Ethical Decision-Making Theory: An Integrated Approach

Mark S. Schwartz1

Received: 15 December 2014 / Accepted: 23 September 2015 / Published online: 26 October 2015

� Springer Science+Business Media Dordrecht 2015

Abstract Ethical decision-making (EDM) descriptive

theoretical models often conflict with each other and typ-

ically lack comprehensiveness. To address this deficiency,

a revised EDM model is proposed that consolidates and

attempts to bridge together the varying and sometimes

directly conflicting propositions and perspectives that have

been advanced. To do so, the paper is organized as follows.

First, a review of the various theoretical models of EDM is

provided. These models can generally be divided into

(a) rationalist-based (i.e., reason); and (b) non-rationalist-

based (i.e., intuition and emotion). Second, the proposed

model, called ‘Integrated Ethical Decision Making,’ is

introduced in order to fill the gaps and bridge the current

divide in EDM theory. The individual and situational fac-

tors as well as the process of the proposed model are then

described. Third, the academic and managerial implica-

tions of the proposed model are discussed. Finally, the

limitations of the proposed model are presented.

Keywords Emotion � Ethical decision making �Intuition � Moral rationalization � Moral reasoning

Introduction

While much has been discovered regarding the ethical

decision-making (EDM) process within business organi-

zations, a great deal remains unknown. The importance of

EDM is no longer in doubt, given the extent of illegal and

unethical activity that continues to take place every year

and the resultant costs to societal stakeholders including

shareholders, employees, consumers, and the natural

environment (U.S. Sentencing Commission 2014; Asso-

ciation of Certified Fraud Examiners 2014). Unethical

activity by individuals continues despite the best efforts of

business organizations to implement comprehensive ethics

programs, including codes of ethics, ethics training, and

whistleblowing hotlines (Ethics Resource Center 2014;

Webley 2011) and despite the extent to which business

schools around the world teach the subject of business

ethics (Rossouw and Stuckelberger 2012). The significant

negative yet potentially preventable costs to society

resulting from the unethical actions of individual firm

agents suggest that ethical decision making might be

considered one of the most important processes to better

understand, not only for the academic management field,

but also for the corporate community and society at large

(Trevino 1986).

There have however been important developments

through academic research over recent years leading to an

improved understanding of EDM (see Trevino et al. 2006;

Tenbrunsel and Smith-Crowe 2008) including how to

measure each of its constructs and dimensions (Agle et al.

2014). Building on and borrowing from a series of aca-

demic disciplines and theories including moral philoso-

phy, moral psychology, social psychology, social

economics, organizational behavior, criminology, behav-

ioral science, behavioral ethics, cognitive neuroscience,

and business ethics, a number of descriptive EDM theo-

retical models have been proposed to help explain the

decision-making process of individuals leading to ethical

or unethical behavior or actions (see Torres 2001).

Commonly referred to as EDM theory, these descriptive

& Mark S. Schwartz

schwartz@yorku.ca

1 School of Administrative Studies, Faculty of Liberal Arts and

Professional Studies, York University, 4700 Keele Street,

Toronto, ON M3J 1P3, Canada

123

J Bus Ethics (2016) 139:755–776

DOI 10.1007/s10551-015-2886-8

theoretical EDM frameworks (as opposed to normative

EDM frameworks) help to explain how cognitive pro-

cesses (i.e., reason or intuition) or affective processes

(i.e., emotion) operate within the brain (Reynolds 2006a;

Salvador and Folger 2009; Greene et al. 2001) leading to

moral judgment and behavior on the part of individuals.

To further enhance our understanding, these theoretical

models typically present the EDM process as a series of

temporal and sequential process stages, typically begin-

ning with initial awareness or recognition of an ethical

issue leading to a moral judgment, intention to act, and

finally to behavior (Rest 1984, 1986).1

In addition to explaining the EDM process, most theo-

retical EDM models also include a set of individual, orga-

nizational, or situational-related variables and indicate at

which stage of EDM (i.e., awareness, judgment, intention,

or behavior) they can exert a causal effect or a moderating

influence. Based on these theoretical EDM models, hun-

dreds of empirical studies, both qualitative and quantitative

in nature, along with several meta-studies, have now been

conducted to try to verify and explain exactly which inde-

pendent factors or variables actually influence the decision

making of individuals, including whether one stage of EDM

necessarily leads to the next stage (see Ford and Richardson

1994; Loe et al. 2000; O’Fallon and Butterfield 2005; Craft

2013; Lehnert et al. 2015).

While such theoretical and empirical research has

proven helpful to better understand what has been referred

to as the ‘black box’ of EDM (Liedka 1989, p. 805;

Tenbrunsel and Smith-Crowe 2008, p. 584), the relevance

or explanatory power of the theoretical and empirical

research can at least initially be questioned given the lack

of consistent findings (O’Fallon and Butterfield 2005;

Craft 2013; Pan and Sparks 2012). This may be partially

attributable due to the research methods being used (e.g.,

the use of scenarios/vignettes, surveys, student samples,

or self-reporting, see Randall and Gibson 1990; O’Fallon

and Butterfield 2005) or the diversity or quality of the

research measurement instruments being utilized (see

Mudrack and Mason 2013; Casali 2011). Another possi-

bility may be that EDM is simply too complex a neuro-

cognitive-affective process involving too many inter-re-

lated or undiscoverable variables being processed by our

brains preventing any possible generalizable conclusions.

It may also be that the predictive ability of any theoretical

EDM model will be limited to activity that more clearly

constitutes ethical or unethical behavior, rather than pre-

dicting behavior involving more complex ethical dilem-

mas where achieving normative consensus over what even

constitutes ‘ethical’ behavior can often prove to be

elusive.2 The challenges and complexity of EDM have

even led some researchers to suggest a ‘punch bowl’ or

‘garbage can’ approach to EDM, which assumes that

researchers will never know exactly what takes place

leading to ethical judgments in that only what goes into or

out of the process is capable of being analyzed (e.g.,

Schminke 1998, p. 207).

One other possible explanation for the lack of consistent

empirical findings however is that further refinements to

EDM descriptive theory models if undertaken might

improve the models’ explanatory and predictive capability

leading to more relevant and consistent empirical findings.

It is this latter possibility that this paper seeks to address.

For example, a review of the descriptive EDM theoretical

models proposed to date (Tenbrunsel and Smith-Crowe

2008) along with consideration of the more recent chal-

lenges and criticisms raised with respect to EDM research

(Haidt 2001; Sonenshein 2007; Whittier et al. 2006; Bar-

tlett 2003) suggests that there is significant room for

improvement in theoretical EDM models. Following their

review of the empirical EDM research, O’Fallon and

Butterfield state (2005, p. 399): ‘‘If the field of descriptive

ethics is to move forward to strengthen our understanding

of the EDM process, it is imperative that future studies

focus more attention on theory development.’’ According

to Tenbrunsel and Smith-Crowe (2008, p. 547): ‘‘…many

[studies] are still atheoretical or uni-theoretical, relying on

a single theory.’’ They then reflect on the deficiency in

EDM theory: ‘‘Unlike in the past, researchers no longer

need to justify their rationale for studying ethics; instead,

their attention needs to focus on developing a more com-

prehensive theoretical platform upon which empirical work

in behavioral ethics can continue’’ (Tenbrunsel and Smith-

Crowe 2008, p. 593). In other words, the current dis-

agreement among scholars over which theoretical EDM

model (if any) is the most appropriate, especially when

engaging in empirical research, needs to be addressed.

This paper will attempt to contribute to EDM literature

by focusing on the primary gaps in the theoretical EDM

models that have been identified. By doing so, the research

objective is to develop a theoretical EDM model that not

only captures and builds upon the current state of EDM, but

also consolidates and attempts to bridge together the vary-

ing and sometimes directly conflicting propositions and

perspectives that have been advanced. In other words, the

paper will attempt to incorporate and depict what has not

always been clearly portrayed in any proposed EDM model

in a more integrated manner. The most important or key

integration being advanced is the combined and inter-

1 For ease of reference, ‘ethics’ or ‘ethical’ are considered throughout

the paper to be synonymous with ‘morality’ or ‘moral.’

2 For example, Ferrell and Gresham state (1985, p. 87): ‘‘Absence of

a clear consensus about ethical conduct…has resulted in much

confusion among academicians…’’

756 M. S. Schwartz

123

related impact of intuition–emotion along with reason–ra-

tionalization on the moral judgment stage of EDM. In

addition, to address the proliferation of individual, organi-

zational, and situational/issue-related factors being applied

in EDM research, several core constructs are proposed in

order to better capture their corresponding sub-variables,

such as an individual’s ‘moral capacity’ and an organiza-

tion’s ‘ethical infrastructure.’ Other important features of

the revised model include (i) the presence of ‘lack of moral

awareness’ leading to behavior; (ii) the expansion of the

issue-based EDM variable; (iii) the inclusion of moral

rationalization; and (iv) the addition of an explicit ‘moral

consultation’ stage into the EDM process.

The proposed integrated model essentially reflects a

synthesis of the ‘intuitionist/sentimentalist’ (Haidt 2001),

‘rationalist’ (Kohlberg 1973; Rest 1986), ‘person-situation

interactionist’ (Trevino 1986), and ‘issue-contingent’ (Jones

1991) approaches to EDM. The revised model attempts to

depict the current theoretical field of EDM in a relatively

comprehensive yet hopefully more coherent and simplified

manner. The intended contribution of the proposed model is

not necessarily to offer any particularly new major insights

into EDM, but to depict a theoretical platform and schematic

representation upon which a broader range of EDM

researchers, including both rationalists and non-rationalists,

can hopefully feel comfortable utilizing in a more cohesive

and consistent manner. In addition, while ‘is’ does not

necessarily imply ‘ought,’ the development of a more robust

descriptive EDM model may lead to more effective and

relevant normative EDM models which might then have an

effect on future management or educational practices.

In order to propose and depict a reformulated theoretical

EDM model, the paper will be organized as follows. First, a

review of the various theoretical models of EDM will be

provided. These models can generally be divided into

(a) rationalist-based (i.e., reason); and (b) non-rationalist-

based (i.e., intuition and emotion). Second, the proposed

model, called ‘Integrated EDM’ (I-EDM), is introduced in

order to fill the gaps and bridge the current divide in EDM

theory. The individual and situational factors as well as the

process of the proposed model are then described. Third,

the academic and managerial implications of the proposed

model will be discussed. Finally, the limitations of the

proposed model are presented.

Several notes of caution are required however. This

study is not intended to provide a comprehensive literature

review of the EDM field. Only what might be considered to

be the most salient or utilized EDM models or research is

included in the discussion.3 In addition, each of the EDM

constructs or processes is not discussed to the same extent,

rather those that require modification from previous EDM

models are given greater emphasis throughout the paper. In

addition, the unit of analysis is individuals acting within or

on behalf of business organizations, rather than organiza-

tional-level ethical decision making.

