Video Case Study

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6-7 Chapter Review

6-7a Summary

Moral philosophy refers to the set of principles or rules people use to decide what is right or wrong. These principles or rules provide guidelines for resolving conflicts and for optimizing the mutual benefit of people living in groups. Businesspeople are guided by moral philosophies as they formulate business strategies and resolve specific ethical issues, even if they may not realize it.

Teleological, or consequentialist, philosophies stipulate that acts are morally right or acceptable if they produce some desired result such as the realization of self-interest or utility. Egoism defines right or acceptable behavior in terms of the consequences for the individual. In an ethical decision making situation, the egoist chooses the alternative that contributes most to his or her own self-interest. Egoism can be further divided into hedonism and enlightened egoism. Utilitarianism is concerned with maximizing total utility, or providing the greatest benefit for the greatest number of people. In making ethical decisions, utilitarians often conduct cost–benefit analyses that consider the costs and benefits to all affected parties. Rule utilitarians determine behavior on the basis of rules designed to promote the greatest utility rather than by examining particular situations. Act utilitarians examine the action itself rather than the rules governing the action, to determine it results in the greatest utility.

Deontological, or nonconsequentialist, philosophies focus on the rights of individuals and the intentions behind an individual’s particular behavior rather than its consequences. In general, deontologists regard the nature of moral principles as permanent and stable and believe compliance with these principles defines ethical behavior. Deontologists believe individuals have certain absolute rights that must be respected. Rule deontologists believe conformity to general moral principles determines ethical behavior. Act deontologists hold that actions are the proper basis to judge morality or ethicalness and that rules serve only as guidelines.

According to the relativist perspective, definitions of ethical behavior derive subjectively from the experiences of individuals and groups. The relativist observes behavior within a relevant group and attempts to determine what consensus group members reach on the issue in question.

Virtue ethics states that what is moral in a given situation is not only what is required by conventional morality or current social definitions, however justified, but by what a person with a “good” moral character would deem appropriate. Those who profess virtue ethics do not believe the end justifies the means in any situation.

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The concept of justice in business relates to fair treatment and due reward in accordance with ethical or legal standards. Distributive justice is based on the evaluation of the outcome or results of a business relationship. Procedural justice is based on the processes and activities that produce outcomes or results. Interactional justice is based on an evaluation of the communication process in business.

The concept of a moral philosophy is not exact; moral philosophies can only be assessed on a continuum. Individuals use different moral philosophies depending on whether they are making a personal or a workplace decision. Moral philosophical theory rejects the good, better, best concept that Kohlberg uses. According to Kohlberg’s model of cognitive moral development, individuals may make different decisions in similar ethical situations because they are in a different stage of moral development. In Kohlberg’s model, people progress through six stages of moral development:

1. punishment and obedience;

2. individual instrumental purpose and exchange;

3. mutual interpersonal expectations, relationships, and conformity;

4. social system and conscience maintenance;

5. prior rights, social contract, or utility; and

6. universal ethical principles.

Kohlberg’s six stages can be further reduced to three levels of ethical concern: immediate self-interest, social expectations, and general ethical principles. Cognitive moral development may not explain as much as people once believed.

White-collar crime occurs when an educated individual who is in a position of power, trust, respectability, and responsibility commits an illegal act in relation to his or her employment, and who abuses the trust and authority normally associated with the position for personal and/or organizational gains. White-collar crime is not heavily researched because this type of behavior does not normally come to mind when people think of crime; the offender (or organization) is in a position of trust and respectability; criminology and criminal justice systems look at white-collar crime differently than average crimes; and many researchers have not moved past the definitional issues. New developments in technology seem to be increasing the opportunity to commit white-collar crime with less risk.

Individual factors such as religion, moral intensity, and a person’s professional affiliations can influence an employee’s decision making process. The impacts of ethical awareness, biases, conflict, personality type, and intelligence on ethical behavior remain unclear. One thing we do know is that the interrelationships among moral philosophies, values, and business are extremely complex.