Used by permission. Ethical Decision Making in Business . The Big Question. Whether to teach ethics in the business curriculum or not? Friedman (1970) Drucker (1981) Knee-jerk reaction to recent spate of scandals. Distinguish between the concepts of “morality” and “ethics”.
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Ethical Decision Making in Business
Whether to teach ethics in the business curriculum or not?
Four Components of Morality:What constitutes moral behavior?
Theory of Cognitive Disequilibrium:How does a person’s understanding of the world change?
Moral Development Progression:How does a person’s morality change?
“When new experiences cannot be assimilated into existing categories of experience or when expectations are violated, humans attempt to revise their categories and expectations so that experience will once again make sense and be predictable. Change in one’s cognition then comes from experiences that do not fit one’s earlier (and simpler) conceptions. Cognitive disequilibrium is the condition for development.”
The same way we make decisions involving non-ethical matters.
We look at the situation, assess alternative courses of action, evaluate outcomes and probabilities, and choose a course of action.
Steps in making a judgment matters?
How do we EVALUATE alternatives?
In management decisions we use tools such as:
Kant’s categorical imperative
Bentham & Mill’s utilitarianism
The Golden Rule, laws, etc.
Bravery, temperance, generosity, justice, pride, and honesty.
1. Define the action under consideration;
2. Derive the underlying rule (maxim) for the action;
3. Test the rule as a universal law.
Act in such a way that you always treat humanity, whether yourself or someone else, never simply as a means to an end, but always at the same time as an end.
Based on the innate dignity of human free will.
For each decision alternative, identify the ramifications if everyone were to follow the principle that underlies that alternative. For each decision alternative, determine if you are respecting the stakeholders and not treating them merely as objects.
For each alternative, identify the cost/benefits. Weigh the cost-benefits of each alternative to each stakeholder and determine if there is a solution that promotes the greatest good for the all of people.
If there is no alternative that results only in good and no harm, choose the alternative that produces the most benefits and causes the least harm to the stakeholders.
These are the types of rules that we find in many great religious traditions, such as rules against killing, stealing, and lying. Others are more local and particular to specific cultures such as rules about proper dress, relations between the sexes, respect for established authority, and so on.
1. Will adopting this decision allow you to be at peace with yourself and develop your character in a way that will improve your relationships with others?
2. How would you feel when you share your decision with your most respected mentors, family members, friends?
3. How would you feel if your actions were reported on the front page of The Wall Street Journal?
Pat is being interviewed by Ken as a possible consultant to the City in negotiating a new water contract. Pat asks for a fee of $600 per day for an estimated 10 days of consulting work, for a total fee of $6,000.
Ken counters with an offer of a $20,000 fee, for political reasons, and requests Pat to give back $14,000 to the “flower fund.” He explains that the flower fund helps the mayor deal with hardship cases among City employees, whom he says are underpaid and receive meager fringe benefits. The mayor wishes to be perceived as a caring and compassionate politician. Pat asks Ken if this contribution of $14,000 is an absolute requirement for her to get the consulting assignment. Ken’s reply is deliberately unclear.
Pat is torn in two directions as she considers her decision. On the one hand, she wants the consulting experience and sees that it can get her started as a successful consultant. The fee will also be welcome, to ease her financial pressures. On the other hand, Pat feels uncomfortable with Ken's request for the flower fund contribution, even though it may be a good cause. She also feels used to help deceive the public by proposing a $20,000 fee to further the Mayor's political purposes, when it is clear that her actual fee will only be about $6,000.