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Bangladesh University of Professionals 

 

ALD-3202 
EthicsinBusiness 
 

TOPIC: Quiz-03 

Submitted to: 
Dr.RafiuddinAhmed
AssociateProfessor

Submitted by: 
Mohua Tanjin Payel
ID-18241075
Sec-A

 
 
 
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Question:  Define  Cognitive  moral  development  (CMD)  and  come  up  with 
the Kohlberg's 6 stages of development stage. 

Lawrence Kohlberg’s stages of moral development, a comprehensive stage theory of moral

development based on Jean Piaget’s theory of moral judgment for children (1932) and developed
by Lawrence Kohlbergin 1958. Cognitive in nature , Kohlberg’s theory focuses on the thinking
process that occurs when one decides whether a behaviour is right or wrong. Thus the theoretical
emphasis is on how one decides to respond to a moral dilemma, not what one decides or what
one actually does.

The framework of Kohlberg’s theory consists of six stages arranged sequentially in successive
tiers of complexity. He organized his six stages into three general levels of moral development.

 
Level1: Pre conventional level

At the pre conventional level, morality is externally controlled. Rules imposed by authority
figures are conformed to in order to avoid punishment or receive rewards. This perspective
involves the idea that what is right is what one can get away with or what is personally
satisfying. Level1 has two stages.

 
Stage1: Punishment / obedience orientation

Behaviour is determined by consequences. The individual will obey in order to avoid

punishment.

 
Stage-2: Instrumental purpose orientation

Behaviour is determined again by consequences. The individual focuses on receiving rewards or

satisfying personal needs.

 
Level-2: Conventional level

At the conventional level, conformity to social rules remains important to the individual.
However, the emphasis shifts from self-interest to relationships with other people and social
systems. The individual strives to support rules that are set forth by others such as parents, peers,
and the government in order to win their approval or to maintain social order.
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Stage-3: Good Boy / Nice Girl orientation

Behaviour is determined by social approval. The in dividual wants to maintain or win the
affection and approval of others by being a “good person.”

 
Stage-4: Law and order orientation

Social rules and laws determine behaviour. The individual now takes into consideration a larger
perspective, that of societal laws. Moral decision making becomes more than consideration of
close ties to others. The individual believes that rules and laws maintain social order that is
worth preserving​.

Level-3: Post conventional or principled leve​l

At the post conventional level, the individual moves beyond the perspective of his or hero own
society. Morality is defined in terms of abstract principles and values that apply to all situations
and societies. The individual at tempts to take the perspective of all individuals.

Stage-5: Social contract orientation 

 
Individual rights determine behaviour. The individual views laws and rules as flexible tools for
improving human purposes. That is, given the right situation, there are exceptions to rules. When
laws are not consistent with individual rights and the interests of the majority, they do not bring
about good for people and alternatives should be considered.

 
Stage 6: Universal ethical principle orientation 

According to Kohlberg, this is the highest stage of functioning. However, he claimed that some
individuals will never reach this level. At this stage, the appropriate action is determined by
one’s self-chosen ethical principles of conscience. These principles are abstract and universal in
application. This type of reasoning involves taking the perspective of every person or group that
could potentially be affected by the decision.

 
 
 
 
 
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Question  :  White collar crimes are booming everywhere. What precautions 
and  punishments  do  you  suggest  to  stop  it?  Can  you  relate  them  with  an 
example? 

White-collar crime is a nonviolent crime committed for financial gain. According to the FBI, a
key agency that investigates these offenses, "these crimes are characterized by deceit,
concealment, or violation of trust." The motivation for these crimes is to obtain or avoid losing
money, property, or services, or to secure a personal or business advantage.

Examples of white-collar crimes include securities fraud, embezzlement, corporate fraud, and
money laundering. In addition to the FBI, entities that investigate white-collar crime include the
Securities and Exchange Commission (SEC), the National Association of Securities
Dealers (NASD), and state authorities.

 
Precautions
 
Screen employees properly and timeously

"I am surprised at how often I have been asked to vet a senior employee's credentials long after
he or she has been appointed," he says. "Companies need to be sure that employees have the
qualifications they say have, and that they have a record of honesty."

 
Maintain a strict segregation of duties 

It is critical that those approving expenditure or any sort of contract are not those who action
them. In tough economic times, when retrenchments occur, it can be hard to maintain proper
segregation of duties but, says Loxton, it is a vital safeguard against common types of fraud,
such as payments to bogus suppliers or the granting of tenders to family members.

 
Ensure you have a good, anonymous tip-off line 

Whistle-blowing by employees or customers is one of the primary sources of information about

underhanded practices by an organisation's employees.

 
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Prioritise an internal audit function – and make sure it is effective  
 
Experience shows that internal auditors, with their inside knowledge of how the company works,
are second only to whistle-blowers as identifiers of fraudulent practices.

 
Use powerful software to perform exception monitoring in real time 

This software is relatively inexpensive and increasingly intelligent. It can flag anomalous activity
as it happens, providing an invaluable early-warning system.

 
Provide employees with proper training 

"Even senior executives find it hard to define exactly what constitutes fraud or unethical business
practices," Loxton says. "Understanding what is unacceptable is the essential first step in
preventing it from happening – and alerting potential whistle-blowers."

 
Develop and manage an ethical culture throughout the company 

One hears about "tone at the top" but it is critical that the same note is struck across middle
management as well. Employees see and discuss everything, and if any managers do not act
ethically, their subordinates will dismiss ethics as window dressing. This may involve some
difficult decisions, for example holding a high performer to the company's ethical standards even
though it might mean losing him or her.

Punishment 

In the United States, sentences for white-collar crimes may include a combination of
imprisonment, fines, restitution, community service, disgorgement, probation, or other
alternative punishment.These punishments grew harsher after the Jeffrey Skilling and Enron
scandal, when the Sarbanes–Oxley Act of 2002 was passed by the United States Congress and
signed into law by President George W. Bush, defining new crimes and increasing the penalties
for crimes such as mail and wire fraud. Sometimes punishment for these crimes could be hard to
determine due to the fact that convincing the courts that what the offender has done is
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challenging within itself.In other countries, such as China, white-collar criminals can be given
the death penalty, yet some countries have a maximum of 10–25 years imprisonment. Certain
countries like Canada consider the relationship between the parties to be a significant feature on
sentence when there is a breach of trust component involved.Questions about sentencing
disparity in white-collar crime continue to be debated. The FBI, concerned with identifying this
type of offense, collects annual statistical information on only three categories: fraud,
counterfeiting/forgery, and embezzlement. All other types of white-collar crime are listed in an,
"miscellaneous" category. In the United States, the longest sentences for white-collar crimes
have been for the following:

● Sholam Weiss (845 years for racketeering, wire fraud and money laundering in
connection with the collapse of National Heritage Life Insurance Company)

● Norman Schmidt and Charles Lewis (330 years and 30 years, respectively, for
"high-yield investment"scheme)

● Bernard Madoff (150 years for $65 billion fraud scheme)

● Frederick Brandau (55 years for $117 million Ponzi scheme)

● Eduardo Masferrer (30 years for accounting fraud)

● Chalana McFarland (30 years for mortgage fraud scheme)

● Lance Poulsen (30 years for $2.9 billion fraud).