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2000 The role of in ethical business decision-making

Agarwal, James; Malloy, David C.

Wiley Online Library

Agarwal, J. and Cruise Malloy, D. (2000), The role of existentialism in ethical business decision-making. Business : A European Review, 9: 143–154. doi: 10.1111/1467-8608.00185 http://hdl.handle.net/1880/50307 journal article

Downloaded from PRISM: https://prism.ucalgary.ca : A European Review The role of existentialism in ethical business decision-making James Agarwal and David Cruise Malloy

Introduction tioner and scholar both implicitly and in recent years explicitly (Brady 1985, Hunt and Vitell 1986, Models of ethical decision making in business Beauchamp and Bowie 1997, Kavathatzopoulos have generally been developed from means- or 1993, Hosmer 1996, Weiss 1998). process-oriented and ends-oriented theoretical In this paper we argue for the inclusion of foundations (Dunfee, Smith and Ross 1999, Hunt another theoretical approach to ethical decision- and Vitell 1986, Ferrell, Gresham and Fraedrich making. We do not argue for the exclusion of the 1989, Malhotra and Miller 1998, Murphy 1999). traditional deontological and teleological ap- These two approaches have provided the decision- proaches but for the inclusion and functional maker with ethical perspectives that focus upon awareness of existentialism (i.e. for a three-faced the established of ethical conduct and Janus head). The mythical Janus head is the upon the consequences of one's actions. Though Roman god of the city gates with two faces (Brady there exist many variations and attempts at 1985). One face looks inward to protect the hybridisation within these two approaches ± for citizens within the city (or corporate) wall, the example Ross's prima facie (Ross 1975), face looks outward to protect the citizens essentially they lead toward decisions that are from external harm. To continue with this -bound (deontological) and/or results-bound metaphor, the third or existential face would (teleological). encourage the decision-maker to look inward The emphasis upon these two approaches in individually, introspectively, and meditatively the business context is not surprising as they (Heidegger 1966) toward authenticity, freedom, methodologically suit the business environment. and . Thus, while deontology and For example, the deontological approach is rule- have the power to influence behaviour based: adherence to the individual firm's code of either through group codes of conduct or by ethics or the profession's code of ethics means that adherence to cost-benefit ratios, existentialism the person is acting deontologically. Similarly, if promotes the organisational member's sense of decisions are grounded in a teleological perspec- individuality, freedom and responsibility. By tive, then the decision-maker is making a rational encouraging each of these three `faces', it may be calculation that factors in the greatest for the possible for member behaviour to reflect organi- firm (local ) and/or for the common- sational principles and organisational goals, as weal (cosmopolitan utilitarianism) (Victor and well as their own genuine sense of ethical conduct. Cullen 1987, 1988). This Janus-headed approach In the proposed model of ethical decision-making, has more or less defined the `theoretical universe' we demonstrate how this comprehensive approach of business and for the practi- can be operationalised.

