summarize and “synthesize” your key learnings from the files that I will share

“Based on your review of the readings, PPTs and video clips this week, summarize and “synthesize” your key learnings. Your post must “synthesize” key learnings from at least one of the video clips and 2 different articles. About 2 pages.”

I will share the PPTs and the videos.

3/31/22
WGB614 Business Ethics
PROF. RAVI DHINGRA
© 2011
1. Introduction to Ethics
Prof. Ravi Dhingra
Sacred Heart University
© 2011
R.S. Dhingra
1
3/31/22
Ethics in the headlines
© 2011
Unethical behavior headlines
• Wells Fargo – fake accounts
• VW – emissions
• Martha Stewart – insider trading
• Enron – accounting fraud
• GM and Toyota – product recalls
• Lance Armstrong – doping scandal
• Penn State – sexual abuse scandal
• Bernie Madoff – Ponzi scheme
© 2011
R.S. Dhingra
2
3/31/22
Unethical behavior headlines
• FIFA bribery scandal
• Walmart – bribery in Mexico
• Nike – child labor in overseas factories
• Brian Williams NBC news anchor –
fabricated story about being under fire while
covering the Iraq war
• Senator Robert Menendez – indicted for
corruption charges
© 2011
Ethics at work – WSJ Survey
• 36% of workers calling in sick are lying
• 35% keep quiet about co-worker misconduct
• 12% of job resumes contain falsehoods
© 2011
R.S. Dhingra
3
3/31/22
Reasons for unethical behavior
• Why do good citizens, business leaders and
respectable members of society wind up
behaving unethically?
• What is the common thread?
© 2011
Reasons for unethical behavior
• Obedience to authority – pleasing the boss
• Be a team player, fit in – peer pressure
• Everybody else is doing it – rationalizing
• Nobody will ever find out – cheating
• Financial pressures – sales & profit goals
• Time pressures – deadlines
• Greed
© 2011
R.S. Dhingra
4
3/31/22
Situation and context
• Workplace factors and situations exert
significant pressure on individual values
• Ethical dilemmas are a normal part of
working in an organization
© 2011
Ethical dilemmas are everywhere
• In your working careers, you face pressures
and competing priorities – from your boss,
your customers, your stockholders – that
may often conflict with your personal
values and beliefs
• Many situations and dilemmas where there
is no clear right or wrong answer
© 2011
R.S. Dhingra
5
3/31/22
Ethical dilemmas are everywhere
• Often, managers must decide between two
difficult situations
• Being a good person and having sound
personal values may not always be enough
for ethical decision-making
• New technologies are creating new dilemmas
© 2011
Ethical dilemmas
• Loyalty to your team (and organization)
versus telling the truth
• Two principles in conflict here – loyalty
versus honesty
© 2011
R.S. Dhingra
6
3/31/22
Ethical dilemma
• You discover that your team mate Sean, a
good friend is using drugs – which is against
the rules and team’s code of conduct
• It does not seem to affect the team’s
performance
• What would you do? How
would you handle the situation?
© 2011
Ethical dilemma
• Would you handle the situation differently if
he was not one of your friends?
• Research show that people often go for
loyalty to their team, their friends – that’s
why so many ethical issues go unreported
© 2011
R.S. Dhingra
7
3/31/22
Intern’s dilemma
• You have a summer internship at a
prestigious firm – you have been looking
forward to the experience, and the money
• You are asked by your manager to
misrepresent yourself as a student doing
summer research to obtain data from
industry competitors. How would you
respond?
© 2011
Intern’s dilemma
• Responsibility and duty to self and family
versus responsibility to others
© 2011
R.S. Dhingra
8
3/31/22
Fundamental challenges
• On what should we base our ethical
standards?
• How should these ethical standards get
applied in specific ethical situations we
face?
© 2011
Ethical dilemmas
• How will you navigate through these
difficult situations (gray zones)?
• What guidelines will you use?
• Will you consider only the law when
making business decisions?
• What personal values and
ethics will you rely on?
R.S. Dhingra
© 2011
9
3/31/22
Ethical dilemmas
• Just following the law does not always result
in the right approach
• Ideas that are considered lawful may not
always be ethical, e.g.
– Racial segregation (till Civil Rights Act 1964)
– Slavery (till 1865)
– Use of asbestos in building materials (till 1989)
© 2011
Ethics, morality and the law
• https://www.youtube.com/watch?v=Xki2fR
A0bY8 (5 min)
© 2011
R.S. Dhingra
10
3/31/22
Ethics for people on the move
• https://www.youtube.com/watch?v=dqMj51
Ea1K8&t=572s (TEDx14 min)
© 2011
Ethical dilemmas
• What if I broke into your store to get some
food to feed 10 homeless dying of hunger
• I calculate that saving lives is more
important than stealing a few cans of food
• But you say that is my store, I have property
rights and we cannot interfere with that
• How should we make our decision?
R.S. Dhingra
© 2011
11
3/31/22
It’s a matter of …
Consequences and calculations
versus
Principles, rights, fairness,
duties, responsibilities
© 2011
Ethics
Ethics is about making
hard choices
© 2011
R.S. Dhingra
12
3/31/22
Ethics
Ethics is about making
gray-area decisions.
© 2011
How will you choose?
© 2011
R.S. Dhingra
13
3/31/22
Ethics course
• Provides a foundation and framework for
ethical thinking and “reasoning” through
ethical dilemmas that can occur in the
workplace – using case studies and
discussions – applied ethics
• Not a theological or philosophical
perspective
© 2011
How did you decide?
• Think of the last time you had to make a
decision where you were worried about the
right thing to do – “what should I be doing?”
• How did you come up with that decision?
• What did you do?
• Did you follow your gut?
• Did you get somebody’s opinion?
© 2011
R.S. Dhingra
14
3/31/22
We need a moral operating system
• https://www.ted.com/talks/damon_horowitz_
we_need_a_moral_operating_system
• (16 min)
© 2011
Ethical dilemmas
• Ethics is hard because it requires thinking –
and sometimes that makes us uncomfortable
• A lot of the bad stuff in the world is not
done by people who choose to be bad
• “It arises from not thinking”
• How do we know what to do if we don’t
have a moral framework to guide decisions?
© 2011
R.S. Dhingra
15
3/31/22
Ethical dilemmas
• Need to develop a strong ethical compass –
guiding principles and values that will help
you navigate these challenges and decisions
• This course will provide some insights on
“ethical” principles and behavior – which
might help you develop your own compass
when dealing with these ethical challenges
© 2011
Providing you with
Knowledge
Skills
Values
© 2011
R.S. Dhingra
16
3/31/22
Knowledge: Concepts & Issues
Before you can make wise decisions, you need
to understand:
• The theories and frameworks of ethics that
might be helpful in handling such dilemmas
• The kinds of ethical dilemmas or situations
we encounter in the workplace
© 2011
Skills: Ethical reasoning
• Course is not just about ethics theory, but
important skills – “ethical decision-making
skills” which you will need to navigate in
the course of your working career
• The critical reasoning process for thinking
through the issues involved, rather than
rationalization and gut reaction
© 2011
R.S. Dhingra
17
3/31/22
Skills: Ethical reasoning
• Applying ethics theories to real-life
situations (applied ethics)
• Focus is on “business” ethics – as a guide to
decision-making
• Business is the dominant social institution
of our time, and many of you will be its
future leaders
© 2011
Personal Values
• Help clarify and articulate your own values –
so you are better prepared for the ethical
challenges in your business careers
© 2011
R.S. Dhingra
18
3/31/22
Core theme: Ethics matters
Doing the right
thing matters
“It takes 20 years to build a reputation and
five minutes to ruin it. If you think about that,
you’ll do things differently.”
– Warren Buffet
© 2011
Core theme: Good ethics
Good ethics is
good business
Bad business conduct travels fast and can be
incredibly damaging – any conduct that is
perceived as unethical can come back and hurt
the company
© 2011
R.S. Dhingra
19
3/31/22
Case discussion format
1. What are the relevant facts?
2. What are the critical ethical issues or
dilemmas?
