Business ethics and ethical decision making
Ethics can be a set of rules or standards to judge something right or wrong. Given a set of rules or standards can be changed depending on the environment and context (Gitman, 2020). Understanding ethical issues and unethical behaviours is the initial step to understand ethics. (Gitman, 2020) describes eleven categories of universal unethical behaviours. Some of the key categories of them are using resources or properties which do not belong to you, saying false information, giving false impressions, hiding information, misusing opportunities, abusing power …etc. By looking at each category, it is understandable those unethical behaviours are independent from the type or nature of the business. On the other hand in order to describe ethical decision making processes deep theoretical analysis is required.
Theoretical model for ethical decision making
Kohlberg’s six stage cognitive moral enhancement model (Kohlberg, 1976) is the origin for (Trevino, 1986) where it discusses about six stages of cognitive moral enhancement model with three levels namely pre-conventional, conventional and post-conventional. However, in order to comprehensively explain a given instance, situational and individual moderators play vital roles (Trevino, 1986).
Kohlberg’s six stage model in nutshell (Kohlberg, 1976)
Level
Stages
Description
Preconventional
Punishment
Considering only personal impact
Self interest
Conventional
Social norms
Considering pressure from peers and law enforcement from society
Law & Order
Postconventional
Social contract
Heist level of moral reasoning by considering universal ethics. Only few may reach to Postconventional level
Universal Ethics
Heinz dilemma is the one of the famous story to explain Kohlberg’s theory in simple terms (Mcleod 2013). In short Heinz’s wife was suffering from serious cancer and required a very expensive drug invented by a local chemist. Heinz didn’t have enough money to buy that drug so he was asking help from friends and relatives. Even after help from others he couldn’t collect the required amount. Heinz went to the chemist and explained the situation expecting some negotiation about the price. Chemist strictly refused price negotiation since he wanted to make real money out of his invention. Finally Heinz had stolen the drug from the chemist in order to save his wife.
Dr. Kohlberg presented above story to different age groups and asked for their viewpoints for couple of questions like should Hienz punished or not punished for stolen of the drug, should chemist punished if Hienz’s wife died without the drug (Kohlberg 1984). Kohlberg was not interested in the judgment right or wrong but the reason behind the judgement. As per the investigation Kohlberg identified three levels of moral reasoning further each level has sub stages. Interpretation of the theory as per the given situation.
Level
Stages
Description
Preconventional
Punishment
By considering direct punishment of stealing others property make the judgement as stolen of the drug is wrong
Self interest
Based on the personal interest, stealing the drug can be interpreted either way right or wrong. The decision highly depend on persona viewpoint
Conventional
Social norms
By considering how society think about you, decide not to steal the drug even which might cause to the death of the women
Law & Order
As adhering to civil law make decision to not to steal the drug
Postconventional
Social contract
Question rules and laws, if I don’t steal the drug for the sake of following rules how to save my wife’s life.Does rules really cater the purpose
Universal Ethics
At this stage people have a personalized framework or vision based on their experience, beliefs and cognitive abilities. Which may or may not fit into the law. Again, the decision to steal or not to steal the drugs is based on the personalized framework of individuals. Only a few may reach to this level.
Trevino Interaction model (Trevino, 1986)
Trevino interaction model is an extension of Kohlberg’s six stage model where it considers two additional factors, situational and individual moderators belonging to a given situation. One of the good examples to explain the Trevino interaction model is the case study of Columbia air space shuttle accident investigation (CAIB, 2003). In short after 81.7 seconds of successful launch of space shuttle Columbia, 1.7 pound of foam struck on the left wing in the space shuttle, which finally caused the total loss of the shuttle with seven astronauts. Even though the accident was avoidable chief shuttle engineer Rodney Rocha’s decision to not to send warning email to key parties regarding the safety issues of the Columbia made the stage for the disaster. Even though Rocha wanted to act with urgency, he was in couse to the final decision which can be comprehensively explained with the Trevino Interaction model (Trevino, 1986).
Level 01: Stage 02: At the time Mr Rocha identified the threat, he typed an email irrespective of organization processes and procedures. Which shows his personal interest.
Level 02: Stage 03: Since he had a good reputation among the engineering community, he did not want to destroy it by doing something out of the process. Which shows his thought process involves what others think about him and pressure from peers.
Level 02: Stage 04: Even though Mr. Rocha typed an email, he did not send it because he doesn’t want to break the chain of commands. The idea is Mr. Rocha took law and order religiously.
It is clear that Mr. Rocha’s ethical decision making process moving between moral development level 1 and level 2. It never hit the level 3. If his ethical decision making process could hit the moral development process level 3 there was a good possibility to avoid such a disaster.
Situational and Individual moderators
Apart from cognitive moral development stages situational moderators like organization culture, hierarchy, organization process directly influenced Mr. Rocha’s ethical decision making process. Furthermore individual moderators like cognitive heuristic, professional ethics, theory of individual decision making affected, Mr. Rocha’s ethical decision making process (CAIB 2003).
In conclusion (Trevino, 1986) a person situation interactionist model is a theory to explain ethical decision making process of people in a given instance irrespective of business domain or context
Ethical behavior of Leadership
Another important factor for business ethics is ethical behavior of the leadership (Turner et al, 2002).
References
Gitman, L.J., McDaniel, C., Amit Shah, Reece, M., Koffel, L., Talsma, B. and Hyatt, J.C. (2018). Understanding Business Ethics. [online] Opentextbc.ca. Available at: https://opentextbc.ca/businessopenstax/chapter/understanding-business-ethics/#rfin-ch02_2 [Accessed 12 Oct. 2020].
Harvard Business Review. (2011). The Best Ways to Discuss Ethics. [online] Available at: https://hbr.org/2011/03/talking-about-ethics-how-we.
Kohlberg, L. & Candee, D. (1984). The relationship of moral judgment to moral action. In W.
Kurtines & J. Gerwitz (Eds.), Morality, moral behavior and moral development (pp. 52–73).
New York: Wiley.
Kohlberg, L. (1976), Moral Stage and Moralization, McGraw-Hill, New York, NY.
Trevino, L. (1986). Ethical decision making in organizations: A person-situation interactionist
model. Academy of Management Review, 11(3), 601–617
Mcleod, S. (2013). Kohlberg’s Stages of Moral Development. [online] Simplypsychology.org. Available at: https://www.simplypsychology.org/kohlberg.html.
Kohlberg, L. (1984). The Psychology of Moral Development: The Nature and Validity of Moral Stages (Essays on Moral Development, Volume 2). Harper & Row
Columbia Accident Investigation Board (CAIB). (2003). Columbia Accident Investigation
Report. Washington, DC: U.S. Government Printing Office
Turner, N., Barling, J., Epitropaki, O., Butcher, V. and Milner, C. (2002), “Transformational
leadership and moral reasoning”, Journal of Applied Psychology, Vol. 87 №2, pp. 304–11.
