Business Ethics

Custom Student Mr. Teacher ENG 1001-04 12 November 2016

Business Ethics


There are decisions made every day in the business world, some big, some small. The biggest struggle professionals face when making these decisions are the ethical consequences they face. Every decision that is made is going to have an impact on at least one person, no matter the size of the decision. And there are ethical consequences to all decisions. In the following paper I will be comparing Maslow’s Stages of Behavior and Kohlberg’s Stages of Moral Development with ethical and unethical behaviors of businesses and society. Both Maslow and Kohlberg have established a hierarchy of either behavior or moral development. I will take both of these hierarchies and apply them to the behavior of business and society, as well as including service-to-self and service-to-others concepts.


Before we can discuss how Malsow and Kohlberg play a role in ethical and unethical behaviors in business and society, it is necessary to understand the values of these theories, beginning with Maslow’s Stages of Behavior. Malsow presents these stages in a hierarchical format, beginning with the lowest order, up to the highest level. The first level is physiological needs, followed by safety, love/belonging, esteem, and finally reaching the highest level of self-actualization. 1 In this hierarchy the first level is usually achieved before reaching the second level, and this continues along the hierarchy. Therefore, the ultimate level of reaching self-actualization isn’t usually achieved until all lower levels have been reached and in a sense, conquered. Similar to this theory is Kohlberg’s stages of moral development.

Kohlberg’s theory also states that the stages are reached in an order and one must be reached before the next, but can stop at any point, so that the highest level is not attainable by everyone. 2 Kohlberg’s stages of moral development consist of three levels and six stages. The first level is Pre-conventional morality (stages 1-2): Obedience and Punishment, Individualism and Exchange. The second level is Conventional morality (stages 3-4): Good Interpersonal Relationships, and Maintaining the Social Order. The third level is Post-conventional morality (stages 5-6): Social Contract and Individual rights, and Universal principles.3


For both Maslow and Kohlberg there is a heavy emphasis on reaching the final stage or level. Reaching the self-actualization stage of Maslow’s stages shows that one has fully developed behavior, and moral behavior. Reaching the final stage of universal principles of Kohlberg’s stages shows that one has fully developed morally, very similar to Maslow. For Maslow’s stages a person is capable of reaching this final stage and then regressing back to lower stages.4Usually reaching this higher stage is only temporary and is seen as peak experience.4

This could be in a sort of out of body experience. But once someone has reached this stage, it usually impacts them for the rest of their life, and they do not immediately go back down to lower levels. This stage could also be called, or is known as having integrity.5 This integrity is for oneself and for others, including “a total commitment to the highest standards of behavior”. 5 This is where ethical and moral reasoning and behavior comes into play. People who have reached or have experienced the highest level of Maslow are going to act morally and ethically in their behavior.

The last stage of Kohlberg is universal principles. This stage “defines the principles by which we achieve justice”. 6 To me this stage entitles treating everyone with dignity. This reminds me of the integrity involved in the highest stage of Maslow. In this stage every human being is given equal respect and is treated with the highest dignity. People who have reached the highest stage of Maslow would not vote for a law or agree with anything that causes some harm to others while helping the majority.6


Now that the theories and stages of Maslow and Kohlberg have been discussed, it is necessary to see how these stages play a part in making either ethical or unethical decisions in the workplace and in society. The first example to take a look at is the behavior of students cheating in school. This is a common example, but it could easily be applied to employees stealing from a company, or anyone taking shortcuts in life to get ahead. Many people would agree that cheating would correlate to students with less moral and ethical values.

During a study by Kohlberg, it was seen that 70% of the students on the pre-conventional level have been found to cheat.7 The pre-conventional level indicates that people are not fully morally developed. These people seem to lack moral development, and therefore will act unethically. The people at these lower levels do not have the respect and dignity for others that the upper level people do. Because this is the case they are more willing to cheat, and don’t feel guilty for what they are doing.

This can easily be transpired into the business world. People cheat and steal money because they have no respect or dignity for the people that they are affecting. They will not take into consideration all of the stakeholders at risk because of their actions. Take for example, Bernie Madoff and the scandal at Enron. This is a case famous across many business environments, for unethical behavior that caused harm to many stakeholders. No one would disagree that Madoff was a very savvy and smart business man. But, because of his actions he would fall into a lower level of Maslow.


People who have reached the highest level of Maslow (peakers, we will call them), and those who have achieved the highest level of development Kohlberg presents will have a service-to-others attitude. These people are less materialistic, and are more socially concerned.8 There seems to be a correlation between people in upper level Maslow who have higher levels of ethical development, and those who are in the upper stage of Kohlberg and have higher levels of moral development.8 This correlation also relates to how these people treat those who are around them. They are not self-centered and are instead focused on the well being of everyone around them.

