chapter2.pdf

Chapter Two
The Ethical Decision-Making Process
In Chapter 1, we looked at the “good or bad apple” approach as well as the situational
perspective to help explain ethical and unethical decision making. But this is only one part of
the ethical decision-making picture. We also need to understand the ethical decision-making
process as well. Yes, different people act differently under the same circumstances based on
their individual moral character, and yes, the same person will act differently when the
situational context changes in terms of the nature of the issue, the ethical corporate culture,
and the personal situation and pressures that are being faced. But we also need to understand
the decision-making process we go through when we make ethical decisions, and at what stage
of the process each of the individual and situational factors we have already discussed might
influence or moderate decision making. Building on and borrowing from a series of academic
disciplines and theories including moral philosophy, moral psychology, social psychology,
social economics, organizational behavior, criminology, behavioral science, cognitive
neuroscience, and business ethics, a number of descriptive ethical decision-making theoretical
models have fortunately been proposed to help explain the decision-making process of
individuals leading to ethical or unethical behavior or actions.

Unfortunately, however, to date there does not appear to be a fully comprehensive ethical
decision-making model. For example, following a comprehensive review of ethical decision-
making research, some researchers suggest the following: “If the field of descriptive ethics is
to move forward to strengthen our understanding of the ethical decision-making process, it is
imperative that future studies focus more attention on theory development.”1 Similarly,
according to others there remains a deficiency in ethical decision-making theory: “Unlike in the
past, researchers no longer need to justify their rationale for studying ethics; instead, their
attention needs to focus on developing a more comprehensive theoretical platform upon which
empirical work in behavioral ethics can continue.”2 In other words, the current disagreement
among scholars over which theoretical ethical decision-making model (if any) is the most
appropriate, especially when engaging in empirical research, needs to be addressed. In fact,
some continue to refer to the ethical decision-making process as a “black box.”3

After looking at the various approaches and ethical decision-making models, my own version
of a descriptive ethical decision-making model is outlined in this chapter that attempts to
consolidate the various models that have already been proposed while incorporating other
important aspects of the ethical decision-making process that have at times been neglected.4
The goal is to not only build upon previous ethical decision-making models, but also to
address the key divergence between what has been referred to as the rationalist (reason) and
non-rationalist (intuition and emotion) approaches to ethical decision making. For those who
are interested in reviewing the dominant ethical decision-making descriptive models that have
been suggested, please refer to Appendix B, which summarizes the key aspects of each of the

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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models. Since the proposed framework attempts to integrate much of the ethical decision-
making literature, the reformulated ethical decision-making model is called Integrated Ethical
Decision Making (or Integrated-EDM). The proposed model, which is shown in its entirety in
Figure 2.1, will now be described.

Figure 2.1 An integrated ethical decision-making model. Primary Sources of the Integrated-
EDM (I-EDM) Model: Rest (1984) (Four-Component model); Jones (1991) (Issue-
Contingency model); Treviño (1986) (Person-Situation Interactionist model); Tenbrunsel and
Smith-Crowe (2008) (Lack of Moral Awareness); Haidt (2001) (Social Intuitionist model).
Legend: Solid Box – Mental State; Dotted Box – Mental Process; Solid Circle – Active
Conduct; Dotted Circle – Factor/Variable.

Source: Schwartz, M.S. 2016. Reproduced with the permission of Springer.

Try not to be too intimidated by all of the different aspects of Figure 2.1. By the end of the
chapter the model should make more sense. At its most basic level, there are two major
components to the Integrated-EDM model: (i) the ethical decision-making process; and (ii) the
factors (or variables) that influence the ethical decision-making process. The ethical decision-
making process is composed of four basic stages: (i) awareness; (ii) judgment; (iii) intention;
and (iv) action/behavior, and in this respect continues to reflect the basic process framework
proposed by most previous ethical decision-making models.5 One important additional set of
processes takes place when impediments potentially interfere with the moral judgment stage.
Given their importance, the impediments to ethical decision making which include cognitive
biases, psychological tendencies, moral rationalizations, and self-interest will each be
discussed further in Chapter 3.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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The precursor to the ethical decision-making process includes basic environmental norms,
while the subsequent stages of the process include potential learning feedback loops. The
ethical decision-making factors that were discussed in Chapter 1 that influence the process fall
into two basic categories: (i) individual; and (ii) situational.6 The Integrated-EDM model
assumes that ethical behavior is contingent on which particular individual is facing the ethical
dilemma (e.g., different individuals may act differently when faced with the same dilemma
depending on their moral character), and (ii) the situational context within which an
individual faces a dilemma (e.g., the same individual can behave differently depending on the
particular situation one is facing or environment one is situated within).

In to gain a better understanding of how the Integrated-EDM model works, a common
ethical situation faced by many employees and managers in the workplace will be considered.
Imagine that you work for a business firm, and a current supplier has sent you a very
expensive bottle of wine during the holiday season. Your firm does not have a policy
specifically addressing receiving gifts. Assuming this is the situation you are facing, let’s now
see how the Integrated-EDM model would apply in terms of your decision-making process.

