Theoretical Foundations for

Ethics in Management

Session Plan
Personal Ethics
Kohlbergs Stages of Moral Development
Religion and Morality

Management and Ethics

Normative Theories

Egoism
Utilitarianism
Kants Ethics
Stockholder Theory
Stakeholder Theory
Social Contract Theory
Indian Ethical traditions

Morality
Concept of right and wrong

How are Moral Standards Formed?:

Kohlbergs Stages of Moral Development
PreConventional

Conventional

PostConventional

The Punishment and obedience Orientation

The instrumental Relativist Orientation
Interpersonal Concordance or Good Boy Nice Girl
Orientation
The Law and Order Orientation
The Social Contract legalistic Orientation
The Universal Ethical Principle Orientation

 Should Heinz have

broken into the
laboratory to steal the
drug for his wife? Why
or why not?

Conventional Level
Interpersonal Concordance or Good
Boy Nice Girl Orientation

The Law and Order Orientation

Post-Conventional Level
The Social Contract legalistic
Orientation

The Universal Ethical Principle

Orientation

Egoism
The view that
associates
morality with selfinterest is
referred to as
Egoism
Instrumental
Relativist
Orientation?

Utilitarianism

Kantianism: Ethics of Duty

UniversalEthical
Principle
Orientation?

Stockholder Theory
Business
relationship
between the
owners
(Shareholders) and
their agents who
are the managers
running the day to
day business of the
company

Stakeholder Theory
Primary Stakeholders

Shareholders (Owners)
Employees
Customers
Business Partners
Communities
Future Generations
The Natural Environment

Secondary Stakeholders
Local, State, and Federal
Government
Regulatory Bodies
Civic Institutions and
Groups
Special Interest Groups
Trade and Industry Groups
Media
Competitors

Stakeholder Theory: Managers Role

Principle of corporate legitimacy: the corporation
should be managed for the benefit of its
stakeholders. The rights of these groups must be
ensured and further, they must participate, in some
sense, in decisions that substantially affect their
welfare
Stakeholder Fiduciary Principle: Management bears a
fiduciary relationship to stockholders and to the
corporation as an abstract entity. Safeguarding the
long term stakes of each group.
Applicability issues

Social Contract Theory

All businesses are ethically duty-bound to
increase the welfare of the society by catering
to the needs of the consumers and employees
without in any way endangering the principles
of natural justice
An implicit agreement between the society and
any created entity such as a business unit, in
which the society recognizes the existence of a
condition that it will serve the interest of the
society in certain specified ways.

Catholic Social Thought

It is not wrong to live better, what is wrong is a
style of life which is presumed to be better
when it is directed toward having rather
than being and which wants to have more,
not in order to be more, but in order to spend
life in enjoyment as an end in itself.

Indian Ethical Traditions

Sarvodaya
Antyodaya
Nishkama Karma
Business and Islam explicit edict against the
exploitation of people in need through lending
them money at interest and doing business
through false advertising
Shariah bans taking of interest