Business

A Multidimensional Approach to Finnish Managers' Moral Decision-Making

Description
A Multidimensional Approach to Finnish Managers' Moral Decision-Making
Categories
Published
of 24
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Related Documents
Share
Transcript
    ABSTRACT.This paper analyses managers’ moraldecision-making, and studies the role of ethicaltheories in it by following the research tradition usingthe multidimensional ethics scale. The researchquestion is: what kinds of ethical dimensions doFinnish business managers reveal when they aremaking moral decisions, and how have these dimen-sions changed in the 1990s? This question is answeredby examining what kinds of factors emerge when themultidimensional ethics scale is used to analyseFinnish managers’ attitudes toward moral dilemmas.The results show that Finnish managers’ decision-making reflects a variety of ethical theories.Teleological thinking is strongly emphasised byFinnish managers, and relativist thinking is used aswell, but often combined with either deontology or  justice thinking. In addition, a strong moralisticdimension emerged in Finnish managers’ decision-making. The analysis was carried out in two differentsurveys in years 1994 and 1999, and the results showthat the ways of decision-making were more complexat the end of the 1990s than almost six years earlier.Key words: managers, moral decision-making,multidimensional approach, survey research   Introduction Ethical theories, such as utilitarianism, deonto-logical ethics, and theories of justice and rightsare introduced to the reader in most businessethics textbooks (see e.g. Beauchamp and Bowie,1983; Boatright, 1993; De George, 1990; Green,1994; Velasquez, 1992; White, 1993). Thesetheories have an important role in business ethicsteaching and research as well, but in everydaydiscussions about moral issues in business thesetheories are, at least explicitly, used less often.According to Loe et al. (2000), the categories of issues impacting the moral decision-making are(1) awareness, (2) individual factors (cognitivemoral development, moral philosophy, gender,age, education and work experience, nationality,religion, locus of control, and intent), (3) organ-isational factors (opportunity, codes of ethics,rewards and sanctions, culture and climate, andsignificant others), and (4) moral intensity (seealso Ford and Richardson, 1994). Examining therole of moral philosophies or ethical theories inmanagers’ decision-making ranks second innumber of empirical studies conducted, andevaluations of moral philosophy have examined,for example, deontological versus teleologicalperspectives in managers’ decision-making (Loeet al., 2000). This study concentrates on examining the roleof ethical theories in managers’ decision-making.To explore the manner in which individualscombine aspects of the different philosophies inmaking moral 1 evaluations, Reidenbach andRobin (1988) started the development of amultidimensional ethics scale derived from moralphilosophy literature. Different forms of this scalehave been used in several empirical studies on A Multidimensional Approach to Finnish Managers’ Moral Decision-Making    Johanna Kujala  Journal of Business Ethics 34 : 231–254, 2001.© 2001 Kluwer Academic Publishers. Printed in the Netherlands. Johanna Kujala is currently acting as a business ethicsresearcher, university teacher and business consultant inTampere, Finland. She has completed her Ph.D. thesisconcerning Finnish managers’ stakeholder perceptions and moral decision-making in 2001. Her articles has been published in International Journal of Value BasedManagement and Business Ethics: A EuropeanReview .  business ethics (see Appendix A), and further testing and developing of the scale have beenrequested (see e.g. Cohen, 1993; Reidenbach andRobin, 1990).The article analyses managers’ moral decision-making, and studies the role of ethical theoriesin it by following the research tradition using themultidimensional ethics scale. The researchquestion is: what kinds of ethical dimensions doFinnish business managers reveal when they are making moral decisions, and how have these dimen-sions changed in the 1990s? This question isanswered by examining what kinds of factorsemerge when the multidimensional ethics scaleis used to analyse Finnish managers’ responses topresented moral dilemmas. Based on this analysis,I will discuss the role of various ethical theoriesin managers’ moral decision-making.The multidimensional ethics scale representsthe ethical evaluative criteria that individuals usein making a moral judgement (Reidenbach andRobin, 1995, pp. 159–160). This study extendsthe earlier research using the