BA 310 Mod 9 Ch 7 Decision Making and Human Resource Issues Objectives 1 Describe the six stages of Kohlberg s moral development model 2 Describe the two ethical studies done at Yale and Stanford Universities 3 Describe the two components of organizational justice 4 5 6 Explain the importance of workplace diversity from an ethical viewpoint Explain equity theory List the reasons employees steal from organizations and some of the red flags that could indicate employee theft 1 Ethical Decision Making Kohlberg s 6 Stages of Moral Development Obedience and Punishment Orientation i ii iii iv In this stage the individual makes moral decisions based on the consequences and repercussions of their actions Instrumental Purpose and Exchange In this stage the individual interprets the rules to determine whether they are beneficial to the individual Interpersonal Accord Conformity Mutual Expectations interpersonal relations and mutual respect impact the decision making In this stage process of the individual Social Accord and System Maintenance In this stage decisions are made based on the obligations and duties that have been accepted by the individual In this stage the individual focuses on making a commitment to improving society and to upholding the laws of the land unless they directly conflict with the individual s perceptions of what is right for society v Social Contract and Individual Rights In this stage the belief is that since individuals may have a different set of values it is important to view rules relative to the group which must accept them vi Universal Ethical Principles In this stage the individual is governed by his or her own chosen ethical principles As a result the individual will support these principles even when they violate the law The Role of Emotion in Moral Decision Making Decision makers use heuristics or rules of thumb in order to help facilitate the decision making process Moral luck also has a role in moral decision making Resultant Luck occurs when two people fire guns at each other and one shooter kills the other person but was not hit by the person killed Even though both individuals performed the exact same actions the results of the actions were vastly different Circumstantial Luck occurs when certain conditions or circumstances occur that allow the individual to demonstrate his or her moral values Two people may have the same moral beliefs but one may never get the opportunity to demonstrate it to others Constitutive Luck based on the background family support system and life experiences a person has before the moral decision is made Influences can help shape the moral value system of the decision maker 2 Studies at Yale and Stanford Yale shock test Stanford prisoners and guards experiment 3 Rationalizing Unethical Behavior Ethics is about being and doing the right thing not just presenting the right idea The Institute of Business Ethics had identified 3 simple ethical tests to use for a business decision Transparency refers to deciding if one accepts having others know what one has decided Effect refers to determining who the decision affects or impacts 1 BA 310 Mod 9 Ch 7 Decision Making and Human Resource Issues Fairness refers to determining if the decision would be considered fair by those affected by it In defining the boundaries of business ethics one could view the binary considerations discretionary actions and nondiscretionary actions Discretionary actions are those that one can compromise within established boundaries Nondiscretionary actions are those that one cannot change that is there is only one acceptable way of acting These include laws and regulations public and employee safety and truthfulness of records and statements Texas Instruments Ethics Test Is the action legal If you do it will you feel bad Does it comply with our values How will it look in the newspaper If you know it s wrong don t do it If you re not sure ask Keep asking until you get an answer Interactionist Model of Ethical Decision Making in Organizations Critical Individual Variables Situational Variables ego strength the strength of conviction or self regulation by the individual field dependence refers to the ability of using external information to help resolve an ambiguous situation locus of control refers to the individual s perception of how much control he or she has over any activity or event immediate job context refers to the rewards or punishment that will be assigned to individuals based on their behavior related to the ethical issue organizational culture can allow individuals in the firm to be given autonomous decision making authority that gives them the freedom to make their own decisions to develop characteristics of work refers to ability of expanded job responsibilities and roles within the firm and therefore mature as an employee the individual Ethical Decision Making and Moral Intensity Level of moral intensity impacts the ethical decision making process Moral intensity refers to the extent in the severity of the moral issues Components of Moral Intensity magnitude of consequences relates to the aggregate of the harm or benefit done to the victims or beneficiaries based on the moral decision made by the manager social consensus refers to the degree in which society would agree that the act is either good or evil probability of effect refers to the decision maker s perception of the probability of the act will take place and the probability that harm or benefit will impact the stakeholders of the firm temporal immediacy refers to the amount of time that will take place between when the decision is being made the consequences of the action proximity the feeling of closeness or nearness the decision maker had with the individuals impacted by the moral dilemma concentration of effect occurs when a relatively small number of people with a large stake in the action of the firm are impacted by the decision The Role of Power and Influence in Ethical Decisions Managing Power To use power in an ethical manner two standards must be met 2 BA 310 Mod 9 Ch 7 Decision Making and Human Resource Issues The first concerns power being exercised to benefit others who have granted the decision make the power with the expectation that the decision maker will serve others The second standard is that the power conforms to both the legal and accepted cultural standards of what is considered to be ethical behavior Influence Can be defined as the ability to change the