Ethical Dilemmas

Where to draw the line between personal feelings

and professional decisions?
How to discern between spirit of law & letter of law
to arrive at a decision.
How to compensate the after-effects of a decision?

What is Ethics
What ethics is NOT:
Ethics is not the same as feelings..
Ethics is not religion.
Ethics is not following the law.
Ethics is not following culturally accepted
norms.
Ethics is not science.
The Iceberg Effect
Figure 2.3
What sinks a ship isnt always
what sailors can see, but what
they cant see.
ETHICAL
UNDERPINNING
Misconduct vs Ethics
Many rules of conduct have been established by
common practice OR are explicitly stated in law or other
guidelines (unwritten standards)
ETHICS are open to interpretation and have only vague
rules - the rules change over time
I cannot define pornography but I know it when I see
it.
( U S Supreme Court Justice Potter Stewart)
Two main theories
Utilitarianism or Consequentialist ethics
Deontology (rule-base ethics)
Two alternative theories
Casuistical ethics (evaluation by analogy)
Virtue ethics

Guideline: maximizing benefits and minimizing harm:
the ends justify the means
the greatest good for the greatest number
The order of priorities is the good before the right

We should strive to create the greatest possible balance of good over evil
General moral principles are guidelines, not binding rules.

Generally focuses on a specific act, not what would be the best course of
action for someone in that kind of situation
Consequentialist ethics / Utilitarian theories
Deontological ethics
Some acts are intrinsically right or wrong
the ends do not justify the means

Rule-based judgments
Moral rules are binding regardless of the consequence
There is one right way.
Casuistical ethics
(evaluation by analogy)
Compare to less complex, similar cases that are easier to evaluate and
have a clear moral resolution, i.e., casuistry.
It analyzes particular moral problems by analogy to prior paradigm
cases (non controversial), rather than as unique isolated cases.
Requires practical wisdom; an ability to understand when, and under
what circumstances and conditions the rules are relevant and should
apply.

Can help decide whether something is ethical and also may give
guidance on what to do about it
Virtue ethics

Focus on the character and moral qualities of the players.
What is their history, character, motives, intentions.
Does the player have the habit or disposition to act morally and do what
is right?
There is less concern with rules, standards and outcome.
Virtue ethics may be most important in determining consequences in
cases of misconduct. (is this a person who made a mistake or is there a
pattern or wrongdoing from a person that lacks virtue and good character?)
Ethical Theories:
(i) Utilitarianism (J.S.Mill)
(ii) Deontology (I.Kant)
(iii) Virtue Theory (Aristotle)
the ends justify the means
the greatest good for the greatest number
The order of priorities is the good before the right
Rule-based judgments
the ends do not justify the means
Casuistical ethics
evaluation by analogy
Person-specific
is there a pattern?
Does the person that lack virtue
and good character?

Dharma
Re Cap
Dharma
righteousness doing the right thing and only the right thing
irrespective of the consequences.
duties in all three situations of despair before duty, despair
after duty, and duty as separate from delight or despair.
propriety of opportunism - Need to be magnanimous and
benevolent, else - those who violate laws, the cannot hope
for the same laws to protect them later
ensure victory of good over evil - the relationship between
dharma, mortals, and God.
proportionality and appropriateness of punishment - the
merit of punishment, and the merits of forgiveness.

HOW TO COMPARE CONCLUSIONS FROM
THE DIFFERENT TESTS


Using several principles will increase the chances of generating new insights into why an action is right
or wrong.

Having different perspectives on why something is wrong can be very helpful in designing alternative
actions that will produce the good that made the action attractive in the first place but without the
qualities that made it wrong.


The choices and rights approaches focus attention on the importance of respect for the individual
whereas exceptions and utility focus more on outcomes.

Exceptions and choices focus on how the decision is made whereas utility is concerned with results rather
than the conditions or rules the action can meet.

The character/virtue approach focuses on what kind of person or organization we aspire to be and
secondarily on judging individual actions.

Utility focuses on total net happiness for all affected individuals whereas the common good test reminds
us that we should consider more than just the goods of individual.
When the principles conflict, what to
do?
If action being considered is ethical according to some of the principles and not ethical according to others, a person can
appeal to reflection and judgment to indicate which principle(s) capture the most important features of the
situation. Refection can either be an internal conversation with yourself, or better a conversation with other people in the
firm whose judgments you trust.

Ethical people can and do sometimes disagree as to which principle(s) should govern in a particular situation and
therefore disagree about what was the ethical thing to do. At least these disagreements are among people who are using
ethical tests to determine how they should act.

