Ethical Decision Making

Week Seven
 Not just choosing between

Making Ethical Decisions

Involves
> analysis of the situation
> analysis of the parties involved
> moral principles
> organizational rules
> organizational climate
> plus other considerations dependent on
the situation and the choice to be made

Making Ethical Decisions

A person is ETHICAL if his/her behavior is
compliant with his/her beliefs and code of
behavior

An ETHICAL DECISION is one that allows

the person to be ETHICAL

Making Ethical Decisions

⚫ DEFINITIONS
⚫ What is Ethics?
⚫ Why care about ethics?
⚫ Basic steps in ethical decision making

Agenda
⚫ ETHICS – a sub-discipline of philosophy
concerned with issues of right and wrong
in human conduct. It is concerned with
good and bad; what is authentic and not
authentic; and with the notions of duty,
obligation, and moral responsibility.
⚫ VALUES – Individual beliefs which
motivate and guide behavior.

DEFINITIONS
⚫ NORMS – Group or societal standards or
generally held criteria for acceptable
conduct.
⚫ ETHICS – Objective basis upon which
judgments are rendered regarding right or
wrong behavior.

DEFINITIONS
⚫ MORALS – Actions, behavior, and the
principles that guide them.

⚫ OFTEN USED AS SYNONYM FOR ETHICS.

DEFINITIONS
⚫ 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

What is Ethics?
1. The discipline dealing with what is good
and bad and with moral duty and
obligation

2. a : a set of moral principles or values

b : a theory or system of moral values
c : the principles of conduct governing
an individual or a group
d : a guiding philosophy

According to Webster’s Dictionary

What is Ethics????
⚫ The rules and standards governing the
conduct of engineers in their role as
professionals.

Engineering Ethics 11
⚫ Principles based on our understanding of
what is good, right, proper, moral, or
ethical.
⚫ Ideas of behavior that are commonly
acceptable to society
⚫ Influenced by a variety of sources such as
family, religious institutions, educational
institutions, professional organizations,
government, etc.

What are ethics?

⚫ Ethics is the study of morality
⚫ Central principles of ethics:
◦ Reversibility – Would you want someone to do
this to you?
◦ Universality – Would you want everyone to do
this?
⚫ Other questions
◦ Am I treating others with respect?
◦ Am I violating the rights of others?
◦ Am I treating others only as a means to my
own ends?
◦ Am I being honest with others and with myself?

Ethics is…
⚫ Right vs. Wrong
◦ Also known as your conscience
◦ Usually a spontaneous decision
● You instantly know right from wrong
◦ Brainstorming exercise – list of “wrongs”
⚫ Who you are when no one is looking
◦ If your mom was watching, would you still do
it?

Ethics is…
⚫ Ethics vs. Morals
◦ Ethics and morals are NOT always the same
◦ Morals = personal view of values
● i.e. beliefs related to moral issues such as
drinking, sex, gambling,
● Can reflect influence of religion, culture, family
and friends
◦ Ethics = how a moral person should behave
● Ethics transcends cultural, religious, and ethnic
differences

Ethics is not…
⚫ Ethics is not about “getting
caught”

◦ Even if you get away with

something, it may still be unethical
◦ Ethics is not defined by what
happens to you, but by your
thoughts and actions

⚫ Ethics is not about placing blame

◦ Do not judge other students based
on their personal beliefs

Ethics is not…
⚫ Legal duties may be clear

⚫ Is the decision the RIGHT action to take?

⚫ Making a business decision can involve

ethical dilemmas

Legal Responsibilities & Ethical Dilemmas

⚫ Self-interest:
◦ Some unethical actions are also illegal
◦ Some can effect our careers and reputation
⚫ For the interest of the others
◦ Some unethical decisions can hurt other
individuals, the organization we work for, or
society
ethical decision making is vital to creating a
world in which we want to live.

Why care about ethics?

1. Determine the facts (which? whose?)
2. Analyze ethical aspects (rights? duties?)
3. Outline the options (moral justification for
each?)
4. Make a decision (results desired &
process/means to end)
5. Take action (reflecting above
values/principles)
6. Evaluate the decision (from #5 back to
#1)

BASIC STEPS IN ETHICAL DECISION MAKING

⚫ When faced with an ethical dilemma the
objective is to make a judgment based on
well-reasoned, defensible ethical
principles.
⚫ The risk is poor judgment i.e. a
low-quality decision
⚫ A low-quality decision can have a wide
range of negative consequences

What is Ethical Decision Making?

