How do you make decisions as to whether something is right or wrong? Knowing your "moral judgment" decision-making style, as well as that of your clients, can help you avoid serious problems.

If you would like to know more about your personal decision-making style, the classic "moral judgment" problem posed by Lawrence Kohlberg in his research provides some surprising answers. Here’s the dilemma Kohlberg posed to his research subjects:

How do you make decisions as to whether something is right or wrong? Knowing your "moral judgment" decision-making style, as well as that of your clients, can help you avoid serious problems.

If you would like to know more about your personal decision-making style, the classic "moral judgment" problem posed by Lawrence Kohlberg in his research provides some surprising answers. Here’s the dilemma Kohlberg posed to his research subjects:

A man’s wife is dying from cancer. The drugstore has a new treatment that will save her life, but it is extremely expensive. The man raised as much money as possible to buy the drug, but it still wasn’t enough.

He went to the druggist and explained, but the druggist refused to sell him the drug even though the man offered to make payments for it. So that night, the man breaks into the drugstore, steals the drug and gives it to his wife. Was he right or wrong to do so? And what was your reasoning for your decision?

There is no right or wrong answer to the problem. Instead, what matters is how you arrive at the decision. Kohlberg’s model identifies six primary levels of thought. Being able to recognize at which level a given client is functioning can help you avoid the clients who can put you and your business at risk.

1. Obedience and punishment orientation
Small children and many criminals function at this level. Their decision to do what is right or wrong is based almost exclusively on the probability of being caught. If this person does cause an issue, they look at how much damage it actually caused. Their motto: "No harm, no foul."

Example: Sellers who tell you not to disclose a defect in the property or buyers who want to misrepresent their income to the lender are usually using this approach. In each case, if you encounter someone who has little regard for the rules or says, "Don’t worry, no one will know," terminate your relationship immediately. It’s not worth putting your license and/or livelihood at risk.

2. Self-interest orientation
People who function at this level generally are focused on "What’s in it for me?" Another way of looking at this approach is, "I’ll scratch your back if you’ll scratch my back." This person cooperates with others only to the extent that it furthers his or her own goals. This is the level where most politicians operate.

Example: This is the person who says he will send you a referral provided you kick back part of your commission to him. "By the way, don’t let anyone else know about our under-the-table commission agreement." This person looks out for No. 1 and uses manipulation to get his way.

3. Interpersonal accord and conformity
This person focuses on creating harmony and avoiding confrontation. Being perceived as being "good" and getting along is what matters.

Example: "Good boy/good girl" agents will go out of their way to avoid confrontation. This can be an issue when they choose not to confront a client who they know is lying. They will attempt to persuade the client to do what is right (i.e., be good), but they’re generally not strong enough to walk away from the situation.

4. Authority and social order-maintaining orientation
This is the level that the military, our justice system, as well as your multiple listing service and board of Realtors, function. Law, order and morality are what matters. Our civilization requires rules to function. Following those rules is necessary to keep society and business functioning.

Example: This is the level at which most Americans function as well. Level 4 clients are the least likely to get you into trouble because obeying the law is paramount. They will do their best to be honest about disclosures and strive to do the right thing. You can usually count on this type of client to play by the rules. Be forewarned, however, that if you violate their sense of fair play, they may sue you.

5. Stages 5 and 6: social contract-driven and universal ethical principles-driven
People who function at these two levels believe that laws are social agreements that can and should be challenged when they fail to promote the general good of the greatest number of people. In the case of the druggist, this is how they would answer that dilemma:

"Yes, he should steal the drug and give it to his wife to save her life. The value of a human life is greater than that of money, but because he broke the law, he must turn himself in for committing the theft."

Example: People who function at this level can sometimes get you into trouble. If they feel a lender guideline is unjust or that the seller is being unreasonable, they may choose to walk away from the transaction "on principle." Underlying their principles, however, is their goal to "always do the right thing" as well as an understanding that breaking the law should have consequences.

If you look at these various ways to make decisions about what is right and wrong, it’s important to understand that some people become stuck in a certain way of doing things and are highly unlikely to shift out of that mode. On the other hand, each person can also have moments where he shifts gears and leaves behind his preferred style of decision-making.

The law of attraction says we attract who we are. If you say "yes" to bending the rules "because I’ll never get caught" or you tolerate people who treat you and others poorly because their approach is "no harm, no foul," you’re heading down a slippery slope that can take you and your business down with it as well.

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