The evidence indicates that, ethical or unethical actions are largely a function of both the individual's characteristics and the environment in which he or she works. The given exhibit presents a model for explaining ethical or unethical behavior:

Stages of moral development
Organizational environment
Locus of control

1. Stages of moral development
Stages of moral development assess a person's capacity to judge what is morally right. The higher one's moral development, the less dependent he or she is on outside influences and the more he or she will be predisposed to behave ethically.

2. Organizational environment
The organizational environment refers to an employee's perception of organizational expectations. Written codes of ethics, high moral behavior by senior management, rewards for ethical behavior, punishment for unethical behavior are some examples of organizational environment. Environmental Factors that influence ethical decision making behavior are-

Supra culture
Economic System

Macro culture
Country (of Origin/Residence)

Meso culture

Micro culture
Relevant Others (Peers/Management and Family)
Organizational Culture Formal and Informal Rules
Ethics Codes and Code Enforcement
3. Locus of Control
It is a personality characteristics that taps the extent to which people believe they are responsible for the events in their lives (what happens to them in life is due to their luck or chance).


The Utilitarian Approach
Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affected-customers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the harm done.

A universalism approach to ethical decision making is similar to the Golden Rule. This approach has two steps. First, you determine whether a particular action should apply to all people under all circumstances. Next, you determine whether you would be willing to have someone else apply the rule to you. Under this approach, for example, you would ask yourself whether paying extremely low wages in response to competition would be right for you and everyone else. If so, you then would ask yourself whether someone would be justified in paying you those low wages if you, as a worker, had no alternative except starvation.

The Rights Approach
Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not merely as means to other ends. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others' rights.

The Fairness or Justice Approach
Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair.

The Common Good Approach
The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerable-are requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas.

The Virtue Approach
A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?"