Ethical Decision Making

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Ethical Behavior
◦ Ethical behavior goes beyond the legal
requirements placed on a business, as it
concerns discretionary decisions and
behavior; in other words, what a business
chooses to do, rather than what is forced to
do.

◦ Business ethics are relevant both to the

conduct of an individual within an
organization and to the conduct of the
organization as a whole.
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Myths of Business Ethics
◦ It is a more religion than management
◦ Our employees are ethical so no need BE
◦ It is a discipline best led by philosophers
◦ It is a matter of good person preaching to
bad persons
◦ It is a new police-person in organization
◦ Ethics can't be managed
◦ Business ethics & CSR are same thing
◦ We obey to law so no need about ethics.

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Ethical Dilemma
◦ There are situation when there is not
simple choice between write or wrong
◦ Ethical dilemma is complex judgments on
the balance between the economic
performance and the social performance
of an organization.
 Have two interests - cannot purse one without
having negative impact on other
 Private Interest Conflicts with Corporate
 Business Interest Conflicts with Public.

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Cont...
◦ An ethical dilemma exists when one is
faced with having to make a choice
among following alternatives:
 Significant value conflicts among differing
interests,
 Real alternatives that are equally
justifiable,
and
 Significant consequences on "stakeholders" in
the situation.

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Characteristics of Dilemma
◦ It have extended consequences
◦ It has multiple alternatives
◦ It have mixed outcomes
◦ It have uncertain consequences
◦ It have personal implications
◦ It is easy to make when a person is not
directly involved
◦ Hence EDM are not simple choice
between right and wrong.

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Paradigms of Dilemma
◦ Four such dilemmas are so common to
our experience that they stand as
models, patterns, or paradigms. They are:
 Truth versus loyalty.
 Individual versus community.
 Short-term versus long-term.
 Justice versus mercy.

Ethics and Sri

Lanka
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Framework for Ethical Decision
Making
◦ Step 01: Describe the problem
◦ Step 02: Determine whether there is
an ethical issue or an ethical dilemma
◦ Step 03: Identify and rank the
key values and principles
◦ Step 04: Gather your information
◦ Step 05: Review any applicable Code
of
Ethics Determine the options
◦ Step 06:
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Framework for Ethical Decision
Making
◦ Step 07: Select a course of action
◦ Step 08: Put your plan into
◦ Step 09: action Evaluate the
result
Don’t forget!
◦ Step 10: Submit cases to your
ethical review team or board regularly for
review

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Effects of Ethical/Unethical
Behavior
Ethical Behavior Unethical Behavior

Increases Efficiency and Reduces Efficiency and

Effectiveness of Effectiveness of
Production and Trade Production and trade

Increases Company Reduces company

Performance Performance

Increases National Reduces National

Standard of Living, Well- Standard of Living, Well-
being, and Prosperity. being, and Prosperity.
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 Utilitarian Rule
An ethical decision should produce
the greatest good for the greatest
number of people

Moral Rights Rule

Rules for Justice Rule
An ethical decision should
maintain and protect the
Ethical An ethical decision should
distribute benefits and harm
fundamental rights and
privileges of peoples.
Decision among people in a fair,
equitable, and impartial
Making. manner

Practical rule
An ethical decision should be one that
a manager has no hesitation about
communicating to people outside the
company because the typical person in
a society would think the decision is
acceptable.
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Ethical Decision Making
Approaches
1) Utilitarian Approach – Moral behavior
produces the greatest good for the
greatest number
2) Individualism Approach – Acts are moral
when they promote the individual’s best
long-term interest, which ultimately
leads to the greater good.

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Ethical Decision Making
Approaches
3) Moral – Rights Approach decisions are
those that best maintain the rights of
those people affected by them.
4) Justice approach – Moral Decisions
must be based on standards of
equity, fairness, impartiality

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 A Venn Diagram Model for
Ethical Decision Making
Area 1 Area 2b
Profitable and
Profitable ethical, Probably
legal, ethical, G legal, Proceed
o for it cautiously
Ethical
Area 2a Responsibility Area 3
Legal, and ethical but
Profitable and not profitable find
legal, Proceed ways to seek
cautiously profitably .

2b 3
1
Economic 2a Legal
Responsibility Responsibility

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Thank
You
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