UBU The Gig Economy Ethical Issues Report

FACULTY OF MANAGEMENT, LAW AND SOCIAL SCIENCESBUSINESS ETHICS AND SOCIAL RESPONSIBILITY (HRM6010-B_2022-3_SEM2)
SUBMISSION DEADLINE: 9th May 2023 @ 3:00pm
2022/23
NOTE: These are draft assessment questions until approved by the
External Examiner.
Students are required to complete a 3000-word individual essay as an assessment for this
module. This assignment will constitute 100% of the final module mark. The assignment will
test the students’ critical understanding of theoretical perspectives on business ethics and
various techniques and practices employed in today’s organisation to tackle socio-economic
and environmental responsibility challenges. The students will also need to show their skills in
applying this theoretical knowledge to the analysis and resolution of ethical business problems.
ASSIGNMENT BRIEF
Explore the following case study and investigate the ethically problematic situation(s) that can
be found. Your specific tasks have been provided directly below the case study.
Case Study:
Driven to despair — the hidden costs of the gig economy.
Sami needed money and Uber seemed like a good way to make it. He could clock off after an
eight-hour shift at Tesco, the supermarket, hop into his car and log straight on to the ridehailing app. But the long hours were a struggle. Sometimes he found himself falling asleep at
the wheel. “I had to force myself to stop the car in the middle of nowhere sometimes, get fresh
air, get Red Bull, just something.” This, the 29-year-old says, is a hidden danger of the socalled “gig economy”: he says the roads are filling up with exhausted drivers who have only
an app for company and no one telling them when to stop. He talked to fellow Uber drivers at
the airport and discovered some were working for 14 or 15 hours a day.
“It’s quite shocking; nobody really knows about it,” he says. “If you go at night to Shoreditch,
Soho, Clapham [in London], you will see a lot of [Uber drivers in] accidents; nine times out of
10 it’s because of tiredness.” Uber does not currently restrict the time drivers in London can be
logged in to the app, though a spokesman says the company sends messages to people who
have been driving for a “prolonged” period to remind them of the importance of taking breaks.
Even if Uber did limit the number of hours people could work per day, Sami says, the company
would not know about people like him who had worked a full day elsewhere before logging
on. He also worries about the slow-burn damage being done to drivers’ physical and mental
health. “It’s very, very lonely — it’s just you inside your box, driving with London traffic, with
all this stress. The long-term effect, honestly: it’s like a bomb waiting to explode.”
“Gig economy” companies like Uber, which from the end of September loses its licence to
operate in London, connect workers to customers via online platforms. They usually allow
people to “logon” to work when they want, but the companies often control and monitor the
work, and some also set the fee. There are roughly 1.1m people working in the “gig economy”
in the UK — about the same number as in the National Health Service, the country’s largest
employer. Ask someone who works in the “gig economy” what attracted them, and they almost
always say “the flexibility”. The promise of being able to choose when to work is a powerful
one, particularly for lower-paid workers whose other job options can be inflexible and
disempowering.
One 21-year-old student at Leicester University, who did not want to be named, said he signed
up to deliver food on his bicycle for “gig” company Deliveroo, after his hours were cut in his
bar job. To be able to top up his income flexibly via Deliveroo was “quite freeing”, he says. “It
was good for my confidence, not being reliant on one thing.”
Multiple studies have shown that genuine flexibility is good for one’s health. Francis Green,
professor of work and education economics at University College London, says data from the
long-running European Working Conditions Survey (which covers 44,000 workers in 35
countries)show a remarkable link between wellbeing and the option to “take an hour or two off
during working hours to take care of personal or family matters”. A 2015 study of virtual
secretaries —white-collar “gig economy” workers who do administrative tasks for clients from
home — flagged this same positive factor. “It’s the flexibility of it. I’m here for my daughter
and it doesn’t matter if she’s sick; it doesn’t matter if she’s on school holiday. I haven’t got to
panic about childcare. That is absolutely fantastic,” one virtual secretary told the researchers.
But for Joanna Wilde, a consultant organisational psychologist and board director of the
Council for Work and Health, these health benefits do not outweigh the risks for “gig economy”
workers. “The flexibility to be around when your daughter is sick — absolutely [that’s good].
But that is not a benefit of working for Uber; that is a benefit of working for a good company,”
she says.
Occupational health experts have yet to investigate properly the potential risks of “gig
economy” work. But a paper published by the American College of Occupational and
Environmental Medicine in April called on the profession to start worrying about it. The article
pointed out that “both off line work in transportation and services and online work are
characterised by a number of health and safety hazards”. In the case of food-delivery bike
riders, demand often peaks at times when conditions are most hazardous. People will often
order takeaway meals when it is cold, dark and wet. One winter night in Brighton, south-east
England, in near-freezing temperatures, a Deliveroo cyclist called Eugene Zakharenko was
cycling up a hill when he felt a sharp pain in his stomach. He phoned a doctor who concluded
he had hypothermia. “I tried to learn from it — if you sweat, you immediately get cold. “Part
of the problem is the waiting outside in bad weather for Deliveroo’s algorithm to assign riders
an order.
Then there are the longer-term health consequences — what Wilde calls “slow accidents”. She
says any gig job that combines a lack of control over how the work is done, insecurity of
income, low pay and isolation represents an “absolute recipe for a stress-related illness”. She
adds: “You couldn’t treat a human being in a way that is more guaranteed to generate some
sort of mental health problem.” Kevin Daniels, professor of organisational behaviour at the
University of East Anglia, says isolation is particularly hazardous to health. “Hundreds of highquality studies” show that social relationships are critical to wellbeing and safety at work, he
says. He has published a study on the health and safety of “remote” workers that shows being
able to talk, preferably face-to-face, with a line manager is also critical.
