Business school's should deal with what ethical matters?
Corporate social responsibility, governance, ethical corporate culture, and ethical decision making.
How is EDM designed to enhance ethical reasoning?
- Insights into the identification and analysis of key issues to be considered and questions or challenges to be raised.
- Approaches to combining and applying decision relevant factors into practical action.
A decision or action is considered ethical if it....
conforms to certain standards.
EDM framework assesses the ethicality of a decision or action by examining:
- Consequences or well-offness
- Rights and duties affected
- Fairness involved
- Motivation or virtues expected
The EDM consideration of well-offness ties to which philosophical theories?
Consequentialism, utilitarianism, and theology.
The EDM consideration of respect for the rights of stakeholders ties to which philosophical theories?
The EDM consideration of fairness among stakeholders ties to which philosophical theories?
Categorical Imperative, and justice as impartiality.
The EDM consideration of expectations for character traits and virtues ties to which philosophical theories?
Consequentialists are intent on...
Maximizing the utility produced by a decision. Rightness of an act depends on its consequences.
Debates involving consequentialism:
- Which consequences should be counted?
- How they should be counted
- Who deserves to be included in the set of affected stakeholders to be considered?
Concerned with overall utility.
Deontology focuses on...
The obligations or duties motivating a decision or actions.
Always act in such a way that you can also will that the maxim of your action should become a universal law. Meaning that if everyone would not follow the same decision rule it is not a moral one.
The interest's of individual are taken into account in decisions.
Virtue ethics is concerned with...
the motivating aspects of moral character demonstrated by decision makers.
Criticisms of virtue ethics use in EDM
- The interpretation of a virtue is culture-sensitive
- As is the interpretation of what is justifiable or right
- One's perception of what is right is influenced by self-interest.
Check a decision in a quick, preliminary manner.
Do unto others as you would have them do unto you
If you are comfortable with an action after asking yourself whether you would mind if all your associates, friends, and family were aware of it, then you should act.
The Intuition Ethic
Do what your gut feeling tells you to do.
The Professional Ethic
Do only what can be explained before a committee of your professional peers.
The Utilitarian Principle
Do the greatest good for the greatest number
The Virtue Principle
Do what demonstrated the virtues expected.
How has the traditional view of corporate accountability recently changed?
- The assumption that all shareholders want to maximize only short-term profits appears too narrow a focus.
- The rights and claims of many non-shareholder groups are being accorded status in corporate decision making.
Fundamental stakeholder interests
- Interests should be better off as a result of the decision (Well-offness) (Consequentialism)
- The decision should result in a fair distribution of benefits and burdens (Fairness) (Deontology)
- The decision should not offend any of the rights of any stakeholder (Right) (Deontology)
- The resulting behavior should demonstrate duties owed as virtuously as expected (Virtuosity) (Virtue ethics)
Costs not included in the determination of profit.
Mirror image alternatives used to measure impacts indirectly.
How many of the fundamental stakeholder interests must be satisfied for a decision to be considered ethical?
Expected values are a combination of...
Value and a probability of its occurrence.
Mitchell, Agle, and Wood suggest that stakeholders and their interests be evaluated on three dimensions:
- Legitimacy or legal and/or moral right to influence the organization
- Power to influence the organization
- Urgency of the issues arising
Approaches to the measurement of quantifiable impacts of proposed decisions:
- 1. Profit or loss only
- 2. 1 plus externalities
- 3. 2 plus probabilities of outcomes
- 4. Cost-benefit analysis or risk-benefit analysis plus ranking of stakeholders
- Health and safety
- Fair treatment
- Exercise of conscience
- Dignity and privacy
- Freedom of speech
- Ask is the decision:
- 1. Profitable
- 2. Legal
- 3. Fair
- 4. Right
- 5. Going to further sustainable development (Optional)
Attempt to revise if any negative responses.
Moral Standards Approach
Develop questions based on three moral standards. More broad than the 5-Questions approach and better suited to considerations of decisions that have impacts outside the corporation.
Three moral standards of the Moral Standard Approach
- Utilitarian - maximize net benefit to society as a whole
- Individual rights - respect and protect
- Justice - fair distribution of benefits and burdens
Analyze a decision based on four key aspects.
Key aspects of the Pastin Approach
- Ground rule ethics
- End-point ethics
- Rule ethics
- Social contract ethics
Ground rule ethics
Individuals and organizations have ground rules that govern their behavior. Purpose is to illuminate an organizations/individuals rules and values.
Purpose is to determine the greatest net good for all concerned.
Purpose is to determine what boundaries a person/organization should take into account according the ethical principles.
Social contract ethics
Incorporates the concept of fairness. Purpose is to determine how to move the boundaries to remove concerns or conflict.
What do all of the stakeholder analysis approaches have in common?
They do not specifically incorporate a thorough review of the motivation for the decisions involved, or the virtues or character traits expected.
Comprehensive Approach to EDM considerations
- Well-offness or Consequentalism
- Rights, duty or Deontology
- Fairness or Justice
- Virtue expectations or Virtue Ethics
All four must be satisfied for a decision to be ethical
Inadvertent or knowing overuse of jointly owned assets or resources.
Ethical decision pitfalls:
- Conforming to an unethical corporate culture
- Misinterpreting public expectations
- Focusing on short-term profit and shareholder only impacts
- Focusing only on legalities
- Limits to fairness
- Limits to rights canvassed
- Conflicts of interest
- Interconnectedness of stakeholders
- Failure to identify all stakeholder groups
- Failure to rank the specific interests of stakeholders
- Leaving out well-offness, fairness, or rights
- Failure to consider motivation
- Failure to consider virtues
Steps for an ethical decision
- Identify the facts and all stakeholder groups likely to be affected
- Rank the stakeholders and their interests
- Assess the impact of the proposed action
Shortfalls of traditional accounting data
- Focuses on past actions
- Does not take into account external factors
- Considers some resources to be free or have no costs
- Focus is narrow