CHAPTER 9
ETHICAL DILEMMA AND INDIVIDUAL
ETHICS MANAGEMENT
Table of Contents
9.1 Introduction
9.2 Ethical Dilemma
9.3 Conflict of Interest
9.4 Mutual Self Enrichment
9.5 Pure Self Interest
9.6 Models of Ethical Decision Making
9.6.1 Utility, Rights, Justice and Caring Model (URJC Model)
9.6.2 Janus Headed Model / The DU Model / White headian Model
9.7 Comprehensive and Sound Ethical Decision Making
9.8 How to take good ethical decision?
9.8.1 Steps for good ethical decision making
9.8.2 Making Quick Ethical Decisions
9.8.3 Secret Ethical Decisions
9.9 White Collar Crimes
9.9.1 Reasons for Growth of White Collar Crimes
Introduction
Oxford dictionary defines ‘dilemma’ as a situation in which ‘a choice has to be made
between two equally undesirable alternatives’.
Ethical dilemma – ‘a situation in which difficult choice has to be made between two
courses of actions, either of which entails transgressing moral principles’ .
In ethical dilemma ; a person finds himself in a situation wherein no ethically right
alternative is available
Ethical Dilemma
A businessman faces conflict between his ethics and economic interest.
He has to choose the alternative which is less unethical
The underlying problems in business decision making:
Conflict of Interest
Mutual Self Enrichment
Pure Self Interest
Conflict of Interest
A situation which arises when a person tries to derive personal benefits from his official
position.
Example: doctors recommending high cost medicine to a patient instead of generic drugs
because the company pays commission on every perscription .
Mutual Self Enrichment
The economic self interest motive is perhaps more apparent when we observe mutual
self enrichment.
Example: Huge pay gap exists between the top level managements’ salary and the
salaries of other employees of private blue chip companies of India
Pure Self Interest
An ethical person is other – centered
An unethical person is ‘self- centered’
It becomes extremely difficult for a person to take ethical decision if he is
guided by pure self interest.
Models of Ethical Decision Making
Taking an ethical and rational decision is never easy or simple
It involves thorough deliberation to reach a logical decision which is suitable and
in the larger interest of everyone
It is also not feasible to consult the deep moral philosophies, every time a person
is caught in a quandary.
There are few models which help a person to take an ethical decision:
1. Utility, Rights, Justice and Caring Model (URJC Model)
2. Janus Headed Model / The DU Model / White headian Model
Utility, Rights, Justice and Caring Model
In 1981, G F Cavanagh, D J Moberg and M Velasquez, proposed a model for the ethical decision
making in business, which is popularly known as the Utility Rights and Justice Model (URJ model).
Initially, this model was based on three categories of ethical obligation that dominates thinking at a
time:
The obligation to promote utility
The obligation to respect rights
The obligation to act justly
Latest developments in the field of ethics and suggestions of critics obliged the authors to include two
more elements:
Duties and
Caring
Cont’d.
The element ‘duty’ is not considered as a fourth category but seen more as an integral to the
category of moral rights.
“Caring” was incorporated in the model as a fourth factor after recognizing the moral
importance of interpersonal relationship in contemporary business.
Though, ‘Caring” is not a superior ethics yet it is true that people often experience moral
dilemmas as dilemmas of care.
The URJC model proposes four criterions for evaluating the ethics of an act:
Does the act optimize the utility or satisfaction of all relevant constituencies?
Does it respect the rights and duties of the individuals involved?
Whether the act is consistent with the principles of justice?
Does the act arise from an impulse to care?
Flow chart of the decision making process using the URJC Model
Cont’d
URJC model breaks down the question of justice into three types of moral
prescriptions:
1. Distribution rules,
2. Principles of administering rules and,
3. Compensation norms
It argues that distribution should not be done arbitrarily and the organizational rules should
be explicit and impartially enforced.
The model also holds that people should not be held accountable for the factors which are
not in their control
Lastly if the people are injured then their injuries should be compensated for by those
responsible for the injuries.
This model has been criticized by the critics for not being parsimonious and missing out
some important elements of Deontology and Utilitarianism
Janus Headed Model /The DU Model/ White headian Model
In 1985, F. Neil Brady proposed a model based upon two popular moral theories namely
deontology (formalism) and utilitarianism.
Brady’s model holds that, there exist a “Janus Headed” relationship between deontology and
utilitarianism and that these two theories are not competing theories but instead they are
complementary to each other.
Janus is a Roman God, having two faces- one facing forward and other backward, depicting his
ability to look into future as well as to the past.