Yet one of the defining features of “gig-economy “work is the lack of human line managers.
The platforms classify the workers as “independent contractors” and most communication is
done via the app or email. When Yaseen Aslam first switched from a traditional minicab
company to Uber in 2013, this was one of the things he loved about it. Unlike at the cab
company, where he felt favouritism led to some drivers being given more jobs, the Uber
algorithm played fair. “If a job comes, you will get it,” he says. But as time went on, Uber cut
the fares and he had to drive for longer to maintain a decent income. He says he was driving
about 40hours a week initially and earning about £1,000 after expenses; two years later, just
before he stopped driving for Uber, he was sometimes working about 70 hours a week and
taking home about £500. He also felt stressed by the customer-rating system. Uber
“deactivates” drivers whose average ratings drop too low, though the company says they are
given “several opportunities” over a two-month period to improve their rating before they are
deactivated. Aslam began to miss the social aspects of his old minicab job. “When the work
was quiet, you’d go back into the office: all the drivers would be there, you’d mingle, you’d
have a little chit-chat.” Uber was lonely by comparison because everyone was operating on
their own, often with fixed costs such as car-loan repayments hanging over them.
He thinks many Uber drivers have depression but avoid seeing a doctor for fear it would go on
their medical record and affect their ability to drive. “You go in the morning to work and you
need to earn ‘X’ amount of money; you’re sitting there all day, you’re not talking to anyone,
you ‘reisolated — it does get to you,” he says. “You notice these low mood swings; there’s
times where you can’t talk properly, you’re shaking, you’re not thinking straight.” But what
obligation, if any, do “gig economy” companies must protect these workers’ health and safety?
Some of the platforms are making changes in response to growing concerns. Speaking before
Uber lost its London licence, a spokesman for the company said the company was planning to
introduce a limit “later this year” on the number of hours a driver in London can use the app
within a given period. Uber also started offering discounted illness and injury insurance to UK
drivers this year. “With our app, drivers are totally free to choose if, when and where they
drive, with no shifts or minimum hours so they can balance driving with other commitments,”
says Fred Jones, head of UK cities at Uber. He says drivers’ average fares are £15 an hour after
Uber’s fee “and, even after costs, the average driver took home well over the national living
wage” of £7.50 an hour.
Aslam believes the best way to help Uber drivers is to force the company to treat them as
“workers “rather than “independent contractors”. Last year, he and another Uber driver called
James Farrar took this argument to an employment tribunal. The judges ruled in their favour,
saying it was “faintly ridiculous” for Uber to present itself as “a mosaic of 30,000 small
businesses linked by a common platform”. Because Uber controlled the fees and funnelled the
work to the drivers, the three-person panel pointed out, the drivers had no power to “grow their
business” other than to “spend more hours at the wheel.” Uber is appealing against the ruling.
A spokesman for the Health and Safety Executive, which enforces UK health and safety law,
says the “changing nature of employment is an area we are following closely in order to identify
and explore possible health and safety impacts”.
Aslam says people who feel under pressure should ask for help.” Not talking about it means
it’s not being dealt with,” he says. “And these guys are getting worse and worse.”
Task:
Write a reflective formal report, responding to the following concerns/questions:
1. Briefly describe the ethically problematic situation(s) that can be identified in the case
study.
2. You should critically review the case study (not repeat the case study information)
and discuss how various ethics and social responsibility theories and concepts could be
applied to address the ethically problematic situation(s) identified.
3. Propose your own approach to resolving the situation and explain why and how your
approach will work in practice.
THE STRUCTURE (A suggested format of the report should be as follows)
The following provides specific guidance on writing the reflective report. The report should
contain the following:
1. Executive Summary (challenges and objectives, business ethics and social
responsibility analytical methods applied, limitations, and findings of the report – about
200 words only, no bullet points; no repetition of the introduction).
2. Introduction (around 200 words – briefly describe the company, its history, objectives,
key activities, present situation, and stakeholders)
3. Ethically problematic situation(s) that can be identified in the case study.
4. A critical review of the case study and theories applicable.
5. Your own approach to resolving the situation and explain why and how your approach
will work in practice.
6. A brief conclusion section that summarises the key aspects of the report (around 200
words)
7. The reference list.
Final Notes for the Assessment.
Summarizing and rehashing facts published about the company is discouraged – except where
factual restatement is an integral part of evaluation. Information gotten from Wikipedia or
Investopedia and or related non-peer reviewed/subjective sources are highly discouraged. Your
report should be concise, incisive, and literate and include appropriate supporting tables, charts,
and exhibits/figures where applicable. There must be clear and convincing evidence of
consultation of academic literature – you are expected to draw in detail and substantively
on peer-reviewed academic literature, including from peer-review journal articles.
Websites should be few and used very cautiously, and all data consulted and cited in the body
of the report should be appropriately referenced in accordance with the University of
Bradford’s referencing guide (see module handbook for further guide on referencing
format/style).
