Philosophical underpinnings of approach to ethical dilemmas: study of Indian managers.
Pande, Sanjay ; Jain, Neetu
These days we need not strain ourselves to gather examples of
unethical business conduct, erosion of values and moral delinquency in
business settings. What is that the mangers draw from while taking a
decision in the face of ethical dilemmas? This study investigates in to
the ethical theories relied on by Indian managers when faced with
ethical dilemmas in business settings. The study reveals valuable and
interesting patterns in the deployment of ethical theories by the Indian
Managers across ethical dilemmas varying in moral intensity.
Introduction
When facing a moral dilemma what is the right thing to do? The
question progressively acquires the central position in business
settings. A search for a satisfactory answer to this question, leads us
to a more fundamental question. What moral philosophies are being relied
upon by business managers while they face a moral dilemma? The question
is more fundamental because it would help us understand why certain
ethical dilemmas are considered important by some managers and not so
important by others. It would also help us understand the underpinnings
of a particular decision of a manager facing a moral dilemma.
This paper examines the role played by various ethical theories in
the decision making of Indian business managers when faced with ethical
dilemmas. The study adopts the multidimensional ethics scale approach of
analyzing the decision making process of managers. This scale has been
widely utilized in many researches. However, studies attempting to
unearth the philosophical underpinnings of the unethical/ethical
decision making of Indian managers have been very scarce. The study in
hand fills this gap. Further, the three scenario and the scale to be
utilized in the study, were developed to reflect the Indian realities
with a sharp focus.
Ethical Theories
Utilitarianism: This draws heavily from the works of Hume, Bentham
(1789, 1973), MiII (1861, 1969), Sidgwick (1874) and more recently
Harsanyi (1955, 1975). It suggests promoting overall human welfare in
such ways as to result in the greatest net, beneficial minus harmful,
consequences. According to utilitarianism an act is ethically right if
it leads to a net increase in the overall good; and it is ethically
wrong if it leads to a net decrease in the overall good.
Egoism. The normative perspective of this moral philosophy
prescribes that people ought to act in their self-interest, exclusively.
The only obligation of a person is to enhance his or her own long-term
welfare and commitments to others are not binding. One should go back on
these commitments if they cease to be advantageous to him (Beauchamp
& Bowie, 2004).
Justice. Plato, Aristotle and Socrates are some of the earliest
philosophers to have pondered over the question of justice. The idea of
distributive justice reflects clearly in the observation of Rawls (1999)
that "Each person possesses an inviolability founded on justice
that even the welfare of society as a whole cannot override".
Contractualism has been defined by Scanlon (1998) as an account of
moral reasoning. Contractualism is named after the conception that
governs it. This concept views morality as the result of an
imaginary-not actual- (Carruthers, 1992) contract between rational
agents who agree upon rules to govern their subsequent behavior.
Relativism. Ethical relativists hold that all ethical beliefs and
values are relative to one's culture, feelings, or religion and
that there can be no rational, objective basis for a moral judgment. No
action is universally right or wrong. The argument of relativism finds
apt reflection in the opinion of Wong (1984) that "One of the
gravest normative problems with which we must deal is the existence of
deep and apparently irresolvable moral disagreements."
Procedure
We developed three scenarios which were presented to the
respondents. Each scenario depicted an ethical dilemma. At the end of
each scenario was an action statement. This statement depicted the
action taken by the main protagonist in the scenario. After the
respondent had gone through the scenario and the action statement,
he/she was presented with a questionnaire which contained items
representing various ethical theories discussed above and the respondent
had to evaluate the action statements of the scenarios against each of
the items of the questionnaire on a Likert scale.
