MAKING DIFFICULT DECISIONS & ETHICS

MAKING DIFFICULT DECISIONS & ETHICS

WHAT SEPARATES US FROM PSYCHOPATHS?

Ethics!!!

WHAT IS A BALL CHECK VALVE?

Spring loaded ball check valve with the inlet port on the left and outlet port on the right.

MAKING DIFFICULT DECISIONS & ETHICS

WHAT SEPARATES FROM PSYCHOPATH

WHAT SEPARATES US FROM PSYCHOPATHS?

WHAT SEPARATES US FROM PSYCHOPATHS?

Commonly used metaphors for conscience include the "voice within", the "inner light", or even Socrates' reliance on what the Greeks called his "daimōnic sign", an averting (ἀποτρεπτικός apotreptikos) inner voice heard only when he was about to make a mistake. https://en.wikipedia.org/wiki/Conscience

con·science/ˈkän(t)SHəns/nounan inner feeling or voice viewed as acting as a guide to the rightness or wrongness of one's behavior."he had a guilty conscience about his desires"

Conscience

Conscience

EthicsConsequences

WHAT SEPARATES US FROM PSYCHOPATHS?

Consequences Conscience

EthicsConsequences

con·se·quence/ˈkänsikwəns/nounplural noun: consequences

a result or effect of an action or condition."many have been laid off from work as a consequence of the administration's policies"

• Cost / benefit • Risk?• Reward?

WHAT SEPARATES US FROM PSYCHOPATHS?

EthicsConscience

EthicsConsequences

eth·ics/ˈeTHiks/noun

moral principles that govern a person's behavior or the conducting of an activity.

the branch of knowledge that deals with moral principles."neither metaphysics nor ethics is the home of religion"

• Morality: An individual’s beliefs and standards about right and wrong, good and evil.

• Ethics: A system of moral principles from a particular society, school of thought, etc.

WHAT SEPARATES US FROM PSYCHOPATHS?

Conscience

EthicsConsequences

NORMAL PERSON DOING NORMAL THINGS

NORMAL PERSON DOING BAD THINGS

Thoughts Actions

NORMAL PERSON CONSIDERING DOING NORMAL THINGS

Thoughts Actions

NORMAL PERSON CONSIDERING DOING NORMAL THINGS

NORMAL PERSON CONSIDERING DOING BAD THINGS

Conscience EthicsConsequences

Thoughts

Thoughts

BAD PERSON CONSIDERING DOING BAD THINGS

Actions

Thoughts

BAD PERSON CONSIDERING PUNISHMENT

• CAN I GET AWAY WITH IT?

• WHAT IS THE RISK?

• THE UPSIDE? • THE DOWNSIDE?

Actions

Thoughts

GOOD BUSINESS ANALYSIS?

• CAN I GET AWAY WITH IT?• $$$$ • WHAT IS THE RISK? • THE UPSIDE? $$$$• THE DOWNSIDE? $$$

Actions

Maximize Net Present Value (NPV)

• NPV = P.V. of Benefits –P.V. of Costs for each option

• How much of the iceberg is above water?

• How often do we account for externalities?

Benefits: Savings

180 Burn Deaths $200,000 each $36,000,000

180 Serious Burn Injuries

$67,000“ 12,060,000

2,100 Burned Vehicles 1,470,000

$49,530,000

Costs:

11 Million Cars $11 each $121,000,000

1.5 Million Light Trucks $11“ 16,500,000

$137,500,000

Issues: looking forward, valuing intangibles, moral imaginationDo you REALY want a pinto?

Case Study: Ford Pinto

DO YOU REALLY WANT A FORD PINTO?

DO YOU REALLY WANT A FORD PINTO?

$14??

WHAT SEPARATES US FROM PSYCHOPATHS?

WHAT SEPARATES US FROM PSYCHOPATHS?

Thoughts Actions

NORMAL PERSON CONSIDERING DOING NORMAL THINGS

NORMAL PERSON CONSIDERING DOING BAD THINGS

Conscience

EthicsConsequences Thoughts

WHAT HAPPENS WHEN IT BECOMES GREY?

WHAT HAPPENS WHEN YOU CAN GET AWAY WITH IT?

ALL THAT IS LEFT IS ETHICS . . .

PRACTICE

KOHLBERG DILEMMA

KOHLBERG DILEMMA• In Europe, a woman was near death with a rare form of cancer.

• One drug might save her.

• Druggist was charging 10 times the drug’s cost.

• Woman’s husband couldn’t afford drug; was unable to borrow funds to purchase.

• Druggist refused to lower price, or give credit.

• Husband considered breaking into the pharmacy to steal drug and, perhaps, save his wife’s life.

KOHLBERG DILEMMA• Should the husband steal the drug?• Is it right or wrong for him to steal the drug?• Does he have a duty to steal it?• What if he doesn’t love his wife?• What if it’s a stranger, not his wife?• Should he steal to save a favorite pet?• Stealing is against the law; does this make it morally or

ethically wrong in this case?• What would you do?

