Four-component model

One way to make ethical decisions is to employ the four-component model, which was devised by James Rest, a professor at the University of Minnesota. The model involves the following four processes:

  1. Moral sensitivity. The person must be able to interpret a situation in terms of specific courses of action, determine who could be affected by each action, and understand how the affected party would interpret the effect. The essential element here is being able to see things from the perspective of others, which requires a person to pay full attention in order to hear an ethical problem in what someone says. Ethical listening requires a person to avoid lecturing, giving advice, or correcting comments so that the other party feels free to talk openly and move closer to a resolution. For example, when a fellow employee pays for a hotel suite, rather than a standard hotel room, the person doing so may feel justified because he will be away from home for a prolonged period of time and wants the extra space, while someone else might consider this to be a moral lapse because it violates the company’s travel policy.

  2. Moral judgment. The person must be able to judge which of the possible actions is right, leading to a decision regarding what to do. This step requires knowledge of concepts, codes of conduct, and ethical principles, thereby allowing one to identify the guidelines that can be used to support a decision. For example, if senior management is actively encouraging employees to stay in the office for long periods of time, their personal use of the company copier might be considered acceptable, because that is the context within which the activity is occurring.

  3. Moral motivation. The person must be able to formulate the actions to be taken to achieve the desired outcome.  Consider these actions in relation to the likely pushback from others, and understand what can realistically be accomplished. For example, a controller who investigates a theft of petty cash discovers that the president’s cousin is the perpetrator. Bringing this issue to the attention of the president will stop the loss of cash, but also incur the ire of the president.

  4. Moral character. The person must possess sufficient courage to follow through on his intentions. Thus, a person is lacking in moral character if he is weak willed or is easily distracted or discouraged. For example, when a chief financial officer is aware that her controller has engaged in fraudulent activities but decides not to fire the controller, she is lacking in moral character.

Most people do not engage in such a protracted amount of self-analysis every time they encounter an ethical quandary. Instead, they are more likely to make a rapid decision based on their experiences with similar situations in the past. Doing so preserves their time for more difficult ethical issues that they have not encountered before.

Related Courses

Behavioral Ethics
Ethical Frameworks in Accounting