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MGX5020: Business ethics in a global environment

Week 2:Moral Development and

Moral Reasoning

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Your Tutor (me)

Nathan Eva

– nathan.eva@monash.edu– 9903 4065– Building N Level 5 Room 14– www.slideshare.net/nathaneva

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Assignment 1

•Guided Reading Activities•Weeks 2-11•Worth 20%•Need to submit at least 8 of 10•Handed in to Cristina • Cristina is the best person to speak to about this

assignment as she marks it.• Info on Moodle

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Assignment 2

•Group Assignment (groups of 4)•Research Paper with subheadings•Week 8 Monday September 16 4pm •3,000 words•Worth 30%• You are required to explore the ethical and business

dimensions of a chosen issue falling under one of the topics in the assignment guide.

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Week 2 Lecture

• Kohlberg’s theory of moral development > Pre-conventional> Conventional > Post-conventional

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Assignment 2

• Get into groups for me please • 2 – 4 • Let me know who is in what group

• Thanks =)

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Hammering it Home - Kohlberg

• Pull out the Kohlberg reading• What are the three levels and six stages?• What does Kohlberg think most adults tend to get

to in their life?• Do you agree with this?• How do schools shape the moral development of

children – how can they?• Does this have implications for how people are

likely to act within organisations?

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Kohlberg’s Moral Stages

• Pre-conventional– Punishment and Obedience

> Avoiding punishment

– Instrumental-relativist orientation> What do I get in return?

• Conventional– Interpersonal concordance

> Behaving to gain acceptance

– Law and order> What is right based on law

• Post-conventional– Social-Contract

> Upholding individual rights

– Universal-ethical > These are my beliefs even if people or the law say otherwise

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Hammering it Home - Norton

• Organizational Totalitarianism

• Patrimonial Bureaucracy

• Where does this fit in Kohlberg?

• Is this relevant to your workplace?

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Hammering it Home - Heinz

In Europe, a woman was near death from a very bad disease, a special kind of cancer. There was one drug that the doctors thought might save her. It was a form of radium for which the pharmacist was charging ten times what the drug cost him to make. The sick woman’s husband, Heinz, went to everyone he knew to borrow the money, but he could get together only about half of what the drug cost. He told the pharmacist that his wife was dying, and asked him to sell it cheaper or let him pay later. But the pharmacist said, “No, I discovered the drug and I am going to make money from it.” So Heinz got desperate and broke into the man’s store to steal the drug for his wife.

Should the husband have done that? Why or why not?

(Kohlberg, 1971)

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Asch Experiments

• http://www.youtube.com/watch?v=qA-gbpt7Ts8

• http://www.youtube.com/watch?v=TYIh4MkcfJA

• http://www.youtube.com/watch?v=uuvGh_n3I_M

• Explain how these are linked to the readings and organisational totalitarianism and patrimonial bureaucracy

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Enron

“A fish rots from the head down”

• Summarise the Enron Case• As a business student, how do you feel about what happened?• Does this align to your own personal ethics?• What would have you done in that situation?

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Enron

• http://www.youtube.com/watch?v=YaY1XF944ps

– How would you describe the organisational culture at Enron– What values were emphasised and encouraged? What values

were discouraged?– How does this adhere with the patterns of organisational

behaviour described by Norton?– What does this indicate about the effects of corporate culture?– How does this behaviour relate to Kohlberg’s model, and to

Gilligan’s analysis of gender-based differences?

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Enron

• Things to think about:– The deregulation of the industry was law. Wasn’t Enron

entitled to create Special Purpose Entities?– Was the intent to deceive the public the point where it

became unethical?– Doesn’t Fastow have a responsibility to LJM Cayman L.P.

to maximise their profits? Wasn’t he doing that?– Was Arthur Ansersen unbiased with his advice?– Was it ethical for Lay and Skilling to sell stock and at the

same time encourage their employees to invest?

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Gilligan’s critique

• What were the main messages?

• Do you agree / disagree with her assessment?

• Summarise the differences between boys and girls development in the article.

• Do you think that these differences translate into the workplace

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Norton

• What are the dominant behavioural interaction models/ models of management that are discussed by Howard Schwartz and Robert Jackall as reviewed by Norton?

• Which of Kohlberg’s stages would they fall into?• What does this indicate about the level or moral reasoning these

institutions encourage?• Does this influence how we might interpret Lawler’s expectancy

theory?• How would Kohlberg analyse ‘rituals of rebellion’? What might they

indicate about organisational culture?• Consider the American steel example mentioned by Norton. What

does this indicate about the follow-on effects of internal organisational culture? Can you think of any other examples of internal culture affecting external behaviour?

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Week 3 Lecture

• Consequentialism – Utilitarianism

> considers the consequences for all effected by the action. – Egoism

> considers only the consequences for the individual (the actor/ agent).

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Reading to Summarise

• Hoffman, D. (2004) ‘The Ford Pinto’, in Gini, A. (ed.) Case Studies in Business Ethics (5th edn.), Upper Saddle River, NJ: Pearson Prentice Hall, pp. 222 - 228.

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Next Week

•I am presenting at a conference in Disney Land

•Jeremy will be taking the class

• Read over the tutorial guide but mainly have a strong knowledge of the Pinto case

•See you in a fortnight