Ethics and Governance 2220,

Vol.:(0123456789)1 3

Journal of Business Ethics (2021) 172:803–819 https://doi.org/10.1007/s10551-020-04489-2

O R I G I N A L PA P E R

Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical Decision‑Making

Matej Drašček1 · Adriana Rejc Buhovac2 · Dana Mesner Andolšek1

Received: 23 December 2019 / Accepted: 18 March 2020 / Published online: 28 March 2020 © Springer Nature B.V. 2020

Abstract The decline of empirical research on ethical decision-making based on ethical theories might imply a tacit consensus has been reached. However, the exclusion of virtue ethics, one of the three main normative ethical theories, from this stream of literature calls this potential consensus into question. This article investigates the role of all three normative ethical theo- ries—deontology, utilitarianism and virtue ethics—in ethical decision-making of corporate executives. It uses virtue ethics as a dependent variable thus studying the interconnectivity of all three normative ethical theories in specific circumstances. We find that managers use different ethical theories in different circumstances (business vs. private life, formal vs informal ethical leadership, etc.). A predictive model of ethical decision-making, however, cannot be established. We also find that only a limited number of variables influence the choice of ethical theory, which leans business ethics towards postmodern management paradigm. We suggest that moral pragmatism could provide the answer to ethical decision-making.

Keywords Ethical decision-making · Managers · Moral pragmatism · Virtue ethics · Postmodernism

Introduction

Ethics, as a philosophical discipline, serves as a theoretical basis for the ethical decision-making of managers (Arjoon 2007; Hunt and Vitell 1986; Paul and Elder 2005; Treviño et al. 2006). However, less than 10% of all empirical studies on ethical decision-making use philosophical ethical theo- ries to understand the decision-making phenomenon (Craft 2013). Additionally, only a few have been done in recent years (see Amirshahi et al. 2016; Khalid et al. 2017; Paik et al. 2019; Vance et al. 2016; Wisler 2018). Indeed, there has been a major decrease in the overall number of published studies, particularly compared to 1993–1994, when 11 stud- ies on this topic were published (O’Fallon and Butterfield

2005). This decrease in research might indicate a tacit con- sensus on the extant empirical findings related to ethical decision-making.

However, there are a number of issues that make the lack of research—and the potential consensus—concern- ing. First, our literature review indicates that the majority (21) of empirical studies of ethical decision-making based on ethical theories investigated two main normative ethical theories, namely utilitarianism and deontology, with other studies including also other theories, e.g. Machiavellianism (e.g. Cyriac and Dharmaraj 1994; Hegarty and Sims 1978); theory of justice and rights (e.g. Kujala 2001; McDonald and Pak 1996; Premeaux 2004). In total, 19 different combina- tions of ethical theories have been researched, with some studies testing only one theory (e.g. Corey et al. 2014) and others testing up to nine different ethical theories simultane- ously (Wisler 2018) (Table 1 shows all the variations of test- ing theories). Second, the simultaneous testing of the basic three normative ethical theories has been limited only to testing of ethical reasoning with limited inclusion of factors (e.g. Khalid et al. 2017). In addition, from the perspective of research participants, only slightly more than a third of stud- ies included managers (largely from lower decision-making levels) to study ethical decision-making. Finally, the major- ity of studies were done in the USA, with around 25% done

* Matej Drašček [email protected]

Adriana Rejc Buhovac [email protected]

Dana Mesner Andolšek [email protected]

1 Faculty of Social Studies, University of Ljubljana, Kardeljeva ploščad 5, 1000 Ljubljana, Slovenia

2 Faculty of Economics, University of Ljubljana, Kardeljeva ploščad 17, 1000 Ljubljana, Slovenia

804 M. Drašček et al.

1 3

in Latin America, Asia and Australia and less than 10% done in Western Europe, which suggests that the relative lack of diversity in study sites is additional limitation of previous research.

This article aims to determine whether the tacit consen- sus on the dominance of utilitarianism and deontology in managers’ ethical decision-making holds if virtue ethics is considered. Virtue ethics has been recently reintroduced in the field of business ethics (Fontrodona et al. 2013; Norman 2013; Whetstone 2001) and we lack the understanding of its influence on ethical decision-making when tested along with utilitarianism and deontology (e.g. Furler and Palmer 2010; Khalid et al. 2017; Yoon 2011). Our study investi- gates the phenomenon on C-suite managers and executives, which has received limited research coverage (Craft 2013), with the inclusion of vast and various personal and organi- sational factors influence (Campbell and Cowton 2015). Finally, the article aims to investigate the possible existence of ‘ethical ambidexterity’, which occurs when managers do not use grand ethical theory consistently, but base their ethical decisions on reasonable deliberation and choose the

one that resonates most in a given situation (Bazerman and Tenbrunsel 2011a, b; Lemoine et al. 2019; Shafer-Landau 2015; Simons 2002).

Theoretical Background

The Big Three: Utilitarianism, Deontology and Virtue Ethics

The arguments for the three main ethical theories—utilitari- anism, deontology and virtue ethics—originate from philos- ophers (e.g. Fieser and Lillegard 2002; Foot 1978; Louden 1984; Hursthouse 1999; MacIntyre 1981; Sher 2012) and are supported by mainstream bodies of knowledge (e.g. the Routledge Philosophy Dictionary and Stanford Encyclopae- dia of Philosophy; The Blackwell Guide to Ethical Theory), business ethicists (Arjoon 2007; Donaldson and Werhane 1993; Norman 2013; Whetstone 2001) and leadership theo- ries (Lemoine et al. 2019).

Kymlicka (2002) summarised the historical evolution of three main ethical theories. Virtue ethics was the first ethi- cal theory established by Aristotle (2000) in ancient Greece. Aquinas used it as the foundation for the ethics of the Cath- olic Church, which prevailed until the eighteenth century. Deontology, which was formally introduced by Kant (1788), is grounded in the divine command theory, which was part of the tradition of justifying ethics based on the existence of God. Utilitarianism, which was formally introduced at almost the same time as deontology by Bentham (1789), opposes the established tradition of connecting ethics with divinity and instead is based in empiricism.

The division of ethical theories into only utilitarianism and deontology started with the Anglo-Saxon school of phi- losophy, which classifies ethical theories based on two main types of moral reasoning: teleological, which judges moral- ity based on the consequences of the action, and deontologi- cal, which does not consider the consequences of an action (Schüller 1973). The basis of teleological ethics (utilitarian- ism and virtue ethics) is the Platonic and Aristotelian idea of good and happiness (Greek: eudaimonia), which is viewed as the ultimate goal of life, while deontological ethics is based on law, obligations and duties (Ricouer 1990). While some research on ethical decision-making has used this divi- sion (e.g. Galbraith and Stephenson 1993), virtue ethics has been largely omitted. This is particularly strange since the most prominent figure in teleological ethical theory, which includes utilitarianism as well, is Aristotle, who developed virtue ethics (Heidegger and Schüssler 1992).

One possible reason for this omission could be that utilitarianism and deontology have long been seen as the only legitimate ethical theories (Sher 2012). Virtue eth- ics was reintroduced to mainstream philosophy as another

Table 1 The underlying ethical theories in the empirical studies of ethical decision-making

Philosophical theory Number

Machiavellism 2 Deontology and utilitarianism 21 Rule and act utilitarianism; act and rule deontology; egoism 2 Personal values, professional values 1 Egoism, utilitarianism, Kant’s imperative, goaled rule 2 Relativism, justice, utilitarianism, deontology, hybrid

theory 1

Self-interest, theory of role conflict 1 Utilitarianism, Machiavellism 1 Self-interest, utilitarianism, categorical imperative, duties,

justice, neutralisation, religion and light of day 1

Contractualism, rules, conformism 1 Justice, deontology, relativism, utilitarianism, egoism 1 Rule and act utilitarianism, theory of justice, theory of

fairness 2

Utilitarianism, morality (duty), justice 1 Ethical sensitivity 1 Justice, utilitarianism, relativism and egoism 1 Deontology (formalism and idealism), social contract

theory 1

Linear and nonlinear thinking 1 Fatalism, virtue ethics, utilitarianism, deontology and

amorality 1

Economic egoism, reputation egoism, rule and act utilitari- anism, self-virtue, other’s virtue, rule and act deontology

1

Utilitarianism 1 Total 44

805Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

normative, philosophical, ethical theory by Anscombe (1958) and reinforced its role as a basis for the other two by MacIntyre (1984). What separates virtue ethics from the other two theories, however, is the importance of virtues of decision makers itself. While utilitarianism considers virtues to be characteristics that result in good consequences and deontology considers them to be characteristics of someone who fulfils his duties, virtue ethics resists any definition of ethics that does not rely on virtues (e.g. justice) (Kawall 2009).

The confusion between the main ethical theories is even greater in other professional and management academic sources. The Stanford Encyclopaedia of Philosophy, for example, differentiates between 39 different types of ethics. However, there is a clear distinction between the main ethi- cal theories, on the one hand, and derived, professional, and political ethical theories, on the other hand. Derived ethical theories build upon main ethical theories but change their propositions. For example, the theory of rights is derived from Kant’s definition of duty as a categorical imperative (Forst 2012). Professional ethical theories are based on main ethical theories but are applied to a specific profession (medicine, law, journalism or business; Singer 1979). Politi- cal ethical theories are mostly the consequence of socio- cultural influences; for example, the feminist ethics of the 1970s was an answer to the rising importance of women in society (Dagger and Lefkowitz 2014).