Environmental Norms
In terms of the process of the Integrated-EDM model, the initial starting point is the norms that
are prevalent in the external environment that tend to determine whether an ethical issue or
dilemma potentially exists. Environmental norms are defined as follows:

Environmental norms: those prevailing standards or expectations of behavior held by
members of a particular group or community.

Several ethical decision-making models propose that there is an “environmental” context
within which the existence of an ethical issue or dilemma can arise.7 Norms can
simultaneously exist at several different levels, including at the societal/cultural/national level,
at the industry, organizational, or professional level,8 or at the work group level within the
organization. The sources of these norms might include deeply embedded sociological,
political, economic, legal, or religious considerations or views.9

For the Integrated-EDM model, a potential ethical issue or dilemma arises when there is a
situation whereby different norms apply, each of which cannot be followed at the same time.
This basic starting point of the ethical decision-making process has also been referred to as the
eliciting situation.10 For example, there may be norms around gift giving, such as societal
norms (bribery is considered unacceptable), industry-level norms (everyone gives and
receives gifts in business), organizational norms (the firm frowns upon conflicts of interest),
professional norms (which restrict gifts), and work group norms (everyone considers gift
receiving acceptable). If your personal view conflicts with any of these norms, or if any of
these norms conflict with each other, you face a potential ethical issue that you may or may not
be aware of.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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The next four stages of the Integrated-EDM model are based on the “Four-Component” model
of ethical decision making, which include awareness, judgment, intention, and action.11 We
will now work through each of these four stages of ethical decision making in more detail.

Moral Awareness Stage
Assuming that a situation with a potential ethical issue or dilemma exists due to conflicting
norms, the next question is whether we become aware of the existence of the issue or dilemma.
Moral awareness is defined as follows:

Moral awareness: the point in time when an individual realizes that they are faced with
a situation requiring a decision or action that could affect the interests, welfare, or
expectations of oneself or others in a manner that may conflict with one or more moral
standards.12

Moral awareness that a particular situation raises ethical issues can take place simply due to
an individual’s moral character and inherent ability to recognize ethical issues,13 or as a result
of a firm’s ethical corporate culture (i.e., including codes, training, meetings, or other
disseminated ethical policy communications).14 If you become aware that an ethical issue or
dilemma exists, then you have by definition identified at least two different possible courses of
action, and you will then potentially engage in an ethical decision-making process consisting of
the moral judgment and intention stages.15 In the case of receiving an expensive gift, the
awareness stage involves whether or not I realize that there are ethical implications to
receiving a gift from a current supplier, or if I merely see this as an economic (self-interest)
issue.

To understand this phenomenon better, the following will now explain how the lack of moral
awareness process takes place, considered to be an equally important component of the
Integrated-EDM model.

Lack of moral awareness
Most ethical decision-making theoretical models presume that only through moral awareness of
the potential ethical nature of a dilemma can you ultimately engage in ethical behavior.16 In
other words, moral awareness is viewed as being binary – you either recognize the ethical
issue or you fail to do so.17 As a result, most researchers have tended to focus on whether
moral awareness is present or absent as a precondition for activating the other stages of
decision making.18 What appears to be lacking in current ethical decision-making models,
however, is the depiction of our lack of moral awareness, which is defined as follows:

Lack of moral awareness: the state of not realizing that a situation we are experiencing
raises ethical implications.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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There are now several overlapping theories that have been proposed in ethical decision-
making literature to help explain the processes or reasons by which we might lack moral
awareness, also referred to as unintentional “amoral awareness”19 or unintentional “amoral
management.”20 For example, we can lack moral awareness due to ethical fading. Ethical
fading is defined as the process by which the “moral colors” of an ethical decision fade into
“bleached hues” that are void of moral implications.21 In for ethical fading to take place,
we engage in self-deception through the use of euphemistic language (e.g., “aggressive”
accounting practices as opposed to being “deceptive”; “borrowing” company funds with the
possible “intention” to return them rather than stealing) and other techniques to “shield
ourselves” from our own unethical behavior. Another similar concept used to explain our lack
of moral awareness is ethical blindness, which means that the decision maker is temporarily
unable to see the ethical dimension of a decision at stake.22 Ethical blindness includes three
aspects: (i) people deviate from their own values and principles; (ii) this deviation is
temporary in nature; and (iii) the process is unconscious in nature.23 The classic example of
ethical blindness comes from Dennis Gioia, the recall coordinator of the defective and deadly
1970s Ford Pinto vehicle that would potentially explode upon being rear-ended. Gioia asked
himself after failing to take any action regarding the defect: “Why didn’t I see the gravity of the
problem and its ethical overtones?”24

