1. Ethical Decision Making
in Business
Overview

2. Business Ethics
….is the process of evaluating decisions,
either pre or post, with respect to the moral
standards of a society’s culture.
or
…’How are we to relate to each other in
order to ensure that our individual and
collective well-being is enhanced?’

3. What is involved in correct moral opinion
• Need to go outside, or beyond one’s self
interest in reaching a decision.
• An ethical judgment is one that can be
“universalised”.
• Ethical opinions are not subject to a ‘vote’.
• Moral opinions are centrally about
evaluating behaviour and prescribing ways
in which people should behave.
• Requires one to think about consequences
of one’s action.

4. Chart of Theories
Ethical Theories
Consequentialist Non Consequentialist
Ethical The Golden
Utilitarianism Theology Kantianism
Egoism Rule
Act
Rule

5. Consequentialist Theory
• Consequential
• The good or evil results of an action
– Egoism
• Self-interest is the proper goal (long term?)
– Utilitarian
• Greatest good for the greatest number
– Feminism (Individualism)
• Philosophy of caring
• Effect on the individuals

6. Ethical Egoism
• It is based on what is right, or what one
ought to do , driven to act in accordance
with one’s own self-interest.
• Tells us what people should do.
• It advocates the long term self interest of the
individual.

7. Act Utilitarianism
• Founder was Jeremy Bentham (1748 – 1832)
thinker and social reformer. Pleasure and pain
principle.
• An act is only morally right if and only if it
maximises utility.
• Utlity – intrinsic goodness, satisfactions,
preferences and desires.
• The ratio of benefit to harm calculated by taking
everyone affected by the act into consideration is
greater than the ratio of benefit to harm resulting
from any alternative act.

8. Calculation Yield Results
P1 P2 P3 Total
A1 +4 -5 +8 +7
A2 +6 +2 -3 +5
A3 -2 -5 +4 -3

9. Rule Utilitarianism
• An act is right if and only if it is in conformity
with a particular moral rule, and the rule is
chosen because, of all alternative rules, it
maximises utility.
• i.e. “We must not hold a person accountable
for a crime he has not committed”

10. Non Consequentialist Theories
• Deontological (Means Duty)
– Immanuel Kant and the Categorical Imperative
• Each person should act in a manner that his or her actions could
become universal law
• Duty is more important than result
• Other Theories
– The Golden Rule
– Virtue Ethics

11. Kantianism
• German Philosopher – Immanuel Kant
(1724-1804).
• Developed a theory of duty – intellectual
justification for the golden rule.
• He believed in a science of morals is
possible because humanity has the use of
freedom and reason.
• When using people to accomplish your
purposes, you have a duty to respect them
as human beings and to promote their ability
to realise their desired potential or goals.

12. Theologism
• Asserts that an act is right if, more than any
alternative open to the agent at the time, it is
the most consistent with what God wills,
either directly or indirectly.
• Theologism provide us with a set of rules
(e.g., the Ten Commandments) that express
God’s will.

13. The Golden Rule
• The Golden Rule “Do unto others as you
would have them do unto you” is a most
widely accepted moral principle.
• Confucianism “That which you do not want
done to yourself, do not do to others”
(Analects)
• Islam “No one is a believer unless he loves
for his brother what he loves for himself
(Traditions)

14. The Golden Rule (c’tnd)
• Buddhism “Hurt not others with what pains
yourself”
• In surveys of business people the Golden
Rule is cited more often than any other
principles the basis of proper ethical
behavior.

15. Virtue Ethics
• Dates back to Aristotle
• It stresses the kind of moral abilities that put
us in a position to act morally, whether after
weighty deliberation or quick reaction.
• It views the character of the person
performing the action and rejects applying
the correct theory.

16. Ethics Related Decision Making
• The General decision making structure is:
Individual or Company X has a Problem P.
The alternative solution to P are S1….Sn.
S1 is the best solution to P.
X should do S1

17. Ethical Problem Framework
1. Gather the facts carefully to determine whether there is
an ethical problem.
2. If there is a problem, try to state it as clearly as possible.
3. Determine whether the problem has an ethical
dimension.
4. Identify those affected by the problem.
5. In many cases you will need to demonstrate the
seriousness of your problem, since there is no need to
deliberate at the length of a trivial problem.
6. In many cases we are interested in determining what
caused the problem.
7. Develop solution
8. Recommendation

18. Summary
• Ethics can be divided into Consequentialism and
Non Consequentialism theories of ethics.
• At the end of the day the business leaders must
make informed business decisions weighing up the
impact of self interest over the greater good for
society.

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