scale by further developing the scale itself, and by using newscenarios that were developed based on inter-views with real life managers. In addition, thestudy enlarges our understanding of managers’moral decision-making as it was carried out in anew cultural context and was targeted at topmanagers of large manufacturing companies.The article is divided into six sections. Thefirst section introduces the research theme andsets the research task. The second sectiondescribes the questionnaire development process,and the third section introduces the sample.Section four presents the empirical analysis anddescribes the moral dimensions of managers’decision-making. The fifth section summarisesthe empirical results and the sixth sectiondiscusses the findings and concludes the study. The questionnaire The questionnaire development process 2 wasstarted by interviewing five top managers in largemanufacturing companies. In the interviews, themanagers described situations they had felt to bemorally problematic in their work. Four moraldilemmas were developed by shortening andclarifying these stories so that they would bemore suitable for questionnaire purposes. In thisprocess, the goal was to maintain the srcinalcontent of the situations as accurately as possible.The dilemmas were presented to managers in asurvey questionnaire. 3 The first dilemma describes a situation wherethe managing director of the company agrees toreceive more money from an order than the realprice and transfer the rest of the money to aSwiss bank account as requested by the customer.This situation is referred to as the Hiding Moneyin Deals dilemma. The second dilemma describesa situation where the managing director had todismiss an older employee due to the company’sfinancial difficulties. This situation is referred toas the Dismissal of an Employee  dilemma. Thethird dilemma describes a situation where themanager accepts personal compensation fromanother company to make good a faulty mer-chandise delivery. This situation is referred to asthe  Accepting Personal Benefits dilemma. Thefourth dilemma describes a situation where anapplicant for a new job suggests that he/shewould like to get paid without tax-payments,which would cut the company’s costs. Themanaging director decides to hire this applicant.The situation is referred to as the Paying Tax-free Salaries dilemma. Table I depicts the four moraldilemmas presented to the managers in thequestionnaire.The respondents were asked to state their views on these four moral dilemmas witha modified multidimensional ethics scale.Reidenbach and Robin (1988) initially developeda 30-item multidimensional ethics scale based ona content analysis of five ethical theories: (1) justice, (2) deontology, (3) relativism, (4) utili-tarianism, and (5) egoism 4 to measure moralreactions of people. This scale was later refinedinto a more parsimonious 8-item instrument(Reidenbach and Robin, 1990) that measuredthree orthogonal constructs: (1) a broad-basedmoral equity dimension, (2) a relativisticdimension, and (3) a contractualism dimension.According to Reidenbach and Robin (1990,p. 650), the multidimensional nature of the scalecan provide information as to why a particular 232  Johanna Kujala  business activity is judged unethical; whether, for example, the activity undertaken is perceived asfair or just, or whether it violates certain culturalor traditional values.Different forms of the multidimensional ethicsscale have been used in several empirical studieson business ethics (Cohen et al., 1993; Cruz etal., 2000; Hansen, 1992; Henthorne et al., 1992;Tsalikis and Nwachukwu, 1988; Tsalikis andOrtiz-Buonafina, 1990). (See Appendix A.)Cohen et al. (1993, p. 25) argue that Robin andReidenbach’s original scale may provide the basisof multidimensional scales, but a scale must beconstructed and validated for each application.The scale used in this study was developed bycomparing the scales used in six previous studies(Appendix B), selecting those items that havebeen used and found relevant in these studies,and by completing the scale with a few items thatwere felt to be absent. After the items wereselected, they were translated into Finnish. Somechanges to the vocabulary were made, since theexpressions were made as familiar and under-standable to Finnish managers as possible. After this, the items were translated back to Englishand compared to the srcinal items to check thatthe changes in expressions have not changed thecontent of the items. 