deemed an acceptable approach to certain
business issues.
Education and employment
Somewhat unclear, although some clear differences in ethical
decision-making between those with different educational and
professional experience seem to be present.
Psychological factors:
· Cognitive moral development
· Small but significant effect on ethical decision-making.
· Locus of control
· At most a limited effect on decision-making, but can be
important in predicting the apportioning of blame/approbation.
Personal Values
Significant influence – some empirical evidence citing positive
relationship.
Personal integrity

Significant influence likely, but lack of inclusion in models and
empirical tests.
Moral imagination
A new issue for inclusion with considerable explanatory
potential.
Situational influences on ethical decision-making
https://www.pbs.org/newshour/economy/why-those-who-feel-
they-have-less-give-more
https://www.pbs.org/newshour/economy/does-wealth-breed-
narcissism-t
Human Behavior Experiments
https://www.youtube.com/watch?v=XVpV73wSyG8
Type of factor
Factor
Influence on ethical decision-making
Issue-related
Moral intensity
Reasonably new factor, but evidence suggests significant effect
on ethical decision-making.
Moral framing
Fairly limited evidence, but existing studies show strong
influence on some aspects of the ethical decision-making
process, most notably moral awareness.

Context-relatedRewards
Strong evidence of relationship between rewards/punishments
and ethical behaviour, although other stages in ethical decision-
making have been less investigated.
Authority
Good general support for a significant influence from immediate
superiors and top management on ethical decision-making of
subordinates.
Bureaucracy
Significant influence on ethical decision-making well
documented, but actually exposed to only limited empirical
research. Hence, specific consequences for ethical decision-
making remain contested.
Work roles
Some influence likely, but lack of empirical evidence to date.
Organizational culture
Strong overall influence, although implications of relationship
between culture and ethical decision-making remain contested.
National Context
Limited empirical investigation, but some shifts in influence
likely.

5 Barriers to an Ethical Organization
Choice of
Ethical
Perspective
“Biases”
individual differences
power structures,
administrative systems,
social influence,
technology =
“ethical breakdowns”
Top Management Leadership
Ethics Programs & Officers
Realistic Objectives
Ethical
Decision
Processes
Codes of Conduct
Ethics Audit

Ethics Training
Whistle-blowing mechanisms
Discipline of Violators
Codes of Conduct
Improving Ethical Climate
Effective Communication
Code of Ethics TopicsAspirational and expected
conductConflicts of interestReceiving and giving of gifts,
gratuities, and entertainmentProtecting company proprietary
informationDiscriminationSexual
harassmentKickbacksEmployee theftProper use of company
resources
*
Ethics Check Questions at WorkIs the action legal? RIGHTSIs
the action right and fair? JUSTICEDoes it promote win-win
relationships? UTILITARIANISMIs it appropriate for both short
and long term? PROFIT MAXIMIZATIONDoes it comply with
the firm’s values? ORGANIZATION ETHICWould I want
everyone to know about this? UNIVERSALISMHow will I feel
about myself? INTUITION

*
Why should business behave ethically?
Fulfills public expectation for business.
Prevents harming others.
Improves business relations and employee productivity.
Reduces penalties under Corporate Sentencing Guidelines.
Protects business from others, including government.
Protects employees from their employers.
Promotes personal morality.
Helps profitability.
Factor Influence on ethical decision -making
Age and gender Very mixed evidence leading to unclear
associations with ethical decision -making.
National and cultural characteristics
Appear to have a significant effect on ethical beliefs, as well as
views o f what is deemed
an acceptable approach to certain business issues.
Education and employment
Somewhat unclear, although some clear differences in ethical
decision -making between
those with different educational and professional experience
seem to be prese nt.
Psychological factors:
mall but significant effect
on ethical decision -making.
-making, but can be
important in predicting the
apportioning of blame/approbation.
Personal Values Significant influence – some empirical
evidence citing positive relationship .