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The purpose of this paper is to present a the greatest good. Is it profiting? Is it organis- comprehensive approach to business ethics which ational survival? Is it organisational efficiency? Is enable the decision-maker to appreciate the it clan-like benevolence among employees? Is it inter-relatedness and multidimensionality of ethi- ? cal behaviour in organisations. We present an Despite the difficulty of establishing appropriate integrated model which enables the decision- goals, this theory does provide an objective maker to incorporate existentialism in the ethical method for choosing among ends. Initially termed decision-making process and to identify the role of the `hedonistic calculus', its contemporary termin- moderating factors as the environment through ology is the rational decision making process. This which s/he gains . The decision-making process involves the identification of the problem, process and the moderating factors are illustrated the generation of alternatives, the quantitative by examining the ethical implications of a business of alternatives, the selection and marketing practice, namely, Negative Option implementation of the `best' alternative, and the Marketing (NOM). evaluation of the performance of this decision. While this process has proved to be an efficient method of resolving many organisational dilem- Traditional Theoretical Approaches to mas, it is often found to be lacking when ethical Ethical Decision-Making dilemmas are considered. The impact of utilitarian (i) Teleology decisions upon the individual or minority presents a further problem. If the greatest good for the The teleological approach encompasses a number greatest number results in the obfuscation or of ethical all of which converge on a outright denial of individual , then the use of similar theme ± what is ethically good is what utilitarianism as an exclusive theoretical outlook achieves the `best' end. The nature of this `best' may not be acceptable to those whose rights are end differs; for example, hedonists argue that the denied (Racheals 1986). individual's goal ought to be that which involves the least and most (physical and/or (ii) Deontology ). Utilitarians, in contrast, insist that the end to be sought is the greatest pleasure or The deontological approach also subsumes a good and least pain or bad for the greatest number of different perspectives that share a number. (e.g. ) common theme. This theme is the duty to abide suggests that the determination of the best end by principles (Beauchamp and Bowie 1997, depends entirely upon the situation. Raphael 1989, Weiss 1998). For example, the From the perspective of the organisation, the theory argues that members of utilitarian theory is the most frequently advocated. collectively agree upon certain norms of It is in fact the philosophical basis for our con- behaviour (Dunfee et al. 1999, Rousseau 1762/ temporary notion of democracy as well as the 1979). If someone steps outside the acceptable underpinning for microeconomic theory (Hosmer societal standard, he or she is acting unethically 1996). The utilitarian view can be considered from according to the pre-established agreement. A pro- local and cosmopolitan organisational perspec- fessional code of ethics is an example of a social tives (Gouldner 1957, Victor and Cullen 1988). contract. A second example of deontology is divine The local utilitarian view is oriented toward the deontology (Brody 1983). Here divine authority in greatest good for the firm, whereas the cosmopo- the form of religious texts and its accompanying litan view would encompass a broader perspective doctrine (e.g., the Bible) gives rules, command- that extends beyond the firm (i.e., the greatest ments, or principles for us to abide by. We can good for society-at-large). However, the problem know what is ethical by following the rules of God. with utilitarianism at both local and cosmopolitan A third type of deontology is Kantian deontology levels is that it is often difficult to assess and define (Racheals 1986, Raphael 1989). This perspective

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views universal ethical principles and duty as that becomes an inauthentic `agent' for an external which any rational person could determine using cause (the firm's internal/local formal and in- his or her intuitive ability to ethically formal ). (Kant's (1788/1977) ). The deontological perspective can be observed at both local and cosmopolitan levels. Deontology Existentialism at both levels provides the decision-maker with a consistent and cognitively uncomplicated task: Existentialism is an eclectic when a dilemma arises, it can be dealt with by (Kaufmann 1975). Though existential writers referring to the appropriate rule. Unfortunately, differ dramatically, two common conceptual organisational life is not that simple; dilemmas threads exist which tie together their ideas which cannot be easily or immediately resolved by regarding the nature of ethical conduct. The first the local or cosmopolitan rulebook occur on a is the in the freedom of the individual to daily basis. Jaspers, referring to decision-making create his or her `'. Sartre stated that the situations, states that `in vain a way out is sought individual's ` precedes essence' (Sartre either in obedience to rules and regulations or 1957: 15). This implies that we first exist as in thoughtlessness' (Jaspers 1975: 167). In such and we then become whom we decide to be cases the decision-maker is left abandoned by through our or choice. Existentialists deontology. By default, the decision-maker may argue that as a function of our capacity to exercise then return to the traditional teleological perspec- free will we are the sum of our decisions. The tive of the cost-benefit ratio (i.e., the hedonistic bottom line is that the business professional is a calculus). In either case, the attempts to resolve person first, then he or she chooses to assume any dilemmas by objective methods may fail to meet one of the many roles that may constitute his or the demands of the particular situation and the her essence (Werhane 1999). demands of the decision-maker qua sentient being The second component of existentialism is the (Sartre 1957, Kierkegaard 1988, Hodgkinson 1996). notion of responsibility for one's actions. What Kierkegaard argued that the great ethical has been labeled the `terrible freedom,' the `agony systems of deontology or teleology do not help of thinking,' `anguish', or the `torment of choice,' the individual in an existential position (i.e. in any points to the anxiety experienced as a result of situation in which one must choose) because they acknowledging responsibility for personal be- are too objective and lacking in the of haviour. Kierkegaard speaks of the tendency for . He considered the utilitarian doctrine individuals to hide behind the group (or the to be dehumanising, and rejected deontological policy) when making a `decision' in order to positions because they absolved individuals of avoid accountability. For example, he states that responsibility. For example, he stated that `on `a crowd in its very is the untruth, by a man can do anything, take part in reason of the fact that it renders the individual anything and himself remain inhuman and in- completely impenitent and irresponsible, or at determinate. . . everything becomes permissible if least weakens his sense of responsibility by done on principle' (Kierkegaard 1962: 74). True reducing it to a fraction' (Kierkegaard 1975: 95). and authentic decision-making requires that the In the organisation `existentialism' would be individual acknowledge his or her subjectivity as manifested as a culture and climate that fosters participating in choice rather than as agent of an opportunity for individual choice, creativity, and external locus of control (Jasper 1975). accountability, perhaps where individual authentic Teleological and deontological perspectives goals and values were congruent with organis- allow the individual to rely upon either the ational goals and values (Liedtka 1989). externally derived (or organisationally pro- Existentialism, it may be argued, is essentially a grammed) rule or the results of a rational personal decision-making philosophy because it is calculation. In both these cases the individual based upon individual choice and the anxiety

