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ADDITIONAL QUESTION 3: WHAT ORGANIZATIONAL FACTORS IMPACT
ETHICAL DECISION MAKING?
Ethical intentions and behaviors are also shaped by organizational factors. Researchers
have found four organizational characteristics associated with ethical behaviors:
Therefore, employees of organizations with a code of ethics, an ethical climate, and
whose managers reward ethical behavior and punish unethical behaviors, are more likely
to make better ethical decisions.
DISCUSSION ACTIVITY
Do you believe small businesses behave more ethically than large corporations? Why?
ADDITIONAL QUESTION 4: WHAT OTHER OBSTACLES DIVERT PEOPLE FROM
FOLLOWING THROUGH ON THEIR ETHICAL INTENTIONS?
An ethical intention is determining mentally to take some action that is morally appropriate. But
even if an intention to act ethically is solidified, an individual still may not follow through on the
ethical intention.
SECOND DOUBTS
WEAKNESS OF WILL OR LACK OF MORAL COURAGE
BREAKING OLD HABITS
Breaking old habits can be formidable. An employee who has never spoken out against
DISCUSSION ACTIVITY
Have students think of a situation when they were absolutely sure they were going to take an
important ethical action, but then at the last moment decided not to. What obstacles arose at the
last second that prevented the students from taking action?
Was it an individual characteristic previously discussed, a moral intensity factor, an
organizational factor, due to weakness or will or difficulty breaking an old habit, or some other
factor? Why was that factor the deciding factor not to take an ethical action?
CHAPTER QUESTION 4: WHAT SEVEN QUESTIONS ARE THE BASES FOR A
SYSTEMATIC RATIONAL ETHICAL DECISION-MAKING FRAMEWORK? WHAT
THREE QUESTIONS POINT THE DECISION-MAKER IN THE DIRECTION OF THE
MSOT MORAL DECISION?
Rational ethical decision-making frameworks help individuals analyze the ethical basis of their
decisions and actions. The simplest question to ask is: How would my mother (or any person of
high integrity you respect) feel if what I’m planning to do appeared on the front page of a
newspaper?
ROTARY INTERNATIONAL’S FOUR-WAY TEST
The Rotary International’s “Four-Way Test” provides a simple framework for analyzing
the ethical dimension of a decision.
Of the things we think, say, or do:
1. Is it the TRUTH?
2. Is it FAIR to all concerned?
3. Will it build GOODWILL and BETTER FRIENDSHIPS?
4. Will it be BENEFICIAL to all concerned?
RAYTHEON’S ETHICS QUICK TEST
Raytheon, a defense industry technology company, provides its 75,000 employees with
an Ethics Quick Test consisting of the following questions to consider when facing an
ethical dilemma:
Is the action legal?
Is it right?
Who will be affected?
Does it fit Raytheon’s values?
How will I feel afterwards?
How would it look in the newspaper?
Will it reflect poorly on the company?
Review BEST PRACTICE IN USE, Raytheon’s ACTION decision-making model
Act Responsibly
Consider our Ethical Principles
Trust your Judgment
Identify Impact on Stakeholders
Obey the Rules
Notify Appropriate Persons
SYSTEMATIC RATIONAL ETHICAL DECISION-MAKING FRAMEWORK
The Rotary’s Four-Way Test and Raytheon’s Ethics Quick Test and ACTION model are
very helpful lists of questions. But they are not philosophically systematic.
Strong consensus, though not absolute agreement, exists among philosophers that some
ethical reasons are more morally acceptable than others. For example, it has been long
established that the Golden Rule “do to others as you would want done to you” takes
precedence over an individual’s self-interests when these two ethical theories are in
conflict, although some hard-core libertarians might object.
Answer Questions 1 through 7 to gather the information necessary for performing an ethical
analysis. Based on this information, develop a decision that has the strongest ethical basis.
1) Who are all the people affected by the action? [Stakeholder Analysis]
2) Is the action beneficial to me? [Egoism]
3) Is the action supported by my social group? [Social Group Relativism]
4) Is the action supported by national laws? [Cultural Relativism]
5) Is the action for the greatest good of the greatest number of people affected by it?
