Ethical Decision Making in Multinational Organizations: A Culture-Based Model

The purpose of this paper is to analyze the relationship between national culture and ethical decision making. Established theories of ethics and moral development are reviewed and a culture-based model of ethical decision making in organizations is derived. Although the body of knowledge in both cross-cultural management and ethics is well documented, researchers have failed to integrate the influence of cultural values into the ethical decision-making paradigm. A conceptual understanding of how managers from different nations make decisions about highly ethical issues will provide business ethics researchers with a sound theoretical foundation upon which future empirical inquiry can be based.     

How should managers treat ethics in international business?

Business ethics concern the consideration of moral in corporate decision making. International managers may be confronted with a variety of ethical dilemmas, usually due to differences among national markets in what constitutes legal or acceptable practice. Beliefs about what constitutes ethical business behavior commonly stem from one of four moral philosophies: teleology, deontology, the theory of justice, and cultural relativism. A framework incorporating all four is presented here which should provide a useful decision tool for international managers. An application of the framework and the complexities associated with it are presented next. We conclude that an effective integration of the company's perspective on ethics and the business behavior of the employees is critical and that it depends on top management, and the entire organization, demonstrating that they are serious about ethical business behavior on an ongoing basis. © 1998 John Wiley & Sons, Inc.     

Personal Characteristics Underlying Ethical Decisions in Marketing Situations: A Survey of Small Business Managers*

This study analyzes the marketing ethics decision‐making process of small business managers. In particular, it examines the relative influences of ethical perceptions, personal moral philosophies, and gender on ethical intentions of small business managers. The sample of this study consists of professional members of the American Marketing Association working in companies with 500 employees or fewer. The results reveal that perceived ethical problem is a positive factor of a small business manager's ethical intention. The results generally support our hypothesis that female managers tend to be more ethical in their intention than their male counterparts. However, the results indicate that neither dimension of personal moral philosophy—idealism and relativism—is a significant predictor of a manager's ethical intention.     

The business of ethics and the ethics of business

This is an essay in personal business ethics of executives as distinguished from the institutional ethics of corporations. Its purpose is to give practical moral guidance to executives for the conduct of their lives both as corporate decision-makers and as human beings. The pivotal concept in this model of personal business ethics is a direct appeal to the self-interest of executives in their being moral. Our thesis is that generally there is a twofold return on investment in ethics (ROIE) for executives. The first one is related to employee output: by becoming a self-actualizing moral type, executives indicate commitment to excellence. Accordingly, they so manage employees that the latter can also live up to their full potential and excell. And that would increase corporate productivity and product or service quality. The second payback of morality is personal: fully developed, self-actualized managers are generally happier people than those whose growth has been arrested. In brief, moral self-actualization is the same as commitment to excellence and there is a payback in being the best. Return on investment in ethics and return on investment in excellence can both be abbreviated as ROIE. We accomplish the purpose and establish the thesis of this essay by seeking answers to the following questions: What business does ethics have in business? What business does business have in ethics? Is there a return on investment in ethics for executives? and Does being moral help executives become more effective managers? In sketching answers to these questions, we first show why executives need a personal business ethics especially in today's world. Then, we sketch the nature of ethics and of business. After these introductory materials, the body of the paper argues for a personal business ethics for executives by correlating elements of management theory with ethics. Specifically, it links a theory of employee motivation with a scale of values, management character types with moral types, and management leadership styles with morality. Then, the practical technique of life by objectives (LBO) is explained. It can help executives manage their lives more effectively in both the business and ethical sense. We conclude by explaining ideals of excellence which can guide executives in their work and development both as managers and as human beings.     

The Role of Ethics and Social Responsibility in Organizational Success: A Spanish Perspective

Ethics has assumed a dominant position in the current economic debate, and this study focuses on ethics as a legitimate underpinning to good business decision making. Using a self-response survey of marketing managers in Spain, the current theory on ethical decision making is extended. Results support the mediating influence of the PRESOR construct (an individual’s perception of the importance of ethics and social responsibility for the effectiveness of the organization) on relativistic and idealistic moral thinking when one is considering the moral intensity of a situation. In addition, the study found support for the relationship between relativism (negative), idealism (positive), corporate ethical values, and job satisfaction, thereby providing additional support for the prior theory. Finally, a thorough review of the extant literature and suggestions for future ethics research in the marketing field are included.     

