Four Steps Leading to Ethical Behavior: Step Three

Ethics and Business

• Ethics is the study of morality, involving moral standards that determine what is right and wrong, or good and evil.
• Morality refers to the standards that an individual or a group has about what is right and wrong, or good and evil.
• Moral standards are norms about the kinds of actions that are morally right and wrong, as well as the values placed on what is morally good or bad.

Characteristics of Moral Standards

• Involve significant injuries or benefits
• Not established by authority figures
• Should be preferred to other values, including self-interest
• Based on impartial considerations
• Associated with special emotions and vocabulary
• Felt to be universal

Four Steps Leading to Ethical Behavior

• Step One: Recognizing a situation is an ethical situation
  • Requires framing it as one that requires ethical reasoning
  • Situation is likely to be seen as ethical when it involves serious harm that is concentrated, likely, proximate, imminent, and potentially violates our moral standards
• Step Two: Judging the ethical course of action
  • Involves moral reasoning, applying moral standards to the situation
• Step Three: Deciding to do the ethical course of action
  • Influenced by the culture of an organization and moral seduction
• Step Four: Carrying out the ethical decision
  • Influenced by one's strength or weakness of will, belief about the locus of control, and moral responsibility

Moral Responsibility

• Three components: causality, knowledge, and freedom
• Person caused or helped cause the injury, or failed to prevent it when they could and should have
• Person did so knowing what they were doing
• Person did so of their own free will

Kohlberg's Three Levels of Moral Development

• First Level: Pre-conventional Stages
  • Stage One: punishment and obedience orientation
  • Stage Two: instrumental and relative orientation
• Second Level: Conventional Stages
  • Stage One: interpersonal concordance orientation
  • Stage Two: law and order orientation
• Third Level: Post-conventional Stages
  • Stage One: social contract orientation
  • Stage Two: universal principles orientation

Corporate Social Responsibility

• Refers to a corporation's responsibilities or obligations toward society
• Professional ethics is both a part of corporate social responsibility and part of the justification for corporate social responsibility

Professional Ethics

• The study of moral right and wrong that concentrates on moral standards as they apply to business institutions, organizations, and behavior
• Types of ethical issues:
  • Systemic: ethical questions about the social, political, legal, or economic systems within which companies operate
  • Corporate: ethical questions about a particular corporation and its policies, culture, climate, impact, or actions
  • Individual: ethical questions about a particular individual's decisions, behavior, or character