Rubric Management UG
Generic Marking Scheme for Business Ethics & Social Responsibility (HRM6010-B_2022-3_SEM2)
Rubric Management UG
Criteria
KNOWLEDGE
(20%)
APPLICATION
(20%)
EVALUATION
(20%)
Ratings
70% and over
Excellent statement
and details of relevant
module concepts and
theory
60-69%
Very good statement
and details of relevant
module concepts and
theory
50-59%
Reasonably good
statement and details of
relevant module concepts
and theory
40-49%
Some basic details
of relevant module
concepts and
theory
Less than 40%
Insufficient details
of relevant module
concepts and theory
70% and over
Excellent coverage
of issues, excellent
application of theory
60-69%
Obvious and subtle
issues dealt with, very
good application of
theory
50-59%
Identifies obvious
issues only, good
application of theory
40-49%
Identifies obvious
issues only, weak
application of theory
Less than 40%
Fails to identify key
issues, poor or no
attempt at application
of theory
70% and over
Excellent evaluation,
critical judgment and
problem solving
60-69%
Good evaluation,
critical judgment
and problem solving
50-59%
Reasonable
evaluation, critical
judgment and problem
solving
40-49%
Weak evaluation,
critical judgment and
problem solving
Less than 40%
Poor/no attempt at
evaluation, critical
judgment, or problem
solving
Rubric Management UG
Criteria
Ratings
RESEARCH (20%)
COMMUNICATION
(20%)
70% and over
Excellent referencing,
bibliography, and
research
60-69%
Clear referencing,
evidence of some
detailed research
70% and over
Excellent spelling,
grammar, structure,
and presentation
60-69%
Good spelling and
grammar, well
organised structure
50-59%
Adequate referencing,
evidence of some
further research
50-59%
Reasonable spelling
and grammar,
satisfactory
presentation
40-49%
Weak referencing,
evidence of basic
research only
40-49%
Significant errors in
spelling, grammar,
careless structure
Less than 40%
Very poor
referencing, no
research apparent
Less than 40%
Inadequate spelling,
grammar, messy and
careless presentation
Framing Business Ethics: CSR
HRM 6010-B
Banita Lal
Module leader: Samuel Ogbeibu
Please see Canvas for further tutor details
1
Today’s Session
❑Analyse the notion of Corporate Social
Responsibility (CSR)
❑Distinguish the various concepts of CSR
❑Discuss some examples in relation to CSR
❑Understand the link between ethics and
sustainability
2
Can a corporation have social
responsibilities?
❑Milton Friedman vigorously argued against the
notion of social responsibilities for corporations
based on three main arguments:
❑ Only human beings have a moral responsibility for their
actions
❑ It is managers’ responsibility to act solely in the interests of
shareholders
❑ Social issues and problems are the proper province of the
state rather than corporate managers
Why do corporations have social
responsibilities?
❑Business reasons;
❑ Extra and/or more satisfied customers
❑ Employees may be more attracted/committed
❑ Long-term investment which benefits corporation
❑Moral reasons:
❑ Corporations cause social problems
❑ Corporations should use their power responsibly
❑ All corporate activities have some social impacts
❑ It is not just about shareholders
What is the nature of corporate social
responsibilities?
Corporate social responsibility The attempt by
companies to meet the economic, legal, ethical, and
philanthropic demands of a given society at a
particular point in time. (p. 50)
There are multiple stakeholders
Can become more complicated if operating in multiple
countries
Carroll’s four-part model of corporate
social responsibility
Desired by society
Philanthropic
Responsibilities
Ethical
Responsibilities
Expected by society
Required by society
Legal
Responsibilities
Required by society
Economic
Responsibilities
Source: Carroll (1991)
Economic Responsibility: Carroll’s CSR pyramid
• Producing goods and services that society needs and
to make a profit on them
• Shareholders expect and demand a reasonable return
on their investments; employees who want to do their
jobs safely and fairly, and have customers that want
quality products for fair prices. That’s the foundation
of the pyramid
• Economic responsibility in CSR is:
❖ The responsibility to be profitable
❖ The only way for a business to survive and support society in the
long term
Legal Responsibility: Carroll’s CSR pyramid
• Complying with the minimum rules that have been set, that
represent society’s views of codified ethics
• They determine how organisations can conduct their
business practices in a fair manner, as defined by legislators
on national, regional, and local level
• Legal responsibility in CSR is:
❖Complying with different national and local regulations
❖Behaving as loyal state and company citizens
❖Supplying goods and services that meet the minimum legal
requirements
Ethical responsibility: Carroll’s CSR pyramid
• Society expects organisations to conduct and manage their
business in an ethical manner
• Where organisations embrace activities, standards, and
practices that haven’t necessarily been written down, but are
still expected
• Ethical responsibility in CSR includes:
❖ Performing in a way that’s consistent with society’s expectations
❖ Recognising and respecting new or evolving ethical and moral
standards adopted by society
❖ Acknowledging that business integrity and ethical behaviour go
beyond compliance with laws and regulations
Philanthropic responsibility or discretionary
responsibility: Carroll’s CSR pyramid
• Includes the voluntary or discretionary activities and
practices of businesses
• Businesses are expected by society to take part in such
activities which are guided by companies’ desire to take part
in social activities
• They give the public the impression that the company wants
to give something back to the community
• Different types of philanthropy, such as gifts, donations,
volunteer work, community development…
Outcomes of CSR: corporate social performance
Social policies
• Social policies state the company’s values, beliefs,
and goals with regard to its social environment
• For example, most major firms now include social
objectives in their mission statements and other
corporate policies
• https://www.ikea.com/gb/en/this-is-ikea/about-us/the-ikeavision-and-values-pub9aa779d0
…the relation to sustainable business
• Interdependency of the three circles
• Economic activity is restricted by the borders
of society
• i.e. what does society deem acceptable?