The trading of insights among the various ethics tests is part of the practical wisdom that we should all
cultivate. Maximizing happiness in the utility test or maintaining the common good may require tempering or even forgoing
the exceptions, choices, rights, justice and/or character principles. Strong considerations raised by the exceptions, choices,
rights, justice, and/or character principles may override the claims of the greater or the common good. We should be
conscious, however, that we do this at the apex of a steep and slippery slope. When making those kinds of decisions, a
person should remember
o that the strong emotional charge carried by his/her intuitive individual judgment does not guarantee that the judgment
is right;

o that when reflecting on the judgment with myself, I will often give myself special considerations that I would not give to
others;

o and that to overcome the limitations of my intuitions and self-reflection he/she should engage wise and experienced
people in a discussion about the best balance among the ethics tests for this situation.

BEING ETHICAL IS ABOUT BEING CONFIDENT
& INSPIRING CONFIDENCE NOT BEING CERTAIN
Stages of ethical maturity
Level I Pre-conventional (Self-oriented)
Punishment avoidance
Reward seeking
Level II Conventional (Others orientation)
Acceptance by others
Acceptance by Societal norms and rules
Level III Autonomous (Principle oriented)
Social Contract consensus based, diversity tolerant
Universal Principle led Justice, Fairness, Conscience
Kohlbergs 6 stages of moral development
Conflicts
Right Vs Wrong
Conflict between clearly ethical and clearly unethical
values
Right Vs Right
Conflict among two or more values, all ethical
Wrong Vs Wrong
Conflict among two or more values, all unethical
Key Questions if Faced with an Organizational
Ethical Dilemma
What are my core values and beliefs?
What are the core values and beliefs of my organization?
Whose values, beliefs, and interests may be at risk in this
decision? Why?
Who will be harmed or helped by my decision or by the
decision of my organization?
How will my own and my organizations core values and
beliefs be affected or changed by this decision?
How will I and my organization be affected by the decision?
Business Ethics & Stake Holders
Are good ethics good business?
Virtue Its the right thing to do
Doing whats right for its own sake out of
integrity and pride

Prudence Its the smart thing to do
Doing whats right for fear of consequences
of getting caught doing something wrong
What is Business Ethics?
Laura Nash has defined business ethics as the study of
how personal moral norms apply to the activities and
goals of commercial enterprise, as dealing with three
basic areas of managerial decision making:
1. Choices about what the laws should be and whether to
follow them
2. Choices about economic and social issues outside the
domain of law
3. Choices about the priority of self-interest over the
companys interests


Societys Expectations Versus
Businesss Actual Social Performance


Societys
Expectations
of Business
Performance
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1960s 2000s
Time
Social
Problem
Businesss Actual
Social Performance
Social Problem
Social Environment, Business Criticism, and
Corporate Response


Factors in the Social Environment
Affluence Education Awareness
Rising Expectations Rights Movement
Entitlement
Mentality
Victimization
Philosophy
Business Criticism
Increased Concern for the
Societal Environment
A Changed Social Contract
Market centricity:
focuses solely on financial and economic relationships,
with stockholders/owners as primary beneficiaries of managerial decisions

Influence
markets
Employee
(recruitment
markets)
Supplier
markets
Referral
markets
Internal
markets
Customer
markets
Based on : The Six
Markets Model
(Christopher et al, 1991)
Stakeholder approach
Typology of Stakeholder Attributes
Legitimacy refers to the perceived validity of the
stakeholders claim to a stake
Power refers to the ability or capacity of a
stakeholder to produce an effect
Urgency refers to the degree to which the
stakeholders claim demands immediate attention
BASIS
Legitimacy, Power, Urgency

Three Assumptions of the Stakeholder Analysis
Approach
1. Profit maximization is constrained by justice
2. Regard for individual rights should be extended
to ALL constituencies that have a stake in a
business
3. Organizations are not only economic in nature
but can act in socially responsible ways, not only
because it is the right thing to do, but also to
ensure their legitimacy

Stakeholder Analysis Framework
Action details :Objectives, time frame
Assumptions & Actors
Key Stakeholders
Affected Parties
Positive
Short &
long term
Negative
Short & long
term
Duties to this
party
Rights of this
party
Best Practices
toward this party
Commitments to
this party
Likely consequences Ethical standards
Typology of Influence Strategies
What responsibilities does a firm have to its stakeholders?

Views of Responsibility to Stakeholders
Strategic approach considers stakeholders primarily
as factors, managers should manage in pursuit of
shareholder profits
Multifiduciary approach considers stakeholders as a
group to which management has a fiduciary
responsibility
Synthesis approach considers stakeholders as a
group to whom management owes an ethical, but
not a fiduciary responsibility