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7/30/2019 Ethical Decision Making-2
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It is designed to enhance ethical reasoning byprofiding :
Insight into the identification and analysis of keyissues to be considered and questioned tochallenges to be raised
Approaches to combining and applying decision-
relevant factors into practical action A decision or action is considered ethical or right if
it conforms to certain standard
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The EDM frameworks assess the ethicality of decision or action by
examining the :
Consequences or well-offness created in terms of net benefit or cost
Rights and duties affected
Fairness involved
Motivation or virtues expected
The first three of these considerations consequentialism,
deontology, and justice- are examined by focusing on the impacts
of decision on shareholders and other affected stakeholders, anapproach known as Stakeholder Impact Analysis. The fourth
consideration the motivation of decision maker - is an approach
known as virtue ethics.
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EDM Considerations
a. Well offness or well being
b. Respect for the rights ofstakeholders
c. Fairness amongstakeholders
d. Expectations for charactertraits, virtues
Specific EDM Issues
a. Different behavior in
different cultures (bribery)b. Conflicts of interest , and
limits to self-interestedbehavior
Philosophical Theories
a. Consequentialsm,Utilitarianism, Theology
b. Deontology(rights andduties)
c. Kants categoricalimperatives, justice asimpartiality
d. Virtue Specific EDM Issues
a. Relativism, subjectivismb. Deontology, subjectivism,
egoism
The basic question that interest philosophers is : What makes a decision or action or person
more or less good or ethical? Each of the 3 philosophical approaches to ethical decision making
(Consequentialsm, Deontology and Virtue ethic s) focuses on different conception of a right action
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Consequentialism are intent on maximizing the utilityproduced by decision.
The rightness of an act depends upon its consequences.
An act and a decision is ethical if its favorable consequencesoutweigh its negative consequences
Because utilitarianism and consequentialism focus on theresults or ends of an action, they are sometimes referred toas Teleological.
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Focus on the obligations or duties motivating a decision oractions rather than on the consequences of the action.
Deontological reasoning is based upon the thinking of
Immanuel Kant, a rational person making a decision aboutwhat would be good to do, would consider what actionwould be good for all members of society to do.
The se duties must supersede self-interest, bias andfavoritism
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Virtue ethicist concerned with the motivating aspects of moral
character demonstrated by decision makers.
Responsibility especially culpability or blameworthiness - in both
morality and law, has two dimensions : guilty act and guilty mind
Virtue ethics focuses on the character or integrity of the moralactor and looks to moral communities, such as professional
communities, to help identify ethical issues and guide ethical
action.
Virtues are those character traits that dispose a person to act
ethically and thereby make that person a morally good humanbeing.
Other dispositions that are often cited as virtue include : honesty,
integrity, enlightened self-interest, compassion, fairness,
impartiality, generosity, humility and modesty.
For virtue ethicist, possessing a virtue is a matter of degree.
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Profitable?
Benefit > Cost
Risk adjusted
Consequences,Utility
Fiduciary duty
Individual Rights
Fairness, Legality
Duty, Rights,Justice
Character
Integrity
Courage
VirtueExpectation
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Corporation
Shareholders
Employees
Customers
Suppliers
Others,incl.media
Lenders
Creditors
Governments
Activists
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Benefit > cost
Well-Offness
The distribution of benefits andburdens should be fairFairness
The proposed decision should notoffend the rights of thestakeholders and decision makerRights
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Profit
Items not included in Profit : Measurable Directly
Items not included in Profit : Not Measurable Directly
Bringing the Future to the Present
Dealing with Uncertain Outcomes
Identifying Stakeholders and Ranking Their Interest
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Pollution Control University Admission
Equipment Scholarships
Impact on Profit Impact on Profit
Short term Long term Total Short term Long term Total
Benefit (PV at 10%)
- Reduction in worker health cost 500,000 500,000
- Increase in worker productivity 200,000 200,000
- Improvement in level of
productivity, scholarship recipient600,000 600,000
Total Benefit 200,000 500,000 700,000 600,000 600,000
Cost (PV at 10%)
- Pollution Equipment 350,000 350,000
- Scholarship paid 400,000 400,000
Total Cost 350,000 - 350,000 400,000 400,000
Net Benefit-Cost (150,000) 500,000 350,000 (400,000) 600,000 200,000
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1. Profit or Loss only
2. Plus externalities
(i.e. Cost-Benefit Analysis/CBA)
3. Plus probabilities of outcomes
(i.e. Risk-Benefit Analysis/RBA)
4. CBA or RBA plus ranking of stakeholders
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1. Life2. Health and Safety
3. Fair treatment
4. Exercise of conscience5. Dignity and privacy
6. Freedom of Speech
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1. 5- Question Approach2. Moral Standard Approach
3. Pastins Approach
4. Extending & Blending the Approach
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Is the decision Stakeholder Interest Examined
