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Chapter 5:
ETHICAL DECISION MAKING
CHAPTER 5 CHAPTER AND ADDITIONAL QUESTIONS
In studying this chapter, students should consider the questions below.
“CQ1” refers to “Chapter Question 1.” This question appears at the end of the textbook
chapter.
“AQ1” refers to an “Additional Question 1.” This is an “additional” question related to
the chapter. It is not listed at the end of the textbook chapter as a “Chapter Question”.
These items are numbered within the two categories based on the order in which the
answer appears in the chapter.
AQ1: Describe James Rest’s ethical decision making model. What is the relationship between
ethical beliefs and ethical actions?
CQ1: What individual characteristics impact ethical beliefs, sensitivities, intentions, and
behaviors?
CQ2: How are ethical intuitions formed? How do the value sets of liberals and conservatives
differ?
CQ3: Describe Icek Ajzen’s “Theory of Planned Behavior.”
AQ2: What is moral intensity and how does it impact ethical decision making?
AQ3: What organizational factors impact ethical decision making?
AQ4: What other obstacles divert people from following through on their ethical intentions?
CQ4: What seven questions are the bases for a systematic rational ethical decision-making
framework? Which three questions point the decision making in the direction of the most moral
decision?
AQ5: Describe the six ethical theories.
AQ6: How do the ethical theories parallel Kohlberg’s theory of moral development?
AQ7: How can the ethical theories be applied to persuade people?
CQ5: Discuss some of the warning signs that an unethical decision is approaching.
CHAPTER 5 LEARNING OBJECTIVES
After completing this chapter, students should be able to:
Describe individual characteristics that impact ethical beliefs, sensitivities, intentions, and
behaviors
Analyze the processes by which general ethical beliefs and sensitivities lead to the
formation of specific ethical intentions
Apply a systematic rational ethical decision-making framework to arrive at a moral
conclusion
Facilitate a negotiation between competing ethical perspectives
Recognize warning signs that an unethical decision is approaching
CHAPTER 5 OVERVIEW
This chapter explores a variety of factors that influence whether a person decides to
behave ethically or unethically, beginning with how ethical intentions are formed quickly,
initially defended, and then may be revised through a rational ethical decision-making process.
The first part of this chapter helps managers understand factors that shape ethical
intuitions, intentions, and behaviors.
The second part summarizes two common ethical decision-making frameworks and then
offers a systemic seven-question rational ethical decision-making framework grounded in moral
philosophy. The framework enables employees to independently derive a moral answer to ethical
dilemmas. A process for persuading people who approach a decision from a different ethical
perspective and warning signs that an unethical situation is arising are also provided.
CHAPTER 5 LECTURE OUTLINE
Teaching Objective: To teach how to derive moral answers to ethical dilemmas.
Suggested Time: Two to three hours of class time is recommended to present this chapter.
I. Additional Question 1: Describe James Rest’s ethical decision making model. What
is the relationship between ethical beliefs and ethical actions?
Background
James Rest’s model
Relationship between ethical beliefs and ethical actions
II. Chapter Question 1: What individual characteristics impact ethical beliefs,
sensitivities, intentions, and behaviors?
III. Chapter Question 2: How are ethical intuitions formed? How do the value sets of
liberals and conservatives differ?
Ethical beliefs and sensitivities
Ethical intuitions
Liberals and conservatives ethical intuitions
IV. Chapter Question 3: Describe Icek Ajzen’s “Theory of Planned Behavior.”
V. Additional Question 2: What is moral intensity and how does it impact ethical
decision making?
Judicial analysis
Moral intensity factors
VI. Additional Question 3: What organizational factors impact ethical decision making?
VII. Additional Question 4: What other obstacles divert people from following through
on their ethical intentions?
Second doubts
Weakness of will or lack of moral courage
Breaking old habits
VIII. Chapter Question 4: What seven questions are the bases for a systematic rational
ethical decision-making framework? Which three questions point the decision
making in the direction of the most moral decision?
Rotary International’s Four-Way test
Raytheon’s ethics quick test
Systematic rational ethical decision-making framework
IX. Additional Question 5: Describe the six ethical theories.
Egoism
Social group relativism
Cultural relativism
Utilitarianism
Deontology
Virtue ethics
X. Additional Question 6: How do the ethical theories parallel Kohlberg’s theory of
moral development?