• i.e. what is consumer purchasing power?
• Environment – biggest circle
• i.e. constrains society in its growth
• i.e. carrying capacity – what/how much is possible?
Social programmes
• Social programmes are activities, measures, and
instruments implemented to achieve social policies
•
• For example, ISO 2600 and social responsibility
• Covers a number of principles including: transparency,
respect for human rights
• E.g. IKEA: https://about.ikea.com/en/sustainability/fairand-equal
Social impacts
• Social impacts can be traced by looking at concrete
changes that the corporation has achieved through the
programmes implemented
• Frequently the most difficult to achieve, since much
data on social impacts is ‘soft’ (i.e. difficult to collect
and quantify objectively), and the specific impact of the
corporation cannot be easily isolated from other factors
• Some impacts can be well estimated, e.g. amount of
plastic used – reduce, reuse, recycle
Corporate accountability
❑Corporate accountability → whether a corporation
is answerable for consequences of its actions
❑Firms increasingly undertake role of ‘political’
actors – taken up many of the functions previously
undertaken by government because:
❑ Governmental failure – incapable/unwilling?
❑ Increasing power and influence of corporations
The case of Primark:

Summary
❑Business ethics is related to the social role of the
corporation
❑Business and giving back to society – expectations
are changing
❑The increasing focus on ethics and sustainable
business
Crane et al.
Evaluating Business Ethics:
Normative Ethical Theories
Lecture 3
Overview
❑The role of ethical theory
❑Differences in International perspectives
❑Critical overview of traditional ethical theories
❑Contemporary ethical theories
Normative Ethical theories?
❑Ethical theories ➔ Rules and principles
determining right and wrong for any given
situation
❑Normative Ethical theories ➔ Prescribe the
morally correct way of acting
❑Descriptive Ethical theories ➔ Describe how
ethics decisions are actually made in business
The role of Ethical theory
The role of Ethical theory
❑Two extreme positions (De George 1999)
❑Ethical absolutism ➔ Eternal, universally
applicable moral principles (i.e. imperatives)
❑ Right and wrong → objective qualities that can be rationally
determined
❑ Typically “traditional” ethical theories
❑Ethical relativism ➔ Morality is contextdependent and subjective
❑ No universal right and wrongs that can be rationally
determined
❑ Dependent on person making decision and culture in which
they are located
❑ Typically contemporary Ethical theories
Normative Ethical theories
International differences between approaches
based on philosophical arguments
❑Individual versus Institutional Morality
❑ US: tend to have an individualistic perspective
❑ Europe: towards wider economic and governing institutions
❑Questioning versus accepting capitalism
❑ US: tend to accept the capitalist framework
❑ Europe: increasingly question the ethical justification of capitalism
❑Justifying vs Applying moral norms
❑ US: tend to focus on application of morality
❑ Europe: focus on justification and ethical legitimation of norms
❑Asia: tend to be based on religion (e.g. Buddhism, Hinduism, Islam)
Normative Ethical Theories and Religion
❑Religious and philosophical theories➔ Inform
us regarding the right things to do
❑Two main differences:
❑Sources of rules and principles.
❑Religions typically invoke deities or organised systems of
belief as the origins of norms. Philosophy typically stems
from belief in human reason to derive norms.
❑Consequences of morality (or immorality)
❑Religions point to spiritual consequences, including
enlightenment, reincarnation, damnation, and salvation.
Philosophy also typically sees consequences as a matter of
creating tangible social benefits or harms for others.
Crane et al.
Western modernist ethical
theories
Traditional Ethical theories
❑ Offer rules or principles to apply to given situations
❑ These theories generally differentiate into two
distinct groups [or a possible combination – simultaneously]
Motivation
/
Principles
Action
Outcomes
Non-consequentialist Ethics
Consequentialist Ethics
Source: Crane et al. (2019)
Major normative theories
Egoism
Utilitarianism
Ethics of duties
Rights & justice
Contributors
Adam Smith
Jeremy Bentham
John Stuart Mill
Immanuel Kant
John Locke
John Rawls
Focus
Individual desires or
interests
Collective welfare
Duties
Rights
Rules
Maximization of
desires/self interest
Act/rule
utilitarianism
Categorical
imperative
Respect for human
beings
Concept of
human
beings
Man as an actor with
limited knowledge
and objectives
Man is controlled by
avoidance of pain
and gain of pleasure
(“hedonist”)
Man is a rational
moral actor
Man is a being that
is distinguished by
dignity
Type
Consequentialist
Consequentialist
Nonconsequentialist
Nonconsequentialist
Source: Crane et al. (2019)
Class
Activity
Vignette
You hold a criminal in custody. He is wanted in two
governing states (A and B) to stand trial for separate
murders, one in each state – which he admits he
committed.
State A routinely sentences convicted murders to the
death penalty.
State B is opposed to the death penalty and sentences
convicted murderers to life imprisonment.
A and B have no diplomatic arrangements and would not
extradite the prisoner to the neighbouring state. Both
states have requested the murderer be deported to their
state for trial. You are opposed to the death penalty and
the decision is entirely yours to make.
C
Class Activity
Scenario 1: Which state would you send the prisoner to?
International protocol is to always service identical requests in
sequence and state A asked first.
Scenario 2: Which state would you send the prisoner to?
Scenario 3: No one would or could ever. know who requested
the prisoner first. Which state would you send the prisoner to?
Scenario 4: The prisoner murdered your favourite relative in
State B. Which state would you send the prisoner to?
