EXAM REVISION
TOPIC 1: INTRODUCTION TO ETHICS AND GOVERNANCE
1. What are the differences between immoral, moral and amoral management (Carroll, 2011)?
Immoral management is defined as an approach that is devoid of ethical principles and implies a positive
and active opposition to what is ethical. Immoral management decisions, behaviours, actions and practices
are usually in conflict with accepted and valued ethical principles. It holds that the management’s motives
are selfish and that it cares only or primarily about its own or its company’s gains. The management does
not care about others’ claims to be treated fairly or justly, caring only about their own or their organisation’s
gains. Legal standards are seen as barriers that must be overcome, and the strategy is to exploit opportunities
for personal or organisational gain.
In moral management, decision makers vigorously conform to high personal and organisational standards
of ethical behaviour. Ethical leadership is a principal characteristic of moral managers. Moral managers are
interested in profits, but they pursue financial success within the confines of legal obedience. They typically
regard the law as an ethical minimum and they have a habit of operating well above what the law mandates.
Moral managers are searching out where ethical problems are likely to arise and proactively addressing
these with respect to all stakeholders.
Amoral management is not just a middle position on a continuum between immoral and moral
management. Conceptually, it has been positioned between the other two, but it is different in nature and
kind from both, and it is of two kinds: intentional amoral management and unintentional amoral
management.
Intentional amoral management consciously decide for themselves that ethics and business should not
mix. Amoral managers of this type do not factor ethical considerations into their decisions, actions and
behaviours because they believe concern for ethics is inappropriate for the tough competitive world of
business. These managers are neither moral nor immoral. They simply think that different rules apply in
business than in other realms of life.
Like intentionally amoral managers, unintentionally amoral managers do not think about business activity
in ethical terms, but for different reasons. These managers are simply casual about, careless about, or
inattentive to the fact that their decisions and actions may have negative or harmful effects on others. These
managers lack ethical perception and moral awareness. They are well intentioned but are either too
insensitive or too self-absorbed to consider the effects of their decisions and actions on others. They comply
with the law to the extent of their awareness and do nothing more than what is expected of them.
TOPIC 2**: NORMATIVE/PRESCRIPTIVE THEORIES
1. ** What is deontological ethics? How does it differ from other (teleological) ethical
understandings? Please give an example of deontological thinking in a business situation. (2012
Exam Question)
Teleological (End based/ Consequential) ethics defines the moral rightness of an action in terms of the
consequences it brings about. If the good consequence outweigh the bad consequences, the decision or
action is morally correct. The sub-theories of teleological ethics are egoism, utilitarianism and virtue ethics.
1Egoism views that an act is morally right if and only if it best promotes an agent’s self interests. This
theory asserts that one should make decisions that maximise their self-interest. The advantage is that it is a
simple argument that suits the notion of self-interest. However, the limitations are each person must allow
everyone else to pursue their self-interests, cannot be universalised and assumes that we live among
strangers, we do not care for anyone or anything.
2Utilitarianism is concerned with making decisions that promote greatest overall amount of good in the
world. According to utilitarianism, an ethical decision is one that maximises good consequence over bad
consequences for the greatest number of people by emphasising on the word ‘Majority’. Best decision is
made when it yield the greatest net benefit. The advantages are that it is a simple and straightforward
decision making – cost benefit analysis. It also provides an objective way of resolving conflicts of self-
interest. The disadvantages are the nature of consequence may be biased and the rights of some stakeholders
are ignored. Eg, workers who are retrenched lack representation or voice in the decision. Furthermore, it is
difficult to evaluate all consequences (eg those affected in the future)
3Virtue ethics focus on the integrity of the moral actor rather than the act itself. It contends that an act is
ethical if it is consistent with certain ideal virtues. A moral virtue is an acquired disposition that is valued as
part of an individual’s character. The advantages are that it considers the importance of community on one’s
action and considers actor’s character in the outcome; however the disadvantage is that community may be
wrong. The two core virtues of a good human being are integrity and constancy.