In the context of ethical decision-making normative models and processes, ethical theories are mostly divided into deontology (or universalism) and utilitarianism (or relativism) (Ferrell and Gresham 1985; Forsty 1980; Hunt and Vitell 1986). This division has been adopted in most empirical research on ethical decision-making based on ethi- cal theories (Craft 2013); since the first study in this stream of research (see Hegarty and Sims 1978), almost half of all related studies have included this dual view. This dualism is also present in quantitative (Craft 2013; Ford and Richard- son 1994; Loe et al. 2000; O’Fallon and Butterfield 2005) and qualitative (Lehnert et al. 2016) meta-reviews of ethi- cal decision-making based on ethical theories. On the other hand, virtue ethics has also been mostly studied in leadership theory (e.g. Bauman 2018; Neubert et al. 2009; Cameron 2011; Whetstone 2001; Knight and O’Leary 2006), values studies (Moore 2008; Murphy 1999; Chun 2005; Chan and Ananthram 2019), personality traits studies (Riggio et al. 2010; Walsh et al. 2016) and applied to selected professions (Oakley and Cocking 2001), such as medical profession (Jor- dan and Meara 1990; Pellegrino 2002; Brody 1988; Barlow et al. 2018). Also, virtue ethics has yet to be researched in comparison with the other two main ethical theories in the domain of managers’ ethical decision-making.

Anyhow, even without inclusion of major normative eth- ical theory, these meta-reviews conclude that deontology

(universalism) positively and utilitarianism (relativism) negatively effects ethical decisions (Craft 2013; O’Fallon and Butterfield 2005). However, this is paradoxical for two reasons. First, by definition, the use of utilitarianism, one of the main ethical theories, cannot lead to unethical decisions because that would mean that the ethical theory is unethical. Second, unlike utilitarianism, deontology does not see con- sequences or results of ethical decision as a part of ethics, and so the conclusions of research cannot be based on the same end results (i.e. ethical decisions).

Thus, the basic problem remains: if a tacit consensus has been reached regarding empirical research on the outcomes of ethical decision-making, but consensus regarding the division of the main ethical theories has not, how could the outcomes of prior research be valid? Indeed, there are, as previous mentioned, 19 different divisions of ethical theories in empirical research, so there could not be a tacit consensus. Additionally, utilitarianism is viewed in ethical decision- making research to lead to unethical decisions and deontol- ogy is viewed to lead to ethical decisions, but virtue ethics is not even included in the meta-reviews research.

Moral Pragmatism as the Bridge Between Theory and Practice in Decision‑Making

Moral pluralism is independent from meta-ethical views (Mason 2018). As a theory, it offers an explanation of the existence of complex super-eminent structure of ethical values. It means that each value has its own basis and that values cannot be derived from only one super-value (for example from justice or fairness) (Becker 1992). However, the philosophical concept of moral pluralism should not be confused with moral relativism, which claims that moral actions are judged in relation to, for example, culture, values and society (Hinman 2012).

On the other hand, moral pluralism goes hand-in-hand with the postmodernist theory of organisational studies, which emphasises a fragmented view of the people in an organisation (Alvesson and Deetz 2006). This theory is a step away from the modernist perspective of people as wholes, which emphasises masculinity, reason, vision and control. In contrast, postmodernism claims that each person is complex and that people are inadvertently part of the web of sex, age, sexuality, power and other factors, all of which have moral weight (Cooper and Burrell 2015).

The concept of narrative fallacy provides the same expla- nation about perceptive as people as whole as postmodern- ism, but it focuses upon models based in social studies. It claims that such models cannot be developed, but attempts are still made because of humans’ tendency to look at a sequence of events or facts and explain them through forced logical connections (Taleb 2008). Explanations connect facts, creating a story that makes it easier for humans to

806 M. Drašček et al.

1 3

remember. However, a problem arises when this is miscon- strued as an understanding of actual facts or modus operandi of phenomena, similar to predictive models, which are both not valid (Taleb 2007).

Rosenthal and Buchholz (2007) attempted to resolve this postmodernist approach and the normative fallacy in busi- ness ethics through pragmatism and moral pluralism. This is in accordance with England (1967), who claimed that the first approach to managerial decision-making must be pragmatism, after which the ethical theories of deontology and utilitarianism, for example, can be applied, but again leaving out virtue ethics. However, moral pragmatism raises two questions: can managers employ more than one ethical theory simultaneously during decision-making, and does business ethics as a discipline need grand ethical theories and predictive models to further establish itself as a legiti- mate scientific discipline?

Donaldson and Werhane (1993) state that determining the dominance of an ethical theory is not necessary for further development of business ethics. Other notable authors with a similar outlook include Boatright (1993), who states that differences in theories should not lead to an endless search for the ‘best’ theory, and Beauchamp and Bowie (1993), who believe that philosophy should help society find reason- able and systematic approaches to moral problems, but not mechanical solutions or steps for decision-making regarding these problems.

The act of making decisions based on multiple moral frameworks is called a ‘metaphysical music chair’ (Callicott 1990; Weston 1991). Many philosophers have started to state that moral principles should be separated from philosophi- cal foundations (Wenz 1993). As a result, they have tried to develop one moral theory that could embrace a variety of moral principles, but at the same time claiming that ethics cannot be reduced to or derived from only one normative ethical framework. (Rosenthal and Buchholz 2007). How- ever, empirical research has yet to prove the validity of this theory.

Hypothesis Development

The major gap stems from the omission of virtue ethics as dependent variable in the empirical research of ethical decision-making based on ethical theories (Arjoon 2000; Crossan et al. 2013; Whetstone 2001; Yoon 2011). While one could argue that virtue ethics has been included in research, e.g. as part of deontology (Premeaux 2004) or the personality traits (e.g. Allen and Davis 1993; Crossan et al. 2013), the use of virtue ethics as independent variable raises theoretical and empirical considerations. From the theoreti- cal perspective, the inclusion of virtue ethics as personality traits misuses the proxy of personality traits or character as

virtue ethics (Walker 1989; Mitchell 2015). Thus, virtue eth- ics should not be treated as personality traits, which happens often in the implications of the virtue theory in the research of ethical decision-making, where personality is involved (Solomon 2003). From the empirical perspective, the use of personality traits as independent variable, both in empirical (e.g. Groves et al. 2007; Mencl and May 2009) and theoreti- cal research (Hunt and Vitell 1986), stems for the above- mentioned misunderstanding of personality traits as part of virtue ethics, thus leading to wrong conclusions. Using vir- tue ethics as independent variable implies that virtue ethics is not a normative ethical theory, at pair with utilitarianism and deontology and also leads to wrong conclusions about which ethical theory is being used by decision makers.

Another major gap in ethical decision-making research is related to the fact that most empirical studies studied a limited number of independent variables (on average 4–6 variables), with the most studied variables being nine (McDonald and Pak 1996) and some only with one (e.g. sex (Galbraith and Stephenson 1993), profession (Cohen et al. 1993) and age (Brady and Wheeler 1996). The included independent variables have also mostly been proxies them- selves (Campbell and Cowton 2015), e.g. personality traits (e.g. Hadjicharalambous and Shi 2015; Brady and Wheeler 1996), ethical culture (e.g. Verbeke et al. 1996), intentions (Cohen et al. 1993) etc., they were not measurable per se, but compounded from other variables to form a new one (e.g. ethical culture).

Moreover, most studies have investigated the reasons for unethical behaviour/decision-making (Campbell and Cowton 2015). Research has yet to show which variables are corre- lated with ethical decisions based on ethical theories (McDe- vitt et al. 2007). This is supported by “positive psychology” approach in organisational studies research, which empha- sizes the need for more research of “positive” phenomena (Peterson and Seligman 2004). To determine which ethical theory and variables lead to ethical decisions, it is neces- sary to understand the causes of managers’ choice of ethi- cal theory when engaging in ethical decision-making. This stream of research would avoid the natural fallacy (Kohlberg 1971; Moore 1903)—also called is-ought problem, where an ought is established from an is—from which some studies have suffered. Even though there is a vast amount of research on the variables in ethical decision-making, limited research has been done on the multiple personal and organisational variables that affect ethical decision-making (Lehnert et al. 2015). Based on this, our first hypothesis is as follows:

Hypothesis 1 A predictive model of managers’ choice of ethical theory in ethical decision-making can be established.

