Moral reasoning is as important today as it was in the past. It could be argued that with the growth in society and the increase in the size of structures that moral reasoning is even more important today. Business and civic leaders that have obtained and support moral reasoning are at a higher level of development than others. It is these highly developed people that should be leading organizations to new levels of performance. A paper in the Journal Business Ethics: A European Review helps highlights how moral reasoning impacts intra-firm networks and the values others maintain (Kulkari & Sobodh, 2014).
Human development and moral reasoning move together hand-in-hand. People who are less developed have a harder time thinking beyond what is of benefit to themselves. The authors have used 6 stages or moral reasoning where the stages 1-4 are primarily concerned with fear, self-interest, and following the rules for personal gain. Only in stages 5 and 6 can one claim moral leadership that thinks beyond oneself and into the greater purpose of action.
Law helps us define what societal expectations are and provide guidelines for citizens to follow. Organizations are bound to follow these laws in employment practices, pollution, operations, etc.. to ensure that their practices do not damage society. Most business leaders follow these rules based upon self-interest and the fear of punishment. This is necessary to keep everyone in good order and society moving forward.
Beyond self-interest are higher stages of development where moral-reasoning includes doing the right thing in difficult situations. Moral leaders have freed themselves from the constraints of fear to a place where they seek to exceed the standards of law. They understand a greater purpose of keeping society free from unfair actions and immoral decisions that infringe on others.
For example, at the lower levels of human development a CEO may put in place the minimum legal requirements to curb pollution while seeking to skirt as many rules as possible. In the mid levels of development the same CEO may wish to follow the rules strictly and proclaim their business is "Green" as a marketing tool. A highly developed CEO would seek to ensure their business is not damaging the environment based upon moral values while not ignoring the benefits that come from being a good corporate citizen.
Position doesn't necessarily determine morality of the person. A person could be in a position of authority and still stuck at lower levels of development. For example, a CEO may create predatory practices and justify that position as a benefit to stakeholders, a DA could raise their arrest numbers but violate more rights in an effort to "clean up" a city, or a politician could take a bribe and vote on a new project saying it is the best interest of everyone. Authority and moral development are not tightly associated and often contradict each other.
The journal article highlights the importance of ensuring that those with solid moral reasoning rise to the top of the societal structure. Moral reasoning of the leader impacts the moral value systems of everyone else. Their behavior and decisions prompt others to act in similar manners creating intra-firm transfers of moral expectations. Those expectations become embedded into the culture of the company (or organization) and become a method of approaching future problems.
Moral reasoning is one part of the assessment of leadership qualities. Those with higher levels of moral reasoning are also more developed as people. They create expectations on those around them who are likely to mirror their behavior and perception. Encouraging high quality people with leadership potential to make their way to the top of organizations helps to ensure that the right expectations of moral reasoning and ethical performance are standardized.
Kulkari, S. & Subodh, R. (2014). Intra-firm transfer of best practices in moral reasoning: a conceptual framework. Business Ethics: A European Review, 23 (1).