Impact of Managers Moral Development stages on Organizational Performance and Responsibility toward Society

1. THE IMPACT OF MANAGERS’ MORAL
DEVELOPMENT LEVEL ON
ORGANIZATION’S PERFORMANCE AND ITS
RESPONSIVENESS TO SOCIETY
Jeeda Rabah
Business Thesis
Under the guidance of
DR. RABIH ZARIF
JINAN UNIVERSITY
TRIPOLI - LEBANON
November, 2012
Master's Thesis Presentation

2. Outline
• Research Questions
• Research Objectives
• Methodology
– Literature Review and theoretical framework
– Research Design (field Study)
• Results and Interpretations
• Conclusions

3. Research Questions
• The research strived to find answers to the
following inquiries:
– Whether the stage of moral development of managers
has a direct impact on the overall organizational
performance and on the responsiveness of this
organization to society and its welfare.
– whether the individuals’ moral development is
somehow correlated to the management culture of a
given organization.
– The weight that should be given to the stage of moral
development of individuals in employment.

4. Research Objectives
• The research main objectives were:
– to find out a correlation between Individuals’ stage of
moral development and their behavior at work place and
to test that against organization’s structural variables, work
environment and organization’s culture
– to test moral development stages characteristics against
responsiveness and responsibility toward society,
– to induce weighing ethical subjects as critical in
organizations, and
– to help evaluate the importance of the need of assessing
individuals’ stage of development as a criteria in
employment.

5. Methodology
• Theoretical Framework
– The research employed moral development* stages theory
of Kohlberg which argued that moral reasoning, which is the
basis of ethical behavior, belongs to one of six distinct stages
of morality development; each stage is more adequate in
responding to moral dilemmas than its predecessors.
– Universality of Values were stressed, and the Philosophy of
Emanuel Kant regarding ethics as well as his deontological
approach* was assumed.
Definitions:
 Moral Development: the level of independency of individual’s moral
judgment from outside influences and the degree of this moral
judgment’s internalization.
 Moral Reasoning: It is the process in which people try to do the right American Psychologist
thing when faced with dilemmas based on weighing the morality of Lawrence Kohlberg
their action and weighing that against its consequences.
 Kant’s deontological approach states that: a morality of an action is October, 1927 – January, 1987
judged based on the action’s adherence to principles where judgments
of right and wrong are determined by the motives of the person who
acts, not based on the consequences of the person’s actions.

6. The literature Review encompassed the following related topics as well:
– Organizational structural variables and human aspect at
work place as determinants of a sought organizational
ethical culture; so as to explain the commitment that is
required by managers today to face challenges in being
socially responsible and ethical in an organization that is
focused both on means as well as outcomes.
– Organization’s accountability toward society and
environment, as well as social responsibility concept and
international social and quality standards.
– The effect of community values on local management and
leadership styles.
– Contrasting ethical systems and moral philosophies with
certain individual characteristics and implications with
regard to certain community cultures, as well as
identifying the research’s community population in that
same regard.

7. •Research Design
– The research design was devised so as to find out from a
cross-section of executives of business registered
establishments, their moral development stages in
comparison to their organizational performance and their
responsiveness to society both on the short and long run
frame.
– It has also compared the sample’s consideration to ethical
subjects with regard to the effect of situational factors on
individuals compared to their stage of moral development.
Master's Thesis Presentation

8. Research Hypothesis’ Variables and Conceptual Model
Independent Variables:
– Executives' Moral Development
stages
Dependent Variables:
– organizational performance and
responsibility toward society
Intervening Variables:
– time frame of short run and long run
effect of moral stage on performance
and responsibility toward society
Extraneous variables:
– positive and/or negative situational
factors which are those that may
increase or decrease the magnitude
of the relationship between
independent and dependent
variables.

9. According to the research hypothesis, the model conceptualized
that:
• majority of adults are at stage four, where they are limited to
obeying rules and behave ethically accordingly. Stages of moral
development cells were highlighted with regard to the probable size of population
individuals in each stage.
• Moral Development stages affect the organization’s responsiveness
and thus responsibility toward society in regard that the greater the
moral development stage, the greater is the altitude of
responsibility toward environmental issues and society’s well fair.
• Moral Development stages affect the organizational performance
slightly on the short run and vastly on the long run.
• magnitude of the situational factors effect on individuals’ decreases
as the stage of moral development increases. (Research’s theory)

10. Study Design
• Research’s study design was cross-sectional in nature,
• designed to find out from a cross-section of executives of business
registered establishments, their moral development stages in
comparison to their organizational performance and its responsiveness
to society
Research Population and Sample
• Random sample (SRS)was chosen by referring to information published
by Central Administration of Statistics (CAS) – Lebanon,
• Cluster Sampling was utilized after that, where each cluster
represented establishments divided according to their common
activity.
• 860 clustered establishments was the preliminary sample size.
• Referring to the Ministry of Commerce and the Directory of Exports
and Industrial Firms in Lebanon, also referring to a directory of
registered companies in Lebanon, the list of participants’
names, districts, and e-mails were identified and 5000 establishments
were contacted.

