Chapter 3 Ethical Decision Making Ethical Theories Copyright

Chapter 3 Ethical Decision Making , Ethical Theories Copyright © 2012 Pearson Education, Inc. All rights reserved.

Chapter Objectives • To provide a comprehensive framework for ethical decision making in business. • To examine the strength of ethical issues as an important element influencing the ethical decision making process. • To introduce individual factors that may influence ethical decision making in business. • To introduce organizational factors that may influence ethical decision making in business. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Making Ethical Decisions • Making good ethical decisions to solve Ethical Dilemma requires a trained sensitivity to ethical issues and a practiced method for exploring the ethical aspects of a decision. • Having a method for ethical decision making is absolutely essential. • Ethical decision should be based on ethical principles and codes rather than on emotions, thoughts, fixed policies. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Habits of Strong Ethical Leaders Have Strong Personal Character. Ethical Leaders Have a Passion to Do Right. Ethical Leaders Are Proactive. Ethical Leaders Consider Stakeholders’ Interests. Ethical Leaders Are Role Models for the Organization’s Values. • Ethical Leaders Are Transparent and Actively Involved in Organizational Decision Making. • • • Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Dilemma • Ethical dilemma: is a situation with uncertainty about what is right to do from a moral or ethical perspective. • For example, the manager of a company may be put in a position in which he must choose between the interests of his employees and his investors. Give more profits or increase the salary? Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Decision Making Framework The Framework Overview: • • • Step One: Describe the problem. Step Two: Determine whethere is an ethical dilemma. Step Three: Identify and rank the key values and principles. Step Four: Gather your information. Step Five: Review any applicable Code of Ethics. Step Six: Determine the options. Step Seven: Select a course of action. Step Eight: Put your plan into action. Step Nine: Evaluate the results. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step One: Describe the problem. • You must first describe the problem and ensure that it’s actually a moral dilemma that needs to follow an ethical model. • Consider the nature of the problem and any signs of the problem and ensure that you’re attempting to solve the issue and not just it’s signs. • Circumstances affect the problem definition (for whom does the problem exist ? What is the surroundings? ) Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Two: Determine whethere is an ethical dilemma. • Terms of an ethical dilemma must be ethical in nature, not legal. • If something is a law, you then have the ethical choice to follow the law or not. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Three: Identify and rank the key values and principles. • What reasons can you provide for prioritizing one competing value over another? • Understand that a decision to a dilemma which goes against an individual’s personal set of values has very little chance of success. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Four: Gather Your Information • Do you have all the known facts? • Do you understand the applicable laws or legalities? • Do you have all relevant policies available to review? • Are you clear about the individual’s views and personal values? * Don’t hesitate to seek out consultation. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Five: Review Any Applicable Code of Ethics • Look for the following: -- Mission statement -- Values base of the organization -- Ethical principles to guide practice -- Ethical standards • Codes can be revised or updated as needed. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Six: Determine the Options • List all possible actionable options. • Consider the cost/benefits of each option. • Seek out additional points of view. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Seven: Select a Course of Action 1) Remove the least desirable option. 2) Remove any which you can not put into action. 3) Remove any options which break the values systems of those affected. 4) Recognize that your final choice will be impacted by your personal values. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Eight: Put your plan into action. • Think about the outcomes with a sense that you have truly approached this ethical dilemma with the best of intentions and to the best of your ability. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Step Nine: Evaluate the Results • Evaluate the results for the future situations and ethical dilemma. • Consider submitting your most difficult cases to an ethics review board for feedback. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Dilemma • Example 2 : (Assignment 1) • A new technology is being launched which is good for the company as well as the customers. But, if this is brought into use, a less man-power is required for the organization. • The entrepreneur is now in an ethical dilemma whether he wants to satisfy his customers with good services or be loyal to his employees who have helped the company grow. • The unpleasantness of the situation arises when neither the customers nor the employees deserve to suffer and it is the entrepreneur’s call to take. Copyright © 2012 Pearson Education, Inc. All rights reserved.

How Can Managers Make Ethical Decisions? • Question: How can managers ensure that ethical issues are considered in business decisions? Ø To encourage ethical decision making, firms should: 1. Hire and promote people with a well grounded sense of personal ethics. – refrain from promoting individuals who have acted unethically. – potential employees should find out as much as they can about the ethical climate in an organization prior to taking a position Copyright © 2012 Pearson Education, Inc. All rights reserved.

How Can Managers Make Ethical decisions? 2. Build an organizational culture that places a high value on ethical behavior. – highlight importance of code of ethics. – implement a system of incentives and rewards that recognize people who engage in ethical behavior and sanction those engage in unethical behavior. Copyright © 2012 Pearson Education, Inc. All rights reserved.

How Can Managers Make Ethical decisions? 3. Develop a moral courage: – enables managers to walk away from a decision that is profitable, but unethical. – gives the employees the strength to say no to the manager who orders them to pursue actions that are unethical. Copyright © 2012 Pearson Education, Inc. All rights reserved.

How Can Managers Make Ethical decisions? 4. Ethics Officers: • To encourage ethical behavior in a business, a number of firms now have ethics officers • Ethics officers ensure that: – employees are trained to be ethically aware – ethical considerations enter decision-making – the company’s code of ethics is followed Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Theories Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Theories • Different ethical theories exist and theories can be applied to different situations to inform our thinking and support decision making. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Theories 1. Consequentialism: ( )ﺍﻟﻌﺎﻗﺒﺔ • Consequentialist ethics holds the view that the correct moral response is related to the outcome. • The central aim is the principle of 'maximizing the greatest good for the greatest number'. • The 'good' referred to a variety of ways and may refer to values or 'utility' such as happiness, or another life enhancing outcome. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Theories 2. Deontology : " "ﺍﻟﺘﺰﺍﻡ ﻭﻭﺍﺟﺐ § Deontology is based on duties and rights rather than the outcomes of any action. § Deontology focuses on rules, obligations and duties. § Deontology consider that acting from duty is viewed as acting ethically. Copyright © 2012 Pearson Education, Inc. All rights reserved.

Ethical Theories 3. Virtue Ethics : ﺍﻟﻔﻀﻴﻠﺔ • Virtue Ethics is based on the moral character, or virtues of the individual. • The virtues are fixed character traits which are held to be societally valuable such as truthtelling, trustworthiness, • Virtue ethics is about an individual of good character doing the right thing. Copyright © 2012 Pearson Education, Inc. All rights reserved.