Decision Criteria for Ethical Reasoning

• The following three criteria can be used in ethical

reasoning:
– Moral reasoning must be logical
– Factual evidence cited to support a person’s judgment
should be accurate, relevant, and complete
– Ethical standards used should be consistent
• A simple but powerful question can be used
throughout your decision-making process in solving
ethical dilemmas:
– What is my motivation for choosing a course of action?

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Decision Criteria for Ethical Reasoning-
Moral Responsibility
• A major aim of ethical reasoning is to gain a clearer and
sharper logical focus on problems to facilitate acting in
morally responsible ways.
• Two conditions that eliminate a person’s moral
responsibility for causing harm are:
– Ignorance
– Inability
• Mitigating circumstances that excuse or lessen a person’s
moral responsibility include:
– A low level of or lack of seriousness to cause harm
– Uncertainty about knowledge of wrongdoing
– The degree to which a harmful injury was caused or averted

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 Ethical Principles
5 basic ethical principles are used in ethical
reasoning for choosing particular alternative
and justifying difficult decisions & actions
– Relativism
– Utilitarianism
– Universalism
– Right
– Justice
 Ethical Relativism:
A Self-Interest Approach

• Ethical relativism holds that no universal standards

or rules can be used to guide or evaluate the
morality of an act.
• This view argues that people set their own moral
standards for judging their actions.
• This is also referred to as naïve relativism.
• The logic of ethical relativism extends to culture i.e
“when in Rome, do as Romans do”

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 Ethical Relativism:
A Self-Interest Approach
• Benefits include:
– Ability to recognize the distinction between individual
and social values, customs, and moral standards
– It considers unique belief system of individuals &
societies i.e norms should be seen in context.
• Problems include:
– Imply an underlying laziness
– Contradicts everyday experience
– Relativists can become absolutists
• Relativism and stakeholder analysis. Read @ pg 79

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 Utilitarianism: A Consequentialist (Results-
Based) Approach
• The basic view holds that an action is judged as right, good, or
wrong on the basis of its consequences.
• The moral authority that drives utilitarianism is the calculated
consequences or results of an action, regardless of other
principles that determine the means or motivations for taking
the action.
• Utilitarianism includes other tenets.
– Action is morally right if it produces greatest good for greatest no. of
people
– If net benefit over cost is greatest for people for all alternatives
considered
– If present & future benefits are greatest for all & among all
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Utilitarianism: A Consequentialist (Results-
Based) Approach

• Problems with utilitarianism include:

– No agreement exists about the definition of the
“good” to be maximized
– No agreement exists about who decides
– How are the costs and benefits of nonmonetary
stakes measured?
– Does not consider the individual
– Principles of rights and justice are ignored
• Utilitarianism and stakeholder analysis.

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 Rights: An Entitlement-Based Approach
• Individual rights means entitlement and unobjectionable
claims
• Moral rights are based on legal rights and the principle of
duty.
• Rights can override utilitarian principles.
• The limitations of rights include:
– Can be used to disguise and manipulate selfish, unjust political
interests and claims
– Protection of rights can be at the expense of others
– Limits of rights come into question
• Rights and stakeholder analysis.
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 Justice: Procedures, Compensation,
Retribution
• The principle of justice deals with fairness and equality.
• It decides what is right and wrong concerns fair distribution of
opportunities and hardships to all.
• Two recognized principles of fairness that represent the principle
of justice include:
– Equal rights compatible with similar liberties for others i.e all individuals
should be treated equally
– Social and economic inequality arrangement i.e justice is served when all
individuals have equal opportunities and advantages to society’s opportunities
and burdens
• Four types of justice include:
– Compensatory- compensating someone for past harm or injustice
– Retributive- serving punishment to someone who has harmed someone else
– Distributive- fair distribution of benefits and burdens
– Procedural- designates fair decision practices, procedures & agreements
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Justice: Procedures, Compensation,
Retribution

• Problems using the principle of justice include:

– Who decides who is right and who is wrong?
– Who has moral authority to punish?
– Can opportunities and burdens be fairly distributed?
• Justice, rights, and power are really intertwined.
• Two steps in transforming justice:
– Be aware of your rights and power
– Establish legitimate power for obtaining rights
• Justice and stakeholder analysis.

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 Four Social
Responsibility Roles
• Figure 3.3 illustrates four ethical interpretations of the
social roles and modes of decision-making.
• The four social responsibility modes reflect business roles
toward stockholders and stakeholders.
• Two social responsibility orientations of businesses and
managers toward society include:
Stakeholder model
 Two set of motives
 Self interest
 Moral duty

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 Four Social
Responsibility Roles
• Productivists
– Hold free market ethic view of corporation
– Hold social responsibility view in terms of rational self
interest & fulfillment of stockholder interest
– Values rewards & punishment in org
– Believe main mission is to earn profit
– Tax reduction and incentives to boost private sector are
policies that productivists advocate as socially
responsible
– Widely used by managers at workplace to deal with
• How many and what people to be laid off during downturn
• What is fair compensation & notice
 Four Social
Responsibility Roles
• Philanthropists
– Hold stockholder view of organization
– View social responsibility in terms of helping less
advantaged members of society through
organized, tax deductable charity & stewardship
– Believe corp.’s primary objective is to earn profit
– Believe that those who have wealth must share it
with others
 Four Social
Responsibility Roles
• Progressivism
– Orientation is Stakeholder Model
– Argue that corporation’s self interest motive is
justified
– Holds that corp. should take broader view of social
responsibility towards social change
– Support policies like environmental protection,
employee stock option programs, energy
conservation
 Four Social
Responsibility Roles
• Ethical Idealists
– Believe fully responsible corp. should transform
businesses into institutions where employees can
realize their full potential
– Employee ownership, cooperatives, community
owned service industries are the examples
– Boundaries b/w business and society are fluid for
ethical idealists
– Believe corp. profits should be shared for
humanitarian purposes
Individual Ethical Decision-Making Styles

• Stanley Krolick developed a survey that

interprets individual primary and secondary
ethical decision-making styles, that include:
– Individualism
– Altruism
– Pragmatism
– Idealism

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