SOLUTION: Business Law Ethical Decision Making Case Questions

Ethical Decision
Making
Consider This: “You and Al”



You are the manager for Big-Mart, a large
discount retailer. You recently fired Al, a
sales clerk, after Al punched a customer
during a dispute in the store(Al admitted this
after the customer complained).
Sue, manager of your competitor, Mega-Mart,
calls you to tell you that Al has applied for a
job at Mega-Mart, and to ask you whether Al
is “good with customers.”
WHAT DO YOU DO ?
WHAT IS
ETHICS?
(class discussion)
What is Ethics?




Ethics: The study of right and wrong “in
action”
Learning Objective: Be able to
effectively resolve “ethical dilemmas” in
business
Moral philosophy: tools for this process
“Values:” principles that are important
to individual, group
Legal Responsibilities &
Ethical Dilemmas



Legal duties may be clear
Is the decision the RIGHT action to
take?
Making a business decision can involve
ethical dilemmas
“An Ethical Dilemma?”





Choice to be made
Implicates competing values, rights, &
goals
Potential harm to decision maker?
Potential harm to others?
“Ripple effect:” long-term, far reaching
implications of decision to be made.
LAW & ETHICS
With an Emphasis on Ethics
A COMPARISON
Is “legal” the same as
“ethical?”
YES or No or
Maybe, or I Don’t
Know?
Is “legal” the same as “ethical?”
YES?






If one is acting within the law
presumably one is acting ethically.
The law defines specific duties.
Some conduct is allowed – some not.
Balance competing values.
Compliance – no further action
Formal punishment of illegal conduct.
Is “legal” the same as “ethical?”
NO?




Ethics offers guidance on how one
should act.
Addresses situations where competing
values clash.
Action or inaction may be controlled by
formal or informal process.
Action beyond mere compliance to legal
duty.
How to Evaluate Solutions:
Some Theories





Stakeholder/Utilitarian Theory: greatest good
to the greatest number
Rights Theory: Respecting and protecting
individual rights to fair and equal treatment,
privacy, freedom to advance, etc.
Justice Theory: fair distribution of benefits and
burdens: can harm to individual be justifiable?
Categorical Imperative: “what if everyone took
such action?”
“Front Page Test:” What if my decision was
reported on the front page of the Los Angeles
Times?
How to Resolve Ethical
Dilemmas in Business








Identify relevant facts
Identify relevant issue(s)
Identify primary stakeholders
Identify possible solutions
Evaluate each possible solution
Compare and assess consequences
Decide on solution
Take action
Additional Approaches to Ethical
Decision Making



Five Question Approach (Tucker)
Moral Standards Approach (Velasquez)
Pastin’s Approach
Practical Approaches to Ethics


Five Question Approach (Tucker)
Evaluate each alternative on:





Profitability (shareholders)
Legality (society at large)
Fairness
Impact on the rights of stakeholders
Impact on sustainable development
(environment)
Practical Approaches to Ethics


Moral Standards Approach (Velasquez)
Is the decision:



Of net benefit to society
Fair to all stakeholders (fair distribution of
benefits and burdens)
Consistent with each person’s rights
Practical Approaches to Ethics

Pastin’s approach (Pastin)




Ground rule ethics (organization/individual rules
and values)
End-point ethics (greatest net good for all
concerned)
Rule ethics (determine ethical boundaries to take
into account – impingement of rights)
Social contract ethics (how to move boundaries)
Consider This: “You and Al”



You are the manager for Big-Mart, a large
discount retailer. You recently fired Al, a
sales clerk, after Al punched a customer
during a dispute in the store(Al admitted this
after the customer complained).
Sue, manager of your competitor, Mega-Mart,
calls you to tell you that Al has applied for a
job at Mega-Mart, and to ask you whether Al
is “good with customers.”
WHAT DO YOU DO ?
Class Exercise
Evaluate “You and Al” in
Light of Class Discussion
Legal vs. Ethical
“You and Al”
Action
Tell the Truth
Lie
No Comment
Other
Legal/Illegal Ethical/Unethical
End of Ethics Exercise

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