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Lecture 3: Business Ethics - Psychological Theories
Lecture 3: Business Ethics - Psychological Theories
Lecture 3: Business Ethics - Psychological Theories
Theories
Recap – Lecture 2
2
Learning Overview
Individual characteristics
3
Ethical decision making
I. Individual characteristics
II. Organizational characteristics (situational factors)
4
Ethical decision making
Individual characteristics
Recognition/ Moral
Moral Intent Moral
awareness judgement behaviour
Organisational characteristics
5
Ethical decision making
6
Moral awareness
7
Moral awareness at work …
8
Moral awareness at work …
Moral awareness is more likely to arise if moral language is used to present the
situation.
o Moral language: wrong, lack of integrity, dishonest, unfair, lying, cheating,
stealing, unethical, immoral,…
o Neutral language: questionable (unethical); corporate restructuring (massive
layoffs); facilitation payments (brides);
Example:
o In a meeting, the manager said that “Some of you often provide false and
misleading information to consumers. Well. That’s not very nice”.
Example:
o John just started his work at a medical equipment company.
o On his first week at the company, he finds that some of his co-workers often use
social media at work.
o John also finds that some sales staff often provide false and misleading
information to consumers.
10
Part I:
The influence of individual characteristics
on ethical decision making
11
The influence of individual
characteristics
Individual characteristics
Recognition/ Moral
Moral Intent Moral
awareness judgement behaviour
Organisational characteristics
12
Individual influences on ethical
decision making
Age ?
Gender ?
Psychological factors:
(3 levels – 6 stages)
14
Kohlberg’s stages of
cognitive moral development (CMD)
15
Stage 1: Focus on Punishment &
Obedience
16
Let’s consider this case …
19
Stage 3: Emphasize others
For people at stage 3, an action or a decision is right if…
i.e., they try to be a ‘good boy’, ‘good girl’, ‘good friend’, ‘good
student’, or ‘good employee’ to please/help or to be approved by
others.
Dou you know why stage 3 people may do what is asked by their
boss ?
21
Stage 4: Duty to society – Rule
followers
People at stage 3 only consider others who are close
to them (e.g., family, friends, peers, or boss).
However, people at stage 4 consider the interest of
society.
Stage 4 people believe that
o Rules (both social and legal rules) are necessary to promote
the common good.
o They should follow rules because society works better when
everyone follows rules.
23
Stage 5: Just rules determined by
consensus
People still regard laws as important because they maintain social
order.
o The bad law should be changed (e.g., one-child law should be changed);
or
o The bad law could be broken to promote the general welfare of society
(e.g., one-child law could be broken).
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Stage 6: Universal moral principle
orientation
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Stage 6: Universal moral principle
orientation
If the laws violate universal moral principles, stage 6
people would uphold the later.
Exercise:
Ben is aware that the current law does not require him to Gandhi
do so. However, he thinks that it would be unfair and
disrespectful to consumers’ safety and life if that car
model continues to be sold.
4 ? 5 ? or 6 ?
27
Kohlberg’s CMD
Very few adults actually reach the post-conventional level (stages 5 &
6), particularly stage 6.
(Kohlberg, 1976)
29
Limitations of Kohlberg’s Model
One can have a very high stage of moral reasoning, but still acts
unethically.
30
Limitations of Kohlberg’s Model
31
Limitations of Kohlberg’s Model
However, this may not true in reality. An “adult’ may act like a “child” and
vice versa.
35
The influence of organisational
characteristics
Individual characteristics
Recognition/ Moral
Moral Intent Moral
awareness judgement behaviour
Organisational characteristics
36
The organizational characteristics
Context related
factors
BAD APPLES OR BAD BARRELS ?
Reward
Work roles
Authority
Diffusion of responsibility
Group norms
Organisational culture 37
a) Moral intensity - Jones (1991)
Would that high moral intensity affect ethical decision making (moral
awareness, moral judgement, moral intent, or moral behaviour) ?
38
Moral intensity
Issue:
Making some short personal calls at work
39
Moral intensity
Social consensus:
o The degree of social agreement that an act is evil
The more intense the moral issue, the more likely that a
person would
Why ?
This experiment confirms that individual behaviour is largely controlled by role rather
than personal characteristics
44
d) Obedience to authority
45
e) Diffusion of responsibility
(e.g., no one writes the report; no one does the proofreading, no one does the
footnotes,…)
46
f) Group Norms
3. Group norms can also put pressure on an individual. He/she may need to
do what everyone does to get along with the crown, e.g., cheating
customers so that he is not excluded from the sales team
(Trevino & Nelson, 193-4) 47
Conclusions
process
organizational/situational characters.
48
References
Crittenden, P 1990, Learning to be moral: Philosophical thoughts about moral development,
Humanities Press International New Jersey.
Chin, M.K., Hambrick, D.C., and Trevino, L.K. (2013), "Political ideologies of CEOs:
Illustrative evidence of the influence of executive values on corporate social responsibility",
Administrative Science Quarterly
Ferrell, OC, Fraedrich, J & Ferrell, L 2005, Business ethics: Ethical decision making and
cases, Houghton Mifflin, Boston.
Forsyth, DR 1992, 'Values, conceptions of science, and the social psychological study of
morality', in WM Kurtines, Azmitia, M., & Gewirtz, J. L. (ed.), The role of values in
psychology and human development, John Wiley & Sons, New York, pp. 239-55.
Gilligan, C 1982, In a different voice: Psychological theory and women's development,
Harvard University Press, Cambridge MA.
Gioia, DA 1992, 'Pinto fires and personal ethics: A script analysis of missed opportunities',
Journal of Business Ethics, vol. 11, pp. 379-89.
49
References
Jones, TM & Ryan, LV 1998, 'The effect of organizational forces on individual morality:
Judgment, moral approbation, and behavior', Business Ethics Quarterly, vol. 8, no. 3, pp.
431-45.
Trevino, LK, & Nelson, K. A. 2006, Managing business ethics: Straight talk about how to do it
right, 4 edn, John Wiley & Sons, New York.
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