Personal integrity Significant influence likely, but lack of
inclusion in models and empirical tests .
Moral imagination A new issue for inclusion with considerable
explanatory potential.
Type of
factor
Factor Influence on ethical decision -making
Moral intensity
Reasonably new factor, but evidence suggests significant effect
on ethical decision -
making.
Issue-related
Moral framing
Fairly limited evidence, but existing studies show str ong
influence on some aspects of
the ethical decision-making process, most notably moral
awareness.
Rewards
Strong evidence of relationship between rewards/punishments
and ethical behaviour,
although other stages in ethical decision -making have been less
investigated.
Authority Good general support for a significant influence from
immediate superiors and top
management on ethical decision -making of subordinates .
Bureaucracy
Significant influence on ethical decision -making well
documented, but actually
exposed to only limited empirical research. Hence, specific

consequences for ethical
decision-making remain contested.
Work roles
Some influence likely, but lack of empirical evidence to date .
Organizational
culture
Strong overall influence, although implications of relationship
between culture and
ethical decision-making remain contested.
Context-
related
National Context Limited empirical investigation, but some
shifts in influence likely.
Xuan Lin
BA3102
Analysis Paper
Abstract
The discussion of the paper revolves around using the
concept of morality to understand my personal life story with
my friend. We got into a fight due to ownership of my property.
I ended up choosing my friendship over my property. The
property provides a deep insight of the situation.
Analysis-The Woes of Kindness
Description of the Situation

I have a reason to entitle my personal life story “The Woes
of Kindness.” The people I loved and I thought they care for me
betrayed my friendship which change my personality a lot.
During the first years of my college life, I developed friendship
with Ai, a young lady that we had grown up together since
middle school. It was interesting that we had met in school after
spending much time in our neighborhood together. Ai was
someone I had trusted to live with because we had shared a
significant part of our lives. We had attended were in the same
learning institutions. I was known by her single mother, and I
spent most evenings with her at their home watching popular
movies and conversing about different issues in life. Chen had
no secrets to hide from me, and our friendship was untouchable.
With us calling ourselves blood sisters, we decided that we
would rent a house and use it as our abode while completing our
college education. We agreed that we would purchase
everything on a 50-50 basis. We also considered the possibility
of moving to another house after we completed our education.
Ai was a happy lady because she had never moved out of her
mom’s house. She was excited that she had her own place to
live. This was the order of the day for her, and it appeared in
every conversation we had. Ai always thanked me for making it
possible for us to live together and make independent decisions
about our lives. She promised to become a cooperative
roommate and even termed us ‘unstoppable sisters.’ The first
year of our college life was all rosy, and we did most of our
things together.
However, with time, the situation changed. Ai was no
longer a friend. She spent much of the time in the room with her
boyfriend. My friends from college always visited and saw this
as a habit and they always asked the reason for her changed
behavior. She stopped doing chores and we have tons of
problem from time to time. Ai stopped talking to me, I had to
spend more time with my classmates for me to tackle my stress.
Trust that is broken is difficult to amend. I decided that it was
time for me to leave. My friends came to assist in moving my

things out of the house.
However, she brought the issue to her mother stating that
she had bought everything and that I would not leave the house
with the things I had purchased. Since my parents were not
aware of my stay with Ai, I could not inform them because they
would get furious. This is because they had warned me against
living outside the school environment and they had refused the
aspect of me living with another student, so I need to hide the
situation. I felt despair from this situation, how can one person
have such a huge change in their personality.
Stakeholders affected by My Decision
Ai had become an individualistic personal in the situation.
She only thought about herself and not those around her.
Individualism as a concept focuses on a decision that is meant
to benefit a person in the long-term without considering others.
Any of our individual friends could see that she had a selfish
personality that had been hidden before the situation occurred. I
was a person that chose to follow universalism because I
believed that my decisions had a significant impact on anyone I
had associations within my environment. I could not let my
relationship go sour due to the things I had bought and owned
during my first years in college. If Ai thought that they were
important than what we had accomplished together, then it
means that she was not the friend I had thought she was in my
entire life. I did not want any fight within the situation and
decided to be moral and think straight about starting life afresh.
I did not want to cause a fight because she was my friend, and
we had come a long way. The situation was somehow selfish,
but I had to leave the house without anything. I told my friends
that there was no need to fight back and that the truth would
finally come out.
The Right Outcome
When it came to the situation, the right outcome would
have been for her to let me leave with the stuff I owned and for

