Chapter 4: Moral Reasoning and Its Application in Business Ethics

 Lawrence Kohlberg- a Harvard professor who became famous for his theory in psychology known as the
stages of moral development
o Essential concept in business ethics
o A person’s moral aspect as a person also follows a progressive pattern
 “The Claim to Moral Adequacy of a Highest Stage of Moral Judgment” by Lawrence Kohlberg
o Paper published in 1971 by Kohlberg explaining his theory or stages
o Longitudinal research of young American boys
o David Ingram sees the potential contribution of Kohlberg’s theory in developing business policies
and understanding the behavior of employees especially the younger generation
 Level One: Pre- Conventional Morality
o Convention- the accepted and agreed upon norms, rules and customs of then society
o The person is not yet fully aware of the various ethical standards, laws and customs agreed upon
and instituted by the community and the society at large
o The child is operating at this level
o The children’s notion of right and wrong
1.) Stage One: Punishment and Obedience Orientation
1) Children are driven to act rightly because they are motivated by fear of punishment
2) They understand that something is wrong or bad when it has a corresponding physical
punishment
3) “The physical consequences of action determine its goodness or badness, regardless of the
human meaning or value of these consequences. Avoidance of punishment and unquestioning
deference to power are valued in their own right, not in terms of respect for an underlying moral
order supported by punishment and authority.”
4) For the child, the motive of doing a good act and avoiding a bad act is to avoid physical
punishment
5) There are adult people who mature physically but not morally
2.) Stage Two: Instrumental-Relativist Orientation
1) The moral disposition of children who are not yet aware of the rules and regulations of the
community and the society at large.
2) Also called reward orientation stage
3) The child is oriented to the value of an act based on the favors and rewards that he can get by
performing the said act
4) They are also motivated to act if they can get something in return, sort of favor or reward
5) Various corporate social responsibility (CSR) programs may also be evaluated based on the idea that many
companies are only motivated by pursuit of a “good image”
6) An adult who operates on the second level sees other people as mere objects that are readily available for
his or her disposal
 Level Two: Conventional Morality
1.) Interpersonal Concordance
a. The young adolescent becomes conscious of his or her image and identity]
b. Becomes concerned not only about his or her physical appearance but also with his
or her overall aura that is projected to his or her immediate circle of relationships
c. He or she aspires to be accepted not only in the family but also in his or her circle of
friends
d. Applying this in the context of business ethics, an employee might keep silent about
unethical conduct that he witnesses in the workplace because he does not want to
“rock the boat” or to be perceived as a sycophant or ‘walang pakikisama”
 e. A person in the interpersonal conformity stage may still be likely do a bad act if
there is certainty of not getting caught
f. His or her main concern is not really the nature of the act but what other people,
especially his or her immediate circle of relationships would say to him or her.
2.) Law and Order
a. Manifested when a person is not just concerned about being punished, getting a
reward or being too conscious about the expectation of family and friends
b. Laws must always be upheld, respected and obeyed
c. A good person is one who abides by the law and respects the authority of the law-
giver
d. He or she realizes that laws in an organization or in the bigger society are needed to
ensure orderly, harmonious and peaceful living
 Level Three: Postconventional Morality
1.) Social Contract Orientation
a. Laws are social contract, that is, people in the society agree to promulgate and be bound by
laws not only because it ensures order and harmony
b. Can see beyond the “letters of the law” recognizing the “spirit of the law” as anchored on
the promotion of the greatest benefit for all the members of the society
c. Always critical of laws that seem to be oppressive, unjust and opposed to the promotion of
the common good
d. Laws should not be enslaving, rather, it is the law maker- the human person- who is the
master of written laws
e. Human laws are not to be absolutized because many times, they do not capture in words the
reason for their very existence
2.) Universal Ethical Principles
a. The person who operates on this stage is simply propelled by the RIGHT thing to do
b. Neither subjective nor objective because it is anchored on universal ethical principles that
are valid for all people at all times
c. The stories of heroes and other people who risk their lives for the sake of truth and justice
attest to the human people’s capacity to attain Kohlberg’s apex of moral reasoning