The questionnaire
The questionnaire used in our study is a multidimensional ethics
scale developed by Reidenbach and Robin (1986). It represents the
"evaluative criteria" that individuals use in making a moral
judgment (Reidenbach & Robin, 1995). It assumes that more than one
rationale is used when making an ethical judgment by an individual
(Clark & Dawson, 1996). Reidenbach and Robin (1986) initially
developed a 33 -item multidimensional ethics scale (MES) based on five
ethical theories: justice, deontology, relativism, utilitarianism and
egoism to measure moral reactions of people. The 33 item scale was later
refined into a more parsimonious 8-item scale in Reidenbachand and Robin
(1990). Multidimensional ethics scale (MES) has been used in several
different empirical studies like Reiden-bach and Robin, 1988; Cohen et.
al., 1993; Cruz et. al, 2000; Kujala, 2001; andTsalikis and Nwachukwu
(1988)
Cohen et al. (1993) suggested to construct and validate
R&R's original multidimensional scale for each application.
Kujala's (2001) investigation of Finnish business manager's
moral decision-making utilized a scale developed by comparing the scales
used in six previous studies and dropped a number of items representing
each of the moral philosophies and rephrased some items or amalgamated
items to suit Finnish circumstances. We followed a similar process to
adopt the scale for Indian sensitivities. For this purpose we referred
the 33 item R&R scale to a group of five Professors and Research
scholars drawn from the faculty of philosophy and linguistics. They were
also detailed the procedure adopted by Kuj ala (2001) in amending the
scale. The group primarily recommended deleting some items and
amalgamating some others, apart from rephrasing a few. The scale
developed by incorporating these recommendations was put for pre-testing
amongst 40 students of management in Delhi University. Based on the
inputs from the students a few items were again rephrased and the scale
so finally developed was used for the present study. The questions used
in the presents study can be seen at Appendix 1
Scenarios
Three scenarios depicting ethical dilemmas faced by the Indian
managers were utilized for the study. The three scenarios can be seen at
Appendix II. The scenario method of collection of data has been utilized
in numerous business ethics studies in the past e.g. -Fritzche and
Becker (1984), Reidenbach and Robin, 1988; Cohen et al, 1993, Chonko and
Hunt, 1985.
Deployment of the three scenarios, however, cropped np a
possibility that the ethical dilemma being depicted in each scenario was
being felt with different intensity. We could not find any previous
study taking care of this factor. But we wanted to have an estimate of
the degree of social consensus or disagreement about the intensity of
the ethical dilemma in our three scenarios in the Indian context. Jones
(1991) had argued that moral intensity has six components. Out of these
six components, social consensus is defined as the "degree of
social agreement that a proposed act is evil (or good)" (Jones,
1991). The construct has been amply examined in previous studies and
some studies like McMahon & Harvey (2006) state it to be the most
robust of all the six components. Therefore we utilized the concept of
social consensus (SC) as brought out in the theory of moral intensity.
For tapping the social consensus we used a single statement: "most
people would agree that the action is wrong" as suggested by
Singhapakdi et. al (1996). This scale has been used in numerous studies
including Valentine and Silver (2001),Frey-(2000) etc. Each of the
respondents rated the item on a Likert scale of 1 (Strongly Disagree) to
7 (Strongly Agree). For calculating the social consensus about any
scenario, the simple average of the rating by all the respondents was
calculated.
The Sample
We intended to capture the moral philosophies tapped by the mangers
in taking decisions on moral dilemmas faced by them. Life circumstances
are believed to influence the values of an individual but this process
takes time. Therefore we tried to reach out to the mangers who have
spent at least 15 years of service in any industry. The survey was
conducted during July, 2013 and February, 2014. Using multiple channels
like email, handing out the surveys during the Management Development
Programs, a total of 1100 surveys were distributed amongst executives
working in private organizations. Out of the surveys distributed, 523
were received back with responses. 21 questionnaires were rejected due
to in complete information of demographic profile and missing data of
variables under study. Seven responses were rejected as they reflected
extreme responses on all items of the questionnaire which indicated
non-serious responses. Therefore, finally 495 surveys were utilized for
data analysis.
