NTUST MBA Forum
How to Thinking &
Making Decision Ethically
Through Pragmatic & Systematic Approach
Professor Andrew B.C. Huang
National Taiwan University of Science And Technology
h f@ il
• Even we’re not prisoners, b t th same dil
E ’ t i but the dilemmas h happen when situations
h it ti
having two or more values, rights, or obligations in conflict, and we’re
frequently had to choose between or among equally unpleasant alternatives.
• Prisoner's Dilemma shows that we even as a rational person, but when
facing a unknown decision of others, will be confused to choose not the best
and rational alternatives.
• There’s no doubt that you’ll meet ethical dilemmas—every employee
probably meets hundreds of times during a career—the only thing in doubt
• How could we do to this conflicts? The more informed you are, the more
effective you’ll be in managing the ethical problems.
• We will discuss a pragmatic approach and p
p g pp practical decision-making tools
that you can use to the ethical dilemmas.
• The fundamental problems in identifying
the ethical standards;
• The questions for examining the ethics of
a business decision;
• The pragmatic and practical approaches
and decision-making tools;
• Understand ethics as a practical and
useful tool for making decision;
• Assess the ethics of a business using the
influential frameworks of famous scholars;
• Manage and make the business decisions
What does ethics mean to you
Sociologist Raymond Baumhart asked business people quot;What does
ethics mean to you?quot; Among their replies were the following:
• quot;Ethics has to do with what my feelings tell me is right or wrong.quot;
• quot;Ethi h t d with my religious b li f quot;
quot;Ethics has to do ith li i beliefs.quot;
• quot;Being ethical is doing what the law requires.quot;
• quot;Ethics consists of the standards of behavior our society accepts.quot;
• quot;I don't know what the word means.quot;
These replies might be typical of our own. The meaning of quot;ethicsquot; is
hard to pin down, and the views many people have about ethics are
p , yp p
(Developed by Manuel Velasquez, Claire Andre Thomas Shanks,
Velasquez Andre, Shanks
S.J., and Michael J. Meyer )
Professor Gardner’s Argument
on the Ethical Mind
• The Harvard Business Review of March 2007 contains an interview worth reading
with Harvard Graduate School Professor of Cognition and Education Howard Gardner.
Gardner became well known by his 1983 book , in which he argued that people don't
have one, but multiple intelligences: linguistic, logical-mathematical, spatial, bodily-
kinesthetic, musical, interpersonal and intrapersonal intelligence.
Likewise, Gardner now proposes to distinguish between :
• The Disciplined Mind - What we gain through applying ourselves in a disciplined
p g g pp y g p
way in school.
• The Synthesizing Mind - Surveys a wide range of sources, decides what is
important and is worth paying attention to.
• The Creating Mind - Looks for new ideas and practices, innovates, takes chances,
g p , , ,
• The Respectful Mind - The kind of open mind that tries to understand and form
relationships with other human beings.
• The Ethical Mind - Broadens the respect for others (see 4) into something more
abstract. Asks: quot;What kind of a person, worker, and citizen do I want to be?quot;
The Ethical Mind
More difficult for businessmen to adhere to an ethical mind
• The Ethi l Mi d
Th Ethical Mind grows at home and in the surrounding community. B d b h i of others can
th d i th di it Bad behavior f th
• Gardner mentions cheating MBA students as an example of this undermining, and thinks that it is
more difficult for businesspeople to adhere to an ethical mind than it is for other professionals,
because business is strictly not a profession, has no guild-structure, no professional model, no
standards and no penalties for bad behavior. The only requirement is to make money and not run
afoul of the law.
• In order to stay on the right track, Gardner advises business leaders to:
• Believe doing so is essential for the good of the organization, especially during difficult
• Take the time to step back and reflect about the nature of their work.
• Undergo quot;positive periodic inoc lationsquot; being forced to rethink what you're doing
quot;positi e inoculationsquot;, hat o 're doing.
• Use consultants, which should include a trusted advisor within organization, the council of
someone completely outside the organization (an old friend), a genuine independent board.