[Utilitarianism]
6) Does the action treat every stakeholder with respect and dignity, and is the act
something that everyone should do? [Deontology]
7) Is this how a virtuous person would act? [Virtue Ethics]
The answers to questions 5, 6, and 7 point managers in the direction of the most moral
decision. Doing something because the action is to the greatest good of the greatest
number of people affected by it, treats all stakeholders with respect and integrity, and is
Note how the “legal” answer is not the highest ethical theory (Question 4). Laws are not
created out of thin air, they are justified by concerns about the greatest good for the
DISCUSSION ACTIVITY
Assume you are a bartender. A very pregnant 35 year old woman and her group of friends,
previously served by another bartender, requests another beer. Being a well-educated and
ethically sensitive person, you realize this is an ethical dilemma. You learned in school that the
Centers for Disease Control and Prevention has determined that“There is no safe level of alcohol
use during pregnancy. Women who are pregnant or plan on becoming pregnant should refrain
from drinking alcohol,” which is when the baby’s brain is being developed. According to the
Mayo Clinic, approximately 40,000 babies are born annually with some type of alcohol-related
damage. Alcohol consumption can cause miscarriage, stillbirth, and a range of fetal alcohol
spectrum disorders (FASDs) following birth, which includes physical, behavioral, and learning
problems.
But the woman is an adult capable of making her own decisions and has already been served by
another bartender, which has happened before. Amid the loud bar noises you find yourself
pouring her another beer. Then you stop and reflect for a moment.
Would it be ethical to serve her a beer?
ADDITIONAL QUESTION 5: DESCRIBE THE SIX ETHICAL THEORIES.
The six ethical theories are ordered in Exhibits 5.5 and 5.6 beginning with the most basic ethical
theory (egoism) and ending with the most important and demanding ones (deontology and virtue
ethics).
Review EXHIBIT 5.6 elaborates on the meaning of each ethical theory that appears in EXHIBIT
5.5. View these six ethical theories as sequential steps on a moral ladder, and the first step is
egoism.
EGOISM
How does the action relate to me? If the action furthers my interests, then it is right. If it
conflicts with my interests, then it is wrong.
SOCIAL GROUP RELATIVISM
How does the action relate to my social group (peers, friends, etc.)? If the action
conforms to the social group’s norms, then it is right. If it is contrary to the social group’s
norms, then it is wrong.
Social group relativists tend to reason as follows: “I strongly believe that x is
the best decision, because that is what my social group supports.”
Social group relativists are very concerned about what their social group
thinks about an issue because they share common interests.
Social group relativism is a common ethical theory. Managers usually feel a
strong affinity for the interests of other managers. When problems arise, a
manager might ask other managers what they have done in the past when
faced with a similar problem. The decision-maker wants to do what a good
manager would do in the particular situation.
CULTURAL RELATIVISM
How does the action relate to the national culture, particularly its laws? If the action
conforms to the law, then it is right. If it is contrary to the law, then it is wrong.
Cultural relativists tend to reason as follows: “I strongly believe that x is the
right thing to do, because the law says so.”
The person perceives herself or himself as a member of a larger society that
has some common interests. A common saying among cultural relativists is
“When in Rome do as the Romans do.” This demonstrates tolerance and
respect for the practices and policies of the host nation or community.
Cultural relativism is also a rather common ethical theory. Many managers do
not want to break the law, even when doing so might personally benefit them
or their company.
UTILITARIANISM
How does the action relate to everyone who is affected by it? If the action is beneficial to
the greatest number of people affected by it, then it is right. If it is detrimental to the
greatest number, then it is wrong.
Utilitarians tend to reason as follows: “I strongly believe that x is the best
decision, because the consequences benefit the greatest number of people.”
Utilitarianism serves as the foundational ethic for the political, economic, and
business systems in the United States.
oDemocracy is utilitarian in the sense that everyone can state his or her
preference and the best public policy is that which the majority desires.
oThe ethics of capitalism is based on utilitarian logic – the economic
pursuit of self-interest improves national wealth more than other
economic systems.
oCost-benefit analysis is based on utilitarian logic – determine a
project’s total benefits and total costs, and if the benefits outweigh the
costs the project receives a favorable review.
DEONTOLOGY
Does the action treat every stakeholder with respect and dignity in all situations? Is the
action something that everyone should do? If yes, then it is right. If no, then it is wrong.
Deontologists tend to reason as follows: “I strongly believe that x is the best
decision, because everyone has a duty to treat everyone else with respect in all
situations.”
Deontologists emphasize the motives behind an action and individual rights,
rather than the consequences. They have a duty to follow “moral rules”
applicable to all people in all situations, such as the Ten Commandments.
