Toward the Development of a Multidimensional Scale for Improving Evaluations of Business Ethics

Abstract

This study represents an improvement in the ethics scales inventory published in a 1988 Journal of Business Ethics article. The article presents the distillation and validation process whereby the original 33 item inventory was reduced to eight items. These eight items comprise the following ethical dimensions: a moral equity dimension, a relativism dimension, and a contractualism dimension. The multidimensional ethics scale demonstrates significant predictive ability.

Appendix

Five Ethical Theories

Each of the following ethical theories seems to provide important ideas and language for modern societies. It is that characteristic that made them the beginning point for this research.

Justice Theory

Much of the most influential and fundamental concepts of justice theory comes from the writings of Aristotle. He developed the “principle of formal justice” which states simply that equals ought to be treated equally, and unequals ought to be treated unequally. It provides a minimum rule of justice, but it does not explain how to determine equality or how to proportion when people or performances are unequal. To establish the latter, philosophers often refer to six principles of distributive justice, usually recognizing that others could be added to the list. These six principles are: (l) to each person an equal share; (2) to each person according to individual need; (3) to each person according to that person’s rights; (4) to each person according to individual effort, (5) to each person according to societal contribution; (6) to each person according to merit (Beauchamp and Bowie 1983, pp. 41–42).

It is not necessary that a society adopt one principle of distributive justice and exclude the others. Societies often use different principles in different situations. For example, in the United States transfer payments to the poor and unemployed are based on some measure of need, while promotions and salary increases are usually based on merit. In still another application, it is society’s intention to provide an equal opportunity for public education to all.

Finally, there is the concept of procedural justice. As the name implies, its purpose is to develop rules or procedures that result in fair or just outcomes. There are three forms of procedural justice – “pure,” “perfect,” and “imperfect.” if the rules, as in a game, guarantee just outcomes in every occurrence, they produce “pure” procedural justice. “Perfect” procedural justice provides a fair result in every case. In “imperfect” procedural justice the rules represent the best attempt to produce fair results but sometimes the outcomes are unjust.

The moral development literature of Kohlberg relies heavily on concepts of justice. It permeates all six of their stages and the last three stages are tied to specific concepts of justice (Rest 1979, pp. 35–36). Their stage four, law and order, can be paired with the idea of “formal justice.” Their stage five fits nicely with the concepts of “procedural justice” described above, and they match stage six with what is called “substantive justice.” Thus, this literature relies heavily on concepts of justice.

Relativism

The basic concept of relativism is that all normative beliefs are a function of a culture or individual, and therefore, no universal ethical rules exist that apply to everyone. The argument continues that since ethical rules are relative to a specific culture, the values and behavior of people in one culture need not govern the conduct of people in another culture. Varied and apparently contradictory values between many cultures have been reported by anthropologists, and this evidence is offered as a justification of relativism. The concept of cultural relativism has been extended to ideas of individual relativism in which the value differences of individuals are recognized. In this form, fundamental and ultimate disagreements between individuals, or an individual and his/her society, are cited as the reason for believing in the concept.

Arguments against relativism seem to be preferred over the preceding arguments by most ethicists. One argument against relativism is simply that, as a philosophy, it does not achieve the main task of ethics. That main task is described by J.S. Mill and Aristotle as the development and maintenance of conditions that allow people to pursue a stable and happy life. A somewhat different view comes from Kant who believed that the objective of ethics is to create a “good will” toward others. Relativism, according to its critics, is not likely to achieve these objectives.

Other arguments against relativism suggest that there is no real basic difference between moral beliefs, in spite of the findings of the anthropologists. This argument is based on the common needs and fears of humans, and suggests that if researchers dug deep enough in trying to understand why different beliefs are held, they would reach a point where the basic rationales were the same. Still another argument against relativism is that, even if a belief or behavior is accepted in a society, that doesn’t mean it is right. Additional arguments exist but these are sufficient to explain why philosophers have not fully adopted the relativistic arguments. Even so, many of these philosophers also recognize that unresolved disagreements in moral beliefs may be inevitable (Brandt 1959, pp. 100–103, 285–288).

Many managers cite as a defense against alleged unethical behavior in international settings, the cultural differences in methods for doing business. “La mordida” or “baksheesh” – bribery or kickbacks – are two culturally acceptable behaviors in some countries. Specifically, this justification was used by Boeing in defense of its actions in Japan.