Some believe that managers use one grand ethical theory that aligns with the modern theory of organisations, while

807Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

others believe in moral pragmatism or “ethical ambidexter- ity”, claiming that there is no one grand theory and instead highlighting the mutual interdependence between theories based on various variables (Rosenthal and Buchholz 2007; Treviño and Nelson 2007) that dictate the use of pragma- tism in ethical decision-making. Theory of ethical decision- making (Arnold et al. 2010; Rosenthal and Buchholz 2007) has already elaborated upon whether managers consistently use different ethical theories or tend towards pragmatism (England 1967; Fraedrich and Ferrell 1992). According to the leadership theory, pragmatic managers are best when it comes to problem-solving (Bedell-Avers et al. 2008). Due to the fundamental differences between normative ethical theories, it can be expected that managers will use the same ethical theories in all their decisions, which is in accordance with Kohlberg’s theory of moral development (Kohlberg 1971). But even Kohlberg (1971) argues that adults live most of their time on the third or the fourth level of moral development and only occasionally reach the fifth or the sixth level. This might indicate a low level of consistency in moral reasoning of managers. Furthermore, one might con- clude that moral agents are prone to using ethical theories which suit them best momentarily. In this case, a pragmatic view is the cause of ethical confusion of managers. If man- agers do use different theories in different circumstances, regardless of internal (i.e. personal, biological) or external (i.e. societal, organisational) factors, they are ethically ambi- dextrous. Extant leadership and management literature rarely examine whether they consistently use one moral philosophy (Lemoine et al. 2019). In normative moral reasoning theory, however, two opposing views are held about consistent use of ethical theories in different circumstances (Hooker and Little 2000).

Moral particularists believe that one absolute principle cannot be applied to every moral circumstance, meaning the moral agent should choose reasonably the most suitable ethical theory in different circumstances (Dancy 2004). On the other hand, the moral generalists believe that absolute moral principles are the backbone of ethical theory and the consistent use of ethical theory, no matter the circumstances, is the moral person’s imperative (Raz 2006). Based on this, our second hypothesis is as follows:

Hypothesis 2 Managers consistently use one ethical theory in all circumstances.

Research Design and Data

To test the hypotheses, managerial ethical decision-making scenarios in six different circumstances were chosen (see Appendix 1): private/family life, business environment, gen- eral ethical dilemma, refusal to do unethical acts, ethical

leadership of colleagues, and informal ethical leadership in ethical decision-making. The scenarios were developed and pilot tested in in-depth interviews with nine C-suite manag- ers (see Appendix 2 for sample characteristics) who were carefully selected to ensure diversity in terms of tenure, industry, age and sex.

The scenarios are short, concise and unambiguous (Bed- nar and Westphal 2006). They allow for many options, as the purpose of the research is to find out what ethical theory managers use rather than developing a solution to ethical dilemmas (Bazerman and Tenbrunsel 2011a, b). All solutions are ethically correct and not ethically disputable, unlike previous research, where the main focus has been to study the variables that lead to unethical behaviour. Con- sequently, the ‘socially desirable answers’ effect (Randall and Fernandes 1991) was eliminated. Finally, each solution represents only one normative ethical theory: deontology (duty, obligations, universal laws, golden rule), utilitarian- ism (results, consequences, added value, benefits, costs), and virtue ethics (character, values, golden mean, practice).

The population of managers under investigation (Slove- nian managers) was identified as 48,513 based on official statistical data (Republic of Slovenia Statistical Office). The target sample was 200 respondents with the aim to get the approximate same ratio of micro, SME and large organisa- tions’ respondents in the sample. Being aware of the fact that response rate in business ethics’ research is low (Bab- bie 1986), the survey was sent to around 2000 managers. In the first round, we used help of two associations, the Man- agers’ Association of Slovenia and the Institute of Internal Auditors Slovenia. The first one was aiming at small and medium-sized organisations, while the other targeted large organisations (by Slovenian law, internal audit is obligatory in large organisations). Because the response rate did not yield desired results, the second round of personal contacts via LinkedIn was used to get the target sample. In total, 166 managers completed the survey. The sample was compared regarding the average characteristics of all Slovenian com- panies, with the identification of the following deviations: the overrepresentation of financial sector as well as manag- ers of large organisations, which was intentional by design. Regarding the size of the sample, it is in line with previous research on business ethics, which included approximately 200 respondents, with a minimum standard of 100 (Bailey 1982). Table 2 shows the sample characteristics.

Results

Hypothesis 1

The frequency of each ethical theory chosen in each circum- stance is shown in Table 3. Virtue ethics was mostly chosen

808 M. Drašček et al.

1 3

in circumstances related to private and business life, leader- ship and informal leadership, while deontology was chosen

in the general ethical dilemma and in the situation involving refusal to do an unethical act.

As managers could only chose from previously defined answers, and thus there was no logical sequence or order, Pearson’s chi-squared test was used. Also, a logistic regres- sion was established for each circumstance. The results are shown in Table 4.

The analyses of each circumstance achieved the follow- ing results:

Personal/Private Life

With regards to decision-making in the private lives of man- agers, no variable was statistically relevant. When build- ing the logistic model, the model was established with only the variable of education. Even though the model had been improved throughout the whole process of variable elimina- tion, the final model, which included only one independent variable, did not achieve statistical significance (p = 0.094).

Business environment

With regards to decision-making in business, managers’ age was established as a statistically significant variable (p = 0.048). In the final logistic model, only one independent variable—managers’ age—was identified as being statisti- cally significant.

General Ethical Dilemma

With regards to decision-making in general ethical dilem- mas, the variables of managers’ sex (p = 0.015), age (p < 0.001), education (p = 0.047), industry (p = 0.039) and ownership (p = 0,041) were established as statistically sig- nificant. In the final logistic model, models were built with three independent variables (age, sex and ownership), which were also statistically significant (p < 0.001). F-tests showed that each independent variable in the model was statistically significant and influenced the managers’ choice of ethi- cal theory. Once the model was established, second-order interactions of other independent variables were introduced. The results showed that model was statistically significant (p = 0.015), but the interactions did not have a statistically significant impact on the forecasting of managers’ preferred ethical theory.

Refusal of Unethical Act

With regards to decision-making concerning refusal of an unethical act, the variable organisation size was established as statistically significant (p = 0.023). In the final logistic model, only one independent variable was identified as statistically significant: organisation size. The final model

Table 2 Descriptive statistics

Sex N %  Male 77 46.4  Female 89 53.6

Age N %  Less than 30 years 2 1.2  31–40 years 50 30.1  41–55 years 95 57.2  Over 56 years 19 11.5

Work experience N %  Less than 10 years 15 9  11–20 years 82 49.4  21–30 years 44 26.5  Over 31 years 25 15.1

Education N %  Less than bachelor’s 28 16.9  Bachelor’s or undergraduate degree 88 53.0  Graduate (master’s or PhD) 50 30.1

Educational background N %  Arts and humanities 8 4.8  Natural sciences 34 20.5  Social sciences 124 74.7

Industry N %  Non-profit organisation 5 3.0  State organisation (ministry, agencies) 10 6.0  Manufacturing 17 10.2  Financial services 54 32.5  Retail 14 8.4  Information technology 16 9.7  Other services 50 30.1

Ownership N %  State institution (ministries, agencies, etc.) 13 7.8  State ownership 21 12.7  Domestic (Slovenian) 83 50.0  Foreign 49 29.5

Work position N %  Managing director or board member or CEO

(more than 251 employees) 22 13.2

 Managing director or board member or CEO (11–250 employees)

43 25.9

 Managing director (less than 10 employees) 25 15.1  Executive, manager, head of department, etc 76 45.8

Organisation size N %  Less than 10 employees 33 19.9

1 1–50 employees 31 18.7  51–250 employees 43 25.9  Over 251 employees 59 35.5

Total 166 100

809Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

revealed that managers in influence of organisations with more than 251 employees made managers use ethical theo- ries of utilitarianism and deontology, while other values did not have a significant impact.

Ethical Leadership of Colleagues

With regards to decision-making in ethical leadership, the variable work experience was established as statistically significant (p = 0.022). In the final logistic model, only one independent variable was identified as being statistically significant: work experience. The final logistic regression model revealed that work experience of 21–30  years led managers to choose deontology or utilitarianism, but not virtue ethics.

Informal Ethical Leadership

With regards to decision-making concerning informal ethi- cal leadership, the variables of managers’ work experience (p = 0.034), educational background (p = 0.023) and industry (p = 0.036) were established as statistically significant. In the final logistic model, models were built with three independ- ent variables (work experience, age and industry). F-tests showed that each independent variable was statistically significant and influenced the managers’ choice of ethical theory. Analysis revealed that the choice of deontology or utilitarianism was statistically valid in state institutions and the retail industry (p < 0.05). Differentiation between virtue ethics and deontology was statistically significant only if the manager was employed in a state institution and had 21–30 years of work experience.

Based on the results of the Pearson chi-square test, a structural model was developed. Table 5 shows the results of an explanatory factor analysis of the Shapiro–Wilk test results for each measured independent variable.

None of the variables’ values had a normal distribution (p < 0.05). This included nominal variables in the factor analysis, which could not be treated as normally distributed. Thus, principal axis factoring was used to create factors. Varimax rotation was used to create factors as the values of each measurement in individual factors were connected with the direction and power of relation. To build factors, the stricter standard marginal value limit of 0,3 was used as

a factor weight, meaning that each measured variable had to achieve a level of factor relation, as Table 6 shows.

