The Questionable Use of Moral Development Theory in Studies of Business Ethics: Discussion and Empirical Findings

The topic of the article is how moral development theory can enlighten the understanding of ethical behaviour in business. It discusses previous research on the subject, and reports an empirical study of academics (engineers and business economists with a master degree) working in the private sector in Norway.Moral development theory is based on a long research tradition, and many researchers within business ethics have assumed the importance of moral reasoning in business environments. However, the truth of these assumptions has not been confirmed by previous empirical research.The article reports on my investigation into the relationship between moral reasoning, ethical attitudes and decision-making behaviour. The data were collected by a survey study among Norwegian engineers and business economists working in businesses (N = 449) in 1997.It has been hypothesised that strong ethical attitudes would have a restraining effect on moral reasoning. In order to test this, ethical attitudes were categorized into four issue categories. The assumption being that the four categories would explain the different restraints on moral reasoning. The statistical testing showed that there was a negative, but not significant, correlation between strong attitudes and good moral reasoning ability.It was also hypothesised that good ability in moral reasoning would tend to exhibit a smaller difference between Policy-decisions and Action-decisions. This hypothesis was based on the difference in behaviour explained in "espoused theory" and "theory in use". When making policy-decisions these can be based on espoused theory and nice "talk" because it is always possible to make exceptions to or reconsider a policy. Action-decisions, on the other hand, are very concrete because they immediately trigger an action. The statistical testing rejected my hypothesis but gave a significant converse result: Good ability in moral reasoning seems to imply less stability and more inconsistence.The article concludes with the fact that moral reasoning testing seems to explain some differences in moral reasoning among people in business but not what kind of behavioural effects these differences actually have.     

Teasing Ethical Decision Making Dilemmas: A Case Study of Land Rights Issues

The purpose of this paper is to highlightthe complexities in making decisions in an ethical wayevidenced by the current dispute over native landrights in contemporary Australia. The caseillustrates an example of a moral issue that involvesmaking a management choice. One approach which givespractice in four questions that the managementpractitioner can ask when faced with a moral dilemmais described. The case involves an on-going situationin which the Australian Government was faced withsupporting the land claims of either indigenousgroups or land holding pastoralists. TheGovernment, therefore, was on the horns of a classicdilemma, having to decide between two groups eachseeking `justice' and `fairness'.The paper refers to contemporary authorities such asRawls, De George, Paine and Badaracco (Jnr). In thecontext of ethical decision making, the main eventsleading to the present dilemma are presented. Thecase study includes a summary outlining the AustralianGovernment's Ten Point Plan response to thedilemma and a summary of the perceived problems forbusiness development where native title is recognised. These can be used to provide students in businessethics classes with an opportunity to recognise anddebate the rights, wrongs and complexities of moralissues as well as appropriate managerial decisionmaking.     

Business Ethics and Moral Motivation: A Criminological Perspective

The prevalence of white-collar crime casts a long shadow over discussions in business ethics. One of the effects that has been the development of a strong emphasis upon questions of moral motivation within the field. Often in business ethics, there is no real dispute about the content of our moral obligations, the question is rather how to motivate people to respect them. This is a question that has been studied quite extensively by criminologists as well, yet their research has had little impact on the reflections of business ethicists. In this article, I attempt to show how a criminological perspective can help to illuminate some traditional questions in business ethics. I begin by explaining why criminologists reject three of the most popular folk theories of criminal motivation. I go on to discuss a more satisfactory theory, involving the so-called “techniques of neutralization,” and its implications for business ethics.

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.     

