Heteronomous moralists judge the righteousness or goodness of behavior by:

7.2.1. Kohlberg’s Theory of Phases in Moral Reasoning

It is generally agreed among psychologists (e.g., Kohlberg, 1969, 1984; Rest, 1979) that ethical reasoning attains full maturity through three main phases as one’s decisions and actions get predominantly based on:

• (1)

  The immediate consequences of an action such as rewards and punishments (Pre-conventional Phase);

• (2)

  Social approval, compliance, or conformity (Conventional Phase); and

• (3)

  Personal, moral, or ethical standards (Post-conventional Phase).

We assume that most corporate executives have reached the second stage of conventional or the third stage of post-conventional moral reasoning. During the third stage, maturity increases through the internalization of moral judgments, and the standards of society are often a subject of criticism. Executives may use, more implicitly than explicitly, some major ethical theories (e.g., teleology, deontology, distributive justice, corrective justice, virtue ethics, and ethics of trust) for ethically analyzing and justifying corporate decisions and strategies. For instance:

Pre-conventional Phase: We do things because of the immediate consequence of an action such as rewards and punishments.

• I work hard lest I should be fired (reward/punishment).

• I work hard as it benefits both the company and me (cost/benefits).

• I work hard that I may learn and grow on my job (instrumental).

• I work hard for my colleagues and superiors (interpersonal).

Conventional Phase : We do certain things for social approval, compliance, or conformity.

• I work hard, as everybody does it (social compliance).

• I work hard, as I need to be recognized (social approval).

• I work hard, because of my contract to do so (contractual).

• I work hard, as this is my duty (obligation).

Post-conventional Phase : We do certain things based on personal, moral, or ethical standards and convictions.

• I work hard, for work unites humankind regardless of race, color, age, gender, or creed (sociological).

• I work hard, because everybody should work for a living (deontological).

• I work hard, for work is human and humanizes me (philosophical).

• I work hard, for work is a divine mandate (theological).

As corporate executives, we could check where we stand in relation to the above sets of motivations. For instance:

• Personally, where would we like to be on this ethics phase, and why?

• Ideally or normatively, where should we be at this stage of our executive life?

• How do we argue for higher forms of ethical and moral reasoning from the pre-conventional to the conventional to the post-conventional phase, and why?

• Does our executive moral reasoning become more objective, universalizable and reversible (in the Kantian sense of categorical imperatives) as we ascend from the pre-conventional to the conventional to the post-conventional phase, and why?

These are equivalent, if not identical, ethical questions that a book or course in business or corporate ethics should include. These questions relate to commissions and omissions, rights and duties, moral obligations, and responsibilities. The word “I” in these questions can easily be substituted by institutions such as a business, a venture, a corporation, a B-school, a university, a church, a government, and the like. The main purpose of any ethical theory is to provide consistent and coherent answers to these practical questions.

In general, an ethical theory is the reasoning process by which we justify our particular ethical decisions. An ethical theory helps us to organize complex information regarding an ethical problem (or dilemma) at hand, the competing values and alternatives available to resolve the problem, and thus, arrive at a solution to the above ethical questions.

7.2.2. Major Normative Ethical Theories or Systems

A well-developed ethical–moral reasoning process or methodology should be guided by a framework of theories, moral principles, moral rules, or norms, whereby moral judgments regarding right or wrong, good or bad, fair or unfair, and just or unjust may be derived and assessed. There are various theories in ethics that attempt to do so. These theories try to answer the basic dichotomous questions of what is right or wrong, truth or falsehood, ethical or unethical, moral or immoral, good or evil, and just or unjust, or the more general question: What should I do and what should I not do?

In general, ethical scholars distinguish at least three positions in judging the moral rectitude of human actions (Beauchamp, 1993; Frankena, 1973; Schüller, 1976): 1

7.2.3. Corrective Justice-based Moral Reasoning

The fourth theory of ethical and moral reasoning is corrective justice:

• Regardless of costs and benefits, rights and duties, and their existing distributions, that executive action is moral if it sets up legitimate laws, and effective procedures and processes to rectify unjust structures in society that inequitably distribute costs and benefits, and rights and duties across the greatest number of affected stakeholders. Thus, while teleologically an action may have positive net benefits, and deontologically the same action may not violate any known moral principles, rights, or duties, yet if in the distribution of these net benefits, rights, and privileges, there is gross injustice, then executive actions should rectify such unjust structures whereby the rich may become richer while the poor become poorer. Hence, the need for a fourth ethical system that of corrective justice.

• To the question: what should I do? The corrective justice theory answers: Act in such a way that, while fulfilling most of your duties and moral obligations, the benefits of your action clearly exceed the costs, and that the costs and benefits, rights and duties are equitably spread across all people affected by the action, and if not, set up processes and procedures to rectify unjust distributions of costs and benefits, and rights and duties among the greatest number of affected stakeholders, especially, the marginalized and the poor.

7.2.4. The Theory of Equality and Corrective Justice

The problem underlying all forms of justice (e.g., distributive, retributive, and corrective) is the content or domain of equality. The fundamental problem, however, is, as Amartya Sen (1979, p. 307) expressed it, “equality of what?” That is, what is the appropriate equalizandum (the entity to be equalized)? There is hardly a consensus among egalitarians justice theorists. For instance, some egalitarians define the domain of equality as resources (Dworkin,1981), as primary goods (Rawls, 2001, pp. 62, 92), as opportunity for welfare or access to advantage (Cohen, 1989, p. 99), or as buyer–seller information asymmetry reduction (Mascarenhas, Kesavan, & Bernacchi, 2008).

The next question is, given an equalizandum such as opportunity for education, earning, health care, and property, what limitations should be imposed on its distribution? For instance, what would justify a deviation from equal opportunity to basic education or basic health among citizens of a given country? Alternately, what is the role of justice, liberty, or responsibility in the distribution of the equalizandum? Most egalitarian theorists of distributive justice attempt to design a distributive policy that is endowment-insensitive but ambition-sensitive. That is, any equalizing of opportunity should not be based on individual endowments such as wealth, race, color, power, social status, and other such considerations, but on the needs, wants, and use of that opportunity for all citizens (Cohen, 1989; Dworkin, 1981).

7.2.5. Virtue Ethics and Moral Reasoning

Frankena (1973, 1980) maintains that virtue ethics cannot be an independent method of moral reasoning. For him, virtues merely augment an existing method; they do not supply specific directives for determining right or wrong conduct. Principles and rules direct, while virtues merely enable us to perform what the principles command. But Nussbaum (1986, 1988) counter-argues that the Greeks used virtues precisely to judge moral conduct. That is, virtues can provide the standards of morally right conduct, and hence, virtues, not moral principles, are the source for understanding normative conduct. In fact, principles and rules are derived from virtues: they are directives that obtain their content from the virtuous activity which humanity enjoins (Nussbaum, 1988). Dunfee (1991), on the other hand, considers virtue ethics theory as an alternative to the stakeholder theory or the social-contracts theory.

Developing a virtue-based ethics for business, Solomon (1992a, p. 104) argues that mere wealth creation should not be the purpose of any business. “We have to get away from ‘bottom-line’ thinking and conceive of business as an essential part of the good life, living well, getting along with others, having a sense of self-respect, and being part of something one can be proud of.” Individuals are embedded in communities and that business is essentially a community activity in which we work together for a common good, and excellence for a corporation consists of making the good life possible for everyone in society (Solomon, 1992a, p. 209).

Some argue that a true understanding and living the virtue concept will be antithetical to competitive economic activity. Thus, corporate executives fundamentally engaged by their profession in the competitive acquisition of wealth, opportunity, and growth could only exercise simulacra of the true virtues (Dobson, 1998). According to MacIntyre (1984, p. 254), “the tradition of the virtues is at variance with central features of the economic order.” According to MacIntyre (1984, p.187), a necessary condition for a business person to be “virtuous” is cooperative or communal business activity within the firm that qualifies for “internal practice.” The concept of “internal practice” involves that “any coherent and complex form of socially established cooperative human activity through goods internal to that form of activity are realized in the course of trying to achieve those standards of excellence which are appropriate to, and partially definitive of, that form of activity, with the result that human powers to achieve excellence, and human conceptions of the ends and goods involved, are systematically extended” (1984, p. 187).

7.2.6. Moral Judgments and Moral Justification

Judgments express a decision, verdict, or conclusion about a particular action or about a person’s character based on our intuition or learning. Moral judgments express a decision, verdict, or conclusion about a particular action or about a person’s character based on our understanding of moral theories and/or their principles. The average executive in most circumstances has no difficulty making moral judgments such as whether to tell the truth, whether a given decision is morally right or wrong, whether there is conflict of interest, and so on. Our moral life is usually composed of a rich blend of directives, experiences, parables, vignettes, and virtues that suffice to guide us to moral judgments.

Moral reasoning is a process of arriving at moral judgments. Moral judgments are followed by moral justification of our moral judgments, decisions, and their outcomes. A typical moral justification starts with a moral judgment. It upholds the judgment by moral rules specific to the context and restricted in scope. The moral rules are justified by certain moral principles, which are more general and fundamental than moral rules. Finally, the moral principles are justified by moral theories, which integrate bodies of principles, rules, and action guides. The theories backing moral principles may themselves need to be defended unless they are already well accepted among moral philosophers. If the proclaimed ethical theories and moral principles are not commonly accepted, then one could further inquire if they need to be replaced, rejected, revised, or expanded. Most executives defend their moral judgments in terms of rules; few in terms of principles; and very few relate them to ethical theories.

Moral justification goes further to deliberate about these moral judgments and justifies them or the principles underlying them. Moral dilemmas occur at the level of moral justification and not so much at the level of moral judgment. An ethical “dilemma” is not seen as an abstract problem with only one ethically “correct” solution that can be agreed on by impartial observers applying universally accepted principles (Gilligan, 1982). Instead, solutions can and should emerge from mutually caring relationships and the contexts in which the problems are embedded. Particular human beings in particular settings should generate “caring” solutions appropriate to unique situations (Jones et al., 2007, p. 139).

7.2.7. The Process of Justifying Executive Moral Judgments

In general, any moral justification of one’s corporate judgment and decision involves five supporting sets of beliefs and values held by a particular person in one or more of the following hierarchical series of moral values:

1. A set of normative ethical theories.

2. A set of moral principles derived from set A.

3. A set of moral standards derived from sets A and B.

4. A set of moral rules derived from set C.

5. A set of moral judgments resulting from applying sets A, B, C, or D while assessing concrete actions.

Briefly, each set may be described as follows:

• Moral or ethical theory is the reasoning process that one uses to justify one’s moral judgments and ethical actions. Major moral or normative ethical theories are deontology, teleology, and distributive and corrective justice. More recent theories include personhood ethics (see Chapter 1), virtue ethics (Chapter 2), ethics of trust (Chapter 3), ethics of leadership (Chapter 4), ethics of rights and duties (Chapter 6), ethics of moral reasoning (Chapter 7), and ethics of moral and ethical responsibility (Chapter 8).

• Moral principles are more general moral axioms or guidelines derived from moral theories that pertain to human or social welfare (teleological moral principles), to personal or social rights/duties (deontological moral principles), to social justice (distributive justice moral principles), or to a sense of personal and spiritual fairness or righteousness (e.g., virtue ethics, responsibility ethics). Example: The deontological principle of non-malfeasance: Do not harm others; or the Golden axiom: Do unto others what you would like others to do unto you.

• Moral standards are less general or more specific moral norms of behavior that require, prohibit, or allow certain actions. Such norms are derived from moral theories and their moral principles. Moral standards are teleological if they relate to social costs and benefits; they are deontological if they uphold rights and duties; they are related to distributive justice if they deal with issues of fairness and justice, and fourth, they are related to virtue ethics if they promote a general sense of physical, functional, and moral well-being. Examples of deontological standards: be honest; do not lie; do not kill; do not steal; do not be avaricious.

• Moral rules are concrete applications of moral principles and moral standards to a society, corporation, government, or any social institution, given the situational context of economy, politics, culture, science, and technology. Example: Do not produce or market harmful products since every consumer has a right to product safety (deontological), a harmful product harms consumers and society (teleological), harmful products bring about serious injustices to the public (distributive justice), and any harm destroys the physical, functional, and moral well-being of people (virtue ethics). Table 7.1 provides some well-known distributive justice moral rules.

• Moral judgments are practical moral assessments of concrete executive decisions, strategies, and actions based on sets A, B, C, and D. Some of these could be “considered moral judgments” applicable to several actions over longer time periods; then, these are tantamount to corporation standards of ethical conduct or the corporate code of ethics. Statements of corporate codes could be typically moral standards or norms, which are also derived from moral theories, but they are less general than moral principles or moral rules. Some examples of moral judgments: human “enhancement” is playing God. Capital punishment is wrong. Child labor is evil. Sweatshops are dehumanizing.

Table 7.1:

Some Practical Distributive Justice Principles.

Two criteria characterize moral principles:

• (1)

  Supremacy: Moral principles override other considerations such as contingencies, situations, self-interest, group interest, or politics. Examples: Do not harm. Keep promises. Speak the truth. Do not lie.

• (2)

  Universal: Moral principles apply to all people under comparable conditions with no exceptions based on any socio-biological factors such as gender, age, race, color, creed, nationality, or social status. Examples: Kant’s universalizable principle: Whatever you do should be a moral rule for all others. Kant’s reversible principle: What all others do should be a moral principle that you should follow. The Golden Rule: Do unto others what you would like others do unto you.

Besides moral theories, principles, standards, and rules, there may be specific conditions and circumstances that render a given moral judgment morally defensible. Moral justification is needed when one has to defend one’s moral convictions or judgments under a given situation.

We distinguish two processes of moral judgment calls in this connection: Forward Moral Judgment, and Reverse Moral Judgment. Exhibits 7.1 and 7.2 illustrate these two moral reasoning processes as corporate exercises.

Exhibit 7.1:

A Framework for Forward Corporate Moral Judgment Call.

Exhibit 7.2:

A Framework of Reverse Corporate Moral Judgment Calls.

Thus, particular judgments are justified by moral rules; moral rules are justified by moral standards; moral standards are derived from moral principles; and moral principles are derived from appropriate ethical theories. Table 7.1 captures this hierarchical process of moral reasoning. The derivation of moral justification based on ethical theories is deductive. Moral justification based on the application of moral principles is deductive-inductive, since this process may have some inductive elements of deriving the moral principles through empirical inquiry. Moral justification via moral rules is inductive, as both moral rules and their concrete applications to a given situation require search and empirical inquiry. Moral justification through moral judgments is situational, as most moral judgments consider the concrete business situation.

7.2.8. Rule versus Act Applications of Ethical Theories

Application problem: Teleology, deontology, distributive justice, and corrective justice are all based on principles. However, what is the ultimate source of appeal under each theory for the determination of morally right and wrong actions? In this regard, it is conventional to distinguish between Act application and Rule application of ethical theories.

The ACT application judges the morality of an act by applying a given moral principle directly to the human act without any intermediary rules, while the RULE application judges the morality of a given act only after verifying if the act conforms to firm and publicly advocated moral rules derived from that moral principle or moral standards set up by past considered moral judgments. Thus:

• Rule application: Apply principles to rules and rules to particular judgments or actions and then judge the morality of the executive action.

• Act application: Apply principles directly to particular actions or judgments to judge the morality of the executive action.

Figure 7.1 traces the process that links the four sets (A: moral theories; B: moral principles; C: moral standards; and D: moral rules]to the derivations of moral judgments. This process may be based directly on the normative moral theories and moral principles as ACT ethical applications; application of these via moral standards (considered moral judgments) or moral rules is designated as RULE ethical applications.

Figure 7.1:

The Process of Deriving and Justifying Corporate Executive Moral Judgments and Decisions.

From everyday executive moral judgments result executive moral choices, decisions, and strategies, which in turn may be ethically assessed using ACT or RULE assessments as indicated in Figure 7.1. From executive actions follow the action effect complex of consequences, which we also need to assess by ACT or RULE applications of the four belief sets A, B, C, and D. Finally, resulting from executive action effect complex of consequences are executive responsibilities, which also may be ethically assessed by ACT or RULE ethical application processes. In other words, one could start with ethical and moral theories and arrive at moral judgments deductively using Figure 7.1 downward.

Alternatively, one could start with one’s actual moral judgments and decisions, and work one’s way upward in Figure 7.1 and derive moral judgments and justification via moral rules, moral standards, moral principles, and moral theories. The vertical bidirectional arrows in Figure 7.1 indicate this forward (see Exhibit 7.1) and reverse (see Exhibit 7.2) dynamic of assessing executive decisions.

Figure 7.1 characterizes the process of deriving and assessing executive moral decisions and actions by linking belief sets A, B, C, and D with the corresponding act and rule applications. Act applications can derive from the interaction (indicated by a bidirectional arrow) of both ethical theories and their moral principles. Similarly, rule applications can arise from the interaction (also indicated by a bidirectional arrow) of both moral rules and considered moral judgments. Executive moral decision actions can result from either act or rule applications of major normative ethical theories such as deontology, teleology, distributive justice, and virtue ethics with their respective moral principles.

7.2.9. Corporate Moral Dilemma and Executive Challenges

The word dilemma is commonly understood as a “challenging problem” implying a “forced choice” for the agent between two or more equally unfavorable (or fatal) choices or alternatives. Most moral problems are usually posed as irreducible value-conflicting dilemmas, quandaries, predicaments, or as a multiple-choice problem (Whitbeck, 1992). The attempt to force most moral problems into dilemmas stems from one’s neglect of what actually goes into the agent’s deliberations, intentions, motivations, and reasoning processes. Kohlberg (1969) seems to assess one’s moral development by one’s forced choice among limited alternatives proposed (Gilligan, 1982).

Many business situations involve moral dilemmas where executives experience moral perplexity, moral conflict, or moral disagreement. As stated earlier, moral dilemmas originate at the level of moral justification and not so much at the level of moral judgment. Executive moral dilemmas involve concerns of moral obligation or moral rightness of a given executive action.

Business problems in general are best described as ethical–moral dilemmas that involve multiple constraints, all of which may not be simultaneously satisfied but which are definitely not just dichotomous or multi-chotomous choices (Whitbeck, 1992). Most business situations imply a real human narrative form that extends over time, and not just faceless theoretical dichotomous dilemmas.

An ethical dilemma is an undesirable or unpleasant choice relating to a moral principle or practice (Maxwell, 2003, p. 5). What do we do in such situations – the easy thing or the right thing? What should I say when a convenient lie can cover a mistake? How far should I go in my promises to win a business contract? How do I deal with executive pressure – by cutting corners and over-rationalizing my downsizing decisions? How far should I go in my promises to win a client?

In such circumstances, do we do the easy thing (ethics of convenience) or the right thing (ethics of morality)? Many people believe that embracing ethics would limit their options, their opportunities, and their very ability to succeed in business. In today’s culture of high debt and me-first living, ethics may be the only luxury some people are choosing to live without! Hence, morality becomes a private and costly luxury. In order to be ethical, we must be honest with ourselves before we can be honest with others. And this could be very challenging and inconvenient. Practicing the honesty discipline is inconvenient. Paying a high price for success is inconvenient. Losing a high potential client or a much desired promotion is inconvenient (Maxwell, 2003).

There are really only two important challenges when it comes to ethics: (1) a standard to follow and (2) the will to follow it. Such a standard can be the Golden Rule. This Rule has been expressed in every living culture. Using this standard, we should have the ability to discern right from wrong, good from evil, just from unjust, fair from unfair, and propriety from impropriety. The second challenge is that we have the dedication and commitment to do what is right, good, just, fair, and proper and that we have the moral courage to consistently avoid what is wrong, evil, unjust, unfair, and improper. Ethics entails decision and action, and commission and omission (Maxwell, 2003, pp. 24–25).

7.2.10. Moral Dilemma and Executive Decisions

If we believe, we have only two choices: (1) win by doing whatever it takes, including being unethical, and (2) to be ethical and lose – we are faced with a real moral dilemma. 2

A moral dilemma is a situation in which an agent is morally obliged to do an action X and is also morally obliged to do another action Y, when at the same time the agent is precluded by circumstances from doing both. For instance, if X is to “win” by doing whatever it takes, even if it is unethical, Y is to be ethical and lose! Few executives set out with a desire to be dishonest, but nobody wants to lose (Maxwell, 2003, p. 7). At the same time, while we desire honesty and plain dealing, we are still not winning the battle of ethics. Companies are even teaching “remedial ethics” to employees via online ethics courses, not because they need ethics, but in order to evade punishment. Under federal guidelines, companies that have ethic programs are eligible for reduced fines if convicted of wrongdoing (Ryan, 2002).

The reasons supporting X and Y are weighty, but neither set of reasons is dominant to force action. That is, each set of reasons, considered in itself, is a good set, but may not be sufficient to oblige or justify an action. If one acts on one set of reasons, the action will be desirable in some aspects but undesirable in others. Hence, one needs both good and sufficient reasons to act morally.

In general, moral dilemmas may take two forms:

• (1)

  Some evidence indicates that act X is morally right, while some evidence suggests that act X is morally wrong, and the evidence on both sides is inconclusive; e.g., seeking downsizing via massive layoffs and seeking bankruptcy to resolve chronic insolvency.

• (2)

  The agent believes that on moral grounds act X ought or ought not to be performed; e.g., plant closing and forced retirement of employees.

Moral dilemma of form (a) deals with the rightness of the act, while that of form (b) concerns obligation. Most moral dilemmas are created by conflicting moral principles that generate conflicting demands. 3 Moral dilemmas and disputes not only involve conflicts between moral rules, principles, and theories but also on factual beliefs about the situation to which the rules, principles, and theories are concretely applied. Often factual beliefs reflect our current scientific, metaphysical, and theological (religious) thinking. The latter underlie our beliefs and help us to interpret current phenomena that create moral dilemma. Factual beliefs often revolve around cost and benefits, and risks and uncertainties associated with obliging actions. 4

7.2.11. Resolving Moral Corporate Executive Dilemmas

Many situations involve ethical dilemmas created by conflicting moral principles, which in turn generate conflicting moral demands. Typical examples are:

• John, a recently hired salesperson, is sure of a serious product flaw in a medical drug that the company has been selling to generate revenues. If he does not continue to sell it, he may be fired; if he pushes it well, he may turn the company around and reap high “success” bonuses. What should he do?

• Jane, another salesperson in the same company, finds that Jack Doe has been doing exceedingly well in prospecting and realizing sales of that flawed medical drug. Jane has also found that Jack has been bribing purchasing managers (e.g., offering kickbacks) to stimulate purchasing. Should Jane let Jack continue his marketing strategy, or should she discourage him from bribing, even at the risk of depressing sales?

• Jim, a recruiter, has the authority and responsibility of filling a position in his firm. His friend John applied and was qualified. However, another applicant, Jane, seems even more qualified. Jim wants to give the job to John, but he feels guilty. He applies the moral principle that one should be impartial. Nevertheless, Jim also argues from the virtue of friendship: friendship has a moral importance that permits, or even requires, partiality in some circumstances. He hires John and rejects Jane. Was he morally right?

In resolving these dilemmas, corporate executives may adopt the following moral reasoning procedure:

• (1)

  Specify the conflicting moral (teleological, deontological, distributive justice, and virtue ethics) principles involved in the dilemma.

• (2)

  Identify the conflicting moral (teleological, deontological, distributive justice, and virtue ethics) obligations involved. Thus, for Case (a): duty to users, to prescribing doctors, and to USDA; also duty to the corporation, to his own sense of executive integrity (virtue ethics), job security, and performance. Case (b): duty to code of ethics and virtue ethics that forbids bribes in the form of kickbacks; duty to consumers who must eventually pay for the kickbacks; on the other hand, duty to the company, to the consumers of the drug, to self, and duty to perform well. Case (c): duty to be impartial in hiring; duty to both John and Jane; duty to the company that needs best skills; and duty to perform well as an executive. Hiring John in the place of Jane may involve conflict of interest.

• (3)

  Identify other feasible alternatives to the one in question. Case (a): rectify the product flaw; warn the doctors; warn prospective users; withdraw the product from the market. Case (b): let Jack progressively reduce kickbacks; change kickbacks to alternative favors that are accepted by the corporation; change Jack’s sales territory. Case (c): recommend John to another company; hire Jane now, but John later if Jane proves inefficient; or hire John and Jane on a part-time basis dividing the budgeted salary between them.

• (4)

  Consider which alternative would you choose if by fulfilling one obligation (alternative) another must be contravened, and why?

• (5)

  What crucial circumstance would change the priority of obligations (alternatives) you have identified under (1)–(3)?

Other things being equal, an executive choice is more ethical if he or she seriously investigates more competing alternatives before selecting the most socially beneficial alternative.

7.2.12. Executive Moral Conflict Management and Moral Reasoning

Conflict has been perceived as a major problem in all organizations throughout the centuries. Classical organization theorists argued that conflict produced inefficiency and was therefore undesirable, even detrimental to organizations, and hence should be eliminated or minimized to the extent possible. But with the emergence of social systems and open system theory, the older view of conflict has changed. Organizational conflicts are now considered as legitimate, inevitable, and sometimes even positive and desirable indicators of effective management (Rahim, 1983). It is even believed that within certain limits conflict may be essential to heighten productivity. Lobel (1994) even argues that the absence of conflict might be a sign of an unhealthy organization. When dealt constructively, conflicts enhance creative definition, formulation, and solution of problems (King, 1999, p.1); conflict can lead to change, adaptation, and survival.

However, much would depend upon two factors: the intensity of the conflict and the way the conflict is managed. In general, if the conflict intensity is moderate and if managed well will impact the organization positively (Schermerhorn, 2001, p. 339). The issue then is to design and engage techniques that empower individuals and organizations to handle conflicts productively (McNary, 2003). In fact, most scholars view today that conflicts, if properly channeled, can be an engine of innovation and change.

People respond to conflicts in different ways, depending upon the degree of assertiveness versus cooperation people bring in to conflict management. Assertiveness is the desire to satisfy one’s own needs, desires, and dreams. On the contrary, cooperativeness is the desire to satisfy another’s needs, concerns, and desires.

7.3.1. Kant’s Theory of Moral Obligation

Justice is the cornerstone of Kant’s theory of moral obligation. In his theory, the notion of justice is inseparably tied to the notions of freedom and rationality (Grassian, 1992, p. 88). Justice involves treating individuals fairly, and this, in turn, involves considering them as rational moral agents who have the right to make their own choices unless these choices interfere with the freedom of others. Justice demands, therefore, that people cannot be used as means but treated as persons, free and rational moral agents. Demands of morality are categorical imperatives. They are not means for achieving any desires or objectives as such, but are pursued for their own ends; they are values or actions that are objectively necessary by themselves without regard to any other ends. That is, moral demands are not conditional or hypothetical imperatives. For instance, our moral obligations to keep our promises are in a way dependent upon whether we desire to keep them.

Kant claims that specific categorical moral demands follow from a supreme categorical moral principle that he calls the categorical imperative. This categorical imperative (CI), Kant claimed, is so basic to moral thinking that all rational persons who understand what it means would accept it as binding, regardless of their specific psychological, political, or religious beliefs. Kant presents five formulations of CI that he claims have an equivalent meaning. Some formulations are as follows:

• Act as if the maxim of your action (the subjective principle under which you act) were to become through your will a universal law of nature (i.e., that everyone could not but follow that maxim).

• Act in such a way that you always treat humanity, whether in your own person, or in the person of any other, never simply as a means, but always at the same time as an end.

The first version is also called the principle of universalizability. That is, when we act on a certain moral principle, we must be willing to accept the right of everyone else to act on the same principle. For example, if I act on the principle, “never break promises and never lie, regardless of the circumstances,” then this is not universalizable, since there is an equally valid principle, “lie if it is necessary to save an innocent human life.”

This first formulation also stands for and demands impartiality. Impartiality is at the heart of the Golden Rule: do unto others as you would have them do unto you. Confucius has a passive version of the Golden Rule: Do not do unto others what you would not have them do unto you. But, what if a sadomasochist hates himself: Can he hate others by the Golden Rule? What if a person does not want to be loved: Can he refuse to love others? Kant’s CI expresses in a more precise manner the real spirit behind the Golden Rule without implicit reference to the vagaries or subjective preferences of human beings. To what extent CI does this, however, is still debated.

The second formulation affirms human dignity that resides in rationality and freedom, equality, and justice. This version of the CI expresses Kant’s view that if we treat people as means and not ends we do not respect them as persons.

7.3.2. Conscience and Moral Obligation

Conscience eludes precise definition, just like rationality, emotion, and choice. Conscience is not a distinct or separate faculty of the mind. It integrates a whole range of mental operations. Conscience is a personal, self-conscious activity integrating reason, emotion, and will in self-committed decisions about right and wrong, good and evil, fair and unfair, and just and unjust (Callahan, 1991, p. 14). Conscience begins in initial sensitivity to moral salience and moves to conscious empathy. Conscience engages in “cross-checking” one’s critical thought, intuitive insight, affective valence, empirical possibilities, imaginatively grasped analogies, and social corroboration. Reason tutors emotion and emotion instructs reason; intuition is assessed against remembered experience; imagination projects possible scenarios that are evaluated by affective resonance and critical reflection. All of these operations converge to the act of making a moral judgment with as much freedom and commitment as we can muster. Conscience enables more than individual moral decisions; it enters into the self-constitution of the person over time. Our moral choices shape our character; they can make us or mar us. We become what we decide and do (Spohn, 2000, pp. 123–124).

The existence of conscience is one of the most widely validated concepts in psychological, sociological, religious, and philosophical literature (Covey, Merrill, & Merrill, 1994/2003, p. 65). Whether called “inner voice” (Book of Wisdom) or the “collective Unconscious” (Sigmund Freud and Carl Jung), our conscience has been recognized as a major part of human dignity and endowment. When corporate executives develop their vision and mission statements, the collective unconscious of the corporate executives frequently comes to the surface when most of them get deeper into their inner lives, regardless of their religion, upbringing, nationality, or culture. They seem to have a common unique sense of the basic laws of life we call conscience. They all carry within them an educated conscience and, often, an educated delicate moral conscience that we have nurtured, internalized, and developed over almost all the conscious years of our life.

Immanuel Kant said, “I am constantly amazed by two things: the starry heavens above and the moral law within.” Conscience is the moral law within. It is the overlapping of moral law and behavior. It is the voice of God in us or the innate sense in us of fairness and justice, of right and wrong, of kind and unkind, of what is true or false, just or unjust, of what contributes and what detracts, and of what beautifies and what destroys. One’s culture may dress and translate this moral sense or conscience into different kinds of practices and words, but this translation does not negate the underlying sense of right and wrong. This universal conscience is a set of values, a sense of fairness, honesty, respect, and contribution that transcends culture, time, and space; it is self-evident; it is the requirement of trustworthiness. When people live by their conscience, their behavior echoes in everyone’s souls. People instinctively feel trust and confidence toward them. This is the beginning of moral authority (Covey, 2002, pp. 4–5).

The spiritual and moral nature of people is independent of their religion, religious cult, culture or religious approach, geography, nationality, or race. Yet all the major enduring religious traditions of the world are unified when it comes to certain basic underlying principles or values (such as respect, compassion, kindness, fairness, contribution, honesty, and integrity). These values are timeless, transcend ages, and self-evident. Conscience is the moral law within. It is the intersection of moral law and human behavior. It is the inner voice of God to his children (Covey, 2004, pp. 77–78).

Morality bears upon conscience, which must judge between right and wrong, good and evil, and fairness and unfairness of various alternatives or strategies such as firing, hiring, promoting, downsizing, plant shut downs, massive layoffs, outsourcing, the plight of the laid-off or the displaced and their healthcare coverage, preservation of the environment, and the dignity of human labor. Conscience is not just what I think about these issues, but it is me in the act of thinking about what is just and true. Conscience is that part of us that is bigger than us.

7.3.3. The Ethical Theory of Non-malfeasance

Often, some harmful effects are inevitable. A good action (e.g., surgery, business venture) may have both good effects (cure, profits) as well as bad side effects (risk of bleeding to death, risk of failure). Similarly, most actions of organizational downsizing (e.g., closing plants, offshore outsourcing, asset divestitures, retiring models, or products) have both good effects and bad consequences.

The principle of non-malfeasance states that an act should do no harm to anyone at any cost and at any time. Non-malfeasance considers both the act itself and its consequences, judging whether the act itself or its consequences are per se harmful. The principle of non-malfeasance as applied to any executive act can imply four elements (Frankena, 1973, p. 47):

• (1)

  The act should not inflict evil or harm (strict liability).

• (2)

  It should prevent evil or harm (preventive justice).

• (3)

  It should remove evil or harm (protective justice).

• (4)

  It should do or promote good (beneficent justice).

The fourth element may not amount to a moral obligation and constitutes the principle of beneficence. The principle of non-malfeasance is primarily incorporated in the first element. The remaining three elements are more principles of beneficence than of non-malfeasance. Preventing harm and removing harm are alternate forms of promoting good (Frankena, 1973). Procedural justice whereby one is obliged to establish just procedures to prevent harm (e.g., of convicting the innocent or wrongly releasing the guilty) is a subset of preventive justice.

According to Curd and May (1984), the following elements are essential to be ethically responsible for a violation of the duty of non-malfeasance: (1) the institution must have a duty to the affected party; (2) the institution must breach that duty; (3) the affected party must experience a harm; and (4) this harm must be caused by the breach of duty. Duty may relate to commission or omission of an act. Imputability accrues with breached duty, and accountability accrues with harm caused by breached duty. Duties of non-malfeasance include not only not inflicting actual harm, but also not imposing “risks of harm.” By strict liability laws, it is not necessary to act maliciously or be even aware of or intending the harm or risk of harm. The harm can be legally “recovered” through the laws of “strict liability” when the duty of non-malfeasance is violated (Stern & Eovaldi, 1984). Such violations may involve commission or omission. Negligence is a failure to guard against risks of harm to others (Prosser, 1971); it fails below the “standards of due care” established by law and morality, or determined by the principle of protective justice (Jonsen, 1977).

Hence, given the principle of non-malfeasance whereby not only all harm must be avoided and prevented, but also “risks of harm” be minimized, when and how can we morally justify some inevitable harm that accompanies or follows certain executive actions? It is under such conditions that we invoke the principle of double effect.

7.3.4. The Principle of Double Effect

When executives are puzzled by the undesirable side effects of actions they feel morally obliged to execute, then they could have recourse to the principle of double effect. This doctrine is grounded on the principle of non-malfeasance, but differs from it. As discussed earlier, the principle of non-malfeasance states that an act should do no harm to anyone at any cost and at any time. This principle is incorporated in the Hippocratic Oath of doctors and physicians as a combined principle of non-malfeasance and beneficence: “I will use treatment to help the sick according to my ability and judgment, but I will never use it to injure or wrong them.”

The correct understanding of the principle of double effect (PDE) has implications not only for the licit self-defense of an individual (the context in which it was first stated by Thomas Aquinas, see footnote below), but also for noncombatants in war, persons undergoing surgery who are significantly at the risk of death, terminally ill patients receiving morphine for palliative care, and other cases that present medical moral issues such as hysterectomy during pregnancy, ectopic pregnancy, and craniotomy. In each case, the unintended death, though a foreseeable consequence of self-defense or surgery or anesthesia, is a side effect of the directly intended aim of preserving life (Anscombe, 1982). The PDE applies to a police officer who in defending himself kills the criminal aggressor, as long as the officer uses minimal force and does not kill because of his animosity against the attacker. Self-defense in such cases may not only be permissible, but also required, when not to defend one’s own life is to act with too little virtue of self-care (Keenan, 1993). PDE rests on the ability to foresee harm without intending harm.

The principle of double effect states: when an action has a twofold effect, one good and another bad, the agent is morally permitted to act as long as the bad effect is not intended. Five conditions must verify in applying this principle (O’Donnell,1991, p. 30):

• (1)

  The action, in itself (independent of its consequences), must not be intrinsically wrong or evil; it must be morally good or at least morally neutral.

• (2)

  The agent must intend only the good effect and not the bad effect; the bad effect may be foreseen, tolerated, or permitted, but not intended; the bad effect is allowed, but not sought; otherwise, the evil effect becomes a direct voluntary effect.

• (3)

  The bad effect must not be a means to the end for bringing about the good effect; that is, the good effect must be achieved directly by the action and not by way of the bad effect; otherwise, the evil effect, like any other means, would be necessarily directly willed.

• (4)

  The good result must outweigh the evil permitted; there must be a favorable balance or due proportion between the good that is intended and the bad effect that is permitted.

• (5)

  The good effect cannot be obtained in some equally expeditious and effective way without the concomitant evil.

The agent must verify all five conditions simultaneously, with no priority or bias for any one against the other. Overemphasizing the second condition would reduce the principle of double effect to deontologism. Insisting only on the fourth condition would reduce this principle to utilitarianism. When the executive fulfills all five conditions, the principle of double effect kicks in to safeguard the principles of strict liability, protective justice, preemptive justice, and the principle of beneficence.

How to apply these five conditions, however, to concrete cases is a matter of some debate. The moral language of “defense,” “self-defense,” and “unjust aggressor” does not adequately resolve the enigma of whether it is morally licit to act under certain circumstances. 5

Hence, to make the principle of double effect even more rigorous, one adds the fifth condition: that the action undertaken be seriously necessary; that is, it is the last and only feasible alternative or resort, given the then level and availability of technology. With this condition, an executive may not want to do what he intends to do; that is, he reluctantly does something (e.g., plant closings, outsourcing) that he cannot morally avoid under the circumstances, even though it causes a bad effect (e.g., massive labor layoffs, impoverishing worker families). The executive wills and decides plant closing directly as something inevitable (condition 5), but does not intend the bad effect that accompanies it (e.g., massive layoffs). The latter is circumstantial necessity. The effect (massive layoffs) that the executive clearly sees will happen or that is very likely to occur is not intended. Some ground for this fifth condition may be found in Faden and Beauchamp (1986, Chapter 7) and Beauchamp and Childress (1989, pp. 131–34).

However, it is not true that just because someone does not want a particular effect of a voluntary action, that the person is relieved of all moral responsibility for causing the effect. The theory of double effect is “not an attempt to absolve persons of responsibility for what they bring about but only to determine what it is permissible to bring about” (Beauchamp & Childress, 1989, p. 132). In other words, the PDE speaks of moral permissibility of the action and not its strict liability. Moreover, in judging responsibility the underlying intentions, motivations and character of the agent should be the most important factors to consider (Hauerwas, 1981).

Choices are actuations of the will, guided by moral norms, by which we determine ourselves with respect to human goods (Grisez, 1970). That is, a choice is a determination of the will following upon deliberation among competing alternatives. Thus, not every form of voluntariness involves choice (e.g., spontaneous willing that responds to an attainable good without considering alternative courses of action). In choice or choosing, one adopts a proposal to act in a certain way. This proposal includes both the good at which the agent aims and anything that one chooses to do as a means to an end. On the other hand, the side effects of the agent’s action are not included in the proposal that one adopts. The side effects are not chosen, and they do not determine the stance of the will involved in a choice. One may accept the bad side effects of one’s act but not cause them. One does not intend the bad side effects, even though one may accept them voluntarily or involuntarily. Such bad side effects are considered “indirect” effects. The agent’s intention is the sole morally determinative factor. Thus, an act may be morally justified, if the agent’s intention is morally good, and the bad effect is not necessarily included in the attainment of the intended good. The causal relation between the good and the bad effect is not a criterion for moral evaluation.

Certain goods are basic and intrinsic (e.g., life, knowledge, friendship) in the sense that they are desirable as ends-in-themselves, while other goods are non-basic and extrinsic (e.g., wealth, physical fitness, health) that are sought for the sake of attaining the basic goods. Each intrinsic good is intrinsic to the human person and participates in the dignity of the person, a dignity that is beyond any price and a dignity that is inalienable (Porter, 1996, p. 615). The basic goods enable us to achieve integral human fulfillment. We direct most of our actions to some basic good or other, though not every action aims at attaining or safeguarding a basic good. Admittedly, we cannot aim at all the basic goods all the time, but we can always act in such a way as to remain open to those basic goods that we do not actively pursue. Only in this way will our actions be reasonable, that is, morally good.