PRESCRIPTIVE APPROACHES TO ETHICAL DECISION-MAKING IN BUSINESS referencing Chapter 4 Trevino & Nelson, Managing Business Ethics. NY: Wiley, 1999.

Objectives Explain the “Prescriptive Approach” to ethical decision-making Distinguish between “Teleological” and “Deontological” theories. Identify a set of decision-making tools (ways of thinking about ethical choices).

Why do they call them Prescriptive Approaches? The term “prescribe” implies a recommended course of treatment to correct a condition (presumably, an ethical problem.) Just as a physician writes a prescription to cure an illness, processes for ethical decision-making are protocols for arriving at ethical solutions.

Two General Types of Prescriptive Approaches “Teleological” ‘telos’ (goal) Consequentialist Focus on results of decision or action; one’s target. Example: Utilitarianism “Deontological” ‘deon’ (duty) Duty, Obligation, Principles, Rights Focus on what’s right in broad, abstract, universal principles. Example: Moral Rights, Justice

Four Models for Ethical Decision-Making Utilitarianism Moral Rights Justice Individualism

Utilitarianism  greatest good for the greatest number  optimizes satisfaction of greatest number  calculates harm/benefits to those affected

UTILITARIANISM: Ethical Standards ORGANIZATIONAL GOALS: satisfy stakeholders maximizing profits EFFICIENCY minimize inputs and external costs to society maximize outputs CONFLICTS OF INTEREST corporate or collective interest is superordinate compared to individual interest

UTILITARIANISM: Application MERIT PAY COMPETITIVE PRICING EFFICIENT MARKETS BANKRUPTCY DOWNSIZING

Moral Rights  maintains rights of people affected  fundamental rights cannot be taken away  rights include: free consent, privacy, life-health-safety, due process, free speech, conscience

Justice equity, fairness and impartiality Distributive Justice: differential allocation of rewards to people is based on objective rules and not arbitrary characteristics  Procedural Justice: rules are administered fairly, even-handedly  Compensatory Justice: compensate cost of injury by responsible party

Individualism (Virtue Ethics) based on personal character, defined by one’s community relativism promotes the individual’s long-term interests self-interest is moderated by reciprocity uses the “golden rule”; cheating - provokes same behavior in others

Four Models for Ethical Decision-Making

8 Steps to Sound Ethical Decision-Making Gather the Facts of the Situation Define the Ethical Issues Identify the Affected Parties Identify the Consequences (Long v. Short, Symbolic Consequences) Identify Your Obligations Consider Your Character and Integrity Think Creatively About Potential Actions Check Your Gut.