Without a doubt, the topic of corporate ethics is nowadays catching up speed and is becoming more and more important in the business world. Corporate moral development is a reflection of the corporation’s culture, which in turn highlights the need to work on the shared beliefs and values of the members of the organization in order to shape an ethical and moral corporation. Reidenback and Robin have identified five stages of moral development and have further discussed how businesses can move from one level to another.
Stage 1: The Amoral Organization
As one might expect, the first stage of the model is the amoral organization in which the primary goal is to make profits. Here, the organization is absorbed on increasing their sales and profits, with no concerns in regards to ethics and morality. Survival and profit generation are the only objectives the organization is absorbed with.
Stage 2: The Legalistic Organization
When the legalistic phase is reached, the organization starts to be more concerned about policies, regulations, and laws. Although the corporation is still fixated on profitability, it nevertheless attempts to comply with all respective policy frameworks. In other words, it does only what it is required to do.
Stage 3: The Responsive Organization
As we climb up the ladder, the next stage after the legalistic phase is a ‘responsive’ organization. At this point, the organization tries to achieve a balance between profitability and ethical business. It is becoming more sensitive to ethical and societal topics and tries to encapsulate some moral concerns in its way of doing business. However, at this stage, the corporation’s mentality is not yet proactive
Stage 4: The Emerging Ethical Organization
The fourth phase of the model is the emerging ethical organization and as the name implies this stage is all about achieving a greater balance between ethics and profit generation. Here, management shows greater commitment to moral values and ethical beliefs are starting to become a part of the company’s culture.
Stage 5: The Ethical Organization
Stage 5 is the highest level a corporation could climb up to. At this stage, there is a perfect balance between ethical practices and profitability. Top management and leaders are strongly embracing ethical and moral behavior as part of the company’s culture, even when this is sometimes against profitability. At this stage, the organization has reached the ultimate level it could possibly reach when it comes to ethical and moral corporate development.
Ethical and moral corporate development is more than just the trend of this era – it is a totally new way of doing business that is here to stay. As society is becoming more aware and mindful, being an ethical organization is no more a choice. As a result, Reidenbach and Robin’s Five Stages of Corporate Ethical Development is a vital guide that can provide useful insights on the stages an organization goes through when it comes to moral development, as well as the dynamics that exist between those stages.