See also the related website The Good Work Project, an quot;effort to identify individuals and institutions that exemplify good work— that is excellent in
quality, socially responsible, and meaningful to its practitioners—and to determine how best to increase the incidence of good work in our society
Identifying Ethical Standards
It’s Hard Or Easy?
There are two fundamental problems in identifying th
t f d t l bl i id tif i the
1. On what do we base our ethical standards?
2. If our ethics are not based on feelings, religion, law,
accepted social practice, or science, what are they
3. How do those standards get applied to specific
situations we face?
Many philosophers and ethicists h
hil h d thi i t have h l d us answer
this critical question.
• They have suggested at least five different sources of
ethical standards we should use. But it is still hare to
Ethical Decision Could Be
A Rational and Logical Process—Down to Up
Evaluate the Action Plan
Make the Decision
(Select the Action Plan)
Explain the Results
(How Should I Do?)
Predict the Possible Results
(What Will Happen?)
Propose the Tactics
(What Can I Do?)
Get the Facts
Collect Relevant Information
(Identify the Truth)
Source: Steven L. Wartick & Donna T. Wood, International Business
and Society 2002
Making Good Decisions
A Framework by Markkula Center
• Making good ethical decisions requires a trained sensitivity to ethical
issues and a practiced method for exploring the ethical aspects of a
decision and weighing the considerations that should impact our
choice of a course of action.
• Having a method for ethical decision making is absolutely essential.
When practiced regularly, the method becomes so familiar that we
work through it automatically without consulting the specific steps.
This framework for thinking and working ethically is the product of dialogue
and debate at the Markkula Center for Applied Ethics at Santa Clara
U i it
Primary contributors include Manuel Velasquez, Dennis Moberg, Michael J.
Meyer, Thomas Shanks, Margaret R. McLean, David DeCosse, Claire
André, and Kirk O. Hanson. This article appeared originally in Issues in
, pp g y
Ethics, V. 1, N. 2 (Winter 1988).
Putting Approaches Together
• Each of the approaches helps us determine what standards of
behavior can be considered ethical. There are still problems to be
• The first problem is that we may not agree on the content of some of
these specific approaches. We may not all agree to the same set of
human and civil rights.
• We may not agree on what constitutes the common g
y g good. We mayy
not even agree on what is a good and what is a harm.
• The second problem is that the different approaches may not all
answer the question quot;What is ethical?quot; in the same way.
• Nonetheless, each approach gives us important information with
which to determine what is ethical in a particular circumstance. And
much more often than not, the different approaches do lead to
Approaches of Evaluating Ethic
A h Factors
C di i Limitation
Li i i
Utilitarian Comparative Net benefit > Quiet hard to measure the social cost
功利理論 cost and net cost and minority benefit always not been
benefit treated well enough
Rights and Human rights General and Hard to balance the conflict of rights
Duty 尊重權利 common The ethical action is the one that most dutifully
human rights respects the rights of all affected.
Justice and Fairness and Fairness of Hard to measure the cost and benefit, and
share Cost and short of the mutual understanding about
公正 The ethical action is the one that embodies the
habits and values of humans at their best.
Recognize an Ethical Issue
1. Is there something wrong personally,
interpersonally, or socially? Could the
p y, y
conflict, the situation, or the decision be
damaging to people or to the community?
2. Does the issue go beyond legal or
institutional concerns? What does it do to
people, who have dignity, rights, and
g y g
hopes for a better life together?
Get the Facts
3 Wh t are the relevant f t of the case? What
th l t facts f th ? Wh t
facts are unknown?
4. Wh t i di id l
4 What individuals and groups h
d have an i
stake in the outcome? Do some have a greater
stake because they have a special need or
because we have special obligations to them?
5 What are the options for acting? Have all the
relevant persons and groups been consulted? If
you showed your list of options to someone you
respect, what would that person say?
Evaluate Alternative Actions
From Various Ethical Perspectives
6. Which option will produce the most good
and do the least harm?
The ethical action will produce the greatest benefits over harms
7. Even if not everyone gets all they want,
will everyone's rights and dignity still be
y g g y
Cost-Benefit Analysis: Institutional decision-making
processes can powerfully influence the decisions that
are made by individuals or groups.