her to keep her own belongings. It was wrong for her to deny
me the right to hold my personal effects. She should not have
called her mother to participate in the situation because the
problem was for us to solve and there was no need to involve
outside parties. I wish my parents knew about my residence
because they would have defended me in dealing with Ai and
her mother. The situation would not have escalated if the
mother wasn’t involved, presented herself as a single mother
who lacked any strength to deal with my social status. She had
claimed that she was a weak and struggling mother and that she
would not let other kid extorting her child.
The Wrong Outcome
Several things discussed above may be considered wrong.
If Ai had not lived with me, we would probably still be friends.
I never had any problem with her before, but my decision of
leaving the house with everything I bought made her furious and
it cause her to lie. This would not have occurred if she was
truthful to her mother. She should have communicated the truth
and not put herself in a situation where everyone would see her
as a victim. We could not have a rational conversation because
of her anger bursts and threats that she would do anything to
protect any property and her mother from me. If it were not for
my kindness, if it happen to someone else, this might resorted to
physical violence.
Ethical Principles in the Situation
I was keen to move out. I did not want to live in such a
toxic environment. I had to sacrifice my property for friendship.
Utilitarianism involves the aspect of the end not justifying the
means. I focused on friendship and forwent the items I had
bought. I told her to have a good life and that I would always be
a friend. It hurt me inside, but I also swore to start again so that
I would have peace of mind. I did not want to get in more deep
about the situation because of the friendship. Ai was greedy in
the situation, greed has changed a girl so much.

Existing Biases in the Situation
I chose friendship over property which was a bias. I failed
to understand that she was in the wrong and that she needed to
be punished. My friends could not believe that I could let her
get away with keeping my things. Nevertheless, I could not
stand her going through many difficulties because she was my
friend and I knew her mother was also a struggling parent. Her
mother also showed bias because she did not want to listen to
my case. She only saw her child as being one who was being
pressured to give up what she had worked for in the situation.
Ai’s mother just concentrated on influencing her daughter to
keep the property. I also failed to fight for the truth of property
ownership and moved out with nothing. The situation made me
feel like a loser because I had worked hard to purchase all the
house items (sofa sets, television, cooker, internet equipment,
and utensils among other things). The above biases were as
reasons that moved out of the house.
Preventive Measures
Situations occur differently, and they are handled through
unique and diverse approaches. This means that every case has a
remedy. As reiterated above, I wish I lived in my own house. I
would not have trusted Chen who only turned out to be an
enemy. I made many mistakes when it came to communicating
with my parents about my residence in school. I had lied to
them about always being in class, so that they would not visit
me and know my accommodation whereabouts. They paid for
accommodation that existed outside the school and not in the
university as they thought, (they wanted me to live within the
school environment and having a apartment room by my self). I
wish I had also learned more about Ai before I chose to live
with her under the same roof. This would allowed me to prepare
for the situation. It is a lesson that I learn to be more precise
when making decision, people will show their humanity if it

involves their interest and benefit.
Morals & Ethical Principles
I Morals
moral/immoral/amoral/nonmoral
moral relativism/universalism/perspectivalism
Kohlberg’s levels of moral development
II Ethical Principles
“Alligator River Story”
Greg Smith
Choice of
Ethical
Perspective
Morality:
The social rules that govern & limit our conduct,
especially the ultimate rules concerning right and wrong.
The basic guidelines for cooperative social existence.

