Dr. K.Elangchezhian
Professor & Head
College Of Management Studies
Vellore Institute Of Technology, Deemed University
D. Malmarugan
Be, MBA, (Phd)
Ugc Net Lecturership In Management,
Research Scholar
Vit Vellore
Sona College Of Technology
Phone : 0427-2386293
Email id: /

In the era of global competition, ethics in business is assuming importance. This is because,relationship with suppliers, customers& other stakeholders are shaped by ethical business practices.This builds trust & adds on to image building&long term profitability
This paper discusses the various issues related to ethics, problems in ethical practices,models of ethical decision making in detail
The models discussed are the josephson's institute model& the plus model
The keywords: ethics, decision making, models

In this era of globalisation&multinational competition, ethical practices in business are assuming importance as relationships with various suppliers& customers are shaped by ethical practices& mutual, ethical decision taking assumes importance in today's corporate world . this paper discusses the various issues relating to ethics  and two models of ethical decision taking


2.1 What Is Ethics?

Ethics refers to principles that define behavior as right, good and proper. Such principles do not always dictate a single "moral" course of action, but provide a means of evaluating and deciding among competing options.The terms "ethics" and "values" are not interchangeable. Ethics is concerned with how a moral person should behave, whereas values are the inner judgments that determine how a person actually behaves. Values concern ethics when they pertain to beliefs about what is right and wrong. Most values, however, have nothing to do with ethics. For instance, the desire for health and wealth are values, but not ethical values.

2.2 The Importance of Universality

Most people have convictions about what is right and wrong based on religious beliefs, cultural roots, family background, personal experiences, laws, organizational values, professional norms and political habits. These are not the best values to make ethical decisions by - not because they are unimportant, but because they are not universal.In contrast to consensus ethical values - such basics as trustworthiness, respect, responsibility, fairness, caring and citizenship - personal and professional beliefs vary over time, among cultures and among members of the same society. They are a source of continuous historical disagreement, even wars. There is nothing wrong with having strong personal and professional moral convictions about right and wrong, but unfortunately, some people are "moral imperialists" who seek to impose their personal moral judgments on others. The universal ethical value of respect for others dictates honoring the dignity and autonomy of each person and cautions against self-righteousness in areas of legitimate controversy.

2.3 When Values Collide

Our values are what we prize and our values system is the order in which we prize them. Because they rank our likes and dislikes, our values determine how we will behave in certain situations. Yet values often conflict. For example, the desire for personal independence may run counter to our desire for intimacy. Our desire to be honest may clash with the desire to be rich, prestigious or kind to others. In such cases, we resort to our values system. The values we consistently rank higher than others are our core values, which define character and personality.

2.4 From Values to Principles

We translate values into principles so they can guide and motivate ethical conduct. Ethical principles are the rules of conduct that derive from ethical values. For example, honesty is a value that governs behavior in the form of principles such as: tell the truth, don't deceive, be candid, don't cheat. In this way, values give rise to principles in the form of specific "dos" and "don'ts."

2.5 Ethics and Action

Ethics is about putting principles into action. Consistency between what we say we value and what our actions say we value is a matter of integrity.It is also about self-restraint:
- Not doing what you have the power to do. An act isn't proper simply because it is permissible or you can get away with it.

- Not doing what you have the right to do. There is a big difference between what you have the right to do and what is right to do.

- Not doing what you want to do. In the well-worn turn of phrase, an ethical person often chooses to do more than the law requires and less than the law allows.

2.6 Why Be Ethical?

People have lots of reasons for being ethical:
- There is inner benefit. Virtue is its own reward.

- There is personal advantage. It is prudent to be ethical. It's good business.

- There is approval. Being ethical leads to self-esteem, the admiration of loved ones and the respect of peers.

- There is religion. Good behavior can please or help serve a deity.

- There is habit. Ethical actions can fit in with upbringing or training.

There are obstacles to being ethical, which include:

- The ethics of self-interest. When the motivation for ethical behavior is self-interest, decision-making is reduced to risk-reward calculations. If the risks from ethical behavior are high - or the risks from unethical behavior are low and the reward is high - moral principles succumb to expediency. This is not a small problem: many people cheat on exams, lie on resumes, and distort or falsify facts at work. The real test of our ethics is whether we are willing to do the right thing even when it is not in our self-interest.

* The pursuit of happiness. Enlightenment philosophers and the American Founding Fathers enshrined the pursuit of happiness as a basic right of free men. But is this pursuit a moral end in itself? It depends on how one defines happiness. Our values, what we prize and desire, determine what we think will make us happy. We are free to pursue material goals and physical sensations, but that alone rarely (if ever) leads to enduring happiness. It more often results in a lonely, disconnected, meaningless existence. The morally mature individual finds happiness in grander pursuits than money, status, sex and mood-altering substances. A deeper satisfaction lies in honoring universal ethical values, that is, values that people everywhere believe should inform behavior. That unity between principled belief and honorable behavior is the foundation for real happiness.


3.1 The Making of an Ethical Decision Making consistently ethical decisions is difficult. Most decisions have to be made in the context of economic, professional and social pressures which can sometimes challenge our ethical goals and conceal or confuse the moral issues. In addition, making ethical choices is complex because in many situations there are a multitude of competing interests and values. Other times, crucial facts are unknown or ambiguous. Since many actions are likely to benefit some people at the expense of others, the decision maker must prioritize competing moral claims and must be proficient at predicting the likely consequences of various choices. An ethical person often chooses to do more than the law requires and less than the law allows. The ethical person is concerned with what is right to do, not with what she has a right to do.

3.2 The Ethical Perspective

Any decision affecting other people has ethical implications, and virtually all important decisions reflect the decision maker's sensitivity and commitment to ethics. These decisions can be evaluated in terms of adherence to the six core ethical principles - trustworthiness, respect, responsibility, fairness, caring and citizenship.

3.3 The Process of Ethical Decision Making

Ethical decision making refers to the process of evaluating and choosing among alternatives in a manner consistent with ethical principles. In making ethical decisions it is necessary to:Perceive and eliminate unethical options. These options subordinate ethical values to nonethical or unethical values.Select the best ethical alternative. Although there may be several ethical responses to a situation, all are not equal. Ethical decision making requires more than a belief in the importance of ethics. It also requires sensitivity to perceive the ethical implications of decisions, the ability to evaluate complex, ambiguous and incomplete facts and the skill to implement ethical decisions without unduly jeopardizing a career.
Golden Rule requires restraint, self-discipline and even sacrifice in avoiding acts that harm others. Another is expressed in the maxim "Love thy neighbor as thyself," which stresses love, not self-interest, as the moral base of conduct.

3.4 treating others better than they treat you. Cynics claim that the Rule will not work in the "real world." They suggest that to survive one must "do unto others before they do unto you." This, of course, becomes a self-fulfilling prophesy fueling an anti-ethical, everyone-for-himself ethos. The fact is, of course, that many people do not live by the Golden Rule; they do not treat others fairly, honestly or with compassion. The challenge to an ethically committed person is to overcome this fact of life and do what is right in spite of, maybe even because of, the failure of others to do so.

3.5problem of conflicting interests. The Golden Rule alone, however, is not a sufficient guide to ethical decision making in situations that involve a complex network of stakeholders with conflicting interests. Often our choices involve competing beneficiaries, and the Golden Rule provides no guidance on how to choose among them. We cannot demonstrate equal love or caring to every person affected by our decisions. Sometimes we must prioritize certain interests over others and advance the well-being of some people, even at a cost to others.

3.6 Kant's Categorical Imperatives:

Absolute Moral Duties Based On Principle

According to Immanuel Kant, the moral character of an action is determined by the principle upon which it is based - not upon the consequences it produces. The foundation of morality is the ability to act rationally. A rational being is free to act out of principle and to refrain from acting out of impulse or the desire for pleasure. Kant contends that ethical obligations are "higher truths," which must be obeyed regardless of the consequences and in spite of social conventions and natural inclinations to the contrary. Referred to as "deontological," Kant's view of ethics is duty-based. Thus, people have an absolute duty to do the right thing under all circumstances, and what is "right" has nothing to do withthe actual consequences produced or avoided.

3.7 no exceptions, no excuses. According to Kant, moral obligations are absolute, invariable and do not allow for exceptions or extenuating circumstances. A major virtue of Kant's duty theory is its simplicity; it does not require one to consider or predict consequences of a specific decision.

3.8 derivative rules.  Two especially useful rules are derived from Kant's categorical imperatives:
* Rule of Universality - Behave only in those ways you feel appropriate for all people, at all times.
* Rule of Respect - All individuals are intrinsically important and the well-being of each is a moral end in itself; never treat others as simply the means for your own gain or gratification.


While this absolutist view requires great personal discipline and commitment, Kant's theory is useful in that it makes the resolution of real-world problems clear in many situations that tempt the decision maker to lie or deceive, break a promise or injure another.

Yet the major shortcoming in Kant's ethical duty theory remains: it produces unresolvable conflicts when a person is faced with a choice between two ethical values. For example, since truth-telling is always right and deception is always wrong, under Kant's theory, one cannot lie or deceive to achieve a "greater good" - not even to save an innocent life from terrorists or sparing the feelings of a friend from candid opinions.

As a result, it is useful to moderate Kant's absolutism with a theory that allows the ethical person to weigh and evaluate competing ethical values in terms of consequences.

4.1 Consequentialism / Utilitarianism

Most people moderate Kant's absolutism with a theory that allows the ethical person to weigh competing values in terms of consequences. This "teleological" approach is the most commonly applied theory of ethics and permits much more flexibility than Kant's strict duty theories. Classically referred to as "consequentialism" or "utilitarianism," this

theory is based on the notion that the ethical merit of an act is best determined by the consequences produced. Consequence-based decision-making models allow the ethical person to evaluate competing ethical values in terms of likely and intended results. In essence, the ends can justify the means.

4.2 principle of utility. Actions are right and good when they produce benefit, pleasure or happiness or prevent harm, pain or unhappiness.