3. Who are the key affected parties
(stakeholders)?
© 2011
Who are stakeholders?
© 2011
R.S. Dhingra
20
3/31/22
Case discussion format
4. Which of the ethical theories or frameworks
are applicable in this case?
5. Identify all possible alternative courses of
action or solutions
– Legal solutions
– Possible legal but unethical solutions
– Economic solutions
– Moral/ethical solutions.
© 2011
Case discussion format
6. Evaluate pros and cons of each of these
alternatives, and practical constraints if
any ….
© 2011
R.S. Dhingra
21
3/31/22
Case discussion format
a. Who benefits; who is harmed?
b. Moral rights of those affected?
c. Advances the common good?
d. Treats everyone fairly and justly?
e. Consider your obligations
f. Potential consequences (long term versus short
term, symbolic consequences, consequences of
secrecy or not doing anything)
© 2011
Case discussion format
7. Recommend best solution or course of
action, or combination of actions –
supported by well reasoned arguments and
counter-arguments
© 2011
R.S. Dhingra
22
3/31/22
Quiz
• It is time to elect a new President and yours
is the deciding vote. Here are some facts
about the 3 candidates:
© 2011
Quiz
• Candidate A: He associates with crooked politicians,
and consults with astrologers. He’s had two
mistresses. He also chain smokes and drinks 5-6
Martinis a day.
• Candidate B: He was removed from office twice,
sleeps until noon, used opium in college and drinks a
large amount of whisky every evening.
• Candidate C: He is a decorated war hero. He’s a
vegetarian, doesn’t smoke, drinks an occasional beer
and hasn’t had any extra-marital affairs.
• Which of these candidates would be your choice?
© 2011
R.S. Dhingra
23
3/31/22
Quiz
• Candidate A is Franklin D Roosevelt
Candidate B is Winston Churchill, and
Candidate C is Adolf Hitler
© 2011
25 biggest corporate scandals
• https://www.youtube.com/watch?v=8UwSU
DvWBBU (11 min)
© 2011
R.S. Dhingra
24
3/31/22
What is ethics about?
• Morals?
• Values?
• Beliefs?
• Religious doctrine?
• Your conscience?
• Or, just following the law?
© 2011
Morals and Values
• They are not the same as ethics
• Values and morals are guiding principles
and core beliefs that govern our personal
behavior
• Awareness of values and morals affects our
moral reasoning ability – and helps influence
ethical decision-making and behavior
• Foundation for ethical decision-making
© 2011
R.S. Dhingra
25
3/31/22
Ethics: Beyond morals & values
• While values and morals are guiding
principles that govern our behavior
• Ethics is the way we “apply” these values
and core beliefs in making decisions and
handling moral dilemmas
• Values: Knowing the difference between
right and wrong vs.
Ethics: Applying these to decision-making
© 2011
6 core values/pillars of character
• Trustworthiness, honesty, integrity
• Responsibility
• Respect
• Fairness
• Caring, compassion, empathy
• Courage – to do the right thing
© 2011
R.S. Dhingra
26
3/31/22
What do you value most?
• Important to clarify your values and morals
• What are the morals and values you care
most about? What matters the most to you?
• Your values become the foundation for:
– Your decisions
– Your behavior
– Your life
© 2011
Where do our values come from?
• Parents and family
• Teachers
• Friends
• Religious beliefs
• Community
• National culture
• Organizational culture
© 2011
R.S. Dhingra
27
3/31/22
Ethics: A reflective process
• Ethics goes beyond morals, values and the
law, by reasoning:
• “What is the right thing to do in this
situation?” when faced with ethical
dilemmas – not just what is legally right
• “How should you distinguish between right
and wrong?”
© 2011
Ethics: A reflective process
• Ethics is the process, not a set of rules or a
formula
• It is the thoughtful process of reflection and
reasoning and that makes a decision ethical
• Different conclusions may result from
different ethical perspectives
© 2011
R.S. Dhingra
28
3/31/22
Ethics: About behavior
• It is about behavior – how we behave and the
decisions we make – the standards and
principles which guide our behavior and
determine what we do day-to-day in life
• It is also about relationships – how we treat
one another, even those we don’t know, in
everyday life
© 2011
Questions ethics asks
• What is right?
• What is good?
• What is just?
• Who benefits?
• Who is harmed?
• What should people do?
• How should people behave?
© 2011
R.S. Dhingra
29
3/31/22
Personal values & ethical choices
• https://www.youtube.com/watch?v=dTs8me
MCiJg (12 mins)
• Is Andrew acting on his values?
• Do you think he approached this the right
way?
• If you were in Andrew’s shoes how would
you have handled this dilemma?
© 2011
Ethos
• Ethics comes from the Greek word “ethos”
• The fundamental character or spirit of a
group or society – the underlying principles
that define the beliefs, customs or practices
of a group or society
© 2011
R.S. Dhingra
30
3/31/22
Dimensions of ethical behavior
• Individual ethics
• Business (organizational) ethics
• Societal ethics
• Global ethics
© 2011
Individual ethics
• Individual Ethics: Rules and principles that
govern all our personal actions – “a set of
moral principles and values”
• This is personal, because it differs from
individual to individual – factors that
influence decision-making in personal
situations like religious convictions, family
and social relationships, etc.
© 2011
R.S. Dhingra
31
3/31/22
Business ethics
• “The principles, norms and standards of
conduct – that guide the behavior of an
organization, as well as individuals within
an organization”
• They are standards that guide our business
behavior and promote integrity in business
• This definition focuses on work-related
conduct and expectations
© 2011
Business ethics
• Business ethics is about ethical behavior
in the workplace
• Looks at the impact of decisions on the
internal and external stakeholders
© 2011
R.S. Dhingra
32
3/31/22
Organizational ethics
• The set of values and beliefs that are shared
by and guide the behavior and decisions of
the members of that organization
• Behavior that conforms to accepted
principles, norms or standards of the
organization
© 2011
Ethical culture
• The behavior of individuals in the
organization in their dealings with each
other and the stakeholders of the
organization (customers, vendors, the
community, stockholders)
• The ethical culture and behavior of the
organization as a whole in its dealing with
its employees and its stakeholders
© 2011
R.S. Dhingra
33
3/31/22
Ethics in the workplace
• What constitutes ethical behavior in the
workplace?
• How do you create a culture of ethical
behavior throughout the organization?
• Ethical behavior is not a single act,
but a habit
© 2011
Ethical behavior
• What should be your ethical compass when
faced with an dilemma?
• What is the right thing to do?
• How do you make ethical decisions?
• How do you resolve conflicts between your
personal values and organization’s policies?
Or between conflicting responsibilities?
© 2011
R.S. Dhingra
34
3/31/22
Gut reactions
• What happens when we are normally
confronted with a dilemma or a difficult
situation?
• We usually act on our “gut reaction”
• Gut reactions usually not the best way to
make good ethical decisions – because they
often tend to be personal and emotional
© 2011
Ethical dilemma
• https://www.youtube.com/watch?v=H7eAB6
u2Hqs (5 min)
© 2011
R.S. Dhingra
35
3/31/22
Child labor dilemmas
• Is a 14-year old who is not in school, better
off working in a factory for 10 hours a day
for $2 an hour? Or being on the street with
little or no economic support for family?
• Trade-offs between economic benefits and
social concerns
© 2011
Reflection and reasoning
• How do we make sound ethical decisions
based on reflection and reasoning, rather
than rationalization and gut reaction?
• Ethical decision-making is a skill, that
should be learned and practiced like any
other skills – so we can make good ethical
decisions
© 2011
R.S. Dhingra
36
3/31/22
Rationalizing our mindset
• https://www.ted.com/talks/julia_galef_why_you_think_you
_re_right_even_if_you_re_wrong?utm_source=newsletter_
weekly_2016-0702&utm_campaign=newsletter_weekly&utm_medium=ema
il&utm_content=talk_of_the_week_button
TEDx talk – 15 mins)
© 2011
The challenge
• On what do we base our ethical standards?