Out of the data analyzed, 64.6% respondents were males. 72% were
between the age of 40 and 45 years and 28 % were aged between 45 and 55
years. 98% had professional academic qualifications. Only about 12% had
monthly income below Rs 1,50,000/. Only 9% of the respondents were
working in organizations employing less than 50 people.
Data Analysis
We intended to unearth the dimensions which underlie the decisions
of Indian mangers facing an ethical dilemma and therefore it was decided
to factor analyze the responses of the managers on the multidimensional
ethics scale. To obtain cleaner factor solutions, we used Principal
Component Factor analysis using varimax rotation. The adequacy of
sampling used was tested using KMO measure. KMO over .90 is considered
marvelous, those over .80 meritorious, over .7 as middling and over .6
as mediocre. Those below 0.5 are unacceptable (Norusis, 1988)
Road Side Assistance Dilemma
At the starting, a reliability analysis was conducted and based on
low correlations two contractualism, one utilitarian and one
relativistic items were removed.
All these items had item-total correlations lower than 0.20. The
Cronbac ITs alpha for the scale after removing these 4 items was 0.872.
This left us with 9 items. After removing the items in the reliability
analysis, those which correlated negatively were turned and the factor
analysis was then conducted with the remaining items. Two factors
emerged. Table 1 depicts the factors along with factor loadings etc. The
first factor consisted of 7 items: and the second factor consisted of
two utilitarian items.
Cruz et. al (2000) suggest that the term "dimension" is
used when we refer to the factor loadings in empirical data involving
the combination of items representing the ethical theories. Many, like
Kujala (2001) utilize the same argument. We continue to adopt the
practice and therefore we propose that the two factors which emerge in
the given scenario be named as: First Factor "Broad Based Moral
Equity Dimension" and the second factor: Utilitarian Dimension.
The social consensus component of the moral intensity of the
scenario was calculated as indicated above. The same was found to be
6.16.
Recruitment Dilemma
After the reliability analysis, due to low correlations one
contractualism item was deleted: "The CEO acted in a morally right
manner" (C). This apart, two utilitarian items had also to be
removed: "The act leads to maximal benefit for society" (U);
and "The act produces greatest utility," (U). These three
items had item-total correlations lower than 0.15. The Cronbach's
alpha for the scale after removing the 3 items was 0.845. After removing
the items in the reliability analysis and turning the items which
correlated negatively the factor analysis was carried out. Three factors
emerged which are depicted in Table 2. The first factor consisted of 6
items. The second factor contained three items and The third factor
contained two utilitarian items. Recollecting the reason to use the term
"dimension" as we indicated above, we named the three factors
as: first factor: Relativistic-Contractual Dimension, second factor:
Moralistic-Egoistic Dimension; and the third factor: Utilitarian
Dimensions. The social consensus component of the moral intensity of the
scenario was calculated as in the previous case. The same was found to
be 5.66.
Tax Officer Bribing Dilemma.
We first undertook a reliability analysis. After the reliability
analysis, due to low correlations two contractualism items were deleted;
"The act violates and unwritten contract" (C), and "The
act violates and unspoken contract" (C). This apart, one Relativism
item had also to be removed: "The act is in accordance with a CEOs
role" (R). All these three items had item-total correlations lower
than 0.15. The Cronbach's alpha for the scale after removing the 3
items was 0.921. After removing the items in the reliability analysis
and turning the items which correlated negatively the factor analysis
was carried out. Three factors emerged which are depicted in the Table
3. The first factor consisted of four items, The second factor and the
third factor also contained four items. These three factors can be named
as: first factor: Moralistic Dimension, second factor: Relativistic
Contractual Dimension; and third factor: Utilitarian Egoist Dimension.
The social consensus component of the moral intensity in this scenario
was found to be 5.33.
Moral Intensities of the Scenarios.
The scores of social consensus component of the moral intensities
of the three Scenarios have been calculated and tabulated for convenient
reading (Table 4).
