Ethical Dilemma

By

Prof Neha Sajnani

 Dilemma

• A situation in which a difficult choice has to be made between two or more

alternatives especially ones that are equally undesirable. Eg: She faces the
dilemma of disobeying her father or losing the man she loves. A moral/ethical
dilemma.
• Ethical dilemmas are situations where two ethical values or requirements seem
to be incompatible.
• Ethical dilemmas involve unclear choices of what is right and what is wrong.
• There are several types of dilemmas in business and one must act out of
prudence to make a better decision. Eg: when a production manager is asked to
make a product, he may face an ethical dilemma if he knows that the product
will harm the large number of consumers who will buy and use the same.
• He will face an inner conflict involving the application of societal values.
 Continued
• The outcome of an ethical decision cannot be predicted with accuracy. Nor
is there any scientific formula or software to determine it.
• Even astute businessmen do commit ethical mistakes while deciding
business issues.
• Thus there is no alternative in such cases except to think well and deeply
before making the decision and once decided to take responsibility of the
same.
• When a persons intentions and final decision are at variance with one
another, they may feel guilty for what they have done. Businesspersons
and professionals come across several such situations in their lives.
 Continued
Product Safety – in all stages : using, maintaining, storing and disposing.
Plant safety - in all areas within the plant and in all operations
Advertising practices – green washing, social/moral norms, disputable claims,
warranty/guarantee issues.
Human Resource management – dignity, glass ceiling effects, fair and just
treatment, discriminatory practices.
Environmental Issues – pollution control, Triple P principle (people, profit and
planet)
Business practices – Equitable, Trustworthy, Honest, Integrity, Cultured,
Societal norms.
 Continued
• An employee who has worked for your corporation as a Secretary
cum typist for fifteen years is involved in a car accident which he
permanently loses the use of his right hand.

• Thus, he can no longer effectively type, file or perform many of the

functions that he previously had performed and that are included in
his job description.
 Continued
• A woman travelling in a car witness an accident. She wants to assist
the victim and ask the driver to pull over to assist. But the driver
ignores the instructions and drives past the same.
• Later, the driver explains to the woman that a person assisting an
accident victim is often held responsible for the accident itself, if the
victim dies, the assisting person might even be held responsible for
the death. Because of these problems, road accident victims are
usually left unattended.
 Continued
• Was the driver’s action right or wrong.
• Applying the theory of ethical egoism, the driver’s decision is correct, as the
consequences of his action are more favorable than unfavorable to himself and
the woman. Had they stopped, they might have been harassed by the police.
• On the principle of ethical altruism, however, the driver’s decision is not
morally correct, as its consequences for others (here the accident victim) are
unfavorable.
• To determine whether the driver is right under the theory of utilitarianism, one
must consider the consequences of the act, both for the driver and the woman,
and the victims and tally the overall good consequences against the bad
consequences of the act.
 How to take a ethical decision
• I Analyze the consequences
Economic Analysis
Legal Analysis
Ethical Analysis
• II Analyze the Actions
• III Make decision
• Ethical decisions are not simple choices between right and wrong
actions, they are complex judgements on the balance between the
economic and social performance of an organization.
• How Ethical Dilemmas in business affect the stakeholders?
• Corporate Dilemma over Ethical behavior
 CATWOE model of resolving Ethical
dilemma
• This model is adapted from Systems Management.
• Ethical dilemma occurs due to mismatch in ethical perspectives of
various stakeholders involved in the ethical situation.
• A CATWOE analysis helps the manager identify all stakeholders
involved in a decision and their respective ethical perspectives.
• CATWOE is an acronym to categorize various stakeholders.
• C – Customers: In this context, ‘customers’ means those who are on
the receiving end who will gain or lose from your decision.
 Continued
• A – Actors: the “Actors’ means those who would actually carry out the
activities envisaged in the notional system being defined.
• T – Transformation : This means the activities system does to the
inputs to transform or convert them into the outputs.
• W –Weltanschauung : Also known as the “World view” implies putting
the system into a wider context to highlight the consequences of the
overall system like assisting in making the world environment safer.
• O – Owners : The owners who have sufficient formal power over the
system to stop if they so wished.
• E – Environment : The environmental constraints include things such
as ethical limits, regulations, financial constraints, resource limitations,
limits set by terms of reference and so on.
 Reasons of ethical problems
• Failure of personal character

• Conflict of personal values and organizational goals

• Organizational Goals Versus Social values

• Personal Beliefs Versus Organizational Practices

• Production and sale of Hazardous but popular products.

 Why business should act ethically?
• To meet stakeholder expectations (& protect business reputations)

• To prevent harm to the general public

• To build trust with key stakeholder groups

• To protect themselves from abuse from unethical employees & competitors

• To protect their own employees

• To create an environment in which workers can act in ways consistent with their
values
 Unethical Business practices
• Price fixing and profiteering due to monopoly and often creating scarcity;

• Shifting unfair shares to the producer stakeholders and employees;

• Discriminatory wage structure;

• Using up scarce and replenishable industrial resources and raw materials;

• Shifting or locating business at the cost of society; and

• Overworking women and children.

 Roots of Unethical behavior

• Balancing work and family 52%

• Poor Leadership 51%
• Poor internal communication 51%
• Lack of management support 48%
• Need to meet goals 46%
How corporations observe ethics to reduce
dilemmas?
• Implement ethical behavior by publishing in-house codes of ethics
that are strictly to be followed;

• At top levels , employ people with reputation for high standards of

ethical behavior;

• Incorporate considerations of ethics into performance reviews;

• Conduct ethics audit.

 Code of personal ethics for
employees
• Respect confidential information to which you have access
• Maintain high standard of professional responsibility
• Avoid being placed in situations involving conflict of interest
• Act with integrity
• Do not discriminate against anybody on any bias
• Maintain professional relations based on mutual respect for
individuals & organizations
• Be committed to the goals of the organization
• Do not give up your individual professional ethics
 Unethical behavior
• Unethical employee behaviors often include:
taking home office supplies,
overreporting hours worked or miles driven for business and
taking excessive breaks or sick days.
• Using company technology for personal reasons,
such as cyber loafing –
surfing the internet,
shopping online and
social networking – is another form of unethical behavior.
Promoting and supporting the importance of workplace ethics reduces
these behaviors.
How to create an ethical working
environment
• Make the decision to commit to ethics
• Recognize that you are a role model by definition, by your action & by
your values
• Assume the responsibility for instilling ethical behaviour
• Articulate you values
• Train the staff
• Encourage open communication
• Be consistent
• Abide by the laws of the land
How do you respond to these ethical dilemma
scenarios
1. Your co worker asks you to cover for him so he can sneak out of work early to
go to his son’s softball game. Do you agree? If he went anyway would you keep
silent.
2. One of the newest sales person in your division is quite lazy and tardy. He is
the son of the company president Your boss instructs you not only to leave the
new guy alone but also to make his sales number look good by throwing him
some no –brainer accounts. What do you do?
3.Your best friend is the VP of one of the companies with which your firm does
business. You take her out for lunch just to catch up on personal stuff, and you
pick up the check. Do you declare this a “business lunch” and submit the receipt
for reimbursement.