Chapter Two:

Ethical Decision Making:

Personal and
Professional Contexts

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 Chapter Objectives
After reading this chapter, you will be able to:
1. Describe a process for ethically responsible decision making.
2. Apply this model to ethical decision points.
3. Explain the reasons why "good" people might engage in unethical
behavior.
4. Explore the impact of managerial roles on the nature of our decision
making.

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 Ethical Decision Making 1

To make a good decision, you actually need to think about its

contours and consequences.
Stacey Abrams

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 An Ethical Decision-Making Process 1

An ethical decision-making process:

• Requires a persuasive and rational justification for a decision.

Compare and weigh the alternatives, based on:

• Consequences (for all stakeholders).
• Facts, alternatives, duties, rights, ethical principles.
• Implications for personal integrity and character.

Make a decision.
Monitor and learn from the outcomes.

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 An Ethical Decision-Making Process 2

• Determine the facts.

• Identify the ethical issues involved.
• Identify stakeholders and consider the situation from their
point of view.
• Consider the available alternatives—also called using moral
imagination.

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 A Decision-Making Process for Ethics 1

An initial sketch of an ethical decision-making process.

• The first step is to determine the facts of the situation.
• Perceptual differences surrounding how individuals experience and
understand situations can explain many ethical disagreements in a situation.
• An ethical judgment made in light of a hardworking determination of the facts
is a more reasonable ethical judgment than one made without regard for the
facts.

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 A Decision-Making Process for Ethics 2

• A second step requires the ability to recognize an ethical decision or an

ethical issue—then identify the ethical issues involved.
• The first and second steps may arise in a reverse order in some circumstances.
• Economic decisions and ethical decisions are not mutually exclusive.
• An ethical decision should be made based on how it would affect the well-
being of all the people involved.
• Some call the inability to recognize ethical issues as normative myopia, or
shortsightedness about values.
• Others warn of inattentional blindness, which is a result of focusing on too
narrow a range of questions.
• When we focus on the wrong thing, or fail to focus, we may fail to see key
information that will lead us to success or prevent unethical behavior.

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 A Decision-Making Process for Ethics 3

Third step is to identify and to consider all of the people affected by a

decision, the people often called stakeholders.
• Many perspectives and interests at stake means that ethical decisions
often involve conflicts and dilemmas.

The fourth step is to consider the available alternatives

• When facing an ethical decision, moral imagination is the ability to
envision various:
• alternative choices,
• consequences,
• resolutions,
• benefits, and
• harms.
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 Figure 2.3: Stakeholder Map

The third step involved in ethical decision making

requires decision makes to identify and to consider all of
the people affected by a decision, the people often
called stakeholders.
Access the text alternative for slide image.

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 A Decision-Making Process for Ethics 4

The fifth step in the decision-making process is to compare and weigh the
alternatives on each stakeholder you defined.
• The point of this exercise is to recognize that a responsible and ethical
decision should be explainable, defensible, and justifiable to all
stakeholders involved.
• Some alternatives might concern principles, rights, or duties that override
consequences.
• Decision making requires consideration of the effects of a decision on
one’s own integrity, virtue, and character.

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 A Decision-Making Process for Ethics 5

Once the variables are explored, the sixth step is to make a decision.
• Making a decision in business usually means formulating a plan and
carrying it out.

The final step is to evaluate the implications of the decisions, to

monitor and learn from the outcomes, and to modify actions
accordingly when faced with future similar challenges.

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 Ethical Decision Making 2

Most decisions are not binary, and there are usually better
answers waiting to be found if you do the analysis and involve
the right people.
Jamie Dimon

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 When Ethical Decision Making Fails 1

Some obstacles to responsible decision making are intellectual or

cognitive.
• Ignorance.
• Considering only limited alternatives.
• Finding comfort in simplified decision rules.
• Selecting the alternative that satisfies the minimum decision criteria, also
known as satisficing.

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 When Ethical Decision Making Fails 2

Other obstacles to decision making are more a question of

motivation and willpower.
• Sometimes it is easier to do the wrong thing.
• Sometimes people make decisions that they regret later because they
lack the courage to do otherwise at the time.
• Courage is also needed when responding to peer pressure.

Making ethically responsible decisions throughout life is perhaps the most

serious challenge we all face.

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 Ethical Decision Making 3

Most discussions of decision making assume that only senior

executives make decisions or that only senior executives’
decisions matter. This is a dangerous mistake.
Peter Drucker

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 Ethical Decision Making in Managerial Roles
Within a business setting, individuals must consider the ethical
implications of both personal and professional decision making.
Some of our roles are social and some roles are institutional.
• Social roles are friend, son or daughter, spouse, citizen, neighbor.
• Institutional roles are employees, managers, employees, parents, children,
professor, and president of a student club.

Managers, executives, and board members have the ability to

create and shape the organizational context in which all
employees make decisions.
• They have a responsibility to encourage ethical behavior and discourage
unethical behavior.

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 End of Main Content

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 Accessibility Content: Text
Alternatives for Images

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 Figure 2.1: Stakeholder Map - Text Alternative
The stakeholder map depicts that a corporation’s policies and
decisions affect its stakeholders. The stakeholders are
employees, customers, the local community, the government,
suppliers, and owners, or shareholders.

Return to parent-slide containing image.

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