The ethical action is the most dutifully
respects the rights of all affected
8 Which option is fair to all stakeholders?
Fairness or Justice Approach:
The ethical action is the one that treats people equally, or if unequally,
that treats people proportionately and fairly.
• 9. Which option would help all participate
more fully in the life we share as a family,
Common Good Approach:
The thi l ti
Th ethical action is the one that contributes most to
i th th t t ib t tt
the achievement of a quality common life together.
10. Would you want to become the sort of person
who acts this way (e.g., a person of courage or
Make a Decision and Test It
11. Considering all these perspectives,
which of the options is the right or best
thing to do?
12 If you told someone you respect why you
chose this option, what would that person
say? If you had to explain your decision on
television, would you be comfortable doing
Act, Then Reflect on the
13. Implement your decision.
How did it turn out for all concerned?
If you had it to do over again, what would you do
No One Is Perfect In Every Situation
We don’t have a perfect solution. We certainly won’t resolve the academic
controversies over the best philosophical approaches, even they will suggest
important factors to keep in mind in making b i
i t tf t t k i i di ki business ethics d i i
Eight Steps to Sound Ethical Decision Making
Ethical decision making is often not liner. But it will be helpful
to recover all of these points even if not in this sequence
Source: Kinda K. Trevino, Katherine A. Nelson,
Managing Business Ethics: Straight Talk About How
To Do It Right The Wharton School,
University of Pennsylvania, 1995
Eight Steps to Sound Ethical
Decision Making In Business
8.Check Your Gut 2.Define the
7.Think Creatively 3.Identify the
about Potential Actions Affected Parties
6.Consider Your 4.Identify the
Character and Integrity Consequences
The Layoff: An Easy Job
e ayo asy Job?
Your Painful Decision Last to Come
• Your boss j t t ld you i complete confidence that the company will
Y b just told in l t fid th t th ill
have to layoff 200 workers.
• Luckily, your job won’t be affected.
• But, a rumor is now circulating in the plant and one of your workers
(an old friend) asks you “Is the plant closing? Am I going to lose job?
What will you say?
• This is a true ethical dilemma, because two values are in conflict.
Two “right” values that can create the significant conflicts are “truth
• Telling the truth to your friend means that you have to break your
promise to be loyal to the company that has treated you so well.
Eight Steps To Sound
Ethical Decision Making In Layoff
1 Gather th F t
G th the Facts:
• Asking yourself, “How did the situation occur?
• Are there historical facts that I should know?
• Are there facts concerning the current situation that I should know such
as legal requirements on informing workers about layoff?”
Even fact gathering is often easier than done. Many ethical choices are
particularly difficult because of the uncertainty involved in them.
Facts may simply be unavailable. For example, in this layoff case, Pat may not
have good information about the legal requirements on informing workers about
layoff. Also, she may not have enough information to determine how long it will
take these 200 workers to find new jobs.
But, recognizing these limitation, you still should attempt to assemble the facts
that are available to you before proceeding.
Is Legal be Ethical?
• What is legal may be unethical.
• Laying off thousands of employees in the
name of downsizing i l
fd i i is legal,
• But widely viewed as u et ca
ut de y e ed unethical
(Source: S Puffer & D McCarthy 1995 Finding the common ground in
S. D.McCarthy, 1995,
Russian ad American business ethics; B. Victor & C. Stephens,
1994, The dark side of the new organizational forms.)
2. Define the Ethical Issues
Truth VS Loyalty, Right VS duty
• Don’t jump t solutions without fi t id tif i th i
D ’t j to l ti ith t first identifying the issues or points of conflicts i th
i t f fli t in the
• It’s not so easy as “Pat should keep promise to her boss and protect her job, or she
should tell the truth to her friend ”
• The issues often go back to such as deontological( focus on rights and duties of
human nature), consequentialist ( also called Utilitarianism, focus on total
benefit>total harm) , or virtue Ethics (Integrity) theories.
) ( g y)
• In layoff, one issues has to do with the workers’ right to know about the plant closing
in advance. How much advance notice is appropriate? What does the law say?
• Another issue has to do with the company’s right to keep the information private.
What is the company’s obligation to its workers in this regard? Is it more important to
be honest with a friend or to keep a promise to one’s boss?