11. Research Tools and Measurement Procedures
• A constructed e-mailed questionnaire* instrument with
closed ended questions was employed, aiming to collect
primary data so as to put to test:
– the stage of moral development for each manager or
subordinate,
– to display effect of structural variables on the individual
behaviors of these managers,
– to observe whether their attitudes and/or entrenched
organizational culture have a subsequent effect on the
individual and organization's performance and its responsibility
toward society,
– to validate weather their moral development stage is immune
enough to minimize effect of situational factors.
*The questionnaire was partly derived from and based on the Defining Issue Test DIT-2
(James Rest).

12. Research Tools and Measurement Procedures Validity
• Instrument questions have utilized an attitudinal scale and succeeded in
obtaining an overall indicator that was able to measure and test:
– managers’ stage of moral development;
– the relationship between managers’ stage of moral development and their
organization’s performance;
– testing organizational variables in contrast to the extent of organization’s
responsiveness and responsibility toward society.
Instrument tool details and scaling
• Part I: Includes demographic conditions’ information as part of the external or the
general environment. (age, gender, language, and level of education)
* Answers were quantitatively categorized for this part and are integrated to SPSS for statistical
analysis.
• Part II: Includes Information obtained regarding professional career and organization.
* Answers were assigned numerical values (higher positive statement will bear the highest number
of the possibilities of a question and so on.
• Part III (DIT2 cases): Responses obtained here were analyzed so as to reveal
respondents’ schemas of moral reasoning according to Kohlberg’s theory of moral
development.
* Responses and ratings of cases’ issues were scaled following the DIT2 test where items were
considered as distillations of themes found in Kohlberg interview data.

13. Results and Interpretations
 Schemas and Correlation of Variables
83 (n) responses OP RtS SF ES
could be obtained Index Index Index Index M Index
reflecting low level Mean 71.88755 75.98967 71.28514 79.669 65.38791
of participation N 83 83 83 83 83
from sample
population, howeve Std. 13.13050 14.82343 12.29527 16.5314 6.76007
Deviation
r, answers could
obtain an average
correlation that
was found
acceptable and
tolerable.
Master's Thesis Presentation

14. Correlation of Research’s main Variables
Numbers show:
• general positive correlation between Morality (M) M Index OP Index RtS Index SF Index ES Index
index and organizational performance (OP), M Index Pearson 1 .273* .378** .397**
responsiveness to society (RtS), positive situational Correlation
factors (SF) and considering ethical subjects (ES). Sig. (2-tailed) .013 .000 .000
•Organizational performance significance level is
0.013 0.05, therefore (OP) correlation with (M) OP Pearson .273* 1 .333** .268*
index is 0.273 and it is significant at 0.05 level but Index Correlation
not on 0.01 level. Sig. (2-tailed) .013 .002 .014
•A positive correlation (.378) between morality and
responsiveness to society is approved with a RtS Pearson .378** .333** 1 .419**
significance of 0.000 on 0.01 level. Index Correlation
•A positive correlation of (.397) is computed Sig. (2-tailed) .000 .002 .000
between morality index and positive situational
factors with significance on the 0.01 level. SF Index Pearson .397** .268* .419** 1
Correlation
•A positive correlation with no significance can be
found between weight given to considering ethical Sig. (2-tailed) .000 .014 .000
subjects in business and morality index.
ES Index Pearson .203 .252* .516** .309**
•A positive correlation between considering ethical
Correlation
subjects (ES) and (OP), (RtS), and (SF) with a
significance on the 0.05, 0.01, and 0.01 levels Sig. (2-tailed) .065 .022 .000 .004
consecutively.

15. Correlation of Research’s main Variables with regard
to the extraneous variable (Situational Factors)
Situational
factors Correl./M index (N) M/OP Corr. M/RtS Corr.
Given two extents of
General Correl. for
morality indexes at three Bad lower M index
18 0.1925399 -0.041063
levels of situational factors, Situational
Factors
numbers show: General Correl. for
higher M index
8 0.37116194 0.21192274
•a positive correlation between
morality and organizational General Correl. for
lower M index
23 -0.0978804 0.31078565
Average
performance indexes at higher Situational
morality index, Factors General Correl. for
13 0.40111328 0.33405113
higher M index
•no significant correlation at
lower morality indexes. General Correl. for
10 -0.1162528 0.344534
Good lower M index
Situational
Factors General Correl. for
11 0.23196424 0.40029682
higher M index

16. Given different situational factors at different morality
indexes, numbers show, and according to the following figure:
• a slight ascending to constant 0.5
correlation coefficient numbers
between (M) and (OP) (
0.371, 0.401, 0.232) at an improved 0.4
situational factors, given higher
morality indexes. 0.3
• a slight ascending to constant Correl M/OP "High
correlation coefficient numbers Morality Indexes"
0.2
between(M) and (RtS) Correl M/Rts "High
(.212, .334, .400) at an improved Morality indexes"
situational factors, given higher 0.1
Correl M/OP "Low
Morality Indexes"
morality indexes.
Correl M/RtS "Low
• insignificance (no clear linear relation) Morality Indexes"
0
between mentioned variables at lower
Situational
morality indexes. Factors
• in spite of the insignificance at lower -0.1
morality indexes, responsiveness to
society showed improving rates at
-0.2
better situational factors in
comparison to organizational
performance indicators.

