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Business ethics Essay

Introduction EDM *** For the purpose of this research, we will look at the factors which influence an individual to engage in unethical behaviour, which is defined as any organizational member action that violates widely accepted societal and moral norms (Rest, 1986).

It may be useful to note that unethical behaviour does not equate to workplace deviance or counterproductive work behaviour (violating organizational norms) These factors can be split into three categories, individual characteristics (cognitive moral development, locus of control, Machiavellianism, moral philosophy, demographics), moral issue characteristics such as moral intensity (T. M. Jones, 1991), and organizational environment characteristics (ethical climate, ethical culture, codes of conduct). Personal Characteristics Cognitive moral development.

The theory of cognitive moral development (CMD) states that there are different levels of reasoning that a person may apply to ethical issues. The individual at level one is concerned with their self-interest and external rewards and punishments. At level two, the individual does what others expect of them. The individual at level three possesses more autonomous decision-making skills based on principles of rights and justice rather than external influences (Kolberg, 1969). According to empirical research by Kolberg, most people operate at level two thinking.

This is supported by Trevino and Nelson (2007), who say that most individuals are not autonomous and do not constantly follow an internal moral compass when it comes to decision making. A study by Weber (1990) also placed most business managers at level two. Rest (1986), who proposed the 4-stage ethical decision making process, places vast importance on CMD theory. This implies that while the level of reasoning an individual carries is a determinant of his actions, the situational context also does influence the actions of that individual.

Taking CMD theory into consideration, it can be said that the actions of an individual is both a consequence of personal and organizational characteristics. National and cultural characteristics According to Crane and Matten (2007), research has shown that nationality and cultural background can have a significant influence on an individual’s ethical beliefs. Of the more than 30 empirical cross-cultural studies on ethical attitudes and ethical behavior conducted, practically all of them recognize the influence of national culture on one’s ethical attitude and behaviour.

In support of this view is a study by Christie et al. (2003) using primary data collected from 345 business manager participating in executive MBA programs in selected schools across India, Korea and the United States looked at the relation between Hofstede’s four cultural dimensions and the attitude of individuals toward business ethics in general and toward twelve common questionable practices in particular. It concluded that there existed strong relationship between cultural dimensions of individualism and power distance and ethical attitudes of business managers toward certain questionable business practices.

The analysis of the relationship between ethical attitudes of business managers toward questionable business practices and cultural dimensions of masculinity, uncertainty avoidance, and long-term orientation produced mixed results, probably due to the effect of external variables and the insiginificant differences in cultural dimension scores among the countries surveyed. Although it is difficult to hypothesize, it is unquestionable that culture has an impact on ethical attitudes and behaviour. Organisational Characteristics Rewards.

According to Trevino and Nelson (2007), a reward system is crucial to the alignment of ethical culture because people pay attention to what is measured, rewarded and disciplined. It is in human nature to do or repeat what is rewarded. The opposite is true; people will avoid what is punished. Jackall (1988) states that what is viewed as acceptable in a workplace is often what is rewarded. Crane’s research (2001) also showed that managers could avoid the moral aspect of issues and problems due to lack of progression and fears of marginalization.

While generally positive, rewards can lead to unethical behaviour too Code of ethics enforcement Others – Moral Intensity What would promote ethical behaviour – link to above References * Kohlberg, L. (1969). Stage and sequence: The cognitive– developmental approach to socialization. In D. A. Goslin (Ed. ), Handbook of socialization theory and research. Chicago, IL: Rand McNally. * Rest, J. (1986). Development in judging moral issues. Minneapolis, MN: University of Minnesota Press. * Trevino, L. K. , & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right.

New York, NY: Wiley. * Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16, 366–395. * Weber, J. (1990). Managers’ moral reasoning: Assessing their responses to three moral dilemmas. Human Relations, 43, 687–702. * Crane, A. , & Matten, D. (2007), Making Decisions in Business Ethics Descriptive Ethical Theories (Chapter 4) in ‘Making decisions in business ethics’ in Business ethics : managing corporate citizenship and sustainability in the age of globalization, 2nd ed., Oxford University Press, Oxford ;

New York, pp. 127-167. * Hofstede, G. H. (1980), Culture Consequences: International Differences in Work-related Values, Sage Publications, London. * Christie, P. M. Joseph, et. al. “A Cross-Cultural Comparison of Ethical Attitudes of Business Managers: India, Korea and the United States”, Journal of Business Ethics, 46(3), pp. 263-287, Sep. 2003. * Crane, Andrew, Unpacking the Ethical Product (November 3, 2004). Journal of Business Ethics, Vol. 30, No. 4, 2001.

Available at SSRN: http://ssrn. com/abstract=1533523 Not used * Trevino, L. K. & Brown, M. E. (2004) ‘Managing to be ethical: Debunking five business ethics myths’, Academy of Management Executive, Vol. 18, No. 2, pp. 69-81. * Brown, M. E. & Trevino, L. K. (2006) ‘Ethical leadership: A review and future directions’, The Leadership Quarterly, Vol. 17, Iss. 6, pp. 595–616. * Ardichvili, A. , Mitchell, J. A. & Jondle, D (2009) ‘Characteristics of Ethical Business Cultures’, Journal of Business Ethics, Vol. 85, Iss. 4, pp. 445-451.


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