5 In the srcinal 30-item ethics scale, the justicescale included three items: “Just,” “Fair,” and“Results in an equal distribution of good andbad.” From these, two items (“Fair” and “Just”)were chosen to be included in the multidimen-sional scale used in this study. The item of “Just”was selected because it was used in all six earlier studies and the item of “Fair” because it was usedin four of them. In the final scale, the items wereused in full sentences in the form of “The act isfair” and “The act is just”.The srcinal deontology scale consisted of sixitems: “Violates an unwritten contract,” “Violatesmy idea of fairness,” “Duty bound to act thisway,” “Morally right,” “Obligated to act thisway,” and “Violates an unspoken promise.” Fromthe deontology scale, four items were selected.The item of “Violates an unwritten contract”was used in all six studies. The item of “Violatesmy idea of fairness” was used in only three  A Multidimensional Approach to Finnish Managers’ Moral Decision-Making  233 TABLEIThe four moral dilemmas used in the study Hiding Money in Deals A company will receive a big order from abroad if the managing director agrees to charge excess price for anorder and transfer, through an intermediate, this amount back to a Swiss bank account indicated by the customer.When the matter is looked at, the managing director concludes that the risk for getting caught is non-existing.The order would guarantee half-a-year’s work for the company. The managing director decides to agree withthe arrangement. Dismissal of an Employee Because of the company’s financial situation, the CEO needs to dismiss an elderly long-time employee withonly three years to his/her pension. Since there are no other easy savings targets, the CEO decides to dismissthe employee. Accepting Personal Benefits When claimed damages for faulty merchandise, the supplier is not willing to accept the claim, but suggests tothe CEO to make it good for him/her personally for example by delivering the company’s products to him/her for free. Because this avoids unnecessary quarrelling and paper work, the CEO decides to accept the personalcompensation. Paying Tax-free Salaries In a job interview, one applicant suggests to the CEO to be paid without paying taxes. The applicant is com-petent and the CEO thinks that agreeing with this would save a lot of costs. The CEO decides to hire theapplicant in question.  studies, but it was felt to be easily translated intothe Finnish language and understood by Finnishmanagers, so it was chosen instead of “Violatesan unspoken promise” which was the deonto-logical item used in all six studies. The thirddeontology item chosen was “Obligated to actthis way” and the fourth “Morally right” whichwere both used in five earlier studies. In the finalscale, the items of “Violates an unwrittencontract”, and “Violates my idea of fairness”were used in full sentences in the form of “Theact violates an unwritten contract”, and “The actviolates my idea of fairness”. The items of “Obligated to act this way” and “Morally right”were used in form “The CEO is obligated to actthis way” and “The CEO acted morally right”.The srcinal relativist scale consisted of fiveitems: “Culturally acceptable,” “Individuallyacceptable,” “Acceptable to people I mostadmire,” “Traditionally acceptable,” and“Acceptable to my family.” From these items,“Culturally acceptable” (used in all six earlier studies) and “Traditionally acceptable” (used infive earlier studies) were combined in a finalversion of “The act is generally acceptable”which was felt to be more suitable to the Finnishlanguage. In addition, the items of “Acceptableto my family” (used in all six earlier studies), and“Individually acceptable” (used in five earlier studies) were selected. The item “Acceptable tomy family” was presented in the form “I believethe act is accepted by people close to me” as thelatter is a more widely used expression inFinland. The “Individually acceptable” item waspresented in the same form. A fourth item,“According to the CEO’s role,” was added to therelativist scale because it did not include any itemrepresenting the idea of individuals havingdifferent values or different ethical standards indifferent roles in their lives (cf. Nash, 1990,pp. 213-214). The srcinal utilitarian scale included eightitems: “Efficient,” “OK if actions can be justifiedby their consequences,” “Compromises animportant rule by which I live,” “On balance,tends to be good,” “Produces the greatest utility,”“Maximises benefits while minimises harm,”“Leads to the greatest good for the greatestnumber,” “Results in a positive cost-benefitratio,” and “Maximises pleasure.” From these, theitems of “Efficient,” “OK if actions can be justified by their consequences,” and “Maximisesbenefits while minimises harm” (all used in four earlier studies) were included in the final scale.The statement “Efficient” was used in