Scenario 5: The prisoner murdered your favourite relative in
State A. Which state would you send the prisoner to?
Egoism
❑Theory of Egoism ➔ Action is morally right if
decision-maker freely decides an action to pursue
their (short-term) desires or their (long-term)
interests:
❑ Adam Smith (1793): pursuit of individual interest morally
acceptable as the “invisible hand” of the market
creates benefit for all (could be myopic!)
❑ Relies on free competition and good information
❑ “Enlightened egoism”
❑ NOTE: Markets do not function perfectly
❑ Anti-globalisation movement
❑ Sustainability debate
Utilitarianism (John Stuart Mills)
• Utilitarianism ➔ Actions are morally right if
results lead to the greatest amount of good for
the greatest number of people affected by the
action
❑Also known as the “greatest happiness principle”
❑Based on cost-benefit analysis [in “management
jargon”]

V1:4.49 Mts
Problems with Utilitarianism
❑Subjectivity
❑ Led to refinement of theory:
❑Act (based) utilitarianism
❑Rule (based) utilitarianism
❑Issues regarding quantification
distribution of utility
and
the
Act- and Rule-Utilitarianism
❑Act Utilitarianism
❑ Moral judgement based on a balance between
perceived “pleasure” and “pain” resulting from a
single action
❑Rule Utilitarianism
❑ Moral judgement of classes of actions and whether
the underlying principles of an action produce more
“pleasure” than “pain” for society in the long run
Ethics of Duties
“Categorical Imperative” (Kant, Transcendental Idealism)
❑ Maxim 1: Consistency
❑ Act only according to that maxim by which you can at the same
time will that it should become a universal law.
❑ Maxim 2: Human Dignity
❑ Act so that you treat humanity, whether in your own person or in
that of another, always as an end and never as a means only.
❑ Maxim 3: Universality
❑ Act only so that the will through its maxims could regard itself at
the same time as universally lawgiving (would others agree?
Would you be happy to see your decision reported in the press?)
Ethics of Duties
Problems with the Ethics of Duties
❑Undervaluing outcomes
❑Undue Complexity
❑Misplaced optimism?
Ethics of Rights and Justice
Human Rights
❑ Basic, inalienable entitlements, inherent to all human
beings – without exception
❑ Based on consensus of the nature of human dignity
❑ Enshrined in principles of UN Global Compact and the
“Ruggie Principles”
Justice
❑ The fair treatment of individuals in a given situation
resulting in all parties getting their just deserts
❑ Fair procedures (procedural justice)
❑ Fair outcomes (distributive justice)
Justice
John Rawls (A Theory of Justice, 1971)
1. Each person is to have an equal right to the
most extensive total system of basic liberties
compatible with a similar system of liberty for
all.
2. Social and economic inequalities are to be
arranged so that they are both:
a. to the greatest benefit of the least advantaged;
b. attached to offices and positions open to all under
conditions of fair equality of opportunity.
Limitations
Traditional Theories are limited by being
too:
❑Abstract
❑Reductionist
❑Objective and Elitist
❑Impersonal
❑Rational and Codified
❑Imperialist
Alternative perspectives on Ethical
theory
Approaches based on character
and integrity
❑Virtue ethics
❑ Morally correct actions are those undertaken by actors with
virtuous characters. The formation of a virtuous character
is, therefore, the first step towards morally correct
behaviour
❑Acquired traits
❑ Intellectual virtues
❑ Moral virtues

V1:1.42 Mts
Approaches based on Ethics and
Responsibility
Feminist Ethics
❑ Prioritises empathy, harmonious and healthy social
relationships, care for one another, and avoidance of harm
above abstract principles
❑Key elements
❑ Relationships
❑ Decisions taken in context of personal human interrelations
❑ Responsibility
❑ Active ‘taking’ of responsibility, rather than merely ‘having’ it
❑ Experience
❑ Learn and develop from experience
Approaches based on Procedures of
Norm generation
Discourse Ethics
❑ Solve ethical conflicts by providing a process of norm
generation through rational reflection on the real-life
experiences of all relevant participants
❑Key elements
❑ Ultimate goal of ethical issues in business → the peaceful
settlement of conflicts
❑ Affected parties in conflict should engage in a discourse
about the settlement of the conflict, ultimately providing a
resolution acceptable to all
❑ “ideal discourse” criteria
Approaches based on empathy and
moral impulse
Postmodern ethics
• An approach that locates morality beyond the sphere of
rationality in an emotional ‘moral impulse’ towards
others. It encourages individual actors to question
everyday practices and rules, and to listen to and follow
their emotions, inner convictions and ‘gut feelings’
about what they think is right and wrong in a particular
incident of decision-making.
Postmodern Business Ethics
Postmodern Business Ethics emphasises
(Gustafson, 2000:21):
❑A Holistic approach
❑Examples rather than principles
❑‘Think local, act local’
❑Preliminary character
Summary
Towards a Pragmatic use of
Ethical theory
Typical Perspective
Ethical
Dilemma
Single normative consideration
for solving the ethical dilemma
‘Lens’ of ethical theory
Pluralistic Perspective
Pluralism?
Crane et al. (2019) ➔ Effective decisions in
business best achieved by:
❑ Not suggesting one theory or one approach as the
best or true view of a moral dilemma
❑ All theoretical approaches illuminate different angles
on the same problem
❑ Each is complementary rather than mutually
exclusive (i.e. definitive)
❑Advocate position of pluralism
❑ Middle ground between absolutism and relativism
Ethical decision making: Summary of key insights from
Ethical theories
Consideration
One’s own interests
Typical question you might ask yourself
Theory
Is this really in my, or my organization’s, best long-term interests? Would it be
Egoism
acceptable and expected for me to think only of the consequences to myself in this
situation?
