ETHC 2000 – Interdisciplinary Ethics and Values
Ethical/Moral Problems in Business
**
As alluded to previously, moral/ethical problems are as pervasive, if not more so,
compared with ethical/moral problems faced by individuals/groups, and are
typically of the type involving actions or decisions where tradeoffs must be made
between acting in the best interests of shareholders versus acting in the best
interests of society at large.
**
Such moral/ethical problems extend far beyond the most obvious issues, including
things such as bribery, collusion, and theft (which are all mostly regarded as
either strictly illegal or marginally illegal in most societies) to include other, less
obvious, areas of business practice such as corporate acquisitions, marketing
policies, and capital investment decisions, with examples of each as follows:
**
Corporate Acquisitions – should some/all of the existing workers in the
firm that is being acquired be laid off due to a need to reduce duplication
between the combined businesses?
**
Marketing Policies – Should tobacco manufacturers be allowed to
advertise their products in media outlets where children/adolescents will
be exposed to such advertisements?
**
Capital Investment Decisions – should a multi-national firm make
capital investments in a country where worker/human rights are not
respected?
**
In each of the above examples, the central issue as to what decision/course of
action is “right” or “wrong” is not as obvious as in the cases of bribery, collusion,
and theft.
**
As was true in the general case, the choice of a given course of action in each of
the above scenarios will apparently either serve the interests of shareholders
primarily or serve the interests of society primarily. Ultimately, one group in
each scenario benefits, and the other group is harmed in some way, regardless of
the course of action chosen. Such is the nature of ethical/moral dilemmas in
business.
**
In terms of the general obligations that businesses have to their shareholders, the
pursuit of profit and the provision of an acceptable return on the shareholders’
investment are considered most relevant. In terms of the general obligations that
businesses have to society at large, examples include protecting/honoring loyal
employees, maintaining competitive markets, producing safe products, and
preserving environmental features.
**
The ethical/moral task for businesses and their managers is to select a course of
action/make a decision so as to effectively balance their financial (shareholder)
obligations with their broader social obligations, so as to result in an action or
decision that is deemed to be “right”, “fair”, or “just”.
**
Moral/ethical problems in business vary dramatically in scope and size, and may
affect a few persons or a very large number of persons either/both inside and/or
outside of the organizational enterprise. (Hydro-Quebec Example)
**
Evaluation of Moral Problems in Business (Conceptual Model)
**
Systematic approach to the resolution of moral/ethical problems in
business situations.
**
Step One – Understand all moral standards that are applicable to the
moral problem at hand
**
Different people will utilize different moral standards to judge
whether a proposed business action/decision is right or wrong, fair
or unfair, etc. Such standards are uniquely individualized and are
influenced by a number of individual-specific factors including:
>>
>>
>>
>>
**
Personal goals: expectations of outcomes
Personal norms: expectations of behavior
Personal beliefs: expectations of thought
Personal values: individual-specific priorities based on an
individual’s goals, norms, and beliefs
**
All of the above, taken together, comprise an individual’s moral
standards of behavior. These are, in turn, presumably influenced
by a number of exogenous factors such as religious/cultural
traditions as well as an individual’s own unique economic/social
circumstances.
**
Understanding the moral standards/beliefs of the individuals and
groups that will potentially be affected by a particular business
action/decision is a key first step on the way to evaluating /
analyzing ethical dilemmas in business.
Step Two – Recognize the moral impact(s) of the business action / decision
at hand
**
Identify who stands to gain / benefit from the action / decision and
the nature of the benefit(s) themselves
**
**
Identify who stands to lose / incur costs from the action / decision
and the nature of the loss / costs themselves
**
Identify those whose rights will be exercised / enhanced as a result
of the action / decision and the nature of those rights
**
Identify those whose rights will be abridged / denied as a result of
the action / decision and the nature of those rights
Step Three – Clearly state the moral problem
**
It is then necessary to state the exact nature of the moral problem
encountered so that all parties to the problem clearly understand all
of the relevant benefits, harms, rights, and wrongs involved with a
given business action or decision.
**
Once the moral problem has been clearly stated in terms of the
above issues, taking into account all the potential moral impacts of
a given business action or decision, the formal evaluation / analysis
of such problems requires that business decision makers formally
consider the economic outcomes, legal requirements, and ethical
principles that surround a given moral problem in order to arrive at
a decision or course of action that is deemed “ethical”.