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Business

and

Society

POST, LAWRENCE, WEBER

Ethical Reasoning andCorporate ProgramsChapter

6

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Figure 6-1

Percentage of U.S. managers emphasizinga value focus in 1990 (N=413)

Self-focus Other-focus Totals

Competency focus

53.5%

21.8%

75.3%

Moral focus

18.4%

6.3%

24.7%

Totals

71.9%

28.1%

Goal-oriented values M

eans

-ori

ente

d va

lues

Source: Adapted from James Weber, “Managerial Value Orientations: A Typology and Assessment.” International Journal of Value-Based Management 3 (1990), pp. 37-54.

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Figure 6-2Stages of moral development and

ethical reasoningAge group Development stage and

major ethics referent Basis of ethics

reasoning

Mature adulthood Stage 6 Universal principles: Justice, fairness, universal human rights

Principle-centered reasoning

Mature adulthood Stage 5 Moral beliefs above and beyond specific social custom: Human rights, social contract, broad constitutional principles

Principle-centered reasoning

Adulthood Stage 4 Society at large: Customs, traditions, laws

Society-and-law centered reasoning

Early adulthood, adolescence

Stage 3 Social groups: Friends, school, coworkers, family

Group-centered reasoning

Adolescence, youth

Stage 2 Reward seeking: Self-interest, own needs, reciprocity

Ego-centered reasoning

Childhood Stage 1 Punishment avoidance: Punishment avoidance, obedience to power

Ego-centered reasoning

Source: Adapted from Lawrence Kohlberg, The Philosophy of Moral Development (New York: Harper & Row, 1981).

6-4

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Figure 6-3

The components of ethical climates

Individual person

Company Society

Egoism (self-centered approach)

Self-interest

Company interest

Economic efficiency

Benevolence (concern-for-others approach)

Friendship Team interest

Social responsibility

Principle (integrity approach)

Personal morality

Company rules and procedures

Laws and professional codes

Focus of ethical concernE

thic

al c

rite

ria

Source: Adapted from Bart Victor and John B. Cullen, “The Organizational Bases of Ethical Work Climates,” Administrative Sciences Quarterly 33(1988), p. 104.

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Figure 6-4

Three methods of ethical reasoning

Method Criticaldetermining

factor

An action isethicalwhen…

Limitations

Utilitarian Comparingbenefits andcosts

Net benefitsexceed netcosts

Difficult to measuresome human and socialcosts. Majority maydisregard rights of theminority.

Rights Respectingentitlements

Basic humanrights arerespected

Difficult to balanceconflicting rights.

Justice Distributing fairshares

Benefits andcosts arefairlydistributed

Difficult to measurebenefits and costs.Lack of agreement onfair shares.

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Figure 6-5a

An analytical approach to ethical problemsStep 1

Ask

NoYesNoYesNoYes

UtilityDo benefits

exceed costs?

RightsAre human

rightsrespected?

JusticeAre benefits

and costsfairly

distributed?

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Figure 6-5b

An analytical approach to ethical problemsStep 2

Compare results

If yes is the answer to all three questions, it is

probably ethical

If the answers aremixed, it could be either

ethical or unethical

If no is the answer to allthree questions, it is probably unethical

6-8

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Figure 6-5c

An analytical approach to ethical problemsStep 3

Assign priorities to

Utility Rights Justice

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Figure 6-6Organization’s ethics safeguards at work

Ethical safeguard

1992 Fortune

1000

1999 Fortune

1000

1996 SWPa. organizations

2000 1,500 employees

Promoted ethics at work

93% 71%

Developed code of ethics

93% 98% 57% 79%

Established ethics committee

13% 14%

Created ethics office

17% 30%

--ethics hot line 9% 51%

--ethics office or hot line

50%

Offered ethics training

25% 20% 55%

Conducted audit/evaluation

11% 23%

6-10

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Exhibit 6-A

Two approaches to ethics programsand their effectiveness

Compliance-based programs

• Rooted in avoiding legal sanctions.

• Companies will establish rules and guidelines for employees to follow.

• Emphasizes threat of detection and punishment.

• Assumes employees are driven by self-interest.

• Research evidence shows that employees do care about moral correctness of their actions.

Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117 and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on

Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.

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Exhibit 6-A(continued)Two approaches to ethics programs

and their effectiveness

Sources: Lynn Sharp Paine, “Managing for Organizational Integrity,” Harvard Business Review, March/April 1994, pp. 106-117 and Gary Weaver and Linda Klebe Trevino, “Compliance and Values Oriented Ethics Programs: Influences on

Employees’ Attitudes and Behavior,” Business Ethics Quarterly, 9(1999), pp. 315-335.

Integrity-based ethics programs• Combine a concern for the law with an emphasis on employee responsibility for ethical conduct.

• Establish a climate of self-governance for employees based on general principles as guidelines.

• Employees told to act with integrity and conduct business dealings in an environment of honesty and fairness.

• Employees are thought of as social beings, concerned for the well-being of others.

• Researchers found that these programs fostered lower observed unethical conduct.