Stages of moral development of corporations

Drawing from the Boulding's (1956) framework for general systems theory, the need to employ richer paradigm in the study of organizations (Pondy and Mitroff, 1979) is reiterated. It is argued that a better understanding of organizational ethical behavior is contingent upon viewing organizations as symbol processing systems of shared language and meanings. Further, it is proposed that organizations, like individuals, develop into collectivities of shared cognitions and rationale, over a period of time. The study adapts Kohlberg's (1983) model of moral development to examine if organizations can be viewed as passing through different stages of moral development depending on the type of moral reasoning employed to explain their behaviors in the face of ethical crises. Several cases raising questions about the ethics of corporate behavior were researched. An instrument entitled Organization Response Analysis was constructed using statements made by various spokespersons representing five of these organizations. The instrument was administered to 246 graduate and undergraduate students of business (N = 246). Results indicated a great degree of concurrence among respondents of differing genders, levels of education and work experience in determining the stages of moral development of organizations. Limitations of the current study and implications for future research and practice are discussed.B. S. Sridhar, Ph.D., is an Assistant Professor of Management at the College of Business, University of Wisconsin — Oshkosh. His research interests include transformational leadership, decision making, attribution, business ethics and cross cultural issues.Artegal Camburn, Ph.D., is an Associate Professor of Management at the Harold Walter Siebens School of Business, Buena Vista College in Storm Lake, Iowa. His research interests concern the social responsibility of business and decision making in the areas of business ethics and corporate social responsibility.     

Moral Development in Business Ethics: An Examination and Critique

The field of behavioral ethics has seen considerable growth over the last few decades. One of the most significant concerns facing this interdisciplinary field of research is the moral judgment-action gap. The moral judgment-action gap is the inconsistency people display when they know what is right but do what they know is wrong. Much of the research in the field of behavioral ethics is based on (or in response to) early work in moral psychology and American psychologist Lawrence Kohlberg’s foundational cognitive model of moral development. However, Kohlberg’s model of moral development lacks a compelling explanation for the judgment-action gap. Yet, it continues to influence theory, research, teaching, and practice in business ethics today. As such, this paper presents a critical review and analysis of the pertinent literature. This paper also reviews modern theories of ethical decision making in business ethics. Gaps in our current understanding and directions for future research in behavioral business ethics are presented. By providing this important theoretical background information, targeted critical analysis, and directions for future research, this paper assists management scholars as they begin to seek a more unified approach, develop newer models of ethical decision making, and conduct business ethics research that examines the moral judgment-action gap.

     

Moral Intensity, Issue Importance, and Ethical Reasoning in Operations Situations

Previous work suggests that moral intensity and the perceived importance of an ethical issue can influence individual ethical decision making. However, prior research has not explored how the various dimensions of moral intensity might differentially affect PIE, or how moral intensity might function together with (or in the presence of) PIE to influence ethical decision making. In addition, prior work has also not adequately investigated how the operational context of an organization, which may embody conditions or practices that create barriers to ethical decision making, may differ from other functional areas of an organization. Consequently, this study investigated the relationships among moral intensity, perceived ethical issue importance, and three stages of the ethical reasoning process: recognition of an ethical issue, ethical judgment, and ethical intention. Using an internet-based, self-report survey containing two operations management scenarios and various ethics measures, information was collected from business professionals working for a Midwestern financial services organization. The hierarchical regression results indicated that some dimensions of moral intensity were positively related to PIE, ethical issue recognition, and ethical judgment, and that PIE was associated with increased ethical issue recognition and ethical judgment. The steps of ethical reasoning were also positively interrelated.     