form “Theact leads to efficiency”. The idea of “OK if actions can be justified by their consequences”statement was formulated to “The act is accept-able based on its consequences” statement. Thislatter form can be argued to be more purely autilitarian statement as it does not use the word“justified” which can be seen to refer to the justice scale. The “Maximises benefits andminimises harm” item was formulated in “Theact maximises gained benefits and minimisesharm.” The ideas of the items “Leads to thegreatest good for the greatest number” and“Produces the greatest utility” were combined ina new item of “The act leads to maximal benefit”which was thought to be more easily understoodby Finnish managers.The srcinal egoism scale consisted of sevenitems: “Self promoting,” “Selfish,” “Self sacri-ficing,” “Prudent,” “Under no moral obligation,”“Personally satisfying,” and “In the best interestof the company.” From these, the items of “Inthe best interest of the company” (used in four earlier studies) and “Selfish” (used in three earlier studies) were selected. In addition, the item of “The act is in the CEO’s own interest” wasadded to the egoism scale. The egoism scalestatement “In the best interest of the company”was formulated to “The act is in the interest of the company,” and the “Selfish” statement to“The act is selfish.” As depicted in Table II, the final multidimen-sional ethics scale used in the questionnaire of this study consisted of 17 statements: two justicescale items, four deontology, relativism andutilitarian scale items, and three egoism scaleitems. The statements were presented in thequestionnaire in random order and the respon-dents were asked to state their views with a fivepoint scale from totally agree (= 1) to totallydisagree (= 5). 6 234  Johanna Kujala  The sample The survey was targeted at top managers inlarge manufacturing companies in Finland. Topmanagers have, based on their positions in theorganisation, power to promote ethical businessbehaviour at the individual, organisational andsocietal level (cf. Harvey, 2000, p. 55). As thebusiness acts depend on decisions of human indi-viduals (Velasquez, 1992, p. 19), it is believed thatthe realisation of ethical and moral principles inbusiness depends largely on the perceptions thatthe decision-makers have. Top managers hold keypositions in the business life and therefore formthe accurate target group for the survey. Themailing addresses were received from TampestLtd. and Statistics Finland and the target popu-lation was the same both in the 1994 and the1999 surveys. Company size was measured bynumber of employees and it was required to belarger than one hundred. The questionnaire wassent to all managing directors as well as to thelocal managers in these companies. The surveywas conducted for the first time in March 1994,and it was repeated in November 1999. In 1999,the target group consisted of 1,047 managers andthe amount of acceptable responses was 325, i.e.31.0%. In 1994, the final sample size was 1,075persons and the amount of acceptable responseswas 357, i.e. 33.2%. (See Appendix C.)In terms of  personal demographics , almost allrespondents (96.6%) in the 1999 data were male.The share of female respondents had increased alittle from the 1994 data. The age  of the respon-dents varied from 26 to 65 years; 22.8% were younger than 45 years, 54.5% between 45 and 54 years, and 19.4% 55 years or older. Comparedto the 1994 data, the share of older respondentshad increased. 35.1% of the respondents had highschool or lower education , and 61.6% academiceducation, and the share of respondents withhigh school or lower education had increasedcompared to the 1994 data. In terms of income  ,40.9% of the respondents earned FIM500,000/year or less, 22.2% earned from FIM500,001 to FIM 600,000/year, and 34.5% of the  A Multidimensional Approach to Finnish Managers’ Moral Decision-Making  235 Table IIMultidimensional ethics scale used in this studyTheoretical backgroundStatements in the questionnaire JusticeThe act is fair The act is justDeontologyThe act violates an unwritten contractThe act violates my idea of fairnessThe CEO obligated to act this wayThe CEO acted morally rightRelativismThe act is generally acceptableI believe the act is accepted by people close to meIndividually acceptableThe act is according to the CEO’s roleUtilitarianismThe act leads to efficiencyThe act is acceptable based on its consequencesThe act maximises gained benefits and minimises harmThe act leads to maximal benefitEgoismThe act is in the interest of the companyThe act is selfishThe act is in the CEO’s own interest
Search
Tags
Related Search
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks