Ethical Dilemma and Decision Making-PGDM

8/13/2019 Ethical Dilemma and Decision Making-PGDM

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Ethical Dilemma and Decision Making

Ethical dilemma is nothing but theconfusion, problem or constraints indecision making one faces, when onehas to make choice of the bestalternative from among the availablealternatives as a solution to theproblem.


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A situation in which an individual feels compelled tomake a choice between two or more actions that he or

she can reasonably and morally justify, or whenevidence or an arguments are inconclusive, is calledan ethical dilemma (Beauchamp&Childress,2001;McConnell,2002).

One action must be chosen because performing both

actions would be impossible.


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This dilemma is faced by people who need tomake decisions in their place of work and that

they need to make more and more decisions ata faster and faster pace.Now a days management has simply becomethe process of decision making. All the partsof management pass through decision makingtowards goal achievement.


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Ethical Dilemmas are usually described in terms ofright or wrong, duty or obligation, rights orresponsibilities, and good or bad. Ethical dilemmas

are commonly identified by the question, Whatshould be done?


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Before organ transplantation , death did not require alegal definition that might still permit viable tissues to

be removed and given to other living persons. Aadvances in the ability to decode and control thegrowth of tissues through gene manipulation presentnew potential ethical dilemmas related to cloningorganisms and altering the course of hereditarydisease and biological characteristics. Today, with

treatment that can prolong and enhance biologic life,these questions arise: should we do what we know wecan?


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Three thought provoking questions become

pertinent in this connection:

How can societies protect themselves frommembers who behave unethically?

Are unethical actions usually the work of few ordoes society inadvertently corrupt members whoare ordinarily honest? Do reward systems and disciplinary procedures oreven ethical codes themselves induce honestmembers to do dishonest things?


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SOURCES OF ETHICAL DILEMMAS

face to face ethics, corporate policy ethicsfunctional area ethics.


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FACE TO FACE ETHICS:

These arise mainly because there is a human element in mosttransactions. For example: A purchasing agent may develop personalrelationship with the sales representatives who sells supplies to acompany. They may frequently know one another on a first name basis,have lunch together and talk often on the phone. A companys bestcustomer may be well known to people in the production department which helps to ensure that the companys product fit the customerneeds.Because of these human transactions in business, it should not besurprising that face to face ethical dilemmas arise often. It is likely thatthe quality assurance man winks at minor defects and approves a lotdelivered by a supplier because of the personal relationship the twoenjoy between them. It is also not unlikely that the supervisor over ratesthe performance of an employee because of the similar relationship thatexists between the two.


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CORPORATE POLICY ETHICS: Companies are often faced with ethical dilemmas that affect theiroperations across all departments and divisions. Followingconflicting situations are typical:

Your R&D department has modernized one of your products.It is not really new and improved but you know printing thisstatement on the package and showing it in the advertisement will increase sales. What would you do? You work for a cigarette company and up to now you have not

been convinced that cigarettes cause cancer. A recent reporthas come across your desk that clearly establishes theconnection between cigarette smoking and cancer, what would you do?

Another issue relates to the consequences of employmentcontraction in labour intensive basic industries because of theimproved methods of production. Modern technology replacingolder methods of production results in hundreds being rendered jobless. The issue therefore is: global economic competitivenessor local social-psychological stability?


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FUNCTIONAL AREA ETHICS:

Functional areas of business are likely to confrontethical issues. Accounting is a critical function of anybusiness. Accounting statements reveal to themanagers and owners about the financial soundness ofaccompany. Managers, investors, regulating agencies,tax collectors and trade unions rely on accountingrequirements of the accounting function. Professionalaccounting organisations have evolved generallyaccepted accounting standards whose purpose is to

establish uniform standards for reporting accountingdata. When they are followed, these standards ensure ahigh level of honest and ethical accounting disclosures.Rarely are they followed in practice.


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M aking Ethical Decisions

Responsible ethical reasoning is rational andsystematic. It should be based on ethical principlesand codes rather than on emotions, intuition, fixed

policies, or precedent (that is, an earlier similaroccurrence).


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Approaches to Ethical Decision Making


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Approaches to Ethical Decision Making Utilitarian Criteria

The Utilitarian method of Reasoning is: Accurately state the action to be evaluated. Identify all those who are directly and indirectly affected by it. Specially all the pertinent good and bad consequences of action forall those directly affected and imaginatively consider variedpossible outcomes and the likelihood of their occurrence. Weigh the total good results (the degree of happiness producedagainst the total bad results, considering such matters: thequantity and duration of the harms and benefits involved).

Carry out a similar analysis, if necessary, for those indirectlyaffected and for society as a whole. Sum up all the good and bad consequences. If the action producesmore good than bad, the action is morally right and if it producesmore bad than good, the action is morally wrong


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Rights Criteria This calls on managers to make decisionsconsistent with fundamental liberties andprivileges as laid in the constitution, to respect andprotect the basic rights of individuals. For example right to speech etc. These criteria world provideprotection toWhistle Blowers when they reportunethical or illegal practices by their organisationsto government agencies or to the media.