Another theory related to a lack of moral awareness is the use of non-moral decision frames,
which occurs when one focuses on the economic or legal implications of issues rather than on
the ethical considerations.25 The process of framing in a non-moral manner leading to a lack of
moral awareness can result due to insufficient or biased information gathering, or socially
constructing the facts in a particular manner.26 Moral myopia can also take place which is
similarly defined as a distortion of moral vision that prevents issues of a moral nature from
coming into focus.27 These initial theories or processes appear to each relate more directly to
our work environment leading to a lack of moral awareness. In other words, if we are situated
in a work environment which tends to ignore ethical considerations in its decision making or
consistently prioritizes the bottom line over ethical concerns, as well as uses non-moral
language in its operations, then we would likely be less inclined to be morally aware when
facing a dilemma.28

The bottom line emphasis at Enron contributed to each of these processes taking place
including ethical fading, ethical blindness, non-moral decision frames, and moral myopia. This
all led to a lack of moral awareness contributing to misconduct at all levels of the organization.
Former Enron CEO Jeff Skilling would reportedly say: “… all that matters is money … Profits
at all costs ….” The use of a “rank and yank” system whereby a percentage of the weakest
performing Enron employees would automatically be fired each year also appeared to
contribute to the lack of moral awareness among Enron employees.29 Several of my former
students worked for Enron, and although they realized impropriety was taking place, they were
able to ignore the misconduct and did not raise any concerns. What was their number one
reason for doing nothing? Because they were extremely well paid, and certainly didn’t want to
“rock” the boat.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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Moral awareness, however, could be attributable to the particular individual’s inherent nature,
and thus directly related to the individual’s moral character described in Chapter 1. For
example, moral awareness can result from moral attentiveness, which has been defined as the
extent to which a person chronically perceives and considers morality and moral elements in
his or her experiences.30 Similar to the notion of moral attentiveness, others have linked moral
awareness to the concept of mindfulness, which is described as the awareness of an individual
both internally (awareness of their own thoughts) and externally (awareness of what is
happening in their environment).31 It may be that a lack of mindfulness exacerbates our self-
serving thoughts, self-deception, and unconscious biases leading to unethical behavior.32

Applying the process of moral imagination might also potentially lead to moral awareness,
while failing to engage in moral imagination might lead to a lack of moral awareness.33 Moral
imagination takes place when a person reframes their situation outside of its current context in
to discern all of the possible alternatives along with the potential impacts of each course
of action on others.34 When we are only able to see one option rather than create imaginative
options, we may be unaware that we are even facing an ethical dilemma with potentially more
ethical alternatives being available.

For example, when faced with the dilemma whether to accept an expensive bottle of wine from
a current supplier, you might initially think that your only option is to accept the gift, because
otherwise you will offend the supplier, which might seriously affect the relationship. But if you
realize through your sense of moral imagination that there are other options, such as accepting
the gift in a particular way, you might become morally aware of the situation leading to a
different outcome. You might imagine for instance that it could be possible for the gift to
become the property of the company (and maybe hold a raffle for the gift among the
employees), which would diminish the likelihood of a conflict of interest or at least perceived
conflict of interest for you individually. You might also imagine that you can still accept the gift
as long as the arrangement is reciprocal, whereby you agree to pay for the next meal together
with the supplier. The issue would shift from being an economic self-interested decision to a
moral decision, and a moral judgment process could then take place. In terms of the individual
factors, a person with a strong moral character and in particular strong moral competence
would also have a high level of moral attentiveness, moral mindfulness, and moral
imagination, and would therefore likely be aware that receiving a gift from even a current
supplier raises ethical considerations. Figure 2.2 summarizes the theories or processes
discussed previously that help explain and contribute to moral awareness or a lack of moral
awareness.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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Figure 2.2 Processes affecting moral awareness.
Source: Schwartz, M.S. 2016. Reproduced with the permission of Springer.

By not including the phenomenon of lack of moral awareness in ethical decision-making
models, an important stream of ethical decision-making research is being ignored. Even if we
are not aware that an ethical dilemma exists when we are asked to accept an expensive gift of a
bottle of wine, we can still engage in what might be considered “unintentional” ethical or
unethical behavior.35 Due to the importance of understanding why there might be a lack of
moral awareness and the processes leading to it, which would presumably increase the
potential for unethical behavior, the lack of moral awareness path is depicted in the Integrated-
EDM model.

Moral Judgment Stage
The moral judgment stage represents the crux of the Integrated-EDM model, and might be
referred to as the actual ethical decision-making process that takes place. Moral judgment is
defined for the purposes of the model as follows:

Moral judgment: the determination of the most ethically appropriate course of action
among the alternatives.

This is the point in the Integrated-EDM model where several different processes either affect
moral judgment directly, or potentially interact with each other leading to a particular moral
judgment. These mental processes include: (i) intuition; (ii) emotion; and (iii) reasoning.
While some would distinguish between the rationalist (reason) and non-rationalist (intuition;

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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emotion) approaches to ethical decision making, the Integrated-EDM model considers each of
these interrelated mental processes to be of equal relevance.36 Each of these three processes
will now be described.