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surrounding the recognition of the freedom and initiated, the existentialist is prepared to accept accountability of that choice. Guignon suggests responsibility for all teleological and deontological that outcomes. This is authentic choice. `The existential notion of authenticity embodies In the ethical decision-making process which we certain traits ± such as , now propose, teleology, deontology and existenti- , clear-sightedness, steadfastness, responsi- alism have fundamental and explicit roles. The bility, and communal ± which can following section provides a framework that will contribute to the formation of a character capable enable the individual decision-maker to make of making meaningful choices in concrete situations. ethical decisions by understanding the significant The authentic agent might be better equipped to role that each of the three ethical approaches play evaluate different ethical standpoints and their and by considering a comprehensive of applicability to specific contexts of than the moderating variables (see Figure 1). slavish rule-follower or the cool cost/benefit calcu- lator'. (Guignon 1986: 88) Kierkegaard (1988) provides one of the most Ethical Decision-Making Process poignant examples of choice and the accompany- ing angst in his description of the Biblical story of This decision-making process is based upon the Abraham and Isaac. In this story, God asks traditional rational decision making process Abraham to sacrifice his only son as an indication (Drucker 1967, Nutt 1984) and the process of his faith. Kierkegaard describes the mental developed by Rest (1984). The rational decision- anguish of Abraham as he travels to the appointed making process generally incorporates five stages location of his son's sacrifice and prepares for the which include problem definition, creating alter- child's death. From the perspective of , natives, selection of the best decision based upon a Abraham certainly feels that his son's death will cost-benefit ratio, the implementation, and evalu- cause great pain; from the perspective of utili- ation of the decision. From the perspective of tarianism and social contract deontology, the moral decision-making, Rest (1984) contends the community will certainly agree that this act would process includes four stages ± recognition of the be nothing short of brutal murder; from the dilemma, judgement, intention, and behaviour. perspective of Kantian deontology, such an act While the rational decision-making process is could not coincide with the categorical imperative. detailed, it does not provide the decision-maker Therefore, Abraham finds himself in the `existen- with an overt prescription to consider ethical tial position' having to choose and act with the aspects of the resolution. In contrast, Rest's assistance or in spite of the guidance from external process does encourage the decision-maker to sources. He chooses to sacrifice his son (and consider the resolution from an ethical/moral accept the potential wrath of the community and perspective. Its weakness, however, is that it lacks his own emotional ), God intervenes, and comprehensiveness. In the decision-making process Abraham's faith in God is secure and his son lives. which follows here, these two processes have been Abraham's commitment is transrational (Hodg- synthesised. In addition, teleological, deontologi- kinson 1996) ± it represents an existential `leap of cal and existential theory has been incorporated faith'. into the stages to allow for more complex and The point to be taken from this metaphor is that ethically oriented choice. the individual can gather a great deal of informa- In the first four stages, teleological and deonto- tion regarding the resolution of a particular logical perspectives guide the individual's infor- dilemma, but there remains a chasm between mation gathering and the selection of an ideal conceptual resolution and behaviour. Negotiating alternative. The questions raised in these initial this chasm is the source of the existentialist `fear stages will cover various aspects. Is this an issue of and trembling'. The `existentialist position' is a means or ends? What alternatives would result in hesitation and not a paralysis. Once behaviour is the best end for the firm? What is the greatest