⚫ Right vs wrong: choosing right from
wrong is the easiest
⚫ Right vs right
◦ Situation contains shades of gray i.e. all
alternative have desirable and undesirable
results
◦ Choosing “the lesser of two evils”
◦ Objective: make a defensible decision

Two Types of Ethical Choices

1. Gather facts
2. Define ethical issues
3. Identify all affected parties
4. Identify consequences (positive and
negative)
5. Identify obligations, duties, & rights
▪ Reference codes of ethics
6. Consider personal character, integrity, &
virtues
7. Check your gut
8. Creatively decide on the proper ethical
action

Ethical Decision Making Process

⚫ Step One: Describe the problem
⚫ Step Two: Determine whether there is an
ethical issue or an ethical dilemma
⚫ Step Three: Identify and rank the key
values and principles
⚫ Step Four: Gather your information

The Framework Overview

⚫ Step Five: Review any applicable Code of
Ethics
⚫ Step Six: Determine the options
⚫ Step Seven: Select a course of action

The Framework, continued

⚫ Step Eight: Put your plan into action.
⚫ Step Nine: Evaluate the results

Don’t forget!
Step Ten: Submit cases to your ethical
review team or board regularly for review

The Framework, continued

Quantitative and Qualitative
Factors in Decision Making
Quantitative Factors
⚫ Provide a numerical basis for decision
making – reduces decisions to looking at a
monetary value placed on different
choices, e.g.
◦ Forecasted sales figures for the next 3 years
◦ The cost of a series of redundancies against the
longer term financial benefits to the firm of this
process

Quantitative Factors
⚫ But:
⚫ Such data provides only part of the story
⚫ Other factors need to be taken into
account particularly the effects of
decisions on stakeholder groups and their
response to such decisions

Quantitative Factors
Qualitative Factors
⚫ Qualitative factors look to take account of
these other issues that may influence the
outcome of a decision
⚫ Can be wide ranging and especially need
to consider the impact on human
resources and their response to decisions

Qualitative Factors
⚫ A decisions (for example investment in a
new production plant) could be considered
not only in financial terms but also to
apply other techniques of decision making
to look at wider issues:
⚫ A SWOT analysis might be part of this:
◦ Strengths
◦ Weaknesses
◦ Opportunities
◦ Threats

SWOT
⚫ Might also need to factor in other external
issues that might influence the decision
making process which can be summarised as:
◦ Political
◦ Economic
◦ Social
◦ Technological
⚫ Political could be in its widest sense e.g. the
internal politics of a firm as well as the
national and international political effect

PEST
⚫ e.g. The decision to site a series of wind turbines
in a coastal area might be justified on financial
grounds but:
◦ What is the reaction of the local community?
◦ Does government policy support such planning
developments?
◦ Are there social impacts – e.g. noise pollution,
damage to eco-systems, etc?
⚫ Such factors may make the difference between
success and failure

PEST
 Impact on a firm’s human resources is
essential to consider, in particular the effects
on:
⚫Motivation
⚫Morale
⚫Recruitment and Retention
⚫May be difficulty to assess and measure
⚫May need to distinguish between short term
effects and long term

Human Resources Management

⚫ Wider impacts on stakeholder groups may
also be necessary, such stakeholders include:
◦ Employees
◦ Shareholders
◦ Managers
◦ Environment
◦ Local Community
◦ Suppliers
◦ Government
◦ Consumers

Stakeholder Analysis
⚫ Eventual decision may rest on the balance
between the perceived effects of
quantitative and qualitative
⚫ If the long term effect on the workforce
for example was to reduce productivity or
increase absence because of the impact
on motivation and morale, the fact that a
decision makes financial sense may be
shelved!
⚫ Qualitative by its nature therefore is very
subjective

Decision Making
⚫ A Systematic approach to make a decision
from available alternatives
⚫ Includes Qualitative and Quantitative
factors
⚫ To meet all requirements
⚫ Everybody is satisfied to the decision
made

Value Engineering (VE)

 • Information Phase
• Function Phase
• Creativity Phase
• Evaluation Phase
• Development Phase
• Recommendation Phase
• Implementation Phase

Value Engineering Process