1. BEV-Module 3
•Difficulties in Ethical Decision Making
•Ethical Decision making Model
•Ethical Dilemmas
•Suggestions for Ethical Decision Making
•Comparison of Codes of Ethics, Codes
of Conduct, Codes of Practice
•Ethic courses and Training
2. Prisoner’s Dilemma
• Two thieves arrested for a crime vow not
to betray each other. But the police put
them into separate rooms and tell each
thief the same thing: “If your partner
confesses and you keep silent, he goes
free and you get five years in prison; if you
confess and he keeps silent, you go free
and he gets 5 years in prison. If both of
you confess, then you both get 3 years in
prison. If you both keep silent, then we’ll
give you each I year in prison on a lesser
charge"
3. Prisoner Prisoner
B B
Defecting Cooperating
Prisoner
A -3,-3 -5,0
Defecting
Prisoner
A 0,-5 -1,-1
Cooperating
The Prisoner‟s Dilemma and the Opportunity
Costs of Lost Opportunities
4. • When two managers talk with each other
they have a choice of cooperating by
telling the truth or try to take advantage by
lying to each other.
• When two investors who each own
property have a choice of cooperating in
the norm against theft or trying to take
advantage of each other by stealing each
other’s property.
• Although taking advantage of another may
pay off in a one-time meeting it rarely
exists in managerial environment.
5. Difficulties in Ethical Decision Making
Difficulties in ethical decision making may
arise from the following:
1. Cross-cultural contradictions.- It may
arise when corporations do business in
other societies where ethical standards
differ from those at home.
2. Competitive pressures- When companies
are squeezed by severe competition,
managers sometimes engage in ethical
activities to beat out a competitor.
6. 3. Manager’s values and attributes- Managers
are key people to investigate whether a
company will act ethically or unethically as
they have more opportunities than others to
set ethical time for their company.
4. Personal gains/Dubious character- Personal
gain even greed causes ethical problems.
Business sometimes employ people whose
personal values are less than desirable.
5. Individual values in conflict with
organizational goals.-Ethical conflicts in
business frequently occur when a company
pursues goals or uses methods that are not
acceptable to some of its employees.
7. How to Clarify Ethical problems
1. Have you defined the problem accurately/
2. How would you define the problem if you
stood on the other side of the fence?
3. How did this situation occur in the first
place?
4. To whom and to what do you give your
loyalty as a person and as a member of the
corporation?
5. What is your intention in making the
decision?
6. How does this intention compare with the
probable results?
7. Who could your decision or action injure?
8. 8. Can you discuss the problems with the
affected parties?
9. Are you confident that your decision will
be as valid over a long period as seems
now.
10.Could you discuss your decision with
your boss/CEO/family without qualms?
11.What is the symbolic potential of your
decion being understood? If
misunderstood?
12.Under what circumstances would you
allow exceptions to your stand?
9. The Ethical Decision Model
1. Clarify the question. What is the
question? (What is at stake? Who is
affected? How?)
2. Determine its relevance for this business.
How does it affect the business?
3. Identify the circumstantial constraints.
What are the external constraints(legal,
regulatory, marketing etc)?
4. Assess the available options. Apply the
Ethical principles. [ Which of the various
options conform to justice and decency
while maintaining long term owner value]
10. ISSUES RESULTING IN ETHICAL
DILEMMAS
A dilemma is a situation in which two or
options are available for action,
representing varied interest are available.
Decisions are important, but not simple,
• Accounting procedures
• Customer service
• Crisis management
• Government regulations
• Targeted advertising
11. • Sexual harassment
• Community spirit etc
• Fair hiring
• Treatment of grievances
• Materials
• Buildings
• Plans
• Locations.
12. SUGGESTIONS FOR ETHICAL DECISION
MAKING
I. Top management can improve
behaviour
II. Codes of ethics improves decision
making. –codes of ethics are formal
statements of what the company expects.
Top management must eliminate
opportunities for unethical behaviour.
III. Interaction with peers and other
colleagues help people to learn ethical
behaviour.
IV. Control Systems.- Policies, rules
regulations worked into control system
ensures ethical behaviour.
13. COMPARISON 0F CODES OF ETHICS, CODES OF
CONDUCT, CODES OF PRACTICE
Codes of Ethics Codes of Conduct Codes of Practice
•Statements of values •Statement of Rules- •Interpretations and
of values and This is what you illustrations of
principles – „This is must/must not do. corporate values and
how we expect you to •Penalties for principles- This is how
behave‟ transgression we do things around
•Seeks to clarify and here.
define the ethics of the •Potential conflicts of * The codes seek to
corporation. „This is interest are described shape the expression
who we re and what we with rules for guidance of corporation‟s stated
stand for‟ *Contain examples of values through
•General guides to appropriate behaviour practice of its
decisions about the to be meaningful. employees- Tends to
acting in the work provide guidance for
place decisions-using such
rule of thumb ” as act
and disclose” or “seek
advice “ . „What we do
is because it is our
character.
14. Ethics Courses and Training
Ethics courses and training can achieve:
• Provide people with rationales, ideas to participate
in ethical decision making
• Help people to ‘make sense’ of their environment.
• Provide intellectual weapon to fight those who
violet ethical standards
• Enable employees to act as alarm system for not
meeting expected ethical standards.
• Enhance conscientiousness and sensitivity to
moral issues.
• Encourage and strengthen moral courage
• Improve moral climate in the firm by increasing
people’s ability to be autonomous ethical
dissenters.