An Analysis of U.S. Disinvestment from South Africa: Unity, Rights, and Justice

This study examines the issues associated with the disinvestment of U.S. interests from South Africa that took place in the mid-80s from the perspective of three dominant moral theories: utility, rights, and justice. By examining the issues in light of these three theories, the paper attempts to establish a decision framework from which managers and investors can evaluate similar decisions they are facing around the world today. Similarly, the reading may prove useful to educators who incorporate discussions of ethical decision making into the classroom.Training in business ethics too often takes a strictly utilitarian perspective, or worse, a relativistic one. This study attempts to illustrate how utilitarian theory and related rights and justice issues can he interwoven into the heuristics associated with the contemporary concepts of corporate social responsibility.     

Ethical Decision Making: Special or No Different?

Theories of ethical decision making assume it is a process that is special, or different in some regard, from typical individual decision making. Empirical results of the most widely known theories in the field of business ethics contain numerous inconsistencies and contradictions. In an attempt to assess why we continue to lack understanding of how individuals make ethical decisions at work, an inductive study of ethical decision making was conducted. The results of this preliminary study suggest that ethical decision making might not be meaningfully “special” or different from other decision making processes. The implications of this research are potentially significant in that they challenge the fundamental assumption of existing ethical decision making research. This research could serve as an impetus for further examination of whether ethical decision making is meaningfully different from other decision making processes. Such studies could create new directions for the field of business ethics.     

Moral Identity as Leverage Point in Teaching Business Ethics

This paper examines whether appealing to learners’ moral identity makes a significant contribution to improving their ethical decision making beyond traditional, rule-based teaching. In response to criticisms leveled at rule-based ethics teaching by alternative approaches, we identify moral identity theory and experiments in moral psychology as useful sources to draw on for the creation of a new, identity-based ethics teaching approach. We develop and apply a set of regular self-reflection focused writing tasks added to the traditional teaching program over a one-semester period, and assess the outcomes of an overall sample of 149 postgraduate business school students, who were randomly assigned to one of three conditions: exposure to both identity-based tasks and rule-based teaching, exposure to rule-based teaching only, and the control condition (i.e., no exposure to ethics teaching). Our findings show that, while the three groups reported the same level of ethical decision making at the beginning of the semester, at the end of the semester the students who were exposed to both identity-based and rule-based teaching reported higher level of ethical decision making compared to those who were only exposed to rule-based education. In addition, the students who received rule-based teaching reported higher ethical decision making compared to those in the control condition. These results suggest that a teaching approach which appeals to the learner’s moral identity can act as an effective leverage point when complementing rule-based teaching. This simple approach should be widely adopted as common practice in graduate business schools.     

Ethics Through an Entrepreneurial Lens: Theory and Observation

Recent work in the fields of ethics and entrepreneurship has raised the possibility that entrepreneurs may differ from other individuals in the moral issues they face, in their moral judgements and behaviors concerning those issues, and even in their level of cognitive moral development. While this work has been exploratory and its conclusions tentative, the findings raise two interesting questions: do entrepreneurs actually differ from non-entrepreneurs in their ethical orientations and, if so, why? We propose a model of ethical decision making for small business entrepreneurs. We suggest some ways in which the ethical framework of entrepreneurs may differ systematically from that of other business people and propose some areas for future research.     

The manager seeking virtue: Lessons from literature

The authors argue that studying classic literature (fiction) is useful in strengthening the manager's ability to resolve specific ethical dilemmas.The authors summarize stories, plays and novels that explicitly address a series of ethical trials common to many managers (e.g., whistleblowing, discrimination and greed). Recognizing the multicultural nature of contemporary business practice, the authors draw upon literature from Europe and Asia to illustrate their thesis. Studying literature offers a challenging and personally compelling method for managers (and management students) to improve their moral sensitivity and strengthen the decision making skills used in addressing the ethical ambiguities of business practice.The article concludes with a supplemental reading list that summarizes additional pieces of international literature with strong business ethics themes.Tony McAdams is Professor of business law in the Management Department at the University of Northern Iowa. Professor McAdams has been published in theHarvard Business Review andThe Academy of Management Review, among other journals, and he is the principal author of the text,Law, Business, and Society. He received the 1978 Distinguished Teaching Award from the student government at the University of Kentucky.Roswitha Koppensteiner received an MBA degree from the University of Northern Iowa in 1990.     