Finally, for the purposes of the paper, a few key defi-

nitions are required. An ethical dilemma is defined as a

situation in which an individual must reflect upon com-

peting moral standards and/or stakeholder claims in

determining what is the morally appropriate decision or

action.4 Moral judgment is defined as the determination of

the ethically appropriate course of action among potential

alternatives. Ethical behavior is defined not merely as

conforming to the legal or moral norms of the larger

community5 (Jones 1991), but consists of behavior sup-

ported by one or more additional moral standards.6

Review of the Theoretical Descriptive EDMApproaches

A review of EDM research reveals that there are two

general categories of EDM theoretical models, those that

are (a) rationalist-based; and (b) non-rationalist-based.7

The rationalist-based models specifically assume that the

3 This is similar to the approach used by Trevino et al. (2006) in their

literature review of EDM.

4 One might try to distinguish situations involving ‘ethical dilemmas’

from those whereby an individual is facing a ‘moral temptation.’

‘Ethical dilemmas’ can be seen as those more challenging situations

involving ‘right versus right’ or ‘wrong versus wrong’ alternatives,

such as deciding which employee to lay off. ‘Moral temptations’

however involve ‘right versus wrong’ alternatives more directly

linked to one’s self-interest, such as deciding whether to steal supplies

from the office supply cabinet (see Kidder 1995). For the purposes of

the I-EDM model, both ethical dilemmas and moral temptations can

be faced by individual decision makers as ethical issues.5 Jones states (1991, p. 367): ‘‘…an ethical decision is defined as a

decision that is both legal and morally acceptable to the larger

community. Conversely, an unethical decision is either illegal or

morally unacceptable to the larger community.’’ This is too limited a

definition of ‘ethical’ to be utilized for the purposes of properly

studying the EDM process. Jones (1991, p. 367) himself admits that

his definition of an ethical decision is ‘‘imprecise and relativistic’’ and

refers to the difficulties of establishing substantive definitions for

ethical behavior. Others have also suggested that this definition of

what is ethical is ‘‘too relativistic’’ and avoids a precise normative

position on right versus wrong (Reynolds 2008; Tenbrunsel and

Smith-Crowe 2008). In addition, community norms can violate

‘hypernorms’ (see Donaldson and Dunfee 1999).6 While there is an extensive literature on moral theory, the moral

standards can be grouped under three general categories: (i) conven-

tionalist (e.g., industry or corporate codes of ethics); (ii) consequen-

tialist (e.g., utilitarianism); or (iii) deontological, including

trustworthiness, respect, moral rights, and justice/fairness (see

Schwartz and Carroll 2003; Schwartz 2005).7 Another possible way of dividing up EDM models is to categorize

those that focus primarily on the disposition of the decision maker,

versus those that are more interactional (person-situation) in nature.

See Tsang (2002, p. 25).

Ethical Decision-Making Theory: An Integrated Approach 757

123

moral reasoning process dominates the core of the model,

leading to moral judgment. The non-rationalist-based

models assume that both intuition and emotion dominate the

moral judgment process, with moral reasoning playing a

secondary ‘after the fact’ explanatory (i.e., reason) or jus-

tificatory (i.e., rationalization) role for one’s moral judg-

ment (Haidt 2001; Sonenshein 2007). More recent models

however suggest that rather than reason–rationalization and

intuition–emotion being mutually exclusive, there is either

a ‘dual-process’ involving two stages or a ‘two-systems’

process whereby there is concurrent interaction between

intuition (impulsive) and reason (reflective) leading to

moral judgment (see Reynolds 2006a; Strack and Deutsch

2004) or between emotion and reason leading to moral

judgment (Greene et al. 2001). These interactions form the

basis of the revised model discussed below. Each group of

EDM theoretical models will now be briefly outlined.

Rationalist approaches

The first group of theoretical models explicitly or implicitly

assumes that a predominantly reason-based process takes

place leading to moral judgment. The rationalist approach

suggests that upon experiencing an ethical dilemma, the

decision maker attempts to resolve conflicts through a

logical, rational and deliberative cognitive process by

considering and weighing various moral standards that

might be in conflict with one another. The vast majority of

empirical EDM researchers appear to rely on this particular

theoretical framework when conducting their research.

For example, Ferrell and Gresham (1985) developed a

‘multistage contingency’ model of EDM, in which an eth-

ical dilemma arises from the social or cultural environment.

The behavior of the decision maker is then affected by two

sets of ‘contingency factors’ including (1) individual factors

(i.e., knowledge, values, attitudes, and intentions); and (2)

organizational factors (i.e., significant others including top

management and peers, and opportunity including codes,

enforcement, and rewards and punishment).8

Trevino (1986) introduces a ‘person-situation interaction-

ist’ model of ethical decision making. Her model begins by

suggesting that the manner by which an ethical dilemma is

analyzed by the decisionmaker depends upon the individual’s

stage of cognitive moral development (Kohlberg 1973).9 The

decision maker’s initial cognition of right and wrong is then

moderated by individual factors including ego strength

(strength of conviction or self-regulating skills), field depen-

dence (dependence on external social referents), and locus of

control (perception of how much control one exerts over the

events in life). Situational factors alsomoderate behavior such

as immediate job context (reinforcement contingencies such

as rewards and punishment for ethical/unethical behavior) and

other external pressures (including personal costs, scarce

resources, or competition). Organizational culture (normative

structure, referent others, obedience to authority, and

responsibility for consequences) and characteristics of the

work also moderate behavior.

Possibly the most significant or prominent rationalist-

based theoretical model of EDM is by Rest (1986), who

posited that there are four distinct process components (or

stages) of EDM: (1) becoming aware that there is a moral

issue or ethical problem or that the situation has ethical

implications (also referred to as ‘interpreting the situation,’

‘sensitivity,’ or ‘recognition’)10; (2) leading to a moral

judgment (also referred to as ‘moral evaluation,’ ‘moral

reasoning,’ or as ‘ethical decision making’)11; (3) estab-

lishing a moral intent (also referred to as moral ‘motiva-

tion,’ ‘decision,’ or ‘determination’)12; and (4) then acting

on these intentions through one’s behavior (also referred to

as ‘implementation’ or ‘action’).13 The moral judgment

stage of Rest’s model which is the key moral reasoning

component of the EDM process is based on Kohlberg’s

(1973) rationalist theory of moral development.

Jones (1991) provided an important contribution to

EDM theory by not only building on and consolidating

previous theoretical EDM models such as Rest (1986), but

by including an important new factor, the nature of the

8 Ferrell et al. (1989) later suggest a revised ‘synthesis model’ which

incorporates into their original model (1985) Kohlberg’s stages of

moral development as well as the deontological and teleological

moral evaluation process taken from Hunt and Vitells’ EDM model

(1986).9 Kohlberg (1973) proposed three general levels of moral develop-

ment including the pre-conventional (stage one: punishment; stage

two: self-interest), conventional (stage three: referent others; stage

four: law), and post-conventional (stage five: social contract; stage

Footnote 9 continued

six: universal ethical principles). Kohlberg in later years indicated

that his model focused on moral reasoning, and later clarified that it

really only focused on justice/fairness issues. See Rest et al. (1999).10 For ‘heightened ethical concern,’ see De Cremer et al. (2010, p. 3).

Moral awareness is defined by Rest (1986, p. 3) as the ‘‘…interpre-

tation of the particular situation in terms of what actions (are)

possible, who (including oneself) would be affected by each course of

action, and how the interested parties would regard such effects on

their welfare.’’11 Moral judgment is defined by Rest as: ‘‘[F]iguring out what one

ought to do. Applying moral ideals to the situation to determine the

moral course of action’’ (Rest 1984, p. 26).12 For ‘determination’ see Ferrell et al. (1989, p. 60). Moral intention

might be considered synonymous with moral motivation which Rest

defines as giving ‘‘…priority to moral values above other personal

values such that a decision is made to intend to do what is morally

right’’ (1986, p. 3).13 Moral action is defined as having ‘‘…sufficient perseverance, ego

strength, and implementation skills to be able to follow through on

his/her intention to behave morally, to withstand fatigue and flagging

will, and to overcome obstacles’’ (Rest 1986, pp. 4–5).

758 M. S. Schwartz

123

ethical issue itself. Jones (1991, p. 367) states that an ethical

issue exists when a person’s actions, when freely performed

(i.e., involve a choice) ‘‘…may harm or benefit others.’’

Jones defines the ‘moral intensity’ of the ethical issue as a

construct that ‘‘…captures the extent of [the] issue-related

moral imperative in a situation’’ (1991, p. 372). Jones’

components or characteristics of ‘moral intensity’ include:

consequences (i.e., magnitude of consequences, probability

of effect, temporal immediacy, and concentration of effect);

social consensus that a proposed act is evil or good; and the

proximity or ‘the feeling of nearness’ (social, cultural, psy-

chological, or physical) the agent has to those affected. The

moral intensity of the issue is proposed by Jones to influence

each of the four stages of EDM and can act as both an

independent and moderating variable.

Most other rationalist models proposed since 1991

appear to be a variation or a combination of Rest (1986)

and Jones (1991).14 Sonenshein (2007) groups the

rationalist approaches into what he considers to be three

‘prominent streams of research’: (i) manager as philoso-

pher (e.g., Hunt and Vitell 1986); (b) person-situation

(Trevino 1986); and (iii) issue-contingent (Jones 1991).

What unites all of these theoretical models however is the

emphasis on the rational cognitive process used by decision

makers to resolve ethical dilemmas. While rationalist

approaches tend to recognize that intuition or emotion

might play a role in EDM,15 they would never be deter-

minative of one’s moral judgments. Rationalist approaches

are now beginning to recognize their limitations however,

including constraints such as ‘bounded rationality’ (or

more specifically ‘bounded ethicality,’16 see Chugh et al.

2005), or due to other cognitive biases that affect how

information is processed (Messick and Bazerman 1996;

Trevino et al. 2006).17

Non-rationalist (Intuitionist/Sentimentalist)

Approaches

Another stream of EDM research has developed that argues

that a non-rationalist approach involving intuition (a cog-

nitive process) and/or emotion or sentiments (an affective

process) should be considered more central or ‘sovereign’

to the moral judgment process of EDM (Saltzstein and

Kasachkoff 2004, p. 274). For example, ‘‘…recent work in

moral psychology shows that ethical decisions are fre-

quently informed by one’s feelings and intuitions’’ (Ruedy

et al. 2013, p. 532).

