Ethical Relativism and Corporate Social Responsibility

Ethical Relativism is the understanding that our morals are a product of the various individual's understandings and beliefs on topics. This idea represents situations where there is no “right or wrong” but truly an ethical dilemma that relies on our moral foundations and virtue ethics to solve a problem. “Our ethical judgments are not from reasoning or rationalism, but rather from a mix of social learning taken from empiricist ideals and nativism.” (Rationality, Steven Pinker) This context of the empiricist school of thought can be applied to relativism as it supports the fact that we look to our peers to determine if something is acceptable or not. This concept of ethical relativism combines individual moral foundations, the ideology of consequentialism as well as deontologicalism, and contextual triggers to create and maintain culture.

As individuals, we have an internal pulse for what we consider right and wrong. These are categorized by prescriptive approaches to ethical decision-making and moral foundations. Ethical decision-making either focuses on consequences that represent consequentialist theories or focuses on duties, obligations, and principles which signifies deontological theories. These processes both have a process that can explain and justify why the behavior is just and fair. There isn’t a correct process, but a leader needs to consider the benefit of having both employees with a similar decision-making process as well as the benefits of having a more diverse perspective. It is also important to consider that context can manipulate these processes and there may be different processes used to approach different situations. This is why it is so important to consider stepping outside of our “moral matrixes” (Haidt) and consider why the individual’s understanding was formed and consider how we can have evolving opinions on certain things and inexorable opinions on other things.

Depending on the level of commitment to authority as a moral foundation and as a contextual trigger you may be more inclined to act unethically. As a leader, you must consider if a culture has been established where the divergence of thoughts allows skepticism or opposition or if the culture caters to being more autocratic and authoritative. Is it a strong or weak culture? While either of these cultures can be effective depending on your beliefs, those that are a mercenary culture and have high obedience to authority may allow for an increase in unethical behavior. This can be explained by conformity bias. The factor of ​​peer pressure or “that’s just business.” Leadership is how corruption in businesses such as Enron and Jordan Belfort’s Stratton Oakmont had such an influence that created a toxic and unethical culture. Their company standard of ethical relativism disappeared through incrementalism and made a culture that violates greater pragmatic expectations from society. Being mindful of small ethical violations is crucial because once they become the norm, they will not be perceived as violations but rather as expectations.

Moral Disengagement is one way that you can manipulate ethical relativism. These mechanisms are used to rationalize and morally justify misconduct into something more palatable using devices such as euphemistic language, displacement, diffusion of responsibility, cherry-picking comparisons and alternatives, distorting consequences, and justifying blame. These are all of the “red flags” that should trigger a further investigation into a culture.

Another contextual factor can be transparency bias. The context that is available to individuals when faced with an ethical dilemma influences the response. According to Gino, people act more ethically when being observed. If there is a culture that emphasizes process and has checkpoints, employees will be more inclined to act with integrity as they know that management is looking for that behavior. Since the company has set expectations and has measures to enforce them the culture can be maintained through set procedures. The process of setting expectations is establishing the company's norms which is a facet of culture. It is also notable to consider that employees are at the second level of the conventional level of cognitive moral development. This means that they are looking outside themselves for guidance on how to act. Transparency, conformity, and cognitive bias all can explain why ethical relativism has such an influence on culture and often why culture changes over time despite legacy values and established procedures.

The problem and fear with ethical relativism is it can be used as a tool to rationalize behavior that does not benefit business or society. It is fluid and has the ability to change when different situations are presented to the culture. As there are no moral absolutes, the accepted norms can shift to create an unethical culture. (Putnam) This can be problematic when it enables moral credentialing which allows a person who affirms their fair perspective or social virtue, they tend to be more inclined to act unethically. On the other side of that spectrum, it can lead to ethical fading which is when people act unethically, they tend to distance themselves from the ethical dimensions of their actions so that they can continue to think of themselves as good people despite ethical misconduct, notably Ken Lay of Enron.

The topic of ethical relativism was inspired by the case study that we worked through in class. We talked about how two employees had differing backgrounds and cultural norms that dictate work expectations. The case in particular surrounded women working in the workplace. In some cultures, women are excluded from participating in business matters and are confined to domestic environments. When one employee holds that view and another is engaged in a counterculture, there can be questions about how to proceed. The answer lies in prioritizing the local company culture. As ethical relativism states, “right and wrong” are based on norms - that is, whatever management says is right or wrong, since leadership dictates culture according to the “tone at the top” theory. I was curious in having conversations about how managing your company's culture considers the environment, people, and greater culture.

What I have come to conclude is that a company's culture is a unique entity. It may be influenced by external factors, but the true catalyst is the contextual triggers within the way that information is presented and the reactions of those that perceive the change based on their foundational identities. It's important to ensure that formal and informal systems align with ethical organizational culture. I now understand how boundary-spanning the company conduct, policy, and norms is the process of determining what cultures fit into the company and what do not. The solution is to focus on ethical leadership. As a leader, I know that acting immediately and decisively to behaviors that are misaligned with the culture that is created is the only way to ensure that the firm has a strong culture of integrity and ethical behavior. Communicating ethics is vital in forming this culture and representing moral management. It establishes trust among employees and a reputation that is well-perceived by the public. This trust is vital as it can be branched out further to broader CSR policy. ​​This means that the best corporate social responsibility initiatives are good for business and good for society. These policies are also sustainable and focus on stability rather than the relative environment and latest trend. By being transparent on the importance of ethics you can create a sustainable culture. Those that respond with backlash, do not have a place in your culture. This is shown by creating a balance of moral absolutes to address the threats of ethical relativism.

Works Cited

​​Putnam, Mark S. “Absolutes and Ethical Relativism in the Workplace.” LinkedIn, 7 Mar. 2018, www.linkedin.com/pulse/absolutes-ethical-relativism-workplace-mark-s-putnam/.

BA 354 HYBRID Lectures

​​Pinker, Steven. Rationality: What It Is, Why It Seems Scarce, Why It Matters. Penguin Books, 2021.

Moral Foundations Theory, moralfoundations.org/.

Pinker, Steven. “An Excerpt from Steven Pinker's Latest Book 'Rationality'.” Harvard Gazette, Harvard Gazette, 3 June 2022, news.harvard.edu/gazette/story/2021/09/an-excerpt-from-steven-pinkers-latest-book-rationality/.

Haidt, Jonathan. “The Moral Roots of Liberals and Conservatives.” Jonathan Haidt: The Moral Roots of Liberals and Conservatives | TED Talk, www.ted.com/talks/jonathan_haidt_the_moral_roots_of_liberals_and_conservatives/transcript.