Ethical dilemma and essence of decision

making
What is ethical dilemma?

An Ethical Dilemma is a moral situation in which a choice has to be made between two
equally desirable alternatives. Dilemmas may arise out of various sources of behaviour or
attitude, as for instance, it may arise out of personal character, conflict of personal values
and organizational goals, organizational goals vs social values, etc.
A Business Dilemma exists when an organizational decision maker faces a choice between
two or more options that will have various impacts on the organization’s
profitability and competitiveness and
its stakeholders.
Managing ethical dilemma:

Organizations have started to implement ethical behaviour by the following actions:

-publishing in-house codes of ethics

-employing people with a reputation for high standards of ethical behaviour at the top levels
-Starting to incorporate consideration of ethics into performance reviews
-Starting to reward ethical behaviour
-Conducting an ethics audit
 What are the steps in the ethics audit process?

A Framework for Ethical Decision-Making:

• Identify the Ethical Issues.
• Get the Facts.
• Evaluate Alternative Actions.
• Choose an Option for Action and Test It.
• Implement Your Decision and Reflect on the Outcome.
Some common code of ethics for employees:

Most company codes list the following values being expected from their
employees:
-Respect confidential information to which you have access.
-Maintain high standard of professional responsibility.
-Avoid being placed in situations involving conflict of interest.
-Act with integrity.
-Do not be biased against anybody or anything.
-Maintain professional relations based on mutual respect for individuals and organizations
-Be committed to the goals of the organization.
-Do not give up your individual professional ethics
 How to create ethical working environment?

• Make the decision to commit to ethics.

• Recognize that you are a role model by definition, by your action, and by your values.
• Assume the responsibility for instilling ethical behaviour.
• Articulate your values.
• Train your staff.
• Encourage open communication.
• Be consistent.
• Abide by the laws of the land
Resolving ethical dilemmas:

1. ANALYSE THE CONSEQUENCES

One should find answers to questions like who all will likely benefit/be harmed from the
action. What is the nature of ‘benefits’ & ‘Harms’.

2. ANALYSE THE ACTIONS

Analyze how the proposed actions measure against moral principles such as ‘honesty,
fairness, equality etc.

3. MAKE A DECISION
Analyze the options carefully and make a rational decision.
A Framework of Ethical Decision Making:

Michael Josephson has constructed the following components of good choices:

1. Take Choices Seriously

2. Good Decisions are both Ethical and Effective

3. Discernment (the ability to judge well) and Discipline

The Process of Decision Making:

Recognise and identify the kind of ethical issue you need to resolve
Recognise the ethical issue; seek answers to questions such as the nature of the issue, the
conflict it has raised and how the decision would impact the larger community.

Pause and Think

Pause for sometime on the ethical issue; think ahead, reflect on the consequences that are
likely to follow.
 Make Sure of Your Goals
Be clear on goals, both short-term and long-term, weigh options clearly

Get Your Facts Right

Gather all facts concerning the issue
Verify the uncertain facts
Get additional information
 Evaluate choices from Different Ethical Perspectives
Make a list of options that attempts to accomplish the goal.
Test each option against various ethical perspectives such as rights, justice, virtue or common good
Find out which option will produce the most good and do the least harm to others.

Consider the Consequences

Ensure that there is no unethical option
See that your option is consistent with all core ethical values
Analyse the possible consequences of each of the options for each stakeholder
Ensure that the end result causes more good than any harm
 Make a Decision
Prepare a criteria derived from the facts gathered. Create a decision criterion including the
financial outcome, if any. Rate the appropriate action against your list of criteria. Talk to a
person who is at the appropriate post..

