Criteria for Ethical Decision Making

Managers faced with tough ethical choices often benefit from a normative strategy based on norms and values to guide their decision making. Normative ethics is based on norms and values. Six approaches are relevant for managers in making ethical decisions.

A. Utilitarian Approach 

1. The utilitarian approach holds that moral behavior produces the greatest good for the greatest number. The decision maker is expected to consider the effect of each decision alternative on all parties and select the one that will optimize satisfaction for the greatest number of people.

B. Individualism Approach

1. The individualism approach contends that acts are moral when they promote the individual’s best long-term interests. Individualism is believed to lead to honesty and integrity because that works best in the long run. Because individualism is easily is interpreted to support immediate self-gain, it is not popular in the highly organized and group-oriented society of today.

C. Moral Rights Approach

1. The moral-rights approach asserts that human beings have fundamental rights that cannot be taken away by an individual’s decision. An ethically correct decision is one that best maintains the rights of those people affected by it. To make ethical decisions, managers need to avoid interfering with the fundamental rights of others, such as the right to privacy, the right of free consent, or the right to freedom of speech.

D. Justice Approach

1. The justice approach holds that moral decisions must be based on standards of equity, fairness, and impartiality. Three types of justice are of concern to managers.

a. Distributive justice requires that different treatment of people not be based on arbitrary characteristics. Men and women should not receive different salaries if they are performing the same job; however, people who differ in a substantive way can be treated differently.

b. Procedural justice requires that rules be administered fairly. Rules should be clearly stated and be consistently and impartially enforced.

c. Compensatory justice argues that the party responsible should compensate individuals for the cost of their injuries. Individuals should not be held responsible for matters over which they have no control.

E. Virtue Ethics Approach

1. The virtue ethics approach says that moral behavior stems from personal virtues. If a manager develops good character traits, such as compassion, generosity, or courage, and learns to overcome negative traits such as greed or anger, he or she will make ethical decisions naturally as a result of being a virtuous person. According to virtue ethics, managers can develop not only their ability to do the right thing, but also their motivation to do right rather than wrong.

F. Practical Approach

1. The practical approach sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account. A decision would be considered ethical if it is one that would be considered acceptable by the professional community, one the manager would not hesitate to publish on the evening news, and one that a person would typically feel comfortable explaining to family and friends.