Ethical Problems and Managerial Decision Making

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Sometimes, making the right decision conflicts with the organization’s goals. Conversely, resolving in favor of the organization may conflict with one’s personal values. In recent years, both the Academy of Human Resource Development and the Academy of Management dedicated entire volumes of their journals to ethics and integrity (Veiga, 2004). The journals contain case studies about the ethical dilemmas professionals face and present guidelines for solutions. People in occupations without a formal set of ethical standards must rely on their own instincts, backgrounds, experience, and judgment to handle ethical dilemmas that arise in the course of their work lives. Leaders at various levels of organizations, large and small, face ethical dilemmas daily and must be prepared to make the right decisions for the organization and for themselves (Bass Steidlmeier, 1999). There is a void in the empirical literature with respect to ethical decision-making because the literature on ethical decision-making has been based on hypothetical dilemmas instead of on actual situations. Decision Making ModelsWhen managers are faced with ethical dilemmas in their employing organizations, they are not always in control of the situation and often must consider other factors (e.g., employees, organizational risks, organizational pressure) in their decisions. Most of the ethical decision-making models have stemmed from the cognitive moral development theory of Kohlberg (1973). Two models that were introduced around the same time are those of Rest (1986) (Four-Component Model) and Trevino (1986) (Person-Situation Interactionist Model). Both Rest and Trevino expanded on the work of Kohlberg, and their models have been tested multiple times. Kohlberg, a social psychologist, was the first to expand Piaget’s concept of stage development to include moral judgment. Moral judgment is a process of reflecting on one’s values and choosing among them. Piaget, a Swiss biologist, was interested in how children reason. From his qualitative studies, he concluded that the ability to reason is age-related, and he identified cognitive stages ranging from infancy through adolescence. He studied moral judgment only in children under the age of 12 and held that cognition and affect develop separately, but in parallel ways, and that moral judgment is a cognitive process. Kohlberg’s (1968) theory focuses on the moral reasoning process – how people decide which course of action to take when faced with an ethical dilemma. Using a research instrument that he developed, Kohlberg conducted a longitudinal study of 84 boys ages 10 to 16, following up at four-year intervals from 1956 to 1976. In the moral judgment interviews, Kohlberg presented the subjects with three dilemmas and asked the boys to tell what the resolution should be and why. The why is the determining factor for stage identification. People at different stages might reach the same conclusion, but Kohlberg was interested in the reasoning process. He was looking for consistency of reasoning across the issues. From his research, Kohlberg (1968) classified moral development into three levels, within which there are six stages, and concluded that there is a relationship between maturity of moral values and maturity of action in ethical dilemmas. He also concluded, like Piaget, that moral