Chapter 6

INDIVIDUAL
FACTORS
M O R A L P H I L O S O P H I E S A N D VA L U E S

Presented By:
G a b r i e l l a A n g g i ta D. C .
212016511
 CHAPTER
OBJECTIVES
1. Understand how moral philosophies and values
influence individual and group ethical decision
making in business

2. Compare and contrast the teleological,

deontological, virtue, and justice perspective of
moral philosophy

3. Discuss the impact of philosophies on business

ethics

4. Recognizes the stages of cognitive moral

development and its shortcomings

5. Introduce white-collar crime as it relates to moral

philosophies, values, and corporate culture

Chapter 6
 Chapter 6

AN ETHICAL DILEMA
CASE STUDY
 CASE STUDY
OVERVIEW
• Connor work as one of the • Connor insisted on enforcing
managers in charge of the 3rd all safety protocols and urged
shift at AlumaArc, manufacturing his employees to take breaks
facility that produced tank parts in spite of the underachieved
for US Army. output levels.
• AlumaArc was asked to increase • Then, Connor was determined
production by the US Army. to enforce safety protocols and
bring up the issue to General
• Adding another shift as well as Manager, Wendy Smith.
incentives was required to
achieve the goal with existing
personnel.
• Even with overtime, it was not
feasible and many workers are
overworked, bypassing standard
safety procedures and breaks to
receive higher incentives.

Chapter 6 4
 “ 1. Describe Connor’s moral dilemma!

2. In AlumaArc’s reasoning, the benefits of

increasing production outweigh the risks of
potential injuries. How could this approach
potentially backfire?

3. How should Connor approach this issue?

Chapter 6 5
 “ MORAL PHILOSOPHY DEFINED

the specific principles or values

people use to decide what is right
and wrong.

Chapter 6 6
 ECONOMIC VALUE ORIENTATION,
IDEALISM, AND REALISM

• ECONOMIC VALUE ORIENTATION

Refers to values quantified by monetary means.
• IDEALISM
Places special value on ideas and ideals as
products of the mind.
• REALISM
The view that an external world exists
independent of our perceptions.

Chapter 6 7
 Chapter 6

MORAL
PHILOSOPHIES
USED IN BUSINESS DECISIONS
 Is there any clear line
between “good” and “bad”?

“ ARISTOTLE:
“Happiness is an intrinsically good end and that its goodness is natural and universal
without relativity.”

IMMANUEL KANT:
“Goodwill, applied toward accomplishment, is the only thing good in itself.”
Chapter 6 9
INSTUMENTAL AND INTRINSIC
GOODNESS
MONISTS GOODNESS THEORIES
Only one thing is intrinsically good. Focus on the end result of actions
and the goodness or happiness
Characterized by hedonism, pleasure created out of them.
is the ultimate good.
PLURALISTS
OBLIGATION THEORIES
Referred as non-hedonists, they
believe that no one thing is intrinsically Stressed the means and motives
good. by which actions are justified and
divided into categories of
INSTRUMENTALISTS teleology and deontology.
Also known as pragmatists, it rejects
the notion that ends can be separated
from the way they were produced.
Thus, outcomes are intrinsically good
in and of themselves.

Chapter 6 10
 TELEOLOGY/CONSEQUENTIALISM
The moral philosophies in which an act is considered morally
right if it produces desired result.

EGOISM UTILITARIANISM
Defines right or acceptable Concerns with consequences by
behaviour in terms of its making decisions that result in
consequences for the individual. the substantial benefit for all
Decision should maximize one’s those affected by the decision.
self-interest.

ACT UTILITARIANS
ENLIGHTENED EGOISM
Examine specific actions to
It takes into account the well-being assess whether they will result in
of others and long-range the greatest utility or not.
perspective although self-interests
remain paramount.

Chapter 6 11
DEONTOLOGY/
NONCONSEQUENTIALISM
CATEGORIAL IMPERATIVE
Act that is allowed by your rational and suitable to become a
universal principle of guiding behaviour is ethical.

RULE DEONTOLOGISTS ACT DEONTOLOGISTS

Adherence to general moral Actions are the proper basis to
principles based on logic judge morality or ethicalness.
determines ethicalness. People are required to uphold
justice and honesty when making
decisions.
Determined by the relationship
between the basic rights of the
individual and set of rules
governing conduct. Past experiences outweigh rules
that only serve as guidelines.

Chapter 6 12
 RELATIVIST PERSPECTIVE
Definitions of ethical behaviour are derived subjectively from
the experience of individuals and groups. It acknowledges the
diverse views and bases used to justify decisions as right or
wrong.

DESCRIPTIVE RELATIVISM NORMATIVE RELATIVISM

Observation of other cultures as One person’s opinion is as good as

they represent different norms, another’s.
customs, and values.

META-ETHICAL RELATIVISM
People naturally see situations from
their own perspectives. Therefore,
one culture’s moral philosophy can’t
logically be preferred to another’s.
RELATIVISM SHORTCOMING
It emphasizes peoples’ differences
while ignoring their basic similarities
and is negatively correlated to one’s
sensitivity to ethical issues.

Chapter 6 13
VIRTUE ETHICS
Ethical behaviour involves not only obeying to conventional
moral standards but also considering what a mature person
with a “good” moral character would deem appropriate in a
given situation.

VIRTUE ETHICS APPROACH TO BUSINESS

1. Good corporate ethics programs encourage individual virtue and
integrity.
2. By the employee’s role in the organization, these benevolences form a
good person.
3. An individual’s ultimate purpose is to serve society’s demands and the
public good and be rewarded in his or her career.
4. The well-being of the community goes hand in hand with individual
excellence.