Intuition
The Integrated-EDM model presumes that for most ethical situations, including those that are
non-complex ethical dilemmas or involve moral temptations with clearly right versus wrong
alternatives, an intuitive mental process takes place at least initially after being evoked by the
situation, and in this respect intuition plays a significant role in the ethical decision-making
process.37 Intuition is defined as follows:

Intuition: an automatic and non-deliberative cognitive process leading to an initial
judgment that may or may not be acted upon.

The intuitive process is reflexive in nature, effortless, immediate, and involves a one-step
mental process. The position of intuitionists is that people have a “built-in moral sense” that
creates pleasurable feelings of approval toward benevolent acts and corresponding feelings of
disapproval toward evil acts.38 The judgment might be considered to be self-evident, with the
truth essentially being engrained or innate in each of us as human beings. The process is
inaccessible and not controllable, and only the results enter our awareness. Our intuitions may
be based on “prototypes” of right and wrong that have been stored over our lifetimes in our
hidden memory based on our experiences.39 When we come to a judgment based on intuition,
we can be morally dumfounded, in that we can’t provide the reasons for our judgments of
approval or disapproval. For example, several situations may provide an automatic gut
“sense” of rightness and wrongness, such as paying a bribe or overcharging a customer.

To understand the nature of intuitions better, consider the following experiment. The
participants were provided with a series of what were called “harmless-offensive” stories in
which an actor does something likely to be considered offensive, yet there are neither harmful
consequences nor intention.40 For example, one story was designed to trigger the emotion of
disgust: “A family’s dog was killed by a car in front of their house. They had heard that dog
meat was delicious, so they cut up the dog’s body and cooked it and ate it for dinner.”41 Other
stories include a woman who cuts up an American flag and uses it to clean up her bathroom, a
son who breaks his promise to his dying mother to visit her grave every week, a brother and
sister who make love to each other,42 and a man who has sexual intercourse with a dead
chicken and then eats it.43 The respondents upon reading the stories know the actions are
wrong, but they are also morally dumbfounded in that they are not able to provide reasons for
their judgments of disapproval.44

Just like these stories, we sometimes in the workplace automatically and without any real
reflection just know what is right or wrong through our intuitions or “gut sense.” When we are
asked to cover up mistakes that cause harm to our clients, we automatically and intuitively

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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sense this is wrong. When we see our firm pollute the natural environment, we know this is
wrong without reflecting on it. When employees are denied breaks or are required to work on
a religious holiday, we intuitively sense this is wrong. As part of the non-rationalist approach
to ethical decision making, some argue that intuition should be considered central or
“sovereign” to the ethical moral judgment stage of ethical decision making:45 for these
theorists, if moral reasoning takes place at all, it happens after the intuitive judgment has
already been reached. In this sense, reasoning is retroactive in nature, in that it is used
primarily to rationalize previous judgments and not to arrive at those judgments.46 One way to
express the intuitive process is by saying: “I don’t know, I can’t explain it; I just know it’s
wrong.”47

In the case of receiving an expensive bottle of wine as a gift from a supplier, our inner intuitive
sense or gut instinct may simply raise an ethical red flag that there is something possibly wrong
in accepting the gift, even if we are not certain exactly why.

Emotions
The second mental process that impacts the moral judgment stage of ethical decision making is
emotion. While for many years the main focus of most ethical decision-making research was
on the moral reasoning process, emotion (along with intuition) continues to receive more
attention in the literature.48 Emotion tends to be defined broadly but for our purposes is defined
as follows:

Emotion: a person’s positive or negative “feeling state” that arises from the appraisal
of an arousing situation.49

Emotions can vary in intensity from mild to intense. The sorts of emotions that have been
suggested to impact ethical decision making include: anger, anxiety, compassion, disgust,
distress, dominance, embarrassment, empathy, fear, grief, guilt, hope, humiliation, love,
meaninglessness, mercy, pride, regret, remorse, responsibility, sadness, shame, and
sympathy.50 Several of these emotions have been considered to be moral emotions, in the
sense that they more directly relate to ethical decision making. Moral emotions can be
categorized into: (i) prosocial emotions which promote morally good behavior such as
empathy, sympathy, concern, or compassion; (ii) self-blame emotions such as guilt, shame, and
embarrassment; or (iii) other-blame emotions, such as contempt, anger, and disgust.51 In many
cases, emotion might be the first response when faced with an ethical situation or dilemma.52

In to understand better how emotion can impact our moral judgments, consider the
following example, known as the “runaway trolley” dilemma:

A runaway trolley is headed for five people who will be killed if it proceeds on the present
course. The only way to save them is to hit a switch that will turn the trolley onto an
alternate set of tracks where it will kill one person instead of five. Should you turn the
trolley to save five people at the expense of one?53