Deontological (Duty based/ Non-consequential) ethics view actions as either right or wrong independent
of their consequences. The moral status of an act is judged not by its consequences but by the moral agent’s
intentions. In deontology, the ethical decision is not simply one of morals, but of duty and justice, which are
the underlying moral principles to follow in making the decision. The sub-theories of deontological ethics
are Kantianism and Justice Ethics.
4Kantianism focus on doing what is ‘right’ rather than doing what will maximise societal welfare. The
motive and intention of the act is more important than the outcome. The decisions made are based upon
abstract universal principles such as honesty, fairness, justice and respect. According to the theory, it
emphasizes on moral rights and the act is ethical if one feels comfortable allowing everyone in the world to
see the act that is committed. The advantages are that it produces universal moral guidelines and treat all
people as moral equals. The disadvantages are that it often involves emotions which can be wrong at times
and it is difficult to determine which rule, principle or right to follow precedence.
5Justice theory focus on fair treatment and due reward in accordance with ethical or legal standards. It
protects the interests of stakeholders who may be under-represented or lack power. For instance, managers
adopting this theory will provide the same rate of pay to workers who are similar in level of skills,
responsibility instead of gender, personality and favouritism. The advantages are that it protects those who
lace of voice and it fits into one’s sense of morality. The disadvantages are that benefits are hard to define
and the rights of some may have to be sacrificed in order to ensure a more equitable distribution of benefits.
An example of deontological thinking in business situation may be that managers adopting the justice
theory will provide the same rate of pay to workers who are similar in level of skills and responsibility
instead of gender, personality and favouritism. This helps to protect the interests of stakeholders who may
be under-represented or lack of power. Similarly, Kantianism indicates that managers will treat everyone in
the company with respect and give them the free speech rights.
*Must know the strengths and weaknesses of each normative theories
TOPIC 3: PSYCHOLOGICAL (COGNITIVE) THEORIES
1. * Explain what Kohlberg meant by cognitive moral development. What did Kohlberg mean by
‘conventional’, ‘pre–conventional’ and ‘post–conventional’ levels of CMD? What might be
some limitations of Kohlberg’s theory?
Kohlberg’s cognitive moral development is a process of stages through which people progress in their
development of moral thought.
There are six stages of the cognitive moral development process.
1. Punishment and obedience: For example, an individual defines right as obedience to rules and authority.
2. Fairness to oneself: An individual defines right as that which serves his or her own needs.
3. Emphasizes others rather than themselves.
4. Right is determined by considering one’s duty to society: An individual determines what is right by
considering his or her duty to society, not just to other specific people.
5. Just rules determined by consensus: An individual is concerned with upholding the basic rights, values
and legal contracts of society.
6. Universal ethical principles:
A person believes that right is determined by universal ethical principles that everyone should follow.
Kohlberg’s six stages can be reduced to three different levels. First is the pre-conventional level which
comprises Stages 1 and 2. The focus is on one’s self-interest. Thus the pre-conventional level concerns one’s
own immediate interests with external rewards and punishment. Moral judgement is governed by the
concept of egoism.
The second level is conventional level, consisting of Stages 3 and 4. In this level, the individual moves from
self-interest to the community. What is right is conforming to the expectations of good behaviour held by
society at large (being a rule-follower) or some significant reference group. Moral judgement is governed by
utilitarianism and virtue ethics.
The third level is the post-conventional level. The focus is on universal principles. At this level, moral
judgement is independent of any external influence. Ethical decisions are made without influence from
authority, rules, consequences, or groups. Moral judgement is governed by justice and Kantianism.
Some limitations of Kohlberg’s theory are:
1. Kohlberg’s research has limited validity as it is only tested on American boys and men which might make
his model not workable in other countries.
2. Different cultures may rank different stages differently.
3. It does not take into account the context of decision making i.e. situational influences.
2. * What is moral awareness and is it the most important step in the ethical decision making
(EDM) process?
Moral awareness is the ability to recognise an ethical issue. If one cannot even recognise a moral issue when
he sees one, he would not be able to make any ethical decisions. Hence, moral awareness is the most
important step in the ethical decision making process. Without being aware of moral issues, one cannot
make a moral judgement and cannot intend to commit to a particular moral action.
3. * What are the four steps in ethical decision making process?
The four steps in ethical decision making process include:
1. Recognition/Moral Awareness:
This stage is the most important because it helps each individual (moral agent) to determine if the issue or
situation requires ethical concerns. In other words, it helps to identify moral issues.
2. Judgement:
The moral agent must engage in some form of moral reasoning to arrive at moral judgement Each judgement
made will differ as agent at each different 6 stages of Kohlberg CMD theory will behave differently.
Furthermore, various factors such as individual characteristics, moral intensity of the issue, locus of control
and situational influences will also affect moral judgement made.
3. Intent:
The oral agent then must establish moral intent. In doing so, one places moral concerns ahead of other
concerns and decides to take moral action
4. Moral Behaviour/Action:
At this stage, the moral agent actually translates intent into moral behaviour. One overcomes all
impediments, internal and external, and carries out one’s intended moral action.
TOPIC 4: CREATING AN ETHICAL ORGANISATION
1. * What is the role and content of an ethics code in an organisation? Might ethic codes have
limitations? What might these be and how might they be overcome?
An ethics code is a formal set of moral principles and responsibilities. The need for a code of ethics can be
due to the firms’ internal or external pressure to conform to or in some cases, it is required by the law (eg
USA). Also, it may help to safeguard reputation, improve customer service and attract the best
employees. The content of an ethics code may include the basic levels of conformation, such as the dos and
n’ts of employees. It varies depending on the nature of the business.Limitations
However, code of ethics is nothing new, as it is common in workplaces across many sectors (Ethics
Resource Center 2007). Mere existence of code is ineffective. People know the presence of the code but do
not practice it. Worse still, if the leaders are not committed to the codes (weak organisation culture),
people under him will follow so. Afterall, these employees tend to look up and look around.
How to have an effective ethics codes/overcome barriers
That said, according to Kish-Gephart, Harrion and Trevino (2010), they found out that a effectively enforced
code of ethics can carry huge influence on one’s actions; and this is the message that we are trying to bring
across. An organisation should place their lens on its code of ethics and not let it be only a façade. The
way in go about doing so is to have a high level oversight, or rather incorporate ethical leadership into
it. (Ferrell et al. 2012). Top managers should provide consistent emphasis on the ethical standards. Most
importantly, they should go beyond ‘window dressing’ and start ‘walking the ethical talk’. Not
surprisingly, a recent survey discovered that when top management emphasize ethics on a constant basis and
practice what they preach, unethical actions tend to be lower in the workplace (Ethics Resource Centre
2003). In conclusion, ethics code should be embedded in the culture, by the leaders and well-committed.
6. Explain when and why codes of ethics are ineffective and discuss the arguments presented by
Stevens (2008) and Trevino and Brown (2004).
Codes of ethics are ineffective when the organisational culture is weak as there is lack of self-control and
there would tend to have lack of open communications. Stevens (2008) affirmed that the mere existence of
a code was not influential but process and systems that the code symbolised needed to be in place for
effectiveness to take place. Also, forced code compliance in firms is not effective. Codes implemented by
senior management usually do not work as employees have not accepted them as part of their culture. He
saw that willingness to employ best practices for implementing ethical codes was weak in the collectivist
culture of Chinese firms with regards to culture. He concluded that culture and power distance play
important roles as subordinates are expected to accept superiors’ instructions even if they disagree.
7. * Is unethical behaviour in business the result of ‘bad apples’? Discuss in relation to
organisational.
Bad apples are generally unethical individuals in the firm
Popular opinion on the causes of bad behaviour by individuals in organizations often ranges between two
extreme views: one view is that some, if not most, people are simply bad and cannot be changed, and,
therefore, one cannot trust people very much; the other view is that people are basically good, and they only
need good influences to guide them to do the right thing. Another way of expressing the two views is to ask:
should we guard against the ‘bad apples’ landing in our barrel, or focus more on the barrel in which we put
the apples?
Extracted from assignment 1:
Individual characteristics can never tell the whole story. It is not only about finding the bad apples and
eliminate them. Often, bad apples turn bad because they are being spoilt by bad barrels (work
environment). To recap, most people fall under the conventional level (CMD) and a significant amount of
people are externals (locus of control), in which both scenarios imply that most people are influenced by
