Ethics in Business

Sometimes making ethical decisions is not as easy as it is defined. Though ethics means to merely just practice what is right the line between right and wrong can many times be blurry. This article should help you ask the questions that need to be answered to come to a decision about whether or not the decisions you are making inside of your company are ethical or not.

Ethical Dilemma- This first road block in making a decision is one of the hardest to overcome. An ethical dilemma is purely a problem that has no clear answer. An example is that a shoe company wants to keep the production of making their shoes down so that they do not have to pass the costs to the consumer and so that they can make a larger profit. The ethical dilemma appears when they must make a decision to either outsource to a third world country were working conditions are considered horrible or lay off employees that they already have. One way of making a decision to an ethical dilemma is the WPH approach.

WPH approach- This approach to an ethical dilemma is a three step process that offers those who manage a business guidelines for making that decision.

1. The (W)ho- Who would this decision effect and how bad would it affect them? When looking at the "who" you must take into account all of the stakeholders in this decision. In the first situation it may only seem that the employees will be affected by the decision you still need to take into account how the shareholders, customers, management, future generations, and the community where the business operates will be affected.

2. The (P)urpose- What is the purpose of making this decision? You must take a look at the reasons why these decisions are being made whether it is for efficiency, security, freedom, justice, productivity, or size.

3. The (H)ow- Now that the "who" and the "purpose" have been answered the next step in making an ethical decision is "how." The three main types of answering the "how" question, are the public disclosure test, the golden rule, and the universalization test.

a) Public Disclosure Test- When making a decision using this method you must ask yourself whether or not you would want the information to be disclosed to the public. If the answer is no then the decision is more likely than not to be unethical.

b) The Golden Rule- Put quite simply, treat those around you with the same respect and dignity that you would want them to treat you if they were in your position. If you can honestly say that you would be happy with the decision that is made if you were the one being affected by it, then you are making the right choice.

c) Universalization Test- When growing up everyone has a role model whether it is their parents, a friend, or an athlete. When making a decision you need to ask yourself whether or not you are setting a good example for others to follow by.

Looking back to the first example it is now easier to figure out whether or not the shoe company should outsource its production or to lay off some of their employees.

Bibliography

KUBASEK, NANCY. Dynamic Business Law. Boston: McGraw-Hill/Irwin, 2009.