…

chapter2.pdf

Chapter Two
The Ethical Decision-Making Process
In Chapter 1, we looked at the “good or bad apple” approach as well as the situational
perspective to help explain ethical and unethical decision making. But this is only one part of
the ethical decision-making picture. We also need to understand the ethical decision-making
process as well. Yes, different people act differently under the same circumstances based on
their individual moral character, and yes, the same person will act differently when the
situational context changes in terms of the nature of the issue, the ethical corporate culture,
and the personal situation and pressures that are being faced. But we also need to understand
the decision-making process we go through when we make ethical decisions, and at what stage
of the process each of the individual and situational factors we have already discussed might
influence or moderate decision making. Building on and borrowing from a series of academic
disciplines and theories including moral philosophy, moral psychology, social psychology,
social economics, organizational behavior, criminology, behavioral science, cognitive
neuroscience, and business ethics, a number of descriptive ethical decision-making theoretical
models have fortunately been proposed to help explain the decision-making process of
individuals leading to ethical or unethical behavior or actions.

Unfortunately, however, to date there does not appear to be a fully comprehensive ethical
decision-making model. For example, following a comprehensive review of ethical decision-
making research, some researchers suggest the following: “If the field of descriptive ethics is
to move forward to strengthen our understanding of the ethical decision-making process, it is
imperative that future studies focus more attention on theory development.”1 Similarly,
according to others there remains a deficiency in ethical decision-making theory: “Unlike in the
past, researchers no longer need to justify their rationale for studying ethics; instead, their
attention needs to focus on developing a more comprehensive theoretical platform upon which
empirical work in behavioral ethics can continue.”2 In other words, the current disagreement
among scholars over which theoretical ethical decision-making model (if any) is the most
appropriate, especially when engaging in empirical research, needs to be addressed. In fact,
some continue to refer to the ethical decision-making process as a “black box.”3

After looking at the various approaches and ethical decision-making models, my own version
of a descriptive ethical decision-making model is outlined in this chapter that attempts to
consolidate the various models that have already been proposed while incorporating other
important aspects of the ethical decision-making process that have at times been neglected.4
The goal is to not only build upon previous ethical decision-making models, but also to
address the key divergence between what has been referred to as the rationalist (reason) and
non-rationalist (intuition and emotion) approaches to ethical decision making. For those who
are interested in reviewing the dominant ethical decision-making descriptive models that have
been suggested, please refer to Appendix B, which summarizes the key aspects of each of the

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
Created from apus on 2021-06-27 02:50:21.

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models. Since the proposed framework attempts to integrate much of the ethical decision-
making literature, the reformulated ethical decision-making model is called Integrated Ethical
Decision Making (or Integrated-EDM). The proposed model, which is shown in its entirety in
Figure 2.1, will now be described.

Figure 2.1 An integrated ethical decision-making model. Primary Sources of the Integrated-
EDM (I-EDM) Model: Rest (1984) (Four-Component model); Jones (1991) (Issue-
Contingency model); Treviño (1986) (Person-Situation Interactionist model); Tenbrunsel and
Smith-Crowe (2008) (Lack of Moral Awareness); Haidt (2001) (Social Intuitionist model).
Legend: Solid Box – Mental State; Dotted Box – Mental Process; Solid Circle – Active
Conduct; Dotted Circle – Factor/Variable.

Source: Schwartz, M.S. 2016. Reproduced with the permission of Springer.

Try not to be too intimidated by all of the different aspects of Figure 2.1. By the end of the
chapter the model should make more sense. At its most basic level, there are two major
components to the Integrated-EDM model: (i) the ethical decision-making process; and (ii) the
factors (or variables) that influence the ethical decision-making process. The ethical decision-
making process is composed of four basic stages: (i) awareness; (ii) judgment; (iii) intention;
and (iv) action/behavior, and in this respect continues to reflect the basic process framework
proposed by most previous ethical decision-making models.5 One important additional set of
processes takes place when impediments potentially interfere with the moral judgment stage.
Given their importance, the impediments to ethical decision making which include cognitive
biases, psychological tendencies, moral rationalizations, and self-interest will each be
discussed further in Chapter 3.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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The precursor to the ethical decision-making process includes basic environmental norms,
while the subsequent stages of the process include potential learning feedback loops. The
ethical decision-making factors that were discussed in Chapter 1 that influence the process fall
into two basic categories: (i) individual; and (ii) situational.6 The Integrated-EDM model
assumes that ethical behavior is contingent on which particular individual is facing the ethical
dilemma (e.g., different individuals may act differently when faced with the same dilemma
depending on their moral character), and (ii) the situational context within which an
individual faces a dilemma (e.g., the same individual can behave differently depending on the
particular situation one is facing or environment one is situated within).

In to gain a better understanding of how the Integrated-EDM model works, a common
ethical situation faced by many employees and managers in the workplace will be considered.
Imagine that you work for a business firm, and a current supplier has sent you a very
expensive bottle of wine during the holiday season. Your firm does not have a policy
specifically addressing receiving gifts. Assuming this is the situation you are facing, let’s now
see how the Integrated-EDM model would apply in terms of your decision-making process.

