Moral Development & Ethical BehaviorUnit 3

Ethical Awareness

EthicsEthical Behavior.

– That which is “right” or “good” in the context of governing moral code.

– Ethical behavior is value driven.

ETHICS AND ETHICAL BEHAVORIAL

Ethics• What is considered ethical varies among moral

reasoning approaches.

• What is considered ethical can vary across cultures.

• Ethical dilemmas arise as tests of personal ethics and values.

• People have tendencies to rationalize unethical behaviors.

Moral Reasoning• Moral Reasoning – Reasons for various ethical practices

Ethics and Culture• Cultural Relativism– Suggest that there is no one right way to behave;

cultural context determines ethical behavior

Ethics and CultureExcerpt From Universal Declaration of Human Rights Excerpt From Universal Declaration of Human Rights

United NationsUnited Nations• Article 1—All human beings are born free and equal in dignity

and right.

• Article 19—Everyone has the right to freedom of opinion and expression.

• Article 23—Everyone has the right to work, to free choice of employment, to just and favorable conditions of work.

• Article 26—Everyone has the right to education

Schools of ThoughtSchools of Thought• Three schools of thought about the extent to

which ethical standards apply across countries and cultures exist:

– Ethical Universalism

– Ethical Relativism

– Integrative Social Contracts Theory

Concept of Ethical UniversalismConcept of Ethical UniversalismAccording to the school of ethical universalism, Ethical universalism is also called moral universalism or moral objectivism. It states that there is one universal system of ethics.

Ethical universalism allows for the possibility of gray areas in moral decision making and for the possibility of multiple answers that are each equally moral. As long as the ethical system is applied equally to everyone, the system is one of ethical universalism.

– Universal agreement on basic moral standards allows a multinational company to develop a code of ethics that is applied evenly across its worldwide operations.

Concept of Ethical RelativismConcept of Ethical Relativism

• According to the school of ethical relativism . . . – What is ethical or unethical must be judged in light of

local moral standards and can vary from one country to another.

• Some Companies code of conduct based upon the principle of ethical relativism assume that local morality is an adequate guide for ethical behavior.

Drawbacks of Ethical RelativismDrawbacks of Ethical Relativism

Does the ethical relativism rule of “when in Rome, do as the Romans do” present a problem?– It is ethically dangerous for company personnel to assume

that local ethical standards are an adequate guide to ethical behavior.

»What if local standards condone kickbacks and bribery?

Integrative Social Contracts TheoryIntegrative Social Contracts Theory

• According to the integrative social contracts theory, the ethical standards a company should try to uphold are governed by both:

1. A limited number of universal ethical principles that put ethical boundaries on actions and behavior in all situations.

and2. The circumstances of local cultures, traditions, and

values that further prescribe what constitutes ethically permissible behavior and what does not.

Ethics Based on IndividualsEthics Based on Individuals

How ethics applied on Individuals:– Have equal political rights.– Deserve to be treated fairly.– Have the right to live as they want, as long as they do not

harm the rights of others.

A good society is one that treats individuals fairly and protects their rights. This requires:– Efficient, non-corrupt government and business.– Roles and regulations reserve individuals’ rights.

Factors That Affect Employee Ethics

• Moral Developmentprinciples for how individuals ought to treat one another, with respect to justice,

others’ welfare, and rights Levels of Individual Moral Development– Preconventional level– Conventional level– Principled level

– Stage of moral development interacts with:• Individual characteristics.• The organization’s structural design.• The organization’s culture.• The intensity of the ethical issue.

Exhibit 1.1Exhibit 1.1

Kohlberg's Moral Stages

Exhibit 1.3Exhibit 1.3

Stages of Moral Development

Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive-Development Approach,” in T. Lickona (ed.). Moral Development and Behavior: Theory, Research, and Social Issues (New York: Holt, Rinehart & Winston, 1976), pp. 34–35.

Factors That Affect Employee Ethics (cont’d)

• In Moral Development, People proceed through the stages of moral development sequentially.

• There is no guarantee of continued moral development.

• Most adults are in Stage 4 (“good corporate citizen”).

Individual Characteristics

• Personality Variables– Ego strength• A personality measure of the strength of a person’s

convictions

– Locus of Control• A personality attribute that measures the degree to

which people believe they control their own life.• Internal locus: the belief that you control your destiny.• External locus: the belief that what happens to you is

due to luck or chance.

Structural VariablesStructural Variables• Organizational characteristics and mechanisms

that guide and influence individual ethics:– Performance appraisal systems.

– Reward allocation systems.

– Behaviors (ethical) of managers.

– An organization’s culture.

– Intensity of the ethical issue.

• Good structural design minimizes ambiguity and uncertainty and fosters ethical behavior.

End of Unit 3