• What’s more, you may miss some other important issues. To present your dilemma to
co-workers, t your spouse or to your friends you respect is a good way.
k to t fi d ti d
3. Identify the Affected Parties
Shareholder VS Stakeholder
• Once stakeholders are id ifi
O k h ld identifies, role-playing can h l you to see
l l i help
the issues from different stakeholders perspectives.
• The consequentialist will want to identify all those who will
experience harms and benefits.
• The deontologist might want to know whose rights are involved and
who has a duty to act in the layoff.
• Being able to see the situation through others’ eyes is a key moral
reasoning skill. One question you could ask yourself is, how could
this or that stakeholder react if this decision were made public?
• It often helps to begin with the individuals in the case who are
immediately affected (Pat the worker Pat’s boss);
(Pat, worker, Pat s
• An then to progressively broaden your thinking to incorporate larger
groups( the other workers, the local community, the rest of the
company, and society i general)
d i t in l)
4. Identify the Consequences
positive and negative: long-term vs. short-term
• After identifying the affected parties think about the
potential (positive and negative), (long-term vs. short-term)
consequences for each of the parties.
• It isn’t necessary to identify every possible consequence.
• But, you should try to indentify consequences that have a
relatively high possibility of occurring and those that would
have particularly consequences if they did occur.
• And Who will be harmed by a particular decision or action? In the layoff case telling
the truth to the worker might cause Pat to lose her job, which will have negative
consequences for her entire family. However, it will give her workers the benefit of
more time to look for new job, perhaps saving many families from negative financial
• Can you determine which solution would accomplish the most net good (the greatest
good for the greatest number of people? Would telling a lie to your friend benefit the
most people? Or would it be better for all affected parties if you tell the truth?
• And evaluate which decision or action will produce the greatest good for the greatest
number of people.
5 Identify the Obligations
• Identify the obligations involved and the reasons for each In layoff
for instance, consider Pat’s obligation toward the affected parties,
and be sure to state the reasons why she has this duty and
• Think in terms of values, principles, character, or outcomes.
• For example, if you consider Pat’s obligation to keep her promise to
her boss, since promising-keeping and trust are important values in
, p g p g p
• Obligations may very depending on the p p involved
g y y p g people
• and the roles they play. For example, since the truth of
• financial report and scientific date is core, so, the auditor
• and the scientist have a particularly strong obligation to
• tell the truth.
6. Consider Character and Integrity
If uncomfortable to tell your family, Rethink it
• You have to begin by identifying the relevant community
Then, you have to determine how community members
will evaluate the decision you’re considering.
• A method that can help you with this process is know as
“the disclosure rule”
• It asks whether you will fell comfortable if your activities
were disclosed in the light of day in a public forum and
• If you will be embarrassed to have someone read about
your activities in newspaper—or if you will be
uncomfortable telling your parents, children, spouse, or
clergy about your d i i
l b t decision—you probably should rethink
b bl h ld thi k
Being ethical is not the same as
doing quot;whatever society accepts.quot;
• standards t which most citizens subscribe. B t l
t d d to hi h t iti b ib But laws,
like feelings, can deviate from what is ethical. Our own
pre-Civil War slavery laws and the apartheid laws of
present-day South Africa are grotesquely obvious
examples of laws that deviate from what is ethical.
• Fi ll b i ethical is not the same as doing quot;whatever
Finally, being thi l i t th d i quot; h t
society accepts.quot; In any society, most people accept
s a da ds a are,
standards that a e, in fact, e ca But s a da ds o
ac , ethical. u standards of
behavior in society can deviate from what is ethical. An
entire society can become ethically corrupt. Nazi
Germany is a good example of a morally corrupt society
Being ethical is not the same as
doing quot;whatever society accepts.quot;
Moreover, if b i ethical were d i quot; h t
being thi l doing quot;whatever
society accepts,quot; then to find out what is ethical,
one would have to find out what society accepts
To decide what I should think about abortion,
• Further the lack of social consensus on many
issues makes it impossible to equate ethics with
whatever society accepts Some people accept
abortion but many others do not. If being ethical
were doing whatever society accepts, one would
g y p ,
have to find an agreement on issues which does
not, in fact, exist.
