Corporate Social Responsibility (Subject) / Chapter 4: Making Decisions in Business Ethics, Lecture 3 (Ethical Decision Maki (Lesson)

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• The process of ethical decision making Recognition of an ethical problem  Judgement of the extent of the problem Motivation to solve the Problem Taking action Unethical decisions result from Individual greed + opportunity + evaluation of the risk of being caught
• Key elements of the conventional view on unethical decision making unethical decisions result from rational activities (risk calculations) stable personality traits play the main role in ethical decision making any ethical problem has a specific intensity which can be evaluated +/- objectivity „Act according to that maxim by which you can at the same time will that it should become universal law“ - Immanuel Kant Universalize = leave one’s context, take an objective position (the moral point of view), and then decide 
• Becoming ethically blind We look at the world through a filter strength of the organizational context strength of the situation ideological context (reduces complexity) Filter: Limits the „picture“
• 1. Looking at the world through a filter Frames are mental structures that determine how a person considers a situation and how s/he makes sense of a problem (sensemaking) Frames are heuristics that allow to reduce complexity and to filter information Principal frames used to inform decision making in organizations: technical, economic & legal frames  Frames impose limits on choice (blindness) The more actors apply several mental frames in a flexible way, the better they perceive a given situation 
• 2. Strength of the Organizational context - Towards an architecture of simplicity Organizations tend towards an “architecture of simplicity”. Result: a vision of the world that is homogenous and rigid  Factors contributing to such an “architecture of simplicity” in organizations:  Organizational routines that inhibit learning  Aggressive competition culture  Metaphors in organizations  Culture of objectivity / technical rationality  Strong economic incentives  Aggressive objectives and assessments  Effect of the locus of control (the further removed from a situation we are, the more likely we are to ignore the situation’s ethical dimension) 
• 3. Strength of the situation Conformity: The experiments of Salomon Ash  The experiments of Stanley Milgram  Average people  who are simply doing « their work »  without having feelings of hostility towards the victims  can rapidly become actors in extremely destructive processes Rigid visions of the world are reinforced by:  Peer pressure Autority pressure Time pressure Role pressure  As a consequence, the probability for unethical behavior increases drastically 
• Descriptive Ethical Theories seek to describe how ethical decisions are actually made in business and what influences the process an outcomes of those decisions
• What is an ethical decision? The decision is likely to have significant effects on others morality is concerned with harms and benefits considerations of social good, considerations of others beyond the self The decison is likely to be characterized by choice, in that alternative courses of action are open ethical dilemma The decision is perceived as ethically relevant by one or more parties if others see a decision as having ethical content = degree of ethicality
• Relationship with normative theory normative theory = moral judgement commercial managers rely primarily on consequentialist thinking
• Influences on ethical decision-making Individual Factors Factors that are given by birth (age, gender, national and cultural charateristics, psychological (cognitive, locus of control), personal values/integrity, moral imagination) aquired by experience and socialization (education, personality, attitudes...) Situational Factors Particular features of the context that influence whether the individual will make an ethical or unethical decision Factors associated with the work context (reward systems, job roles...) and issue itself (intensity of the moral issue or the ethical framing of the issue)
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• Influences on ethical decision-making - National and cultural characteristics = Explains certain differences in ethical decision making Individualism/collectivism Degres to which one is autonomous and driven primarily to act for the benefit of one`s self Power distance represents the extend to which the unequal distribution of hierachical power and status are accepted and respected Uncertainty avoidance measures the extent of one`s preference for certainty rules and absolute truths Masculinity/femininity value money and things (masculinity) vs. valuing people and relationships (femininity)
• Influences on ethical decision-making - Psychological factors Cognitive moral development refers to the different leverls of reasoning that an individual can apply to ethical issues and problems Level one: self interest and external rewards/punishment Level two: individual does what is expected from him by others Level three: individual is developing more autonomous decision-making based on principles of rights and justice rather than external influences Locus of control determines the extend to which he or she belives that they have control over the events in their life Internal: events can shaped by own efforts External: events are affected by others behavior
• Influences on ethical decision-making - Personal Values Enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state values are abut the behaviors and things that we deem important in live
• Influences on ethical decision-making - Personal integrity Is defined as an adherence to moral principles or values seen as one of the most important characteristics of an ethical person
• Influences on ethical decision-making - Moral imagination the ability to imagine a wide range of possible issues, consequences and solutions sense of the variety of possibilities and moral consequences creativity with which an individual is able to reflect about an ethical dilemma
• Situational influences on decision-making Issue related  Moral intensity Moral framing Context related Rewards Authority Bureaucracy Work roles Organizational Culture National Context
• Situational influences on decision-making - Issue related - Moral intensity Intensity of an issue will vary according to six factors Magnitude of consequences (expected sum of the harms or benefits) Social consensus (intensity increases when act will be deemed unethical by others) Probability of effect (harms or benefits) Temporal immediacy (speed with wich the consequences are likely to occur) Proximity (feeling of nearness: social, cultural, psychological...) Concentration of Effect (Consequences concentration)
• Situational influences on decision-making - Issue related - Moral framing Most important aspect of moral framing: The Language in which moral issues are couched Using moral language will more likely trigger moral thinking becuase these terms attached to existing cognitive categories that have moral content (honesty, fairness, lying, cheating, stealing) Example: Copy - Paste can also occur after a decision has been made or an act carried out look at how people justify decisions to themselves and others (rationalization tactics) Denial of responsibility Denial of injury Denial of victim Social weighting Appeal to higher loyalities Methaphor of the ledger
• Situational influences on decision-making - Context releated Rewards (strong relationship between rewards/punishments and ethical behaior) Authority (influence from management on ethical decision-making) Buraucracy  Work roles  Organizational culture National context

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