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Chapt-3

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Chapter 3
Ethical Decision Making
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Chapter Objectives
• To provide a comprehensive framework for ethical
decision making in business.
• To examine the strength of ethical issues as an
important element influencing the ethical decision
making process.
• To introduce individual factors that may influence
ethical decision making in business .
• To introduce organizational factors that may
influence ethical decision making in business.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Making Ethical Decisions
• Making good ethical decisions to solve Ethical
Dilemma requires a trained sensitivity to ethical
issues and a practiced method for exploring the
ethical aspects of a decision.
• Having a method for ethical decision making is
absolutely essential.
• Ethical decision should be based on ethical
principles and codes rather than on emotions,
thoughts, fixed policies.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Habits of Strong Ethical Leaders
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Ethical Leaders Have Strong Personal Character.
Ethical Leaders Have a Passion to Do Right.
Ethical Leaders Are Proactive .
Ethical Leaders Consider Stakeholders’ Interests.
Ethical Leaders Are Role Models for the
Organization’s Values.
• Ethical Leaders Are Transparent and Actively
Involved in Organizational Decision Making.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Ethical Dilemma
• Ethical dilemma: is a situation with
uncertainty about what is right to do from a
moral or ethical perspective.
• For example, the manager of a company may
be put in a position in which he must choose
between the interests of his employees and
his investors. Give more profits or increase
the salary?
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Ethical Decision Making Framework
The Framework Overview:
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Step One: Describe the problem.
Step Two: Determine whether there is an ethical dilemma.
Step Three: Identify and rank the key values and principles.
Step Four: Gather your information.
Step Five: Review any applicable Code of Ethics.
Step Six: Determine the options.
Step Seven: Select a course of action.
Step Eight: Put your plan into action.
Step Nine: Evaluate the results.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step One: Describe the problem.
• You must first describe the problem and ensure
that it’s actually a moral dilemma that needs to
follow an ethical model.
• Consider the nature of the problem and any signs
of the problem and ensure that you’re attempting
to solve the issue and not just it’s signs.
• Circumstances affect the problem definition (for
whom does the problem exist ? What is the
surroundings?)
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Two: Determine whether there is an ethical
dilemma.
• Terms of an ethical dilemma must be ethical in
nature, not legal.
• If something is a law, you then have the ethical
choice to follow the law or not.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Three: Identify and rank the key values
and principles.
• What reasons can you provide for prioritizing
one competing value over another?
• Understand that a decision to a dilemma
which goes against an individual’s personal set
of values has very little chance of success.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Four: Gather Your Information
• Do you have all the known facts?
• Do you understand the applicable laws or
legalities?
• Do you have all relevant policies available to
review?
• Are you clear about the individual’s views and
personal values?
* Don’t hesitate to seek out consultation.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Five: Review Any Applicable Code of
Ethics
• Look for the following:
-- Mission statement
-- Values base of the organization
-- Ethical principles to guide practice
-- Ethical standards
• Codes can be revised or updated as needed.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Six: Determine the Options
• List all possible actionable options.
• Consider the cost/benefits of each option.
• Seek out additional points of view.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Seven: Select a Course of Action
1) Remove the least desirable option.
2) Remove any which you can not put into
action.
3) Remove any options which break the values
systems of those affected.
4) Recognize that your final choice will be
impacted by your personal values.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Eight: Put your plan into action.
• Think about the outcomes with a sense that
you have truly approached this ethical dilemma
with the best of intentions and to the best of
your ability.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Step Nine: Evaluate the Results
• Evaluate the results for the future
situations and ethical dilemma.
• Consider submitting your most difficult
cases to an ethics review board for
feedback.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
Ethical Dilemma
• Example 2 : (Assignment 1)
• A new technology is being launched which is good for
the company as well as the customers. But, if this is
brought into use, a less employees is required for the
organization.
• The company is now in an ethical dilemma whether
wants to satisfy the customers with good services or be
loyal to the employees who have helped the company
grow.
• The unpleasantness of the situation arises when neither
the customers nor the employees deserve to suffer and
it is the company's call to take.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
How Can Managers Encourage Ethical Decision
Making?
 To Encourage Ethical Decision Making, Firms Should:
1. Hire and promote people with a well grounded
sense of personal ethics.
– Refrain from promoting individuals who have
acted unethically.
– Potential employees should find out as much as
they can about the ethical climate in an
organization prior to taking a position
Copyright © 2012 Pearson Education, Inc. All rights reserved.
How Can Managers Make
Ethical decisions?
2. Build an Organizational culture that places a
high value on ethical behavior.
 highlight importance of code of ethics.
 implement a system of incentives and rewards
that recognize people who engage in ethical
behavior and sanction those engage in unethical
behavior.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
How Can Managers Make
Ethical decisions?
3. Develop a moral courage:
– Enables managers to walk away from a
decision that is profitable, but unethical .
– Gives the employees the strength to say no to
the manager who orders them to pursue
actions that are unethical.
Copyright © 2012 Pearson Education, Inc. All rights reserved.
How Can Managers Make
Ethical decisions?
4. Ethics Officers:
• Ethics officers ensure that:
– Employees are trained to be ethically aware.
– Ethical considerations enter decision-making.
– The company’s code of ethics is followed .
Copyright © 2012 Pearson Education, Inc. All rights reserved.
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