Serves to restrain the purely self-interested desires in each of us
in order to make it possible for all of us to live together.
When we make a decision or take an action we can be:
Moral - in compliance with moral standards
key operating questions of management is "is this
action or decision fair to us and all stakeholders
involved?"
Immoral - in opposition to moral standards
key operating question of management is "can we
make money with this action or decision regardless of
what it takes?"
Amoral - without consideration of moral standards
key operating question of management is "can we
make money with this action or decision?"
Nonmoral - outside the sphere of moral concern
Moral standards get confused with:
Law Etiquette
Conscience
Corporate/Professional Codes
Religion

Moral Relativism:
The belief that morality is just a function of what a
particular society happens to believe, that what is right is
determined by what a society says is right.
abortion is condemned as immoral in Catholic Spain, but is
practiced as a morally neutral form of birth control in Japan
Moral relativists believe that there is no absolute moral
standard independent of culture, no universal definition of right
or wrong.
polygamy, stealing, slavery have all been tolerated by the
moral system of one society or another
Moral Universalism is the belief that variations in moral
standards reflect different factual circumstances rather than
fundamental differences in values.
Which is right?
It is good to emphasize that in viewing other cultures we should
keep
an open mind and not simply dismiss their social practices.
Compromise position is Moral Perspectivalism,
the consideration of multiple perspectives while at the same
time asserting universal truths.

Kohlberg’s Levels of Moral Development
*
1. Preconventional Level:
- how we behave as infants & children
- emphasis in decisions is on ourselves
Stage 1 - Reaction to punishment - pain avoidance
Stage 2 - Seeking of rewards - praise, candy, trip to a
movie
2. Conventional Level:
- child learns the importance of conforming to norms of
society
Stage 3 - Good boy/nice girl morality - rewards such as
feelings of warmth, loyalty acceptance from family & peers
Stage 4 - Law and order morality - certain norms are
expected in society - individual sees himself as part of a
larger social system
3. Postconventional Level:
- a more advanced notion of right or wrong than that which
is conventionally articulated
- moral principles are internalized, seen as "right"
- focus is on humanity as a whole
- few people reach this level – most remain at Stage 4.
Stage 5 -Social contract orientation - view that individuals
have rights given by society as a whole, that personal
values are relative, and that consensus should be reached
through process
Stage 6 - Universal ethical principle orientation -
individual uses his or her self- chosen ethical principles to
consistently do what is considered to be universally right
The relationship between morality, ethics and ethical theory

Moral/Ethical decisions have:
Extended consequences Multiple alternatives Mixed and
complex outcomes Uncertain consequences Personal
implications
*
Ethical Principles/Decision Tools
Profit Maximization/Individualism Approach
Utilitarian Approach
Universalist/Categorical Imperative Approach
Rights/Rule of Law Approach
Justice Approach
Golden Rule Approach
Might = Right Approach
Duty to Care Approach
Organization Ethic Approach
Intuition Approach
Revelation Approach
Hedonistic Approach
Virtue Approach
*
Ethical Principles

of people
good
entitlements
they deserve
unto you"
everyone else

organization
decisions
Profit Maximization/Individualism
Key Principle
The objective of a decision should be to maximize the
corporation’s/individual’s profit and shareholder value in the
long term.
“Do what’s best for you/your company”
Profit Maximization/Individualism
Criticisms/Weaknesses
Assumptions of open and free competition often not met.
Can cause undue harm to some stakeholders.
Often does not account for “externalities.”
Puts a great deal of pressure on the law to reflect society’s
values.
Biases may affect decision making.
Utilitarianism
Key Principles
The greatest good for the greatest number.
The ends justify the means.