Managers’ Moral Decision-Making Patterns Over Time: A Multidimensional Approach

Taking multidimensional ethics scale approach, this article describes an empirical survey of top managers’ moral decision-making patterns and their change from 1994 to 2004 during morally problematic situations in the Finnish context. The survey questionnaire consisted of four moral dilemmas and a multidimensional scale with six ethical dimensions: justice, deontology, relativism, utilitarianism, egoism and female ethics. The managers evaluated their decision-making in the problems using the multidimensional ethics scale. Altogether 880 questionnaires were analysed statistically. It is concluded that relying on the utilitarian principles is a core ethical evaluation criterion amongst top business managers in Finland. This study proves that managers’ moral decision-making patterns change over time. According to the results of this research, managers’ moral decision-making became more multidimensional during the study period. The change is explained by (1) the inclusion of female ethics items in the scale which allows managers to show more diversity in their decision- making, (2) the change in the Finnish economic context from depression to economic prosperity and growth during the study period, which is conducive to the spread of post materialist values, such as the importance of social relations and (3) the increasing public discussion of the importance ethical issues in business.     

Can Ethical Behaviour Really Exist in Business

Our soft survey reveals that the assumption underlying much of the business ethics literature -- that the conduct of business can and ought to support the social good -- is not accepted within the workplace. This paper considers an apparent dichotomy, with companies investing in ethical programs whose worth their employees and managers question. We examine the relationship between work, bureaucracy and "the market" and conclude that employees often question the existence of business ethics because there is no good and bad between which to choose. The choice is between success and failure. A common view of success and the "good life" is one determined by hard work in a well-organised company operating in a free market. Analysing the three aspects of this view (the free market, hard work, bureaucracy) we suggest these are mere fictions. A major problem we identify in business is that organisations are designed as profit making mechanisms and have no interest in the good of society. The challenge is to convince such organisations that a direct benefit accrues to them through their own ethical behaviour. In order to do this organisations must first be shown the importance of long termism. Executives, managers and other employees can be expected to attain high ethical standards only when they feel they are a integral part of an organisation and the organisation itself respects those standards. One of the keys to unravelling the undesirable situation of a perceived absence of ethics in business is in encouraging a greater identity community, company and workforce. We provide some examples of ways companies can meet the challenge of encouraging more ethical, long-sighted behaviour. In addition, we highlight ways in which the expectations of the organisations of the organisation can be communicated more strongly through corporate structures that foster ethical action that benefits the long term interests of the individual and the organisation. Overall implementing a successful ethical program is shown to parallel that of the implementation of a quality program.     

The Effect of Implicit Moral Attitudes on Managerial Decision-Making: An Implicit Social Cognition Approach

This article concerns itself with the relationship between implicit moral cognitions and decisions in the realm of business ethics. Traditionally, business ethics research emphasized the effects of overt or␣explicit attitudes on ethical decision-making and neglected intuitive or implicit attitudes. Therefore, based on an implicit social cognition approach it is important to␣know whether implicit moral attitudes may have a substantial impact on managerial ethical decision-making processes. To test this thesis, a study with 50 participants was conducted. In this study the participants were asked to work on a deliberative managerial ethical decision-making task, in which they had to decide on one of two options. Implicit moral attitudes towards the two options were measured using the implicit association test (IAT). A semantic differential scale was used to diagnose explicit moral attitudes towards the two options. Each step taken within the deliberative decision-making process, as well the decision itself, was assessed using a scoring model-based decision analysis and a decision-making questionnaire. The results of this study show that implicit moral attitude has a great influence on the deliberative ethical decision-making process. The derived conclusion is that complex and deliberative decision-making processes in the context of business ethics can be affected by implicit social cognitions such as implicit moral attitudes.     

Is Decision Style Related to Moral Development Among Managers in the U.S.?

