1. COMMUNICATION AND ETHICS IN ORGANIZATIONS
Lecture 9a

2. Decision-Making and Ethics
Ethics: “a practice … by which we may reach conclusions concerning the rightness or wrongness of voluntary acts related to our [goal] last end” (AR)
Some that believe that ethics and economics cannot be reconciled.
Success in business requires greed, deceit and unfeeling ruthlessness…
Advancement … can come only from unsavory actions...a truly good person cannot succeed in business”

3. Decision-Making and Ethics
Others, however:
Business Ethics: “The study of how personal moral norms apply to the activities and goals of commercial enterprise. It is not a separate moral standard, but the study of how the business context poses its own unique problems for the moral person to act as an agent of this system”

4. THE CHALLENGER DISASTER
January 1985, engineer Roger Boisjoly of Morton Thiokol, a contractor to NASA, suspected trouble.
Begins tests: Do low temperatures negatively affect the ability of the booster rocket’s O‑rings to seal?
March 1985, the tests confirmed danger.
June 1985, post‑flight inspection of shuttle launch revealed erosion of both primary and backup seals
Erosion that was close to being severe enough to cause an explosion.

5. THE CHALLENGER DISASTER
Talked with his immediate supervisor. Wrote a memo to the vice president of engineering, discussing it first with his immediate supervisor.
Boisjoly and others came up with recommendations that included studying ways of improving the O‑rings. Got a team to study problem.
Day before the Challenger launch, the overnight temperature to be eighteen degrees, much lower than the fifty‑three degree minimum recommended by Morton Thiokol
Boisjoly and other O‑ring team recommended not to launch. Bob Lund, engineering vice president and Joe Kilminster, recommended against the launch after having met with Boisjoly and the O‑ring team.

6. THE CHALLENGER DISASTER
Video Case Study

7. THE CHALLENGER DISASTER

8. THE CHALLENGER LAUNCH

9. 73 SECONDS LATER

10. THE CHALLENGER DISASTER INVESTIGATION
Morton Thiokol’s top managers reversed their recommendation not to launch under pressure from NASA, their customer.
NASA itself was under great pressure from the White House to deliver a successful launch.
Earlier in the year, the President had made a public commitment to have the space shuttle fly on a regular basis and he was upset by the number of delays and scrubbed launches.

11. INVESTIGATION CONCLUSION
Ensuing investigation concluded…engineers at Morton Thiokol were aware of the problem and warned against launching, but organizational and management problems prevented their warning from reaching NASA.

13. COMMUNICATION AND ETHICS IN ORGANIZATIONS
Lecture 9b

14. ETHICAL PROBLEMS IN ORGANIZATIONS
FREE SPEECH

15. KOHLBERG’S STAGES OF MORAL GROWTH
2. NAIVE EGOIST - INSTRUMENTAL
PRE-
CONVENTIONAL
STAGES
1. PUNISHMENT - OBEDIENCE

16. KOHLBERG’S STAGES OF MORAL GROWTH
Level One - Stages One and Two
Child can respond to rules and social expectations in terms of “good” - “bad”
Rules enforced for outside
Followed in terms of pain and pleasure resulting from actions
Self-interest is child’s concern
Punishment and Obedience
Little awareness of others’ needs and desires
Naively Egoistic and Instrumental
Recognizes others’ needs; defers to get what he/she wants
“Right” is a fair exchange satisfying individual

17. KOHLBERG’S STAGES OF MORAL GROWTH
4. LAW AND ORDER
3. INTERPERSONAL CONCORDANCE-
DOING WHAT’S EXPECTED
CONVENTIONAL STAGES
2. NAIVE EGOIST - INSTRUMENTAL
PRE-
CONVENTIONAL
STAGES
1. PUNISHMENT - OBEDIENCE

18. KOHLBERG’S STAGES OF MORAL GROWTH
Level Two - Stages Three and Four
Responsiveness to one’s family, peers, nation is “right” thing
Regardless of consequences loyalty is highest value
Subordinating individual needs to group
Interpersonal Concordance
“Good boy-Good Girl” principle
Good behavior is doing what’s expected - feeling loyalty, affection trust
Law and Order Orientation
Doing one’s duty, obey authority; maintain social order
Fulfilling contracts; obligations and following rules defined as good for society
Recognizes differences between individual and society - society first

19. KOHLBERG’S STAGES OF MORAL GROWTH
6. UNIVERSAL ETHICAL PRINCIPLES
PRINCIPLED
STAGES
5. SOCIAL CONTRACT
4. LAW AND ORDER
CONVENTIONAL STAGES
3. INTERPERSONAL CONCORDANCE-
DOING WHAT’S EXPECTED
PRE-
CONVENTIONAL
STAGES
2. NAIVE EGOIST - INSTRUMENTAL
1. PUNISHMENT - OBEDIENCE

20. KOHLBERG’S STAGES OF MORAL GROWTH
Stage 5 Social Contract
Realize others hold a variety of conflicting views
Use fair ways to reach agreement - consensus, contract, due process
Social views and values are relative
Agreement is vital but certain “higher values” must always be upheld
Stage 6 Universal Ethical Principles
Right action means following self-chosen principles: comprehensive, universal, consistent
Not codes of specific behaviors (like 10 Commandments) but universal moral principles - justice, equality of human rights, respect for human dignity
Uses these principles to evaluate all other rules

21. MORAL AND COGNITIVE DEVELOPMENT IN ADULTHOOD
DEVELOPMENT STAGE COGNITIVE STYLE INTERPERSONAL STYLE
3. CONCORD- SIMPLICITY, LOYALTY,
ANCE STEREOTYPES CONFORMITY
4. LAW AND
GENERALIZED
ASSERTION
ORDER
PERCEPTIONS
5. SOCIAL COMPLEX MUTUALITY
CONTRACT
PATTERNS
SEES CONTRADICTIONS
AND PARADOXES
EMPATHY,
GROWTH
RELATIONSHIPS 6.
UNIVERSAL
PRINCIPLES

22. The Loss Ethical Focus and the Ability to Talk About It
Enron
Rapid shift from pipelines to deal-making produced enormous growth -- for a while
In the process, Enron lost a sense of core identity and values (“lots of smart people, but no wise people”)
But also corrupt, manipulative leaders - lots of strategic control talk
Use of positive values to deceive
No room to talk about contradictions
Raising concerns - personal weakness or disloyalty

23. The Loss Ethical Focus and the Ability to Talk About It
Aggressive culture.
Brutal system inside the company in which each employee was graded on their performance. And the bottom ten percent were supposed to be fired.
“Rank and Yank”
Hostile, Warrior Culture
Everybody would battle each other inside of the company so they could go outside into the marketplace and defeat the competition by any means.