1. profitable? Shareholders usually short term
2. legal? Society at large legally enforceable rights
3. fair? Fairness for all4. right? Other rights of all
5. Going to further sustainabledevelopment?
Specific rights
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Moral Standard Question of proposed decision
1. Utilitarian:Maximize the net benefit tosociety as a whole
Does the action maximize social benefitsand minimize social injures?
2. Individual Rights:Respect and protect
Is the action consistent with each personsrights?
3. JusticeFair distribution of benefit and
burdens
Will the action lead to a just distribution ofbenefits and burdens?
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Key Aspects Purpose for Examination
Ground rule ethics To illuminate an organizations and/or an individualsrules and values
End-point ethics To determine the greatest net good for all concerned
Rule ethics To determine what boundaries a person ororganization should take into account according toethical principles
Social contract ethics To determine how to move the boundaries to removeconcerns or conflicts
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5-Ques. Velasq Pastin
Max Profit v
Consequences, Utility Max Utility (Benefit > Cost) v
Max utility (Risk Adjusted) v
Fiduciary Duty v v v
Duty, Rights, Justice Individual Rights v v v
Fairness v v v
Character v v v
Virtue Expectation Integrity v v v
Courage v v v
Duty, Rights,Justice
Virtue Expected
Consequences,Utility
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1. Motivation Expected
Self-control rather than greed Fairness or justice consideration
Kindness, Caring, Compassion, and benevolence2. Virtues Expected
Dutiful loyalty
Integrity and transparency
Sincerity rather than duplicity3. Character Traits Expected
Courage to do the right thing according to personal and/orprofessional standard
Trustworthiness
Objectivity, impartiality
Honesty, truthfulness Selfness rather than selfishness Balanced choice between extremes
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Does the decision or action involve and exhibit theintegrity, fairness, and courage expected?
Does the decision or action involve and exhibit the
motivation, virtues, and character expected?
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Consideration Description
Well-offness orConsequentialism
The proposed decision should result in more benefitsthan costs
Rights, duty or
Deontology
The proposed decision should not offend the rights of
the stakeholders, incl. the decision makerFairness or Justice The distribution of benefits and burdens should be
fair
Virtue Expectations orVirtue Ethics
The motovation for the decision should reflectstkaeholders expectations of virtue
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Decision makers repeatedly make the following mistakes : Focus on short term profit and shareholders only impact
Focusing only on legalities subject to consumer boycotts, employeeslowdowns, increasing govt regulation
Limits to fairness fair only to groups they like Limits to rights canvassed should canvass the impact on all rights for all
stakeholder groups
Conflicts of interestpersonal /group interest vs corps best interest
Interconnectedness of stakeholders fail to anticipate that what they do toone group will redound to trigger action by another
Failure to identify all stakeholder groups Failure to rank the specific interest of stakeholders
Leaving out well-offness, fairness or rights
Failure to consider the motivation for the decision
Failure to consider the virtues that are expected to be demonstrated
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Better
Alternative?Proposed Decision
or Action
Identify the facts
FinalDecision
Ethical AnalysisRank interest in importanceApply Comprehensive EDM Framework :1. A Philosophical Approach :
Consequentialism, Deontology &Virtue Ethics and/or, a
2. Stakeholder Impact Assessment + GapAnalysis of Motivation, Virtues &Character Traits
Identify
Stakeholders,
their interest &
the ethical issues
Yes No
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1. Identify the facts and all stakeholder groups and interestlikely to be affected
2. Rank the stakeholders and their interest
3. Assess the impact4. Specify the alternatives5. Compare values and alternatives6. Assess the consequences7. Make your decision