In terms of intuition, this non-rationalist research stream

posits that intuitive (i.e., gut sense) and emotive processes

(i.e., gut feelings) tend to at least initially generate moral

judgments. For example, according to Haidt (2001): ‘‘The

central claim of the social intuitionist model is that moral

judgment is caused by quick moral intuitions and is fol-

lowed (when needed) by slow, ex post facto moral rea-

soning’’ (Haidt 2001, p. 818). Haidt states (2001, p. 814):

Intuitionism in philosophy refers to the view that there

are moral truths and that when people grasp these

truths they do so not by a process or ratiocination and

reflection but rather by a process more akin to per-

ception, in which one ‘just sees without argument that

they are and must be true’…Intuitionist approaches in

moral psychology, by extension, say that moral intu-

itions (including moral emotions) come first and

directly cause moral judgments…Moral intuition is a

kind of cognition, but it is not a kind of reasoning.18

14 For example, other rationalist models include the ‘general theory

model’ proposed by Hunt and Vitell (1986), a ‘behavior model’

proposed by Bommer et al. (1987), and a ‘reasoned action’ model

proposed by Dubinsky and Loken (1989) based on the theory of

reasoned action (Fishbein and Ajzen 1975). In conducting a summary

of various early models, Brady and Hatch (1992) propose that at least

four of the models (Ferrell and Gresham 1985; Hunt and Vitell 1986;

Trevino 1986; Bommer et al. 1987) contain the same four elements

(1) a decision process, modified by (2) internal and (3) external

factors, leading to (4) ethical or unethical behavior.15 For example, Rest himself refers to the cognitive–affective

interactions that take place during each of the four stages of EDM

(Rest 1984, p. 27). According to Rest (1986, p. 6), the moral

awareness stage involves trying to understand our own ‘gut feelings’

and in terms of the moral judgment stage ‘‘…most people seem to

have at least intuitions about what’s morally right or wrong’’ (1986,

p. 8). Rest states: ‘‘…there are different affect and cognition

interactions in every component’’ (1984, p. 28). He also states:

‘‘…I take the view that there are no moral cognitions completely

devoid of affect, no moral affects completely devoid of cognitions,

and no moral behavior separable from the cognitions and affects that

prompt the behavior’’ (Rest 1986, p. 4). Hunt and Vitell (1986, p. 10)

also refer to the ‘feeling of guilt’ one might experience if behavior

and intentions are inconsistent with one’s ethical judgments.

16 ‘Bounded ethicality’ can be defined as one making decisions that

run counter to values or principles without being aware of it (Chugh

et al. 2005; Palazzo et al. 2012).17 In terms of cognitive biases, Messick and Bazerman (1996)

propose a series of theories about the world, other people, and

ourselves which are suggested to help explain the often unethical

decisions that executives make. In terms of theories about the world,

people often ignore possible outcomes or consequences due to five

biases: ‘‘…ignoring low-probability events, limiting the search for

stakeholders, ignoring the possibility that the public will ‘find out,’

discounting the future, and undervaluing collective outcomes’’ (1996,

p. 10).18 Moral reasoning might also be argued to potentially take place

without a conscious, effortful deliberation, suggesting it can be

classified as a form of intuition. Intuition might also be classified as a

very basic form of moral reasoning, meaning there is no real dispute

between the two forms of processing, but rather they merely represent

a difference in degree (i.e., time or effort) of processing. However,

because moral reasoning involves non-automatic inferential process-

ing, moral reasoning can be distinguished from intuition not only in

terms of degree but also in terms of the kind of processing taking

place (see Wright 2005, pp. 28–29 and 44–45).

Ethical Decision-Making Theory: An Integrated Approach 759

123

In other words, ‘‘…moral reasoning is retroactive: It

seeks to rationalize previous judgments and not to arrive at

those judgments’’ (Saltzstein and Kasachkoff 2004,

p. 276). One way to express the intuitive process is by

saying: ‘‘I don’t know, I can’t explain it, I just know it’s

wrong’’ (Haidt 2001, p. 814).

Emotion or sentiment, defined as one’s ‘feeling state’

(Gaudine and Thorne 2001, p. 176), has also become more

explicitly incorporated into EDM research: ‘‘…[C]umula-

tive evidence from empirical research supports the asser-

tion that ethical decision making is based not only on

intuitive but also on emotion-based mechanisms, and that

emotions constitute a key component of moral decision

making’’ (Salvador and Folger 2009, pp. 11–12). Tangney

et al. (2007, p. 346) also note the importance of emotion in

relation to EDM: ‘‘Moral emotions may be critically

important in understanding people’s behavioral adherence

(or lack of adherence) to their moral standards.’’ Emotions

that have been suggested as being more directly related to

EDM can be categorized into: (i) ‘pro-social’ emotions

which promote morally good behavior such as empathy,

sympathy, concern, or compassion19; (ii) ‘self-blame’

emotions such as guilt and shame; or (iii) or ‘other-blame’

emotions, such as contempt, anger, and disgust (see Prinz

and Nichols 2010).20

Several researchers have attempted to explain how

emotion impacts EDM. Haidt (2001) as a non-rationalist

appears to directly link emotion to intuition with little

emphasis placed on reason. According to Elfenbein (2007,

p. 348): ‘‘The three main perspectives on the relationship

between emotion and cognition are that emotion interferes

with cognition, that emotion serves cognition, and that the

two are intertwined…’’ Greene et al. (2001) link emotions

directly to the cognitive process and state (p. 2107):

‘‘…emotional responses generated by the moral-personal

dilemmas have an influence on and are not merely inci-

dental to moral judgment.’’21 According to Damasio

(1994), emotion is not in conflict with reason but provides

crucial support to the reasoning process by acting as a

regulator of conduct. Another similar means to explain the

relationship between emotion and reason is by describing

emotions as the ‘hot system’ (‘go’), which can undermine

efforts to self-control one’s behavior. In contrast, the ‘cool

system’ (‘know’) which is cognitive, contemplative, and

emotionally neutral can potentially control the ‘hot system’

through what is referred to as ‘moral willpower’ (Metcalfe

and Mischel 1999).22

The non-rationalist approaches have been persuasively

argued by researchers such as Haidt (2001) and Sonenshein

(2007). Building on the works of philosophers like

Shaftesbury and Hume, Haidt (2001, p. 816) suggests that:

‘‘…people have a built-in moral sense that creates plea-

surable feelings of approval toward benevolent acts and

corresponding feelings of disapproval toward evil and

vice.’’ The relationship between emotions and intuition is

not so clear however. Monin et al. (2007, p. 101) state that:

‘‘The difference between intuitions and emotions…seems

to be that intuitions are behavioral guides or evaluations

that directly follow from an emotional experience.’’ Dane

and Pratt (2007, pp. 38–39) refer to intuitive judgments as

‘‘…affectively charged, given that such judgments often

involve emotions’’ and are ‘‘…detached from rationality.’’

Kahneman (2003) states: ‘‘The operations of [intuition] are

typically fast, automatic, effortless, associative, implicit

(not available to introspection), and often emotionally

charged.’’ This seems to suggest that emotions either affect

or cause intuitions and are thus importantly related, or in

other cases, emotions may directly affect any of the four

EDM stages (Gaudine and Thorne 2001). It is important to

note however that not all intuitive judgments are neces-

sarily emotionally charged, and that intuitions should be

considered to be a cognitive (albeit non-deliberate) process

evoked by the situation: ‘‘It must be stressed…that intu-

ition, reasoning, and the appraisals contained in emo-

tions…are all forms of cognition’’ (Haidt 2001, p. 818).

Proposed Reformulation: Integrated EthicalDecision-Making (I-EDM) Model

Building on previous EDM models and in order to address

the key divergence outlined above between the rationalist

and non-rationalist approaches to EDM, a reformulated and

more integrative EDM model, referred to as ‘Integrated

Ethical Decision Making’ (or I-EDM), will now be

described (see Fig. 1 below).

At its most basic level, there are two major components

to the I-EDM model: (1) the EDM process (including

19 While positive emotions such as empathy are generally associated

with ethical behavior, it may also be the case that positive affect arises

following unethical behavior (e.g., cheating) which can then reinforce

additional future unethical behavior. See: Ruedy et al. (2013).20 The sorts of emotions that have been suggested as impacting EDM

include anger; anxiety; compassion; distress; dominance; embarrass-

ment; empathy; fear; grief; guilt; hope; humiliation; love; meaning-

lessness; mercy; pride; regret; remorse; responsibility; sadness;

shame; and sympathy (see: Haidt 2001; Agnihotri et al. 2012).

Eisenberg (2000) provides a review of the research on guilt, shame,

empathy, and moods in relation to morality.21 ‘Moral-personal’ dilemmas (as opposed to ‘impersonal’ dilemmas)

that trigger an emotional response relate to situations such as deciding

whether to physically push someone onto a trolley track to save the

lives of many others. See Greene et al. (2001).

22 Moral willpower (or self-sanction) can act like a ‘moral muscle’

that can be depleted following heavy use, or strengthened over time

(see Muraven et al. 1999).

760 M. S. Schwartz

123

antecedents and subsequents along with lack of moral

awareness); and (2) the factors (or variables) that influence

the EDM process. The EDM process is composed of four

basic stages: (i) awareness; (ii) judgment; (iii) intention;

and (iv) action/behavior, and in this respect continues to

reflect the basic process framework proposed by Rest

(1984, 1986). The antecedents to the EDM process include

basic environmental norms, while the subsequent stages of

the process include potential learning feedback loops. The

EDM factors that influence the process fall into two basic

categories: (i) individual; and (ii) situational (Trevino

1986). The I-EDM model assumes that ethical behavior is

contingent on which particular individual is facing the

ethical dilemma (e.g., different individuals may act dif-

ferently when faced with the same dilemma), and (ii) the

situational context within which an individual faces a

dilemma (e.g., the same individual can behave differently

depending on the particular situation one is facing or

environment one is situated within). The following will

first describe the individual and situational factors that can

influence each of the stages of EDM, followed by a

description of each stage in the Integrated-EDM process.

Individual Factors

Most EDM models refer to individual factors or variables

including, for example, ego strength, field dependence, and

locus of control (Trevino 1986), values (Ferrell and Gre-

sham 1985), or personal experiences (Hunt and Vitell

1986). It may however be more useful to utilize a broader

construct that captures all of the individual factors. Toward

this end, the I-EDM model attempts to collate together all

the individual factors into one general overarching main

construct: one’s ‘moral capacity’ (see Hannah et al. 2011).

There are two inter-related but distinct components that

comprise an individual’s moral capacity: (i) moral char-

acter disposition; and (ii) integrity capacity. Moral

capacity is defined as the ability of an individual to avoid

moral temptations, engage in the proper resolution of eth-

ical dilemmas, and ultimately engage in ethical behavior.

In other words, one’s moral capacity is based not only on

one’s level of moral maturity and the core ethical values

they possess, but the extent to which they will cling to

those values even when faced with pressures to act other-

wise. Each component of moral capacity will now be

described in more detail.