The Untapped Relevance of Moral Development Theory in the Study of Business Ethics

The construct of cognitive moral development seemingly has powerful practical relevance in many areas of life. Nonetheless, moral reasoning seems of marginal relevance at best in the context of business ethics. Simply put, moral reasoning measurement indices are often only weakly related to many other apparently pertinent variables, and such findings cast doubt upon the construct validity of cognitive moral development. Many such unexpectedly weak relationships, however, may stem from two largely unrecognized methodological artifacts. The first artifact is an almost total reliance on the P index of the Defining Issues Test (DIT) designed to assess moral development even when this index may be inappropriate in a particular context. A second artifact that seems particularly salient in the context of attitudes toward authority involves a not always appropriate reliance on samples that include respondents whose moral reasoning is uncoupled from their action choices. These artifacts may restrict the amount of variance explained in observed relationships, and thus constrain the potential for moral reasoning to understand and explain behavior and attitudes relevant in the context of business ethics. Researchers are urged to use DIT D scores (in addition to P scores) in specific situations, and to examine relationships among high DIT U scorers whose moral reasoning is tightly coupled with their action choices. The application of these guidelines may have profound implications for advancing our fundamental understanding of moral reasoning, and of increasing its relevance to business ethics.     

Using Attribution Theory to Help Frame Moral Dilemmas: An Empirical Test of the President Clinton – Monica Lewinski Case

This study extends theapplication of attribution theory to analyzemoral dilemmas. Kelley's model of causalattribution is proposed as a pedagogical toolin helping students organize and evaluatecomplex moral dilemmas while avoiding commonperception errors. By posing three questions,students are challenged to identify patternsand context of behaviors that help arrive atthe source cause(s) of those behaviors. To testthe usefulness of Kelley's model in analyzingmoral dilemmas, the President Clinton – MonicaLewinski case is empirically tested. Resultssupport the usefulness of Kelly's model ofcausal attribution as a valid and useful toolfor students in framing complex moral dilemmasand avoiding common perception and attributionerrors.     

Small Business and Empirical Perspectives in Business Ethics: Editorial

In this editorial to a collection of papers on ethics in small firms, the case is made for greater use of high quality empirical research on business ethics. Sociological perspectives have much to offer to the field of business ethics that continues to be dominated by normative, moral philosophy. The second contribution of the paper is to argue for a re-orientation away from the large multi-national firm as a benchmark subject of business ethics research. One important point of view to be included is that of the small firm, which remains the dominant organisational form throughout all the OECD countries.     

Compulsory Ethics Education and the Cognitive Moral Development of Salespeople: A Quasi-Experimental Assessment

This study investigated several basic research questions suggesting a positive relationship between education and cognitive moral development. More specifically, these research questions examined the relationship between government mandated ethics education and cognitive moral development by testing the efficacy of a compulsory ethics intervention. Kohlberg's (1969, 1984) Cognitive Moral Development Theory was applied to test the efficacy of compulsory ethics education on the moral development of real estate salespeople used comparative statistical measures of ethical reasoning ability.The results of this research, while somewhat counterintuitive, suggest that the value of compulsory ethics education as an intervention to improve the moral reasoning of real estate salespeople is highly questionable. However, the results of the study do provide new insights into the relationship between ethics education and cognitive moral development.     

Enhancing Business Ethics: Using Cases to Teach Moral Reasoning

The growing trend of required ethics instruction in the business school curriculum has created a need for relevant teaching materials. In response to this need the Journal of Business Ethics is introducing a new case section. This section provides a forum for publishing and accessing a range of materials that can be used in teaching business ethics. This article discusses how business ethics cases can facilitate the development of deductive, inductive and critical reasoning skills.     

The Effects of Commitment to Moral Self-improvement and Religiosity on Ethics of Business Students

Using survey methodology we examined the relationships between commitment to moral self-improvement (CMSI), religiosity, ethical problem recognition, and behavioral intentions in a sample of 242 business students. Results of the study suggest that CMSI predicts ethical problem recognition and behavioral intentions. Our findings also suggest that CMSI is positively related to religiosity. The study provides some evidence of CMSI being a mediator in the influence of religiosity on ethical problem recognition and behavioral intentions. Compared to religiosity, CMSI turned out to be a better predictor of perceived importance of ethics, ethical problem recognition, and ethical behavioral intentions. The results of the study have implications for increasing understanding of ethical decision-making, future studies of business ethics, and business ethics education.     