POLL

KOHLBERG DILEMMAS

RELATIONSHIP BETWEEN LAW AND ETHICS

LEGAL RULES AND RULES OF ETHICS SERVE DIFFERENTGOALS

• Is an action legal?• Is an action morally or ethically correct?

LAW IS IMPERFECT – exclusive compliance with the law may fall short ofcorrect behavior. It is possible to comply with the letter of the law and still not act in amoral manner

WHAT ARE ETHICS?• The study of the general nature of morals and moral choices to be made by the

individual in relationships with others• Standards governing the conduct of the member of a profession, e.g., the legal

profession – this does NOT mean the Rules of Professional Responsibility are equalto ethics

• Standards of fair and honest conduct

THE OBJECT OF ETHICS IS TO DETERMINE THE RIGHT THING TO DO

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DEFINING ETHICS• ETHICS – conventional standards of right and

wrong that prescribe what people should do

• Includes rights, obligations, fairness, honesty, taking responsibility

• Most people believe ethical standards go beyond following the law.

• Many ethical dilemmas have no right answer, but one solution is often better than another.

ETHICAL STANDARDS &DECISION MAKING

UTILITARIANISM: Determining right conduct is based onconsequences; that the purpose of the behavior should be thegreatest happiness of the greatest number of people

• Requires a cost-benefit analysis

UTILITARIAN BASED MODEL

ETHICAL STANDARDS &DECISION MAKING

DUTY-BASED ETHICS: Actions are morally correct ifthey comply with existing obligations owed another or ourselves

• Often based on religion• Kantian ethics: the morality of conduct depends on the

guiding principle (categorical imperatives), not on the resultsor consequences of the conduct

• Act as if the maxims of your action were to become throughyour will a universal law of nature.

ETHICS IN THE WORKPLACE NEEDED MORE THAN EVER

DUTY BASED MODEL

ETHICAL DECISION MAKING –A PHILOSOPHICAL FRAMEWORK

Consequences, Utility

Duty, Rights, Justice

Virtue Expectations

Best EthicalDecision

WHAT MAKES A DECISION ETHICAL?

Consequences, Utility

Duty, Rights, Justice

Virtue Expectations

Profitable?Benefits > CostsRisk adjusted

Fiduciary dutyIndividual rightsFairness

CharacterIntegrityCourageProcess

CONCEPTS MEASUREMENTS

Duty

, Rig

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Just

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Virt

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Conscience EthicsConsequences

EXTERNAL SOURCES OF ETHICS AND VALUES IN BUSINESS

Conscience

EthicsConsequences

THE LAW

INDIVIDUAL

FAMILY & LOVED ONES

COMMUNITY

SOCIETY

ORGANIZATION

Side Note

ETHICS & GOVERNANCEEthics is about right and wrong.Business Ethics is about right and wrong or appropriate behavior in business.Governance is about setting or approving appropriate strategies, objectives & policies, ensuring their appropriate achievement & reporting to stakeholders to ensure their continuing support.

ORGANIZATIONAL CULTUREThe values, beliefs, norms, & practices shared by an organization’s members

Action

Identification &Communication

Code, Guidelines, Reinforcement

Monitor, Reward, Punishment

Values Beliefs

© 2007 L.J. Brooks, Business & Professional Ethics for Directors, Executives & Accountants, Thomson South-Western

MindsetNorms

Mustmanage better

Must add expectations for

motivation & rationalization

Motivation

Back at it: What to Do?

SO WHAT DO WE DO?

ETHICS IN THE WORKPLACE WHAT DO WE DO?

A VERY BASIC APPROACH

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O ABIDING BY THE LAW

• Become familiar with the laws and regulations within your field.

• Understand copyright laws and infringement penalties.

TELLING THE TRUTH

• Do not intentionally make statements that are untrue or deceptive.

• Scandals related to lying or cheating may have a lingering effect on a company’s reputation.

LABELING OPINIONS

• Know the difference between facts (verifiable, quantifiable) and opinions (unsubstantiated beliefs).

BEING OBJECTIVE

• Recognize your own biases and how they may distort your message.

• Present the whole picture and relate all facts fairly.

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COMMUNICATING CLEARLY

• Use short sentences, simple words, and clear organization.

USING INCLUSIVE LANGUAGE

• Use language that includes rather than excludes, and avoid expressions that discriminate based on sex, ethnicity, disability, race, sexual orientation, or age.

GIVING CREDIT

• Refer to originators’ names within text, use quotation marks, and document sources.

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ETHICS IN THE WORKPLACE WHAT DO WE DO?

A VERY BASIC APPROACH

CONSIDERING CULTURE AND ETHICAL BUSINESS PRACTICES

MAKING ETHICAL DECISIONS ACROSS BORDERSUse these suggestions to acknowledge different values while emphasizing moral initiative:

Broaden your view.

Create virtuous

incentives for staff.

Find alternatives.

Refuse business if

options violate your basic values.

Embrace transparency

.

Don't rationalize

shady decisions.

Resist legalistic

strategies.

A more detailed approach for another time!

