Ethical Philosophies
There are various schools of thought on business ethics. Two perspectives will be discussed in this study. The first perspective will look at the five schools or ethical philosophies as proposed by Hansen (1992) and the second will discuss the five business philosophies by cited by Bageac, Furrer, and Reynaud (2011) from the work of Stevens 1979 book Business Ethics.
This section provides the reader with a brief description of the five schools of thought as presented by Hansen (1992). When dealing with the issue of ethics, one must pay close attention to the various schools of thought. The question of what is “right” or “moral” can be debatable.
It can be seen as a concept that is relative or that it changes with time or generation or that it can be determined based on religion or culture. The attempt here is to highlight the fact that deciding what is ethical can be based on interpretation which can be lead to conflicting ideas. According to (Hansen, 1992) “Over the years, researchers have developed several categories of ethical philosophies, many of which posit conflicting ideas, rules, and interpretations which in turn, can lead to conflicting evaluations of what is ethical or unethical, moral or immoral, just or unjust” (p.
523).
According to Hansen (1992), Reidenbach and Robin (1988, 1990) were one of the first researchers to attempt to quantify the various ethical philosophies into multidimensional scale of business ethics. They first developed a 29-item philosophy scale and in 1990, they refined the scales to a final 3-factor solution: Factor 1: broad-based moral equity dimension - Fair/Unfair Just/Unjust Morally right/Not morally right Acceptable/Unacceptable to my family. Factor 2:
relativistic dimension - traditionally acceptable/Unacceptable Culturally cceptable/Unacceptable and Factor 3: contractualism dimension - Violates/Does not violate an unspoken promise Violates/Does not violate an unwritten contract. Hansen (1992) in his work to refine the scales proposed by Reidenbach & Robin (1988, 1990) spoke about the five philosophies of ethical decision making namely deontology, utilitarianism, egoism, relativism and justice. The following is a brief definition of each philosophy as obtained from (Lin, 1999).
Deontology
It focuses on universal principles of right and wrong. Argues that people accept concept of duty that is independent of the concept of good and that a person's actions are not justified by the consequences associated with these actions, but rather, on the motives underlying these actions, as well as the morals and character of the agent rather than the consequences actually produced by the actor.
Utilitarianism
It is most concerned with the consequences of actions. Rooted in the proposition that an action is right if it leads to the greatest good for the greatest number or, conversely, to the best balance of bad consequences.
Egoism
An act is ethical when it promotes the individual's best long-term interests. If an action produces a greater ratio of good to evil for the individual in the long-run than any other alternative then the action is ethical.
Relativism
Believes that what is ethical is determined by culture or the individual and therefore there are no universal principles or ethical rules that can be applied to everyone. Thus the major implication is that all moral norms are relative to particular cultures.
Justice
The ethics of an act is determined by the notion that equals ought to be treated equally and unequals ought to be treated unequally--with an emphasis on fairness. Includes the idea of distributive justice, which looks at how fairly things are distributed--and procedural justice, which develops rules or procedures that result in fair or just outcomes
These five philosophies defined above are important when discussing attitudes towards business ethics because an individual’s attitude can be influenced by their belief in one philosophy over another. For example someone who subscribes to the utilitarian philosophy make see nothing wrong with hiring illegal immigrants, women or minorities and paying them minimum wage or below because at the end of the day it makes profit for the business, shareholders and contributes to economic growth of the domestic economy while one who subscribes to the justice philosophy may see this decision as unfair to the underpaid workers.
Therefore the one who subscribes to the justice philosophy will regard this as an unethical decision where as for the utilitarian it would be ethical. We will now proceed to the second school of thought on the five business philosophies.
Business Philosophies
This section is specific to the providing information needed to answer the research question which seeks to determine the business philosophies held by students and employees.
As mentioned earlier in the purpose of the study, in order to gain further insight into attitudes towards business ethics and to know what these attitudes are, it was necessary to also study the five sub dimensions of business ethics (business philosophies) as contained in the ATBEQ.