The first component of an individual’s moral capacity is

one’s moral character disposition. A number of researchers

have raised the concern that this factor is lacking in EDM

models. According to Pimental et al. (2010, p. 360): ‘‘The

presently available models are insufficient [because] they

fail to find that individuals’ characteristics are integral to

the identification of ethical dilemmas.’’ Others suggest that

‘‘…‘bad’ or ‘good’ apples, or bad features of otherwise

good apples play a role in decision making as well’’

(Watson et al. 2009, p .12). Damon and Hart (1992, p. 455)

propose that: ‘‘…there are both theoretical and empirical

reasons to believe that the centrality of morality to self may

Awareness(Recognize)

Consulta�on(Confirm)

Issue

Norms

Learning(Retrospect)

Emo�on(Feel)

Ra�onaliza�on(Jus�fy)

Reason(Reflect)

Intui�on(Sense)

Judgment(Evaluate)

Inten�on(Commit)

Behavior(Act)

Lack ofAwareness(Overlook)

Situa�on(Issue; Organiza�on;

Personal)

Individual(Moral Capacity)

Modera�ngFactors

Fig. 1 Integrated ethical decision-making model. Primary sources of

the model: Rest (1984, 1986) (four-component model); Jones (1991)

(issue-contingency model); Trevino (1986) (person–situation interac-

tionist model); Tenbrunsel and Smith-Crowe (2008) (lack of moral

awareness); Hannah et al. (2011) (moral capacity); Haidt (2001)

(social intuitionist model). Legend solid box—mental state; dotted

box—mental process; solid circle—active conduct; dotted circle—

factor/variable

Ethical Decision-Making Theory: An Integrated Approach 761

123

be the single most powerful determiner of concordance

between moral judgment and conduct.’’ It is therefore clear

that moral character disposition should be incorporated into

any EDM model.

While there might be several different approaches to

defining moral character disposition,23 for the purposes of

the Integrated-EDM model, it is intended to be a broad

construct that would potentially capture other moral char-

acter concepts that have been identified in the EDM liter-

ature. These concepts include ‘cognitive stage of moral

development’ (CMD) (Kohlberg 1973; Trevino 1986),

‘current ethical value system’24 (CEVS) (Jackson et al.

2013), ‘personal value orientations’ (Weber 1993; Bartlett

2003), ‘philosophy/value orientation’ (O’Fallon and But-

terfield 2005), ‘ethical ideology’25 (Schlenker 2008),

‘ethical predisposition’ (Brady and Wheeler 1996; Rey-

nolds 2006b26), and ‘moral sensitivity’ (Reynolds 2008).

Moral character disposition is closely related to the con-

struct of ‘moral maturation’ described by Hannah et al.

(2011, pp. 669–670) which includes moral ‘complexity’

(i.e., ‘‘knowledge of concepts of morality’’), ‘meta-cogni-

tive ability’ (i.e., the ‘engine’ used to ‘‘deeply process

complex moral knowledge’’), and ‘moral identity’27 (i.e.,

‘‘….individuals’ knowledge about themselves as moral

actors’’). For the purposes of the I-EDM model, an indi-

vidual’s moral character disposition is defined as one’s

level of moral maturity based on their ethical value system,

stage of moral development, and sense of moral identity.

Moral capacity however also includes another construct

related not just to one’s moral character disposition but to

the commitment or motivation one has to act consistently

according to their moral character disposition through their

ability to self-regulate (see Jackson et al. 2013). The con-

struct that comes closest to capturing this consistency and

therefore what will be used in the I-EDM model is one’s

integrity capacity suggested by Petrick and Quinn (2000).

They define ‘integrity capacity’ as the individual’s

‘‘…capability for repeated process alignment of moral

awareness, deliberation, character and conduct…’’ (2000,

p. 4).

The construct of integrity capacity overlaps closely with

Rest’s (1986) conceptualization of ‘moral character’ or

Hannah et al.’s (2011) ‘moral conation’ construct (i.e., the

impetus or moral willpower to act in accordance with one’s

ethical values or principles). Integrity capacity would

include concepts such as ‘moral ownership’ (i.e., the extent

to which one feels responsible over the ethical nature of their

own actions or the actions of others), ‘moral efficacy’ (i.e.,

believing one has the capability to act ethically), and ‘moral

courage’ (i.e., the strength and commitment to resist pres-

sures to act unethically) (see Hannah et al. 2011). An indi-

vidual’s moral capacity is continuously tested depending on

the circumstances one is facing. Whether one’s moral

character disposition will be maintained when put to the test

depends directly on one’s integrity capacity, meaning there

is a direct relationship between the two constructs.

According to the I-EDM model, rather than directly

affecting awareness, judgment, intention, or behavior as

suggested in much EDM research, the key EDM individual

variables found in EDM literature potentially affect one’s

‘moral capacity’ which then potentially affects the various

EDM stages. These include demographic variables (e.g.,

age, gender, education, nationality, work experience, etc.),

personality or psychological variables (e.g., cognitive

moral development/CMD, locus of control, ego strength,

etc.), and variables more directly related to one’s ethical

experience (e.g., religion/religiosity, ethics training, pro-

fessional education, etc.).28 Figure 2 below depicts the

individual moral capacity construct.

Situational Context

As indicated above, all dominant EDM models refer to

situational or organizational factors that can impact the

decision-making process (Bommer et al. 1987; Ferrell and

Gresham 1985; Hunt and Vitell 1986; Trevino 1986).

Building on these models along with Jones (1991), the

23 For example, one might include intuition and emotions (or the

ability to control one’s emotions) as part and parcel of one’s moral

character based on a virtue-based ethics approach. For the purposes of

the I-EDM model, intuition and emotion are described as part of the

moral judgment stage; however, the extent and manner in which this

takes place would potentially depend on one’s moral character

disposition.24 ‘Current ethical value system’ (CEVS) is the framework that

guides an individual’s ethical choices and behavior (see Jackson et al.

2013, p. 236).25 Ethical ideology is ‘‘…an integrated system of beliefs, values,

standards, and self-assessments that define an individual’s orientation

toward matters of right and wrong’’ (McFerran et al. 2010, p. 35).

One’s ‘ethical ideology’ is made up of one’s ‘moral personality’ and

‘moral identity’ (McFerran et al. 2010). Schlenker (2008, p. 1079)

suggests that there is a continuum between a ‘principled ideology’

(one believes moral principles exist and should guide conduct

‘‘…regardless of personal consequences or self-serving rationaliza-

tions’’) and ‘expedient ideology’ (one believes moral principles have

flexibility and that deviations for personal gain are justifiable).26 Ethical predisposition is defined as ‘‘…the cognitive frameworks

individuals prefer to use in moral decision making’’ (Reynolds 2006b,

p. 234).27 ‘Moral identity’ has been suggested by several theorists as playing

an important self-regulatory role in linking moral attitudes to one’s

behavior. See Schlenker (2008, p. 1081). See also Lapsley and

Narvaez (2004) for a review of the concept of moral identity.

28 See O’Fallon and Butterfield (2005) and Craft (2013) for a

complete list of EDM individual-related variables that would

potentially fall into these categories.

762 M. S. Schwartz

123

situational context of the I-EDM model comprises three

components: (1) the issue; (2) the organizational infras-

tructure; and (3) personal factors.

Issue

With respect to the first component, rather than focusing on

the good or bad ‘apples’ (i.e., individual characteristics) or

the good or bad ‘barrels’ (i.e., organizational environment),

some have argued that the issue itself should be the focus of

EDM (Jones 1991; Weber 1996; Bartlett 2003; Kish-

Gephart et al. 2010). While Jones’ (1991) issue-contingent

model clearly moved EDM in this direction, it is not clear if

it was moved far enough in certain respects. For the pur-

poses of the I-EDM model, the issue variable would consist

of three dimensions: (i) issue moral intensity; (ii) issue

importance; and (iii) issue complexity. Each dimension of

the issue-related variable will now be described.

As indicated above, Jones (1991) suggests that the moral

intensity of an issue can impact each of the four stages of the

EDM process. One initial concern with Jones’ moral inten-

sity construct is that the dimensions of moral intensity can

simply be incorporated into the moral judgment stage

(Herndon 1996).29 Setting this concern aside, Jones’ char-

acteristics of moral intensity can also be considered some-

what limited in a normative sense. Jones only considers

consequences (either positive or negative), social norms, and

the proximity or ‘closeness’ the agent has to those affected,

as tied to moral intensity. For the purposes of the I-EDM

model, the moral intensity of an issue would include not only

Jones’ (1991) criteria, but would be extended to include

additional deontological (i.e., duty-based) and fairness

dimensions (see May and Pauli 2002; McMahon and Harvey

2007; Singer 1996). In other words, the moral intensity of an

issue would be expected to increase if an individual is facing

a situation which might require breaking rules (e.g., codes),

laws, or promises, acting in a disloyal or dishonest manner,

infringing the moral rights of others, or relate to notions of

retributive, compensatory, procedural, or distributive justice.

As indicated by some researchers, ‘‘…other ethical per-

spectives should also be considered…such as fairness or law

breaking where harm was not involved’’ as part of the moral

intensity construct (Butterfield et al. 2000, p. 1010). A higher

level of moral intensity would then presumably increase the

likelihood of moral awareness (see May and Pauli 2002).

Issue importance is another component that would be

taken into account by the I-EDMmodel. Issue importance is

defined as the ‘‘…perceived personal relevance or impor-

tance of an ethical issue to an individual’’ (Robin et al. 1996,

p. 17, emphasis added). Anumber of researchers have shifted

Jones’ (1991) focus on the moral intensity of an issue to the

subjective importance placed on a particular issue by a par-

ticular individual. The reason for this approach is that any

objective determination of issue intensity would be irrele-

vant unless the decision maker himself or herself subjec-

tively perceived the issue as being of importance (Haines

et al. 2008; Valentine and Hollingworth 2012; Yu 2015;

Dedeke 2015). If issue importance to the decision maker is

not considered, the ethical implications of the issue might be

ignored altogether leading to a lack of moral awareness.

Another dimension of an issue that appears to have been

ignored in EDM theoretical models is the extent to which an

issue is perceived to be very complex. Issue complexity is

defined as issues that are perceived by the decision maker to

be hard to understand or difficult to resolve. Warren and

Smith-Crowe (2008, p. 90) refer to issue complexity in

relation to the type of moral judgment (reason versus intu-

ition) that might take place: ‘‘…the intuitionists are not

seeking judgments from individuals on issues that are new,

complex, or have many options.’’ Issue complexity can

involve the perceived degree of conflict among competing

moral standards or multiple stakeholder claims. Issues can

also be perceived as more complex when the decision maker

has never faced a similar situation before, or faces a wide

range of different alternatives. Issue complexity might also

include other components such as the degree to which there

are complicated facts involved or multiple factual assump-

tions that need to be made due to a lack of relevant infor-

mation being available. Such information may be necessary

in order to properly understand the ramifications of a par-

ticular issue (e.g., potential future harm to oneself or others).

