A good business decision is both effective and ethical, but how can we approach ethical decision-making?
Ethical decision-making is the process by which we aim to make our decisions based on ethical values.
When we put ethnics at the heart of decision-making, we commit to doing what is ‘right’, even if a higher degree of risk, effort or cost is involved. We remain consistently aware of our organisation’s core ethical values at all times – not just when it suits us.
Questions to ask ourselves during the ethical decision making process include:
How will a proposed action benefit or harm either an individual or the company as a whole? Which action leads to the greatest overall good and the least overall harm?
What basic human and moral rights do those people affected by the decision have? Which proposed actions most closely takes those rights into account?
Which action is the fairest, either treating everyone equally or offering positive discrimination to those who need an extra boost in order to level the playing field?
Which action is for the common good of the organisation and its people?
Which course of action would make you feel good about yourself as a moral person?
These questions for ethical leaders are derived from the following five major approaches to ethical decision-making developed by philosophers throughout history. They can be applied by anyone facing an ethical quandary – from parents to generals and, of course, business leaders.
Utilitarianism
Moral human rights
Fairness and justice
For the common good
Virtue
The secret is to choose the right approach for your particular organisation and situation.
The most ethical choice is the one that will produce the greatest good for the greatest number.
Jeremy Bentham and John Stuart Mill created utilitarianism in the 19th century. They designed it as a means to help legislators consider the moral soundness of laws.
Adopt the utilitarian approach to ethical decision making in 3 steps:
Identify potential actions and next steps.
Ask who will be affected and weigh up or calculate the potential benefit and harm of each action.
Choose the action that achieves the least harm and the greatest good for the highest number of people.
Does the action respect the moral rights of everyone involved?
The 18th century philosopher Immanuel Kant placed great value on a person’s right to choose for themselves, on the grounds that free will is what differentiates humans from objects.
In line with the rights approach, a person’s human dignity depends on:
The right to be told the truth about anything that might affect or impede their choices.
The right to say, do, believe and think anything without fear of harm, so long as it doesn’t harm the rights of others.
The right to promises being kept if people have freely agreed to a contract or agreement.
With this Kantian approach to business ethics, decisions will be considered ethical if they do not impact on the human rights of employees, clients, consumers or stakeholders involved.
In a fair world (or organisation) does everyone get treated the same? Or should they be treated differently, according to their needs and circumstance?
The Greek philosopher Aristotle said that “equals should be treated equally and unequals unequally”.
It sounds a bit like the terrifying excesses of George Orwell’s Animal Farm, but asks a leader to consider what a fair action looks like. Does fairness mean everyone gets treated the same? Or does a truly fair company policy show positive discrimination, as in the case of diverse hiring practices?
There is the argument that favouritism singles people out for success without ethical justification and negative discrimination holds back people who are marginalised. There is also the argument that positive discrimination levels the playing field, helping those who are marginalised access training, experiences and opportunities that they would not otherwise have had, leading to a reduced need for positive discrimination in the future.
The good of the individual is linked to the good of the organisation.
We are all bound by the pursuit of common goals in an organisation – and, according to modern ethicist John Rawls, what’s good for an individual benefits an organisation as a whole. To use his precise words, the common good can be described as “certain conditions that are… equally to everyone’s advantage”.
Leaders who make ethical decisions for the common good appeal to colleagues to view each other as members of a greater whole. In an organisation that works towards the common good, we are asked to consider what kind of organisation we want to become, and how we can collectively achieve that goal.
Develop ethical traits as an individual using self-reflection and resilience.
Virtue is a state of mind or character trait that an individual can develop to act in ways that will help them fulfil their highest potential. In a business environment, virtues might include integrity, courage, prudence, altruism and fairness.
Developing a virtue requires honest self-reflection and requires a leader or team member to ask: “How should I act in order to develop my character, while contributing to the ethical and tangible success of our team/business as a whole?”
Ethical approaches to decision-making can be used in combination with other decision-making techniques to help leaders come to informed, ethically sound conclusions.
It’s not always easy, but by behaving according to a high ethical standard, companies can strengthen the drive to succeed internally among executives, management teams and staff. And, of course, amid growing scrutiny of business practices, it’s more important than ever for companies to carry out work the right way.