ETHICAL DECISION MAKING FRAMEWORK –AN OVERVIEW Brooks& Dunn, 7e

Preliminary Decision

Sniff Tests & Rules of Thumb-preliminary assessmentIf this decision were in the newspaper, would I/my mother/my

company be proud?/Golden Rule

FULL ETHICAL ANALYSIS

ASSESSMENT OF/SAMPLE QUESTIONS: INTEREST FOCUS

• Consequences of the Decision (Consequentialism)Is it profitable? ShareholdersDoes it result in greater benefits than costs?Stakeholders

• Impact on Rights (Deontology, Justice)Is the impact on legal and other rights favorable? StakeholdersIs the decision fair to all? Stakeholders

• Motivation and behavior implied (Virtue Ethics)Does the decision demonstrate the virtues, Stakeholderscharacter, and motivation expected?

Note: Relative importance (rank) of each impact must be considered.

No problems

found

Possible problems found

Final Decision

RevisedDecision

Problems found

No problemsfound

Reassess

PRACTICE

Some Practice

KITTY GENOVESE CASE

IS LEGAL COMPLIANCE SUFFICIENT?

• Kitty Genovese was stabbed near her home. Shestarted screaming for help: “He stabbed me!” andthe assailant ran away while numerous neighbors(38 of them) turned on their lights and looked outtheir windows.

• Then, “I’m Dying!” Shortly after, the assailantreturned (3rd time) and stabbed her to death. Noneof her neighbors did anything to stop the murderand the police were not called until it was too late.

https://www.youtube.com/watch?v=6Vio49Y4BeU

IS LEGAL COMPLIANCE SUFFICIENT?KITTY GENOVESE CASE

• Duty Based Ethical Approach (Including Categorical Imperative)

• Utilitarian Based Ethical Approach

BREAK INTO GROUPS

MORAL REASONING CONT’D• Under the utilitarian model, the book says failing to aid Kitty Genovese

could be justified• General premise

• One should rescue helpless people unless doing so would causegreater harm to society

• Factual premise• Coming to Kitty Genovese’s aid while she was being stabbed could

have resulted in a multiple murder – a greater harm• Conclusion

• Failing to rescue Kitty Genovese was not morally improperbecause it could have resulted in more people being murdered

• Apply the same case to the duty-based models

IS LEGAL COMPLIANCE SUFFICIENT?

• Kitty Genovese case• No legal obligation to aid?• Good Samaritan Statutes

• RCW 4.24.300• Duty to rescue/report

• RCW 9.69.100

ERIC J. V. BETTY M.,

• FACTS: Robert was released from prisonafter being incarcerated for childmolestation. He then began dating Helen(she did not know about his stint in jail).

• Robert began molesting Helen’s son andHelen eventually sued members ofRobert’s family on her sons behalf forfailing to inform her of Robert’s priorconviction. Helen learned of Robert’s pastand the molestation after a friendinformed her that she saw Robert on aprogram about child molesters.

76 CAL. APP. 4TH 175, 90 CAL. RPTR. 2D 549 (1999).

ERIC J. V. BETTY M.,

• .

76 CAL. APP. 4TH 175, 90 CAL. RPTR. 2D 549 (1999).

BREAK INTO GROUPS TO DISCUSS!

• Who is the appellant? Respondent?• Who was the plaintiff? Defendant?• What precedent did the appellant cite?• How do you feel about the decision?• Did the court promote ethical conduct?

Why or why not?• How did the court distinguish the Soldano

case?

ERIC J. V. BETTY M., 76 CAL. APP. 4TH 175, 90 CAL. RPTR. 2D 549 (1999).

• Soldano v. O’Daniels (1983)

• Helen Argued the Soldano case modified the “no aid” rule becausethe court found liability against a bar owner who refused to allow apatron to use the telephone to call for help in an eminent shootingacross the street where someone was eventual shot and injured.

• The appeals court noted that there is a difference between “failingto aid” someone and “interfering with someone else attempting toaid” another. The former creates no liability while the former doescreate liability.

• If the new case is not the same and the underlyingrationale of the old case doesn’t make sense in thisnew case, distinguish the new case from the old oneand limit the rule from the old case (Argue the Facts)

ETHICAL DILEMMA• Sally Senior Vice President for a Savings and Loan about

to be closed by the regulators• When the regulators were to take over, the company

would terminate almost all employees in the lending function

• Only two officers knew of the pending takeover• Two weeks before the schedule takeover, a young loan

officer asked John if he should close a loan for he and his family to buy their first home

• Sally had been directed by the regulators not to advise anybody of the pending takeover

• What should Sally tell the employee?

GROUP ACTIVITYGifts and Entertainment Limits: What Is Nominal Value?You are one of a group of new-hires at a large company. As part of your onboarding, your director asks your team to investigate the codes of conduct of other organizations. In particular, the manager asks you to find comparison information on gifts, gratuities, kickbacks, and entertainment limits.

• Search the Internet for sections in codes of conduct that relate to gifts, gratuities, kickbacks, and entertainment.

• From three companies or organizations, investigate specific restrictions.

• What do these organizations allow and restrict? • Prepare a list and summarize your findings in your

own words.

LEARNING OUTCOME 2

Organize information into strategic relationships.