• How do these standards get applied to
specific dilemmas or situations we face?
© 2011
R.S. Dhingra
37
3/31/22
The ethical continuum
• http://www.youtube.com/watch?v=gUJ00vN
GCPE&list=TLIi_jmLObrxnqiOO8kaQKcn
W244pH-DpV
• Chuck Gallagher
© 2011
Grey’s Anatomy
• https://www.youtube.com/watch?v=oF1Cmt
KyHNw (5 min)
• Dilemmas in healthcare
© 2011
R.S. Dhingra
38
3/31/22
Ethics, economics and the law
• Businesses are economic organizations that
operate within the framework of the law
and regulations
© 2011
Core responsibilities of business
LEGAL
ECONOMIC
Obey the laws
Be profitable
ETHICAL
Conduct
business
ethically
© 2011
R.S. Dhingra
39
3/31/22
Economic dimensions
• Profit motive – maximize returns for
investors/stockholders
• Free market – charge for market will bear
• Economic efficiency – maximum output
for minimum input/resources
• Competition is essential to capitalism – can
be destructive or cooperative
© 2011
Legal dimensions
• Complying with all federal and local laws
and regulations
• Is complying with the law enough to also
make the decisions ethical?
• If it is legal is at also morally okay?
© 2011
R.S. Dhingra
40
3/31/22
Ethical dimensions
• Decisions that are right from an economic
and legal perspective can often conflict
with what is ethically correct
• Conflict between interest of different
stakeholder groups
• They may be permissible under the law,
but not always the “right thing to do” –
the law sometimes may not be enough
© 2011
Ethics and the law
• Ethics and law are not fixed principles
• Some ethical beliefs change over time; and
laws change to reflect the changing beliefs
of a society
• It was considered legal and ethical to acquire
and possess slaves till late 19th century
© 2011
R.S. Dhingra
41
3/31/22
Ethics and the law
• Cigarettes, gay rights, civil rights,
environment awareness
• Decriminalizing marijuana laws (addiction
or medicine?)
• Abortion is legal, but many consider it
personally immoral
• Consider some of these old ads
© 2011
© 2011
R.S. Dhingra
42
3/31/22
© 2011
© 2011
R.S. Dhingra
43
3/31/22
© 2011
© 2011
R.S. Dhingra
44
3/31/22
Ethics matters
What will matter is
not your competence
but your character
© 2011
Reasons for unethical behavior
• Personal greed (I deserve more)
• Financial temptations and pressures – great
rewards for great results (Enron, sub-prime
mortgage scandal in 2008)
• Competing and conflicting demands –
shareholder interest vs consumer interests
(GM and Toyota product recalls)
© 2011
R.S. Dhingra
45
3/31/22
Reasons for unethical behavior
• Management pressure; to please the boss
• Peer pressure – to be a team player; conform
• Rationalization (justification):
– No one will ever know (I won’t get caught)
– Everybody else is doing it
– Nobody will get hurt (slippery slope)
© 2011
Reasons for unethical behavior
• Insensitivity – doing dumb things without
realizing it
• Arrogance – rules do not apply to me
• It is just business – my employees are
depending on me
© 2011
R.S. Dhingra
46
3/31/22
Reasons & Rationalizations
• https://www.youtube.com/watch?v=i9KMJu
Gg52Q#t=55 (9 min)
© 2011
2. Ethical dilemmas
Reasoning & Decision-making
Prof. Ravi Dhingra
Sacred Heart University
© 2011
R.S. Dhingra
47
3/31/22
Ethical dilemma
• A situation that involves conflicting
principles of ethical behavior
• Where there is no clear answer – all the
alternatives have some negative implications
or side effects
Value
Value
© 2011
What is an ethical dilemma?
Ethical dilemmas occur when your values or
responsibilities are in conflict:
•A conflict between two or more values or
responsibilities, or
•Your personal values conflict with those of
the organization or a particular situation in the
organization
•Deciding between “right and wrong”
© 2011
R.S. Dhingra
48
3/31/22
Ethical dilemma
• Ethics and morals can clash in the workplace
e.g. work pressures and deadlines (long
hours) conflicting with family obligations
to spouse and family e.g.
• Boss asks you to work long hours and
weekends on a project, but a spouse or
parent is critically ill
© 2011
Ethical dilemma
• https://www.youtube.com/watch?v=U_66IlRIYU (7 mins)
© 2011
R.S. Dhingra
49
3/31/22
Ethics in the workplace
• https://www.youtube.com/watch?v=3aYwE
WmELBw (5 mins)
© 2011
Ethical dilemma
• Many ethical choices are clear-cut so that
we can decide between right and wrong e.g.
embezzling funds from the company –
because embezzling is stealing and is wrong
• But consider the following
© 2011
R.S. Dhingra
50
3/31/22
Dilemma
• You have just learned in confidence from
your boss that the company you work for
will be laying off 100 people in 2 weeks
• One of them is your very good friend Jane
• She asks you about the rumor going around
about the closing. “Am I going to lose my
job? We are buying a new house next week.”
• What do you tell her? How do you handle it?
© 2011
Dilemma
• This is an ethical dilemma, because several
of your values are in conflict
• Being truthful vs. your loyalty to the
company and your boss
• What would be the consequences (benefits
and harms) if you tell Jane?
• What would be the consequences if you do
not tell Jane?
© 2011
R.S. Dhingra
51
3/31/22
No black and white
• In the realm of ethical dilemmas there may
sometimes be no single right or wrong
answer
• But how you choose to deal with it says a
lot about your business and its ethical culture
© 2011
Sales rep’s dilemma
• https://www.youtube.com/watch?v=0E94W
w1-CrU (3 min)
• https://www.youtube.com/watch?v=G9QrSa
hQF38 Resolution of dilemma
© 2011
R.S. Dhingra
52
3/31/22
Dilemma
• Have any of you experienced an ethical
dilemma?
• Have you witnessed an ethical misconduct?
• How did you handle it?
© 2011
Sophie’s Choice
• https://www.youtube.com/watch?v=N4ZgQI
3nrms (9 min)
© 2011
R.S. Dhingra
53
3/31/22
Ethics and reasoning
• Ethical reasoning: Process of sorting out the
facts, principles and consequences when
faced with an ethical dilemma – to help
decide “what is the right thing to do?”
• Rational thinking based on facts and wellreasoned arguments (pros and cons), when
you are faced with tough choices
© 2011
Ethics and reasoning
• It is about thinking through the various
ethical choices from different perspectives
• A thoughtful decision-making process –
versus rationalization
– No one will ever know (I won’t get caught)
– Everybody else is doing it
– It really won’t hurt anybody
– I work so hard, I deserve it
R.S. Dhingra
© 2011
54
3/31/22
Ethical decision-making steps
1. What is the critical ethical issue(s)?
2. What are the relevant facts?
3. Who are the affected parties (stakeholders)?
4. Which of the ethical frameworks apply in
this situation?
5. What are the alternative courses of action?
© 2011
Ethical decision-making steps
6. What are the pros and cons of the
alternative courses of action?
7. What is the best course of action? – make a
decision
8. Ask the “spotlight” question – check your
instinct, consider your integrity, prioritize
values
© 2011
R.S. Dhingra
55
3/31/22
Spotlight question
• Would my family and friends be proud of
my decision?
• How would I feel if my
actions were in the news or
on social media, or open to
public scrutiny?
© 2011
Before you make a decision
• CARE Principle
• Consistency: Would I make the same
decision if a similar situation arose in the
future?
• Accountability: Have I behaved responsibly?
Will my family be proud of my decision?
© 2011
R.S. Dhingra
56
3/31/22
Before you make a decision
• Rationality: Is my decision impartial and
supported by logic?
• Equity: Would I want to be treated the same
way? Did I treat everyone fairly regardless
of who they are?
© 2011
Justice Potter Stewart
• “There’s a difference between that which
you have a right to do and that which is right
to do. I don’t think they have a legal right to
do this. But even if they do, that doesn’t
make it right.” – Justice Potter Stewart
© 2011
R.S. Dhingra
57
A Framework for Making Ethical Decisions | Science and Technology Studies
2/17/18, 9:13 PM
A Framework for Making Ethical
Decisions
MAKING CHOICES: A FRAMEWORK FOR MAKING ETHICAL
DECISIONS
Decisions about right and wrong permeate everyday life. Ethics should
concern all levels of life: acting properly as individuals, creating responsible
organizations and governments, and making our society as a whole more
ethical. This document is designed as an introduction to making ethical
decisions. It recognizes that decisions about “right” and “wrong” can be
difficult, and may be related to individual context. It first provides a summary
of the major sources for ethical thinking, and then presents a framework for
decision-making.
1. WHAT IS ETHICS?:
Ethics provides a set of standards for behavior that helps us decide how we
ought to act in a range of situations. In a sense, we can say that ethics is all
about making choices, and about providing reasons why we should make
these choices.
Ethics is sometimes conflated or confused with other ways of making choices,
including religion, law or morality. Many religions promote ethical decisionmaking but do not always address the full range of ethical choices that we
face. Religions may also advocate or prohibit certain behaviors which may not
be considered the proper domain of ethics, such as dietary restrictions or
sexual behaviors. A good system of law should be ethical, but the law
establishes precedent in trying to dictate universal guidelines, and is thus not
able to respond to individual contexts. Law may have a difficult time
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designing or enforcing standards in some important areas, and may be slow
to address new problems. Both law and ethics deal with questions of how we
should live together with others, but ethics is sometimes also thought to apply
to how individuals act even when others are not involved. Finally, many
people use the terms morality and ethics interchangeably. Others reserve
morality for the state of virtue while seeing ethics as a code that enables
morality. Another way to think about the relationship between ethics and
morality is to see ethics as providing a rational basis for morality, that is,
ethics provides good reasons for why something is moral.
2. TRADITIONAL ARRANGEMENT OF THE FIELD OF ETHICS:
There are many systems of ethics, and numerous ways to think about right
and wrong actions or good and bad character. The field of ethics is
traditionally divided into three areas: 1.) meta-ethics, which deals with the
nature of the right or the good, as well as the nature and justification of
ethical claims; 2.) normative ethics, which deals with the standards and
principles used to determine whether something is right or good; 3.) applied
ethics, which deals with the actual application of ethical principles to a
particular situation. While it is helpful to approach the field of ethics in this
order, we might keep in mind that this somewhat “top down” approach does
not exhaust the study of ethics. Our experience with applying particular
ethical standards or principles can inform our understanding of how good
these standard or principles are.
Three Broad Types of Ethical Theory:
Ethical theories are often broadly divided into three types: i) Consequentialist
theories, which are primarily concerned with the ethical consequences of
particular actions; ii) Non-consequentialist theories, which tend to be broadly
concerned with the intentions of the person making ethical decisions about
particular actions; and iii) Agent-centered theories, which, unlike
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consequentialist and non-consequentialist theories, are more concerned with
the overall ethical status of individuals, or agents, and are less concerned to
identify the morality of particular actions. Each of these three broad
categories contains varieties of approaches to ethics, some of which share
characteristics across the categories. Below is a sample of some of the most
important and useful of these ethical approaches.
i.) Consequentialist Theories:
The Utilitarian Approach
Utilitarianism can be traced back to the school of the Ancient Greek
philosopher Epicurus of Samos (341-270 BCE), who argued that the best life
is one that produces the least pain and distress. The 18th Century British
philosopher Jeremy Bentham (1748-1832) applied a similar standard to
individual actions, and created a system in which actions could be described
as good or bad depending upon the amount and degree of pleasure and/or
pain they would produce. Bentham’s student, John Stuart Mill (1806-1873)
modified this system by making its standard for the good the more subjective
concept of “happiness,” as opposed to the more materialist idea of “pleasure.”
Utilitarianism is one of the most common approaches to making ethical
decisions, especially decisions with consequences that concern large groups
of people, in part because it instructs us to weigh the different amounts of
good and bad that will be produced by our action. This conforms to our
feeling that some good and some bad will necessarily be the result of our
action and that the best action will be that which provides the most good or
does the least harm, or, to put it another way, produces the greatest balance
of good over harm. Ethical environmental action, then, is the one that
produces the greatest good and does the least harm for all who are affected—
government, corporations, the community, and the environment.
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The Egoistic Approach
One variation of the utilitarian approach is known as ethical egoism, or the
ethics of self- interest. In this approach, an individual often uses utilitarian
calculation to produce the greatest amount of good for him or herself. Ancient
Greek Sophists like Thrasymacus (c. 459-400 BCE), who famously claimed
that might makes right, and early modern thinkers like Thomas Hobbes
(1588-1679) may be considered forerunners of this approach. One of the most
influential recent proponents of ethical egoism was the Russian-American
philosopher Ayn Rand (1905-1982), who, in the book The Virtue of
Selfishness (1964), argues that self-interest is a prerequisite to self-respect
and to respect for others. There are numerous parallels between ethical
egoism and laissez-faire economic theories, in which the pursuit of selfinterest is seen as leading to the benefit of society, although the benefit of
society is seen only as the fortunate byproduct of following individual selfinterest, not its goal.
The Common Good Approach
The ancient Greek philosophers Plato (427-347 BCE) and Aristotle (384-322
BCE) promoted the perspective that our actions should contribute to ethical
communal life life. The most influential modern proponent of this approach
was the French philosopher Jean-Jacques Rousseau (1712-1778), who argued
that the best society should be guided by the “general will” of the people
which would then produce what is best for the people as a whole. This
approach to ethics underscores the networked aspects of society and
emphasizes respect and compassion for others, especially those who are more
vulnerable.
ii.) Non-consequentialist Theories:
The Duty-Based Approach
The duty-based approach, sometimes called deontological ethics, is most
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commonly associated with the philosopher Immanuel Kant (1724-1804),
although it had important precursors in earlier non-consquentialist, often
explicitly religious, thinking of people like Saint Augustine of Hippo (354430), who emphasized the importance of the personal will and intention (and
of the omnipotent God who sees this interior mental state) to ethical decision
making. Kant argued that doing what is right is not about the consequences of
our actions (something over which we ultimately have no control) but about
having the proper intention in performing the action. The ethical action is
one taken from duty, that is, it is done precisely because it is our obligation to
perform the action. Ethical obligations are the same for all rational creatures
(they are universal), and knowledge of what these obligations entail is arrived
at by discovering rules of behavior that are not contradicted by reason.
Kant’s famous formula for discovering our ethical duty is known as the
“categorical imperative.” It has a number of different versions, but Kant
believed they all amounted to the same imperative. The most basic form of
the imperative is: “Act only according to that maxim by which you can at the
same time will that it should become a universal law.” So, for example, lying
is unethical because we could not universalize a maxim that said “One should
always lie.” Such a maxim would render all speech meaningless. We can,
however, universalize the maxim, “Always speak truthfully,” without running
into a logical contradiction. (Notice the duty-based approach says nothing
about how easy or difficult it would be to carry out these maxims, only that it
is our duty as rational creatures to do so.) In acting according to a law that we
have discovered to be rational according to our own universal reason, we are
acting autonomously (in a self-regulating fashion), and thus are bound by
duty, a duty we have given ourselves as rational creatures. We thus freely
choose (we will) to bind ourselves to the moral law. For Kant, choosing to
obey the universal moral law is the very nature of acting ethically.
The Rights Approach
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The Rights approach to ethics is another non-consequentialist approach
which derives much of its current force from Kantian duty-based ethics,
although it also has a history that dates back at least to the Stoics of Ancient
Greece and Rome, and has another influential current which flows from work
of the British empiricist philosopher John Locke (1632-1704). This approach
stipulates that the best ethical action is that which protects the ethical rights
of those who are affected by the action. It emphasizes the belief that all
humans have a right to dignity. This is based on a formulation of Kant’s
categorical imperative that says: “Act in such a way that you treat humanity,
whether in your own person or in the person of another, always at the same
time as an end and never simply as a means to an end.” The list of ethical
rights is debated; many now argue that animals and other non-humans such
as robots also have rights.
The Fairness or Justice Approach
The Law Code of Hammurabi in Ancient Mesopotamia (c. 1750 BCE) held
that all free men should be treated alike, just as all slaves should be treated
alike. When combined with the universality of the rights approach, the justice
approach can be applied to all human persons. The most influential version of
this approach today is found in the work of American philosopher John Rawls
(1921-2002), who argued, along Kantian lines, that just ethical principles are
those that would be chosen by free and rational people in an initial situation
of equality. This hypothetical contract is considered fair or just because it
provides a procedure for what counts as a fair action, and does not concern
itself with the consequences of those actions. Fairness of starting point is the
principle for what is considered just.
The Divine Command Approach
As its name suggests, this approach sees what is right as the same as what
God commands, and ethical standards are the creation of God’s will.
Following God’s will is seen as the very definition what is ethical. Because
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God is seen as omnipotent and possessed of free will, God could change what
is now considered ethical, and God is not bound by any standard of right or
wrong short of logical contradiction. The Medieval Christian philosopher
William of Ockham (1285-1349) was one of the most influential thinkers in
this tradition, and his writings served as a guide for Protestant Reformers like
Martin Luther (1483-1546) and Jean Calvin (1509-1564). The Danish
philosopher Søren Kierkegaard (1813-1855), in praising the biblical Patriarch
Abraham’s willingness to kill his son Isaac at God’s command, claimed that
truly right action must ultimately go beyond everyday morality to what he
called the “teleological suspension of the ethical,” again demonstrating the
somewhat tenuous relationship between religion and ethics mentioned
earlier.
iii.) Agent-centered Theories:
The Virtue Approach
One long-standing ethical principle argues that ethical actions should be
consistent with ideal human virtues. Aristotle, for example, argued that ethics
should be concerned with the whole of a person’s life, not with the individual
discrete actions a person may perform in any given situation. A person of
good character would be one who has attainted certain virtues. This approach
is also prominent in non-Western contexts, especially in East Asia, where the
tradition of the Chinese sage Confucius (551-479 BCE) emphasizes the
importance of acting virtuously (in an appropriate manner) in a variety of
situations. Because virtue ethics is concerned with the entirety of a person’s
life, it takes the process of education and training seriously, and emphasizes
the importance of role models to our understanding of how to engage in
ethical deliberation.
The Feminist Approach
In recent decades, the virtue approach to ethics has been supplemented and
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sometimes significantly revised by thinkers in the feminist tradition, who
often emphasize the importance of the experiences of women and other
marginalized groups to ethical deliberation. Among the most important
contributions of this approach is its foregrounding of the principle of care as a
legitimately primary ethical concern, often in opposition to the seemingly
cold and impersonal justice approach. Like virtue ethics, feminist ethics
concerned with the totality of human life and how this life comes to influence
the way we make ethical decisions.
Applied Ethics
Terms Used in Ethical Judgments
Applied ethics deals with issues in private or public life that are matters for
ethical judgments. The following are important terms used in making moral
judgments about particular actions.
Obligatory: When we say something is ethically “obligatory” we mean that it
is not only right to do it, but that it is wrong not to do it. In other words, we
have a ethical obligation to perform the action. Sometimes the easiest way to
see if an action is ethically obligatory is to look at what it would mean NOT to
perform the action. For example, we might say it is ethically obligatory for
parents to care for their children, not only because it is right for them to do it,
but also because it is wrong for them not to do it. The children would suffer
and die if parents did not care for them. The parents are thus ethically
“obligated” to care for their children.
Impermissible: The opposite of an ethically obligatory action is an action that
is ethically impermissible, meaning that it is wrong to do it and right not to
do it. For example, we would say that murder is ethically impermissible.
Permissible: Sometimes actions are referred to as ethically permissible, or
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ethically “neutral,” because it is neither right nor wrong to do them or not to
do them. We might say that having plastic surgery is ethically permissible,
because it is not wrong to have the surgery (it is not impermissible), but
neither is it ethically necessary (obligatory) to have the surgery. Some argue
that suicide is permissible in certain circumstances. That is, a person would
not be wrong in committing suicide, nor would they be wrong in not
committing suicide. Others would say that suicide is ethically impermissible.
Supererogatory: A fourth type of ethical action is called supererogatory.
These types of actions are seen as going “above and beyond the call of duty.”
They are right to do, but it is not wrong not to do them. For example, two
people are walking down a hallway and see a third person drop their book
bag, spilling all of their books and papers onto the floor. If one person stops
to help the third person pick up their books, but the other person keeps on
walking, we somehow feel that the person who stopped to help has acted in a
more ethically appropriate way than the person who did not stop, but we
cannot say that the person who did not stop was unethical in not stopping. In
other words, the person who did not help was in no way obligated (it was not
ethically obligatory) to help. But we nevertheless want to ethically praise the
person who did stop, so we call his or her actions supererogatory.
3. FRAMEWORKS FOR ETHICAL DECISION-MAKING:
Making good ethical decisions requires a trained sensitivity to ethical issues
and a practiced method for exploring the ethical aspects of a decision and
weighing the considerations that should impact our choice of a course of
action. Having a method for ethical decision making is essential. When
practiced regularly, the method becomes so familiar that we work through it
automatically without consulting the specific steps. This is one reason why we
can sometimes say that we have a “moral intuition” about a certain situation,
even when we have not consciously thought through the issue. We are
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practiced at making ethical judgments, just as we can be practiced at playing
the piano, and can sit and play well “without thinking.” Nevertheless, it is not
always advisable to follow our immediate intuitions, especially in particularly
complicated or unfamiliar situations. Here our method for ethical decision
making should enable us to recognize these new and unfamiliar situations
and to act accordingly.
The more novel and difficult the ethical choice we face, the more we need to
rely on discussion and dialogue with others about the dilemma. Only by
careful exploration of the problem, aided by the insights and different
perspectives of others, can we make good ethical choices in such situations.
Three Frameworks
Based upon the three-part division of traditional normative ethical theories
discussed above, it makes sense to suggest three broad frameworks to guide
ethical decision making: The Consequentialist Framework; The Duty
Framework; and the Virtue Framework.
While each of the three frameworks is useful for making ethical decisions,
none is perfect—otherwise the perfect theory would have driven the other
imperfect theories from the field long ago. Knowing the advantages and
disadvantages of the frameworks will be helpful in deciding which is most
useful in approach the particular situation with which we are presented.
The Consequentialist Framework
In the Consequentialist framework, we focus on the future effects of the
possible courses of action, considering the people who will be directly or
indirectly affected. We ask about what outcomes are desirable in a given
situation, and consider ethical conduct to be whatever will achieve the best
consequences. The person using the Consequences framework desires to
produce the most good.
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Among the advantages of this ethical framework is that focusing on the
results of an action is a pragmatic approach. It helps in situations involving
many people, some of whom may benefit from the action, while others may
not. On the other hand, it is not always possible to predict the consequences
of an action, so some actions that are expected to produce good consequences
might actually end up harming people. Additionally, people sometimes react
negatively to the use of compromise which is an inherent part of this
approach, and they recoil from the implication that the end justifies the
means. It also does not include a pronouncement that certain things are
always wrong, as even the most heinous actions may result in a good outcome
for some people, and this framework allows for these actions to then be
ethical.
The Duty Framework
In the Duty framework, we focus on the duties and obligations that we have
in a given situation, and consider what ethical obligations we have and what
things we should never do. Ethical conduct is defined by doing one’s duties
and doing the right thing, and the goal is performing the correct action.
This framework has the advantage of creating a system of rules that has
consistent expectations of all people; if an action is ethically correct or a duty
is required, it would apply to every person in a given situation. This evenhandedness encourages treating everyone with equal dignity and respect.
This framework also focuses on following moral rules or duty regardless of
outcome, so it allows for the possibility that one might have acted ethically,
even if there is a bad result. Therefore, this framework works best in
situations where there is a sense of obligation or in those in which we need to
consider why duty or obligation mandates or forbids certain courses of action.
However, this framework also has its limitations. First, it can appear cold and
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impersonal, in that it might require actions which are known to produce
harms, even though they are strictly in keeping with a particular moral rule. It
also does not provide a way to determine which duty we should follow if we
are presented with a situation in which two or more duties conflict. It can
also be rigid in applying the notion of duty to everyone regardless of personal
situation.
The Virtue Framework
In the Virtue framework, we try to identify the character traits (either positive
or negative) that might motivate us in a given situation. We are concerned
with what kind of person we should be and what our actions indicate about
our character. We define ethical behavior as whatever a virtuous person
would do in the situation, and we seek to develop similar virtues.
Obviously, this framework is useful in situations that ask what sort of person
one should be. As a way of making sense of the world, it allows for a wide
range of behaviors to be called ethical, as there might be many different types
of good character and many paths to developing it. Consequently, it takes into
account all parts of human experience and their role in ethical deliberation,
as it believes that all of one’s experiences, emotions, and thoughts can
influence the development of one’s character.
Although this framework takes into account a variety of human experience, it
also makes it more difficult to resolve disputes, as there can often be more
disagreement about virtuous traits than ethical actions. Also, because the
framework looks at character, it is not particularly good at helping someone
to decide what actions to take in a given situation or determine the rules that
would guide one’s actions. Also, because it emphasizes the importance of role
models and education to ethical behavior, it can sometimes merely reinforce
current cultural norms as the standard of ethical behavior.
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Putting the Frameworks Together
By framing the situation or choice you are facing in one of the ways presented
above, specific features will be brought into focus more clearly. However, it
should be noted that each framework has its limits: by focusing our attention
on one set of features, other important features may be obscured. Hence it is
important to be familiar with all three frameworks and to understand how
they relate to each other—where they may overlap, and where they may differ.
The chart below is designed to highlight the main contrasts between the three
frameworks:
Consequentialist
Duty
Virtue
Deliberative
process
What kind of
outcomes should I
produce (or try to
produce)?
What are my
obligations in
this situation,
and what are the
things I should
never do?
What kind of person
should I be (or try to
be), and what will my
actions show about my
character?
Focus
Directs attention to
the future effects of an
action, for all people
who will be directly or
indirectly affected by
the action.
Directs attention
to the duties
that exist prior
to the situation
and determines
obligations.
Attempts to discern
character traits (virtues
and vices) that are, or
could be, motivating
the people involved in
the situation.
Definition
of Ethical
Conduct
Ethical conduct is the
action that will achieve
the best consequences.
Ethical conduct
involves always
doing the right
thing: never
failing to do
one’s duty.
Ethical conduct is
whatever a fully
virtuous person would
do in the
circumstances.
Motivation
Aim is to produce the
most good.
Aim is to
perform the
right action.
Aim is to develop one’s
character.
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───
Because the answers to the three main types of ethical questions asked by
each framework are not mutually exclusive, each framework can be used to
make at least some progress in answering the questions posed by the other
two.
In many situations, all three frameworks will result in the same—or at least
very similar—conclusions about what you should do, although they will
typically give different reasons for reaching those conclusions.
However, because they focus on different ethical features, the conclusions
reached through one framework will occasionally differ from the
conclusions reached through one (or both) of the others.
4. APPLYING THE FRAMEWORKS TO CASES:
When using the frameworks to make ethical judgments about specific cases,
it will be useful to follow the process below.
Recognizing an Ethical Issue
One of the most important things to do at the beginning of ethical
deliberation is to locate, to the extent possible, the specifically ethical aspects
of the issue at hand. Sometimes what appears to be an ethical dispute is really
a dispute about facts or concepts. For example, some Utilitarians might argue
that the death penalty is ethical because it deters crime and thus produces the
greatest amount of good with the least harm. Other Utilitarians, however,
might argue that the death penalty does not deter crime, and thus produces
more harm than good. The argument here is over which facts argue for the
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morality of a particular action, not simply over the morality of particular
principles. All Utilitarians would abide by the principle of producing the most
good with the least harm.
Consider the Parties Involved
Another important aspect to reflect upon are the various individuals and
groups who may be affected by your decision. Consider who might be harmed
or who might benefit.
Gather all of the Relevant Information
Before taking action, it is a good idea to make sure that you have gathered all
of the pertinent information, and that all potential sources of information
have been consulted.
Formulate Actions and Consider Alternatives
Evaluate your decision-making options by asking the following questions:
Which action will produce the most good and do the least harm? (The
Utilitarian Approach)
Which action respects the rights of all who have a stake in the decision? (The
Rights Approach)
Which action treats people equally or proportionately? (The Justice
Approach)
Which action serves the community as a whole, not just some members?
(The Common Good Approach)
Which action leads me to act as the sort of person I should be? (The Virtue
Approach)
Make a Decision and Consider It
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After examining all of the potential actions, which best addresses the
situation? How do I feel about my choice?
Act
Many ethical situations are uncomfortable because we can never have all of
the information. Even so, we must often take action.
Reflect on the Outcome
What were the results of my decision? What were the intended and
unintended consequences? Would I change anything now that I have seen the
consequences?
5. CONCLUSIONS:
Making ethical decisions requires sensitivity to the ethical implications of
problems and situations. It also requires practice. Having a framework for
ethical decision making is essential. We hope that the information above is
helpful in developing your own experience in making choices.
Acknowledgements:
This framework for thinking ethically is the product of dialogue and debate in
the seminar Making Choices: Ethical Decisions at the Frontier of Global
Science held at Brown University in the spring semester 2011. It relies on the
Ethical Framework developed at the Markkula Center for Applied Ethics at
Santa Clara University and the Ethical Framework developed by the Center
for Ethical Deliberation at the University of Northern Colorado as well as the
Ethical Frameworks for Academic Decision-Making on the Faculty Focus
website which in turn relies upon Understanding Ethical Frameworks for ELearning Decision-Making, December 1, 2008, Distance Education Report
(find url)
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Primary contributors include Sheila Bonde and Paul Firenze, with critical
input from James Green, Margot Grinberg, Josephine Korijn, Emily Levoy,
Alysha Naik, Laura Ucik and Liza Weisberg. It was last revised in May, 2013.
Related Files
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Assessing and Developing
Ethical DecisionMaking Skills
Assessing
& Developing
Unforgettable
Business
Learning Ethical
Decision-Making Skills
1
© Capsim Management Simulations
Table of Contents
What is Ethics?………………………………………………………………………………………………………………………………1
Why Should Educators Care About Teaching Business Ethics?…………..3
Sustaining an Ethical Frame of Mind……………………………………………………….…………………5
Ethical Standards……………………………………………………………………………………………………………………….6
Utilitarian Approach………………………………………………………………………………………………………………….7
Rights Approach……………………………………………………………………………………………………………………….8
Fairness Approach…………………………………………………………………………………………………………………….9
Common Good Approach……………………………………………………………………………………………………..10
Virtue Approach………………………………………………………………………………………………………………………..11
The Dilemma of Business Ethics……………………………………………………………..……………………12
Developing Ethical Decision-Making Skills…………………………………………………………..14
CapsimInbox: Ethical Decision-Making…………………………………………………………………..16
Self-Assessment……………………………………………………………………………………………………………………….17
Inbox……………………………………………………………………………………………………………………………………………17
Feedback Report……………………………………………………………………………………………………………………..18
Individual Development Plan………………………………………………………………………………………………..19
Implementation Examples……………………………………………………………………………………………………..19
Adding Value to all Stakeholders………………………………………………………………………………………..20
Learn More About CapsimInbox: Ethical Decision-Making……………………22
What is Ethics?
