Solving ethical dilemmas

Before you read

Key terms

Match the terms with their definitions.

1) utilitarian approach	a) the approach concerning itself with moral principles, regardless of the consequences
2) moral rights	b) the approach under which you balance the cost and benefits of taking a particular action
3) universalism	c) the approach which compares business ethics to the strategy of playing a game
4) cost-benefit approach	d) the approach taking the action that will result in the greatest good for the greatest number of people
5) gamesmanship	e) a two-step approach similar to the Golden Rule

Think ahead

In their lives people face ethical problems. What do you think helps them to find solutions in such cases?

Text 8.5. Skim the text and give headings to the paragraphs.

Approaches to Ethical Decision Making

1. Business owners often face difficult ethical dilemmas, such as whether to cut corners on quality to meet a deadline or whether to lay off workers to enhance profit. A current ethical debate concerns the use of extremely low-wage foreign workers, especially in the light industry.

By considering various approaches to ethical decision making, you may be better able to make the right choice when the need arises.The subject of business ethics is complex. The method you prefer may not suit everyone. Hopefully, by considering the alternatives, you will be able to make decisions that are right for you.

2. The utilitarian approach to ethical decision making focuses on taking the action that will result in the greatest good for the greatest number of people. Considering the example of employing low-wage workers, under the utilitarian approach you would try to determine whether using low- wage foreign workers would result in the greatest good.

3. The moral rights approach concerns itself with moral principles, regardless of the consequences. Under this view, some actions are simply considered to be right or wrong. From this standpoint, if paying extremely low wages is immoral, your desire to meet the competition and keep your business afloat is not a sufficient justification. Under this view, you should close down your business if you cannot operate it by paying your workers a “living wage”, regardless of the actions of your competitors.

4. The universalist approach to ethical decision making is similar to the Golden Rule. This approach has two steps. First, you determine whether a particular action should apply to all people under circumstances. Next, you determine whether you would be willing to have someone else apply the rule to you. Under this approach, for example, you would ask yourself whether paying extremely low wages in response to competition would be right for you and everyone else. If so, you then would ask yourself whether someone would be justified in paying you those low wages if you, as a worker, had no alternative except starvation.

5. Under the cost-benefit approach, you balance the cost and benefits of taking a particular action. For example, one of the costs of paying extremely low wages might include negative publicity. You would weigh that cost against the competitive advantage that you might gain by paying those wages.

6. One more approach is gamesmanship. It compares business ethics to the strategy of playing a game. For instance, is it considered unethical to bluff in a game of poker? Obviously, bluffing in a game of poker does not reflect on the morality of the player. It is merely a strategy of playing a game. This approach does not offer any specific guideline for this determination.

At present time the application of ethics in business seems to be an evolutionary state. However, the importance of ethics in business is best summarised as follows: those who treat management and ethics apart will never understand either one.

Concept check

Read the text again and answer the questions.

1. How can you make the right choice when the need arises?

2. What is the focus of the utilitarian approach to ethical decision making?

3. What does the moral rights approach concern itself with?

4. What is the universalist approach?

5. How do you make decisions under the cost-benefit approach?

6. What is gamesmanship?

Key learning points Ethics is concerned with norms, Values, right and responsibilities. Business ethics focuses on wide range of conduct by managers and employees. Legal responsibility deals with specific laws and regulations, while social responsibility involves a degree of voluntary response from the organization. Ways of improving ethical performance include codes of ethics, ethics committees, social audits, and ethics training. The most typical social responsibility strategies are: obstructive, defensive, adaptive, proactive.