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A Rock and a Hard Place
How to Make Ethical Business Decisions When the Choices Are Tough

By Kent Hodgson

Business Book Summaries

Summary by Lydia Morris Brown, Business Book Summaries

Far more attention needs to be given to the values and principles-both business and ethical-that business people hold, for the simple reason that they make up the foundation upon which decisions are made. Solving business/ethical issues and challenges is every manager's responsibility. Value-based decision-making demands basic ethics skills as well as business skills-the implication being that the decision maker knows and uses a process that consciously merges the business and ethical factors inherent in most situations. While not leading to perfect solutions, decisions flowing from both business and moral values can produce more effective, responsible, and defensible resolutions to most dilemmas.

Whenever people make a decision to act, they are touching base with their own system of values-their ground rules. These values and principles, which make up our value system, are uniquely our own. Our values and principles spring from our nature as human beings, the law, public opinion, religious authority, the community, our conscience, and our own experiences. Individuals prioritize their values, knowing at some conscious or subconscious level which ones are most important. That awareness is crucial when the individual's principles come into conflict with each other and/or with the principles of others.

The organization, like the individual, has principles that drive decision-making; thus, organizational decisions spring from the values and principles of the organization as well as from the individuals. Organizational principles are ground rules that dictate the way business is carried out. Whether spoken or unspoken, officially approved or not, they guide the complex organizational decision-making process. Organizations intend that their ground rules be shared values, for the purpose of attaining the mission, goals, and objectives of the company. Organizational principles also identify the organization, giving it a personality and a unique character.

There is another set of principles-norms-which are usually unwritten and unofficial and which let others know what the organization really means. In many cases norms are practical implementations of company policy and practice and serve to reinforce and apply stated values and principles. The problem is that norms often reflect the "don't do as I say, do as I do" mentality. Such norms send a contradictory message and represent a real danger to ethical decision-making. To have unified, consistent, and effective decision-making, the stakeholders must be able to depend on the same ground rules.

The three-step process gives the decision maker a practical means of merging business action options, working values and principles, and accepted General Principles into a coherent picture. It also enables one to choose the best option more effectively, responsibly, and justifiably.

In the first step, the situation is examined by getting the critical facts, identifying the key stakeholders, and identifying what each stakeholder wants done. The second step requires establishing the dilemma. In this part of the process, the working principles and norms that drive each option-a matter of why each stakeholder wants it done-are identified. Next, the possible outcomes of each stakeholder option must be projected, then the actions necessary to produce each outcome must be determined. In both instances it must be ascertained if any consequences or means violate the principles of the decision maker or the organization. The third and final step evaluates the options. The decision maker identifies the General Principle(s) behind each stakeholder option, compares the Principle(s) behind each option to determine which is the most responsible, and chooses the option with the most responsible Principle(s).

In today's global marketplace, there is much to be accomplished and mutually gained; however, the real challenge is to bridge differences, value gaps, judgments, suspicions, and one's own perceived obstacles.

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