Social consequences If I consider all of the possible consequences of my actions, for everyone that is Utilitarianism
affected, will we be better or worse off overall? How likely are these
consequences and how significant are they?
Duties to others
Who do I have obligations to in this situation? What would happen if everybody Ethics of duty
acted in the same way as me? Am I treating people only to get what I want for
myself (or my organization) or am I thinking also of what they might want too?
Entitlements of
Whose rights do I need to consider here? Am I respecting fundamental human Ethics of rights
others
rights and people’s need for dignity?
Fairness
Am I treating everyone fairly here? Have processes been set up to allow everyoneTheories of justice
an equal chance? Are there major disparities between the ‘winners’ and ‘losers’
that could be avoided?
Moral character
Am I acting with integrity here? What would a decent, honest person do in the
Virtue ethics
same situation?
Care for others and
How do (or would) the other affected parties feel in this situation? Can I avoid
Feminist ethics
relationships
doing harm to others? Which solution is most likely to preserve healthy and
harmonious relationships among those involved?
Process of resolving What norms can we work out together to provide a mutually acceptable solution Discourse ethics
conflicts
to this problem? How can we achieve a peaceful settlement of this conflict that
avoids ‘railroading’ by the most powerful player?
Moral impulse and
Am I just simply going along with the usual practice here, or slavishly following Postmodern ethics
emotions
the organization’s code, without questioning whether it really feels right to me?
How can I get closer to those likely to be affected by my decision?
What do my
emotions or gut feelings tell me once I’m out of the office?
Adapted from Crane et al. (2019)
Business Ethics and CSR
HRM 6010-B
Making Decisions in Business Ethics:
Descriptive Ethical Theories
1
Overview
❑ Examine the question of why ethical and unethical
decisions get made in the workplace
❑ Determine what an ethical decision is
❑ Review prominent ethical decision-making models
❑ Discuss the importance of differences between individuals
in shaping ethical decision-making
❑ Critically evaluate the importance of situational influences on
ethical decision-making (issues and context based)
Adapted from Crane et al. (2019)
Descriptive Ethical Theories
Descriptive business ethics theories seek to
describe how ethics decisions are actually made
in business, and what influences the process
and outcomes of those decisions.
Adapted from Crane et al. (2019)
Main factors in deciding the moral
status of a situation
Decision is:
❑likely to have significant effects on others
❑likely to be characterised by choice, in that
alternative courses of action are open
❑perceived as ethically relevant by one or more
parties
Adapted from Crane et al. (2019)
Stages in ethical decision-making
Ethical decision-making process
Recognise
moral
issue
Make
moral
judgement
Establish
moral
intent
Engage in
moral
behaviour
Source: Derived from Rest (1986)
Adapted from Crane et al. (2019)
Influences on ethical decision-making
Two broad categories: individual and situational
(Ford and Richardson (1994))
❑ Individual factors – unique characteristics of the individual
making the relevant decision
❑ “Given” at birth [the DNA of the decision maker]
❑ Acquired by experience and socialisation
❑ Situational factors – particular features of the context that
influence whether the individual will make an ethical or
unethical decision
❑ Work context
❑ The issue itself, including:
❑ Moral Intensity
❑ Ethical framing
Adapted from Crane et al. (2019)
Framework for understanding ethical
decision-making
Individual factors
Recognise
moral issue
Make moral
judgement
Establish
moral intent
Engage in
moral
behaviour
Situational factors
Adapted from Crane et al. (2019)
Individual factors influencing ethical
decision-making
Factor
Influence on ethical decision-making
Age and gender
Very mixed evidence leading to unclear associations with ethical decision-making.
National and cultural characteristics
Appear to have a significant effect on ethical beliefs, as well as views of what is deemed
an acceptable approach to certain business issues.
Education and employment
Somewhat unclear, although some clear differences in ethical decision-making between
those with different educational and professional experience seem to be present.
Psychological factors:
• Cognitive moral development
• Small significant effect on ethical decision-making.
• Locus of control
• At most a limited effect on decision-making, but can be important in predicting the
apportioning of blame/approbation.
Personal Values
Significant influence – some empirical evidence citing positive relationship.
Personal integrity
Significant influence likely, but lack of inclusion in models and empirical tests.
Moral imagination
A new issue for inclusion with considerable explanatory potential.
Adapted from Crane et al. (2019)
Age and Gender → Demographic
❑Age
❑Results contradictory
❑However experiences may have impact1
❑Gender
❑Individual characteristic most often researched
❑Results contradictory
❑Are these categories too simplistic?
1Possible interaction effect?
Adapted from Crane et al. (2019)
National and Cultural characteristics →
Demographic
❑ People from different cultural backgrounds
❑different beliefs about right and wrong, different values,
etc.
