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Business Ethics

Basic Principles: Ethics and


Business

Kohlbergs Three Levels of


Moral Development
First Level: Pre-conventional Stages
Stage One: punishment and obedience
orientation
Stage Two: instrumental and relative
orientation

Second Level: Conventional Stages


Stage Three: interpersonal concordance
orientation
Stage Four: law and order orientation

Third Level: Post-conventional Stages


Stage Five: social contract orientation
Stage Six: universal principles orientation

Kohlbergs Three Levels of


Moral Development
Helps in understanding how our moral capacities develop
Not everyone passes through all the stages
Moral reasoning at later stage is better that at earlier
stages.
See things from wider and fuller perspective
Better ways of justifying their decisions
Basis of justification is impartial and reasonable and that
therefore can appeal to any reasonable person

Criticism

Later stage perspectives are not always morally better then


the earlier stages
Face to adequately trace out the pattern of development of
women
Females tend to see themselves as part of a wave of
relationships with family and friends; when females encounter
moral issues, they are concerned with sustaining these
relationships, avoiding hurt to others in these relationships,
and caring for their well-being. For women morality is
primarily a matter of caring and being responsible.

The Heinz Dilemma


Heinzs wife is dying from a serious disease. There
is a drug that might save her, a drug that has been
developed by a pharmacist living in the same town
as Heinz. But whilst the drug is expensive, the
pharmacist is charging ten times what it cost him to
make. Heinz goes to everyone he knows to try and
borrow the money for the drug, but can only raise
half the amount he needs. Heinz goes to the
pharmacist and explains his situation, asking the
pharmacist to reduce the price. The pharmacist
refuses. Heinz gets desperate and breaks into the
pharmacy to steal the drug.

Kohlbergs Moral Judgement Interviews


Use of semi-structured interview technique
Should Heinz have stolen the drug?
Why should / shouldnt Heinz have stolen
the drug?
Should Heinz be punished for what he did?
Why should / shouldnt Heinz be
punished?
Focus on justifications given rather than
course of action taken.

Answers to Heinz: Preconventional


Level
Stage 1: Punishment and Obedience Orientation
For: If you let your wife die, you will get into
trouble. Against: If you steal the drug, you will go
to jail.
Ignores Heinzs intentions and focuses on
consequences
Stage 2: Instrumental Hedonism
For: If you did get caught, you could always pay
the pharmacist back. Against: The pharmacist
just wants to make a profit like anyone else.
Focuses on individual instrumental needs / goals

Answers to Heinz: Conventional Level


Stage 3: Good girl /Good boy morality
For: Heinz cant be blamed for stealing the drug
out of love for his wife. Against: If Heinz steals the
drug he will be regarded as a criminal and wont
be able to face his family.
Interpersonal approval / intentions of the actor are
relevant
Stage 4: Society Maintaining Orientation
For: The pharmacist is leading the wrong kind of
life and it is Heinzs duty to steal the drug.
Against: Its natural for Heinz to want to steal the
drug, but it is still always wrong to steal.
Societys norms become paramount

Answers to Heinz: Postconventional


Level
Stage 5: Contract / Individual Rights /
Democracy
For: It might be against the law, but anyone in
Heinzs position would steal the drug. Against:
Stealing the drug might help, but the ends dont
justify the means.
Judgements no longer black and white.
Stage 6: Universal Ethical Principle Orientation
For: Between obeying a law and saving a life, saving
a life is the higher principle. Against: If Heinz steals
the drug, there might not be enough to go around
for everyone else.
Individual conscience, sanctity of life.

Moral Reasoning
The reasoning process by which human
behaviors, institutions, or policies are
judged to be in accordance with or in
violation of moral standards.
Moral reasoning always involves:
An understanding of what reasonable moral
standards require, prohibit, value, or condemn;
and
Evidence or information that shows that a
particular person, policy, institution or
behavior has the kind of features that these
moral standard requires, prohibit, value, or
condemn .

Moral Reasoning

Moral Reasoning

Moral reasoning involves:


The moral standards by which we evaluate things
Factual Information about what is being evaluated
A moral judgment about what is being evaluated.

In many cases one or more of the three components involved are not
expressed.
Failure to make ones moral standard explicit leaves one vulnerable to all
the problems created by basing critical decision on unexamined
assumptions.
The assumptions may be inconsistent, may have no rational basis, and
may lead the decision maker into unwittingly make decisions with
undesirable consequences.
To uncover the implicit moral standard one has to retrace the persons
moral reasoning back to its bases.
What factual information does the person accepts as evidence for this moral
judgment, and
What moral standards are needed to relate this factual information (logically) to the
moral judgment.

Developed moral standards incorporate qualifications, exceptions, and


restrictions that limit there scope. They may also be combined in various
ways with other important standards.

