Ethical Considerations in Decision Making
Rex C. Mitchell, Ph.D.

Most significant decisions in organizations are not only complex but could be considered dilemmas, because they involve fundamental conflicts between a set of economic and self-interest considerations and a competing set of ethical, legal, and social considerations. These competing considerations favor different alternatives. While developing creative alternatives can help reduce the conflict, some tension almost always remains. Some individuals avoid the more difficult task of trying to balance these conflicting factors by arguing that organizations and managers should consider economic (organizational self-interest) considerations exclusively. Others simplify by over-emphasizing the social responsibility of organizations and their managers. I believe we need to struggle with the dilemmas and the more difficult task of balancing the competing goals and considerations.

Ethics is concerned with what is "right" and "wrong," "fair" and "unfair" in decisions and actions that affect others. Our ethical framework is founded on the values we hold and believe to be important. Values are a set of moral principles we embrace about what is "good," "desirable," "just,"and "of value" in human actions and interactions. We use these principles (values) to evaluate choices and actions.

Ethical decisions are almost always complex, for several reasons. Most ethical decisions have: (a) multiple alternatives; (b) consequences that extend beyond the immediate situation; (c) uncertain consequences; (d) outcomes that mix various economic, legal, and social benefits and costs; and (e) personal implications. Ethical decisions in organizations are seldom simple choices between right and wrong; they involve complex judgments balancing economic and self-interest benefits and costs against various legal, ethical, and social benefits and costs. Further, ethical decisions often involve many stakeholders and constituencies, with varied and often-opposing goals and interests. There are multiple factors that may tempt individuals to behave unethically, for example: (a) personal gain, including power, (b) competition, and (c) restoration of justice or fairness. Of course, "justice" and "fairness" can have widely different meanings for different individuals.

Four factors that can be useful in sorting out the ethical features of a given situation are (adapted from Fletcher, 1966):

All of us make judgments and decisions from some kind of ethical framework or system, although these are usually tacit, rarely are examined explicitly, and often are applied inconsistently. Making our values and implicit ethical systems explicit to ourselves can help us use them for disciplined and informed ethical decision making.

The following table gives brief summaries of eight different ethical systems, including what I see as some of the limitations of each. The first five systems are classical ones, while the last three are examples of many other systems that have received more limited exposure. Other than the Egoist system, these systems generally do not conflict significantly with each other on major actions such as stealing; however, they can not be integrated or reconciled into a single logically consistent system, for eventually conflict will arise over the relative importance of the different principles and values stressed in the various systems.

Therefore, a reasonable way to proceed is to use several different ethical systems and think through the consequences of our actions on multiple dimensions (that include ethical, legal, and social considerations, in addition to economic and self-interest factors). Further, it is important to (a) clarify and be aware of our value/ethical systems in advance of difficult decisions and (b) avoid rationalizing (deceiving ourselves) about our motives and possible compromises of our values as we make important decisions. Although creating such clarity of thought may cause us cognitive dissonance and discomfort, the alternative of blurring and compromising our values can be a progressive and most serious loss.

