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An ethical dilemma is a situation in which all alternative choices or behaviours have potentially

negative consequences. Right and wrong cannot be clearly distinguished.

Normative ethics uses several approaches to describe values for guiding ethical decision making.
Five approaches that are relevant to managers are the utilitarian approach, individualism approach,
moral-rights approach, justice approach, and practical approach.

Utilitarian Approach
The utilitarian approach, espoused by the nineteenth-century philosophers Jeremy Bentham and
John Stuart Mill. Under this approach, a decision maker is expected to consider the effect of each
decision alternative on all parties and select the one that optimizes the benefits for the greatest
number of people.

Individualism Approach
The individualism approach contends that acts are moral when they promote the individual’s best
long-term interests. In theory, with everyone pursuing self-direction, the greater good is ultimately
served because people learn to accommodate each other in their own long-term interest. Lying and
cheating for immediate self-interest just causes business associates to lie and cheat in return.
Thus, proponents say, individualism ultimately leads to behavior toward others that fits standards of
behaviour that people want toward themselves. However, because individualism is easily
misinterpreted to support immediate self-gain, it is not popular in the highly organized and group-
oriented society of today.

Moral-Rights Approach
The moral-rights approach asserts that human beings have fundamental rights and liberties that
cannot be taken away by an individual’s decision. To make ethical decisions, managers need to avoid
interfering with the fundamental rights of others, such as the right to privacy, the right of free
consent, or the right to freedom of speech. Performing experimental treatments on unconscious
trauma patients, for example, might be construed to violate the right to free consent. A decision to
monitor employees’ non-work activities violates the right to privacy. The right of free speech would
support whistle-blowers who call attention to illegal or inappropriate actions within a company.

Justice Approach
The justice approach holds that moral decisions must be based on standards of equity,
fairness, and impartiality. Three types of justice are of concern to managers. Distributive
justice requires that different treatment of people not be based on arbitrary characteristics.
For example, men and women should not receive different salaries if they have the
same qualifications and are performing the same job. Procedural justice requires that
rules be administered fairly. Rules should be clearly stated and consistently and impartially
enforced. Compensatory justice argues that individuals should be compensated for the
cost of their injuries by the party responsible. The justice approach is closest to the thinking
underlying the domain of law in Exhibit 5.1 because it assumes that justice is applied
through rules and regulations. Managers are expected to define attributes on which different
treatment of employees is acceptable.

Practical Approach
The approaches discussed so far presume to determine what is “right” or good in a moral
sense. However, as has been mentioned, ethical issues are frequently not clear-cut, and
there are disagreements over what is the ethical choice. The practical approach sidesteps
debates about what is right, good, or just and bases decisions on prevailing standards of the
profession and the larger society, taking the interests of all stakeholders into account.