To find out if the difference in the social consensus about the
moral intensity was statistically significant we conducted ANOVA. We
found that the difference was indeed significant as F(2, 1482) = 166.07,
p = <.001
Discussion
Our study is intended to explore the interplay of various ethical
theories in the Indian managers' decision making while they faced
ethical dilemmas. A prominent thread which appears in our results is
that the Indian managers deploy a number of ethical theories in their
decision making. However, like many other previous studies (Kujala,
2001) utilitarianism seems to be playing an important role in the Indian
managers' decision making. In fact in our recruitment dilemma and
road side assistance dilemma, pure utilitarian dimensions emerged. In
the third scenario also i.e. sales tax/excise officer bribing dilemma,
there was a utilitarian dimension albeit not a pure one. But even then
three out of four items which loaded onto this dimension were
utilitarian and all the three utilitarian dimensions loaded more
strongly than the fourth item. Therefore, our study reiterates what has
been previously found in other settings in other countries that,
perhaps, the life circumstances of those working in the corporate
environment for a considerable period of time tend to develop a strong
utilitarian instinct while taking decisions relating to ethical
dilemmas.
The second interesting aspect of our results emerges on
simultaneous reading of the factors for all the scenarios. But before we
do that we need to realize certain differences between the three
scenarios. It is seen that in sales tax/excise officer bribing scenario
the case is that of outright, illegal, corruption. Paying illegal money
to government officials is an offense in India as per the statutes and
the parties involved in it might be prosecuted under the law. In
contrast to this, in the road side assistance scenario, though the
salesmen are omitting an important part of information before selling
the program to its buyers, this is not as clear cut illegal action as
that of bribery as he is concealing only that information which is not
directly related to the terms and conditions of service. Thus, we
suspect that the two dilemmas may have differed in terms of intensity of
the unethical behavior. This suspicion got confirmed in the different
social consensus scores of the two scenarios. The score for sales
tax/excise officer bribing scenario is 6.16 and for the road side
assistance scenario the score is 5.66.
Having noted this difference now we notice that in the road side
assistance scenario, the dimension of ethical decision making of the
managers is depicted in two factors. One of these is a complex dimension
containing justice, relativity and contractualism items. But as we
proceed to the outright illegal/corruption scenario of bribing sales
tax/excise officer, this one complex dimension splits into two rather
clear cut dimensions, one being predominantly moralistic and the other
being predominantly relativistic. It seems that, in more sharply defined
ethical dilemmas, Indian managers tend to be clearer about their
approach to the dilemma and purer moral dimensions emerge in their
thinking.
Third important inference from our results is that while
relativistic is an important thread in the ethical decision making of
Indian managers, as we moved from scenarios with least moral intensity
to the highest moral intensity and examined the first dimension of
ethical thinking deployed by managers while facing each of the
scenarios, we found that, in the top three items of the first dimension,
there were 3, 1 and nil relativistic items in the case of scenario with
least moral intensity (5.33), medium moral intensity (5.66), and highest
moral intensity (6.16), respectively. This apart, as we moved from
scenarios with least moral intensity to highest moral intensity, the
proportion of relativistic items in the first dimension decreased
steadily from 50%(3 /6), 42.85%(3/7) and nil (0/5) respectively. This
shows a decreased reliance of the Indian managers on relativistic
thinking as the dilemma becomes ethically more intense.
Conclusion
To conclude about the philosophical underpinnings of Indian
managers from the study it can be said with fair amount of confidence
that they deploy a number of ethical philosophies in dealing with
ethical dilemma at workplace. However as the dilemmas grow in moral
intensities, clear factors tend to emerge in the philosophies being
deployed by Indian managers. It was also found that while the
philosophical underpinnings of Indian managers almost always have
utilitarian instincts like in many other studies in other times and
other countries, Indian managers tend to rely lesser on relativistic
thinking as the ethical dilemma becomes more intense.
