Business Sustainability, Corporate Governance, and Organizational Ethics

CHAPTER 26How People Make Ethical Decisions

1. Introduction

Ethical decisions are made by people no matter what the context for them might be. The best that all the influences discussed in the previous chapter can do is to encourage a person one way or another. The best that all the corporate management discussed in subsequent chapters can do is to incentivize and perhaps punish bad decisions made by people. In this chapter, we get as close as we can to how people make these decisions, perhaps holding such external influences and organizational parameters constant.

This chapter considers several important ways of looking at decisions that have ethical content. For many years, a stage model of ethical development dominated our thinking about ethics. We describe this model in some detail, and look both at the evidence that supports it as a predictive model and the reasons that we might not want to trust it. Next, we examine the role of demographic differences between people. We also look at various psychological differences that are believed to be ethically sensitive. The last major element of the chapter could be thought of as a process approach to ethical decision making.

As a prelude to this chapter, we should underline the reality that ethical decision making does not exist in a vacuum. If it did, people would invariably do the right thing, if for no other reason than the right thing has more social support. Decision making is made difficult because people are invariably ...