Ethical Decision Making

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Ethical Decision Making
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Consider This You and Al

• You are the manager for Big-Mart, a large
  discount retailer. You recently fired Al, a
  sales clerk, after Al punched a customer during a
  dispute in the store(Al admitted this after the
  customer complained).
• Sue, manager of your competitor, Mega-Mart, calls
  you to tell you that Al has applied for a job at
  Mega-Mart, and to ask you whether Al is good
  with customers.
• WHAT DO YOU DO ?

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• WHAT IS ETHICS?
• (class discussion)

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What is Ethics?

• Ethics The study of right and wrong in action
• Learning Objective Be able to effectively
  resolve ethical dilemmas in business
• Moral philosophy tools for this process
• Values principles that are important to
  individual, group

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Legal Responsibilities Ethical Dilemmas

• Legal duties may be clear
• Is the decision the RIGHT action to take?
• Making a business decision can involve ethical
  dilemmas

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An Ethical Dilemma?

• Choice to be made
• Implicates competing values, rights, goals
• Potential harm to decision maker?
• Potential harm to others?
• Ripple effect long-term, far reaching
  implications of decision to be made.

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LAW ETHICSWith an Emphasis on Ethics

• A COMPARISON

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Is legal the same as ethical?

• YES or No or Maybe, or I Dont Know?

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Is legal the same as ethical?YES?

• If one is acting within the law presumably one is
  acting ethically.
• The law defines specific duties.
• Some conduct is allowed some not.
• Balance competing values.
• Compliance no further action
• Formal punishment of illegal conduct.

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Is legal the same as ethical?NO?

• Ethics offers guidance on how one should act.
• Addresses situations where competing values
  clash.
• Action or inaction may be controlled by formal or
  informal process.
• Action beyond mere compliance to legal duty.

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How to Evaluate Solutions Some Theories

• Stakeholder/Utilitarian Theory greatest good to
  the greatest number
• Rights Theory Respecting and protecting
  individual rights to fair and equal treatment,
  privacy, freedom to advance, etc.
• Justice Theory fair distribution of benefits and
  burdens can harm to individual be justifiable?
• Categorical Imperative what if everyone took
  such action?
• Front Page Test What if my decision was
  reported on the front page of the Los Angeles
  Times?

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How to Resolve Ethical Dilemmas in Business

• Identify relevant facts
• Identify relevant issue(s)
• Identify primary stakeholders
• Identify possible solutions
• Evaluate each possible solution
• Compare and assess consequences
• Decide on solution
• Take action

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Additional Approaches to Ethical Decision Making

• Five Question Approach (Tucker)
• Moral Standards Approach (Velasquez)
• Pastins Approach

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Practical Approaches to Ethics

• Five Question Approach (Tucker)
• Evaluate each alternative on
• Profitability (shareholders)
• Legality (society at large)
• Fairness
• Impact on the rights of stakeholders
• Impact on sustainable development (environment)

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Practical Approaches to Ethics

• Moral Standards Approach (Velasquez)
• Is the decision
• Of net benefit to society
• Fair to all stakeholders (fair distribution of
  benefits and burdens)
• Consistent with each persons rights

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Practical Approaches to Ethics

• Pastins approach (Pastin)
• Ground rule ethics (organization/individual rules
  and values)
• End-point ethics (greatest net good for all
  concerned)
• Rule ethics (determine ethical boundaries to take
  into account impingement of rights)
• Social contract ethics (how to move boundaries)

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Consider This You and Al

• You are the manager for Big-Mart, a large
  discount retailer. You recently fired Al, a
  sales clerk, after Al punched a customer during a
  dispute in the store(Al admitted this after the
  customer complained).
• Sue, manager of your competitor, Mega-Mart, calls
  you to tell you that Al has applied for a job at
  Mega-Mart, and to ask you whether Al is good
  with customers.
• WHAT DO YOU DO ?

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Class Exercise

• Evaluate You and Al in Light of Class Discussion

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Legal vs. EthicalYou and Al
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End of Ethics Exercise