XI. Additional Question 7: How can the ethical theories be applied to persuade people?
Background
Persuasion
Achieving ethical consensus
XII. Chapter Question 5: Discuss some of the warning signs that an unethical decision is
approaching.
CHAPTER 5 SUPPORTING MATERIALS
Textbook Inserts
Ethical Dilemma Analysis
What would you do?
Let’s Build a Building
In the Real World: Enron
Exhibits
Exhibit 5.1: Decline from Ethical Belief to Ethical Action
Exhibit 5.2: Ethical Behavior Model
Exhibit 5.3: Individual Characteristics
Exhibit 5.4: Liberal and Conservative Ethical Intuitions – What Matters Most
Exhibit 5.5: A Systematic Rational Ethical Decision-Making Framework
Exhibit 5.6: Six Ethical Theories
Exhibit 5.7: The Trolley Problem
Exhibit 5.8: Virtues and Vices
Exhibit 5.9: Kohlberg’s Stages of Moral Development and Ethical Theories
Exhibit 5.10: Universal Virtues
Exhibit 5.11: Critical Thinking Decision-Making Process Table
Exhibit 5.12: Ten “Ethical Hazard Approaching” Signs
Thematic Boxes
Tips and Techniques
Best Practice in Use
ADDITIONAL QUESTION 1: DESCRIBE JAMES REST’S ETHICAL DECISION
MAKING MODEL. WHAT IS THE RELATIONSHIP BETWEEN ETHICAL BELIEFS
AND ETHICAL ACTION?
BACKGROUND
As noted by business ethicist Marvin Brown, “Most people do what they think is right,
considering the world they think they live in.”
JAMES REST’S MODEL
James Rest, an educational psychologist, has developed a four component model
sequentially showing that an individual is likely to behave morally if:
(1) he or she is aware that an ethical dilemma has arisen,
RELATIONSHIP BETWEEN ETHICAL BELIEFS AND ETHICAL ACTIONS
In general, ethical beliefs generate ethical intentions and result in ethical behaviors. But
there is typically a drop off going from one step to the next.
DISCUSSION ACTIVITY
Have each student reflect on a time when he or she observed another student cheating. Does the
student believe cheaters should be stopped? Did the student report the cheater? If the first answer
is “Yes” and the second answer is “No”, what prevented the student from doing the right thing?
CHAPTER QUESTION 1: WHAT INDIVIDUAL CHARACTERISTICS IMPACT
ETHICAL BELIEFS, SENSITIVITIES, INTENTIONS, AND BEHAVIORS?
Review the research findings in EXHIBIT 5.3 for individual characteristics that have a
positive impact on ethical decision making
oAge (mixed results)
oEducation level (higher education)
DISCUSSION ACTIVITY
Do students believe that: (a) older people are more ethical than young people? (b) educated
people more ethical than less educated people? or (c) women are more ethical than men? Why?
CHAPTER QUESTION 2: HOW ARE ETHICAL INTUITIONS FORMED? HOW DO
THE VALUE SETS OF LIBERALS AND CONSERVATIVES DIFFER?
ETHICAL BELIEFS AND SENSTIVITIES
A belief is a mental state that guides behaviors.
Ethical sensitivity refers to an individual’s awareness that a particular situation raises
ethical concerns.
ETHICAL INTUITIONS
Ethical intuition is a quick insight independent of any reasoning process about right and
wrong. Ambiguous situations, where there is high uncertainty regarding people’s
motivations or the consequences of their actions, also tap into the decision-maker’s
intuition.
LIBERALS AND CONSERVATIVES ETHICAL INTUITIONS
Haidt and his colleagues researched the apparent large difference in ethical intuitions
liberals and conservatives have to public policy issues.
Review the ethical intuition value sets for liberals and conservatives in EXHIBIT 5.4.
This does not mean liberals and conservatives ignore the other political group’s values.
They just care more about their own political group’s values.
DISCUSSION ACTIVITY
Present two contentious political issues to students, one that is of concern to liberals (such as
wanting to nationalize healthcare) and one that is of concern to conservatives (such as reducing
federal spending). Ask students to write down why they support or oppose these policies. Then
review Exhibit 5.4 and note which value sets their reasoning matches. Does the student identify
with the political affiliation (liberals or conservatives) the value set represents?
DISCUSSION ACTIVITY
Ask students if they classify themselves as liberals or conservatives, or if their parents are liberal
or conservatives? Which of the value sets in Exhibit 5.4 resonates the most with students or their
parents? How does this political preference impact their views about government regulation of
business activities?
CHAPTER QUESTION 3: DESCRIBE ICEK AJZEN’S “THEORY OF PLANNED
BEHAVIOR.”
According to Icek Ajzen’s Theory of Planned Behavior, formulating an intention to act
ethically is a function of a person’s:
Each of the three factors has two dimensions. The factor dimensions are explained below
in terms of whether a person should prevent a co-worker from stealing:
Attitude toward the behavior dimensions:
Subjective norms dimensions:
Perceived behavioral control dimensions:
The theory of planned behavior is very useful for understanding precursors to ethical
behavior. Employees will behave ethically if the desired behavior fits their belief system,
they personally have a strong desire to behave ethically, others at work desire the ethical
DISCUSSION ACTIVITY
Have students think of two injustices they’ve observed or heard about: (1) an injustice when they
took some action to remedy, and (2) an injustice when they did not act to remedy.
Evaluate both injustices using the theory of planned behavior. What were:
1. the student’s attitudes (strength of belief and evaluation of outcome) toward the two
injustices?
2. the subjective norms (strength of the normative belief and motivation to comply with the
referent group) toward the two injustices?
3. the perceived behavioral control (strength of the control belief and perceived power of the
control belief) toward the two injustices?
Did one or more of these three factors influence why action was taken in one unjust situation but
not in the other?
ADDITIONAL QUESTION 2: WHAT IS MORAL INTENSITY AND HOW DOES IT
IMPACT ETHICAL DECISION MAKING?
Moral intensity refers to issue-related factors, rather than individual or organizational factors,
JUDICIAL ANALYSIS
Factors that influence the decision-making of judges and juries include the nature of the
harm (physical, economic, or psychological), the nature of those harmed (person or
nonperson), and the stage of the organization’s resource transformation at which the harm
occurs (during the input stage, throughput state, or output stage).
The legal system holds managers most blameworthy for physical harms to people. Less
blameworthy are psychological harms to people and physical harms to animals.
MORAL INTENSITY FACTORS
An issue’s moral intensity is likely to vary based on six factors:
1. Magnitude of Consequences refers to the total sum of harms and benefits generated
by an act, such as the number of people who may be harmed (2 versus 100 people) or
whether the harm is a minor injury or a death. Harmful acts with severe consequences
have high moral intensity.
2. Social Consensus refers to the degree of social agreement that an act is good or bad.
Consensus can occur at two levels, on the broad societal level or within a localized
group of people. The strongest consensus occurs when both levels are in agreement.
Situations that violate social consensus have high moral intensity.
3. Probability of Effect refers to the probability that an act’s effect will actually occur or
cause the predicted harm. Acts with a high likelihood of causing harm have high
moral intensity.
4. Temporal Immediacy refers to the length of time between an act and the onset of
consequences. Acts that immediately cause harm have high moral intensity.
5. Proximity refers to the nearness of an act to its victims and beneficiaries. Harmful
acts that are nearby have high moral intensity.
6. Concentration of Effect refers to the amount of harm an act will create in a
concentrated area. Harmful acts concentrated in a particular area have high moral
intensity.
Therefore, the most morally intense acts are those with a high likelihood of causing
severe harm to many people in a short period of time within a close and concentrated
area, and where there is strong social consensus that the act is wrong. If such an act
occurs, the manager and organization face public outrage and strong legal condemnation.
DISCUSSION ACTIVITY
Have students evaluate two public issues, one that is high on the political agenda (national
healthcare/reducing federal spending) and one that is not (implementing living wage regulation
on the national level) using the six moral intensity factors.
Do the six moral intensity factors differentiate why one issue is high on the national agenda and
the other issue is low?