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good for the clients and public? What policy is at today. Type I is where there is an ongoing stake? Does a new policy or procedure have to be relationship between the buyer and seller based developed in order to resolve this particular on the buyer's affirmative agreement to partici- dilemma? The intent at this stage is to arrive at pate in a negative option plan (as in `book of the the alternative that best satisfies teleological and month' clubs). Type II combines an ongoing deontological criteria, a decision that satisfies ends positive choice exchange relationship (as in credit and means ± a `good' and `right' decision (Hitt card billing) with occasional negative option 1990). offers: the buyer agrees with the adhesion contract In order to demonstrate the practical utility of that empowers the seller to make secondary nega- this model and to illustrate the role of existential- tive exchange offers to sell additional products or ism in the decision-making process, Negative services from time to time. Type III is similar to Option Marketing (NOM) was chosen as a Type II except that there is no adhesion contract running case study. NOM is the situation where and therefore no customer agreement. It is the a promoter tenders to the customer some product Type III NOM plan that has generated most or service and declares that acquiescence or silence controversies and complaints since it is difficult to on the part of the customer constitutes acceptance. determine intent given the exchange partner's There are at least three different types being used silence (Spriggs and Nevin 1996). Today, Type III

Figure 1. An Integrated Framework of Ethical Decision-Making: Process and Moderators

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NOM practices can be found in industries such as (ii) Generation of Alternatives (Stage 2) cable television, financial services, and entertain- At this stage, several alternatives may be gener- ment. ated which may be examined from the two theories. Teleological alternatives would consider (i) Recognition of the Problem (Stage1) how the best end result could be achieved. How In the context of NOM, the problems could be does the marketer maximise organisational and defined in the following questions. Does NOM transactional efficiencies and thus customer reten- amount to infringement of consumers' rights tion? How is it possible to avoid lawsuits and the namely, the right to safety, the right to be possibility of a total (or even restricted) ban on informed, the right to choose, and the right to NOM? For example, one way might be for be heard? Similarly, does the buyer's silence marketers to focus on high volume buyers with a amount to product acceptance and purchase history of `silent' acceptance. (According to intention? The problem may be viewed from each contract , a buyer's silence or inaction is valid of the two philosophical perspectives. acceptance if previous dealings indicate that From the teleological perspective, the problem silence or inaction is acceptable). Another way may involve the consequence of the action (NOM) to retain customers may be to charge an exit fee from a cost-benefit point of view. A utilitarian and thereby raise the exit barrier. The deonto- would analyse the maximum good caused to logical alternative might involve development or maximum people such as production and transac- modification of policies to address the problem, tion related efficiencies to the seller. For example, from total or partial banning of NOM at one one transaction-related efficiency for the seller extreme to self-regulation (a market driven system accrues if the acceptance rate of the product is that punishes deceptive practices and rewards pro- greater than 50 percent. In other words, if more efficiency uses of NOM) on the other. than half the customers want to purchase a seller's product, NOM minimises the number of explicit (iii) Evaluation of Alternatives (Stage 3) responses the seller must process since the number Once alternatives have been generated, the marketer of (silent) acceptances is greater than the number must evaluate each option to determine which of (affirmative) rejections. Similarly the buyer alternative best meets the teleological and deonto- enjoys transaction-related efficiencies such as pay- logical criteria. For example, consider the option ing a lower price due to lower search cost since the of charging an exit fee to retain customers into the seller performs the search process for the buyer. NOM plan. The teleologist would argue that such The downside (cost) may be the legal and ethical an option protects the sellers especially when the issues and implications of this system. seller's cost savings are dependent on predictable From the deontological perspective, the prob- volume and the buyer's early termination raises lem may involve the policies and procedures of the the seller's cost. The deontologist would argue that firm, industry standards, and state and federal exit barriers have the potential for anti-competitive regulations. For example, according to the con- behaviour that may lead to monopolistic or oligo- tract law, exchange is based on a contract between polistic types of competition and would therefore the buyer and the seller in which an offer by the be a violation of federal trade regulations. More- seller is accepted by a buyer's affirmative, explicit over, this solution also has the potential to raise response to that offer. In the absence of explicit the capital cost for the new seller who would want acceptance, the common rule is that no contract to absorb the buyer's exit penalty. exists if the buyer remains silent except in a limited set of circumstances. Similarly, the right to be (iv) IdealDecision(Stage4) informed and the right to choose are two important and relevant consumer rights in most Presumably, the alternative that most closely NOM complaints. satisfies the two ethical criteria would be selected