Table 6 shows the results of the factor analysis, which included principal axis factoring and varimax rotation. The factor analysis included four factors. Two variables (educa- tion background and education level) were not included due to their unsatisfactory level of relation with any factor. The four established factors were combined as follows:

• Factor 1: age and work experience (experience). • Factor 2: size of organisation. • Factor 3: ownership structure and industry (company). • Factor 4: sex and work position.

The results of Bartlett’s test of sphericity, which shows whether variables have relation, statistically showed vari- ability of factors (χ2 = 246; df = 36; p < 0.001).

Table  7 shows the results of the Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy. The relation between variables was weak (below 0.5) but is still within the limits of acceptability (Cerny and Kaiser 1977). The model was thus built with four factors. The alternative methods included either incorporating more variables into model, which led to lower KMO, or using all variables without intermediate factors into structural equation modelling (SEM), which led to weaker explainable variance, were thus not suitable.

Table 8 shows the percentage of explainable variance for each individual factor, with factors ordered from the highest explainable variance to the lowest. In total, the explainable variance of all four factors was only 47.1%, with root of mean square error (RMSE) of four established factors being 0,0969.

The four factors were used to build a path diagram of the structural model to check the relation of managers’ choice of ethical theory. Prior to inclusion in the model, all categori- cal variables were transformed into dummy variables. Due to the small sample and variability, some dummy variables were eliminated (education background and education level).

Figure 1 shows the path diagram. The measured values in the upper row are represented by squares and factors are represented by circles. The variables related to the ethical theory that the structural model is attempting to predict are shown at the bottom. Ethical theories are coded as follows: utilitarianism is 1, virtue ethics is 2 and deontology is 3.

Table 3 Frequency of chosen ethical theory by circumstance

Private life (%) Business (%) Ethical dilemma (%)

Refusal of unethical act (%)

Ethical leadership (%)

Indirect involvement (%)

Virtue ethics 51.8 41.6 4.2 30.1 74.7 88.0 Utilitarianism 41.0 37.3 33.1 9.6 10.8 1.2 Deontology 7.2 21.1 62.7 60.3 14.5 10.8

810 M. Drašček et al.

1 3

Table 4 Pearson χ2 for different circumstances

Circumstance Variable χ2 Coverage p

Personal/private life Sex 0.83 2 0.660 Age 8285 6 0.218 Work experience 5202 6 0.518 Education 8.78 4 0.067 Educational background 8346 4 0.080 Industry 18,873 12 0.092 Ownership 5519 6 0.479 Work position 7284 6 0.295 Size 8,617 6 0.196

Business Sex 0.237 2 0.888 Age 12,705 6 0.048 Work experience 12,393 6 0.054 Education 2275 4 0.685 Educational background 2028 4 0.731 Industry 13.35 12 0.344 Ownership 5318 6 0.504 Work position 0.842 6 0.991 Size 5663 6 0.462

Ethical dilemma Sex 8452 2 0.015 Age 52.1 6 < 0.001 Work experience 6065 6 0.416 Education 9644 4 0.047 Educational background 2751 4 0.600 Industry 21.89 12 0.039 Ownership 13,127 6 0.041 Work position 3211 6 0.782 Size 6.98 6 0.323

Refusal of unethical act Sex 0.746 2 0.689 Age 7893 6 0.246 Work experience 11,049 6 0.087 Education 6032 4 0.197 Educational background 2008 4 0.734 Industry 7.33 12 0.835 Ownership 8758 6 0.188 Work position 11,511 6 0.074 Size 14,66 6 0.023

Ethical leadership Sex 2097 2 0.350 Age 12,215 6 0.057 Work experience 14,738 6 0.022 Education 2123 4 0.713 Educational background 4724 4 0.317 Industry 15,655 12 0.208 Ownership 6278 6 0.393 Work position 5712 6 0.456 Size 7513 6 0.276

811Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

The structural model was built with 1.229 interactions, and in order to optimise the NLMINB method, 28 free parameters were used. The statistical value of the built model was 218.633, the degree of freedom was 82, and p < 0.001.

While analysing the influence of the measured variables on the dummy variables, as shown in Table 9, no variable had a statistically important impact on the creation of the dummy variables or successfully predict managers’ choice of ethical theory (p > 0.05).

The calculated dummy variables were unable to success- fully predict managers’ choice of ethical theory, as shown in Table 10, as no dummy variable statistically impacted the choice of ethical theory (p > 0.05). This can also be seen in the standard weights in Fig. 1. Thus, the model cannot be statistically valid.

The results of Pearson chi-square tests show the limited number of variables influencing the manager’s choice of ethical theory. In only two circumstances (general ethical dilemma and informal ethical leadership) more than one variable is correlated with managers choice of ethical theory.

The correlation between multiple variables and general ethical dilemma, with results of using deontology (golden rule) as dominant ethical theory, can be interpreted as a con- solidation of ethical decision-making in the business world. There has been a discussion about having clear rules when doing ethical business (Enderle 1999) and golden rule comes as the best proxy for this (Donaldson 1994).

Regarding the informal ethical leadership, this topic is yet to be research. Our research shows that virtue ethics is, as

Table 4 (continued) Circumstance Variable χ2 Coverage p

Indirect involvement Sex 0.04 2 0.980

Age 8054 6 0.234

Work experience 13,657 6 0.034

Education 4 4 0.406

Educational background 11,329 4 0.023

Industry 22,177 12 0.036

Ownership 4945 6 0.551

Work position 5791 6 0.447

Size 4548 6 0.603

Table 5 Explanatory factor analysis of the Shapiro–Wilk test

Variable Age Work experience Education Size

N 166 166 166 166 Shapiro–Wilk p < .001 < .001 < .001 < .001

Table 6 Factor analysis using a principal axis factoring method and varimax rotation

Variable Factors Uniqueness

1 2 3 4

Age 0.882 0.212 Work experience 0.853 0.264 Size 0.904 0.150 Educational background 0.921 Ownership 0.769 0.365 Industry 0.538 0.668 Education 0.720 0.907 Sex 0.416 0.453 Work position 0.818

Table 7 Kaiser–Meyer–Olkin measure of sampling adequacy

Variable MSA

Total 0.486 Age 0.504 Work experience 0.499 Education 0.454 Size 0.450 Sex 0.567 Educational background 0.531 Industry 0.437 Ownership 0.462 Work position 0.443

Table 8 Percentage of explained variance for each individual factor

Factor SS loadings % of variance Cumulative %

1 1.547 17.19 17.2 2 1.000 11.11 28.3 3 0.953 10.59 38.9 4 0.743 8.26 47.1

812 M. Drašček et al.

1 3

with formal ethical leadership, the main ethical theory man- agers use in this circumstance. The diminishing use of utili- tarianism and growing importance of deontology, connected with higher age and work experience, could be confirma- tion of Kohlberg theory of moral development (Forte 2004). This shows as well that the process of moral learning is a constant in managers’ life (consciously or unconsciously). These results are opposite to previous research that elderly respondents are inclined toward utilitarianism and not deon- tology (Marques and Azevedo-Pereira 2009). The results of dominance of utilitarianism in public sector are surprising as well. This phenomenon could be explained with elevated pressure and spending cuts of public sector as well as the raise of importance of efficiency in public spending among managers in public sector (Jurkiewicz and Massey 2003).

The first tested hypothesis of this article was that it was possible to develop a model of managers’ choice of ethi- cal theories in different circumstances as well as the influ- ence of variables on the choice of ethical theories. Based on

Fig. 1 Path diagram of manag- ers’ choice of ethical theory. Age age—WE work experience, Sizesize—O_1 state-owned institution, O_2—state-owned corporation, O_3—privately owned corporation, I_1—non- profit industry, I_2—state insti- tution industry, I_3—production industry, I_4—financial services industry, I_5—retail industry, I_6—IT industry, WP_1— board or director (more than 251 employees), WP_2—board or director (11–250 employ- ees), F1—factor 1, F2—factor 2, F3—factor 3, F4—factor 4, ET—ethical theory

Table 9 Influence of the measured variables on the dummy variable

Factor Statistical test value

Standard error Z p

F1  Age 1.000  Work experi-

ence 2.961 2.562 1.156 0.248

F2  Size 1.000

F3  Ownership_1 1.000  Ownership_2 − 0.002 0.006 − 0.278 0.781  Ownership_3 − 0.006 0.022 − 0.285 0.776  Industry_1 0.016 0.053 0.290 0.772  Industry_2 0.047 0.157 0.300 0.764  Industry_3 − 0.001 0.002 − 0.236 0.814  Industry_4 − 0.000 0.003 − 0.165 0.869  Industry_5 − 0.000 0.001 − 0.113 0.910  Industry_6 0.000 0.001 0.010 0.992

F4  Workposi-

tion_1 1.000

 Workposi- tion_2

− 0.003 0.349 − 0,009 0.993

Table 10 Results of regression analysis of dummy variables

Factor Coefficient Standard error Z p

Ethical theory F1 − 0.043 0.126 − 0.341 0.733 F2 0.060 0.062 0.961 0.336 F3 0.005 0.017 0.279 0.780 F4 − 0.002 0.248 − 0.009 0.993

813Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

the research, however, it can be concluded that a predictive model could not be developed. This result is in accordance with the postmodernist explanation of management, accord- ing to which the development of predictive models is coun- terproductive (Alvesson and Deetz 2006).