In a similar vein, relevant knowledge on the issue has been

suggested as being linked with ‘‘…one’s ability to engage in

effortful cognitive activity’’ (see Street et al. 2001, p. 263).

As a result, regardless of its intensity or importance, themere

perceived complexity of the issue or dilemma could possibly

cause one to ignore facing and addressing the issue alto-

gether, leading to a type of ‘moral paralysis.’ For example,

decidingwhether to blow the whistle on firmmisconduct can

be a highly complex and difficult decision with ramifications

to multiple parties (De George 2010) which might prevent

Moral Character Disposition

Integrity Capacity

Individual Moral Capacity

Demographics EthicalExperience

Personality/Psychological

Fig. 2 Individual moral capacity

29 For example, Herndon states (1996, p. 504): ‘‘While Jones (1991)

adds the concept of moral intensity which is the degree of ‘badness’

of an act; it can be placed in the consequences and behavioral

evaluation portions of the synthesis integrated model.’’

Ethical Decision-Making Theory: An Integrated Approach 763

123

coming to any judgment on the ethically appropriate action

to take. Due to its potential impact on at least the moral

awareness and moral judgment stages, perceived ‘issue

complexity’ is also included in the I-EDM model as part of

the issue-related situational construct in addition to issue

intensity and issue importance.

Organizational Environment

The second component of the situational context is the

organizational environment. One potentially useful way to

denote organizational factors is to collectively refer to them

as representing the ‘ethical infrastructure’ of the organi-

zation (Tenbrunsel et al. 2003; Trevino et al. 2006). Ethical

infrastructure, as the overarching construct for all organi-

zational environmental variables, is defined as ‘‘…the

organizational elements that contribute to an organization’s

ethical effectiveness’’ (Tenbrunsel et al. 2003, p. 286). The

ethical infrastructure would include formal and informal

systems such as communication systems (i.e., codes of

conduct or ethics, missions, performance standards, and

compliance or ethics training programs), surveillance sys-

tems (i.e., performance appraisal and reporting hotlines),

and sanctioning systems (i.e., rewards and punishments

including evaluations, promotions, salary, and bonuses).30

Both the formal and informal systems form part of ‘‘…the

organizational climates that support the infrastructure’’

(Tenbrunsel et al. 2003, p. 286). A substantial body of

empirical research has examined the potential impact the

various components of ethical infrastructure can have on

ethical decision making by individuals within organiza-

tions (see O’Fallon and Butterfield 2005; Craft 2013). The

underlying assumption is that firms with a strong ethical

culture and climate generally lead to more employees

becoming aware of ethical issues and the importance of

behaving in what would be considered by the company to

be in an ethical manner (Ethics Resource Center 2014).

The impact of significant or ‘referent’ others/peers

which can lead to one imitating or learning from the

behavior of others along with authority pressures (e.g.,

managers or executives) would also be included in the

I-EDM model as part of the ethical infrastructure (e.g.,

Hunt and Vitell 1986; Bommer et al. 1987; Trevino 1986).

Opportunity, or ‘‘…the occurrence of circumstances to

permit ethical/unethical behavior’’ would also be included

as a component of an organization’s ethical infrastructure

in terms of organizational culture (Ferrell et al. 1989,

p. 61).

Personal Situation

One’s personal situation, as distinct from one’s moral

capacity, is the final component of the situational context.

The key variable of one’s personal situation is one’s per-

ceived ‘need for personal gain,’ which can result from

living beyond one’s means, high debt, financial losses, or

unexpected financial needs (see Albrecht 2003). Another

means of expressing one’s ‘need for personal gain’ at any

given point in time is what might be referred to as one’s

current state of ‘ethical vulnerability.’31 This means that if

one is in a weak financial position, facing significant per-

ceived financial pressures or obligations, with few or non-

existent career or job alternatives available, one would

presumably be in a much weaker position to resist uneth-

ical requests and put one’s job, promotion, or bonus at risk

or be willing to accept the ‘personal costs’ of taking moral

action (Trevino 1986). Other constraints such as time

pressure or limited financial resources to do what one

knows to be right can also be considered part of the per-

sonal situational context (Trevino 1986).

One or more of the situational factors can come into

direct conflict with one’s moral character disposition, and

whether one is able to withstand the pressures one faces

would be dependent on the extent of one’s integrity

capacity. Figure 3 below depicts each of the components of

the situational context construct.

Process Stages of EDM

Now that the individual and situational context factors have

been described, the process stages of the I-EDM model

which can be affected by the moderating variables can be

outlined. In terms of the process of the I-EDM model, the

initial starting point are the norms (i.e., environment) that

are prevalent which tend to determine whether an ethical

issue or dilemma potentially exists. Norms are defined as

those prevailing standards or expectations of behavior held

by members of a particular group or community. Norms

can simultaneously exist at several different levels,

including at the societal/cultural/national level (e.g., brib-

ery is seen as being generally acceptable), at the organi-

zational level32 (e.g., dating a work colleague is considered

unacceptable according to corporate policy), or at the work

group level (e.g., padding expense accounts is viewed as

acceptable by one’s work colleagues).

30 As an alternative to ‘ethical infrastructure,’ others (e.g., Valentine

et al. 2013) have used the term ‘ethical context’ to refer to both the

‘ethical culture’ (Trevino et al. 1998) and the ‘ethical climate’ of the

organization (Victor and Cullen 1988).

31 The notion of ‘vulnerability’ has apparently received little

attention in the business ethics literature. See: Brown (2013).32 The firm’s ethical infrastructure should be considered distinct from

organizational-level norms, although there would clearly be a

relationship between them. This discussion is however beyond the

scope of the paper.

764 M. S. Schwartz

123

Several EDM models propose that there is an ‘environ-

mental’ context within which the existence of an ethical

issue or dilemma can arise (Ferrell and Gresham 1985; Hunt

and Vitell 1986; Jones 1991; Brass et al. 1998; Randall

1989; Trevino 1986). While the sources of these norms

might also be discussed, such as deeply embedded socio-

logical, political, legal, or religious considerations or views,

this discussion is beyond the scope for the purposes of this

paper. For the I-EDM model, a potential ethical issue or

dilemma arises when there is a situation whereby different

norms apply, each of which cannot be followed at the same

time. This basic starting point of the EDM process has also

been referred to as the ‘eliciting situation’ (Haidt 2001).

Moral Awareness

Assuming that a situation with a potential ethical issue or

dilemma exists due to conflicting norms, the next question

is whether the individual becomes aware of the existence of

the issue or dilemma. Moral awareness is defined as the

point in time when an individual realizes that they are

faced with a situation requiring a decision or action that

could the affect the interests, welfare, or expectations of

oneself or others in a manner that may conflict with one or

more moral standards (Butterfield et al. 2000). Moral

awareness that a particular situation raises ethical issues

can take place simply due to an individual’s moral capacity

and inherent ability to recognize ethical issues (Hannah

et al. 2011) and/or as a result of a firm’s ethical infras-

tructure (i.e., including codes, training, meetings, or other

disseminated ethical policy communications) (Tenbrunsel

et al. 2003). If one becomes aware that an ethical issue or

dilemma exists, then one has by definition identified at

least two different possible courses of action, and can then

potentially engage in an EDM process consisting of the

moral judgment and intention stages.33 The following will

now explain how the ‘lack of moral awareness’ process

takes place, considered to be an equally important com-

ponent of the I-EDM model.

Lack of Moral Awareness

The vast majority of EDM theoretical models, by relying

on Rest (1986), presume that only through moral awareness

of the potential ethical nature of a dilemma can one ulti-

mately engage in ethical behavior. For example, Sonen-

shein states (2007, p. 1026): ‘‘…moral awareness is often

viewed as binary—you either recognize the ethical issue or

you fail to do so…Consequently, research has tended to

focus on whether moral awareness is present or absent as a

precondition for activating the other stages of rationalist

models (Jones 1991, p. 383)…’’ What appears to be lack-

ing in current EDM models however is the depiction of

one’s lack of moral awareness, meaning one does not

realize (i.e., they overlook) that the situation one is expe-

riencing raises ethical considerations.

There are now several overlapping theories that have

been proposed in EDM literature to help explain the pro-

cesses or reasons by which one might lack moral aware-

ness, also referred to as unintentional ‘amoral awareness’

(Tenbrunsel and Smith-Crowe 2008) or unintentional

‘amoral management’ (Carroll 1987).34 For example,

Bandura’s theoretical work on moral disengagement is an

important theoretical source underlying one’s lack of moral

awareness. According to Bandura (1999), moral disen-

gagement involves a process by which one convinces

oneself in a particular context that ethical standards do not

apply. Moral standards regulate behavior only when self-

regulatory mechanisms or ‘moral self-sanctions’ (i.e., one’s

conscience) are activated. Psychological processes that can

prevent this activation include ‘‘…restructuring of inhu-

mane conduct into a benign or worthy one by moral jus-

tification, sanitizing language, and advantageous

comparison; disavowal of a sense of personal agency by

diffusion or displacement of responsibility; disregarding or

minimizing the injurious effects of one’s actions; and

Issue Organization (Ethical Infrastructure)

Situational Context

Personal

Intensity;Importance;Complexity

Perceived Need for Gain;

Constraints(time, financial

ability)

Communication; Training;

Sanctioning Systems(including

peers, authority,opportunity,

rewards, sanctions)

Fig. 3 Situational context for EDM

33 There is however a risk of moral awareness being confounded with

moral judgment, especially when the definition of moral awareness

Footnote 33 continued

includes consideration of one or more ethical standards (see Reynolds

2006b, p. 233).34 Carroll (1987) refers to ‘amoral managers,’ who can either act

intentionally or unintentionally. Unintentional amoral managers

‘‘…do not think about business activity in ethical terms. These

managers are simply casual about, careless about, or inattentive to the

fact that their decisions and actions may have negative or deleterious

effects on others. These managers lack ethical perception and moral

awareness; that is, they blithely go through their organizational lives

not thinking that what they are doing has an ethical dimension to it.

They may be well intentioned but are either too insensitive or

egocentric to consider the impacts on others of their behavior’’

(Carroll 1987, p. 11).

Ethical Decision-Making Theory: An Integrated Approach 765

123

attribution of blame to, and dehumanization of, those who

are victimized’’ (Bandura 1999, p. 193).