Act, and then Reflect on the Decision Later

Implement the decision
Evaluate the consequences.
 Common causes of unethical behavior:

▪ Pressure
▪ Fear
▪ Greed
▪ Unethical Behavior of superiors
▪ Following boss’s directives
▪ Unethical Behavior of one’s peers in the organization
▪ Formal organizational policy (or lack of one)
▪ Helping the organization survive
▪ Meeting schedule pressures
▪ Pressure of overly aggressive business/financial objectives
▪ Advancing own career
▪ Personal financial needs
 Common modes of misconduct in the organization:

▪ Misrepresenting hours worked

▪ Employees lying to supervisors
▪ Management lying to employees, customers, vendors or the public
▪ Misuse of organizational assets
▪ Lying on reports/falsifying records
▪ Sexual harassment
▪ Stealing/theft
▪ Accepting or giving bribes or kickbacks
▪ Withholding needed information from employees, customers, vendors or public
Different levels where ethical dilemmas may be
faced:
Personal level—situations faced in personal life

Organizational level—workplace situations faced by managers and employees

Industrial level—situations confronted by professionals

Societal and international levels—local-to-global situations confronted indirectly as a

management team
Role of Organizational Ethics in performance:
Case Study…

Assume that you are the Personnel Director for a manufacturing firm that
is undergoing a major change in direction. The change involves the hiring
of young, energetic workers and you have some difficult decisions to
make. The firm is building two new technologically advanced plants and
it will close four of its old plants out of five. Raju is a 56 year old
production worker who has been with your firm for 10 years. In your
opinion, he is not fit to be retained, but he is not old enough to be sent out
with any retirement benefits.
You must decide whether to place Raju in the only remaining old plant
the company has left or fire him. Also mention the reasons for your
decision.
Analyze each of the below mentioned points individually in relation to ethical
behavior advantages:
 Case Study no. 2…
You are the CEO of a company that operates at the national level. In one of
the plants, located in a rural area of your state, 110 villagers are working as
labourers who earn per day wages. It is the only source for them to earn their
livelihood. They have been associated with your firm for 5 years.

Now, you have planned for the expansion of your business and want to opt
for fully automatic plants for all of your factories. Thus, you need to decide
whether to lay off all the village labourers as they are not experts.

(you can come up with any other solutions that you feel can be implemented)

Give 8 reasons for any decision you take.

Framing the ethical working environment by solving the
existing issues of Data Privacy…

Design a solution for eradicating the Data Privacy (you found that the confidential data of
your company is getting leaked by some of your employees) issue in your organization...

Use the steps of the topic- “How to create an ethical working environment?”
 ETHICAL LEADERSHIP….

Introduction:
Leaders can use power for good or ill, and the leader’s personal values may be one of the
most important determinants of how power is exercised or constrained.

The mere possession of power, of any kind, leads inevitably to ethical questions
about how that power should and should not be used.

The challenge of leadership becomes complex when we consider how individuals of

different backgrounds, cultures, and nationalities may hold quite different values.
 Definition:

We can define ethical leadership as “the process of influencing people through principles,
values and beliefs that embrace what we have defined as right behaviour.”
Ethical Leadership dimensions can be
categorized in following ways:

There are five principles that are believed to lead to the development of ethical leadership:

1. Respect for Others

Ethical leaders treat others with dignity and respect. This form of respect recognizes that
followers have goals and ambitions and confirms followers as human beings who have worth
and value to the organization. In addition, it leads to empathy, active listening, and tolerance
for conflicting viewpoints.
2. Service to Others

Ethical leaders serve others. These leaders put followers first—their prime reason for being is
to support and nurture subordinates. Service to others is exemplified through behaviors such
as mentoring, building teams, and empowering others.

3. Justice for Others

Ethical leaders ensure that justice and fairness are central parts of their decision-making. This
means treating all subordinates in very similar ways, except when there is a very clear need for
differential treatment and there is transparency about why this need exists. In addition to being
transparent, the logic for differential treatment should be morally sound and reasonable.
4. Honesty toward Others

Ethical leadership requires honesty. Dishonesty destroys trust—a critical characteristic of any
leader–follower relationship. On the other hand, honesty increases trust and builds the
leader–follower relationship. Honesty means to be open with others by expressing our thinking
and our reality as fully as we can.
This means balancing openness with disclosing only what is appropriate in a given
scenario.

5. Building Community with Others

Ethical leaders build community with others. This is crucial because leadership is about
influencing others to achieve a common goal. This means that leaders develop organizational
or team goals that are appropriate for the leader and his or her followers. These goals need to
excite as many people as possible, and ethical leaders achieve this by taking into account the
goals of everyone in the team or organization.