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A Framework for Understanding Ethical Decision Making in Business

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firms must assess their key risk areas (ethical & legal) ... ethical dilemmas involve decision rules which are often vague or in conflict ... – PowerPoint PPT presentation

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Title: A Framework for Understanding Ethical Decision Making in Business


1
Chapter 5
  • A Framework for Understanding Ethical Decision
    Making in Business

2
Ethical Issue Intensity
  • the perceived relevance or importance of an
    ethical issue to the individual, work group,
    and/or organization
  • reflects the ethical sensitivity of the
    individual or work group and triggers the ethical
    decision process
  • positive or negative incentives can affect
    the perceived importance of an
    ethical issue
  • employees need education regarding
    potential problem areas

3
Under the Federal Sentencing Guidelines
for Organizations
  • firms must assess their key risk areas
    (ethical legal)
  • ethical issue intensity has been found to have a
    strong impact on both ethical judgment
    behavioral intentions
  • the more important an ethical issue, the less
    likely an individual is to engage in questionable
    or unethical behavior associated with the issue

4
Role of Cognitive Moral Development
  • individuals make different decisions in similar
    ethical decisions because they are in different
    stages of CMD
  • Kohlbergs six stages include
  • punishment obedience
  • fairness to oneself
  • emphasizes others rather than themselves
  • right is determined by considering ones duty to
    society
  • concern for upholding the basic rights, values,
    legal contracts of society
  • right is determined by universal ethical
    principles

5
Kohlbergs Six Stages
  • can be reduced to three levels
  • concern for ones own immediate interests with
    external rewards punishment
  • define right as conforming to the expectations of
    good behavior of the larger society or some
    significant reference group
  • see beyond the norms, laws, and authority of
    groups or individuals

6
Kohlbergs Model Suggests
  • as people progress through stages of CMD, and
    with time, education, and experience, they may
    change their values and ethical behavior

7
Corporate Culture
  • a set of values, beliefs, goals, norms, and ways
    to solve problems that members (employees) of an
    organization share
  • some corporate cultures support and reward
    unethical behavior
  • ethical climate is a component of
    corporate culture

8
Ethical Climate
  • the character or decision processes used to
    determine whether actions are ethical or
    unethical
  • consists of corporate codes of ethics, top
    management actions, ethical policies, coworker
    influence, and the opportunity for unethical
    behavior
  • the perceived ethics of the immediate work group
    has been found to be a major factor influencing
    ethical behavior

9
Significant Others
  • the work group, which includes people such as
    peers, managers, and subordinates
  • help on a daily basis with unfamiliar tasks
    provide advice and information formally
    informally
  • significant others have more influence on daily
    decisions than any other factor

10
Role of Stress in Affecting Behavior
  • stress influences ethical/unethical behavior
  • stress creates strain, conflict, or disruption as
    a result of a lack of agreement as to job-related
    activities
  • role stress situations have a
    tendency to increase the
    likelihood of unethical behavior

11
Role of Opportunity in Influencing Ethical
Behavior
  • opportunity relates to permitting ethical or
    unethical behavior
  • rewards punishment play a key role
  • relates to the employees immediate job context
  • can be eliminated by establishing
    formal codes, policies, and rules
    that are enforced

12
Business Ethics Evaluations Intentions...
  • ethical dilemmas involve decision rules which are
    often vague or in conflict
  • critical thinking plays a key role
  • a persons intentions and the final decision as
    to what actions to take are the last step in the
    ethical decision-making process
  • if intentions behavior are not consistent with
    ethical judgments, the individual may feel guilt
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