CHAPTER 6
Individual Factors: Moral Philosophies and
Values
SUMMARY
This chapter provides a description and analysis of how individuals’ background and philosophies
influence their decisions. It is important to determine when one action is considered right and when
another is viewed as wrong, as well as the individual moral philosophies that are often used to justify
decisions or explain actions. To understand how people make ethical decisions, it is useful to have a grasp
INSTRUCTOR NOTES FOR “AN ETHICAL DILEMMA”
In this scenario, Connor feels he must choose worker safety or meeting a production deadline. His
immediate supervisor advocates cutting safety corners and skipping breaks in favor of a higher daily
output. Connor knows this compromises worker safety and workers are following orders because they fear
losing their jobs. This case helps students understand the difficulties faced by middle managers who value
ethics.
LECTURE OUTLINE
I. Moral Philosophy Defined
A. Moral philosophy refers to the specific principles or values that people use to decide what is
right or wrong.
B. Moral philosophies are person-specific, whereas business ethics is based on decisions made by
groups or when carrying out tasks to meet business objectives.
Chapter 6: Individual Factors: Moral Philosophies and Values 33
II. Moral Philosophies
A. Although there are many moral philosophies, the text focuses on those that are most applicable
to the study of business ethics. There is no one “correct” way to resolve ethical issues.
1. Instrumental and Intrinsic Goodness
a. Two basic concepts of goodness are monism and pluralism. Monists believe that
only one thing is intrinsically good, and pluralists believe that two or more things are
of a good thing
c. Pluralists (non-hedonists) take the position that no one thing is intrinsically good.
i) All pluralists are non-hedonists, but not all monists are hedonists because an
individual can believe in a single intrinsic good other than pleasure.
d. Sometimes called pragmatists, instrumentalists reject the idea that
i) ends can be separated from the means that produce them.
2. Teleology
a. Refers to moral philosophies that assess the moral worth of a behavior by looking at
its consequences, and thus moral philosophers today often refer to these theories as
consequentialism.
b. Egoism defines right or acceptable behavior in terms of the consequences for the
individual. They believe in making decisions to maximize self-interest.
i) Enlightened egoists take a long-range perspective and allow for the well-
3. Deontology
a. Refers to moral philosophies that focus on the rights of individuals and on the
intentions associated with a particular behavior rather than on its consequences.
b. They regard certain behaviors as inherently right, and the determination of this
rightness focuses on the individual actor, not society. Thus, these perspectives are
34 Chapter 6: Individual Factors: Moral Philosophies and Values
d. They regard the nature of moral principles as permanent and stable, and they believe
that compliance with these principles defines ethicalness.
e. Deontologists believe that individuals have certain absolute rights, including
i) freedom of conscience
ii) freedom of consent
4. Relativist Perspective,
a. Definitions of ethical behavior are derived subjectively from the experiences of
individuals and groups.
5. Virtue ethics
a. Argues that ethical behavior involves not only adhering to conventional moral
standards but also considering what a mature person with a “good” moral character
would deem appropriate.
b. Individual virtue and integrity count, but good corporate ethics programs encourage
individual virtue and integrity.
6. Justice
a. Is fair treatment and due reward in accordance with ethical or legal standards,
including the disposition to deal with perceived injustices of others.
b. Three types of justice provide a framework for evaluating fairness of different
situations.
i) Distributive justice is based on the evaluation of outcomes or results of the
business relationship.
III. Applying Moral Philosophy to Ethical Decision Making
Chapter 6: Individual Factors: Moral Philosophies and Values 35
A. Individuals use different moral philosophies depending on whether they are making a personal
or making a work-related decision.
B. Two possible reasons may explain this behavior.
IV. Cognitive Moral Development and its Problems
A. Many people believe that individuals advance through stages of moral development as their
knowledge and socialization continue over time. Some models attempt to explain, predict, and
control individual’s ethical behavior.
B. According to Kohlberg’s model of cognitive moral development (CMD), people pass
through six cognitive moral development stages, divided into three different stages of ethical
concern. (1. Punishment and obedience; 2. Individual instrumental purposes and exchange; 3.
Mutual interpersonal expectations, relationships, and conformity; 4. Social system and
conscience maintenance; 5. Prior rights, social contract, or utility; 6. Universal ethical
principles)
1. The model suggests that people continue to change their decision-making priorities after
their formative years, and as a result of time, education, and experience, they may change
V. White-Collar Crime
A. White-collar crimes (WCCs) do more damage in monetary and emotional loss in one year than
the crimes of the street over several years combined. A WCC is a “non-violent criminal act
involving deceit, concealment, subterfuge and other fraudulent activity.”
1. White-collar criminals tend to be highly educated people who are in positions of power,
trust, respectability, and responsibility within a business or organization.
2. Online WCC is a growing problem globally because technology allows people to hack
into systems and access sensitive information.
a. WCCs that previously originated at the top of organizations are now able to be
committed at lower levels.
VI. Individual Factors in Business Ethics
A. Not everyone agrees on the roles of traditional moral philosophies in ethical decision making in
an organization.
36 Chapter 6: Individual Factors: Moral Philosophies and Values
B. Although a personal moral compass is important, it is not sufficient to prevent ethical
misconduct in an organizational context.
C. Both the rewards for meeting performance goals and the corporate culture, especially for
coworkers and managers, have been found to be the most important drivers of ethical decision
making.
DEBATE ISSUE: TAKE A STAND
Have your students split into two teams. One team will argue for the first point, and the other will
argue for the opposing view. The purpose is to get students to realize that there are no easy answers
to many of these issues. This debate asks students to speculate on the causes behind white-collar
crime cases. The team who argues that white-collar criminals tend to have psychological disorders
might point to the narcissistic nature of many white-collar criminals, their tendency to blame the
victims, and the fact that many continue to commit fraud despite their knowledge of the consequences.
Those who argue that white-collar crime results more from the organizational culture could give
examples of white–collar criminals who were coerced by managers and co–workers to commit a crime.
“RESOLVING ETHICAL BUSINESS CHALLENGES” NOTES
From this case, students should identify Saul’s ethical challenge as deciding whether to report his brother
for Medicaid fraud or say nothing and risk losing his accounting license. Students should realize what
Robert is doing is illegal and considered a white-collar crime.