1. Ethical Principles, Quick Tests, And Decision-Making Guidelines
Chapter Three
Ethical Principles, Quick Tests, And Decision-Making Guidelines
Copyright © 2003 by South-Western, a division of Thomson Learning

2. Copyright © 2003 by South-Western, a division of Thomson Learning
Chapter Topics
Decision criteria for ethical reasoning
Ethical relativism: A self-interest approach
Utilitarianism: A consequentialist (results-based) approach
Universalism: A deontological (duty-based) approach
Rights: An entitlement-based approach
Justice: Procedures, compensation, retribution
Immoral, amoral, and moral management
Four social responsibility roles
Individual ethical decision-making styles
Quick ethical tests
Concluding comments
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3. Decision Criteria for Ethical Reasoning
A first step in addressing ethical dilemmas is to identify the problem and related issues.
Laura Nash developed twelve questions to ask yourself during the decision-making period to help clarify ethical problems.
These twelve questions can help individuals:
Openly discuss the responsibilities necessary to solve ethical problems
Facilitate group discussions
Build cohesiveness and consensus
Serve as an information source
Uncover ethical inconsistencies
Help a CEO see how managers think
Increase the nature and range of choices
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4. Decision Criteria for Ethical Reasoning
The following three criteria can be used in ethical reasoning:
Moral reasoning must be logical
Factual evidence cited to support a person’s judgment should be accurate, relevant, and complete
Ethical standards used should be consistent
A simple but powerful question can be used throughout your decision-making process in solving ethical dilemmas:
What is my motivation for choosing a course of action?
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5. Decision Criteria for Ethical Reasoning
A major aim of ethical reasoning is to gain a clearer and sharper logical focus on problems to facilitate acting in morally responsible ways.
Two conditions that eliminate a person’s moral responsibility for causing harm are:
Ignorance
Inability
Mitigating circumstances that excuse or lessen a person’s moral responsibility include:
A low level of or lack of seriousness to cause harm
Uncertainty about knowledge of wrongdoing
The degree to which a harmful injury was caused or averted
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6. Ethical Relativism: A Self-Interest Approach
Ethical relativism holds that no universal standards or rules can be used to guide or evaluate the morality of an act.
This view argues that people set their own moral standards for judging their actions.
This is also referred to as naïve relativism.
The logic of ethical relativism extends to culture.
Copyright © 2003 by South-Western, a division of Thomson Learning

7. Ethical Relativism: A Self-Interest Approach
Benefits include:
Ability to recognize the distinction between individual and social values, customs, and moral standards
Problems include:
Imply an underlying laziness
Contradicts everyday experience
Relativists can become absolutists
Relativism and stakeholder analysis.
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8. Utilitarianism: A Consequentialist (Results-Based) Approach
The basic view holds that an action is judged as right, good, or wrong on the basis of its consequences.
The moral authority that drives utilitarianism is the calculated consequences or results of an action, regardless of other principles that determine the means or motivations for taking the action.
Utilitarianism includes other tenets.
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9. Utilitarianism: A Consequentialist (Results-Based) Approach
Problems with utilitarianism include:
No agreement exists about the definition of the “good” to be maximized
No agreement exists about who decides
How are the costs and benefits of nonmonetary stakes measured?
Does not consider the individual
Principles of rights and justice are ignored
Utilitarianism and stakeholder analysis.
Copyright © 2003 by South-Western, a division of Thomson Learning

10. Universalism: A Deontological (Duty-Based) Approach
This view is also referred to as deontological ethics or nonconsequentialist ethics and holds that the means justify the ends of an action, not the consequences.
Kant’s principle of the categorical imperative places the moral authority for taking action on an individual’s duty toward other individuals and humanity.
The categorical imperative consists of two parts.
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11. Universalism: A Deontological (Duty-Based) Approach
The major weaknesses of universalism and Kant’s categorical imperative include:
Principles are imprecise and lack practical utility
Hard to resolve conflicts of interest
Does not allow for prioritizing one’s duties
Universalism and stakeholder analysis.
Copyright © 2003 by South-Western, a division of Thomson Learning

12. Rights: An Entitlement-Based Approach
Moral rights are based on legal rights and the principle of duty.
Rights can override utilitarian principles.
The limitations of rights include:
Can be used to disguise and manipulate selfish, unjust political interests and claims
Protection of rights can be at the expense of others
Limits of rights come into question
Rights and stakeholder analysis.
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13. Justice: Procedures, Compensation, Retribution
The principle of justice deals with fairness and equality.
Two recognized principles of fairness that represent the principle of justice include:
Equal rights compatible with similar liberties for others
Social and economic inequality arrangement
Four types of justice include:
Compensatory
Retributive
Distributive
Procedural
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14. Justice: Procedures, Compensation, Retribution
Problems using the principle of justice include:
Who decides who is right and who is wrong?
Who has moral authority to punish?
Can opportunities and burdens be fairly distributed?
Justice, rights, and power are really intertwined.
Two steps in transforming justice:
Be aware of your rights and power
Establish legitimate power for obtaining rights
Justice and stakeholder analysis.
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15. Immoral, Amoral, Or Moral Management
Immoral management means intentionally going against ethical principles of justice and of fair and equitable treatment of other stakeholders.
Amoral management happens when others are treated negligently without concern for the consequences of actions or policies.
Moral management places value on equitable, fair, and just concern of others involved.
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16. Four Social Responsibility Roles
Figure 3.3 illustrates four ethical interpretations of the social roles and modes of decision-making.
The four social responsibility modes reflect business roles toward stockholders and stakeholders.
Two social responsibility orientations of businesses and managers toward society include:
Stockholder model
Stakeholder model
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17. Individual Ethical Decision-Making Styles
Stanley Krolick developed a survey that interprets individual primary and secondary ethical decision-making styles, that include:
Individualism
Altruism
Pragmatism
Idealism
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Quick Ethical Tests
The Center for Business Ethics at Bentley College suggests six questions to be asked before making a decision.
Classical ethical tests:
The Golden Rule
The Intuition Ethic
The Means-End Ethic
Test of Common Sense
Test of One’s Best Self
Test of Ventilation
Test of Purified Idea
Copyright © 2003 by South-Western, a division of Thomson Learning