7. Think Creatively Potential Actions
Is there another answer?
• Before making a final decision, be sure that you haven’t
unnecessarily forced yourself into a corner.
• If you have only two choices, either “A” or “B”, it’s important to look
for other creative alternatives.
• For example, will you receive an extravagant gift from a foreign
supplier. Should I accept the gift (
li Sh ld t th ift (against company policy), or refuse
i t li ) f
it (slap in the face). The “C” solution was to accept the it as the
company gift that will be displayed in the headquarters entrance.
How about in this layoff? Do you have another “C”?
8. Check Your Gut
Intuition is gaining credibility
• Intuition is gaining credibility as a source for good business decision
• In ethical choices, If your gut is bothering you, it probably means
that something is not right Pay attention to your gut but don’t let
right. gut, but, don t
your gut make your decision for you.
• Your gut is your internal warning system. The gut never lies. When
your g tells y something’s wrong, consider it a warning siren.
gut you g g, g
The emphasis in these steps has been on a highly rational fact
gathering and evaluation p
g process once y know that y
you you’re faced
with an ethical dilemma.
But don’t forget your gut. It might be your only clue that you’re facing
an ethical dilemma to begin with and it can be a source of empathy
f those affected by a decision or action.
ff t d b d i i ti
How to Manage The Grey Area
Vedan’s Application in Vietnam
• Legal: I th action l
L l Is the ti legal? I it comfortable t b di l
l? Is f t bl to be disclosed?
• Mutual Benefits: Do the counterparts know the project’s advantages
• Truth: Show the figures and truths (examples)
• Why we have to do that : Communicate with workable tactics and
• Look for the long run, Don’t take the short medicine ( those you can
not control and manage)
• Catch the hand of knife by yourself: 100 % Shares
• With workable master plan and promises: First Mover Strategy
Steps of Evaluating Ethical Dilemmas
Theories can be Applied in the Layoff
• Focus on Consequences (Consequentialist Theories):
Utilitarianism is probably the best know consequentialist theory. According to the principle of utility,
an ethical decision should maximize the benefits to society and minimize harms.
What matters is the net balance of good consequences over bad. What will be the consequences
(societal harms and benefits) of my telling/not sharing what I know about the layoff?
) y g g y
• Focus on Duties, Obligations, and Principles (Deontological Theories):
The word “deontological” comes from the Greek deno or duty, rather than focus on consequences,
it approaches would ask,quot; what's right on broad, abstract universal principles such as honesty,
promise keeping, fairness, rights, justices and respect to persons and property.
This model of thinking asks whether the rationale for you actions (telling/not telling) is suitable to
become a universal law or principle for every to follow.
• Focus on Integrity (Virtue Ethics):
A Virtue ethics perspective considers primarily the actor’s character, motivations, intentions, and
actor’s character and integrit as well. And character is very much defined b ones’ comm nit
integrity ell er m ch by community.
Therefore, it’s important to think about the community and communities within which business
What matters is are you a person of integrity? What if the community has not done this type of
thinking? What’s the relevant community standards?
The Ethics Quick Test
Keep asking IS THE ACTION
until you get an answer LEGAL ?
Does it comply with your best
If you’re not sure, ask.
’ t k understanding of
d t di f
our value and principles?
If you know it’s wrong, If you do it,
Don’t do it, period!
,p Will you fell bad?
How will it look
In the newspaper
oay e a o a
Is it the truth?
Will it be beneficial
Is it fair to all concerned?
to all concern4ed To All
Will it build good will
and better relationships?
Practical Preventive Medicine
In Ethical Decision
Source: Linda K. Trevino, Katherine A. Nelson,
Wharton School, University of Pennsylvania
There is no doubt that you’ll encounter ethical dilemma—
every employee probably encounters hundreds of them
during a career—the only thing in doubt is when.
Your mission is to be as prepared as possible before you run
into a problem. The more informed you are, the more
effective you ll be in protecting yourself and your employer.
Doing Your Homework
First Read Your Company’s Code of Ethics and Policy Manual. Manual
The best way to be effective in ethical decision is to learn the rules of your
organization and your profession, and to develop relationships that can help
you if and when the need arises.
• Second, ask questions.