The second hypothesis was built on the premise that even though models of each circumstance could not be developed in a structural model, managers could still choose the same ethical theory in different circumstances.

Hypothesis 2

Table 11 shows the frequency of selection of each theory in different circumstances. A high number of grey cells and very low number of white cells (ideally, 0) indicates that managers used the same theory, regardless of the cir- cumstances. However, the results show that the opposite occurred.

Table 12 shows the results of McNemar’s test for com- paring connected answers. McNemar’s test, besides the Bonferroni correction, was used, because answers did not have a designated order. Each comparison showed that there are statistically relevant differences in the frequency of selection of each ethical theory (p < 0.05). Based on these results, hypothesis 2, which states that managers consistently

Table 11 Frequency of ethical arguments based on three main ethical theories in different circumstances VV UU DD VV UU DD VV UU DD VV UU DD VV UU DD

VV 4141 2929 1616 44 2626 5656 2222 55 5959 6363 99 1414 7979 11 66

UU 2525 2626 1717 22 2626 4040 2727 99 3232 5252 66 1010 5656 11 1111

DD 33 77 22 11 33 88 11 22 99 99 33 00 1111 00 11

VV 22 1616 5151 2121 88 4040 4949 88 1212 6363 00 66

UU 55 2626 3131 1414 55 4343 5050 77 55 5353 11 88

DD 00 1313 2222 1515 33 1717 2525 33 77 3030 11 44

VV 00 11 66 44 11 22 66 11 00

UU 2222 33 3030 3636 88 1111 4949 11 55

DD 2828 1212 6464 8484 99 1111 9191 00 1313

VV 3737 11 1212 4545 11 44

UU 1212 22 22 1616 00 00

DD 7575 1515 1010 8585 11 1414

VV 108108 00 1616

UU 1717 00 11

DD 2121 22 11

Business Ethical

dilemma

Refusal of

unethical act Leadership

Indirect

involvement

P ri

v a te

l if

e B

u si

n e ss

E th

ic a l

D il

e m

m a

R e fu

sa l

o f

u n e th

ic a l

a c t

L e a d e rs

h ip

V virtue ethics, U utilitarianism, D deontology

Table 12 McNemar’s test for comparing connected answers

C1—private life; C2—business; C3—ethical dilemma; C4—refusal of unethical act; C5—ethical leadership; C6—indirect involvement

Circumstances χ2 Level of coverage

p (with adjustment)

C1–C2 13,358 3 < 0.004 C1–C3 105,479 3 < 0.001 C1–C4 97,662 3 < 0.001 C1–C5 35,168 3 < 0.001 C1–C6 65,541 3 < 0.001 C2–C3 64,126 3 < 0.001 C2–C4 47,783 3 < 0.001 C2–C5 35,481 3 < 0.001 C2–C6 74,444 3 < 0.001 C3–C4 41,123 3 < 0.001 C3–C5 111,494 3 < 0.001 C3–C6 142,080 3 < 0.001 C4–C5 64,870 3 < 0.001 C4–C6 87,954 3 < 0.001 C5–C6 18,009 3 < 0.001

814 M. Drašček et al.

1 3

use one ethical theory regardless of the circumstances, is rejected.

The results of the analysis show that when managers are faced with a general ethical dilemma or must refuse an unethical decision, managers primarily use deontology, in accordance with previous reviews of ethical decision- making (Craft 2013; Ford and Richardson 1994; Loe et al. 2000; O’Fallon and Butterfield 2005). On the other hand, when managers are in a position of leadership or informal leadership position, they predominately use virtue ethics, in accordance with the importance of virtue ethics in leader- ship theory (Norman 2013). Managers predominantly use virtue ethics (frequency) and utilitarianism in business life (Collier 2018; Paine 1994) and deontology (frequency) in family life, in accordance with the research on medical eth- ics (Foreman 1999), while research on this in business ethics is yet to be established. Finally, integration of all theories into one grand theory remains elusive (Lemoine et al. 2019), as only some variables influence managers’ choice of ethical theory in different circumstances. No clear multiple regres- sion model could be established.

An analysis of the structural model confirmed that manag- ers were characterised by ethical ambidexterity or pragmatic approach, as the model could not be developed. The results show that a statistically relevant model could not be estab- lished based on the characteristics of the decision makers, circumstances or ethical theories. Similarly, the postmodern explanation of science claims that no absolute truth exists and that all truths are local (Gergen & Thatchenkery, 1996). While building the model, avoidance of the narrative fallacy was crucial in order to ensure that a complex phenomenon such as ethics was not forced into a model. However, even the introduction of more variables than had been included in previous research did not lead to a statistically valid model. Thus, the results confirm the moral pragmatism, a concept in which the ethical theory used by a decision maker varies in different circumstances based on their moral reasoning.

Limitations and Future Research

The research has some limitations. First, managers have busy schedules (Porter and Nohria 2018) as well as requests from many different researchers to provide input for stud- ies (Scandura and Williams 2000). As such, it is possible that managers themselves did not complete the survey. Also, the positive selection may have occurred (Randall and Fernandes 1991) with only ‘ethical’ managers completing the survey. Both risks were minimised by direct, personal requests sent to managers. Second, answers given by man- agers may vary from what they would do in real life, when faced with time pressure and the demand to make important decisions (Frederiksen et al. 1972; Nederhof 1985). Finally,

the research utilised a sample of Slovenian managers (direc- tors and CEOs). Due to socio-cultural and historical specif- ics, generalisations of study findings may be questionable (Eweje and Brunton 2010; Ho 2010; Mintz 1996; Hsee and Weber 1999).

The future research should tackle these limitations. One direction is conducting multicultural research in different parts of the world with emphasis on areas, such as the Mid- dle East and Asia, where additional, non-Western ethical theories could be used to explain managers’ choices of ethi- cal theories in decision-making. The role of family life as well as tensions in private/professional life in regard to ethi- cal theory could be examined, as well. The investigation of the role of family status, children, religion, marriage status, sexual preference etc. could be considered to understand the choices of ethical theories. The use of qualitative studies in ethical decision-making based on ethical theories is yet to be established, as well (Lehnert et al. 2016). The observa- tion method could be used to reveal actual process of ethi- cal decision-making in real life. Furthermore, the tipping point, when, how, and why managers change their ethical theories should be established, and definition of change in managers’ chosen ethical theory should be used to examine variables or circumstances. This could be done with field experiments (Thaler and Ganser 2015) or neuroscientific methods (Robertson et al. 2017). Finally, the role and the practice of reflection as a tool to improve moral reasoning should be observed more intensively in practice, particularly when moral reasoning or imagination is not on the main agenda in the boardrooms.

Conclusions

The field of business ethics has yet to establish how manag- ers choose an ethical theory to use in ethical decision-mak- ing. This paper could not establish this either. A person, as a being characterised by reason as well as emotions, is a com- plex system that, in contrast to natural sciences, cannot be formalised or modelled. Indeed, Buckingham and Goodall (2019) claimed that management cannot be researched with models or formulas, as they cannot take into account the complexity and variables associated with everything that happens in humans when they make decisions. The com- plexity of people is especially relevant in management, where managers have important influences on not only other people but also the environment (Drucker 1954). Thus, even if research on management avoids a methodological point of view, different studies can sometimes produce diametri- cally different results on the same topic. However, this does not mean that this phenomenon should not be researched or understood.

815Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

Business ethics also faces the same problem as leader- ship literature: integration of different theories into a holistic theory (Piccolo et al. 2012). Haidt (2012) thinks that man- agers view morality from different perspectives, leading to different answers about what is right and wrong. This notion is rooted in ethical theories, which have only recently been examined in empirical and theoretical research (Lemoine et al. 2019). Future empirical and theoretical research should first try to determine whether the three main ethical theories complement one another or are fundamentally opposed.

From the theoretical perspective, the theory of business ethics should focus more on moral pragmatism with the first step being a clear definition of normative ethical theories. Starting from the normative models of ethical decision- making (e.g. Treviňo 1986; Jones 1991; Schwartz 2016), it should be clear, that there are three (and not two) main normative ethical theories with virtue ethics being an out- put rather than the input to the model of ethical decision- making as currently suggested (e.g. Hunt and Vitell 1986). With virtue ethics included in the models, theorist should use moral pragmatism to define ethical decisions. Currently, models focus on why managers make unethical decision (Soltes, 2016; Clayton, 2019), which is in accordance with the modernistic approach, where the world is seen as black and white. Moral pragmatism, which is supported by this research, on the other hand is still not seen as part of norma- tive models of ethical decision-making. Normative models should thus change to better resonate with reality.

Furthermore, business ethics research should focus more on “positive psychology” (Peterson and Seligman 2004), where the emphasis is on positive (ethics) and not negative (crime or unethical) phenomena. Our study has used this approach. In the future, we need to better establish what variables lead to ethical behaviour.