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as the ideal decision. Whether this ideal decision is one hand, and what is authentic for the individual acted upon or remains conceptual is determined on the other (Hirschman 1970). First, the indi- by the subsequent stage in the process. Consider vidual can choose to accept the `ideal' decision the decision that the buyer must be made aware of that is good and right despite its lack of the NOM plan which is bundled with existing authenticity. However, this would be, according positive exchange relationships. According to to Sartre, acting in `.' For the existentially teleological criteria, education and awareness help oriented individual (and for Kohlberg's post- foster positive exchange relationships that are conventional individual) this would result in a beneficial to both seller and buyer. Whether or not great deal of dissatisfaction, , and anguish the buyer holds on to the NOM plan is matter of (Kohlberg 1984). Second, an individual could voice buyer's choice. According to deontological criteria, disapproval and make an authentic decision that education and awareness is a self-regulation does not accord with the deontologically and teleo- mechanism that fits well with the broad market- logically `ideal' decision. The difficulty here is that based system as well as with other regulatory organisational ends and means may be compro- systems. The deontologist would have to address mised. The individual would, however, be making whether or not buyer indifference amounts to lack a statement that they should in fact be compro- of responsibility. Therefore, on the basis of the two mised (i.e., bad ends are being sought and/or the criteria, buyer education and awareness qualifies wrong means are being used). Third, the individual as the best decision which later needs to be refined may choose to exit the decision-making situation to address issues related to awareness. altogether, and thus choose not to choose. In the NOM situation, the existentialist may (v) The Existential Position (Stage 5) argue that both the seller and the buyer need to exercise free will and responsibility. Free will is At this point in the decision-making process, the engendered when the buyer faces a competitive decision-maker is faced with the `existential market with multiple sellers. The buyer is free to position'. The `existential position' (Jasper 1975) exit the relationship with the current seller and is presented as a stage at which the data gathered enter another relationship with a different seller if and the ideal choice must be mediated through an not satisfied with the negative option concept. existential `filter.' The choice is to act upon the However, in a monopoly situation, buyers are data gathered (the facts gleaned from deontologi- often left with no choice and therefore a lack of cal and/or teleological ) independent of free will. Similarly, while the seller is responsible free will or to incorporate further the path of free for anti-competitive actions and restriction of will. Hodgkinson states the decision making `is the consumer choice, the buyer is also responsible most ordinary, familiar, and of activities. for being aware of the negative option selling It is also the most philosophical because it raises methods so that the positive exchange relationship at once the imponderable issue of free will' (on which the negative option exchange is (Hodgkinson 1996: 50). predicated) does not terminate as a result. In We argue that the existential position provides a other words, high volume buyers who have deeper understanding of this pre-action stage than historically availed of negative option exchanges does the traditional use of intent (Rest 1984, Hunt (and thus enjoyed transaction efficiencies) have a and Vittell 1986). It is here that the individual responsibility and to continue the determines what, in fact, he or she will do as an exchange relationship with the seller so as to individual responsible for all of humanity as maintain the seller's projected future stream of opposed to an exclusive agent of an external revenues. authority (e.g., an employee of Company X). The The existentialist may consider the possibility of individual has at least three options if there exists providing to the buyer to make the a conflict between what is good for the organis- best responsible decision. Based on the existen- ation and what is right for the organisation on the tialist criteria, education and awareness would

