Lesson 2 - The Philosophical Approach

Ethical Issues might occur anytime in the workplace.

How to handle such situations?

Step
1. Identify the ethical issues
In the workplace, a manager’s decisions may affect staff, customers,
suppliers, creditors, and shareholders. These are the stakeholders of an
organisation.
2. Deliberate on alternative courses of action
Every dilemma usually has more than just one solution. By identifying the
alternatives, a workable value-based solution may take place.
3. Apply ethical reasoning to decide on a course of action
Ethical reasoning skills are essential to making ethical decisions.

A variety of ethical theories exist to guide us to

make ethical business decisions.

An ethical decision is considered good or bad based on

ethical theories.

The 3 types of ethical theories are:

Duty-Based (Deontology)
What are my moral duties?
Outcome-Based (Teleology)
Consequences to Public (Utilitarian, Egoism)
What is the beneficial outcome?
Character-Based
(Virtue)
What would a good person do in a given situation?

Lesson 3-Deontology (Duty-Based Ethics)

Deontology (Duty-Based Ethics) is associated with philosopher Immanuel Kant
who believed that ethical actions should follow universal moral rules such as "Don't
lie. Don't steal. Don't cheat."

Kant argued that during a decision-making process, a rational person would consider
what action will be good for all members of society.

It is principle / rule-based, for example, every staff in the company must follow the
existing Standard Operating Procedures (SOP) and Code of Ethics (COE).

- IMMANUEL KANT

Limitation of Deontology
Here is an example of a scenario.

- A regular branch customer came to bank.

- He forgot to bring his Identification Card (IC) for cash withdrawal
verification.
- He needs cash urgently but his house is too far for him to go back to
get the Identification Card (IC).
- However, as per bank's policy, Identification Card (IC) verification is a
must.

In this case, Deontology may not cater to

exceptional situations.

The Ethical Solution be?

Seek Branch Manager's authority and approval to continue the

transaction without Identification Card (IC) verification.

If none, you will need to follow the Standard Operating Procedures

(SOP) on Identification Card (IC) verification.

LIMITATION OF DEONTOLOGY
During the 2008 Financial Crisis, USA regulators considered
it not their duty to bail out failing banks - Allowed Lehman
Brothers to collapse.

This sends shockwaves around the world making it a Global

Financial Crisis.

The USA Regulators failed to consider the outcome of the

collapse of Lehman Brother to its staff, shareholders,
customers, creditors &, etc.

Lesson 4 - Teleology (Outcome-Based Ethics)

Teleology (Outcome-Based Ethics) focuses on the good result that maximizes
benefits. It is value-based, for example, value for someone or some ends.

Defined by the ethical implications of the concept 'majority rules'.

From a Utilitarian perspective, an action is morally right if it results in the greatest

amount of good/happiness for the greatest number of people affected by the action.

Jeremy Bentham

TELEOLOGY (OUTCOME BASED)

Click each card to flip and lean more

UTILITARIAN

Outcome benefits the largest number of people i.e. stakeholders/public.

e.g. New bank interest rates/products should be offered to all customers
regardless of whether they are existing or new customers of the bank.

EGOSIM

Outcome benefits the owner, shareholders (self-interest)

e.g. Sales staff tell the customer to sign up for other products by telling them it is
mandatory for loan applications.
ELEOLOGY (OUTCOME BASED APPROACH)
UTILITARIAN

1. The most ethical choice is the one that will produce the greatest good
for the greatest number.
2. Example: - During the Global Financial Crisis, the most ethical
decision is to bail out the banks as this benefits the most number of
people.

EGOISM

1. Defines right or wrong behaviour in terms of its consequences for the

individual.
2. An egoist will choose the alternative that contributes most to his/her
self interest.
3. Adam Smith & Milton Friedman both state the only goal of business is
to profit within the constraints of the law.

What are the limitation for utilitarian & Egoism?

LIMITATIONS OF TELEOLOGY

Utilitarianism
Tends to focus on the majority and neglected minorities.

Egoism
Many believe egoist people are unethical, short-term-
focused, and willing to take advantage at the expense of
others.

Lesson 5 - Virtue ( Character-Based)

Ethical behaviour results from individual demonstrating good character. A virtuous
person will consider the problem in terms of benefits and harms.

The elements of virtue in business are justice, integrity, courage, empathy,

fairness, and honesty. These virtues provide a foundation to make good judgment
when faced with an ethical dilemma.

A virtuous person may choose to do a good thing - not necessarily what is right
based on the circumstances/situations.

In Virtue (Character-Based) ethics, the character is all about what a well-

intentioned person with a good character would do. It emphasizes the importance
of developing good habits of character and the disposition to do the right thing in
the right place at the right time in the right way.

Aristotle

All of these virtues are manifested in actions that are habitual patterns of
behaviour of the virtuous person, rather than just occurring once or in
one-off decisions. These virtues are acquired by learning and most notably
in business, by being in relationships with others in community practice.

The right act is the action that a virtuous person would do. This provides
guidance as to the sort of characteristics and behaviours a good person will
seek to achieve.
 LIMITATIONS OF VIRTUE ETHICS
Elements listed under virtue may be self-contradictory (e.g. justice,

integrity, courage, compassion, empathy, fairness & honesty)

- Assume HR inform you (Branch Manager) that they are going to close your
branch as part of the bank’s transformation programme and redeploy staff to
other branches.
- One of the staff, Ms. Chan, will be transferred to the Penang branch and
promoted to Asst. Branch Manager.
- HR also informs you that you cannot inform your staff as it will affect morale
and productivity. Furthermore, the customers and the public have not been
informed.
- You are aware Ms. Chan is about to sign a purchase agreement to buy a new
condominium near the branch.

- Is it okay not to tell Ms. Chan About this?

What would you do?
1. DEONTOLOGY (RULE BASED)
Comply strictly with HR directive – do not tell

2. UTILITARIANISM (GREATEST BENEFIT)

Although it is good that Ms. Chan and the other staff are

informed, as the public has not been informed, the greater

good is not to inform Ms. Chan.

3. VIRTUE (CONFLICT)
Between compassion and integrity.
1. Do you tell her not to sign the agreement because she

will be redeployed (compassion) or

2. Do you strictly comply with HR directive to maintain

confidentiality and remain silent (integrity)?

Hoe Would you resolve this ethical dilemma?

A PERSON MAY NEED TO FALL BACK ON HIS OWN MORAL CHARACTER TO

MAKE THE MOST ETHICAL DECISION WHEN CONFRONTED WITH AN

ETHICAL DILEMMA – i.e. TO INFORM OR NOT!

ETHICAL DECISION MAKING

● Ethical decisions require the application of ethical principles. There

may be a best or ‘least worst’ outcome

● The ethical decision does not mean it will be a popular decision.

● Before approaching any ethical issue, it is necessary to know the

facts, know your authority, have technical competence & evaluate

the consequences of the action.

GOOD

- Based on empathy and logic of the circumstances and situations

RIGHT

- Based on external rules, for example, law, code of conducts and SOP