From the managerial perspective, no theory can provide perfect grounds to all ethical circumstances. But the premise that ethical decision-making is based on normative ethical theories is valid. With no aim to establish a grand ethical theory, future research should consider plurality (not exclu- sivity) of theories and include moral creativity, education/ training, reflection and reading (Badaracco 2006). Moral guidance should come from experience and provide different views on decision-making. Ethical decision-making involves not only use of theories but also actions, which become hab- its. Moral pragmatism could be a solution to moral dilemmas that managers face.

Moral pragmatism is primarily focused on moral under- standing. Different values and their conflicting dimensions, which lead to different solutions, demand moral sensitiv- ity from managers. New decisions breed new dilemmas, and thus basing decisions on just past experience is fruit- less. Although this does not mean that managers should be ignorant of the past, prior experiences should be interpreted

based on present circumstances, and moral creativity should be used to develop possible solutions.

The role of moral reflection as well as moral learning is thus a must for managers. The complexity of the modern business world does not support one grand ethical theory. Managers should be aware and proficient in all ethical theo- ries and views. The competency of ethical reasoning should be examined and actively supported in all organisations (Jain et al. 2018) thus helping their managers to become ethically proficient.

Moral pragmatism achieves this by helping managers clarify what is important in an ethical dilemma and pro- viding guidelines to make reasonable and enlightened deci- sions. Sometimes, different, conflicting moral norms must be integrated into decisions (Drucker 1967). To do so, manag- ers should not only be intellectually capable but also able to use moral creativity to solve ethical dilemmas. A pragmatic approach, which emphasises practical knowledge, daily problems and cost-effective solutions, is thus more effective for managerial problems than other approaches (Mumford and Van Doorn 2001). Similarly, pragmatic leaders are more flexible and able to cooperate with others than charismatic or ideological managers, even in the face of adversity (Beddell- Avers et al. 2008). Another reason, why pragmatic managers are more effective, is that they investigate the causes of prob- lems and articulate solutions based on present circumstances (Mumford et. al. 2008). Based on previous findings, thus, solely following rules or specific ethical theories and not adopting a pragmatic approach could lead to a lack of moral sensitivity, which is the opposite goal of ethical decision- making. Moral pragmatism thus can help to improve ethical decision-making while not falling into the ethical relativism trap.

Compliance with Ethical Standards

Conflict of interest The authors declare that they have no competing interests.

Ethical Approval All procedures performed in studies involving human participants were in accordance with the ethical standards of the insti- tutional and/or national research committee and with the 1964 Dec- laration of Helsinki and its later amendments or comparable ethical standards.

Research Involving Human and Animal Rights The article does not contain any studies with human and animals participants performed by any of the authors.

Appendix 1

Scenarios with ethical theories in parentheses following the answer (not shown in actual survey):

816 M. Drašček et al.

1 3

Private life

1. At work, you have organised a very important meet- ing, which is important not only for the organisation but also for your career. Unfortunately, you did not notice that you also have family obligations, which you cannot avoid. Assume that you chose your family obligations. You would make this decision because:

• Family obligations always take priority over business obligations. (deontology)

• The fulfilment of family obligations will bring the greatest good/happiness to the most people affected by the decision. (utilitarianism)

• Being a good parent/spouse is the most important value in my life. (virtue ethics)

Business/professional life

2. Your organisation is in trouble and you have to lay off many colleagues (assume that you have already done everything that was formally or informally possible, including talking with employees, cost optimisation and lowering investments, so there are no other options). To make a decision about who to lay off, you will use the following as a guiding principle

• The added value that the employee brings to the organisation. (utilitarianism)

• The legal criteria for layoffs. (deontology) • The work attitude of the employee. (virtue ethics) General ethical dilemma

3. When you find yourself in an ethical dilemma, your main decision-making principle is:

• The golden mean (not too much, not too little). (vir- tue ethics)

• The greatest good for the greatest number of people. (utilitarianism)

• Do unto others as you would have them do unto you. (deontology)

Refusing to do an unethical act

4. The reason why you would NOT do an unethical act is:

• It is simply wrong. (deontology) • Only in actions is a person’s real ethical character

revealed. (virtue ethics) • Because of my act, a lot of people would suffer.

(utilitarianism) Ethical leadership—leading colleagues.

5. Your subordinate has lied to you. Nobody else has found out about the lie except you, and it does not have any consequences for the organisation or its work. Assume that you will give a disciplinary notice to the employee. You would do so because the employee:

• Did indirect damage to the organisation. (utilitarian- ism)

• Did not meet his work obligations as defined by the labour contract. (deontology)

• Showed his true character to be one you cannot trust anymore. (virtue ethics)

Informal ethical leadership

6. Your friend or colleague made an ethical mistake. What advice would you give him/her?

• We learn from mistakes, so you will do better next time. (virtue ethics)

• As long as nobody got hurt, everything is OK. (utili- tarianism)

• It is important is that you have good intentions, no matter the consequences. (deontology)

Appendix 2

See Table 13

References

Allen, J., & Davis, D. (1993). Assessing some determinant effects of ethical consulting behavior: The case of personal and profes- sional values. Journal of Business Ethics, 12(6), 449–458.

Alvesson, M., & Deetz, S. (2006). Critical theory and postmodernism approaches to organisation studies. In S. R. Clegg & C. Hardy (Eds.), Studying organization: Theory & method (pp. 185–211). Thousand Oaks, CA: Sage.

Table 13 Characteristics of interviewed directors Age

 Below 40 years 1  41–55 years 7  Above 55 years 1

Sex  Male 8  Female 1

Tenure  Below 5 years 3  6–15 year 4  More than 15 years 2

Organisation  Profit 7  Non-profit 2  SMEs 1  Large 8

Education background  Natural science 5  Social studies 4

817Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

Amirshahi, M., Shirazi, M., & Ghavami, S. (2014). The relationship between salespersons’ ethical philosophy and their ethical deci- sion-making process. Asian Journal of Business Ethics, 3(1), 11–33.

Anscombe, G. E. M. (1958). Modern moral philosophy. Philosophy, 33(124), 1–19.

Aristotle. (2000). Nicomachean ethics (ed. and trans by Crisp, R.). Cambridge, UK: Cambridge University Press.

Arjoon, S. (2000). Virtue theory as a dynamic theory of business. Jour- nal of Business Ethics, 28(2), 159–178.

Arjoon, S. (2007). Ethical decision-making: A case for the triple font theory. Journal of Business Ethics, 71(4), 395–410.

Arnold, D. G., Audi, R., & Zwolinski, M. (2010). Recent work in ethi- cal theory and its implications for business ethics. Business Eth- ics Quarterly, 20(4), 559–581.

Babbie, E. (1986). The Practice of social research (4th ed.). Belmont, CA: Wadsworth Inc.

Badaracco, J. L. (2006). Questions of character: Illuminating the heart of leadership through literature. Cambridge, MA: Harvard Busi- ness Review Press.

Bailey, K. D. (1982). Methods of social research. New York: Free Press.

Barlow, N. A., Hargreaves, J., & Gillibrand, W. P. (2018). Nurses’ contributions to the resolution of ethical dilemmas in practice. Nursing Ethics, 25(2), 230–242.

Bauman, D. C. (2018). Plato on virtuous leadership: An ancient model for modern business. Business Ethics Quarterly, 28(3), 251–274.

Bazerman, M. H., & Tenbrunsel, A. E. (2011a). Ethical breakdowns. Harvard Business Review, 89(4), 58–65.

Bazerman, M. H., & Tenbrunsel, A. E. (2011b). Blind spots: Why we fail to do what’s right and what to do about it. Princeton, NJ: Princeton University Press.

Beauchamp, T. L., & Bowie, N. E. (1993). Ethical theory and business. Englewood Cliffs, NJ: Prentice Hall.

Becker, L. C. (1992). Places for pluralism. Ethics, 102(4), 707–719. Bedell-Avers, K. E., Hunter, S. T., & Mumford, M. D. (2008). Condi-

tions of problem-solving and the performance of charismatic, ideological, and pragmatic leaders: A comparative experimental study. The Leadership Quarterly, 19(1), 89–106.

Bednar, M. K., & Westphal, J. D. (2006). Surveying the corporate elite: Theoretical and practical guidance on improving response rates and response quality in top management survey question- naires. In D. Ketchen & D. Bergh (Eds.), Research methodology in strategy and management (Vol. 3, pp. 37–55). Stamford, CT: JAI Press.

Bentham, J. (1789). An introduction to the principles of morals. Lon- don: Athlone.

Brady, F. N., & Wheeler, G. E. (1996). An empirical study of ethical predispositions. Journal of Business Ethics, 15(9), 927–940.

Brody, J. K. (1988). Virtue ethics, caring, and nursing. Scholarly Inquiry for Nursing Practice, 2(2), 87–96.

Boatright, J. R. (1993). Ethics and the conduct of business. Englewood Cliffs, NJ: Prentice Hall.

Buckingham, M., & Goodall, A. (2019). Nine lies about work: A free- thinking leader’s guide to the real world. Cambridge, MA: Har- vard Business Review Press.

Callicott, J. B. (1990). The case against moral pluralism. Environmen- tal Ethics, 12(2), 99–124.

Cameron, K. (2011). Responsible leadership as virtuous leadership. Journal of Business Ethics, 98(S1), 22–35.

