Figure 4.1 Ethical Decision Making Framework (EDM) – An Overview

Figure 4.1Ethical Decision Making Framework (EDM) – An Overview Preliminary Decision Sniff Tests & Rules of Thumb-preliminary assessment: If this decision were in the newspaper, would I/my mother/my company be proud?/Golden Rule No problems found Revised Decision Reassess Possible problems found Problems found • Full Ethical Analysis • Assessment of/sample questions: Interest Focus • Consequences of the Decision (Consequentialism) • Is it profitable? Shareholders • Does it result in greater benefits than costs? Stakeholders • Impact on Rights (Deontology, Justice) • Is the impact on legal and other rights favorable? Stakeholders • Is the decision fair to all? Stakeholders • Motivation and behavior implied (Virtue Ethics) • Does the decision demonstrate the virtues, • character, and motivation expected? Stakeholders • Note: Relative importance (rank) of each impact must be considered. No problems found Final Decision

TABLE 4.1 EDM CONSIDERATIONS: PHILOSOPHICAL UNDERPINNINGS

TABLE 4.2 SNIFF TESTS FOR ETHICAL DECISION MAKING Would I be comfortable if this action or decision were to appear on the front page of a national newspaper tomorrow morning? Will I be proud of this decision? Will my mother be proud of this decision? Is this action or decision in accord with the corporation’s mission and code? Does this feel right to me?

FIGURE 4.2 ETHICAL DECISION-MAKING APPROACHES AND CRITERIA Profitable? Benefits > Costs Risk adjusted Consequences, Utility Fiduciary duty Individual rights Fairness, Legality Duty, Rights, Justice Character Integrity Courage Process Virtue Expectations AACSB EETF Report, June 2004

FIGURE 4.3 MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY Shareholders Activists Employees Governments Customers Corporation Creditors Suppliers Others, including the Media, who can be affected by or who can affect the achievement of the corporation’s objectives Lenders

TABLE 4.3 FUNDAMENTAL INTERESTS OF STAKEHOLDERS

TABLE 4.4 COST-BENEFIT ANALYSIS: SHORT- & LONG-TERM PROFIT IMPACT

FIGURE 4.4 STAKEHOLDER IDENTIFICATION & INTERESTS POWER LEGITIMACY Dynamic Influence URGENCY SOURCES:Mitchell, Agle and Wood, 1997; Rowley, 1997.

TABLE 4.5 APPROACHES TO THE MEASUREMENT OF QUANTIFIABLE IMPACTS OF PROPOSED DECISIONS*

TABLE 4.6 STAKEHOLDERRIGHTS

TABLE 4.7 MOTIVATION, VIRTUE, CHARACTER TRAIT & PROCESS EXPECTATIONS

TABLE 4.8 MODIFIED 5-QUESTION APPROACH* TO ETHICAL DECISION MAKING

TABLE 4.9 MODIFIED MORAL STANDARDS APPROACH* TO ETHICAL DECISION MAKING

TABLE 4.10 MODIFED PASTIN'S APPROACH* TO STAKEHOLDER IMPACT ANALYSIS

FIGURE 4.5 ETHICAL DECISION-MAKING APPROACHES Stakeholder Impact Analyses 5-Question Pastin Philosophical Velasquez Maximize Profit  Maximize Utility (Benefits>Costs) Maximize Utility (Risk-adjusted) Consequences, Utility Fiduciary duty    Individual rights   Fairness  Duty, Rights, Justice Character  Integrity  Courage  Process    Virtue Expectations See AACSB EETF Report, June 2004

TABLE 4.11 A COMPREHENSIVE APPROACH TO EDM Consideration Description Well-offness The proposed decision should result in more or Consequentialism benefits than costs. Rights, duty The proposed decision should not offend the or Deontology rights of the stakeholders, including the decision maker. Fairness The distribution of benefits and burdens or Justice should be fair. Virtue expectations The motivation for the decision should reflect or Virtue Ethics stakeholders’ expectations of virtue. All four considerations must be satisfied for a decision to be considered ethical

FIGURE 4.6 STEPS TOWARD AN ETHICAL DECISION Proposed Decision Or Action Better Alternative? Final Decision Iterate Yes No Identify the facts Ethical Analysis Rank Stakeholder Interests in importance Apply Comprehensive EDM Framework Using a Philosophical Approach Involving: Consequentialism, Deontology & Virtue Ethics And/or Stakeholder Impact Assessment Identify Stakeholders, Their interests, & The Ethical issues

Figure 4.1 Ethical Decision Making Framework (EDM) – An Overview