Managers, executives, and peers will admire your initiative when you ask
what they think is “important around here” since many organizational
standards are unwritten and they differ from company to company
• Finally, develop relationships with people who are outside of your
chain of command.
Get to know people in human resources or p
p p personnel, legal, audit, and in
, g , ,
other departments who might be able to provide information, help you raise
an issue or determine if something even is an issue, or vouch for your
credibility in a crisis.
Suggestion: After you’ve done your homework, and if you learned that your,
your employer’s, and your company’s standards and values are in
substantial conflict, you may have to look for work in another organization.
When You’re Asked to
Make a Snap Decision
Obviously making decisions quickly can be dangerous
• Assume you have some time to devote to the decision, consider the
following guidelines when a quick decision seems called for:
1. Don t
1 Don’t underestimate the importance of a hunch (presentiment
rather think) to alert you that you’re facing an ethical dilemma.
2. Ask for time to think it over. Say something like, “let me think about
it and I’ll get right back to you ” “Bargaining for time is a smart way to
I ll you. Bargaining
give yourself a break.”
3.Find out quickly if your organization has a policy that applies to your
4. Ask your manager or your peers for advise. Regardless of your
level within the organization, you should never hesitate to ask for
5. Use The New York Times test. If you’d be embarrassed to have
your decision disclosed in the media or to your family, don’t do it.
To Be, or Not To Be
It’s really a headache to your ethical decision
1.You’re upgrading your department’s data processing capabilities and have
just placed an order for 4 personal computers and 2 laser printers with a
computer company’s representative.
p p y p
2. When you mention that you wish you had a printer at home like the ones
you just ordered, the representative tells you that because of your larger
order, she can give you a 50% discount on a printer for your home.
However all items must be ordered new new.
3. You fell that this is not quite right, but you’re not sure why.
• Questions and Doubts:
1.He could have real doubt about whether or not to accept a 50% discount
on a printer for his home. Even though, he feels funny about the offer, he
might be thinking that he does a lot of work at home, so accepting a
personal printer could be justified.
2 And since the computer representative made the offer after the order was
placed, there’s not conflict of interest—his decision to purchase wasn’t
influenced by the offer of a discount.
3. If it was you, what and how you can do?
Twelve Questions for Examining
the Ethics of a Business Decision
Laura L. Nash, Harvard Business School Professor
• Have you defined the problem accurately?
• How would you define the problem if you stood on the other side of the
• How did this situation occur in the first place?
• To whom and to what do you give your loyalties as a person and as a
member of the corporation?
• What does this intention compare with they likely results?
• Whom could your decision or action injure?
• Can you engage the affected parties in a discussion of the problem before
you make your decision?
• Are you confident that your position will be as valid over a long period of
time as it seems now?
• Could you disclose without qualm your decision or action to your boss, your
CEO, the board of directors, your family, or society as a whole?
y y y
• What is the symbolic potential of your action if understood, if misunderstood?
• Under what conditions would you allow exceptions to your stand?
The Prescriptive Approaches
You may be able to take
Step Actions to Take
Don’t underestimate the Listen to the gut. When your gut tells you something is wrong and
Importance doubt, consider it a warning.
Ask the time to think it Stall the company representative by telling her, he will get back to
over her later in the day or tomorrow
Read Company Policy Find out what’s the company’s saying about making purchase.
Does company allow personal discounts?
Ask your manager or your Ask for another opinion
peers for advice
Use The New York Times Ask yourself how would the public react to this decision? Someone
test might believe that the order was influenced by the discount, if it’s not
absolutely true, but hard to convince other.
The Bottom Line If you think that your decision could be misinterpreted or if someone
could think the objectivity of your decision has been compromised.
Rethink The Decision If you ever feel that accepting a favor from a vendor will place you
under an obligation to the vendor, be very careful.
The Topic We Will Discuss
• The N
Th New Business Ethics And Today’s Mangers: Th Ethical Skills
B i E hi A d T d ’ M The E hi l Skill
of the New Information Society.
• Changing is the reality of business world; nevertheless, the ethics
g g y ; ,
even the content in depth might be varied somehow, but the values
still remain the unchangeable.
• See you next Monday