Ethical Decision Making-2

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

Ethical Decision Making-2

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