What is right? What is wrong? Unlike
popular belief, ethics is more than just right
and wrong. Its meaning is hard to pin down
because the views people have about
ethics vary from person to person. As a
?
result, perhaps the best way to understand
the meaning of ethics is by discussing what it
is not. Sociologist Raymond Baumhart once
asked business people to define what ethics
meant to them. Their replies associated ethics
to feelings, religious beliefs, laws, and socially
acceptable behaviors1.
Unintentionally, these business people answered what ethics is not. Ethics is not
based on whether we feel something is right or wrong. Even if a person wants to do
the right thing, making decisions while experiencing emotions such as fear or desire
will likely lead to unethical behavior.
Ethics is not linked to religion. Even though religions can encourage ethical
behaviors, ethics applies as much to an atheist as to a devout religious person. Being
ethical also does not necessarily entail abiding by the letter of the law. Some laws,
like the United States’ pre-Civil War slavery laws and the racial segregation laws of
South Africa, can still be unethical.
Assessing & Developing Ethical
Decision-Making Skills
1
© Capsim Management Simulations
Furthermore, ethical behavior does not always align with what is socially acceptable.
Social expectations of behavior can certainly contain ethical standards. However,
this does not prevent entire societies from becoming ethically corrupt; look no
further than Nazi Germany.
What, then, is ethics? First, ethics refers to specific standards of right and wrong
which guide us in our daily life. These standards inform us how we ought to act in
such matters as fulfilling our obligations and duties, being compassionate and fair,
respecting the rights of others, and contributing to the greater good of society.
Secondly, ethics refers to the continuous examination of our moral beliefs and
conduct to ensure that we live up to the ethical standards1.
Ethics is a practical wisdom we gain from experience in daily life. But, can this
practical wisdom be nurtured in the young mind, the student who is on the verge of
entering a career path? The student who is inexperienced?
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Why Should Educators Care
About Teaching Business Ethics?
Career advancement is far from the main reason to develop a deliberative, ethical
consciousness. Ethical decisions are made every day, often without thinking about them:
whether to hold the door open for a senior citizen; how to respond to a boorish remark;
whether to slide through a stop sign when there is no traffic around; or how to deal with
a co-worker or classmate who does not contribute their share of the work.
Sometimes, daily decisions made to get through the school or work day can have
serious and far reaching consequences. For example, the 1986 Space Shuttle Challenger
explosion could have been prevented if engineers at Morton Thiokol had adequately
voiced their safety concerns far enough up NASA’s chain of command. The Space
Shuttle Challenger broke up over the Atlantic Ocean 73 seconds into its flight, killing all
seven crew members.
Allan McDonald, project director at engineering contractor Morton Thiokol, referenced
his failure in a recent lecture at NASA, “In my career, I don’t know how many times
people have raised their hand and said, ‘This may be a dumb question, but…’ I always
stood up and said, ‘In my entire career I’ve never, ever heard a dumb question. I’ve heard
a lot of dumb answers2.”
Similarly, technicians on BP’s Deepwater Horizon oil rig continued drilling even though their
blowout preventer was defective, faulty software was causing their systems to crash, their
emergency alarms were disabled and a $500,000 acoustic trigger, which could have shut
down a busted well, was not installed. In this incident, eleven BP employees were killed, 17
more were injured, and nearly 5 million barrels of oil leaked into the Gulf of Mexico.
The key question to keep in mind is: Would people have done things differently if they
had seen the bigger picture and recognized the consequences of their actions? It is
important to introduce ethics into classrooms to help students develop ethical decisionmaking skills, skills that could prevent the next catastrophe and save their careers.
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The value of introducing ethics into business school classrooms is tied to the
following two reasons: student employability and promotability. As demonstrated
by multiple surveys, including a Graduate Management Admission Council survey
of 842 employers in 40 countries, hiring organizations regard skills directly tied to
ethical decision-making as top attributes in business school graduates. These skills
include integrity, ethics, critical thinking, problem solving, and leadership. However,
the same surveys also reveal these skills are considered rare among graduates.
Students possessing these skills graduate with an immediate competitive advantage
that can be leveraged into a job.
“The key question to keep in mind is: Would people have
done things differently if they had seen the bigger picture
and recognized the consequences of their actions?”
Extensive research has also revealed the impact of ethical and unethical leaders on
the workforce. Ethical leaders create trust and high-quality relationships, nurture
higher job satisfaction and commitment, and lower counterproductive behavior in
their peers. On the other hand, unethical leaders encounter increased resistance,
raise intentions to quit, and lower performance in peers. Developing ethical
decision-making skills in students better positions them to receive future
promotions to managerial roles.
Even though business schools acknowledge the importance of ethics, as
demonstrated by the multitude of learning goals related to decision-making and
social responsibility, many institutions still fail to develop these skills in their
students. So what does it take to develop a sustainable ethical mindset, that internal
compass that can guide individuals in the “right” direction?
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Sustaining an Ethical
Frame of Mind
The past two and a half decades of ethics scholarship tells us of four common
situations in business that present ethical issues and dilemmas. These situations can
cause employees, who are morally scrupulous in their personal lives, to
compartmentalize unethical behavior at work as “just business.” These four
situations are the following:
• Conflict of Interest: Situations where the objectivity of one’s judgement is
compromised or appears to others to be compromised.
• Information Confidentiality: Situations that involve obligations to protect the
privacy of information and those who provide it.
• Right and Responsibilities: Situations that involve ensuring individual rights to
equal opportunity, dignity, and freedom from harassment or disrespect.
• Use of Resources: Situations that require acting responsibly with company
resources such as money, property, and corporate reputation.
The first step to developing an ethical mindset and avoiding the compartmentalization
of unethical decision as “just business” is realizing that there is not a set method that
will consistently produce highly ethical decisions and actions. The adoption of such a
method only leads to complacency and the diminishment of ethical awareness.
The answer lies in being open to fresh perspectives and new information, asking
pertinent questions, voicing our convictions, and continually reexamining the
soundness of our ethical standards. This provides a window through which we can
view our behavior and actions more objectively and clearly recognize the
consequences of those actions.
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Ethical Standards
There are five ethical standards, or approaches, that can help dissect an ethical
dilemma and lead to ethical decisions and actions. The approaches are the following:
• Utilitarian Approach
• Rights Approach
• Fairness Approach
• Common Good Approach
• Virtue Approach
These approaches can be thought of as ethical building blocks or frameworks that
shape ethical decisions. It is important to note that every ethical dilemma can be
dissected using more than one standard and its end result can vary depending on
the road taken.
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Utilitarian Approach
This approach assesses an action in terms of its consequences or outcomes. Under
the Utilitarian Approach, the most ethical option is the one which produces the best
balance of benefits over harm for the most stakeholders. The interest of every entity,
including other species, is considered equally during the decision making process.
Outcomes may be quantified in such terms as contentment and suffering, the
relative value of individual preferences, monetary gain or loss, or the short-term and
long-term effects of an action. In a business context, this approach might rely on a
statistical analysis of probable outcomes, a classic costs/benefits assessment, and/
or a consideration of the marginal utility of a consequence for various stakeholders
in the group.
Utilitarian Approach in Action
$
$
Utilitarianism
Who are the
stakeholders?
$
$
vs
Benefits
vs Harm
$
$
Non-Utilitarianism
The Goal
• Family?
• Friends?
How can stakeholders
• Company?
benefit and how can they
• Community?
be harmed by my action?
Create the most benefit over
harm for the most stakeholders.
• Society?
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Rights Approach
This approach focuses on respect for human dignity. The Rights Approach bases its
framework for ethical decision-making on the various rights we have as human
beings. Some of these rights are articulated in the U.S. Constitution, U.S. Bill of
Rights, and the United Nation’s Universal Declaration of Human Rights.