Embedded in the ATBEQ can be found the following five business philosophies which will be analyzed in this study. The first three philosophies definitions are obtained from (Miesing &
Preble, 1985; Neumann, 1987, cited in Bageac et al., 2011).
Social Darwinism
Social Darwinism is essentially a utilitarian philosophy, which argues that individuals should freely pursue their self-interest in a competitive environment. In such an environment, social welfare is created as the strong and the fittest survive and the inefficient are eliminated.
The idea of progress is an essential idea of Social Darwinism. While natural selection is a key element of progress for the biological world, natural selection in the business world is made possible through free market mechanisms. Social Darwinism is also an amoral philosophy, which
argues that morality has no place in a business world governed by natural laws. Social Darwinism is the most prevalent philosophy in business ethics.
Machiavellianism
Machiavellianism pertains to a business philosophy, which considers that a business firm is a self-contained organism with its own ‘‘natural’’ laws that can be bent but not broken and that efficiency should take precedence over virtue to succeed. Machiavellianism refers to the fact that we judge an action – in the sense of ethics – not on the basis of the conformity of this action to any categorical imperative, but to the efficient achievement of its goal. Machiavellianism promotes a business philosophy based on what is real, rejecting idealism: ‘‘people should believe in what they do instead of doing what they believe in’’ (Christie & Geis, 1970).
Machiavellianism is also an amoral philosophy as the end, which is usually winning, is a sufficient justification for the means. In describing someone who subscribes to this philosophy, Miesing and Preble (1985) says that Machiavellianism has attained a pejorative connotation by describing someone who is coldblooded and conniving in using others with total disregard for human dignity. Considered 'opportunistic' by their detractors and 'realistic' by their admirers, Machiavellians view others as naive about the real world and reject conventional moral standards in their emotionally detached pursuit of selfish ends.
Moral Objectivism
Moral Objectivism focuses on the ability to reason within the existing reality: rational action is the only conformity to reality, the most productive, and the only approach worthy of being called ethical. Similar to Machiavellianism, Moral Objectivism is rational self-interest;
however, contrarily to Machiavellianism, Moral Objectivism does not consider the real world to be at odds with ethics (Miesing & Preble, 1985). According to Moral Objectivism, an individual’s moral obligation is to achieve their own well-being but in order to achieve it, they ought to have a moral code, a sort of meta-ethic, valid for everyone. Therefore, following such a moral code is necessary for individuals to succeed and reach their personal goals.
Legalism
Legalism is a school that greatly emphasizes law. Shklar (1964) in her book Legalism:
Law, morals, and political trials defines legalism as the ethical attitude that holds moral conduct to be a matter of rule following, and moral relationships to consist of duties and rights determined by rules.
Ethical relativism
The term ethical relativism represents the position that there are no moral absolutes, no moral right or wrong. This position would assert that our morals evolve and change with social norms over a period of time (allaboutphilosophy.org). According to Miesing and Preble (1985) Ethical Relativism departs from business philosophies centered around the individual to one intended to serve the group or society. Here, ethics does deal with feelings and attitudes and is based on social convention which accepts behavior sanctioned by established group norms.
Hence, moral good means conforming to the way things are in a given time and place and Rand's selfishness becomes the root of all evil. Thus, conventional morality justifies the 'commonly accepted practice' argument in business. Those unable to adapt to the particular culture will suffer and questionable practices may eventually be seen as ethical under different circumstances.
There isn’t much literature available on the effect of factors discussed in this study on the above mentioned business philosophies. Miesing and Preble (1985) studied the effect of gender, expected salary and religious conviction and Bageac et al., (2011) studied the effect of gender and religious practice. Due to the fact that this study compares the data for two different sample groups studying the effect of each variable on each business philosophy seems cumbersome, therefore this study will only study the effects of gender, interpersonal and intrapersonal religiosity and household income.
