Ethical Decision

Making
 Consider This: “You and Al”
 You are the manager for Checkers a large
discount retailer. You recently fired Al, a
sales clerk, after Al punched a customer
during a dispute in the store(Al admitted this
after the customer complained).
 Sue, manager of your competitor, Pick ‘n Pay
calls you to tell you that Al has applied for a
job at Pick ‘n Pay, and to ask you whether Al
is “good with customers.”
 WHAT DO YOU DO ?
WHAT IS
ETHICS?
(class discussion)
 What is Ethics?
 Ethics: The study of right and wrong “in
action”
 Learning Objective: Be able to
effectively resolve “ethical dilemmas” in
business
 Moral philosophy: tools for this process
 “Values:” principles that are important
to individual, group
 Legal Responsibilities &
Ethical Dilemmas
 Legal duties may be clear

 Is the decision the RIGHT action to

take?

 Making a business decision can involve

ethical dilemmas
 “An Ethical Dilemma?”
 Choice to be made
 Implicates competing values, rights, &
goals
 Potential harm to decision maker?
 Potential harm to others?
 “Ripple effect:” long-term, far reaching
implications of decision to be made.
LAW & ETHICS
With an Emphasis on Ethics

A COMPARISON
Is “legal” the same as
“ethical?”

YES or No or
Maybe, or I Don’t
Know?
Is “legal” the same as “ethical?”
YES?
 If one is acting within the law
presumably one is acting ethically.
 The law defines specific duties.
 Some conduct is allowed – some not.
 Balance competing values.
 Compliance – no further action
 Formal punishment of illegal conduct.
Is “legal” the same as “ethical?”
NO?
 Ethics offers guidance on how one
should act.
 Addresses situations where competing
values clash.
 Action or inaction may be controlled by
formal or informal process.
 Action beyond mere compliance to legal
duty.
 How to Evaluate Solutions:
Some Theories
 Stakeholder/Utilitarian Theory: greatest good
to the greatest number
 Rights Theory: Respecting and protecting
individual rights to fair and equal treatment,
privacy, freedom to advance, etc.
 Justice Theory: fair distribution of benefits and
burdens: can harm to individual be justifiable?
 Categorical Imperative: “what if everyone took
such action?”
 “Front Page Test:” What if my decision was
reported on the front page of the Los Angeles
Times?
 How to Resolve Ethical
Dilemmas in Business
 Identify relevant facts
 Identify relevant issue(s)
 Identify primary stakeholders
 Identify possible solutions
 Evaluate each possible solution
 Compare and assess consequences
 Decide on solution
 Take action
 Additional Approaches to Ethical
Decision Making

 Five Question Approach (Tucker)

 Moral Standards Approach (Velasquez)
 Pastin’s Approach
Practical Approaches to Ethics
 Five Question Approach (Tucker)
 Evaluate each alternative on:
 Profitability (shareholders)
 Legality (society at large)
 Fairness
 Impact on the rights of stakeholders
 Impact on sustainable development
(environment)
Practical Approaches to Ethics
 Moral Standards Approach (Velasquez)
 Is the decision:
 Of net benefit to society
 Fair to all stakeholders (fair distribution of
benefits and burdens)
 Consistent with each person’s rights
Practical Approaches to Ethics
 Pastin’s approach (Pastin)
 Ground rule ethics (organization/individual rules
and values)
 End-point ethics (greatest net good for all
concerned)
 Rule ethics (determine ethical boundaries to take
into account – impingement of rights)
 Social contract ethics (how to move boundaries)
 Consider This: “You and Al”
 You are the manager for Big-Mart, a large
discount retailer. You recently fired Al, a
sales clerk, after Al punched a customer
during a dispute in the store(Al admitted this
after the customer complained).
 Sue, manager of your competitor, Mega-Mart,
calls you to tell you that Al has applied for a
job at Mega-Mart, and to ask you whether Al
is “good with customers.”
 WHAT DO YOU DO ?
Class Exercise
Evaluate “You and Al” in
Light of Class Discussion
 Legal vs. Ethical
“You and Al”
Action Legal/Illegal Ethical/Unethical

Tell the Truth

Lie

No Comment

Other
End of Ethics Exercise