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ensure free will and responsibility of the buyer and The decision may not be teleologically good as the seller. This may mean clear and conspicuous `the greatest good for the greatest number' disclosure of the material terms of the NOM plan. principle may not be served if the number of While awareness may be a critical issue in deter- buyer complaints grow. Finally the decision does mining responsibility, other factors such as buyer not meet the existential criteria. From the indifference or high cost of rejection of the perspective of the buyers, they are not educated negative option may perpetuate the problem. and made aware of the available information with The decision-maker, now knowing what is the which to make informed and responsible decisions. ideal decision, may or may not choose to From the perspective of the decision-maker, only implement it based upon his/her intention. As he or she will know whether or not the behaviour with each stage of the ethical decision-making was authentic. process, a variety of factors may influence the Regardless of the outcome, for this person the intent (Trevino 1986). For example, the marketer experience of decision-making and the subsequent may feel pressure from internal sources (, existential, deontological, and teleological analysis culture, and climate) not to react to `alarmists' of behaviour contributes to the sum of experience complaining that NOM is unethical and illegal. As that makes up an individual's essence. The a result, although a decision to act proactively to decision will have changed the person. From the promote awareness may be the ideal decision, it existential perspective, it is of utmost importance may not be implemented. that the person is aware of this change, however subtle, because it will contribute to the way in (vi) Overt Behaviour (Stage 6) which future ethical choices are approached. For example, suppose a person has made a decision Stage six is the result of the decision-maker's that meets organisational demands and yet is activity in stages one through four as mediated by inauthentic. If this person is guilt ridden as a the `existential position'. The decision-maker may consequence of his or her own `bad faith', then in continue with existing policy and dismiss any the future there may be a heightened awareness of claims of unfairness and oppression to buyers the significance of authentic choice. until such time as regulatory bodies propose new For the organisation, this process encourages legislation. Until such time as regulations are each decision-maker to consider a wider array of updated to reflect current market practices, the perspectives than the traditional cost-benefit decision to continue a NOM plan may be analysis when making ethical decisions. It encour- characterised as being primarily teleological rather ages decision-makers to exercise the personal free than existential and/or deontological, since this will that is typically submerged in organisational will bring substantial production- and transaction- agent states. Such freedom and responsibility may related efficiencies to both buyer and seller. result in personal growth and enhanced organis- (vii) Evaluation of Behaviour (Stage 7) ational commitment (Barnard 1968, Hodgkinson 1996). Finally, it may lead to a `better' organisation The final stage evaluates the overt action in terms that can move beyond the morally primitive stage of each ethical approach. Was it authentic to a more enlightened existence in which both in- (existential)? Was it right (deontological)? Was it dividual and organisational means and ends can be good (teleological)? A decision that satisfies each congruent and authentic (Malloy and Fennell 1998). criterion represents effectiveness as well as personal While the process itself provides considerable commitment and accountability. However, this direction for the decision-maker, more informa- stage may also demonstrate that a `comprehensive tion is needed in order to make comprehensive decision' was not made. In the context of NOM, ethical decisions. Such information includes the the resulting decision may be described as many variables that influence the decision-maker deontologically right if one accepts the premise to make authentic choices. These variables or that existing policies and procedures are sufficient. `moderators' are explored in the following section.

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Ethical Decision-Making Moderators be equally unaware of the `existential position' and, abiding by the external locus of control, may Moderators may influence ethical decision making dutifully follow orders. in three ways. They may affect the extent to which On the other hand, the post-conventional existen- an ethical issue is recognised (Rest 1984, Jones tialist will take seriously the `existential position' and 1991). They may affect the content and form of though armed with teleological calculations and the individual's ethical orientation (Sinclair 1993). deontological guidance may still experience tremen- Finally, moderators may affect the ethical decision dous angst prior to initiating a truly authentic making process itself (Ferrell et al. 1989). decision. It is this angst and the awareness of the The decision-making process also influences the freedom and responsibility that the decision-maker moderators. Existentialists will argue that each has that will cause the existentialist to question the decision we make adds to what we are as human statistics, question the implicit wisdom of the , therefore each decision will contribute to majority, and question policy and duty (Guignon the first layer of moderators termed `individual 1986). The end result may or may not be the same in nature'. Similarly, other layers will be influenced these examples. But only the person who has paused by individual decisions. For example, decisions at at the edge of the existential position and considered the individual level can profoundly influence cor- the enormity of the impact of the impending porate performance, organisational culture and decision will have made a truly authentic choice. climate as well as societal norms and . The framework contains five categories of mod- (ii) Issue-Specific Moderators (Layer 2) erator which are presented as layers surrounding the The second layer surrounding the ethical decision- `core' ethical decision-making process. These layers making process details the characteristics of the identify the individual's nature, the characteristics ethical dilemma at hand. Factors relating to the of the issue, and the influence of significant others, relative intensity (proximity, magnitude, consensus, the organisation, and the external macro-factors. concentration, probability, and immediacy) (Jones 1991, Morris and McDonald 1995) and the strategic (i) Individual Moderators (Layer1) and tactical significance (Fritzsche 1991) of the issue influence the decision-maker to modify his/her The first layer is the most fundamental because it behaviour to suit the perceived demands of the represents the `essence' of the decision-maker (i.e., ethical dilemma. An issue deemed by the individual the sum of and decisions). This includes to be ethically intensive and organisationally the ethical orientation, the level of cognitive moral strategic may result in behaviour significantly dif- development, as well variables such as gender, ferent in method and content from one perceived ethnicity, and education. Generally, the nature or to be ethically neutral and organisationally moot. the essence of the individual will determine how In addition, it will also result in a heightened level the decision-making process is approached, the of existential introspection. In the case of issues relative intensity of the `existential position,' and relating to NOM, the magnitude of the consequence the extent to which an authentic decision is fully of the decision can be potentially enormous, understood. For example, an individual who is in involving lawsuit damages and jeopardy of the Kohlberg's conventional stage in terms of the firm's . However, the proximity of the capacity to reason and who is generally utilitarian decision-maker to the issue is perhaps personally in ethical and political orientation may not realise or emotionally distant unless a strategic relation- at all the enormity of the `existential position.' ship exists with the key affected buyer groups Once the cost-benefit analysis is complete or the vote is counted, the decision is made and there is (iii) Significant Other Moderators (Layer 3) no `': for this individual the numbers don't and the majority is never wrong. The Research suggests that personal (Bommer et al. 1987, conventional deontological decision-maker may Dubinsky and Loken 1989), intra-organisational