Utilitarianism
It could be argued that sometimes harm cannot be outweighed
by any benefit. That is, sometimes the ends can’t justify the
means.
Calculating the harm and benefit can be difficult. Some argue
that the ends can never truly be foreseen. So the focus needs to
be on the means.
Biases (personal, situational, organizational) can
inappropriately affect benefit/harm assessment.
Universalism
Key Principles
Take an action only if you’d get what you want if everyone did
it, under equivalent circumstances.
“Do the right thing”
Universalism
Difficult to “never lie,” yet a pure application of universalism
says lying is always wrong.
Some would argue that there aren’t many things that are wrong
“no matter what.”
Biases (personal, situational, organizational) can affect how
“equivalent circumstance” and “inappropriately” are defined.
Could potentially justify any action.
Rights/Rule of Law
Key Principles

Do what you have the right to do, as reflected in our legal
system.
“Obey the law.”
Rights/Rule of Law
What is legal or illegal does not always reflect a society’s moral
standards – “moral minimum.”
Not all in society have equal ability to influence the legal
system.
What if you intentionally break the law and accept the
punishment: Is that ethical?
Hard to always obey every law. Where to draw the line?
Justice
Key Principle
What is fair for one should be fair for all.
“Do what is fair.”
Treating people equally may not mean treating them the same.
Virtue Ethics
Key Principle
Develop individual character (virtues) and you will necessarily
make the right decision.
Virtues: wisdom, prudence, justice, fortitude, courage,
liberality, magnificence, magnanimity, temperance

Assumes “good” people will make “good decisions.
Considerations in making ethical decisions…
Ethics Check QuestionsIs the action legal? RIGHTSIs the action
right and fair? JUSTICEDoes it promote win-win relationships?
UTILITARIANISMIs it appropriate for both short and long
term?Does it comply with the firm’s values? ORGANIZATION
ETHICWould I want everyone to know about this?
UNIVERSALISM/CATEGORICAL IMPERATIVEHow will I
feel about myself? INTUITION
*
THE ALLIGATOR RIVER STORY
There lived a woman named Abigail who was in love with a
man named Gregory. Gregory lived on the shore of a river.
Abigail lived on the opposite shore of the same river. The river
that separated the two lovers was teeming with dangerous
alligators. Abigail wanted to cross the river to be with Gregory.
Unfortunately, the bridge had been washed out by a heavy flood
the previous week. So she went to ask Sinbad, a
riverboat captain, to take her across. He said he would be glad

to if she would consent to go to bed with him prior to the
voyage. She promptly refused and went to a friend named Ivan
to explain her plight. Ivan did not want to get involved at all in
the situation. Abigail felt her only alternative was to accept
Sinbad’s terms. Sinbad fulfilled his promise to Abigail and
delivered her into the arms of Gregory.
When Abigail told Gregory about her amorous escapade in order
to cross the river, Gregory cast her aside with disdain. Heartsick
and rejected, Abigail turned to Slug with her tale of woe. Slug,
feeling compassion for Abigail, sought out Gregory and beat
him brutally. Abigail was overjoyed at the sight of Gregory
getting his due. As the sun set on the horizon, people heard
Abigail laughing at Gregory.
*
How To Increase Moral/Ethical Awareness?Study and
understand ethical principles.Become more aware of the
institutions in which you live and work and how they relate to
one another.Make conscious your unconscious biases and
prejudices.Surround yourself with people who are trying to do
well by others.
*
1. Preconventional Level:
- how we behave as infants & children
- emphasis in decisions is on ourselves
Stage 1 - Reaction to punishment - pain avoidance
Stage 2 - Seeking of rewards - praise, candy, trip to a
movie
2. Conventional Level:

- child learns the importance of conforming to norms of
society
Stage 3 - Good boy/nice girl morality - rewards such as
feelings of warmth, loyalty acceptance from family & peers
Stage 4 - Law and order morality - certain norms are
expected in society - individual sees himself as part of a
larger social system
3. Postconventional Level:
- a more advanced notion of right or wrong than that which
is conventionally articulated
- moral principles are internalized, seen as "right"
- focus is on humanity as a whole
- few people reach this level – most remain at Stage 4.
Stage 5 -Social contract orientation - view that individuals
have rights given by society as a whole, that personal
values are relative, and that consensus should be reached
through process
Stage 6 - Universal ethical principle orientation -
individual uses his or her self- chosen ethical principles to
consistently do what is considered to be universally right
*
*
Ethical Principles
of people

good
entitlements
they deserve
unto you"
everyone else
organization
decisions

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