Campbell, D., & Cowton, C. J. (2015). Method issues in business eth- ics research: Finding credible answers to questions that matter. Business Ethics: A European Review, 24(S1), S3–S10.

Cerny, C. A., & Kaiser, H. F. (1977). A study of a measure of sampling adequacy for factor-analytic correlation matrices. Multivariate Behavioral Research, 12(1), 43–47.

Chan, C., & Ananthram, S. (2019). Religion-based decision making in Indian multinationals: A multi-faith study of ethical virtues and mindsets. Journal of Business Ethics, 156(3), 651–677.

Chun, R. (2005). Ethical character and virtue of organizations: An empirical assessment and strategic implications. Journal of Busi- ness Ethics, 57(3), 269–284.

Clayton, S. (2019). 6 signs your corporate culture is a liability. Harvard Business Review. Published online on December 05, 2019.

Cohen, J. R., Pant, L. W., & Sharp, D. J. (1993). Culture-based ethical conflicts confronting multinational accounting firms. Accounting Horizons, 7(3), 1–13.

Cooper, R., & Burrell, G. (2015). Modernism, postmodernism and organizational analysis: An introduction. In For Robert Cooper (pp. 149–175). Routledge.

Collier, P. (2018). The future of capitalism: Facing the new anxieties. New York: Harper.

Corey, C. M., Fok, L. Y., & Payne, D. M. (2014). Cross-cultural dif- ferences in values and conflict management: A comparison of US and Puerto Rico. Journal of Organizational Culture, Com- munications & Conflict, 18(2), 59–78.

Craft, J. L. (2013). A review of the empirical ethical decision-mak- ing literature: 2004–2011. Journal of Business Ethics, 117(2), 221–259.

Crossan, M., Mazutis, D., & Seijts, G. (2013). In search of virtue: The role of virtues, values and character strengths in ethical decision- making. Journal of Business Ethics, 113(4), 567–581.

Cyriac, K., & Dharmaraj, R. (1994). Machiavellianism in Indian man- agement. Journal of Business Ethics, 13(4), 281–286.

Dagger, R., & Lefkowitz, D. (2014). Political obligation. Retrieved from https ://plato .stanf ord.edu/archi ves/fall2 014/entri es/polit ical-oblig ation /.

Dancy, J. (2004). Ethics without principles. Oxford: Clarendon Press. Donaldson, T. (1994). When integration fails: The logic of prescription

and description in business ethics. Business Ethics Quarterly, 4(2), 157–169.

Donaldson, T., & Werhane, P. (1993). Ethical issues in business. Engle- wood Cliffs, NJ: Prentice Hall.

Drucker, P. (1954). The practice of management. New York: Harper & Brothers.

Drucker, P. (1967). The effective decision (pp. 92–98). Jan/Feb: Har- vard Business Review.

Enderle, G. (Ed.). (1999). International business ethics: Challenges and approaches. Notre Dame, IN: University of Notre Dame Press.

England, G. W. (1967). Personal value systems of American managers. Academy of Management Journal, 10(1), 53–68.

Eweje, G., & Brunton, M. (2010). Ethical perceptions of business stu- dents in a New Zealand university: Do gender, age and work experience matter? Business Ethics: A European Review, 19(1), 95–111.

Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework for understanding ethical decision making in marketing. Journal of Marketing, 49(3), 87–96.

Fieser, J., & Lillegard, N. (2002). A historical introduction to phi- losophy: Texts and interactive guides. Oxford: Oxford University Press.

Fontrodona, J., Sison, A. J. G., & de Bruin, B. (2013). Editorial intro- duction: Putting virtues into practice. A challenge for business and organizations. Journal of Business Ethics, 113(4), 563–565.

Foot, P. (1978). Virtues and vices and other essays in moral philosophy. Oxford: Blackwell.

Ford, R. C., & Richardson, W. D. (1994). Ethical decision-making: A review of the empirical literature. Journal of Business Ethics, 13(3), 205–221.

818 M. Drašček et al.

1 3

Foreman, D. M. (1999). The family rule: A framework for obtaining ethical consent for medical interventions from children. Journal of Medical Ethics, 25(6), 491–500.

Forst, R. (2012). The right to justification: Elements of a constructivist theory of justice. New York: Columbia University Press.

Forsyth, D. R. (1980). A taxonomy of ethical ideologies. Journal of Personality and Social Psychology, 39(1), 175–184.

Forte, A. (2004). Business ethics: A study of the moral reasoning of selected business managers and the influence of organizational ethical climate. Journal of Business Ethics, 51(2), 167–173.

Fraedrich, J., & Ferrell, O. C. (1992). Cognitive consistency of mar- keting managers in ethical situations. Journal of the Academy of Marketing Science, 20(3), 245–252.

Frederiksen, N., Jensen, O., Beaton, A. E., & Bloxom, B. (1972). Pre- diction of organizational behavior. Oxford: Pergamon.

Furler, J. S., & Palmer, V. J. (2010). The ethics of everyday practice in primary medical care: Responding to social health inequities. Philosophy, Ethics, and Humanities in Medicine, 5, 6.

Galbraith, S., & Stephenson, H. B. (1993). Decision rules used by male and female business students in making ethical value judgments: Another look. Journal of Business Ethics, 12(3), 227–233.

Gergen, K. J., & Thatchenkery, T. J. (1996). Developing dialogue for discerning differences. The Journal of Applied Behavioral Sci- ence, 32(4), 428–433.

Groves, C. M., Vance, K. S., & Paik, Y. (2007). Linking linear/non- linear thinking style balance and managerial ethical decision- making. Journal of Business Ethics, 80(2), 305–325.

Hadjicharalambous, C., & Shi, Z. (2015). Attitudes toward ethical sen- sitivity: Implications related to gender identity and personality. Journal of Legal, Ethical and Regulatory Issues, 18(3), 31–67.

Haidt, J. (2012). The righteous mind: Why good people are divided by politics and religion. New York: Pantheon Books.

Hegarty, W. H., & Sims, H. P. (1978). Some determinants of unethical decision behavior: An experiment. Journal of Applied Psychol- ogy, 63(4), 451–457.

Heidegger, M., & Schüssler, I. (1992). Platon, sophistes. Frankfurt am Main: Klostermann.

Hinman, L. M. (2012). Ethics: A pluralistic approach to moral theory. Belmont, CA: Wadsworth Publishing.

Ho, J. A. (2010). Ethical perception: Are differences between eth- nic groups situation dependent? Business Ethics: A European Review, 19(2), 154–182.

Hooker, B. W., & Little, M. (2000). Moral particularism. Oxford: Oxford University Press.

Hsee, C. K., & Weber, E. U. (1999). Cross-national differences in risk preference and lay predictions. Journal of Behavioral Decision Making, 12(2), 165–179.

Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics. Journal of Macromarketing, 6(1), 5–16.

Hursthouse, R. (1999). On virtue ethics. Oxford: Oxford University Press.

Jain, A., Leka, S., & Zwetsloot, G. I. (2018). Managing health, safety and well-being: Ethics, responsibility and sustainability. Amster- dam: Springer.

Jones, T. M. (1991). Ethical decision making by individuals in organi- zations: An issue-contingent model. Academy of Management Review, 16(2), 366–395.

Jordan, A. E., & Meara, N. M. (1990). Ethics and the professional practice of psychologists: The role of virtues and principles. Pro- fessional Psychology: Research and Practice, 21(2), 107–114.

Jurkiewicz, C. L., & Massey, T. (2003). Their jobs versus what they are getting. Local Government Management., 20(2), 229–239.

Kant, I. (1788). Critique of practical reason. Raleigh, NC: Generic NL Freebook Publisher and eBook Collection (EBSCOhost).

Kawall, J. (2009). Virtue theory, ideal observers, and the supereroga- tory. Philosophical Studies, 146(2), 179–196.

Khalid, K., Eldakak, S. E., & Loke, S. P. (2017). A structural approach to ethical reasoning: The integration of moral phi- losophy. Academy of Strategic Management Journal., 16(1), 81–113.

Knight, D., & O’Leary, M. (2006). Leadership, Ethics and Responsibil- ity to others. Journal of Business Ethics, 67(2), 125–137.

Kohlberg, L. (1971). Stages of moral development. Moral Education, 1(51), 23–92.

Kujala, J. (2001). A multidimensional approach to Finnish managers’ moral decision-making. Journal of Business Ethics, 34(3–4), 231–254.

Kymlicka, W. (2002). Contemporary political philosophy: An introduc- tion. Oxford: Oxford University Press.

Lehnert, K., Craft, J., Singh, N., & Park, Y. H. (2016). The human experience of ethics: A review of a decade of qualitative ethical decision-making research. Business Ethics: A European Review, 25(4), 498–537.

Lehnert, K., Park, Y. H., & Singh, N. (2015). Research note and review of the empirical ethical decision-making literature: Boundary conditions and extensions. Journal of Business Ethics, 129(1), 195–219.

Lemoine, G. J., Hartnell, C. A., & Leroy, H. (2019). Taking stock of moral approaches to leadership: An integrative review of ethi- cal, authentic, and servant leadership. Academy of Management Annals, 13(1), 148–187.