❑ lead to variations in ethical decision-making across
nations, religions and cultures
❑ Hofstede (1980; 1994) influential in shaping our
understanding of these differences – i.e. “mental
programming”:
❑ Individualism/collectivism
❑ Power distance
❑ Uncertainty avoidance
❑ Masculinity/femininity
❑ Long-term/short-term orientation
❑ Indulgence
Adapted from Crane et al. (2019)
Education and Employment →
Demographic
❑Type and quality of education may be
influential
❑Ex. Business students rank lower in moral
development than others and more likely to
cheat
❑“Amoral” business education reinforces myth of
business as amoral
❑ Nature of Employment can also act as a
factor influencing Ethical decision making
Adapted from Crane et al. (2019)
Psychological factors
❑Cognitive moral development (CMD) ➔ different
levels of reasoning that an individual can apply to
ethical issues and problems
Depends on individual’s cognitive capacity.
❑ 3 levels (details follow)
❑Locus of control → the extent to which the
individual decision maker believes they have
control over events in their life:
Internal LOC
External LOC
Adapted from Crane et al. (2019)
Adapted from Crane et al. (2019)
Levels for Cognitive Development (Kohlberg,
1969)
Level 1: Individual exhibits concern for self-interest and
external rewards
Level 2: Individual does what is expected of them by others
Level 3: Individual develops more autonomous decisionmaking grounded in rights and wrongs and justice not
external influences
Adapted from Crane et al. (2019)
Stages of Cognitive Moral Development
1. Preconventional
❑ Obedience and punishment
❑ Instrumental purpose and exchange
2. Conventional
❑ Interpersonal accord, conformity and mutual expectations
❑ Social accord and system maintenance
3. Postconventional
❑ Social contract and individual rights
❑ Universal ethical principles
Stages of cognitive moral development (I)
Level
Stage
1
I
Preconventional
2
3
II Conventional
4
Obedience
and
punishment
Instrumental
purpose and
exchange
Interpersonal
accord,
conformity
and mutual
expectations
Social accord
and system
maintenance
Explanation
Individuals define right and
wrong according to expected
rewards and punishments from
authority figures
Illustration
Whilst this type of moral reasoning is usually
associated with small children, we can also
see that businesspeople frequently make
unethical decisions because they think their
company would either reward it or let it go
unpunished (see Gellerman 1986).
Individuals are concerned with
An employee might cover for the absence of
their own immediate interests and a co-worker so that their own absences might
define right according to whether subsequently be covered for in return – a
there is fairness in the exchanges “you scratch my back, I’ll scratch yours”
or deals they make to achieve
reciprocity (Treviño and Nelson 1999).
those interests.
Individuals live up to what is
An employee might decide that using
expected of them by their
company resources such as the telephone, the
immediate peers and those close
internet and email for personal use whilst at
to them
work is acceptable because everyone else in
their office does it.
Individuals’ consideration of the A factory manager may decide to provide
expectations of others broadens to employee benefits and salaries above the
social accord more generally,
industry minimum in order to ensure that
rather than just the specific
employees receive wages and conditions
people around them.
deemed acceptable by consumers, pressure
groups and other social groups.
Source: Adapted from Ferrell et al. (2002); Kohlberg (1969); Trevino and Nelson (1999)
Adapted from Crane et al. (2019)
Stages of cognitive moral development (II)
Level
III
Stage
Explanation
Illustration
5
Social
contract
and
individual
rights
Individuals go beyond identifying
with others’ expectations, and
assesses right and wrong according
to the upholding of basic rights,
values and contracts of society.
The public affairs manager of a food
manufacturer may decide to reveal which of the
firm’s products contain genetically modified
ingredients out of respect for consumers’ rights
to know, even though they are not obliged to by
law, and have not been pressurised into by
consumers or anyone else.
6
Universal
ethical
principles
Individuals will make decisions
autonomously based on self-chosen
universal ethical principles, such as
justice, equality, and rights, which
they believe everyone should
follow.
A purchasing manager may decide that it would
be wrong to continue to buy products or
ingredients that were tested on animals because
he believes this doesn’t respect animal rights to
be free from suffering.
Postconventional
Adapted from Crane et al. (2019)
Personal values, integrity & moral
imagination
Personal values
❑ “[ … ] an enduring belief that a specific mode of conduct
or end-state of existence is personally or socially
preferable to an opposite or converse mode of conduct or
end-state” (Rokeach 1973:5)
❑ 00
Personal integrity
❑ Adherence to moral principles and values
Moral imagination
❑ Concerned with whether one has “[ … ] a sense of the
variety of possibilities and moral consequences of their
decisions, the ability to imagine a wide range of possible
issues, consequences, and solutions” (Werhane, 1998:76)
Adapted from Crane et al. (2019)
Situational influences on ethical
decision-making
Type of
factor
Factor
Influence on ethical decision-making
Moral intensity
Reasonably new factor, but evidence suggests significant effect on ethical decisionmaking.
A few studies show strong influence on some aspects of the ethical decision-making
process, most notably moral awareness.
Strong evidence of relationship between rewards/punishments and ethical behaviour,
although other stages in ethical decision-making have been less investigated.
Good general support for a significant influence from immediate superiors and top
management on ethical decision-making of subordinates.
Issue-related
Moral framing
Rewards
Authority
Contextrelated
Bureaucracy
Work roles
Significant influence on ethical decision-making well documented, but actually
exposed to only limited empirical research. Hence, specific consequences for ethical
decision-making remain contested.
Some influence likely, but lack of empirical evidence to date.
Organizational
culture
Strong overall influence, although implications of relationship between culture and
ethical decision-making remain contested.
National Context
Limited empirical investigation, but some shifts in influence likely.
