Chapter 8: Ethical Dilemma
Date of Presentation: October 2, 2021
Members:
Castro, Geene E.
Magnaye, Juliet Dianne G.
Valencia, Klein Tom M.
20-54764
20-59058
20-52250
Expected Learning Outcomes:
1. Explain what ethical dilemma is.
2. Describe the steps in resolving ethical dilemma.
3. Apply the steps in resolving ethical dilemma.
Content
An ethical dilemma is defined as a situation where in an individual faces a decision which
must be aligned to the moral and appropriate behavior. According to CFI Education (2015), an
ethical dilemma (also known as an ethical paradox or a moral dilemma) is an issue that arises
when a decision must be made between two options, neither of which is completely ethical.
Although we face many ethical and moral issues in our daily lives, the majority of them have
simple solutions. A simple example of an ethical dilemma is finding a diamond ring, which
necessitates deciding whether to attempt to find the owner or to keep it. With regards to this, in
order to solve a particular ethical dilemma, a framework has been developed to help make
decisions.
SIX-STEP APPROACH IN RESOLVING DILEMMAS
In understanding the six-step approach in resolving ethical dilemmas, it is a matter of
considering all of the possibilities of the outcome and its consequences that mainly affect one’s
or the group in totality.
1. OBTAIN THE RELEVANT FACTS. In this step, the facts will be indicated as well as the nature
of the issue
2. IDENTIFY THE ETHICAL ISSUES. With the help of assessing the information, it enables a
person to know and to point out the focal point or the main issue from the specific situation.
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control
3. DETERMINE WHO IS AFFECTED BY THE OUTCOME OF THE DILEMMA AND HOW EACH
PERSON OR GROUP IS AFFECTED. In this step, we will see such and different factors that
might influence and also includes the perspectives of those individuals affected by the decision
to make.
4. IDENTIFY THE ALTERNATIVES AVAILABLE TO THE PERSON WHO MUST RESOLVE
THE DILEMMA. In this, we would consider the resources as well as the capabilities of the persons
involve in resolving the problem. The alternative options must correlate to the abilities and
availability of time and resources of the persons involved.
5. IDENTIFY THE LIKELY CONSEQUENCES OF EACH ALTERNATIVE. In this step, we will
now consider different choices or alternatives that would be most beneficial in order to arrive at a
decision. It is vital that there must have an analyzing, comparing, and evaluating of each
alternative wherein we will use each of its advantages and disadvantages from one another. In
every choice, there will be corresponding consequences, hence the importance of considering it
to anticipate what will happen when the decision is made. It is essential to look for each choice
and assess the possible positive and negative consequences of the alternatives or its strengths
and weaknesses which primarily answer the question “What are the benefits and harms of each
of the alternatives? Also, we have to consider what would happen, not what you hope would
happen. How does all of this look over the long run as well as the short run and how much is the
probability or chance of each decision option. You could ask yourself about these questions
includes how risky is each alternative? How would it affect the future? How will this decision affect
other people, other departments, other brands, other company divisions, partners, the industry?
Always keep in your mind that the options must interconnect to the behavioral or ethical choice
and not an opinion.
6. DECIDE THE APPROPRIATE ACTION. After looking at all of the options, which among of it
produces the best combination of benefits maximization and harm-minimization? And simply
answer the question “What is the best among the rest of the alternatives?”
TWO COMMON ESSENTIAL TECHNIQUES
1. DELPHI TECHNIQUE
•
a decision-making method in which the members of the panel of experts respond to
questions and to each other until reaching agreement on an issue.
2. THE STEPLADDER TECHNIQUE
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the group members are added to a group discussion one at a time like a stepladder and
all members are equal.
According to Herbert Simon, from his renowned work Administrative Behavior; A study of
Decision-Making Process in Administrative Organization published in 1948. Simon divided the
concept into two main parts: Decision being arrived at and the Process of action. He believed that
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control
“Mere making decision is not enough and therefore its implementation”. The organization should
be concerned from the processes of the decision as well as the processes of actions and
implementation. Proper management has significant role and most importantly the collaborative
efforts among the members of the organization as well.
ILLUSTRATIVE CASE: RESOLVING AN ETHICAL DILEMMA
Bert Cruz has been working for 6 months as a staff assistant for a law firm, Alvendia and
Castro. Currently he is assigned to the case of Ryan Manufacturing Company under the
supervision of Carlos Reyes, an experienced senior lawyer. There are three junior legal of
assistants assigned to the case, including Bert, Carlos and more experienced assistant, Martha
Sy.
During lunch on the first day, Carlos says, “It will be necessary for us to work a few extra
hours on our own time to make sure we come in on our budget. This case isn’t very profitable
anyway, and we don’t want to hurt our firm by going over budget. We can accomplish this easily
by coming in a half hour early, taking a short lunch break, and working an hour or so after normal
quitting time. We just won’t write that time down on our time report.