Loe, T. W., Ferrell, L., & Mansfield, P. (2000). A review of empirical studies assessing ethical decision-making in business. Journal of Business Ethics, 25(3), 185–204.

Louden, R. B. (1984). On some vices of virtue ethics. American Philo- sophical Quarterly, 21(3), 227–236.

MacIntyre, A. (1984). Does applied ethics rest on a mistake? The Mon- ist, 67(4), 498–513.

MacIntyre, A. C. (1981). After virtue: A study in moral theory. Notre Dame, IN: University of Notre Dame Press.

Marques, P. A., & Azevedo-Pereira, J. (2009). Ethical ideology and ethical judgments in the Portuguese accounting profession. Jour- nal of Business Ethics, 86(2), 227–242.

Mason, E. (2018). Value pluralism. Retrieved from https ://plato .stanf ord.edu/archi ves/spr20 18/entri es/value -plura lism/.

McDevitt, R., Giapponi, C., & Tromley, C. (2007). A model of ethical decision making: The integration of process and content. Journal of Business Ethics, 73(2), 219–229.

McDonald, G., & Pak, P. C. (1996). It’s all fair in love, war, and busi- ness: Cognitive philosophies in ethical decision-making. Journal of Business Ethics, 15(9), 973–996.

Mencl, J., & May, D. R. (2009). The effects of proximity and empathy on ethical decision-making: An exploratory investigation. Jour- nal of Business Ethics, 85(2), 201–226.

Mintz, S. M. (1996). Aristotelian virtue and business ethics education. Journal of Business Ethics, 15(8), 827–838.

Mitchell, L. A. (2015). Integrity and virtue: The forming of good char- acter. The Linacre Quarterly, 82(2), 149–169.

Moore, G. E. (1903). Principia ethica. Cambridge, MA: Cambridge University Press.

Moore, C. (2008). Moral disengagement in processes of organizational corruption. Journal of Business Ethics, 80(1), 129–139.

Mumford, M. D., Antes, A. L., Caughron, J. J., & Friedrich, T. L. (2008). Charismatic, ideological, and pragmatic leadership: Multi-level influences on emergence and performance. The Lead- ership Quarterly, 19(2), 144–160.

Mumford, M. D., & Van Doorn, J. R. (2001). The leadership of pragma- tism: Reconsidering Franklin in the age of charisma. The Leader- ship Quarterly, 12(3), 279–309.

Murphy, P. E. (1999). Character and virtue ethics in international market- ing: An agenda for managers, researchers and educators. Journal of Business Ethics, 18(1), 107–124.

819Moral Pragmatism as a Bridge Between Duty, Utility, and Virtue in Managers’ Ethical…

1 3

Nederhof, A. J. (1985). Methods of coping with social desirability bias: A review. European Journal of Social Psychology, 15(3), 263–280.

Neubert, M. J., Carlson, D. S., Kacmar, K. M., Roberts, J. A., & Chonko, L. B. (2009). The virtuous influence of ethical leadership behav- ior: Evidence from the field. Journal of Business Ethics, 90(2), 157–170.

Norman, W. (2013). Business ethics. Retrieved from https ://www.hbs. edu/.../Norma n,%20Bus iness %20Eth ics,%20Int Encyc Ethic s.pdf.

O’Fallon, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996–2003. Journal of Business Ethics, 59(4), 375–413.

Oakley, J., & Cocking, D. (2001). Virtue ethics and professional roles. Cambridge: Cambridge University Press.

Paik, Y., Lee, J. M., & Pak, Y. S. (2019). Convergence in international business ethics? A comparative study of ethical philosophies, think- ing style, and ethical decision-making between US and Korean managers. Journal of Business Ethics, 156(3), 839–855.

Paine, L. S. (1994). Law, ethics, and managerial judgment. Journal of Legal Studies Education, 12, 153–170.

Paul, R., & Elder, L. (2005). Critical thinking and the art of substantive writing, part I. Journal of Developmental Education, 29(1), 40.

Pellegrino, E. D. (2002). Professionalism, profession and the virtues of the good physician. Mount Sinai Journal of Medicine, 69(6), 378–384.

Peterson, C., & Seligman, M. E. P. (2004). Character strengths and vir- tues: A Handbook and classification. New York: Oxford University Press.

Piccolo, R. F., Bono, J. E., Heinitz, K., Rowold, J., Duehr, E., & Judge, T. A. (2012). The relative impact of complementary leader behaviors: Which matter most? The Leadership Quarterly, 23(3), 567–581.

Premeaux, S. R. (2004). The current link between management behavior and ethical philosophy. Journal of Business Ethics, 51(3), 269–278.

Porter, M. E., & Nohria, N. (2018). How CEOs manage time. Harvard Business Review, 96(4), 42–51.

Randall, D. M., & Fernandes, M. F. (1991). The social desirability response bias in ethics research. Journal of Business Ethics, 10(11), 805–817.

Raz, J. (2006). The Trouble with particularism (Dancy’s version). Mind, 115(457), 99–120.

Ricouer, P. (1990). Oneself as another (K. Blamey, Trans.). Chicago: University of Chicago Press.

Riggio, R. E., Zhu, W., Reina, C., & Maroosis, J. A. (2010). Virtue-based measurement of ethical leadership: The Leadership Virtues Ques- tionnaire. Consulting Psychology Journal: Practice and Research, 62(4), 235–250.

Robertson, D. C., Voegtlin, C., & Maak, T. (2017). Business ethics: The promise of neuroscience. Journal of Business Ethics, 144(4), 679–697.

Rosenthal, S. B., & Buchholz, R. A. (2007). Toward new directions in business ethics: Some pragmatic pathways. In R. E. Frederick (Ed.), A companion to business ethics (pp. 112–127). Oxford: Blackwell Publishers.

Scandura, T. A., & Williams, E. A. (2000). Research methodology in management: Current practices, trends, and implications for future research. Academy of Management Journal, 43(6), 1248–1264.

Schüller, B. (1973). Die Begründung sittlicher Urteile: Typen ethischer Argumentation in der katholischen Moraltheologie. Ostfildern: Patmos-Verlag.

Schwartz, M. S. (2016). Ethical decision-making theory: An integrated approach. Journal of Business Ethics, 139(4), 755–776.

Shafer-Landau, R. (2015). The fundamentals of ethics. New York: Oxford University Press.

Sher, G. (2012). Ethics: Essential readings in moral theory. New York: Routledge.

Simons, T. (2002). Behavioral integrity: The perceived alignment between managers’ words and deeds as a research focus. Organi- zation Science, 13(1), 18–35.

Singer, P. (1979). Practical ethics. Cambridge, UK: Cambridge Univer- sity Press.

Solomon, R. (2003). Victims of circumstances? A defense of virtue ethics in business. Business Ethics Quarterly, 13(1), 43–62.

Soltes, E. (2016). Why they do it: Inside the mind of the white-collar criminal. New York: Public Affairs.

Taleb, N. N. (2007). The black swan: The impact of the highly improb- able. New York: Random House.

Taleb, N. N. (2008). The fourth quadrant: A map of the limits of statistics. Retrieved from https ://www.edge.org/conve rsati on/nassi m_nicho las_taleb -the-fourt h-quadr ant-a-map-of-the-limit s-of-stati stics .

Thaler, R. H., & Ganser, L. J. (2015). Misbehaving: The Making of behav- ioral economics. New York: WW Norton.

Treviňo, L. K. (1986). Ethical decision making in organizations: A person-situation interactionist model. Academy of Management Review, 11(3), 601–617.

Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics. Hobo- ken. NJ: Wiley.

Treviño, L. K., Weaver, G. R., & Reynolds, S. J. (2006). Behavioral eth- ics in organizations: A review. Journal of Management, 32(6), 951–990.

Vance, C. M., White, J. A., Groves, K. S., Paik, Y., & Guo, L. (2016). Comparing thinking style and ethical decision-making between Chinese and U.S. students. Journal of Business Ethics Education, 13, 117–146.

Verbeke, W., Ouwekerk, C., & Peelan, E. (1996). Exploring the contex- tual and individual factors on ethical decision making of salespeo- ple. Journal of Business Ethics, 15(11), 1175–1187.

Walker, A. D. M. (1989). Virtue and character. Philosophy, 64(249), 349–362.

Walsh, L. D., Onorato, M., & Simms, W. V. K. (2016). Ethical sensitiv- ity and its relationship to personality and area of study. Advanced Management Journal, 81(2), 11–20.

Wenz, P. S. (1993). Minimal, moderate, and extreme moral pluralism. Environmental Ethics, 15(1), 61–74.

Weston, A. (1991). On Callicott’s case against moral pluralism. Environ- mental Ethics, 13(3), 283–286.

Whetstone, J. T. (2001). How virtue fits within business ethics. Journal of Business Ethics, 33(2), 101–114.

Wisler, J. C. (2018). US CEOs of SBUs in luxury goods organizations: A mixed methods comparison of ethical decision-making profiles. Journal of Business Ethics, 149(2), 443–518.

Yoon, C. (2011). Theory of planned behavior and ethics theory in digital piracy: An integrated model. Journal of Business Ethics, 100(3), 405–417.

Publisher’s Note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.