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Ethical Guidelines for Business Decision-Making

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Ethical Guidelines for Business Decision-Making

Business leaders and managers are often faced with the task of making decisions that

offer the greatest benefit to the organization and as many other parties as possible. The WH

framework allows leaders to consider the needs and interests of all stakeholders and apply ethical

principles to guide their decisions.

WH Framework Chart for L’Oreal USA

Stakeholders (Who) Ethical Guidelines (How)

Consumers To enhance customer satisfaction and maintain a customer-

focused work environment.

Employees To ensure fair treatment of all employees and guarantee job

security.

Shareholders/ Investors To generate profit and increase value for investors. To meet

shareholders financial goals and safeguard the company's

reputation.

Legal Authorities To ensure compliance with legal requirements, professional

standards, and ethical practices.

Selection of the Stakeholders and Ethical Guidelines

Regarding the scenario, a number of people and organizations are involved in and may be

impacted by the company's decisions. These stakeholders include the surrounding community,

law enforcement, business owners, and Trzaska and his crew, among other employees of the

corporation. Here, Trzaska served the legal establishment, which included the US Patent and

Trademark Office (USPTO) and the legal community. His refusal to submit patent applications
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for which he believed there was no possibility of patentability demonstrates his dedication to

respecting USPTO regulations as well as the norms and ethics of the legal profession.

Additionally, Trzaska acted in the best interests of the shareholders by arguing that failing to file

sufficient patent applications would be against the law and might result in damaging the

company's reputation.

On the other hand, the management of L’Oreal focused on satisfying the interests of the

shareholders, the French parent company of L’Oreal USA, who had set a target for the patent

applications for the regional office. The rule to increase the quality of patent applications filled

with USPTO, indicated in the scenario, shows the management’s dedication to upholding the

company's integrity and image. Additionally, the management catered to the employees because

job security was at stake should the goal of achieving the patent global quota fail.

In addition to the values itemized in Exhibit 2.3, L'Oreal's official website defines the six

core values that guide the company’s operations (L'Oreal, 2020). The decision to fire Trzaska

shows that the management prioritized efficiency at the expense of justice and fairness. Based on

this decision, the management of L’Oreal considers their responsibility to meet shareholder

financial goals more important than fair treatment of the employee. Their emphasis was to

achieve the global quota, which could potentially imply higher profits for the investors.

Moreover, by sacrificing Trzaska, the management demonstrated their priority to safeguard the

careers of the other employees. Therefore, the judgment was driven by the interests of the

shareholders, to expand their patented assets, and of the employees, to keep their jobs.

Self-Reflection

Ferrell et al. (2022) claim that the WH Framework enumerates all pertinent parties, their

specific interests, and the moral conundrums that require resolution. The framework offered an
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organized and transparent way to examine Trzaska's and the management's choices while taking

the organization's core values and principles into account. Notably, evaluating the possible

results of a decision and the moral implications for each stakeholder group, the WH tool

simplified the scenario. Furthermore, the paradigm draws attention to potential contradictions

between corporate goals and ethical principles, offering a basis for addressing moral concerns.

In modern business, managers often face the task of solving ethical dilemmas with every

action they take. Using the WH Framework chart gives managers a more direct and structured

approach to evaluating potential actions based on moral values and how they will impact various

stakeholders. The framework facilitates the balancing of competing values and the making of

business decisions that advance the corporate goals of the company. The WH model helps the

managers recognize the various stakeholders and their disparate interests. It also enables them to

identify conflicting values and choose the best compromise. All of these perspectives must be

taken into consideration for corporate decision-making to be comprehensive and inclusive.

According to Ferrell et al. (2022), ethical decision-making tools are useful in situations where

dilemmas arise from conflicting norms, interests, and values, but there are other constraints that

make it difficult to pursue the desired course of action. The WH Framework chart is useful in

decision making in such circumstances where the stakeholders have varied interests and

priorities. This chart would help weigh the effects of the selected action on the various groups

and determine the best trade-off.

In summary, the actions of any business affect its customers, employees, owners, and

legal entities, among other parties whose interests and priorities differ. Therefore, decision-

makers need to analyze the impact of their choices on each of these groups to ensure that their

actions offer the maximum benefit. The WH chart provides an easy and straightforward strategy
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to identify all possible stakeholders and consider alternatives given the organization’s values and

ethical principles. As witnessed in the analysis of the scenario example, the WH structure can

help in balancing contending interests and business policies and standards.

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References

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2022). Business ethics: Ethical decision making and

cases. Cengage.

L’Oreal. (2020, January 23). L’Oréal group: Values & Mindset. L’Oréal.

https://www.loreal.com/en/group/culture-and-heritage/our-values-and-mindset/