Chapter 6 14
 VIRTUES THAT SUPPORT
BUSINESS TRANSACTIONS
TRUST LEARNING
Placing confidence in others’ behavior while taking The disposition to constantly acquire knowledge
the risk that it will not be performed. internal and external to the firm, whether about an
SELF-CONTROL industry, corporate culture, or other societies.
The ability to restrain yourself from exploiting a GRATITUDE
known opportunity for personal gain.
A sign of maturity that is the basis of civility and
EMPATHY decency.
The ability to share the feelings or emotions of CIVILITY
others.
The disposition or essence of courtesy, politeness,
FAIRNESS respect, and consideration for others.
The natural tendency to deal equitably with the
perceived injustices of others. MORAL LEADERSHIP

TRUTHFULNESS Strength of character, peace of mind and heart,

leading to happiness in life.
The nature to provide facts or correct information as
known to the individual.

Chapter 6 15
 JUSTICE
Fair treatment and due reward in accordance with ethical or
legal standards. In business interaction, it is based on the
perceived rights of individuals and the intentions of the people
involved.

DISTRIBUTIVE JUSTICE AREA OF EMPHASIS

Based on the evaluation of Benefits derived
outcomes or results of the business Equity in rewards
relationship.
PROCEDURAL JUSTICE
Decision making process
Based on the processes and
Level of access, openness, and
activities that produce the outcome
participations.
or results.
INTERACTIONAL JUSTICE
Based on relationships and the Accuracy of information
treatment of others. Truthfulness, respect, and courtesy
in the process.

Chapter 6 16
 APPLYING MORAL
PHILOSOPHY TO ETHICAL
DECISION MAKING
• In the business scope, goals and pressures for success differ from the goals and pressures outside work
life.

• Business contains one variable, THE PROFIT MOTIVE.

• Common problems encountered is conflicting personal values with profit-oriented decisions.

• Corporate culture contributes to the alteration of employees’ moral philosophies.

• Unsolvable ethical situations may drive people to conduct unethical behavior with an alibi, “because
everyone else does it.”

• Companies’ ethical core values should be entrenched to help employees stipulate decisions in which moral
philosophies are in conflict.

Chapter 6 17
 KOHLBERG’S MODEL OF COGNITIVE
MORAL DEVELOPMENT (CMD)

1. Stage of Punishment and Obedience

2. Stage of Individual Instrumental Purpose and
Exchange/Reciprocity
3. Stage of Mutual Interpersonal Expectations, Relationships,
and Conformity
4. Stage of Social System and Conscience Maintenance
5. Stage of Prior Rights, Social Contract, or Utility
6. Stage of Universal Ethical Principles.

Chapter 6 18
WHITE-COLLAR CRIME
(WCC)
WCC is a nonviolent criminal act involving
deceit, concealment, subterfuge, and other
fraudulent activity.

US Deparment of Justice

The criminals tend to be highly educated,

hold positions of power, trust, respectability
and responsibility within a business or
organization.

Chapter 6 19
WHY DO PEOPLE
COMMIT WCC?
Corporation is a living, breathing organism
that can collectively become deviant. The
patterns of its activities can encourage
unethical behaviors.

Companies with high numbers of unethical

employees can entice employees with
undecided behavior to go along with their
coworkers.

Under financial predicament, stressful

business environment can force people to
“act out of desperation.”

Chapter 6 20
 THE MAN WHO
STOLE $65 BILLION
BIGGEST PONZI SCHEME IN HISTORY

Chapter 6 21
 DEBATE ISSUE: TAKE A
STAND
1. White-collar criminals tend to have psychological
disorders that encourage misconduct as a route
to success.

2. White-collar crime occurs as a result of

organizational cultures that do not effectively
control organizational behavior.

Chapter 6 22
 INDIVIDUAL FACTORS IN
BUSINESS ETHICS
• Individual values are not the sole driver of ethical behavior in business.
• Personal moral compass is, therefore, insufficient to prevent ethical misconduct in
organizational context.
• Most of unethical behaviors are done to meet performance goals in which the rewards for
doing so become the most important drivers of ethical decision making for coworkers and
managers.
• Thus, equipping employees with both intellectual skills and characters that allow them to
understand and resolve complex ethical dilemmas must be enforced.

Chapter 6 23
 Chapter 6

RESOLVING ETHICAL
BUSINESS CHALLENGES
CASE STUDY
 CASE STUDY
OVERVIEW
• Dr. Robert Smith was in the midst
of fulfilling his dream of becoming
a heart surgeon when his father
became ill and his mother died
from a rare cancer.
• He had to put his dream on hold
and opened a family practice in
his hometown as he decided to
take care of his father.
• Dr. Smith’s brother, Saul, helped
him with paperwork likewise
administrative office matters as
he used to own an accounting
firm.
Chapter 6
• Saul uncovered increasing
charges to Medicaid, dating
back at least 5 years whilst
records that the patients paid
in cash exists.
• Dr. Smith disaffirm his deed as
if the charges were accidental,
however, Saul was convinced
that they were not.
• Saul was in dilemma to find
the best solution that will bring
no harm to both of them.
25
 “ 1. Describe Saul’s ethical dilemma!

2. Why would Medicare fraud be a white-collar

crime?

3. How should Saul approach the situation?

Chapter 6 26
THANK YOU
SOURCE:
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2017).
Business Ethics: Ethical Decision Making & Cases
(11 ed.). Boston: Cengage Learning.

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