Ethical Dilemma

• A situation that arises when all alternative choices or behaviors have been deemed undesirable because...

• potentially of negative ethical consequences, making it difficult to distinguish right from wrong

• An ethical dilemma is a moral situation in which a choice has to be made between two equally undesirable alternatives.

• Why Dilemma arise?– Out of conflict of personal values and

organizational goals– Organizational goals v/s social values– Failure of personal character

• A business dilemma exists when an organizational decision maker faces a choice between two or more options that will have various impact on:– Organizational profitability and competitiveness– Its stakeholders

• Ethical dilemma involves solving problem solving situations in which decision rules are often vague or in conflict.

• The outcome cannot be predicted with any degree of accuracy.

• We cannot be sure of our decision, whether right or wrong.

Structure of Ethical Dilemma

Doing what is morally right

Doing what is morally wrong

Good or at least better effects or

outcome

A bad outcome or bad effects

Either

Or

Results in

Results in

Ethical Dilemmas and Stakeholders Shareholders

Employees Society

Business Balance

• Who are shareholders?– Real owners, expect ROI

• Expectations of the shareholders from the corporations/businesses– Dividends, bonuses, bonus shares, etc.

• Society can be constructed through creditors, competitors, suppliers, distributors and the common public in and around the organization.– Corporations have to pay suppliers on time– Repay the creditors due instalments and interest in

time

• What Corporations’ owe to the society/ stakeholders– Take infrastructure, resources, trained manpower

and other things provided by the society.– Corporations must repay to the society with

gratitude– Organizations is there because the society allows

it to be there.

• When there is an equitable distribution of wealth among all the three, there will be peace, harmony and all round well being.

• The corporation will earn goodwill and the support from all of them.

Corporate Dilemma over Ethical Behavior

• Lack of clear linkage between business ethics and financial success.

• No clarity in how much to invest in business ethics system.

• Unclear about the right balance between business ethics and investment required for the same

• Long gestation periods and lack of short term gains are also obstacles.

Major Sources

• Failure of personal character, conflict of personal and organizational values and organizational v/s social values.

• Hazardous but popular products• Newer technologies, diverse religious, cultural and

social beliefs, different economic systems, political systems and ideologies

Sources of ethical problems

• Failure of personal character– May recruit workers whose personal values are

not desirable, without knowing the background.– If recruiters are aware of such problems, they may

weed them out.– Issue is to spot the person with unethical qualities– Still if they are taken, employees may embezzle

funds, steal supplies, take unjustified leaves, may not cooperate with fellow workers

• Conflict of personal values and organizational goals– When the company uses methods or pursue goals

unacceptable to the manager or executives– E.g. George Couto, marketing executive in Pharmaceutical

Company, Bayer AG. Conspiracy to overcharge American Medicaid for antibiotic Cipro. Thanks to Couto’s effort to let the country know of the conspiracy.

– Bayer AG had to pay fine of USD 257 million to F&D Administration

• Companies resort to unethical practices because of– Intensive competitions pressures– Exclusive focus on economic goal of making profit.

• Organizational goals versus social values– Activities of company may be considered

unethical by the stakeholders– Procter & Gamble withdrew its products which

was linked to some user deaths whilst Johnson & Johnson cleared al retail stores of its Tylenol analgesic within days of discovery that some containers have cyanide poison traces and had caused deaths.

• Production and sale of hazardous but popular products– Smoking cigarettes, excessive drinking, use of

drugs… YET THESE PRODUCTS ARE BEING PRODUCED AND CONSUMED.

– IS THIS PRACTICE ETHICAL???– Example: ITC Ltd. &United Breweries Ltd.

Why business should act ethically?

• To meet shareholders expectations• To prevent harm to general public• To build trust with key stakeholders groups• To protect their own employees• To create an environment in which workers

can act in ways consistent with their values

How Corporations Observe ethics to reduce dilemma?

• Implementing ethical behavior by publishing in-house code of ethics that are to be strictly followed by all their associates.

• Employing people with a reputation for high standards of ethical behavior in top levels.

• Incorporating consideration of ethics into performance reviews.

• Rewarding ethical behavior.• Conducting an ethics audit.

How to create ethical work environment?

• Make the decision to commit to ethics• Recognize that you are role model, by your action

and values• Assume the responsibility for instilling ethical

behavior• Articulate your values• Train the staff in ethical behavior• Encourage open communication• Be consistent• Abide by the laws of land.