Bert recalls reading in the firm policy manual that working hours and not charging for them
on the time report is a violation of Alvendia and Castro employment policy. He also knows that
seniors are paid bonuses, instead of overtime, whereas staffs are paid for overtime but get no
bonuses.
Later, when discussing the issue with Martha, she says, “Carlos does this on all of his job.
He is likely to be our firms next manager. The partners think he is great because of his job always
come in under budget. He rewards us by giving us good engagement evaluations, especially
under the cooperative attitude category. Several of the other seniors staff follow the same
practice.”
Ethical Issue
•
Is it ethical for Bert to work hours and not them as hours worked in this situation?
Who is Affected and How is each Affected?
There are typically more people affected in situations in which ethical dilemmas occur than
“would normally be expected. The following are key persons involved in this situation:
Who
Bert
Martha
How Affected
Being asked to violate firm policy
Hours of work will be affected.
Pay will be affected.
Performance evaluations may be affected.
Attitude about firm may be affected.
Same as Bert.
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control
Carlos
Success on engagement and in firm may be affected.
Hours of work will be affected.
Alvendia and Castro
Stated firm policy is being violated.
May result in under billing clients in the current and future
engagements.
May affect the firm’s ability to realistically budget engagements
and bill clients.
May affect the firm’s ability to motivate and retain employees.
Staff assigned to Rayon May result in unrealistic time budgets.
Manufacturing in the future
May result in unfavorable time performance evaluations.
May result in pressures to continue practice of not charging for
hours worked,
Other staff in firm
Following the practice of this engagement may motivate others
to follow the same practice on other engagements.
Bert’s Available Alternatives
•
•
•
•
•
•
Refuse to work the additional hours.
Perform in the manner requested.
Inform Carlos that he will not work the additional hours or will charge the additional hours
to the engagement.
Talk to manager or partner about Carlos’s request.
Refuse to work on the engagement.
Quit working for the firm.
Each of these options includes a potential consequence, the worst likely one being termination
by the firm.
Consequences of Each Alternative
In deciding the consequences of each alternative, it is essential to evaluate both the shortand long-term effects. There is a natural tendency to emphasize the short term because those
consequences will occur quickly, even when the long-term consequences may be more important.
For example, consider the potential consequences if Bert decides to work the additional hours
and not report them. In the short term, he will likely get good evaluations for cooperation and
perhaps a salary increases. In the longer term, what will be the effect of not reporting the hours
this time when other ethical conflicts arise?
Consider the following similar ethical dilemmas Bert might face in his career as he advances:
•
•
•
A supervisor asks Bert to work 3 unreported hours daily and 15 unreported hours each
weekend.
A supervisor asks Bert to initial certain procedures as having been performed when they
were not.
Bert concludes that he cannot be promoted to manager unless he persuades assistants
to work hour that they do not record.
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control
•
•
Management informs Bert, who is now a partner, that either the company gets a P400,000
legal fee or the company will change lawyers.
Management informs Bert that the legal fee will be increased P50,000 if Bert can find a
plausible way to increase probability of winning the case.
Appropriate Action
Only Bert can decide the appropriate option to select in the circumstances after
considering his ethical values and the likely consequences of each option. At one extreme, Bert
could decide that the only relevant consequence is the potential impact on his career. Most of us
would conclude that Bert is an unethical person if he follows that course, at the other extreme,
Bert can decide to refuse to work for a firm that permits even one supervisor to violate firm policies.
Many people would consider such an extreme reaction naïve.
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control
References:
A. BOOK
Cabrera, G.A. & Cabrera M.E. (2019). Corporate Governance, Business Ethics, Risk
Management and Internal Control (2019-2020 Edition). GIC Enterprises & Co., Inc.
B. ONLINE SOURCES
Corporate Finance Institute (2015). Ethical Dilemma. Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/other/ethical-dilemma/
May, D. (2019). Steps of the Ethical Decision-Making Process. Retrieved from
https://crenshawconsultingassociates.com/wpcontent/uploads/2019/01/EESE_EthicalDecisionmakingFramework.pdf
Mind Tools (2021). The Stepladder Technique. Retrieved from
https://www.mindtools.com/pages/article/newTED_89.htm?fbclid=IwAR3mM6YQsPSRv
CNldsqXhyZ-n3gMgn80l65A-o_Nns0b84h8e9VSEvBBLF8
Zimmerman, A. (2014). Effective Decision Making. Retrieved from
https://slideplayer.com/slide/753719/
MGT 209: Corporate Governance, Business Ethics, Risk Management and Internal Control