Limitations & Future Research
We have deployed three scenarios to study the theories underlying
the Indian managers in deciding upon ethical dilemmas. It would be
interesting to undertake a deeper study of each dilemma by creating
slight variations of each dilemma and examining the pattern that emerges
in managerial ethical decision making. Further, our study involved a
sample consisting of a wide array of industry as suited to our objective
but it might also be revealing to undertake an in-depth sectoral study
for each type of dilemma. Such a study could have valuable practical
implications.
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Sanjay Pande (Email:sanjaypandecvc@gmail.com) is Assistant
Registrar, Indian Institute of Technology Delhi. Neetu Jain
(Email:drneetujain76@gmail.com) is Associate Professor, Indian Institute
of Public Administration. New Delhi
Appendix I (Multidimensional Ethics Scale Questionnaire)
"The action is Just," (J)
"The action is Fair", (J)
"The act is Generally acceptable in India" (R)
"The act is Acceptable to my family" (R)
"The act is acceptable to me in my Individual capacity" (R)
"The act is in accordance with a CEOs role". (R)
"The act violates and unwritten contract" (C)
"The act violates and unspoken contract" (C)
"The CEO is Obliged to act this way" (C)
"The CEO Acted in a morally right manner". (C)
"The act leads to efficiency" (U)
"The act is acceptable based on its consequences" (U)
"The act leads to maximal benefit for society" (U)
"The act Produces greatest utility," (U)
"The act is Selfish." (E)
"T he act is in the best interest of the company" (E)
Items of the Questionnaire used in the study. (Letters in brackets
indicate the Ethical philosophy represented by the Item. J=Justice,
R=Relativism, C=Contractuaiism, U =Universalism, E=Egoism.
Appendix-II (Three Ethical Dilemma Scenarios)
SCENARIO-I (Bribing Sales Tax/Excise Officer Dilemma)
It is closing time of the financial year. Company X has to get
clearances from Excise and Sales Tax offices. The rules governing the
Sales Tax and Excise are numerous and complicated. Excise and Sales tax
officers have the power to refuse clearances on slightest deviation from
rules by the company. This power, however, is used by the officers to
refuse clearances to companies on trivial and flimsy grounds even if the
company has followed all the rules and regulations. These officers tend
not so much to ensure compliance on the part of companies as is to
create a situation where the companies facing the deadline of the
clearance procedure find themselves hard pressed and anxious to obtain
clearances. Running a business without clearances even for a single day
is sure to invite penalties. A company may, however, circumvent all
these rules, regulations and obtain the clearances in a single day. by
paying a fixed amount of money to these officers. This method of
settling the books at the year end is well established in the region and
is considered completely reliable. Government officers are even prepared
to overlook slight deviations and omissions on the part of companies if
this payment is made by the companies. Needless to say that the said
payment to Excise and Sales tax officials is completely illegal and
punishable under law. Such payment is clearly defined as a bribe in law.
However, given the fact that this payment saves the company a lot of
cost and time/manpower, apart from developing a good relationship with
local tax officials, most CEOs opt for this illegal payment. It is once
again clearance time of the year and the CEO of company "X"
has to decide whether to bribe the Sales Tax/Excise officers or not.
Action: The CEO of company X decides to make this illegal payment
to the Sales Tax/Excise officials Scenario-II (Road Side Assistance
Program Dilemma)
A Car dealership namely ABC Motors offers "Assistance in
Emergency on the Road" program to the buyers of Brand "H"
of cars from his dealership. The dealership sells the program at a
discounted rate of Rs 4500/- per year if the program is purchased at the
time of purchase of the car. The program is run by the manufacturers of
Brand "H" but is sold to the customers through the car
dealerships at the rate of Rs 8000/- per year. The dealership may,
however, provide a discount on the program. A subscriber to this program
would get immediate and free assistance in case of breakdown etc. on the
road 24x7anywhere in India. The salesmen at the dealership aggressively
sell the program. However, they conveniently omit telling the customers
that going by the past record, only about 1.5% of cars sold require the
services of the program during first 04 years of the purchase of car. In
other words, the salesmen conceal from the buyers the fact that only
about 2 out of 300 buyers of "H" would actually utilize the
benefits of the program and the rest 298 buyers will never have to use
the program during the first 4 years. The CEO/owner of the dealership
knows about this practice. He has a choice to either instruct them to
ensure that they disclose the facts to the customer in future or to turn
a blind eye to what the salesmen are doing.