The philosopher Immanuel Kant prevents this faulty reasoning based on a
categorical imperative, which is a rule that applies to all situations. Kant’s
primary categorical imperative maintains that one must: “Act according to the
maxim whereby you can at the same time will that it should become a
universal law.” In other words, what would happen if everyone did what you
were planning to do?
VIRTUE ETHICS
How would a virtuous person act in this situation? If the act strengthens moral character,
then it is right. If it is contrary to moral character building, then it is wrong.
Virtue ethicists tend to reason as follows: “I strongly believe that x is the best
decision, because that is what a person of high moral character would do.”
Virtue refers to achieving excellence in morals. The list of virtues is quite
extensive. The most common grouping of virtues includes justice, empathy,
passion, piety, reliability, respect, and incorruptibility.
Virtue ethics is based on cultivating good habits. Humans are creatures of
habit. Kindness and fairness must be practiced daily to become virtuous
habits. A person becomes kind and fair by being kind and fair.
Review EXHIBIT 5.8, which provides a list of virtues and vices.
Review EXHIBIT 5.10, five values Rushworth Kidder and his colleagues
have found strong global consensus: Responsibility, Fairness, Respect,
Compassion, and Honesty
DISCUSSION ACTIVITY
Have students respond to the three scenarios in Exhibit 5.7 “The Trolley Problem.” For scenario
1, tally how many students would pull the lever (utilitarian) or not pull the lever (deontology)
and discuss the results.
Then for scenario 2, tally how many people who would pull the lever (utilitarian) in Scenario 1
would now not pull the lever (deontology) because the one person is a family member and
discuss the results.
Similarly, for scenario 3, tally how many people who would pull the lever (utilitarian) in
Scenario 1 would now not throw the stranger I the path of the trolley (deontology) and discuss
the results.
ADDITIONAL QUESTION 6: HOW DO THE ETHICAL THEORIES PARALLEL
KOHLBERG’S THEORY OF MORAL DEVELOPMENT?
The six ethical theories parallel Lawrence Kohlberg’s six levels of moral reasoning discussed in
Chapter 1.
Review EXHIBIT 5.9, which shows that:
DISCUSSION ACTIVITY
Have students review some of their answers to the opening “What Would You Do?” ethical
dilemmas, the “Let’s Build a Building” ethical dilemmas, and the Enron ethical dilemmas. Based
on their answers, what stage of moral reasoning do they most often use when deriving a moral
conclusion? What ethical theory do they most often use when deriving a moral conclusion?
ADDITIONAL QUESTION 7: HOW CAN THE ETHICAL THEORIES BE APPLIED TO
PERSUADE PEOPLE?
BACKGROUND
Most managers are primarily social group relativists (Question 3), wanting to do what a
good manager would do, and cultural relativists (Question 4) who want to obey the law.
But some managers are primarily egoists (Question 2), utilitarians (Question 5),
deontologists (Question 6), or virtue ethicists (Question 7). Their ethical intuition is
grounded in one of these six theories.
PERSUASION
A healthier approach is for a manager to listen carefully to people who disagree,
categorize the other person’s response in terms of one of the six ethical theories, and then
reframe the analysis using the other person’s ethical theory to address the employee’s
concern.
Each ethical theory is similar to a different foreign language.
oFor the egoist to persuasively reason with the utilitarian, the egoist must realize
that the utilitarian does not care what is in his or her self-interest, so appealing to
oSimilarly, egoists do not care about the greatest good for the greatest number of
people, so appealing to the egoist’s sense of the greatest good will fall on deaf
ACHIEVING ETHICAL CONSENSUS
Review TIPS AND TECHNIQUES.
Many ethical disagreements can be solved. Use the following steps to help people
achieve ethical consensus and win-win ethical outcomes.
Step 1: Both parties state their position on the issue.
Step 2: Both parties reveal the values and ethical reasoning that underlie their
position.
Step 3: Both parties paraphrase each other’s position.
Step 4: Both parties paraphrase each other’s underlying values and ethical
reasoning.
Step 5: Both parties, working together, craft a resolution to the conflict over the
issue.
Step 6: Both parties check that the resolution does not conflict with their own
values or ethical reasoning, or those of the other party.
DISCUSSION ACTIVITY
Choose any ethical dilemma in this chapter and put students in teams of two based on arriving at
different conclusions regarding the right thing to do. Then have the two students following the 6
steps for achieving ethical consensus. After doing so, did the two students reach consensus?