Adapted from Crane et al. (2019)
Moral Intensity
❑ Jones (1991:366-95) proposes that the moral
intensity of an issue will vary according to six
factors:
1. Magnitude of consequences
2. Social consensus
3. Probability of effect
4. Temporal immediacy
5. Proximity
6. Concentration of effect
Adapted from Crane et al. (2019)
Measures for Moral Intensity (Measurement Scales)
Magnitude of Consequences
❑ The negative consequences (if any) of the decision will be very
serious
❑ The overall harm (if any) as a result of the decision will be very small
Social Consensus
❑ People are not likely to agree about whether the decision was right or
wrong
❑ Most people would agree on what the appropriate decision is in this
scenario
Probability of Effect
❑ There is a very small likelihood that the decision will actually cause
any harm
❑ The decision is likely to cause harm
…
Adapted from Crane et al. (2019)
Moral Intensity (continued)
❑ Temporal immediacy. This is concerned with the speed with which the
consequences are likely to occur. When outcomes are likely to take years to
have much effect, decision-makers may perceive the moral intensity to be
much lower—for example in the case of the long-term effects of
smoking or other ‘unhealthy’ products.
❑ Proximity. This factor deals with the feeling of nearness (social, cultural,
psychological, or physical) the decision-maker has for those impacted by
their decision. For example, poor working conditions in one’s own
country might be experienced as a more intense moral issue than poor
conditions in a faraway country.
❑ Concentration of effect. Here we are concerned with the extent to which
the consequences of the action are concentrated heavily on a few or lightly
on many. For example, many people may feel that cheating a person
out of €100 is much more morally intense than cheating the same sum
out of a large multinational with millions of shareholders.
Adapted from Crane et al. (2019)
Moral framing and Muteness
❑ Moral framing → The same problem or dilemma
can be perceived very differently according to the
way that the issue is framed
❑ Language important aspect of moral framing (using moral
language likely to trigger moral thinking)
❑ Moral muteness (Bird & Walters 1989) → Concerns
regarding perceived threats to:
❑ Harmony
❑ Efficiency
❑ Image of power and effectiveness
Adapted from Crane et al. (2019)
How Ethical decisions are (self)
justified: Rationalisation tactics
Strategy
Denial of responsibility
Denial of injury
Denial of victim
Social weighting
Appeal to higher
loyalties
Metaphor of the ledger
Description
The actors engaged in corrupt behaviours
perceive that they have no other choice than to
participate in such activities.
The actors are convinced that no one is harmed
by their actions; hence the actions are not really
corrupt.
The actors counter any blame for their actions
by arguing that the violated party deserved
whatever happened.
The actors assume two practices that moderate
the salience of corrupt behaviour: 1. Condemn
the condemner, 2. Selective social comparison.
The actors argue that their violation of norms is
due to their attempt to realize a higher-order
value.
The actors argue that they are entitled to
indulge in deviant behaviours because of their
accrued credits (time and effort) in their jobs.
Examples
“What can I do? My arm is being twisted.”
“It is none of my business what the corporation
does in overseas bribery.”
“No one was really harmed”
“It could have been worse.”
“They deserved it.”
“They chose to participate.”
“You have no right to criticise us.”
“Others are worse than we are.”
“We answered to a more important cause.”
“I would not report it because of my loyalty to my
boss.”
“It’s all right for me to use the internet for personal
reasons at work. After all, I do work overtime.”
Adapted from Crane et al. (2019)
Systems of Reward
Adherence to ethical principles and standards
stands less chance of being repeated and
spread throughout a company when it goes
unnoticed and unrewarded:
“What is right in the corporation is not what is right
in a man’s home or in his church. What is right in
the corporation is what the guy above you wants
from you. That’s what morality is in the corporation”
(Jackall, 1988:6)
Adapted from Crane et al. (2019)
Authority and Bureaucracy
Authority
Bureaucracy
❑ People do what they are told
to do – or what they think
they’re being told to do
❑ Recent
survey
of
government
employees
(Ethics Resource Centre, 2008: 9):
❑ Jackall (1988), Bauman
(1989, 1993) and ten Bos
(1997) argue bureaucracy
has a number of negative
effects on ethical decisionmaking
❑ Suppression of moral
autonomy
❑ Instrumental morality
❑ Distancing
❑ Denial of moral status
❑ 20% think top leadership is
not held accountable
❑ 25% believe top leadership
tolerates
retaliation
against those reporting
ethical misconduct
❑ 30% don’t believe their
leaders keep promises
Adapted from Crane et al. (2019)
Work roles and organisational norms
and culture
Work roles
❑ Work
roles
can
encapsulate a whole set
of expectations about
what to value, how to
relate to others, and
how to behave
❑ Can
be
either
functional
or
hierarchical
Organisational
norms and culture
❑ Group norms delineate
acceptable standards
of behaviour within the
work community
❑ Ex. ways of talking,
acting,
dressing
or
thinking
Adapted from Crane et al. (2019)
National and Cultural context
❑Instead of looking at the nationality of the
individual making the decision; now we are
considering the nation in which the decision
is actually taking place, regardless of the
decision-maker’s nationality
❑Different cultures, to some extent, still
maintain different views of what is right and
wrong
Adapted from Crane et al. (2019)
Summary
In this lecture we have:
❑ Discussed the various stages of and influences on ethical
decision-making in business
❑ Presented basic model of decision-making
❑ Outlined individual and situational influences on ethical
decision-making
❑ Suggested that some individual factors – such as
cognitive moral development, nationality and personal
integrity – are clearly influential
❑ Suggested that in terms of recognising ethical problems
and actually doing something in response to them, it is
situational factors that appear to be most influential
Adapted from Crane et al. (2019)