Action: CEO decides to neglect what salesmen are doing.
Scenario III (Recruitment Dilemma)
A company XYZ is about to recruit a Marketing Manager. Two
candidates were selected for the final interview with the CEO of the
company. Candidate A was certainly better than candidate B in term of
quality of experience, qualifications, demonstrated competencies,
interpersonal relationships and soft skills etc. Candidate B, however,
is working with a company LMN. Company LMN is the competitor of XYZ and
the CEO taking the interview knows that if B is selected, then he will
bring with him a number of clients of company LMN, something which
candidate A will not be able to do. Company XYZ was facing a stagnation
in terms of sales and was aiming at a quick and big push in the sales
figure within next 3 months. CEO has to decide whom to select, A or B.
Action: CEO selects candidate B.
Table 1 Moral Dimensions in the Road Side Assistance Dilemma
Component 1 2
"The action is Just," (J) 0.913
"The action is Fair", (J) 0.876
"The act is Generally acceptable in India" (R) 0.851
"The act is Acceptable to my family" (R) 0.741
"The act is in accordance with a CEOs role". (R) 0.721
"The CEO acted in a morally right manner (C)" 0.713
"The act leads to efficiency" (U) 0.842
"The act is acceptable based on its consequences" (U) 0.746
"The act is Selfish," (E) 0.697
Eigen value 5.32 2.76
Percentage of variance explained 44.36 23.01
KMO = .869
Table 2 Moral Dimensions in the Recruitment Dilemma
Components 1 2 3
"The action is Fair". (J) 0.812
"The act is Generally acceptable in India" (R) 0.891
"The act is Acceptable to my family" (R) 0.843
"The act is acceptable to me in my Individual
capacity" (R)
"The act is in accordance with a CEOs role". 0.815
(R)
"The act violates and unwritten contract" (C) 0.756
"The act violates and unspoken contract" (C) 0.732
"The CEO is Obliged to act this way" (C) 0.801
"The act leads to efficiency" (U) 0.891
"The act is acceptable based on its 0.763
consequences" (U)
"The act is Selfish," (E) 0.741
"The act is in the best interest of the 0.733
company" (E)
Eigenvalue 3.97 2.92 1.15
Percentage of variance explained 30.57 22.49 8.85
KMO = .873
Table 3 Moral Dimensions in the Sales Tax/Excise Officer Bribing
Dilemma
Items 1 2 3
"The action is Just," (J) .903
"The action is Fair", (J) .832
"The act is Generally acceptable in India" (R) 0.842
"The act is Acceptable to my family" (R) 0.756
"The act is acceptable to me in my Individual 0.713
capacity" (R)
"The CEO is Obliged to act this way" (C) 0.695
"The CEO Acted in a morally right manner". (C) .732
"The act leads to efficiency" (U) 0.832
"The act is acceptable based on its 0.811
consequences" (U)
"The act Produces greatest utility," (U) 0.703
"The act is Selfish," (E) .806
"The act is in the best interest of the 0.635
company" (E)
Eigen values 4.32 2.42 1.97
Percentage of Variance explained 33.26 18.63 15.17
KMO = .897 (acceptable)
Table 4 Social Consensus on Scenarios
S. No. Scenario depicting Ethical Dilemmas. Social Consensus
on Moral Intensity
1 Bribing of Sales Tax/Excise Officer 6.16
2 Road Side Assistance program 5.66
3 Recruitment of the Marketing Manager 5.33