Nature of the Ethical System or Belief Problems in the Ethical System
Eternal Law: Moral standards are given in an Eternal Law, which is revealed in scripture or apparent in nature, and then is interpreted by religious leaders or philosophers. The belief is that everyone should act in accordance with the interpretation. There are multiple sources of the Law and interpretations of the Law within each, but no method to choose among them beyond human rationality, which can be influenced by both situation and self-interests. Human rationality needs an absolute principle or value as the basis for choice, which completes a circle and brings us back to the starting point without a resolution that all will accept.
Ethical Egoism: Centers around the standpoint of the individual. The belief is that individuals should seek their own self-interests, and act to promote the greatest balance of good over bad for themselves. Ethical egoism might be seen as the usual standard for businesses in a free market system. Some have interpreted economist Milton Friedman's claim that the only obligation of business is to increase its profits as an expression of the egoist view. Our own market-based economy is built on the belief that individuals will generally follow this ethic in making purchase and many other personal decisions. It could be argued that this is not an ethical theory at all, but more nearly a description of a "survival of the fittest" society. Some have argued that ethical egoism is a contradiction in terms; i.e., if people always act in their own self-interest, it is not necessary to tell them that they ought to do so. This viewpoint is rather barren re how social cooperation and social productivity will result, since ethical egoism provides no way of settling competing claims when they do arise, and no way of determining whether one interest is more important than another. Further, since no egoist occupies a disinterested position, an egoist is not in a position to give advice or to pass moral judgments on other people's actions.
Utilitarianism: Moral standards are applied to the outcome of an action or decision (a teleological theory) for, not only oneself, but for all those affected by the action. The principle is that everyone should act to generate the greatest benefits for the largest number of people (i.e, the highest net social benefit to society, the "greatest good for the greatest number" ...or maximize the social benefit function). An act is "right" if, and only if, it produces greater net benefits for society than any other act possible under the circumstances. In using this system one needs to consider both positive benefits and negative costs/outcomes, also satisfactions such as health, friendships in addition to material ones. Most advocates of this system say we should consider utilities equally for everyone in society, although some suggest weighting [Jeremy Bentham (1748-1832) originated Utilitarianism, also see J. S. Mill] This system has several problems: (a) utilitarians can disagree about the "good" they believe should be maximized (e.g., truth, health, peace, freedom, pleasure...); (b) it tells us nothing about the distribution of the benefits (e.g., it would not disapprove of a slave- owning society if the total sum of "goodness" were higher than an egalitarian one), and (c) it seems to have no place for rights or justice. Immoral acts can be "justified" if they provide substantial benefits for the majority, even at an unbearable cost or harm to the minority. An additional principle or value is needed to balance the benefit-cost equation. For example, Dostoevsky, in The Brothers Karamazov, asked what should be done if the happiness of the whole human race, forever, could be brought about by the sacrifice of only one person, one completely innocent child, who would have to be tortured to death in a horrible fashion. No one should ever be able to accept that exchange. There is no universal way to balance the benefits of the majority against the sacrifices of a minority.
Universalism: Moral standards are applied to the intent of an action or decision, because the outcomes are so indefinite and uncertain at the time the decision to act is made. The principle is that everyone should act to ensure that similar decisions would be reached by others, given similar circumstances. This is a deontological (duties or obligations) approach, roughly the reverse of teleological theory. The first duty of Universalism is to treat others as ends and not means. Kant (1724-1804) proposed a simple test for personal duty and goodwill, to eliminate self-interest and self-deception, and to ensure regard for the moral worth of others: ask whether you would be willing to have everyone in the world, faced with similar circumstances, be forced to act in exactly the same way (the Categorical Imperative) ...i.e., to make a decision and act as if your basis for action were to become a general law binding on everyone) It is not easy to express the principle of one's action accurately and to test it; e.g., it might be possible to describe "immoral" actions in so specific a way that they would pass Kant's tests, even if they would violate the categorical imperative when framed in general terms. Further, this ethical system does not offer a framework for resolving conflicts among duties (e.g, conflict between duty to one's company and duty to society at large). Immoral acts can be "justified" by persons who are prone to self-deception or self-importance, and there is no scale to judge between "shoulds" - there are no priorities and no degrees. (For example, one individual might wish law and order to be absolute, with no opposition to the government outside of the formal election process, while another might prefer greater personal freedom.) An additional principle or value is needed to refine the Categorical Imperative concept. It also assumes we are not overly clumsy or ineffectual; otherwise it crashes!
Enlightened Self interest: This system is a hybrid of utilitarianism and egoist theory. It may be thought of as "self-interest rightly understood by a reasonable person." ESI argues that an individual's self-interest and society's interests are (should be) similar if one takes a long-term perspective and if one understands his/her own true self-interests. Spinoza maintained that all wrong decisions are due to intellectual error and result from not understanding one's true or real self-interest. By this definition a truly ethical person will recognize that his/her own long-term interests and those of society are much the same. Using this framework, a person might ask: how am I likely to judge this action from my deathbed? Represents an ideal (or requires ideal people) that is far beyond most of us. It is subject to rationalization, and doesn't provide much guidance in specific applications.
Ethics of Interdependence: Confucius taught that conflicts should be resolved by amicable compromise, thereby allowing nature to follow its harmonious course. In a system founded on his principles, the relationships of interdependence between individuals are fundamental to determining what is ethical. The duties of individuals are stressed, rather than their rights. These duties are encompassed in two virtues - li and jen. Li refers to a combination of manners, ritual, custom, etiquette, and propriety that are inherent in the concept of filial duties and obligations. The other basic concept, jen means human-heartedness. In this system, reasonable people will always be capable of compromise and each side is obligated to try to provide what the other side needs to achieve its goals and fulfill itself. Any other kind of behavior is insincere, exploitive, contentious, and unethical. This also represents an ideal. It is focused on small-scale human interactions and is difficult to apply to broader or more general situations.
Distributive Justice: Moral standards are based on the primacy of a single value, justice. Everyone should act to ensure a more equitable distribution of benefits, for this promotes individual self-respect, which is essentially for social cooperation. [This and Personal Liberty are two modem ethical systems developed by two different professors at Harvard - this by John Rawls] The primacy of the value of justice is dependent on acceptance of (a) justice as the first, preeminent virtue of social institutions, and (b) the proposition that social cooperation provides the basis for all economic and social benefits (an equitable distribution of benefits ensures social cooperation). "Justice" or "just distribution" means different things to different people, e.g., equally, according to need, to effort, to contribution, to competence, etc.. Individual effort is ignored.
Personal Liberty: Moral standards are based on the primacy of a single value, liberty. Everyone should act to ensure greater freedom of choice, for this promotes market exchange, which is essential for social productivity. This system is espoused by libertarians. [developed by Robert Nozick at Harvard] The primacy of the value of liberty is dependent on acceptance of (a) liberty as the prime value, the first requirement of society, and (b) the proposition that a market system of exchange ensures social productivity. This system is based on a very narrow definition of liberty that is limited to the negative right not to suffer interference from others; there may also be a positive right to receive some of the benefits enjoyed by others.

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Last modified January 21, 2009 Copyright 1994-2009 Rex Mitchell