Four Steps Leading to Ethical


Behavior
Step One: Recognizing a situation is an
ethical situation.
Requires framing it as one that requires ethical
reasoning
Situation is likely to be seen as ethical when:
involves serious harm that is concentrated, likely,
proximate, imminent, and potentially violates our
moral standards

Obstacles to recognizing a situation:


Euphemistic labeling, justifying our actions,
advantageous comparisons, displacement of
responsibility, diffusion of responsibility, distorting the
harm, and dehumanization, and attribution of blame.

Four Steps Leading to Ethical


Behavior
Step Two: Judging the ethical course
of action.
Requires moral reasoning that applies
our moral standards to the information
we have about a situation.
Requires realizing that information about
a situation may be distorted by biased
theories about the world, about others,
and about oneself.

Four Steps Leading to Ethical


Behavior
Step Three: Deciding to do the ethical
course of action.
Deciding to do what is ethical can be
influenced by:
The culture of an organizationpeoples
decisions to do what is ethical are greatly
influenced by their surroundings.
Moral seductionorganizations can also
generate a form of moral seduction that can
exert subtle pressures that can gradually lead
an ethical person into decisions to do what he
or she knows is wrong.

Four Steps Leading to Ethical


Behavior
Step Four: Carrying out the ethical
decision.
Factors that influence whether a person
carries out their ethical decision include:
Ones strength or weakness of will
Ones belief about the locus of control of
ones actions

Analyzing Moral Reasoning


Logical- logic of arguments used to establish a moral
judgment be rigorously examined all the unspoken moral
and factual assumptions be made explicit and both
assumption and premises be displayed and subjected to
criticism.
Factual evidence cited in support of a persons judgement
must be accurate, relevant, and complete.
Moral standard involved must be consistent
Consistent with each other and with the other standards and
beliefs the person holds.
One must be willing to accept the consequences of applying
ones moral standards consistently to all persons in similar
circumstances.
Two situations are relevantly similar when all those factors
that have a bearing on the judgement that an action is right
or wrong in one situation are also present in the other
situation.

Moral Responsibility and


Blame
Determining whether a person is morally
responsible for an injury or for a wrong;
Judgment about a persons moral
responsibility for wrongdoing is that the
person should be blamed, punished, or
forced to pay restitution.
Distinct from moral obligation or moral
duty.
People are not always responsible for
injuries they inflict on others.
Caused the injury and did so knowingly and
freely.

Moral Responsibility
Three Components of Moral Responsibility
Person caused or helped cause the injury, or failed to
prevent it when he or she could and should have
(causality).
Omissions; power to prevent the injuries, and should have done
so.
For some reason the person has an obligation to prevent such
injury (special relationship)

Person did so knowing what he or she was doing


(knowledge).
Deliberately stays ignorant of a certain matter to escape liability
Negligently fails to take adequate steps to become informed
about a matter that is of known importance.
Ignorance of relevant facts or of relevant moral standards.

Person did so of his or her own free will: acts deliberately


or purposefully and his actions are not result of some
uncontrollable mental impulse or external force. (freedom)

Factors that Mitigate Moral


Responsibility
Minimal contribution

In general, the less ones actual actions contribute to the


outcome of an act, the less one is morally responsible for that
outcome.

Uncertainty

A person may be fairly convinced that doing something is


wrong yet may still be doubtful about some important facts,
or may have doubts about the moral standards involved, or
doubts about how seriously wrong the action is.

Difficulty

A person may find it difficult to avoid a certain course of


action because he or she is subjected to threats or duress of
some sort or because avoiding that course of action will
impose heavy costs on the person.

Seriousness

Seriousness of the wrong need to be taken into consideration


while deciding extent to which these mitigating
circumstances can diminish a persons responsibility for a
blame.

Corporate Responsibility

Corporate acts normally are brought about by several actions or


omissions or many different people all cooperating together so as
there linked actions and omissions jointly produce the corporate act.
View # 1 those who knowingly and freely did what was necessary to
produce the corporate act are each morally responsible.
Bringing about wrongful act with the help of others does not differ in
a morally significant way from deliberately bringing about a wrongful
act with the help of inanimate instruments.
View # 2 When an organized group such as a corporation acts
together there corporate act may be described as the act of the
group and consequently the group and not the individuals who make
up the group must be held responsible for the act.
The law typically attribute the acts of managers to the corporation
and not to the managers as individual.
Employees of large corporations can not be said to have knowingly
and freely joined their actions together--- Bureaucratic rules and
structures
Depending on the seriousness of the act, the mitigating factors
diminishes a persons moral responsibility.

Subordinates Responsibility
When a subordinate acts on the orders of a
legitimate superior, the subordinate is
absolved of all the responsibility for that act:
only the superior is morally responsible for the
wrongful act even though the subordinate was
the agent who carried it out.
There are limits to an employees obligation to
obey an order to do what is immoral. Superior
can put significant economic pressure on an
employee and such pressure can mitigate the
employees responsibility, but they do not
totally eliminate it.

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