Environmental Norms
In terms of the process of the Integrated-EDM model, the initial starting point is the norms that
are prevalent in the external environment that tend to determine whether an ethical issue or
dilemma potentially exists. Environmental norms are defined as follows:

Environmental norms: those prevailing standards or expectations of behavior held by
members of a particular group or community.

Several ethical decision-making models propose that there is an “environmental” context
within which the existence of an ethical issue or dilemma can arise.7 Norms can
simultaneously exist at several different levels, including at the societal/cultural/national level,
at the industry, organizational, or professional level,8 or at the work group level within the
organization. The sources of these norms might include deeply embedded sociological,
political, economic, legal, or religious considerations or views.9

For the Integrated-EDM model, a potential ethical issue or dilemma arises when there is a
situation whereby different norms apply, each of which cannot be followed at the same time.
This basic starting point of the ethical decision-making process has also been referred to as the
eliciting situation.10 For example, there may be norms around gift giving, such as societal
norms (bribery is considered unacceptable), industry-level norms (everyone gives and
receives gifts in business), organizational norms (the firm frowns upon conflicts of interest),
professional norms (which restrict gifts), and work group norms (everyone considers gift
receiving acceptable). If your personal view conflicts with any of these norms, or if any of
these norms conflict with each other, you face a potential ethical issue that you may or may not
be aware of.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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The next four stages of the Integrated-EDM model are based on the “Four-Component” model
of ethical decision making, which include awareness, judgment, intention, and action.11 We
will now work through each of these four stages of ethical decision making in more detail.

Moral Awareness Stage
Assuming that a situation with a potential ethical issue or dilemma exists due to conflicting
norms, the next question is whether we become aware of the existence of the issue or dilemma.
Moral awareness is defined as follows:

Moral awareness: the point in time when an individual realizes that they are faced with
a situation requiring a decision or action that could affect the interests, welfare, or
expectations of oneself or others in a manner that may conflict with one or more moral
standards.12

Moral awareness that a particular situation raises ethical issues can take place simply due to
an individual’s moral character and inherent ability to recognize ethical issues,13 or as a result
of a firm’s ethical corporate culture (i.e., including codes, training, meetings, or other
disseminated ethical policy communications).14 If you become aware that an ethical issue or
dilemma exists, then you have by definition identified at least two different possible courses of
action, and you will then potentially engage in an ethical decision-making process consisting of
the moral judgment and intention stages.15 In the case of receiving an expensive gift, the
awareness stage involves whether or not I realize that there are ethical implications to
receiving a gift from a current supplier, or if I merely see this as an economic (self-interest)
issue.

To understand this phenomenon better, the following will now explain how the lack of moral
awareness process takes place, considered to be an equally important component of the
Integrated-EDM model.

Lack of moral awareness
Most ethical decision-making theoretical models presume that only through moral awareness of
the potential ethical nature of a dilemma can you ultimately engage in ethical behavior.16 In
other words, moral awareness is viewed as being binary – you either recognize the ethical
issue or you fail to do so.17 As a result, most researchers have tended to focus on whether
moral awareness is present or absent as a precondition for activating the other stages of
decision making.18 What appears to be lacking in current ethical decision-making models,
however, is the depiction of our lack of moral awareness, which is defined as follows:

Lack of moral awareness: the state of not realizing that a situation we are experiencing
raises ethical implications.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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There are now several overlapping theories that have been proposed in ethical decision-
making literature to help explain the processes or reasons by which we might lack moral
awareness, also referred to as unintentional “amoral awareness”19 or unintentional “amoral
management.”20 For example, we can lack moral awareness due to ethical fading. Ethical
fading is defined as the process by which the “moral colors” of an ethical decision fade into
“bleached hues” that are void of moral implications.21 In for ethical fading to take place,
we engage in self-deception through the use of euphemistic language (e.g., “aggressive”
accounting practices as opposed to being “deceptive”; “borrowing” company funds with the
possible “intention” to return them rather than stealing) and other techniques to “shield
ourselves” from our own unethical behavior. Another similar concept used to explain our lack
of moral awareness is ethical blindness, which means that the decision maker is temporarily
unable to see the ethical dimension of a decision at stake.22 Ethical blindness includes three
aspects: (i) people deviate from their own values and principles; (ii) this deviation is
temporary in nature; and (iii) the process is unconscious in nature.23 The classic example of
ethical blindness comes from Dennis Gioia, the recall coordinator of the defective and deadly
1970s Ford Pinto vehicle that would potentially explode upon being rear-ended. Gioia asked
himself after failing to take any action regarding the defect: “Why didn’t I see the gravity of the
problem and its ethical overtones?”24