How to resolve ethical problem

• Is it a policy, a decision or an action?• Is it ethical or unethical?

TO SOLVE THESE QUESTIONS THAT CREATE A DILEMMA, ASK…– Utility: Does the benefits exceed cost?

(shareholders)– Rights: Does it respect human rights? (society)– Justice: Does it distributes benefits and burdens

evenly (employees)

How to resolve an ethical dilemmas??

• Step 1: Analyse the consequences– Who are the beneficiaries of your action?– Who are likely to be harmed by your action?– What is the nature of the “benefits” and “harms”?– How long these harms and benefits likely to exist?

• Step 2 : Analyse the actions– Once you identified the best option, concentrate

on the actions– Know how your action measure against the moral

principles like honesty, fairness, equality, respect for the dignity and rights of others, etc.

– Choose the one which is least problematic

• Step 3 : Make the decision– Having considered all the factors that lead to

choices among various options, analyse them carefully and take a rational decision.

Ethical Decision Making

Rights Theories• Stressed personal and property rights.• Ethical decisions should protect legal and moral rights that an

individual is entitled to. • Individual rights include:i) Free consentii) Freedom of conscienceiii) Privacyiv) Free speechv) Due processLegal rights are protected by law, moral rights have to be

protected by society.

Justice Theories

• All persons should be guided by fairness, justice, equity, and by sense of impartiality.

• Ethical decisions should result in a situation where all human beings are treated equally, and in case some are treated unequally it must be based on some defensible reasons.

• Treating unequals as equals is unjust in itself.

Utilitarianism Theory

• Instances in which utilitarianism based decisions would be considered as unethical:

Decisions that bring about personal gains at cost of society.

Decisions that result in inefficient attainment of desired ends.

Virtue Approach

• Ethical actions should be consistent with certain morally acceptable virtues that would pave the way for full development of humanity.

• It stresses the importance of such eternal virtues that human beings would always like to showcase in persons who will be referred to as role models to others.

Common Good Approach

• It draws attention to certain conditions such as effective system of law and order, policing and fire service, health care, public education.

• Establishment and maintenance of which are imperative to promote the overall welfare of everyone in society.

A junior member of staff has just returned to work after taking special leave to care for her elderly mother. For financial reasons she needs to work full-time. She has been having difficulties with her mother’s home care arrangements, causing her to miss a number of team meetings (which usually take place at the beginning of each day) and to leave work early. She is very competent in her work but her absences are putting pressure on her and her overworked colleagues. You are her manager, and you are aware that the flow of work through the practice is coming under pressure. One of her male colleagues is beginning to make comments such as “a woman’s place is in the home”, and is undermining her at every opportunity, putting her under even greater stress.

How should you proceed so as not to discredit yourself, your profession or the practice for which you work and at the same time maintaining integrity and confidentiality in your actions?

Keshav recently got a job of First Division Assistant in Tehsil (Taluk) office. He is smart and hardworking. Because of which Tehsildar has become fond of him and though he is Keshav’s superior, he has made Keshav his good friend.

Keshav is married to Ramya who is educated and recently got posted as Panchayat Secretary, incidentally to the Panchayat office located in Keshav’s village itself. Ramya’s mother-in-law is not supportive of her and her job. She frequently taunts Ramya and demands all of Ramya’s salary to be given to her. Though Keshav supports Ramya, he seldom objects to her mother’s remarks to his wife.

A young, male Panchayat member of same Panchayat where Ramya works ,and who wields considerable clout in the village and Tehsil, comes to know that she had ‘illegally’ signed a property assessment certificate and claims that he has documents to prove his claim. The certificate was obtained by a relative of this Panchayat member who was not in good terms with him. In the past serious fights were taken place between them over this property.

Ramya insists that she signed it only after Panchayat’s bill collector surveyed the property and gave his verbal assurance about the legality of the property in question. As he was born and brought up in the village and knew matters of the village very well, Ramya had trusted him. Now the Panchayat member is threatening her to take the matter to District Panchayat and get her suspended.

Ramya seeks her husband’s help who is close to tehsildar and who in turn is a close friend of Block Development Officer. Ramya’s mother-in-law is forcing her to quit the job and stay at home, but Ramya wants to be financially independent and pleads her innocence. Keshav is in moral dilemma over the entire episode.

What should be Keshav’s course of action so that he doesn’t compromise his ethics in personal and professional relationships?