Applied Ethical

Decision Making

Decision-Making
Identifying and choosing alternatives based on
values and preferences.
Process of sufficiently reducing uncertainty and
doubt about alternatives to allow a reasonable
choice to be made.

Moral DecisionMaking
Process for dealing with moral uncertainties
Introduces a degree of rationality and rigor into our
moral deliberations
Ethical problems require examination through filters
(organizational, social, personal, legal)

Organizing Principles of Ethics

Autonomy right to noninterference, self-determination
Beneficence mercy, kindness, charity to others
Empathy
experience the experience of others
Fidelity
faithfulness to duties or obligations
Justice
benefits, risks, costs distributed fairly
Non-maleficence avoid harm or risk of harm
Universalizability all moral principles/judgments have
universal applicability

Ethics Principles Inform Decisions

Ends -based
Rule-based or Kantian principle
Justice or fairness-based (Aristotle)
Care-based principle (i.e., Golden Rule)
Virtue-based

How do Ethics Influence Decision

Making?
Ethical issues and decision making
Ethical dilemma
A situation in which a person must decide whether or
not to do something that, although personally or
organizationally beneficial, may be considered
unethical and perhaps illegal.
Ethical dilemmas are often associated with:
Risk and uncertainty
Non-routine problem situations

Most dilemmas are not right vs. wrong but right vs. right
dilemmas.
It is right to protect forests or it is right to provide jobs for
loggers
It is right to uphold confidentiality or it is right to protect
the welfare of others
Dilemmas often represent competing moral paradigms
- Truth vs. Loyalty
- Individual vs. Community
- Short-term vs. Long-term goals
- Justice vs. Mercy

How To Make an Ethical Decision

Recognize that decisions have ethical implications
Develop a method for exploring the ethical aspects
of a decision
Discuss with others

Recognize an Ethical Issue

Is
there
something
interpersonally, or socially?

wrong

personally,

Could the conflict, the situation, or the decision be

damaging to people or to the community?
Does the issue go beyond legal or institutional
concerns?
What does it do to people, who have dignity, rights,
and hopes for a better life together?

Get the Facts

What are the relevant facts of the case? What facts are
unknown?
What individuals and groups have an important stake in the
outcome? Do some have a greater stake because they
have a special need or because we have special
obligations to them?
What are the options for acting? Have all the relevant
persons and groups been consulted? If you showed your
list of options to someone you respect, what would that
person say?

Evaluate Alternative Responses

Utilitarian/Principle Based
The ethical action is the one that will produce
the greatest balance of benefits over harms.
Which option will produce the most good and do
the least harm?
Clarify
Determine dilemma
Formulate alternatives
What key ethical principles and values involve

Utilitarian/Principle Based
Evaluate
Is any ethical principle violated?
Distinguish facts from beliefs, theories, opinions
Consider credibility of sources
Weigh the benefits, burdens and risks
Decide
Evaluate alternatives & determine consequences
Prioritize ethical principles/values
Consider the worst case scenario
Apply principles

Utilitarian/Principle Based
Implement
to maximize benefits & minimize costs & risks
Monitor and modify
as new information emerge

Standards-Based
Based on the assumption that rules, laws, & policies
provide the best basis for determining action.
Determine primary dilemma
Spell out ethical standards for response
Determine if there is a reason to deviate
Decide on course of action

Moral Reasoning-Based
Recognize the moral issue
Make a judgment
Establish intent
Individual and situational variables
Factors of opportunity and significant others

Moral intensity (effect of decision on others):

concentration of effect
probability of effect
proximity
social consensus
temporal immediacy
magnitude of consequence

Act

(individual or group)
(likelihood of harm)
(closeness to the issue)
(agreement with society)
(closeness in time)
(impact)

Virtue Approach/Based Model:

The ethical action is the one that embodies the habits
and values of humans at their best.
Considers that dispositions and habits enable us to
act according to the highest potential of our
character and on behalf of our values.
What kind of person will I become if I do this?
Is this action consistent with my acting at my best?

Use virtues in considering options

Make decision accordingly

Practice-Based
Recognize problem, get facts
Assess values, benefits, burdens
Determine legal, social influences
Generate solutions, outcomes
Consult
Act, review, reflect

Application of a Practice-Based
1. Recognize there is a moral issue
2. Determine the actor(s)
3. Gather the relevant facts
4. Test for right-versus-wrong issues
5. Test for right-versus-right paradigms

6. Determine resolution principles involved

Ends-based
Rule-based or Kantian principle
Justice or fairness-based
Care-based principle
Virtue-based

Application of a Practice-Based
7. Investigate possibilities for action
8. Consult
9. Weigh benefits & burdens
10. Consider other dilemmas that arise
11. Make the decision
12. Formulate a justification for the decision

List reasons & arguments

Recognize shortcomings
Anticipate objections
Recognize limitations in perspective

13. Document
14. Review and reflect on decision

Make a Decision and Test It

Considering all these perspectives, which of the
options is the right or best thing to do?
If you told someone you respect why you chose this
option, what would that person say? If you had to
explain your decision on television, would you be
comfortable doing so?

Act, Then Reflect on the

Decision Later
Implement your decision. How did it turn out for all
concerned? If you had it to do over again, what
would you do differently?

Ethical Issues in Business

CONFLICT OF INTEREST
Exists when a person must choose whether to
advance his or her own personal interests or those
of others.

FAIRNESS and HONESTY

The heart of business ethics and relate to the general values
of decision makers.
Businessmen are expected to follow all applicable laws and
regulations.
They are also expected not to harm customers, employees,
clients or competitors knowingly through deception,
misrepresentation, coercion or discrimination.
Furhtermore, disclosure of potential harm caused by product
use warning smoking is dangerous to your health

COMMUNICATION
False and misleading advertising, as well as
deceptive personal-selling tactics, anger consumers
and can lead to the failure of the business .
Truthfulness about product safety and quality are
also important to consumers. Example: dietary
supplements are sold with limited regulations;
manufacturers fail to provide enough information for
consumers about differences between products.
(sensitive eye drops) and product labelling.

BUSINESS ASSOCIATIONS
The
behaviour
of
businesspersons
toward
customers, suppliers, and others in their workplace
may also generate ethical concern.
Example: keeping company secrets, meeting
obligations and responsibilities, and avoiding undue
pressure that may force others to act unethically.

Integrating Ethical Decision Making

into the Firm
Develop a code of ethics and follow it.
Establish procedures for reporting violations.
Involve employees in identifying ethical issues.
Monitor ethical performance.
Reward ethical behavior.
Publicize ethical efforts.

Ethical Decision-Making Checklist

Is my action legal?
Is it right?
Is it beneficial?
How would I feel if my family found out about
this?
How would I feel if my decision were printed in
the local newspaper?

Ethical Standards of Conduct for

Management Accountants

Management accountants have an obligation to provide

services at the highest ethical level possible.

COMPETENCE
Accountants are to prepare complete, accurate and
clear reporting of the business' financial information.
Accountants are to maintain competence
continuing the development of their knowledge.

by

Accountants follow all relevant laws, standards and

regulations.

CONFIDENTIALITY
Accountants
must
keep
confidential
information undisclosed to anyone not
entitled to receive the information.
Confidential information
misused in any way.

should

not

be

INTEGRITY
Accountants should refuse gifts that would
influence their decisions, avoid conflicts of
interest and refrain from activities that would
discredit them, the business or the
profession.

OBJECTIVITY
Accountants must be objective with the information
they receive.
Accountants must fully disclose the most accurate
picture of the business possible.