Similar to moral disengagement, one can also lack moral

awareness due to ethical fading. Ethical fading is ‘‘…the

process by which the moral colors of an ethical decision

fade into bleached hues that are void of moral implica-

tions’’ (Tenbrunsel and Messick 2004, p. 224). In order for

‘ethical fading’ to take place, people engage in self-de-

ception through the use of euphemistic language (e.g.,

‘aggressive’ accounting practices; ‘right sizing’) and other

techniques to ‘shield themselves’ from their own unethical

behavior. Another similar concept used to explain one’s

lack of moral awareness is ethical blindness, or ‘‘…the

decision maker’s temporary inability to see the ethical

dimension of a decision at stake’’ (Palazzo et al. 2012,

p. 324). Ethical blindness includes three aspects: (i) people

deviate from their own values and principles; (ii) this

deviation is temporary in nature; and (iii) the process is

unconscious in nature (Palazzo et al. 2012, p. 325).35

Another theory related to a lack of moral awareness is

the use of non-moral decision frames, which occurs when

one focuses on the business or legal implications of issues

rather than on the ethical considerations (Tenbrunsel and

Smith-Crowe 2008; Dedeke 2015). The process of framing

in a non-moral manner leading to a lack of awareness can

result due to insufficient or biased information gathering, or

socially constructing the facts in a particular manner (So-

nenshein 2007). Moral myopia can also take place which is

similarly defined as ‘‘….a distortion of moral vision that

prevents moral issues from coming into focus’’ (Drum-

wright and Murphy 2004, p. 7). These initial theories or

processes (moral disengagement, ethical fading, ethical

blindness, non-moral decision frames, and moral myopia)

appear to relate more directly to one’s work environment

leading to a lack of moral awareness. In other words, if one

is situated in a work environment which tends to ignore

ethical considerations in its decision making or consistently

prioritizes the bottom line over ethical concerns, as well as

uses non-moral language in its operations,36 then one

would likely be less inclined to be morally aware when

facing a dilemma.

Moral awareness however could be attributable to the

particular individual’s inherent nature, and thus directly

related to one’s moral character disposition described

above. For example, moral awareness can result from

moral attentiveness, which has been defined as: ‘‘…the

extent to which an individual chronically perceives and

considers morality and moral elements in his or her expe-

riences’’ (Reynolds 2008, p. 1027). Similar to the notion of

moral attentiveness, others have linked moral awareness to

the concept of mindfulness, which is described as ‘‘…an

individual’s awareness both internally (awareness of their

own thoughts) and externally (awareness of what is hap-

pening in their environment)’’ (Ruedy and Schweitzer

2010, p. 73). It may be that a lack of mindfulness exac-

erbates one’s self-serving cognition, self-deception, and

unconscious biases leading to unethical behavior: ‘‘Mindful

individuals may feel less compelled to ignore, explain

away, or rationalize ideas that might be potentially

threatening to the self, such as a conflict of interest or a

potential bias’’ (Ruedy and Schweitzer 2010, p. 76).

Engaging in moral imagination (Werhane 1998) might

also potentially lead to moral awareness, while failing to

engage in moral imagination might lead to a lack of moral

awareness. Moral imagination involves whether one has

‘‘…a sense of the variety of possibilities and moral con-

sequences of their decisions, the ability to imagine a set of

possible issues, consequences, and solutions’’ (Werhane

1998, p. 76). When one is only able to see one option rather

than create imaginative solutions, one may be unaware that

one is even facing an ethical dilemma with a potentially

more ethical alternative being available. Figure 4 below

summarizes the theories or processes discussed above that

help explain and contribute to moral awareness or a lack of

moral awareness.

By not including the phenomenon of ‘lack of moral

awareness’ in EDM models, an important stream of EDM

research is being ignored. Even if one is not aware that an

ethical dilemma exists, one can still engage in what might

be considered ‘unintentional’ ethical or unethical behavior

(Tenbrunsel and Smith-Crowe 2008; Jackson et al. 2013).

Due to the importance of understanding why there might be

a lack of moral awareness and the processes leading to it,

which would presumably increase the potential for

Ethical Issue

• Moral Disengagement• Ethical Fading• Ethical Blindness• Non-Moral Framing• Moral Myopia

• Moral Attentiveness• Moral Mindfulness• Moral Imagination• Moral Framing

MoralAwareness

Lack of Moral Awareness

Fig. 4 Processes affecting moral awareness

35 The classic example of ‘ethical blindness’ comes from the recall

coordinator of the defective Ford Pinto vehicle who asked himself:

‘‘Why didn’t I see the gravity of the problem and its ethical

overtones?’’ (Gioia 1992, p. 383).36 This can also take place due to moral muting, which involves

managers who ‘‘…avoid moral expressions in their communica-

tions…’’ (Bird and Waters 1989, p. 75).

766 M. S. Schwartz

123

unethical behavior, the lack of moral awareness path is

depicted in the I-EDM model.

Moral Judgment and Intention Stages of I-EDM

The moral judgment and intention stages represent the crux

of the I-EDM model, and might be referred to as the actual

EDM process that takes place. Moral judgment is defined

for the purposes of the model as the determination of the

most ethically appropriate course of action among the

alternatives. Moral intention is defined as the commitment

or motivation to act according to one’s moral values.37 This

is the point in the I-EDM model where several different

processes either affect moral judgment directly, or poten-

tially interact with each other leading to judgment and

intention. These mental processes include (i) emotion; (ii)

intuition; (iii) reason; (iv) rationalization; as well as (v) the

active process of consultation.

As can be seen in Fig. 1 above, the Integrated-EDM

model does not suggest that only reason or intuition is

involved in the moral judgment process, but that both are

potentially involved, along with emotion and rationaliza-

tion. As indicated above, a growing number of researchers

are indicating the importance of including what has been

referred to as the ‘dual process’ of both reason and emo-

tion/intuition in any EDM model (e.g., see Elm and Radin

2012; Marquardt and Hoeger 2009). For example, Woice-

shyn (2011, p. 313) states [emphasis added]: ‘‘Following

the developments in cognitive neuroscience and neu-

roethics (Salvador and Folger 2009) and paralleling the

general decision-making literature (Dane and Pratt 2007),

most researchers have since come to hold a so-called dual

processing model of ethical decision making.’’

Despite this fact, very few studies provide a clear visual

depiction of the influence of reason, intuition, and emotion

on EDM. Haidt (2001) includes reason (or reasoning) as

well as intuition in his schematic social intuitionist model,

although as indicated above reason serves primarily a post

hoc rationalization function and emotion (or affect) appears

to be comingled with intuition. Reynolds (2006a) proposes

a two-system model which also includes both intuition (the

reflexive X-system) and reason (the higher order conscious

reasoning C-system) but appears to have left out the impact

of emotion. Woiceshyn (2011) also attempts to integrate

reason and intuition through a process she calls ‘integration

by essentials’ and ‘spiraling’ but does not explicitly include

emotion. Gaudine and Thorne (2001) visually depict the

influence of emotion on the four EDM stages but do not

refer to intuition. Other fields, such as social psychology,

have attempted to merge intuition and reason together

schematically (Strack and Deutsch 2004).

One EDM study was identified however that shows the

links between reason, intuition, and emotion. Dedeke

(2015) does so by proposing a ‘cognitive-intuitionist’

model of moral decision making. In the model, intuitions

are referred to as reflexive ‘automatic cognitions,’ which

may or may not interact with ‘automatic emotions.’ This

interaction is considered part of the ‘pre-processing’ pro-

cess which often takes place and is then ‘‘…subject to

review and update by the moral reflection/reasoning pro-

cess’’ (Dedeke 2015, p. 446). Emotion can also ‘sabotage’

the moral reflection stage for some people and thus an

‘emotional control variable’ is proposed ‘‘…that enables an

individual to…modify…their feelings stages’’ (Dedeke

2015, p. 448). Dedeke’s ‘cognitive-intuitionist’ model

recognizes and captures the importance of moving future

EDM theory in a more integrative manner, in other words,

one that incorporates reason, intuition, and emotion into the

EDM process.

While the actual degree of influence of reason versus

intuition/emotion and the sequencing or nature of the

interaction remain open for debate and further research

(Dane and Pratt 2007), virtually everyone now agrees that

both approaches play a role in EDM.38 The relationships

between emotion and intuition upon each other, as well as

on moral judgment and intention, should therefore be

indicated in any revised EDM model. As indicated by

Haidt (2001, p. 828):

The debate between rationalism and intuitionism is an

old one, but the divide between the two approaches

may not be unbridgeable. Both sides agree that people

have emotions and intuitions, engage in reasoning,

and are influenced by each other. The challenge, then,

is to specify how these processes fit together.

Rationalist models do this by focusing on reasoning

and then discussing the other processes in terms of

their effects on reasoning. Emotions matter because

they can be inputs to reasoning…The social intu-

itionist model proposes a very different arrangement,37 Ethical intention is sometimes linked with ethical behavior as

being part of the ‘same phenomenon’ (Reynolds 2006a, p. 741) or

they can be combined together as representing one’s ‘ethical choice’

(Kish-Gephart et al. 2010, p. 2). It may be therefore that ‘intention’

should be eliminated from Rest’s (1986) four-stage model, but might

continue to act as a proxy for measuring judgment or behavior in

EDM empirical research (see Mencl and May 2009, p. 205). For the

purposes of the I-EDM model, intention remains theoretically distinct

from behavior.

38 Some have argued that the debate over reason versus intuition/

emotion is actually based on whether one is experiencing a moral

dilemma requiring a reasoning process, versus an affective or

emotion-laden process based on reacting to a shocking situation such

as considering the prospect of eating one’s own dog (Monin et al.,

2007, p. 99).

Ethical Decision-Making Theory: An Integrated Approach 767

123

one that fully integrates reasoning, emotion, intuition,

and social influence.

Yet despite the claim of ‘fully’ integrating reason,

emotion, and intuition, Haidt (2001) clearly makes reason

play a secondary role to intuition in a potential two-stage

process, highlighting its lack of importance to EDM (see:

Saltzstein and Kasachkoff 2004). As opposed to the EDM

process models discussed above, the following will briefly

explain how the I-EDM model incorporates emotion,

intuition, reason, and rationalization along with their

potential inter-relationships as part of a neuro-cognitive-

affective process as depicted in Fig. 1 above.

Emotion

Emotion is considered an important part of the moral

judgment and intention stages in the I-EDM model. In

many cases, emotion might be the first response when

faced with an ethical situation or dilemma (Haidt et al.

1993). Emotions such as empathy can lead to intuitive

judgments (e.g., ‘affect-laden intuitions’), often referred to

as ‘gut feelings’ about the rightness or wrongness of certain

actions (Toffler 1986). For example, the discovery that a

work colleague is downloading child pornography, or that

one’s firm is selling defective and dangerous goods to

unknowing consumers, may trigger an emotional response

such as a feeling of anger or disgust. This may then lead to

an intuitive moral judgment that such behavior is unac-

ceptable and needs to be addressed. In addition to affecting

intuitions, emotion may impact or affect the moral rea-

soning process (Damasio 1994; Metcalfe and Mischel

1999; Dedeke 2015). Emotions can also lead to moral

rationalization, for example, envy of one’s work colleagues

who are paid more than oneself for the same performance

may lead one to morally rationalize padding expense

accounts. Emotions may impact other stages of the EDM

process in addition to judgment such as intention by cre-

ating a motivation to act (see Eisenberg 2000; Huebner

et al. 2009).