The decision making process is an important aspect of the managerial function that is becoming increasingly complex due to technological and global impacts. It is essential, therefore, to understand why various managers approach the decision making process differently. One area that is related to how managers perceive and process the information that is associated with decision making, is that of decision style.It is not enough, however, to explore decision style in isolation, as some of the decisions that managers make often entail ethical components concerning the ability to balance the interests of diverse groups. Moral reasoning is therefore important for every manager, and could impact the decision style that is employed by such managers. The relationship between managerial decision style and moral development is one that could provide unique insights into the area of decision making, yet it is an area that has remained relatively unexplored.Using Alan Rowe's Decision Style Inventory (DSI), in conjunction with James Rest's Defining Issues Test (DIT), the purpose of this study was to ascertain the relationship between decision style and moral development among U.S. managers.The findings of this study of 270 managers suggest that there is a relationship between higher directive decision style scores and lower principled reasoning scores. Since the focus of individuals who demonstrate a directive decision style is on task completion, perhaps the consideration of the many alternatives that are necessary to reason at a more ethically attuned level is neglected. Managers who exhibit a directive decision style might be responsible for the management of non-managerial populations of workers, and in such a capacity, set the ethical tones and examples for employees to follow. Since training and educational interventions in the area of ethics have been shown to increase moral development scores, those managers who are identified as displaying a directive decision style might benefit from such training.     

A Philosophical Framework for Case Studies

People who teach business ethics seem locked between two general approaches: an applied philosophy approach that emphasizes the application of abstract ethical theories and principles to specific cases, and the case method approach that leaves the students without any more general theoretical framework with which to approach ethical issues. Classical American Pragmatism, understood as a school of philosophical thought, links these two approaches by providing a new grounding for moral theory in which moral rules are understood as working hypotheses abstracted from concrete situations and moralreasoning demands the return to concrete situations as the foundation for moral decision making that is inherently contextual. Thus moral decision making is bottom up rather than top down, and a sense of moral rightness comes not from the indoctrination of abstract principles but from attunement to the way in which moral beliefs and practices must be rooted naturally in the very conditions of human existence.     

The Impact of Personal Gains on Cognitive Dissonance for Business Ethics Judgments

When managers make business ethics judgments, the decisioninevitably has impact on them. Sometimes managers reluctantly putorganizational profit as their first priority and make decisions against personal values. Howmanagers are affected by their business ethics judgments has rarely been examined. The purposeof this paper is to explore such an issue.Cognitive dissonance experienced by managers after makingbusiness ethics judgments is studied in this paper. It is hypothesized that thedegree of cognitive dissonance experienced by managers after making business ethicsjudgment is contingent upon (1) the nature of the judgment (ethical or unethical); (2)the magnitude of personal gains involved in the situation; and (3) managers' moraldevelopment.Two hundred and thirty-eight managers who attendednon-degree graduate management classes offered by a university participated in thisstudy. A business ethics situation of unfair competition with different amount of personalgains was used in this study. First, participants were asked to make a business ethicsjudgment about one of the situations. After making the judgment, cognitive dissonance andmoral development were measured for the participants. The analysis revealed thatan interaction effect was found for the three hypothesized independent variables. Generally speaking, however, the degree of cognitive dissonance experienced by managers wassignificantly affected mainly by their moral development.     

An examination of the ethical beliefs of managers using selected scenarios in a cross-cultural environment

Academic literature addressing the topic of business ethics has paid little attention to cross-cultural studies of business ethics. Uncertainty exists concerning the effect of culture on ethical beliefs. The purpose of this research is to compare the ethical beliefs of managers operating in South Africa and Australia. Responses of 52 managers to a series of ethical scenarios were sought. Results indicate that despite differences in socio-cultural and political factors there are no statistically significant differences between the two groups regarding their own ethical beliefs. Results thus support the view that culture has little or no impact on ethical beliefs.Russell Abratt (DBA Pretoria) is Professor of Marketing at the University of Witwatersrand, Johannesburg, South Africa. His research interests include business ethics and promotional strategy. His work has been published in various sources includingJournal of Business Ethics, European Journal of Marketing, International Journal of Advertising andIndustrial Marketing Management.Deon Nel (DCom Pretoria) is Professor of Marketing at the University of Pretoria, South Africa. His research interests include business ethics and group decision making in organisations. His work has been published in various sources includingJournal of Business Ethics, European Journal of Marketing, Management Research News.Nicola Higgs is a graduate student at the University of the Witwatersrand, Johannesburg, South Africa.