BA:300 FINAL SDSU Naida Austin

Ethical Decision-Making Process

Moral Awareness, Ethical/ Morale Judgment, Ethical Behavior

Morales Awareness is likely to rise when?

1. Peers consider it morally problematic

2.Moral language is used when problem is presented

3.Decisions could cause serious harm to others

Steps in Ethical Decision Making

1. Gather the facts

2. Define the Ethical issue

3. Identify the affected parties (stakeholders)

4. Identify the consequences

5. Identify the obligations

6. Consider your character and integrity

7. Think creatively about potential actions

8. Check your gut

Who shapes your ethical decisions?

Peers, Superiors and Organizational Norms

Define Pygmalion Effect

You become what others expect from you

Rewards and Punishments

Reward and punishments towards ethical dilemmas reinforce our actions towards them

Goals

Pros: Goals set focus to meet an outcome

Cons: If goal set to be meet no matter what the cost

Diffusion of Responsibility

allows individual to escape responsibility

4 ways of Diffusion of Responsibility

1.Responsibility is taken away

2. Shared with others

3.Obscured by organizational hierarchy(pass up and down blame on chain of command)

4. Distance

Define Roles and Deindividuation

Roles: established reduce responsibility

Deindivation: loss of self awareness in groups (minimizes responsibility by saying you only focused on the role you were given)

Define the Pygmalion Effect

You become what others expect from you

What are the relationships between ethics and law

1.Corporate rules as "law" (policies and guidelines)

2.Discrimination laws

3.Whistle blower laws

4. Federal Organizational Sentencing Guidelines(Culpability score determines punishment)

Cognitive Biases: Fact Gathering

Overconfidence about your knowledge of the facts

Cognitive Biases: Fact Gathering

Falling into Confirmation Trap (getting data that matches previous data already believed

Cognitive Biases: Looking at Consequences

Reduced number of consequences- not looking at all of them

Cognitive Biases: Looking at Consequences

Consequences for self vs. others- how will consequences affect me vs how does it affect others

Cognitive Biases: Looking at Consequences

Consequences as risk ( illusion of optimism and illusion of control)

Illusion of Optimism

People tend to be blindly optimistic that they've done the right thing and that everything will be okay.

illusion of control

people's belief that they can influence events, even when they have no control over what will happen

Cognitive Biases: Looking at Consequences

Escalation of Commitment- no one can dissuade you

book suggests that you invite input from others who disagree with you

Cognitive Biases: Thinking about integrity

1. Illusion of Superiority- we all think we are above average- just cause u think its right doesn't mean it is

2. Ethics of your profession (integrity conflicts with code)- professional code might not line up with yours

Individual differences: Levels of Moral Development

Level 1: Rewards and Punishments, (exchange) (deal making)(ex hit suzie with ball=punishments)

Level 2: Shared Norms, Society obligations (EX in my fam we treat strangers politely)

Level 3 : Principal, autonomous (do what you think is right, not following others)

Locus of Control: Internal

take responsibility for your actions , recognize that your consequences are caused by you

Locus of Control: External

"I couldn't help it", it wasn't my fault

High Ego (healthy ego)

behave more ethically- confident in decision making

Low ego (weak ego)

less ethical actions, look at others

DMA from Others—Praise

want people to be impressed by actions,

DMA from Others-Blame

some people are sensitive and think others are blaming others when they do something wrong

Dired Moral Approbation

desire for moral approval from oneself or others

DMA from Self

feeling good about yourself, need approval from oneself

Utilitarianism Example:

little community who did max the common good and had the ideal community but theres one little girl is locked in a basement her whole life- The ones who walk away from Omelas knew that it was wrong, but did it to maximize the benefits- true utilitarian would be completely fine with it

Pro of Utilitarianism

Provides scientific approach to ethical decision making

Con of Utilitarianism

The means don't matter, as long as "many benefit" its ok that a "few" suffer

Utilitarianism

Maximize common good- only care about consequences, do math and do what is the most good

Robert Nozick's :Rights Theory

Freedom from force (physical or threat of physical force) & Fraud (getting someone to do something through misinformation)- focuses on the negative rights position

Pro of Robert Nozick's :Rights Theory

Gives decision maker virtually complete freedom of government intrusion- do whatever as long as there is no force or fraud

Con of Robert Nozick's: Rights Theory

disregard for the interest of others

Robert Nozick's :Rights Theory Example:

"Payday loan" providers charge high interest rates and justify it by saying the customer has a choice to take the offer or not

John Rawl's Justice Theory

Greatest benefit to the least advantaged

John Rawl's Con of Justice Theory

Denies free will & meritocracy

John Rawl's Pro of Justice Theory

"Unbiased" approach to social justice

John Rawl's Justice Theory Example:

Ben and Jerry's Ice cream will not pay CEO's 7x the amount of their lowest working employee

John Rawl's Con of Rights Theory

Almost complete disregard of interest of objects with a stake in behavior (only primary stakeholder)

Approaches moral judgement

Utilitarianism

Rights

Justice

Objectivism

Social Contract

Care

Kohlberg: Level 1: Preconventional

Stage 1: Obedience and Punishment Orientation

Obidence to authority for its own sake. Sticking to rules to avoid punishment

Kohlberg: Level 1: Preconventional

Stage 2: Instrumental Purpose and Exchange

Following the rules only when it is in one's immediate interest. Rights is an equal exchange, getting a good deal.

Objectivism

Be rational and be all you can be. SELF INTEREST.- be a hard worker and build yourself into best human being you can be

Objectivism Con

Individualistic and judgmental

Objectivism Pro

reinforces personal responsibility- no moochers, dont accept hand outs

Objectivism Example

Mode of Communications- built company on competitive and independent people who dont need pats on the back

Ethics of Care

focuses on relationships and responsibilities

Ethics of Care Pro

protects the weak and dependent- could be temporary and you could have offered it

Ethics of Care Con

neglects justice- example) someone did something wrong and you help them through it but u could be enabling them

Ethics of Care example

usually a small business and has the business to not be solely based on profiting- Teachers dentist has limited hours so he can surf and focus on his family

Integrative Social Contracts Theory

action doesn't violate a global hypernorm or local authentic norm - tailored to global business, respecting dignity and human rights

Integrative Social Contracts Theory Pro

adapts to variations in local norms within some global limits

Integrative Social Contracts Theory Con

local norms are vague and may give actors-too much flexibility

Integrative Social Contracts Theory Example

Levis underage workers in Bangladesh- paid for their school until they were of working age

Corporations the Fundamentals

legal entity chartered by the state with rights and responsibilities apart from the persons running or working for the corporations

Shareholder Perspective

maximize profits within the law and morality

Stakeholder Theory

advance the interests of all stakeholders (even at the expense of profits)

Corporate Social Responsibility (CSR)

commitment to corporate actions beyond maximizing profits within the law and morality

Instrumental/Strategic

•How corporations should engage in CSR programs in order to maximize profits within legal and moral constraints

Normative CSR

•How corporations should engage in CSR programs because it's the right or moral thing to do, even at the expense of profits

Arguments against Normative CSR

•Violates owners' property rights

•Presumes that managers have better moral skills than shareholders

•Weakens management's accountability to shareholders

•Distracts management from its primary purpose

A Key CSR Distinction

•Repair externalities/"do no harm," but not responsible for general social problems

Advance the common good,

Shareholder Theory: Ethical Justifications

•Powerful corporations can help alleviate global inequalities

•Stakeholder approach leads to greater liberty for the vulnerable

•Capitalism will only be efficient if the masses buy into it

•Shareholders don't do the real "work"

•Consider non-Western values: Economic actors should pursue what is sufficient

Government Interventions: Top-down process

(limited) International organizations (e.g., the UN) specify norms endorsed by executives- these are the norms you follow and executives say ok ill follow

Bottom-up processes

(limited) Ethical norms are rewarded by the purchasing decisions of consumers and investors"- done here in the US, chosen by the people on the ground and do good business

Significant intervention

CSR as legal mandate (e.g., codetermination laws)- not done in the US, employees have the power to form boards by law

Whistleblowing "triggers"

•Truth

•Employee or customer rights

•Trust

•Harm

•Your personal reputation

•Your organization's reputation

•Breaking the law

Precursors to whistleblowing

•Dealing with a serious issue

•Assembled the facts

•Checked to be sure facts are accurate

•Asked peers or manager for advice

•See a law or policy about to be violated

Steps of whistleblowing

1.Approach your immediate manager first

2.Discuss the issue with your family

3.Take it to the next level

4.Contact your company's ethics officer

5.Consider going outside your chain of command

6.Go outside the company

7.Leave the company

Pragmatic

based on recognition that business must use its power responsibility in society or risk losing it EX) apple, sea world, nike

Ethical

these businesses believe that, as part of society, they have the responsibility to behave ethically- ie executives had an ethical duty to care about multiple stakeholders because it is simply the right thing to do EX) ben and jerrys, google, lego

Strategic

the recognition of the interdependence of business and society, the best CSR initiative will be simultaneously good for business and for society- creating shared value

EX) walmart

Sustainable Business: The Triple Bottom Line

These businesses aim to hit this line which include people, planet, profit OR better known as social, environmental, and financial/economic (3 Ps is easier to remember)