Values Ethics and Business Decisions From Ethics to
Values, Ethics and Business Decisions From Ethics to Ethical Rationality Marc Le Menestrel
What does it mean to be ethical? Are you an ethical person? Do you work for an ethical company? n Is business ethical?
Thinking Ethics as a Grey Zone Looking at the bad side Looking at the good side You are honest It feels bad But you are more aware and anticipate Purely unethical You are here! You feel good, full of energy You may not be very credible And you may be blind to risks Ø Your ethical judgments are bounded and biased by your emotions, your interest, your mental habits and self-image, your cultural context and work environment, etc. Ø This psychological phenomenon is not necessarily intentional, but it can have significant consequences. It can be used by others to influence or even control you. Ø With training and effort, you can develop, refine and structure your ethical consciousness. It requires to open your mind and be able to think beyond the justification of your ethical opinion.
Enlighten your Ethical Blindspot To which extent is this unethical? To which extent is this ethical? Which stakeholders can be harmed? How much? When? Which stakeholders can benefit? How much? When? Can this be wrong? According to law? To some ethical principle? If everyone does the same? All the time? Is this right? Is this legal? Is this respecting ethical principles, code of values? Can this be universalized? Am I having bad feelings? A sense of discomfort? An early warning signal inside? What good feelings do I have? What virtue do I incarnate? Why is this respecting my personal integrity? Would this be better kept secret? Is this taboo? Could it be publicly known? What would I like to be known? To be transparent? is transparent?
Some Ethical Questions n n n n Are you an ethical manager? Do you work for an ethical company? Is it ethical to close a profitable plant? Is it ethical to influence a government? Is it ethical to compromise on the safety of a product? Is it ethical to shape customers desires? Is economic progress ethical? Is it ethical to work as hard as possible?
Ethics vs. Business Interest Ethical Values More Ethical Better Worse Business-Interest Less ethical What Should you do? There is no point of talking about ethics in business if we don’t talk about how much it costs
First Discourse: Economic Rationality Ethical Values Better More Ethical Rational Worse Business-Interest Less ethical Irrational Business interest should be the sole and unique criterion of rational choice
Second Discourse: Idealism Ethical Values Better More Ethical Irrational Rational Worse Business-Interest Less ethical Ethical values should be the sole and unique criterion of choice
Third Discourse: Corporate Social Responsibility Ethical Values Better More Ethical Rational Ir ra t io Worse Business-Interest Less ethical na l Business interest and ethics should always combine
Ethical Rationality Ethical Values Interest Better Less ethical Priority to More Ethical Ideal Worse interest Irrational Priority to ethics Rational choices between interest and ethics are often kept hidden, but they are the most difficult: We can rationally give priority to interest, and sacrifice ethics We can rationally give priority to ethics, and sacrifice interest Marc Le Menestrel, UPF & INSEAD, for
A Framework of Ethical Rationality 1. Economic Analysis 2. Ethical Analysis 3. Ethical Dilemma 4. Dynamic Analysis
1. Economic Analysis Step 1: What is the action that leads to the best consequence for you? ? Interest of the consequence The rational actor (you, the team, the firm) 1. Anticipates the consequences of the available actions 2. Evaluates these consequences according to their interest for the actor 3. Identify the action that leads to the best consequence
2. Ethical Analysis Step 2: What is the ethics of the action that leads to the best consequence for you? ? To which extent is it unethical? n Emotions/Virtue: To which extent is it ethical? n Do I feel bad? Is this an unnatural way to act? n Deontology/Idealism: Do I feel good? Is this a natural way to act? n What sort of principle, rule or norm do I violate? What happens if everybody does the same? What happens if I always act like this? n Here you raise an ethical dilemma! Deontology/Idealism: What sort of principle, rule or norm do I respect? What happens if everybody does the same? What happens if I always act like this? Utilitarianism/Consequentialism: What are the bad consequences for others? Would I suffer these consequences for myself? What are the bad consequences for the environment? Would the children of my children dislike these consequences? Emotions/Virtue: n Utilitarianism/Consequentialism: What are the good consequences for others? Would I like these consequences for myself? What are the good consequences for the environment? Would the children of my children like these consequences? Here you justify your interest!
3. Ethical Dilemma Step 3: Facing the extent to which there is a dilemma Unethical aspects of behavior ? ? More ethical alternative Prudence: Vision: Imagination: ? Could the unethical aspects lead to unexpected negative consequences? Can you find a more ethical alternative? If the consequences of the alternative affect your interest, cannot they be improved?
4. Dynamics Analysis Increasing demands (legal, social) Credibility ambiguous Contentment, lack of vigilance Unawareness, rationalization Lack of transparency Legal pressure Liabilities Bad Reputation PR costs Negative motivation Managerial inertia If you give priority to interest, you will need reactive strategies to survive Priority to interest Ideal Irrational Priority to ethics If you are in the ideal position, you may not be lucky for very long Transparency Social involvement & support New scope of activities New business processes Long term thinking Strategic investment Positive motivation Learning process If you give priority to ethics, you may find help for your proactive strategies
A Difficult Strategy… Priority to interest Ideal Irrational Priority to ethics Few ones are going to believe it, Outside or inside the company…
A Reactive Strategy… Priority to interest Ideal Irrational Priority to ethics We wait for change to become necessary But it can be very dangerous…
A Proactive Strategy… Priority to interest Ideal Irrational Priority to ethics We are likely to be more credible, And more motivated for change… Visionary Leaders Welcome!
Conclusions n It is easy not to see ethical dilemmas: you just have to find a good justification for the action leading to the best consequence! n It is not easy to see ethical dilemmas: it questions ourselves and it does not look fun… n It can be rational to be ethical sacrificing your interest, or to sacrifice ethics for your interest: the choice remains yours n It is difficult, but helpful, to search for ethical dilemmas beforehand if you want to have a chance not to be trapped by them and anticipate their dynamics
Joan Miro, 1968
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