Business Ethics
The current state of ethics in business practices is perhaps the underlying motivation for undertaking this study. Some have argued that business and ethics may not always adhere to the same objective. Indeed the firm’s reason for existence is to make profit, but can the pursuance of profit be made at the expense of ethics?
Business ethics research has been widespread and is gaining relevance because of the many scandals that have essentially lead to the collapse of many businesses and careers, with the biggest being the 2008 world economic crises which threatened the world’s economy. The research on business ethics is categorized into two major complimentary approaches – conceptual and empirical (Preble & Reichel, 1988). Conceptual approach aims to addresses the meaning of business ethics, social responsibility and moral conduct and the empirical approach highlights prevailing ethics, perceptions and attitudes of general public, business people, and college students who are often regarded as the future leaders of organizations (Preble & Reichel, 1988).
We will first look at the conceptual approach. The definitions for business ethics are many. One thing however though that binds them together is that they all seem to suggest behavior in doing the ‘right’ thing. Gilbert (1992) defines business ethics as consisting of principles of morally right and wrong behavior and their application to business situations or put quite simply in layman’s terms the definition listed earlier by Carroll and Buchholtz (2008) as having to do with right or wrong behavior and practices that takes place in the business environment. According to Bageac et al., (2011) “Business ethics supports the legitimacy of a firm’s strategic behavior. It is ethics that ensures society’s acceptance of the business’s ‘‘right to produce’’ or ‘‘license to operate’’ (p. 393).
The second component as listed above in the conceptual approach is social responsibility.
For purposes of this paper, social responsibility will be expressed as Corporate Social Responsibility (CSR). Before we review the scholar’s definition of the term, the researcher finds it fitting to gain a perspective from the business viewpoint. The World Business Council for Sustainable Development (WBCSD) in attempting to define CSR the WBCSD says that no universally acceptable definition of CSR exists. According to the report, CSR in broad summary is the ethical behavior of a company towards society. However, a more formal definition emerged from a 1988 international meeting:
Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (WBSCD, 1998, p. 3).
I now proceed to the scholar’s definition. In addition to the definition stated above by Matten and Moon (2008) in the introductory section of this paper, McWilliams, Siegel and Wright (2006) defined CSR as “Situations where the firm goes beyond compliance and engages in ‘actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (p. 1). They also agree just as did the WBCSD that there is no clear definition of the term.
The importance of CSR has permeated all levels of the governance at the organizational, state and has also reached the global level. In an April 13, 2011 report from the korea times by Ju Chul-ki, vice president and secretary-general of the Global Compact Korea Network says:
Recently, the corporate world has been changing through the evolution of time. Since the 2008 financial crisis, further impetus has been given to the promotion of transparency and accountability as well as corporate citizenship. In addition to corporate governance, corporate social responsibility (CSR) has added further importance as a factor permitting sustained growth of companies. “Doing well by doing good” is the new catch phrase. At a global level, the United Nations already initiated the U.N. Global Compact (UNGC), an initiative designed to promote CSR, focusing on human rights, labor rights, environmental causes and anti-corruption (p.1).
There is also a new sense of heightened public scrutiny as was the case of the Wall Street protests of 2011 as well as legal compliance for example in the USA, the revisions to the Federal Sentencing Guidelines for Organizations (FSGO) and the post Enron-Oxley have created a culture in which more and more companies are recognizing the importance of tending to the ethical cultures of their organizations (Harned, 2005). More and more firms are seeing the necessity of being seen as an ethical organization. Many organizations are sponsoring green
energy projects, community based projects all in an effort to promote a positive corporate image.
Despite this good news, I must however point out that many of those companies that triggered 2008 world economic crisis, had there been Government regulations and in some cases adherence to regulations; this crisis could have been averted. While those too big to fail companies were being bailed out, their CEO’s were raking in millions in bonuses. It therefore demands that measures be put in place to guard against such corporate greed.