Another theory related to a lack of moral awareness is the use of non-moral decision frames,
which occurs when one focuses on the economic or legal implications of issues rather than on
the ethical considerations.25 The process of framing in a non-moral manner leading to a lack of
moral awareness can result due to insufficient or biased information gathering, or socially
constructing the facts in a particular manner.26 Moral myopia can also take place which is
similarly defined as a distortion of moral vision that prevents issues of a moral nature from
coming into focus.27 These initial theories or processes appear to each relate more directly to
our work environment leading to a lack of moral awareness. In other words, if we are situated
in a work environment which tends to ignore ethical considerations in its decision making or
consistently prioritizes the bottom line over ethical concerns, as well as uses non-moral
language in its operations, then we would likely be less inclined to be morally aware when
facing a dilemma.28

The bottom line emphasis at Enron contributed to each of these processes taking place
including ethical fading, ethical blindness, non-moral decision frames, and moral myopia. This
all led to a lack of moral awareness contributing to misconduct at all levels of the organization.
Former Enron CEO Jeff Skilling would reportedly say: “… all that matters is money … Profits
at all costs ….” The use of a “rank and yank” system whereby a percentage of the weakest
performing Enron employees would automatically be fired each year also appeared to
contribute to the lack of moral awareness among Enron employees.29 Several of my former
students worked for Enron, and although they realized impropriety was taking place, they were
able to ignore the misconduct and did not raise any concerns. What was their number one
reason for doing nothing? Because they were extremely well paid, and certainly didn’t want to
“rock” the boat.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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Moral awareness, however, could be attributable to the particular individual’s inherent nature,
and thus directly related to the individual’s moral character described in Chapter 1. For
example, moral awareness can result from moral attentiveness, which has been defined as the
extent to which a person chronically perceives and considers morality and moral elements in
his or her experiences.30 Similar to the notion of moral attentiveness, others have linked moral
awareness to the concept of mindfulness, which is described as the awareness of an individual
both internally (awareness of their own thoughts) and externally (awareness of what is
happening in their environment).31 It may be that a lack of mindfulness exacerbates our self-
serving thoughts, self-deception, and unconscious biases leading to unethical behavior.32

Applying the process of moral imagination might also potentially lead to moral awareness,
while failing to engage in moral imagination might lead to a lack of moral awareness.33 Moral
imagination takes place when a person reframes their situation outside of its current context in
to discern all of the possible alternatives along with the potential impacts of each course
of action on others.34 When we are only able to see one option rather than create imaginative
options, we may be unaware that we are even facing an ethical dilemma with potentially more
ethical alternatives being available.

For example, when faced with the dilemma whether to accept an expensive bottle of wine from
a current supplier, you might initially think that your only option is to accept the gift, because
otherwise you will offend the supplier, which might seriously affect the relationship. But if you
realize through your sense of moral imagination that there are other options, such as accepting
the gift in a particular way, you might become morally aware of the situation leading to a
different outcome. You might imagine for instance that it could be possible for the gift to
become the property of the company (and maybe hold a raffle for the gift among the
employees), which would diminish the likelihood of a conflict of interest or at least perceived
conflict of interest for you individually. You might also imagine that you can still accept the gift
as long as the arrangement is reciprocal, whereby you agree to pay for the next meal together
with the supplier. The issue would shift from being an economic self-interested decision to a
moral decision, and a moral judgment process could then take place. In terms of the individual
factors, a person with a strong moral character and in particular strong moral competence
would also have a high level of moral attentiveness, moral mindfulness, and moral
imagination, and would therefore likely be aware that receiving a gift from even a current
supplier raises ethical considerations. Figure 2.2 summarizes the theories or processes
discussed previously that help explain and contribute to moral awareness or a lack of moral
awareness.

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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Figure 2.2 Processes affecting moral awareness.
Source: Schwartz, M.S. 2016. Reproduced with the permission of Springer.

By not including the phenomenon of lack of moral awareness in ethical decision-making
models, an important stream of ethical decision-making research is being ignored. Even if we
are not aware that an ethical dilemma exists when we are asked to accept an expensive gift of a
bottle of wine, we can still engage in what might be considered “unintentional” ethical or
unethical behavior.35 Due to the importance of understanding why there might be a lack of
moral awareness and the processes leading to it, which would presumably increase the
potential for unethical behavior, the lack of moral awareness path is depicted in the Integrated-
EDM model.

Moral Judgment Stage
The moral judgment stage represents the crux of the Integrated-EDM model, and might be
referred to as the actual ethical decision-making process that takes place. Moral judgment is
defined for the purposes of the model as follows:

Moral judgment: the determination of the most ethically appropriate course of action
among the alternatives.

This is the point in the Integrated-EDM model where several different processes either affect
moral judgment directly, or potentially interact with each other leading to a particular moral
judgment. These mental processes include: (i) intuition; (ii) emotion; and (iii) reasoning.
While some would distinguish between the rationalist (reason) and non-rationalist (intuition;

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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emotion) approaches to ethical decision making, the Integrated-EDM model considers each of
these interrelated mental processes to be of equal relevance.36 Each of these three processes
will now be described.

