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Chapter 2

Ethical Principles,
Quick Tests, And
Decision-Making
Guidelines
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Chapter Topics
Decision criteria for ethical reasoning
2.
Ethical relativism: A self-interest approach
3.
Utilitarianism: A consequentialist (resultsbased) approach
4.
Universalism: A deontological (duty-based)
approach
5.
Rights: An entitlement-based approach
6.
Justice: Procedures, compensation,
retribution
7.
Immoral, amoral, and moral management
8.
Four social responsibility roles
9.
Individual ethical decision-making styles
10.
Quick ethical tests
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Decision Criteria for


Ethical Reasoning
A first step in addressing ethical dilemmas is to
identify the problem and related issues.
Laura Nash developed twelve questions to ask
yourself during the decision-making period to
help clarify ethical problems.
These twelve questions can help individuals:

Openly discuss the responsibilities necessary to


solve ethical problems
Facilitate group discussions
Build cohesiveness and consensus
Serve as an information source
Uncover ethical inconsistencies
Help a CEO see how managers think
Increase the nature and range of choices

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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 persons
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?

Copyright 2003 by South-Western, a division of


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Decision Criteria for


Ethical Reasoning
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 persons moral
responsibility for causing harm are:

Ignorance
Inability

Mitigating circumstances that excuse or lessen


a persons 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 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 nave


relativism.

The logic of ethical relativism


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extends
to culture.

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Ethical Relativism:
A Self-Interest
Approach
Benefits include:

Problems include:

Ability to recognize the distinction


between individual and social values,
customs, and moral standards
Imply an underlying laziness
Contradicts everyday experience
Relativists can become absolutists

Relativism and stakeholder analysis.

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Utilitarianism: A
Consequentialist (ResultsBased) 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.

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Utilitarianism: A
Consequentialist (ResultsBased) 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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Universalism: A
Deontological (Duty-Based)
Approach

This view is also referred to as


deontological ethics or
nonconsequentialist ethics and holds
that the means justify the ends of an
action, not the consequences.
Kants principle of the categorical
imperative places the moral authority
for taking action on an individuals duty
toward other individuals and humanity.
The categorical imperative consists of
two parts.

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Universalism: A
Deontological (Duty-Based)
Approach
The major weaknesses of
universalism and Kants
categorical imperative include:

Principles are imprecise and lack


practical utility
Hard to resolve conflicts of interest
Does not allow for prioritizing ones
duties

Universalism and stakeholder


analysis.

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Rights: An EntitlementBased Approach


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.
Two recognized principles of fairness
that represent the principle of justice
include:

Equal rights compatible with similar


liberties for others
Social and economic inequality arrangement

Four types of justice include:

Compensatory

Retributive

Distributive

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Justice: Procedures,
Compensation,
Retribution
Problems using the principle of justice
include:

Justice, rights, and power are really


intertwined.
Two steps in transforming justice:

Who decides who is right and who is wrong?


Who has moral authority to punish?
Can opportunities and burdens be fairly
distributed?

Be aware of your rights and power


Establish legitimate power for obtaining
rights

Justice and stakeholder analysis.

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Immoral, Amoral, Or
Moral Management
Immoral management means
intentionally going against ethical
principles of justice and of fair and
equitable treatment of other
stakeholders.

Amoral management happens when


others are treated negligently without
concern for the consequences of actions
or policies.

Moral management places value on


equitable, fair, and just concern of
others
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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:

Stockholder model
Stakeholder model

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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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Quick Ethical Tests


The Center for Business Ethics at
Bentley College suggests six
questions to be asked before
making a decision.
Classical ethical tests:

The Golden Rule

The Intuition Ethic

The Means-End Ethic

Test of Common Sense

Test of Ones Best Self

Test of Ventilation

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