The third component of the conceptual approach is moral conduct. Moral conduct has to do with behavior that is ‘right’. Before we delve into moral conduct it is important to first define what morality is. According to Hogan (1973) “Moralities, then, are systems of rules that are external to people, designed to guide social or interpersonal behavior, and which may to some degree be codified and spelled out” (p. 219). He goes on to say that “morality is a natural phenomenon, an adaptive response to evolutionary pressures, and that an understanding of moral behavior is relative to our knowledge of man's biological and psychological nature” (p. 218).
This also suggests that morality is dynamic because of its adaptive nature. One can therefore logically deduce that as societies change so can the rules that govern morality. Based on Hogan’s view of morality the researcher can safely assume that morality is dynamic and subjective making it a concept that may be difficult to apply a universal definition to.
We now proceed to moral conduct or moral behavior. Hogan (1973) goes on to define moral behavior as “Consisting of actions carried out with regard to the rules that apply in a given social context” (p. 219). The words “apply in a given social context” suggest that moral behavior to be a subjective concept. What then may be moral to someone in say for example a Christian society can be highly immoral to someone in a Muslim society; or between an individualistic society compared to a collectivist society. Hogan by this definition also takes into account the social context. McDougall (1871 to 1938) in defining moral conduct says “For the essence of moral conduct is the performance of social duty, the duty prescribed by society”
(Cited in Batoche Books: An Introduction to Social Psychology, 2001, p. 213). He goes on to say that “Moral conduct consists in the regulation and control of the immediate promptings of impulse in conformity with some prescribed code of conduct” (p. 214).
I now proceed to the empirical approach of business ethics which will be discussed in the subsequent captions. According to Preble and Reichel (1988) the empirical approach to business ethics deals with prevailing ethics, perceptions and attitudes of general public, business people, and university students. There exists a vast array of literature examining ethical attitudes, ethical perceptions, ethical behavior of students and practioners alike all in an effort to deal with ethics in business practices. The review will include not only studies examining attitudes towards business ethics but it will also address studies on ethical perceptions, ethical intentions and ethical behavior. The reason being is that perceptions, intentions play a role in one’s attitude which will impact behavior. The topics presented are as follows: Business ethics across professions, the demographic variables namely, Gender and Business Ethics, Age and Business Ethics, Household Income and Business Ethics, Status and Business Ethics followed by Religion and Business Ethics, Religiosity and Business Ethics, Studies of ethical attitudes among Business Students, Business Ethics in the Caribbean and finally a summary of the literature
Demographic Variables and Business Ethics Gender and Business Ethics
The issue of the influence of gender has been addressed by many researchers. Ford and Richardson (1994) say that “Sex is reported in more empirical studies more than any other variable” (p. 206). According to Atakan, Burnaz and Topcu (2008), “The relationship between gender and business ethics receives the most attention and is widely researched” (p.574). The role of gender in determining such attitudes may find it roots in how girls and boys are socialized into becoming men and women of tomorrow. The age old argument is that women are more caring and are more inclined to pursue a course of action that is deemed correct perhaps because of the fact the God had placed this propensity in the woman if for nothing else was for the fact that she was to be the mother and caretaker of the family. The socialization of girls and boys in the family has also had its place and role in the family. In Caribbean societies influenced by its history have given rise to girls being freely allowed to express their emotions whereas the boy was encouraged to be tough and not show his emotion -crying was a sign of weakness.
Devonish et al., (2009) says:
Traditionally, it has been argued that males and females have been socialized differently.
Females were socialized to be more compassionate and caring, whereas males were socialized to be more competitive and justice-oriented. Thus, females may be more likely to be ethically sensitive and less inclined to engage in questionable or unethical acts.
(p.161)
Another argument is the biological argument. Sidani, Zbib, Rawwas and Moussawar (2009) suggested that “Males and females are biologically predisposed to act in a certain manner
Another argument is the biological argument. Sidani, Zbib, Rawwas and Moussawar (2009) suggested that “Males and females are biologically predisposed to act in a certain manner