Ethical Decision Making

1. Ethical Decision Making

2. 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 ?

3. WHAT IS ETHICS? (class discussion)

4. 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

5. 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

6. “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.

7. LAW & ETHICSWith an Emphasis on Ethics A COMPARISON

8. Is “legal” the same as “ethical?” YES or No or Maybe, or I Don’t Know?

9. 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.

10. 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.

11. 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?

12. 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

13. Additional Approaches to Ethical Decision Making • Five Question Approach (Tucker) • Moral Standards Approach (Velasquez) • Pastin’s Approach

14. 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)

15. 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

16. 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)

17. 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 ?

18. Class Exercise Evaluate “You and Al” in Light of Class Discussion

19. Legal vs. Ethical“You and Al”

20. End of Ethics Exercise