Thus, inspired by the duality in the personality of Roman God Janus, this new model too points
towards the dual nature of issues and dilemmas faced by the business people in the day to day
business activities
Cont’d
According to Brady, those who are confronted with the task of ethical decisions are doing
two things at once, just like Roman God Janus:
- As a formalist (Deontologists), they are looking to the cultural heritage established
by law, language, and tradition and assessing the relevance and adequacy of knowledge
to the issue at hand.
- As a Utilitarian they are simply seeking to discover a solution that will give the best
possible results according to some idea of what it means to be fully human.
Comprehensive and Sound Ethical Decision Making
“Good ethics is good business”.
However, doing business with ethics and taking sound ethical decisions isn’t always simple.
Three things should be bourne in mind while taking ethics related decisions:
1. Benevolence: the principle guides us ‘to do good’ in case of ethical dilemma. This principle is
closely related to the utilitarian theory of ethics “the greatest good for the greatest
number”.
2. Least Harm: This principle deals with situations in which neither of the choice is likely to be
beneficial or cause no harm.
3. Respect for Autonomy: This principle states that every person has every right to control his life
and lifestyle. The autonomy of a person should be completely respected unless it
becomes a threat for others.
Cont’d
It can be seen from three viewpoints: Paternalistic, Libertarian and Justice.
The Paternalistic viewpoint gives greater priority to the interest of the
dependent person over his wishes.
The Libertarian viewpoint prioritizes the person’s wish over his best interest.
In this case, his decision may be harmful for him but his autonomy must
be respected.
The Justice viewpoint holds that ethical decisions should be consistent with
the universally accepted ethical theories unless there are compelling reasons to
go against it.
How to take good ethical decisions?
A good ethical decision demands ethical awareness, ethical judgment and ethical action.
Steps for good ethical decision making:
Michael Davis has proposed seven- step guide to ethical decision making:
1. State problem: the first step involves stating the problem specifically. (for eg. ‘there’s something
about this decision which makes me uncomfortable’).
2. Check facts: Acc. to Davis, many problems disappears upon closer examination of the situation,
while others change radically.
3. Identify relevant factors: This step involves identification of relevant factors (the persons
involved, applicable laws, professional codes or standards etc.)
4. Develop a list of options: This involves being imaginative and thinking about the alternatives.
5. Test the options: The fifth step undergoes the following tests:
a. Harm Test: Is this option less harmful than the others?
b. Publicity Test: Would I want my choice of this option to be known to
everybody?
c. Defensibility Test: Could I defend this choice of option before a committee?
d. Reversibility Test: Would I still think this choice of option was good if it was
to be applied to me instead of others?
e. Colleague Test: What might my profession’s governing board or ethics
committee say about this option?
f. Organization Test: What does my organization’s ethics officer or legal counsel
say about this?
g. Virtue Test: Would a virtuous person do this? What kind of a person does this?
6. Make a choice: The step involves making a choice on the basis of Step 1- 5
7. Review steps 1- 6: The final step involves reviewing Steps 1-6. It involves asking
questions like, what could you do to make it less likely that you would have to make such a
decision again.
Making Quick Ethical Decisions
A good, feasible and quick ethical decisions can be taken by considering some pertinent facts
about the situation and questioning self like:
i) Conscience: What does his conscience say?
ii) Law: What does the law state? Whether the offer is legal or illegal?
iii) Company Policy: What does your company’s policy state/
iv) Peer Group: What does your peer say?
v) Public: What will the common public say if your act is made public by the press?
Secret Ethical Decisions
If the decision is taken secretly and in private because it may invite negative reactions, then the
publicity test should be done first.
White Collar Crimes
The term “White Collar Crime” was coined in 1939 by Sociologist Edwin Sutherland.
It means that even business and professional men commit crimes which should be brought
within the scope of the theories of criminal behaviour.
WCC involves all types of frauds by businessmen, professional and government officers who
occupy respectable and high social status in the society.
Reasons for growth of WCC:
1. Greed is the foremost reason behind a WCC. It has often come to light that economically secure
people commit WCCs.
2. Financial and physical duress is another reason for WCC. Economic recession, companies
retrenchment etc. leads to increase in WCC
3. The emergence of cutting edge technology, technological advancements has made job of law
enforcement and fraud detection agencies very tough.
4. Good ethical environment and clear cut ethical policy helps the companies in checking WCC.
5. Some loose cannons always exist in organizations who try to defy rules and take advantage
of loopholes.
6. Often the legislators and the law implementers belong to the same group or class to which
these occupational criminals belong and hence the white collar criminals may escape
punishment.
Summary
A businessman often faces conflict between his ethical and economic interest. Determining the
‘right thing’ to do and does he have the moral courage to do it is very tough.
