There are a number of major ethical schools or standards:

  • Ethics of Results
  • Ethics of Rules
  • Ethics of Virtue

and they are all discussed here in a what we hope is a fairly easy to comprehend style.

But why are they important?

Don’t business people make decisions every day without a knowledge of philosophy?

With recognition that business people are more rather than less likely to face dilemmas of an ethical nature during their careers, many of the experts advise managers to enhance their ability to ‘reason ethically’.

But what is meant by ‘ethical reasoning’? It has been described as the process of systematically analysing an ethical issue and applying to it using one or more ethical standards.

There have many suggested approaches, typically involving steps such as these three:

1. Definition of the ethical problem: The first step necessitates determining whether a decision has ethical implications. This requires an assessment of the nature and consequences of the action. This step frames a question as an ethical problem. For example, is it acceptable to highlight the medical benefits of a new medicine whilst minimising its side effects in an advertising campaign?

2. Selection of an ethical standard: Various theories of recommended moral behaviour exist. While most theories will lead managers to the same solution given similar circumstances, different standards sometimes lead to divergent solutions. The existence of competing moral theories is one reason why well intentioned managers disagree about what is ethically proper.

3. Application of the ethical standard: Once an ethical standard is chosen, it still must be applied to a specific situation. For example, a standard can be applied to a particular ethical dilemma, and the subsequent determination of an ethical choice is the completion of the ethical reasoning process.

If managers do not follow this or a similar procedure, ethical discussions too easily degenerate into a clash of personal opinion or preference.

Prof Alejo Sison, EBEN President, a renowned business ethics philosopher, points out that :

“The three steps outlined  are themselves dependent on the kind of person one is.  An ‘ethical’ person would define, select and apply standards differently from an ‘unethical’ person.

In other words, we can never be ‘objective’ to the extent that we are able to rid ourselves of our ethical dimension, nor is this desirable”.

For the most part, ethical reasoning ability is grounded in a knowledge of ethical theory. If managers understand ethical theory, they can apply specific principles or rules to guide their decision making. Those principles can then be unpacked and examined in order to determine the appropriate choices emanating from an ethical problem.

For example, a manager considering marketing a soft drink banned in the local market because of health questions raised by the local authorities might consider the following:

1. Sending the product to the foreign market where it can be legally sold

2. Waiting for additional research information that might further validate or invalidate the danger of the substance

3. Exporting the product with a warning label

4. Dumping the product as waste

5. Disposing of the product to a wholesaler at a severely discounted price and letting that independent business firm make its own determination as to what to do with the controversial product.

Each of these options raises ethical questions. How should a manager go about deciding what to do? How does one go about reasoning to arrive at an ethical solution?

The answer to these questions lies partly in understanding different ethical theories. This response is not without its challenges.

As already noted, the difficulty in choosing among various theories is that different ethical theories may lead to different conclusions. However, this realisation should not be sufficient to dismiss the study of ethical reasoning as a fruitless exercise.

Ethical issues regularly stem from “tough cases.” Few people maintain that ethics is an easily understood subject. The existence of ethical dilemmas, where different approaches lead to different solutions, should not be a cause of cynicism. Some ambiguity is inherent in grappling with tough ethical problems, whether in business or in other realms.

The fact that differing principles sometimes generate different decisions opens up more options than may have been considered initially. A more optimistic view is that managers should take some satisfaction from knowing that the application of various ethical theories to a particular situation will most often lead to consensus.

At minimum, ethical theories will usually not generate unethical solutions.

Finally, for those who may be skeptical about the values of ethical theory in business, we offer this statement by the classic philosopher Cicero in resolving a conflict between a grain trader and the famine-starved citizens of Rhodes, in favour of the latter:

To everyone who proposes to have a good career, moral philosophy is indispensable (De Offidis, 44 EL).


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