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04 ethical decision making


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04 ethical decision making

  1. 1. Ethical Decision Making Lesson 04 1
  2. 2. Lessons’ Objectives ◦ Identify ethical behavior and myths of ethics ◦ Define ethical dilemma ◦ Familiar with resolving dilemma ◦ Identify process of Ethical decision making 2
  3. 3. Ethical Behavior ◦ Ethical behavior goes beyond the legal requirements placed on a business, as it concerns discretionary decisions and behavior; in other words, what a business chooses to do, rather than what is forced to do. ◦ Business ethics are relevant both to the conduct of an individual within an organization and to the conduct of the organization as a whole. 3
  4. 4. Myths of Business Ethics ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ It is a more religion than management Our employees are ethical so no need BE It is a discipline best led by philosophers It is a matter of good person preaching to bad persons It is a new police-person in organization Ethics can't be managed Business ethics & CSR are same thing We obey to law so no need about ethics. 4
  5. 5. Ethical Dilemma ◦ There are situation when there is not simple choice between write or wrong ◦ Ethical dilemma is complex judgments on the balance between the economic performance and the social performance of an organization.  Have two interests - cannot purse one without having negative impact on other  Private Interest Conflicts with Corporate  Business Interest Conflicts with Public. 5
  6. 6. Ethical Dilemma ◦ E.g.  New house purchase by employee to reach office fast meanwhile he is considered to retrench.  When the both products are same quality to justify your high price touch drawback of competitor 6
  7. 7. Cont... ◦ An ethical dilemma exists when one is faced with having to make a choice among following alternatives:  Significant value conflicts among differing interests,  Real alternatives that are equally justifiable, and  Significant consequences on "stakeholders" in the situation. 7
  8. 8. Characteristics of Dilemma ◦ ◦ ◦ ◦ ◦ ◦ It have extended consequences It has multiple alternatives It have mixed outcomes It have uncertain consequences It have personal implications It is easy to make when a person is not directly involved ◦ Hence EDM are not simple choice between right and wrong. 8
  9. 9. Paradigms of Dilemma ◦ Four such dilemmas are so common to our experience that they stand as models, patterns, or paradigms. They are:     Truth versus loyalty. Individual versus community. Short-term versus long-term. Justice versus mercy. Ethics and Sri Lanka 9
  10. 10. Classical Approach Resolving Dilemma ◦ Three approaches are facilitated  End-based thinking (utilitarianism)  Rule based thinking  Care-based thinking (value to you or close relationships) And Virtue ethics - instead upon execute as an alternative way  Here action is considered morally right if in carrying out the action.  10
  11. 11. Nine ways to Resolving Dilemma ◦ Rushworth Kidder 1. Recognize as moral issue and define the problem accurately 2. Identify the affected by decision 3. Gather the facts how events happened 4. Test for right vs. Wrong issues 11
  12. 12. Nine ways to Resolving Dilemma 5. Test for right vs. right paradigm (true vs... 6. Apply for the resolution principle (end, rule, care) 7. Investigate if is any third way out of the situation 8. Make decision & take action 12
  13. 13. Whistle blowing ◦ It is methods can be contributed to identify and act of disclosing wrong in an organization ◦ Like blowing a whistle to call attention to a thief or unethical practitioner ◦ But it is questionable when...  Dissent / disagree - Must speak out against others in organization  Breach of Loyalty - Perceived as one who violates confidentiality and loyalty  Accusation - Singles out specific individuals as threats to organization or the public 13
  14. 14. Whistle blowing ◦ Care about whistle blowing ◦ Make sure situation involves an imminent threat to society or to the business ◦ Document all allegations ◦ Examine internal whistle blowing first ◦ Should you remain secret Ethics and Our behavior 14
  15. 15. Framework for Ethical Decision Making ◦ Step 01: Describe the problem ◦ Step 02: Determine whether there is an ethical issue or an ethical dilemma ◦ Step 03: Identify and rank the key values and principles ◦ Step 04: Gather your information ◦ Step 05: Review any applicable Code of Ethics ◦ Step 06: Determine the options 15
  16. 16. Framework for Ethical Decision Making ◦ Step 07: ◦ Step 08: ◦ Step 09:  Select a course of action Put your plan into action Evaluate the result Don’t forget! ◦ Step 10: Submit cases to your ethical review team or board regularly for review 16
  17. 17. Effects of Ethical/Unethical Behavior Ethical Behavior Unethical Behavior Increases Efficiency and Effectiveness of Production and Trade Reduces Efficiency and Effectiveness of Production and trade Increases Company Performance Reduces company Performance Increases National Standard of Living, Wellbeing, and Prosperity. Reduces National Standard of Living, Wellbeing, and Prosperity. 17
  18. 18. Utilitarian Rule An ethical decision should produce the greatest good for the greatest number of people Moral Rights Rule An ethical decision should maintain and protect the fundamental rights and privileges of peoples. Rules for Ethical Decision Making. Justice Rule An ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner Practical rule An ethical decision should be one that a manager has no hesitation about communicating to people outside the company because the typical person in a society would think the decision is acceptable. 18
  19. 19. Ethical Decision Making Approaches 1) Utilitarian Approach – Moral behavior produces the greatest good for the greatest number 2) Individualism Approach – Acts are moral when they promote the individual’s best long-term interest, which ultimately leads to the greater good. 19
  20. 20. Ethical Decision Making Approaches 3) Moral – Rights Approach decisions are those that best maintain the rights of those people affected by them. 4) Justice approach – Moral Decisions must be based on standards of equity, fairness, impartiality 20
  21. 21. Three Types of Justices ◦ Three types of Justice Approaches: I. Distributive Justice – In case of substantive differences, people should be treated differently in proportion to the differences among them II. Procedural Justice – Rules should be clearly stated & consistently and impartially enforced III. Compensatory Justice –Individuals should be compensated for the cost of their injuries by the party responsible. 21
  22. 22. Ethical Test 1. Is it Legal 2. Benefit Cost Test 3. Categorical Imperative 4. Light of Day Test 5. Do onto Others Test 6. Ventilation Test 22
  23. 23. Is It Legal 1. Is It Legal     Ethical – Legal Ethical-Illegal Unethical – Legal Unethical – Illegal I II III IV ◦ I and IV ◦ II and III Difficult 23
  24. 24. Ethical • Quadrant II • Ethical and Illegal • Quadrant I • Ethical and Legal Codification Manifestation Legal Illegal Corporate Decisions • Quadrant IV • Unethical and Illegal • Quadrant III • Unethical and Illegal Unethical 24
  25. 25. Benefit & Categorical Imperative 2.Benefit Cost Test  Do the benefits exceed the costs to whomsoever they accrue? 3.Categorical Imperative  Are you willing to allow to everyone to practice the proposed action or do you want to be a special case? 25
  26. 26. Light of Day & Do onto Others 4.Light of Day Test – What would be your reaction if the action were brought out into the open for public scrutiny 5.Do onto Others Test – Golden Rule – If you would like others to do the same to you - passes the test 6.Ventilation Test – Seek out others views. Discuss the 5 tests with them. If others feel it is OK – passes the test 26
  27. 27. A Venn Diagram Model for Ethical Decision Making Area 1 Profitable legal, ethical, G o for it Area 2a Profitable and legal, Proceed cautiously Area 2b Profitable and ethical, Probably legal, Proceed cautiously Ethical Responsibility 2b Economic Responsibility Area 3 Legal, and ethical but not profitable find ways to seek profitably . 3 1 2a Legal Responsibility 27
  28. 28. Thank You 28