Intuition

The I-EDM model presumes that for most dilemmas,

including those that are non-complex or involve moral

temptations (right versus wrong), an intuitive cognitive

process takes place at least initially after being evoked by

the situation (Haidt 2001; Reynolds 2006a; Dedeke 2015),

and in this respect, intuition plays a significant role in the

EDM process. Intuition is the more automatic and less

deliberative process often leading to an initial intuitive

judgment that may or may not be acted upon. For example,

several situations may provide an automatic gut ‘sense’ of

rightness and wrongness, such as paying a bribe or over-

charging a customer. The moral reasoning or the moral

rationalization process is then expected typically to follow

one’s initial intuitive judgment.

Reason

The I-EDM model considers the moral reasoning process

to be just as important as intuition (Saltzstein and

Kasachkoff 2004), and not limited to merely post hoc

rationalization (e.g., Haidt 2001). For example, in deciding

whether to dismiss an underperforming colleague who is

also considered a close friend, a more deliberative moral

reasoning process may take place, leading to a particular

moral judgment. Moral reasoning provides the means by

which the decision maker can reflect upon and resolve if

necessary any conflict among the moral standards (e.g.,

consequences versus duties versus fairness) or competing

stakeholder claims. More complex ethical dilemmas would

presumably lead to a more challenging moral reasoning

process, the proper resolution of which may require a

stronger individual moral capacity. Moral intention is then

expected to follow one’s moral judgment depending on

one’s integrity capacity and situational context.

Moral Rationalization

This is the point during the I-EDM process when moral

rationalization, which has not been made explicit in any of

the dominant EDM models, becomes important. Moral

rationalization has over time become recognized as a more

important psychological process with respect to EDM.

Moral rationalization has been defined as ‘‘…the cognitive

process that individuals use to convince themselves that

their behavior does not violate their moral standards’’

(Tsang 2002, p. 26) and can be used to justify both small

unethical acts as well as serious atrocities (Tsang 2002,

p. 25). Another way of thinking about rationalization is

through the process of belief harmonization which involves

‘‘…a process of arranging and revising one’s needs, beliefs,

and personal preferences into a cohesive cognitive network

that mitigates against cognitive dissonance’’ (Jackson et al.

2013, p. 238). Rest seems to suggest that the rationalization

process is a type of faulty or ‘flawed’ moral reasoning

(1986, p. 18):

…a person may distort the feelings of obligation by

denying the need to act, denying personal responsi-

bility, or reappraising the situation so as to make

alternative actions more appropriate. In other words,

as subjects recognize the implications of [their moral

judgment and intention] and the personal costs of

moral action become clear, they may defensively

768 M. S. Schwartz

123

reappraise and alter their interpretation of the situa-

tion [i.e., the awareness stage] so that they can feel

honorable, but at less cost to themselves.

There are several potential theories underlying moral

rationalization. Moral rationalization may be based on the

notion of moral appropriation or ‘‘…the desire for moral

approval from oneself or others’’ (Jones and Ryan 1997,

p. 664). The moral rationalization process has also been

tied to what Ariely (2012, p. 53) refers to as fudge factor

theory, which helps explain how many are prepared to

cheat a little bit through ‘flexible’ moral reasoning while

still maintaining their sense of moral identity. Similarly,

moral balance theory permits one to engage in moral

deviations as long as one’s moral identity remains ‘satis-

factory’ (Nisan 1995).

Anand et al. (2005) extend Bandura (1999) and Sykes

and Matza (1957) by outlining the means by which one can

rationalize corrupt or unethical acts.39 These methods

include (Anand et al. 2005, p. 11): (i) denial of responsi-

bility (‘My arm was being twisted’); (ii) denial of injury

(‘No one was really harmed’); (iii) denial of victim (‘They

deserved it’); (iv) social weighting (‘Others are worse than

we are’); (v) appeal to higher authorities (‘We answered to

a higher cause’); and (vi) balancing the ledger (‘I deserve

it’). In terms of the timing of rationalization in the EDM

process, according to Anand et al. (2005, p. 11): ‘‘Ra-

tionalizations can be invoked prospectively (before the act)

to forestall guilt and resistance or retrospectively (after the

act) to ease misgivings about one’s behavior. Once

invoked, the rationalizations not only facilitate future

wrongdoing but dull awareness that the act is in fact

wrong.’’

If one’s moral judgment based on moral reasoning is

contrary to one’s self-perceived moral identity, typically

due to a preference or desire to act toward fulfilling one’s

self-interest, then one may engage in a biased or distorted

process of moral rationalization. By doing so, one is able to

avoid experiencing the emotions of guilt, shame, or

embarrassment. Some refer to this state as being one of

‘moral hypocrisy’ or the appearance of being moral to

themselves or others while ‘‘…avoiding the cost of actually

being moral’’ (Batson et al. 1999, p. 525). While moral

rationalization is a cognitive (albeit possibly subconscious)

process, it may also affect, be affected by, or work in

conjunction with (i.e., overlap) the moral reasoning process

(Tsang 2002), intuition (Haidt 2001), or emotion (Bandura

1999). With few exceptions, moral rationalization is often

unfortunately ignored or simply assumed to exist by most

EDM models,40 but due to its importance is included in the

I-EDM model.

Moral Consultation

One additional potential process that can impact one’s

judgment, intention, or behavior is that of moral consul-

tation. Moral consultation is defined as the active process

of reviewing ethics-related documentation (e.g., codes of

ethics) or discussing to any extent one’s ethical situation

or dilemma with others in order to receive guidance or

feedback. While it is clear that not all individuals will

engage with others in helping to determine the appropri-

ate course of action, any degree of discussion with col-

leagues, managers, family members, friends, or ethics

officers, or the review of ethics documentation when

facing an ethical dilemma, would constitute moral

consultation.

Moral consultation as a procedural step of EDM, while

not incorporated into the dominant EDMmodels, is referred

to by some EDM theorists (see Sonenshein 2007; Hamilton

and Knouse 2011). For example, Haidt (2001, 2007) refers

to individuals being influenced or persuaded through their

social interactions with others in his ‘social intuitionist’

model and suggests that ‘‘…most moral change happens as

a result of social interaction’’ (Haidt 2007, p. 999). Moral

consultation should be considered particularly important in

an organizational setting given that firms often encourage

and provide opportunities to their employees to discuss and

seek ethical guidance from others or from ethics docu-

mentation (Weaver et al. 1999; Stevens 2008). While moral

consultation is generally expected to improve ethical deci-

sion making, the opposite might also occur. One may dis-

cover through discussion that ‘unethical’ behavior is

considered acceptable to others or even expected by one’s

superiors potentially increasing the likelihood of acting in

an unethical manner.

Ethical Behavior

One’s moral judgment (evaluation), whether based on

emotion (feel), intuition (sense), moral reasoning (reflect),

moral rationalization (justify), and/or moral consultation

(confirm), may then lead to moral intention (commitment),

which may then lead to ethical or unethical behavior (ac-

tion) (see Fig. 1 above). Each of the above processes (i.e.,

emotion, intuition, reason, rationalization, and

39 Heath (2008) provides a similar list of moral rationalizations

which he refers to as ‘neutralization techniques.’

40 Three notable exceptions include Reynolds (2006a), who makes

rationalization explicit in his model as a retrospective (e.g., post hoc

analysis) process operating as part of the higher order conscious

reasoning system, while the decision-making model proposed by

Tsang (2002) positions moral rationalization (along with situational

factors) as being central to the ethical decision-making process.

Dedeke (2015) also indicates that rationalization of one’s reflexive

(intuitive or emotion-based) judgment can be part of the ‘moral

reflection’ stage of EDM where moral reasoning also takes place.

Ethical Decision-Making Theory: An Integrated Approach 769

123

consultation) can impact moral judgment either directly or

following interaction with each other. The behavior can

either relate to ‘proscriptive’ (e.g., avoid harm) or ‘pre-

scriptive’ (e.g., do good) actions (see Janoff-Bulman et al.

2009) and can be of different degrees of ethicality in terms

of the ‘rightness’ or ‘wrongness’ of the behavior (see

Henderson 1984; Green 1994; and Kaler 2000).

Feedback Loops

Potential feedback loops represent the final procedural

step in the I-EDM model. Behavior may be followed by

perceived positive or negative consequences to others or

to oneself through rewards or punishments/sanctions for

the decision made or actions taken. When the conse-

quences are observed by the decision maker, learning

involving internal retrospection over one’s actions can

take place, which may then affect one’s individual moral

capacity and thereby the decision-making process the next

time an ethical dilemma arises. According to Reynolds

(2006a, p. 742): ‘‘…anyone who has lain awake at night

contemplating the experiences of the previous day knows

that retrospection is a key component of the ethical

experience…’’ The learning might be either positive or

negative, for example, one might determine that acting in

an unethical manner was worth the risks taken, or that

acting ethically was not worth the personal costs suffered.

In either case, such realizations might impact future

decision making. Similar feedback loops including con-

sequences and learning are included in several (but not

all) EDM models. For example, Ferrell and Gresham

(1985) refer to ‘evaluation of behavior,’ while Hunt and

Vitell (1986, p. 10) refer to ‘actual consequences’ which

is the ‘‘major learning construct in the model’’ which

feeds back to one’s ‘personal experiences.’ Stead et al.

(1990) refer to their feedback loop as one’s ‘ethical

decision history.’

One additional feedback loop of the I-EDM model (see

Fig. 1) flows from behavior to awareness, in that only after

one acts (e.g., telling a white lie, fudging an account) one

may realize that there were ethical implications that ought

to have been considered (i.e., if there was originally a lack

of awareness) meaning that the matter ought to have been

considered differently. The original issue or dilemma may

then potentially be judged again based on any of the pro-

cesses (i.e., emotion, intuition, reason, rationalization, and/

or consultation) leading to a different judgment and addi-

tional behavior (e.g., admission, apology, steps to fix the

mistake, etc.). To provide greater clarity, Table 1 below

summarizes the various moderating factors, while Table 2

below summarizes the process stages of the I-EDM model

including the potential interaction between emotion, intu-

ition, reason, rationalization, and consultation.

Basic Propositions

In general, according to the I-EDM model, ethical behavior

is assumed to be more likely to take place when there is

strong individual moral capacity (strong moral character

disposition and integrity capacity), strong issue character-

istics (high level of moral intensity and perceived impor-

tance with a lack of complexity), strong ethical

infrastructure (including weak perceived opportunity with

strong sanctions for unethical behavior), along with weak

personal constraints (weak perceived need for personal

gain, sufficient time and financial resources). Unethical

behavior tends to take place when there is weak individual

moral capacity (weak moral character disposition and

integrity capacity), weak issue characteristics (weak issue

intensity and importance along with a high level of issue

complexity), weak ethical infrastructure (including strong

perceived opportunities, weak sanctions, along with strong

authority pressures and peer influence to engage in uneth-

ical behavior), and a lack of personal constraints (strong

perceived need for personal gain and time pressures).