Deontology

Deontology suggests that individuals have a duty, the root word for the term, to satisfy the legitimate claims or needs of others as determined by applying logic to an ethical rule. These duties to others are many and diverse. Under this philosophy it is our duty to pay our debts, care for our children, and tell the truth because it is the “right” thing to do. The most prominent ethical rule comes from Immanuel Kant and it’s called the “Categorical Imperative” (Immanuel Kant, Foundations of the Metaphysics of Morals, Beck, trans., 1959, pp. 9–28). The most popular formulation says, “I ought never to act except in such a way that I can also will that my maxim should become a universal law.” With this rule and the use of logic any action can be evaluated to determine if it is ethical or unethical. These duties on the part of one individual toward another create rights for the other. Thus, the duty of parents creates rights for children, and the duty of debtors creates rights for the lender. A popular understanding of these ideas comes to the general public through the church, the Bill of Rights, the boy and girl scout pledges, and even the military (duty, honor, country).

Deontology may be the most preferred ethical philosophy today, but it also has its critics. The most important complaint against deontology is that, whatever rule might be constructed, exceptions can almost always be found to be necessary. Applying the categorical imperative and logic, most people would agree that lying is unethical. However, it is easy to imagine situations in which lying seems to be the most ethical thing to do. W. D. Ross (1930) gave one solution to this problem by suggesting that the rules created are prima facie and that we should recognize exceptions. In effect, this approach shifts the burden of proof to the individual that would break the rule.

An interesting adaptation of Kantian Deontology was developed by John Rawls. His approach has become labeled “contractarianism” or “contractualism” because of the manner in which he uses the idea of a social contract. Bayles and Henley (1983) describe the connection as follows:

The contemporary American philosopher John Rawls, for instance, has developed an account of justice that has roots in Locke, Rousseau, and Kant. The guiding idea behind this account is the social contract in a form similar to that underlying the fifth formulation of Kant’s categorical imperative: ‘Every rational being must act as if he, by his maxims, were at all times a legislative member in the universal realm of ends.’ In this formula Kant uses the conception of the social contract found in Jean-Jacques Rousseau (1712–1778), although he interprets it in his own distinctive way. (pp. 59–60)

Teleology – Egoism

Teleological, or consequentialist theories include all of those theories that measure morality based on the consequences of actions. The two most commonly discussed teleological theories in modern philosophy can be illustrated by asking if evaluation of the consequences should focus solely on the individual or if the evaluation should encompass all of society. If the answer is that the evaluator should consider only the consequences to the individual, then the ethical theory is called egoism. If the answer is to consider all of society, then the theory is called utilitarianism.

One presentation of egoism suggests that an act is ethical when it promotes the individual’s long-term interests. There are many variations of the theory which focus on short-term hedonism, or in the case of psychological egoism, which contends that everyone is psychologically programed to behave only in their own self interest. However, the presentation of egoism using long-term interests is taken most seriously by modern philosophers. In this formulation, it is possible for an individual to help others, help formulate and follow the rules of society, and even give gifts if that person feels that those actions are in his or her own best interests. It should also be noted that the theory states that people should behave as egoists and not that they do behave that way.

The philosophy of ethical egoism is usually attacked on the basis that it ignores what most people would agree are blatant wrongs. It also has no way of solving conflicts of egoistic interests, and therefore like relativism, does not satisfy the goals of ethical philosophy. Egoism has been important in business because of the well-known work of Adam Smith who believed that through an “invisible hand” businesses operating in their own self interest would produce the greatest economic good for society. The concern for society is utilitarian, and Smith’s work provides a link between the two teleological theories.

Teleology–Utilitarianism

Utilitarianism is the teleological theory which states that individuals should act so as to produce the greatest possible ratio of good to evil for all of society. It forces the actors to consider all of the outcomes of their action or inaction and to weigh one against another to determine that which is best for society. Since one action is compared to another, utilitarianism promotes efficiency. That is, a less efficient action is likely to produce less utility than a more efficient action, and is therefore less ethical. As suggested in the preceding section, much of the justification for capitalism is based in utilitarianism. In addition, the general public learns about the ideas of utilitarianism through the concept of the democratic process which focuses on majority rule.

The two most important complaints against utilitarianism are that it is impossible to project and measure the consequences of many important actions, and that important harms to individuals or small groups can be averaged with small gains to a large number and appear to be acceptable. The first complaint is less troublesome because individuals are constantly making important decisions with less than perfect information. The second complaint has caused an important problem for the theory, and even though it still has a large following among philosophers, the theory has lost some stature because of its failure to deal with the complaint.