Ethical decision-making unpacked

Why it's sometimes hard to do what's right.

While it is self-evident that an ethical organisation should be synonymous with ethical decision-making, it does not mean that making the right decision is always easy. Circumstances can arise when it seems hard to know what's right.

This is where decisions entail two desirable but mutually incompatible 'rights'. This can occur as a conflict between two ways of resolving a problem where each option represents a right thing to do. It can also encompass a conflict between personal values and consistency with company policies.

Yet the ethics of right versus right choices is often ignored in the face of more frequent right versus wrong issues. It warrants particular attention for two reasons: because right versus right issues are likely to be the toughest of ethical decisions to make, and because ethical dilemmas are likely to exert a significant influence on an organisation and the individuals involved. Joseph Badaracco, Ethics Professor at Harvard Business School, views right versus right choices as "defining moments" with three basic characteristics: They reveal the individual's or the organisation's basic values; they test the strength of the individual's commitment or the commitment the organisation has made; and they shape the individual's or the organisation's character into the future.

Ethical dilemmas can arise from various circumstances. Rushworth Kidder, founder of the US-based Institute for Global Ethics, recognises four types of ethical dilemma: short-term versus long-term, individual versus community, truth versus loyalty and justice versus mercy. In addition, the triple bottom line represents a fifth source of ethical dilemmas.

Understanding these dilemmas can help an organisation to make better ethical decisions. The tension between short-term and long-term goals and priorities is a long-standing strategic challenge where an 'and' approach, rather than an 'either/or' approach, may apply as both are right choices. However, balancing the short-term against the long-term is often made more difficult by the pressure to achieve good results in the current period. There are examples where business leaders have focused on short-term results for personal gain, for example to boost a performance bonus. But the more common form of pressure is from analysts and investors whose views and actions can affect the organisation's share price if its immediate results are unsatisfactory.

The issue of individual versus group rights is relevant in most workplaces. Even in an apparently homogeneous workforce there are gender, cultural and religious differences, and groups with diverse, often conflicting demands that need to be balanced against each other. An example of different rights for different groups applies in the form of affirmative action to citizens classified as previously disadvantaged. The Employment Equity Act aims to address this historical imbalance.

The choice between truth or honesty on the one hand and loyalty on the other can occur at a personal level to anyone within a workplace. It may not, at first sight, appear to be a difficult ethical dilemma because, for many people, honesty is the stronger value. It can, however, present a hard choice when bonds among colleagues are strong. When, for example, people have shared a profound experience – as those who were part of the struggle for freedom – it builds extraordinary bonds of loyalty. This can present a choice between supporting a long-standing friend or comrade who is guilty of misconduct, in the name of loyalty, and reporting them to the authorities for a breach of ethics in the name of honesty. While the choice of loyalty may be understandable, it can nonetheless serve to condone unethical behaviour.

Situations where justice conflicts with mercy often stem from the need to deal with a wrongdoing, such as fraud or theft. The wrongdoing is not ignored in viewing this as a right versus right issue. Instead, this ethical dilemma focuses on managing the consequences or punishment of the misconduct. Labour law provides guidance on the justice side of the decision. The choice to act mercifully, however, needs to be balanced against the risk that such a decision could set a precedent in the organisation, or send the wrong message – for example, that misconduct is not treated consistently. An employee assistance programme can actively address situations of desperation and in this way help to avoid potential misconduct.

In the realm of the triple bottom line, ethical dilemmas exclude the right versus wrong choice when an organisation gives precedence to its financial bottom line above its social or environmental responsibilities. Rather, right versus right dilemmas exist where economic, social and environmental interests conflict with each other. An ethical dilemma can arise between social and environmental priorities when business development damages the environment but creates employment and training opportunities for local communities. So too, cheap imports can support customers by offering more affordable goods, but could mean sacrificing the benefits of local production and the habit of buying products manufactured at home. Resolving such conflicts successfully will continue to become more important given the increasing emphasis on the welfare of people and the environment.

In making decisions related to these ethical dilemmas, an organisation needs to recognise that its decision may not be shared by other stakeholders who perhaps interpret the situation differently. This means that the company has to improve its communication about such choices. It may not persuade everyone to its view but, in the absence of its own explanation, even fewer people may understand the choice. This kind of communication can also serve as a check and balance as to whether the reasoning and choice will hold up to scrutiny. If the organisation is uncomfortable about having its choice made public, the choice could be a bad one.

By Cynthia Schoeman

Published in HR Future, April 2013