17. Correlation of Research’s Organization is business-
registered since:
OP
Index
RtS
Index
SF
Index
ES
Index
M
Index
main Variables with regard OP Index Pearson Cor.
Sig. (2-tailed)
1 .278
.358
.095
.758
.463
.111
-.095
.757
to the intervening variable Less than 5 yrs
RtS Index Pearson Cor.
Sig. (2-tailed)
.278
.358
1 .263
.385
.462
.112
-.136
.657
of time frame effect N=13 SF Index Pearson Cor.
Sig. (2-tailed)
.095
.758
.263
.385
1 .081
.794
.672*
.012
M Index Pearson Cor. -.095 -.136 .672* -.091 1
Numbers show:
Sig. (2-tailed) .757 .657 .012 .768
•Significance at level 0.01 between OP Index Pearson Cor. 1 .511* .366 .283 .402
Sig. (2-tailed) .021 .113 .226 .079
morality and resp. to society variable only
RtS Index Pearson Cor. .511* 1 .615** .764** .318
for organizations registered for more than 5 - < 10 yrs Sig. (2-tailed) .021 .004 .000 .172
20 years, where no significance obtained N=20 SF Index Pearson Cor. .366 .615** 1 .375 .455*
Sig. (2-tailed) .113 .004 .103 .044
on shorter time frames. M Index Pearson Cor. .402 .318 .455* .005 1
•Significance at 0.05 level between Sig. (2-tailed) .079 .172 .044 .984
.599* .575* .551*
morality and org. performance was OP Index Pearson Cor. 1 .402
Sig. (2-tailed) .014 .020 .123 .027
obtained for organizations registered for RtS Index Pearson Cor. .599* 1 .477 .575* .273
more than 10 years and less than 20 years 10 - < 20 yrs Sig. (2-tailed) .014 .062 .020 .306
and no significance could be obtained for N=15 SF Index Pearson Cor. .575* .477 1 .014 -.109
Sig. (2-tailed) .020 .062 .958 .687
other time frames.
M Index Pearson Cor. .551* .273 -.109 .447 1
•Situational factors impact showed Sig. (2-tailed) .027 .306 .687 .083
decreasing significance in contrast to OP Index Pearson Cor. 1 .100 .114 .066 .180
Sig. (2-tailed) .575 .522 .709 .309
Morality at the following time frames (less
RtS Index Pearson Cor. .100 1 .254 .277 .474**
than 5 yrs, 5 - < 10 yrs) and a negative More than 20 Sig. (2-tailed) .575 .147 .113 .005
correlation at a time frame of 10 - < 20 yrs Yrs N=34 SF Index Pearson Cor. .114 .254 1 .466** .496**
with no significance Sig. (2-tailed) .522 .147 .005 .003
M Index Pearson Cor. .180 .474** .496** .252 1
Sig. (2-tailed) .309 .005 .003 .150

18. Conclusion
Summary of conclusions:
• Stage of managers’ moral development has a direct impact and a positive correlation on
the overall organizational performance and on the responsiveness of this organization
to society and its welfare.
• Individuals’ moral development is correlated to the management culture of a given
organization, where it interacts for both parties by shaping the general ethical behavior.
Yet the more the ethicality of an executive, the less is the effect situational factors take
part in affecting the relationship between his behavioral sensitivity toward these factors
and the positive relationship that exists between his morality and organizational
performance as well as this organization’s responsiveness toward society.
• Results have provided an evidence on how morality affects organizational performance
and consequently societies’ welfare especially on long run frame. Accordingly, it has
called for an important correction action and stressed the need to assess individuals’
stage of development as a criterion in employment.
• the research has presented an issue of concern and offered a win-win situation that
matters beyond individual’s own interests and instead, served to attain greatest good
for greatest number of community

19. “if capitalism is to be respected, and so sustain itself for
global prosperity, it must be both responsible and moral”
Caux Round Table
THE IMPACT OF MANAGERS’
MORAL DEVELOPMENT
LEVEL ON ORGANIZATION’S
Thank you
PERFORMANCE AND ITS
RESPONSIVENESS TO
SOCIETY
Submitted by:
Jeeda Rabah