The Decomposition of the Corporate Body: What Kant Cannot Contribute to Business Ethics

Kant is gaining popularity in business ethics because the categorical imperative rules out actions such as deceptive advertising and exploitative working conditions, both of which treat people merely as means to an end. However, those who apply Kant in this way often hold businesses themselves morally accountable, and this conception of collective responsibility contradicts the kind of moral agency that underlies Kant’s ethics. A business has neither inclinations nor the capacity to reason, so it lacks the conditions necessary for constraint by the moral law. Instead, corporate policies ought to be understood as analogous to legal constraints. They may encourage or discourage certain actions, but they cannot determine a person’s maxim – which for Kant is the focus of moral judgment. Because there is no collective intention apart from any intentions of the individual agents who act as members of the corporation, an organization itself has no moral obligations. This poses a dilemma: either apply the categorical imperative to the actions of particular businesspeople and surrender the notion of collective responsibility, or apply a different moral theory to the actions of businesses themselves. Given the diffusion of responsibility in a bureaucracy, the explanatory usefulness of collective responsibility may force business ethicists to abandon Kant’s moral philosophy.     

Contrasting the Behavioural Business Ethics Approach and the Institutional Economic Approach to Business Ethics: Insights From the Study of Quaker Employers

The article suggests that in a modern context, where value pluralism is a prevailing and possibly, even ethically desirable interaction condition, institutional economics provides a more viable business ethics than behavioural business ethics, such as Kantianism or religious ethics. The article explains how the institutional economic approach to business ethics analyses morality with regard to an interaction process, and favours non-behavioural, situational intervention with incentive structures and with capital exchange. The article argues that this approach may have to be prioritised over behavioural business ethics, which tends to analyse morality at the level of the individual and favours behavioural intervention with the individual’s value, norm and belief system, e.g. through ethical pedagogy, communicative techniques, etc. Quaker ethics is taken as an example of behavioural ethics. The article concludes that through the conceptual grounding of behavioural ethics in the economic approach, theoretical and practical limitations of behavioural ethics, as encountered in a modern context, can be relaxed. Probably only then can behavioural ethics still contribute to raising moral standards in interactions amongst the members (stakeholders) of a single firm, and equally, amongst (the stakeholders of) different firms. Dr. Sigmund Wagner-Tsukamoto is researcher in business ethics, organisational economics and economic issues that concern the Old Testament. He is placed at the School of Management of the University of Leicester, UK. He holds two doctorates, one in social studies from the University of Oxford, UK, and one in economic studies from the Catholic University of Eichstaett, Germany. He has widely published on green consumerism and institutional economic issues that concern organization theory, business ethics theory and an economic interpretation of the Old Testament. His publications include the books Understanding Green Consumer Behaviour (Routledge, 2003) and Human Nature and Organization Theory (Edward Elgar, 2003).     

The Internet and the Book: Media and Messages in Teaching Business Ethics

The central idea advanced by this article is that thecombination of the Internet and the book in networkinglearning technologies while teaching business ethicsis not only a matter of methodology, but also a matterof educational message. The concept of reflectiveequilibrium underlies the curriculum of a one semestercourse in business ethics. A Phase-model of moraldecision making in business serves as the central axisof the course schedule. Each phase outlines theframework of the ``class' discussion as the courseprogresses. The actual teaching experiencedemonstrates that networking may enrich bothindividual and group learning processes, and advancethe growth of business leadership capable ofincorporating moral considerations within managerialdecisions.     

Toward a Model of Cross-Cultural Business Ethics: The Impact of Individualism and Collectivism on the Ethical Decision-Making Process

In this paper, we explore the impact of individualism and collectivism on three basic aspects of ethical decision making – the perception of moral problems, moral reasoning, and behavior. We argue that the inclusion of business practices within the moral domain by the individual depends partly upon individualism and collectivism. We also propose a pluralistic approach to post-conventional moral judgment that includes developmental paths appropriate for individualist and collectivist cultures. Finally, we argue that the link between moral judgment and behavior is related to individualism and collectivism.