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Justice Criteria This requires individuals to improve and enforcerules fairly and impartially so that there is

equitable distribution of benefits and costs. It justifies paying the same wages for a given job andusing seniority as the main determinant inmaking a retrenchment decision.


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The 60 Minute Rule


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Two decision making models1- Thompson and Thompson (1985)

Review the situation to determine decision needs,ethical components, and key individuals.Gather additional information to clarify the situationIdentify the ethical issues in the situation.

Define personal and professional moral positions.Identify moral positions of key individuals involvedIdentify value conflicts, if anyDetermine who should make the decisionIdentify range of actions with anticipated outcomes.Decide on a course of action and carry it out.Evaluate / review results of decision / action.


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2- Cassel ls and Redman (1989)Identify and Gather relevant facts related to a moral issue.

Clarify and apply personal valuesUnderstand ethical theories and principlesUtilize competent interdisciplinary resources

Propose alternative actions.Apply codes of ethics to help guide actionsChoose and implement the action.Participate actively in resolving the issueApply state and federal laws.Evaluate the action taken


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F ive step f ramework by M arkkul a Cente for appli ed Ethi cs

Recognise an ethical issue

Get the facts

Evaluate alternative actions

Make a decision and test it

Act and reflect on the outcome


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Recognize an Ethical Issue Could this decision or situation be damaging tosomeone or to some group? Does this decision involvea choice between a good and bad alternative, orperhaps between two "goods" or between two "bads"?

Is this issue about more than what is legal or what is

most efficient? If so, how?


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Get the Facts

What are the relevant facts of the case? What facts arenot known? Can I learn more about the situation? Do Iknow enough to make a decision? What individuals and groups have an important stakein the outcome? Are some concerns more important? Why?

What are the options for acting? Have all the relevantpersons and groups been consulted? Have I identifiedcreative options?


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Evaluate Alternative Actions Evaluate the options by asking the following questions:

Which option will produce the most good and do the leastharm? (The Utilitarian Approach) Which option best respects the rights of all who have astake? (The Rights Approach) Which option treats people equally or proportionately?(The Justice Approach)

Which option is accepted to the community as a whole,not just some members?(The Practical Approach)


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Make a Decision and Test It Considering all these approaches, which option bestaddresses the situation?If I told someone I respect-or told a televisionaudience-which option I have chosen, what wouldthey say?


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Act and Reflect on the Outcome How can my decision be implemented with thegreatest care and attention to the concerns of allstakeholders?How did my decision turn out and what have I learnedfrom this specific situation?


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Guiding factors for managers in ethical decision making

A persons personal code of ethics

The companys formal policies, values and culture

The ethical climate in the industry

Government regulations.

Behaviour of management in the company

Deep belief to abide by the laws

Ethical conduct/Standards tend to rise due to greater public exposure/image


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Ethical Dilemmas at Workplace(Donaldson)

Recognizing conflicts of interest and avoiding them

Deciding if the business gift is just a gift or a bribe

Attaining fairness in employee performance appraisals

Initiating disciplinary action against an employee

Executing an order to take action against staff


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Ethical Dilemmas at Workplace(Donaldson)

Managing a problem employee

Handling reports of wrong doing on the job

Safeguarding confidential information

Recognizing and balancing the legitimate interest of

customers, employees, suppliers, owners and the societyin which they live


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Difficulties in ethical decision

making Cross cultural contradictions Competitive PressuresBusiness Goals vs Personal valuesPersonal Gain and self interest


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Why ethical problems occur in business

Personal gain andselfish interest

Selfish interestversus othersinterests

Egoistical mentality I will benefit me!

Competitive pressures on profits

Firms interestversus othersinterests

Bottom-linementality

We have to beat theothers at all costs!

Cross-culturalcontradictions

Companys interestsversus diversecultural traditionsand values

Ethnocentricmentality

It is fine in foreigncountry.

Reason Nature of EthicalProblem

Typical Approach Attitude

Business goalsversus personalvalues

Bosss interestsversus subordinatesvalues

Authoritarianmentality Do as I say, orelse!


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Suggestions for Ethical decision making

Top management can improve behavior

Code of Ethics

Interaction with peers and other colleagues

Control System


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Lets Judge how ethical are we?? You're applying for a new job as a databaseadministrator. You're currently a softwareengineer, but due to layoffs, you've beenperforming most of your department's database-related projects for almost a year now. You want your resume to be taken seriously for the databaseadministrator position.

What Do You Do?


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Options Use the title database manager on your resume --

after all, you've been performing the duties of theperson who last had that role. Use your official title, software engineer, on yourresume, even though it doesn't accurately reflect

the database skills you perform each day. Come up with a new job title altogether that betterdescribes what you do each day. It's not your officialtitle, but it delivers the message.


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Ethical Dilemma and Decision Making-PGDM