As mentioned before, they seem to be concerned with giving every human being the respect and dignity that they deserve. If someone is concerned with the way that they are treating others, this is seen as a moral consideration. And if they are concerned with how well they are treating themselves, it is seen as a non-moral consideration.8 So, those who are focused on service-to-others instead of service-to-self are more likely to belong to the higher levels of Maslow and Kohlberg. Those who are more concerned with themselves and have a service-to-self attitude; they are stuck in the lower levels. They are still trying to achieve the basic needs that Maslow sets out.


The most difficult part about these two theories, are what they have to do with an organization, how employers can utilize this information to better motivate their employees, and people are going to treat themselves and others within the levels of Maslow and Kohlberg. One of the biggest examples of this, are how these theories can be incorporated into a non-profit organization.

These organizations would be more known for their ethical behavior than most other companies. These companies can obtain an ethical culture by following and paying attention to the hierarchy of values that Maslow proposed.9 Maslow noted that in order to achieve the highest value the previous needs have to have been met. If a company takes this into consideration than they should make sure the lower needs of the employees are being met, if they expect them to behave ethically. This leads to an ethical culture.

In the article that discusses this they translate the individual levels of Maslow into levels that an organization should achieve. These levels or needs are financial competence, accountability, reciprocity, respect, and integrity.9 They feel that in order to employees to attain the ethical values and culture that is wanted, the lower needs must first be met. This may include wage benefits and giving employees more responsibility to begin with. Eventually employees will feel a sense of respect from the employer and will work their way up to level 5. If all of the employees at this company are at the level 5, then they have an ethical culture. This is a way to apply the theories of Maslow and Kohlberg into an organization, even if is a for profit company, and achieve the ethical culture that is desired.


To sum up, Maslow and Kohlberg have developed a hierarchy of needs and stages of moral development, respectively. It is possible to use these models to understand the ethical and unethical behavior of people in businesses and in society. There is a focus on achieving self-actualization and universal principles. If someone has reached this level of self-actualization it transforms their identity, and they are more apt to act morally and ethically. In the same sense, those who are in the universal principle level of Kohlberg, treat all humans with the respect, integrity, and dignity that they deserve. The people in these upper levels are also known to have a service-to-others attitude, instead of service-to-others. Lastly, companies can use this information to make sure the basic needs of their employees are being met, in order to achieve an ethical corporate culture.


1. SADRI, GOLNAZ, and R. CLARKE BOWEN. 2011. “Meeting EMPLOYEEE requirements: Maslow’s hierarchy of needs is still a reliable guide to motivating staff.” Industrial Engineer: IE 43, no. 10: 44-48.

2. Walker, Lawrence J. 1982. “The Sequentiality of Kohlberg’s Stages of Moral Development.” Child Development 53, no. 5: 1330-1336., 1330-1336.

3. W.C. Crain. (1985). Theories of Development. Prentice-Hall.

4. Christopher, John Chambers, Guy J. Manaster, Robert L. Campbell, and Michael B. Weinfeld. 2002. “Peak Experiences, Social Interest, and Moral Reasoning: An Exploratory Study.” Journal Of Individual Psychology 58, no. 1: 35

5. Strickland, Ruth Ann, and Shannon K. Vaughan. 2008. “The Hierarchy of Ethical Values in Nonprofit Organizations.” Public Integrity 10, no. 3: 233-235

6. W.C. Crain. (1985). Theories of Development. Prentice-Hall.

7. Emerci, Çetin. 2006. “THE OPINIONS OF MEDICINE FACULTY STUDENTS REGARDING CHEATING IN RELATION TO KOHLBERG’S MORAL DEVELOPMENT CONCEPT.” Social Behavior & Personality: An International Journal 34, no. 1: 41-49

8. Christopher, John Chambers, Guy J. Manaster, Robert L. Campbell, and Michael B. Weinfeld. 2002. “Peak Experiences, Social Interest, and Moral Reasoning: An Exploratory Study.” Journal Of Individual Psychology 58, no. 1: 35

9. Strickland, Ruth Ann, and Shannon K. Vaughan. 2008. “The Hierarchy of Ethical Values in Nonprofit Organizations.” Public Integrity 10, no. 3: 233-235


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  • University/College: University of Chicago

  • Type of paper: Thesis/Dissertation Chapter

  • Date: 12 November 2016

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