Cognitive Theory and Moral Behavior: The Contribution of F. A. Hayek to Business Ethics

This paper shows how business ethics as a concept may be approached from a cognitive viewpoint. Following F. A. Hayek's cognitive theory, I argue that moral behavior evolves and changes because of individual perception and action. Individual moral behavior becomes a moral rule when prominently displayed by members of a certain society in a specific situation. A set of moral rules eventually forms the ethical code of a society, of which business ethics codes are only a part. By focusing on the concept of "limited" or "dispersed knowledge" that underlies the cognitive approach, I show that universal ethical norms that should lead to defined outcomes cannot exist. This approach moreover shows the limits of deliberate rule-setting. Attempts to deliberately impose universal ethical rules on societies may turn out to be harmful for societal development and lead to an abuse of governmental power.     

A Typology of Moral Problems in Business: A Framework for Ethical Management

This paper develops a typology of moral problems in business. The cross-classification of two fundamental dimensions of ethical conduct: judgment and motivation, is employed to distinguish four types of moral problems: genuine dilemmas, compliance problems, moral laxity, and no-problem problems. Actual cases are brought to illustrate each type of problem, and corresponding coping strategies are presented. The paper highlights the need to design a dynamic strategy that will take into account the relationships among different types of ethical problems. In its capacities as both an analytical tool for identifying and clarifying an ethical problem and a strategic tool for handling it, the typology has direct implications for developing ethical awareness, assigning accountability, and unfolding typical rationalizations in business activity.Aviva Geva is senior lecturer in the Open University of Israel, with a Ph.D. in Business Administration from the Hebrew University of Jerusalem. The author of two text books and a monograph (in Hebrew) relating to business ethics and consumer behavior, she has also published a number of articles on issues of attitude change and moral decision making in business.     

Developing Moral Principles and Scenarios in the Light of Diversity: An Extension to the Multidimensional Ethics Scale

The purpose of this article is to develop the multidimensional ethics scale and moral scenarios that allow or even support diversity in managers’ reactions when measuring their moral decision-making. This means that we expand the multidimensional ethics scale with a female ethics dimension and take a critical look at the previously used scenarios in the light of diversity. Furthermore, we develop two new scenarios in order to better attain diversity in managers’ moral decision-making. Diversity is primarily looked at from a gender perspective, meaning that we pay attention to the femininities and masculinities of the scale items and scenarios. In addition, we use the concept of social desirability to assess diversity as we presume that social desirability works against diversity. Our article builds on previous research using the multidimensional ethics scale. First, we present a summary of the theoretical dimensions of the original multidimensional ethics scale and extend the scale with female ethics principles to foster diversity. Second, we analyse and assess previously used moral scenarios in order to see how they permit the expression of diversity. Third, we develop two new scenarios based on the interviews conducted with female managers.     

An Economic Approach to Business Ethics: Moral Agency of the Firm and the Enabling and Constraining Effects of Economic Institutions and Interactions in a Market Economy

The paper maps out an alternative to a behavioural (economic) approach to business ethics. Special attention is paid to the fundamental philosophical principle that any moral ‘ought’ implies a practical ‘can’, which the paper interprets with regard to the economic viability of moral agency of the firm under the conditions of the market economy, in particular competition. The paper details an economic understanding of business ethics with regard to classical and neo-classical views, on the one hand, and institutional, libertarian thought, on the other hand. Implications are derived regarding unintentional and passive intentional moral agency of the firm. The paper moves on to suggest that moral agency can be economically viable in competitive ‘market’ interactions, which is conventionally disputed by classical/neo-classical and institutional, libertarian economics. The paper here conceptualises active moral agency of the firm as the utilisation of ethical capital in firm--stakeholder interactions. This yields a reinterpretation of instrumental stakeholder theory.