Intuition
The Integrated-EDM model presumes that for most ethical situations, including those that are
non-complex ethical dilemmas or involve moral temptations with clearly right versus wrong
alternatives, an intuitive mental process takes place at least initially after being evoked by the
situation, and in this respect intuition plays a significant role in the ethical decision-making
process.37 Intuition is defined as follows:

Intuition: an automatic and non-deliberative cognitive process leading to an initial
judgment that may or may not be acted upon.

The intuitive process is reflexive in nature, effortless, immediate, and involves a one-step
mental process. The position of intuitionists is that people have a “built-in moral sense” that
creates pleasurable feelings of approval toward benevolent acts and corresponding feelings of
disapproval toward evil acts.38 The judgment might be considered to be self-evident, with the
truth essentially being engrained or innate in each of us as human beings. The process is
inaccessible and not controllable, and only the results enter our awareness. Our intuitions may
be based on “prototypes” of right and wrong that have been stored over our lifetimes in our
hidden memory based on our experiences.39 When we come to a judgment based on intuition,
we can be morally dumfounded, in that we can’t provide the reasons for our judgments of
approval or disapproval. For example, several situations may provide an automatic gut
“sense” of rightness and wrongness, such as paying a bribe or overcharging a customer.

To understand the nature of intuitions better, consider the following experiment. The
participants were provided with a series of what were called “harmless-offensive” stories in
which an actor does something likely to be considered offensive, yet there are neither harmful
consequences nor intention.40 For example, one story was designed to trigger the emotion of
disgust: “A family’s dog was killed by a car in front of their house. They had heard that dog
meat was delicious, so they cut up the dog’s body and cooked it and ate it for dinner.”41 Other
stories include a woman who cuts up an American flag and uses it to clean up her bathroom, a
son who breaks his promise to his dying mother to visit her grave every week, a brother and
sister who make love to each other,42 and a man who has sexual intercourse with a dead
chicken and then eats it.43 The respondents upon reading the stories know the actions are
wrong, but they are also morally dumbfounded in that they are not able to provide reasons for
their judgments of disapproval.44

Just like these stories, we sometimes in the workplace automatically and without any real
reflection just know what is right or wrong through our intuitions or “gut sense.” When we are
asked to cover up mistakes that cause harm to our clients, we automatically and intuitively

Schwartz, M. S. (2017). Business ethics : An ethical decision-making approach. ProQuest Ebook Central http://ebookcentral.proquest.com
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sense this is wrong. When we see our firm pollute the natural environment, we know this is
wrong without reflecting on it. When employees are denied breaks or are required to work on
a religious holiday, we intuitively sense this is wrong. As part of the non-rationalist approach
to ethical decision making, some argue that intuition should be considered central or
“sovereign” to the ethical moral judgment stage of ethical decision making:45 for these
theorists, if moral reasoning takes place at all, it happens after the intuitive judgment has
already been reached. In this sense, reasoning is retroactive in nature, in that it is used
primarily to rationalize previous judgments and not to arrive at those judgments.46 One way to
express the intuitive process is by saying: “I don’t know, I can’t explain it; I just know it’s
wrong.”47

In the case of receiving an expensive bottle of wine as a gift from a supplier, our inner intuitive
sense or gut instinct may simply raise an ethical red flag that there is something possibly wrong
in accepting the gift, even if we are not certain exactly why.

Emotions
The second mental process that impacts the moral judgment stage of ethical decision making is
emotion. While for many years the main focus of most ethical decision-making research was
on the moral reasoning process, emotion (along with intuition) continues to receive more
attention in the literature.48 Emotion tends to be defined broadly but for our purposes is defined
as follows:

Emotion: a person’s positive or negative “feeling state” that arises from the appraisal
of an arousing situation.49

Emotions can vary in intensity from mild to intense. The sorts of emotions that have been
suggested to impact ethical decision making include: anger, anxiety, compassion, disgust,
distress, dominance, embarrassment, empathy, fear, grief, guilt, hope, humiliation, love,
meaninglessness, mercy, pride, regret, remorse, responsibility, sadness, shame, and
sympathy.50 Several of these emotions have been considered to be moral emotions, in the
sense that they more directly relate to ethical decision making. Moral emotions can be
categorized into: (i) prosocial emotions which promote morally good behavior such as
empathy, sympathy, concern, or compassion; (ii) self-blame emotions such as guilt, shame, and
embarrassment; or (iii) other-blame emotions, such as contempt, anger, and disgust.51 In many
cases, emotion might be the first response when faced with an ethical situation or dilemma.52

In to understand better how emotion can impact our moral judgments, consider the
following example, known as the “runaway trolley” dilemma:

A runaway trolley is headed for five people who will be killed if it proceeds on the present
course. The only way to save them is to hit a switch that will turn the trolley onto an
alternate set of tracks where it will kill one person instead of five. Should you turn the
trolley to save five people at the expense of one?53

…