1

Ethical Guidelines for Business Decision-Making

Name

Institution

Course

Date
 2

Title: 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 the 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
 3

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 whose

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 me
 4

an organized and transparent way to examine Trzaska's and the management's choices while

taking the organization's core values and principles into account. 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 view of the requirements of modern business management, I believe that using the WH

Framework provides a more direct and structured approach that business leaders can utilize to

evaluate potential actions based on moral values and their impact on various stakeholders. In my

opinion, the framework facilitates the balancing of competing values and advancing the

corporate goals of the company. First, the model should aid the managers in distinguishing the

various groups with vested interests and their contrasting priorities. Secondly, it should enable

the identification of competing values and how different choices align with the company

policies. Finally, managers should consider all the alternatives and choose the best compromise

—the action that causes the least harm to the fewest stakeholder groups as possible.

Based on how the WH Framework chart simplified the scenario for me, the tool can be

useful in any circumstance involving opposing or competing moral imperatives. Conforming to

this opinion, Ferrell et al. (2022) note that ethical decision-making tools are useful in situations

where dilemmas arise from conflicting norms, interests, and values. Since the stakeholders have

varied interests and priorities, the chart can help in weighing the effects of the selected action on

the various groups and determining the best trade-off. In my observation, most of the major

actions in a business require such an approach, including CSR, recruitment, and new market

segment decisions.
 5

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

to identify all possible stakeholders and consider alternatives in view of 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.
 6

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/