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(Cote and Goodstein 1999, Dunfee et al. 1999, tices that capitalise on buyers' restricted choice. In Jensen and Wygant 1990, Fritzsche 1991, the past, the cable industry has used bundling and Schminke and Wells 1999, Weaver and Trevino unbundling of services along with NOM plans 1999), and extra-organisational (Stead et al. 1990) (often erratically) without giving choice to buyers, `significant others' can influence individual be- and adopted a consensual method of decision- haviour. Much of this research is premised upon making to insure industry-wide harmony. behavioural theory which points to social model- ling (Bandura 1986) and reward and punishment (v) External Moderators (Layer 5) structures as key variables. However, the extent to which significant others influence behaviour will The final layer of moderators are those which exist also be a function of the ethical and cognitive in the broad realm of society, , , orientation of the individual. For example, a post- and . This set of moderators, like each conventional existentialist is less likely to be of the preceding four, forms the context through influenced by the behaviour of peers than is a con- which an individual's essence is formed. These ventional teleologist. For the latter, the support or external variables may influence the decision- censure of , friends, co-workers, peers, and/ maker directly or may be mediated through the or a variety of extraneous stakeholders may pro- organisation, through interpersonal relationships, vide incentives to behave in a prescribed ethical or and through the social consensus on moral inten- unethical manner. In the case of an issue such as sity of ethical dilemmas (Ferrell and Gresham NOM there may be some within the organisation 1985, Hunt and Vitell 1986, Bommer et al. 1987, who favour addressing the question of the un- Stead et al. 1990, Malhotra and Miller 1998). We ethical content of NOM plans, although they may see the importance of this in the case of NOM. lack the definitive information necessary to sup- Legally, NOM practice is under examination, and port action. Alternatively pressure may come from regulations in some key sectors such as banking various consumer-protection lobby groups outside and telecommunications are being tightened. Tech- the organisation. nology also influences the nature of the decision process. For example, satellite transmitted TV pro- vides an alternate technology to cable transmission. (iv) Organisational Moderators (Layer 4) The presence of new substitute technology is The extent to which an organisation fosters generating increased competition, which strengthens personal growth or perceives the individual consumer choices and weakens NOM plans. mechanistically will be dependent on the organ- isation's stated or unstated philosophy, the formal Conclusion and informal culture, the code of ethics, the social- isation process, the decision maker's immediate This paper presents a theoretical and practical job context, and the organisation's reward and perspective on the role of existentialism in ethical punishment structure. Each of these factors decision-making in business. The authors argue influences the individual to make decisions in an that traditional approaches to ethical decision- organisationally prescribed manner (Trevino 1986, making have employed teleological and deontolo- Stead et al. 1990, Jones 1991, Sinclair 1993, Denison gical theories at the expense of the existential 1996) or alternatively encourage the individual to perspective. This, they suggest, has been a curious take personal responsibility for all decision-making omission as all business decisions eventually are behaviour and outcomes. Organisational moder- reduced to an individual taking action. In terms of ators include the ideology, culture, and climate of the existential metaphor, the individual stands at the organisation. For example, the cable industry has the edge of the decision abyss armed with the traditionally been a regional monopoly (although available of the best ends and the best this is now changing): the organisational culture means and with this information must make a leap would therefore have a tendency to adopt prac- of faith ± he or she must choose. This leap cannot

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