Teaching, Research, and Managerial Implications

The I-EDM model has a number of important potential

implications for both the academic and business commu-

nities. In terms of teaching implications, despite the history

of major corporate scandals, a debate continues over the

utility of business ethics education (Bosco et al. 2010). For

those who teach business ethics, many still argue over what

the proper teaching objectives should consist of (Sims and

Felton 2006). The I-EDM model suggests that the focus of

business ethics education should be on two particular

stages of EDM, the moral awareness stage, and the moral

judgment stage. In terms of moral awareness, by presenting

an array of relevant ethical dilemmas, and then sensitizing

students to the potential ethical implications arising from

the dilemmas, might increase students’ general level of

moral awareness following the course.

By explaining the tools of moral reasoning, including

consequentialism and deontology, students may be better

prepared and able to engage in moral reasoning. The

dangers of pure egoism in the form of greed along with the

deficiencies of relativism as a moral standard need to be

pointed out. Students should also be exposed to the moral

rationalization process, so that they will be more aware

when it is taking place and can better guard against its

occurrence. New approaches such as ‘giving voice to val-

ues’ (Gentile 2010) can also help provide a better means

for students and others to transition their values from

intentions to actual behavior rather than merely focus on

the moral reasoning process. Ultimately, business students

770 M. S. Schwartz

123

need to possess the tools to be able to determine and

actualize what might be considered ethical versus unethical

behavior.

Research that focuses on the relationship and interaction

between emotion, intuition, reasoning, rationalization, and

moral consultation should be further pursued. It is not clear,

for example, the extent to which intuition and emotions

improve ethical decision making or hinder it. More research

on the particular aspects and types of ethical issues, beyond

issue intensity such as issue importance and complexity,

should be examined to see which process (i.e., emotion,

intuition, reason, consultation) is utilized to a greater

degree, and to what extent this leads to more ethical

behavior with fewer instances of rationalization. New sci-

entific methods and studies of brain activity should assist in

this endeavor. Given that the current EDM models have

only partially explained the causes and processes of ethical

behavior, clearly more work needs to be done to revise

EDM theory leading to more fruitful empirical examination.

Future EDM research should also continue to consider

whether certain individual and/or situational variables play

a more significant causal or moderating role depending on

which stage of EDM is taking place. For example, it may

be that during the awareness and judgment stages, one’s

moral character disposition, issue intensity, issue impor-

tance, and issue complexity are more important, while

during the intention to behavior stage, integrity capacity

and perceived ‘need for gain’ might play more important

roles. The role of biases and heuristics should also continue

to be examined in relation to EDM during each of the

stages.

In terms of managerial implications, the I-EDM model

suggests that ethical infrastructure and moral consultation

each play an important role in EDM, with formal elements

such as codes and training potentially being more impor-

tant for awareness and judgment. The model also suggests

that hiring practices based on seeking individuals with

strong moral capacities should continue to be pursued,

especially for managers or senior executives. For managers

and employees, the I-EDM model may have possible

normative implications as well, such as avoiding the sole

use of intuition and emotion whenever possible, taking

steps to improve one’s ethical awareness potential, and to

always be cognizant of rationalizations and biases affecting

the moral reasoning process.

Limitations

The proposed I-EDM model contains a number of impor-

tant limitations. In terms of scope, the I-EDM model is

focused on individual decision making and behavior, rather

than organizational, and is designed to apply mainly to the

business context. One could argue that the model is overly

rationalist in nature by continuing to rely on Rest (1986) as

the dominant framework to explain the EDM process, and

Table 1 I-EDM moderating factors

Concept/construct Definition and relationships Key sources

Individual moral

capacity

The ability to avoid moral temptations, engage in the proper resolution of ethical

dilemmas, and engage in ethical behavior. Consists of one’s moral character

disposition and integrity capacity. Can impact each EDM stage

Hannah et al. (2011)

Moral character

disposition

An individual’s level of moral maturity based on their ethical value system, stage of

moral development, and sense of moral identity. Primarily impacts the moral

awareness and moral judgment stages

Kohlberg (1973);

Jackson et al. (2013)

Integrity capacity The capability to consistently act in a manner consistent with one’s moral character

disposition. Impacts primarily the intention and behavior stages

Petrick and Quinn (2000)

Ethical issue A situation requiring a freely made choice to be made among alternatives that can

positively or negatively impact others. Can impact each EDM stage

Jones (1991)

Issue intensity The degree to which consequences, social norms, proximity, or deontological/fairness

considerations affect the moral imperative in a situation. Can impact each EDM stage

Butterfield et al. (2000)

Issue importance The perceived personal relevance of an ethical issue by an individual. Direct

relationship with issue intensity. Primarily impacts the moral awareness stage

Robin et al. (1996)

Issue complexity The perceived degree of difficulty in understanding an issue. Based on perceived

conflict among moral standards or stakeholder claims or required factual information

or assumptions needed to be made. Primarily impacts the moral awareness and moral

judgment stages

Street et al. (2001); Warren

and Smith-Crowe (2008)

Organization’s ethical

infrastructure

The organizational elements that contribute to an organization’s ethical effectiveness.

Can impact each EDM stage

Tenbrunsel et al. (2003)

Personal context The individual’s current situation which can lead to ‘ethical vulnerability’ including

‘personal need for gain’ or time/financial constraints. Can impact each EDM stage

Albrecht (2003)

Ethical Decision-Making Theory: An Integrated Approach 771

123

thus does not represent a purely synthesized model. The

manner and extent to which the variables and processes

were depicted by the I-EDM model as portrayed in Fig. 1

can be criticized as being too all encompassing and thus

lacking sufficient focus. It might on the other hand be

criticized as failing to take into account other key variables

or processes involved in EDM that have been suggested in

the literature. For example, the role of inter-personal pro-

cesses (rather than intra-personal processes) may not be

sufficiently accounted for in the I-EDM model (Moore and

Gino 2013) despite recognizing the influence of peers/ref-

erent others, authority pressures, the rationalization process

(‘everyone is doing it’), and the consultation process.

Finally, each element of the I-EDM model, including the

individual and situational context variables as well as the

relationship between and overlap among the variables and

each of the process stages of EDM, requires further

detailed exploration and explication which hopefully fur-

ther research will address.

Conclusion

This paper attempts to address several deficiencies that

appear to exist in current EDM theoretical models. It does

so by merging together the key processes, factors, and

theories together, including emotion, intuition, moral rea-

soning, moral rationalization, and moral consultation along

with the key individual and situational variables. The

proposed integrated model might be considered to take a

‘person-situation’ interactionist approach along with an

‘intuition/sentimentalist-rationalist’ approach to moral

judgment. It attempts to clarify the key factors influencing

EDM, and introduces or makes more explicit other factors

such as ‘moral capacity’ including ‘moral character dis-

position’ and ‘integrity capacity,’ and additional situational

characteristics of the issue beyond merely intensity

including ‘issue importance’ and ‘issue complexity.’ As

research suggests: ‘‘…most all of us may commit unethical

behaviors, given the right circumstances’’ (De Cremer et al.

Table 2 I-EDM process stages and constructs

Process stages Definition and relationship with other I-EDM constructs and stages

Moral awareness The point in time when an individual realizes that they are faced with a situation requiring a decision or action that could

affect the interests, welfare, or expectations of oneself or others in a manner that may conflict with one or more moral

standards (Butterfield et al. 2000)

Lack of moral

awareness

The state of not realizing that a dilemma has moral implications. Leads to unintentional ethical or unethical behavior

(Tenbrunsel and Smith-Crowe 2008)

Moral judgment Determination of the ethically appropriate course of action among alternatives. Activates the moral intention stage (Rest

1986)

Emotion One’s feeling state. Can impact judgment directly (Greene et al. 2001). Can also impact the moral reasoning process

(Damasio 1994; Greene et al. 2001; Huebner et al. 2009); trigger intuitions (Haidt 2001), or can lead to rationalization

(e.g., through feelings of guilt or sympathy for others) (Tsang 2002)

Intuition A cognitive process involving an automatic and reflexive reaction leading to an initial moral judgment. Can lead to moral

judgment directly (Haidt 2001). Can also impact emotion (Dedeke 2015), moral reasoning when there are unclear or

conflicting intuitions (Haidt 2001), or lead to a rationalization process if judgment is contrary to one’s moral identity

(Reynolds 2006a; Sonenshein 2007)

Reason The conscious and deliberate application of moral standards to a situation. Can impact moral judgment directly

(Kohlberg 1973). Reason (‘cool system’) can also control emotions (‘hot system’) (Metcalfe and Mischel 1999).

Reason through ‘private reflection’ can lead to a new intuition (Haidt 2001), or can be ‘recruited’ to provide post hoc

rationalizations (Dedeke 2015)

Moral rationalization The conscious or unconscious process of explaining or justifying one’s intended or actual behavior in an ethically

acceptable manner to oneself or others. Can lead to moral judgment directly (Tsang 2002). Can also impact emotion by

forestalling or reducing guilt (Anand et al. 2005; Bandura 1999; Ariely 2012), lead to new intuitions (Haidt 2001), or

over-ride moral reasoning through a biased or distorted cognitive process (Tsang 2002)

Moral consultation Discussing to any extent one’s ethical dilemma with others or the review of ethical documentation (e.g., codes). Can be

overridden by rationalization. Takes place after initial awareness, but could also take place after behavior.

Moral intention The commitment or motivation to act according to one’s moral values. Affects moral behavior and can lead to moral

consultation (Rest 1986)

Ethical behavior Ethical behavior supported by one or more moral standards. Can be intentional (moral awareness) or unintentional (lack

of moral awareness). Typically follows moral judgment and/or moral intention (Rest 1986)

Learning The process of understanding and internalizing the impacts of one’s decisions. Can impact one’s moral capacity for

future decisions (Reynolds 2006a)

772 M. S. Schwartz

123

2010, p. 2). The possibility of a lack of moral awareness is

also depicted in the model, as well as ‘moral consultation’

and the key feedback loops (i.e., learning and reassessment

of behavior). Obviously, the proposed I-EDM model

remains subject to further criticism, leading to the need to

be further modified as new EDM research is generated.

There are several other potential important deficiencies

in the current state of EDM theory which are beyond the

scope of this study that should be addressed as well. But if

a new proposed theoretical EDM model can at least

properly take into account the primary concerns raised

above, a potentially more robust model will have been

developed for use by a broader range of empirical

researchers. Given the extent of theoretical and empirical

research that has now taken place, EDM in organizations

might be considered to be moving toward developing into a

‘stand-alone’ academic field (Tenbrunsel and Smith-Crowe

2008, p. 545). Whether this eventually takes place is pri-

marily dependent on the strength of the theoretical EDM

models being developed and tested by empirical EDM

researchers.

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