The reward contingency of ethical attitudes of business stakeholders under conditions of moral ambiguity

Abstract

Available theory suggests that both issue and context related factors as well as individual factors influence the ethical decision-making process. This study used an experimental design to investigate whether the issue-related construct reward consequences, an extension of Jones’ (1991) issue-related factor, magnitude of consequences, is a strong predictor of attitude of business stakeholders towards the ethicality of a morally ambiguous action, in this case, a strategic competitor bluff. The study also investigated the predictive capability of the personal moral philosophy dimensions of relativism and idealism in the presence of differential reward consequences in a morally ambiguous context. The study found clear support for the predictive capability of the issue-related factor, reward consequences, for the moral decision-maker, however, the personal factor of business stakeholders’ a priori personal moral philosophy, measured using Forsyth’s (1980) Ethics Position Questionnaire (EPQ), was not found to predict their attitudes towards the morally ambiguous action. These findings were consistent across four different business stakeholder roles considered. The findings did indicate, however, that the relativism dimension of the EPQ moderates the relationship between reward consequences and attitude towards the morally ambiguous action. The contributions of the findings to theory bearing on ethical decision-making in the context of morally ambiguous circumstances and stakeholder management are discussed, as are their implications for business management.