Under the Rights Approach, the most ethical option would be the one we have a
moral obligation to perform that does not infringe on the rights of others. In the
event where the rights of conflicting parties are being dissected, this approach
prioritizes the action that best protects those rights. For example, in the United
States, the right to freedom of speech is generally protected, but citizens do not
have the right to needlessly scream “Fire!” in a crowded theater.
Rights Approach in Action
FIRE
FIRE
!
Rights
What are my
rights?
!
vs
Obligation
Freedom of:
Is my action respecting
• Speech?
everyone’s moral, legal,
• Religion?
and contractual rights?
• Assembly?
• etc.
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Non-Rights
The Goal
Take the action that does not
infringe on other’s rights.
Are they fully informed?
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Fairness Approach
This approach focuses on the fair and equitable distribution of good and harm across
the spectrum of society. Under the Fairness Approach, all equals should be treated
equal. In addition, those who are unequal should be treated differently in a manner that
is proportionate to their difference. An example of the Fairness Approach is the different
salaries for a group of employees based on their contribution to their company’s
profitability. Questions that can help determine the fairness of our actions include:
• Are those who are similar in some relevant aspect treated similarly?
• Are those who are different in some relevant way treated differently based on a
legitimate distinction and a standard of fairness?
• Are some favored where they may receive certain benefits for no justifiable reason?
• Is there a discriminatory practice where some, who are no different than others,
bear a burden that is not imposed on the rest?
• What are the relevant factors that determine similarities and differences of those
in a group?
• What is the fair course of action for all the stakeholders or all entities which may
be affected by the outcome?
Fairness Approach in Action
Non-Fairness
Fairness
Who are the
stakeholders?
• Family?
• Friends?
• Company?
• Community?
• Society?
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Relevant
Factors
What factors determine
stakeholder’s similarities
and differences (wages,
social status, etc.)?
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Non-Fairness
Will effects
be fair to all?
Are all stakeholders being
affected fairly vis-a-vis the
relevant factors?
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Common Good Approach
This approach regards all individuals as part of a larger community. The Common
Good Approach emphasizes the need to safeguard the sustainability of our
community in order for society to thrive. It is why this approach is useful when the
issues being dissected involve the overall picture or environment. Examples of things
that nurture the sustainability of our communities are: good schools, effective public
safety, a peaceful society, and a just legal system.
Under the Common Good Approach, an action is tested on whether it benefits or
erodes a specific element of the common good. In addition, this approach also takes
into consideration the action’s overall effect on the community. This ethical
approach ultimately invites us to ask what kind of society we are and want to
become, and what actions we need to take to achieve that end.
Common Good Approach in Action
Common Good
vs
Who
benefits from
my action?
How do I benefit
from society?
• Public safety
• Just legal system
• Affordable healthcare
• Fair trade & commerce
• Peaceful society
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Non-Common Good
Reflection
• Me?
• My family?
• My community?
• The ecosystem?
• The strong, the weak?
By benefiting society, did I help
others progress as well
as myself?
• Society?
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Virtue Approach
This approach focuses on elements that make up individual character. These
elements, or virtues, refer to traits like honesty, kindness, civility, loyalty, fairness,
courage, and generosity. This approach also takes into account the fact that
different cultures or societies value certain virtues more than others.
The Virtue Approach ultimately causes us to ask whether a given action is reflective
of the kind of person we are or want to be. Will it promote the kind of character we
value within ourselves and for our community? Does it represent the kind of
enterprise my business aspires to be? If the situation does not proceed as we
expect, will this be something we can personally “live with” in the aftermath?
Virtue Approach in Action
Rights
What are my
virtues?
vs
Who do I
want to be?
• Honesty?
• Loyalty?
Will my action enforce
• Fairness?
the kind of character I
• Courage?
value in myself?
• Generosity?
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Non-Rights
Am I satisfied?
Can I live with my decision and
the effects it has?
Does it represent me?
© Capsim Management Simulations
The Dilemma of
Business Ethics
According to the Wall Street Journal, 79 percent of young Americans believe
that there are no absolute standards in ethics. With the recent scandals that have
plagued the last decade, can you really blame them?
While we would like to believe that our business and corporations have honesty and
integrity edged into their values, stories of greed point to another reality: ethics is
not always a priority in business. For example, the global financial meltdown of 2008
was a result of unethical behavior in the U.S. and Western Europe regarding
subprime mortgages. Or consider the former head of the now bankrupt MF Global,
Jon Corzine, telling a congressional committee that he doesn’t know what happened
to the $1.2 billion in client funds missing from his company’s accounts3.
The stories of unethical behavior don’t stop there. Other scandals include: British
Petroleum struggling to stop the Gulf of Mexico oil leak, News Corp. executives
grappling with the phone hacking scandal, and American International Group
under-collateralizing its credit default swaps product with devastating effects on the
world economy.
These scandals are situations in which CEOs, board of directors, and other seniorlevel executives acted unethically with devastating consequences. However, recent
business graduates are likely to encounter job-related ethical conflicts early in their
career too. It is our job to prepare them.
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Consider the following scenario:
A new hire at an advertising agency is ordered by a mid-level executive to
alter a routine financial report on media and advertisement production
provided to one of their clients. Not knowing how to approach the situation,
the new hire complies and numbers are massaged to misrepresent the
agency’s spending of client funds.
The client brand manager detects the discrepancy and immediately informs
the entire corporate chain of command resulting in a crisis in confidence
between the two parties. Eventually, when the situation is reviewed at the
agency’s senior level, whose job will on the line in an effort to appease the
client and save the business relationship? The mid-level executive who has
plausible deniability or the freshly-minted business graduate?
This is the sort of situation business graduates entering the work force must learn to
effectively and ethically address. It is why the development of ethical decision-making
skills in students is critical to their success post-graduation.
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Developing Ethical
Decision-Making Skills
There is not a clear consensus on the best method for teaching ethics in higher
education. For example, the Gustavson Business School at the University of British
Columbia hosts a lunch for faculty and students to discuss the importance of ethics
while John Cook Business School at St. Louis University utilizes a personal evaluation
tool that allows students to explore what influences their choices. The different
methodologies go on and on, but is one better than the rest?
Stanford Business School once held a series of events titled “Does Teaching Ethics
do any Good?” where it was agreed upon that ethics classes cannot make students
more ethical, but they can teach students to partake in ethical dialogue4. This is
where they key lies. Ethics classes are not about making students more ethical, they
are about providing students with the tools to be able to make better decisions.
In order to successfully provide students with these tools, educators must answer
the following four challenges preventing the effective development of ethical
decision-making skills.
1. Moving from theory to application: Teaching students how ethical concepts
and theories relate to real-life scenarios.
2. Emphasizing decision-making skills: Helping students move from knowing
about ethics to actually practicing ethical decision-making.
3. Allowing opportunities to practice: Providing a high-fidelity, realistic, and safe
environment for students to practice ethics without the risks of real-world
ethical dilemmas.
4. Providing actionable feedback: Providing guidance that fosters professional
development by allowing students to acquire an understanding of where they
currently are and where they need to be in the future.
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Traditional lectures on ethics, filled with research papers and projects, can help
students learn and understand ethical definitions but they do very little in helping
them translate those definitions into real-life situations and decisions. This is why
the most effective method for developing ethical decision-making skills is through
experiential learning opportunities.
Presenting students with different ethical scenarios gives them an opportunity to
reflect and discuss possible actions and the reasoning behind those actions. It also
allows them to think through and understand the implications that their decisions
can have in various areas.
This point is made strikingly clear in an AACSB article discussing how to teach
students to be ethical. The author defines the role of schools in ethical development,
“Business schools can help students better identify ethical issues and then have a
process for approaching them. This capability comes in part with experience but also
through exposure to a wide range of approaches, possible situations, and responses4.”
How can you effectively expose your students to a wide range of ethical
approaches, situations, and responses? CapsimInbox: Ethical Decision-Making is an
experiential learning tool that introduces your students to ethical situations, allows
them to think through different decisions, and encourages the development of an
ethical decision-making process.
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