* Act Utilitarianism - The ethical merit of an act is judged in terms of the immediate and direct consequences of the action.

* Rule Utilitarianism - The ethical merit of an act is judged in terms of what the consequences of the action would be if such conduct became the general rule and everyone acted accordingly.

4.3 greatest good for the greatest number.  Theoretically, consequentialist theory requires the decision maker to consider and predict the likely consequences of contemplated conduct and weigh the good the act will produce against the harm it will cause. Consequentialists should seek to produce the greatest possible balance of benefits ("good") over burdens ("evil").

4.4 problems with consequentialism.  The major shortcoming of pure consequentialism is the ease with which it can be manipulated by self-serving rationalizations to produce situational ethics and an end-justifies-the-means credo that elevates expediency over principle. In practice, many people treat ethical and nonethical values on the same plane, often concluding that ethical values can be outweighed by nonethical ones and that self-interest (including the needs and wants of family and friends) can be given greater weight than the interests of others. This is not consistent with true philosophical consequentialism, but it seems to be the dominant application of the theory.


In developing a decision-making model that avoids the shortcomings of each traditional theory and can be practically applied to common problems, the Josephson Institute has combined features of each and added the stakeholder concept. Acknowledging its primary influences, this hybrid theory might be called "Golden Kantian Consequentialism." There are three steps:

5.1. All decisions must take into account and reflect a concern for the interests and well being of all stakeholders.

The first principle of the JI model is the underlying principle of the Golden Rule. It embodies both the affirmative and negative dimensions of the Rule - help when you can, avoid harm when you can. It also utilizes the stakeholder concept.

5.2. Ethical values and principles always take precedence over nonethical ones.

Like Kant's absolute duty theory, the second principle of JI's model asserts that ethical values are morally superior to nonethical ones and that when faced with a clear choice between such values, the ethical person should always choose to follow ethical principles. This principle operates only when the decision maker perceives the conflict as one between an ethical value, such as honesty, and a nonethical value, such as money or power. Perceiving the difference between ethical and nonethical values can be difficult. When faced with this sort of dilemma, people rarely see choices as being between ethical and nonethical values. Instead, they see ethical dilemmas arising from the clash between what they want or "need" and ethical principles that might deny them their desires. A rationalization process then kicks in, transforming self-interested, nonethical motives into others-centered, ethical ones.

5.3. It is ethically proper to violate an ethical principle only when it is clearly necessary to advance another true ethical principle, which, according to the decision maker's conscience, will produce the greatest balance of good in the long run.

Many ethical dilemmas pit honesty against fidelity or fairness against promise-keeping or loyalty to one person against commitment to another. In such cases, it is difficult to evaluate the problem objectively and not allow self-interest and nonethical values to unduly affect the process.

The consequentialist facet of JI's decision-making model acknowledges the need to prioritize among competing ethical values in particular cases, but only when it is clearly necessary to do so because the only viable options require the sacrifice of one ethical value to advance another. In such cases, the ethical decision maker should act in a way that will create the greatest amount of good and the least amount of harm to the greatest number of people. Dispensing with comparatively abstract principles such as honesty or promise-keeping is generally acceptable in order to avoid immediate and serious physical harm to oneself or others.

Like traditional utilitarianism, the third principle of the JI model is vulnerable to manipulation by those who know what they want to do and are willing to construct a rationale for doing it. An ethical consequentialist must assert the necessary justification on two separate levels (1) the purpose of the conduct must be deemed necessary, and (2) the specific conduct contemplated must be necessary to accomplish that purpose.

People tend to operate on an instinctive, unreflective level that presumes and invariably exaggerates the importance of personal and professional goals. Objective scrutiny would reveal that, in many cases, our motivations are no more noble than the desire to get a job done, to build our reputations, to satisfy our pride, to win or to avoid the shame of failing. Many people pursuing worthy goals do not search diligently enough for acceptable ways of achieving them. Ethical ways are available - though they may be less convenient and more costly. In many cases, ethical means of reaching worthy ends only require a little more work, a little more sacrifice.

6.  The PLUS Decision Making Model

6.1 PLUS - A Process for Ethical Decision MakingUntil now we have been discussing a generic decision model similar to those taught in every business school and management training program. But our concern is not just decision making; it is ethical decision making.

The ethical component of the decision making process takes the form of a set of "filters". Their purpose is to separate the sought after elements from their containing environment.

At key steps in the process the decision maker can stop and run his/her considerations through these filters and thereby separate the ethical conations from the remainder of the decision. This ensures that the ethical issues imbedded in the decision can be given consideration.In their academic form, the language for these filters is too complex and academic for most employees. In simplifying the process we risked losing some of the finer points but dramatically increased the utility of the ethics filters process.
To make it easy to understand and apply these ethics filters we have adapted to mnemonic word PLUS.
* P = Policies
Is it consistent with my organization's policies, procedures and guidelines?
* L= Legal
Is it acceptable under the applicable laws and regulations?
* U = Universal
Does it conform to the universal principles/values my organization has adopted?
* S= Self
Does it satisfy my personal definition of right, good and fair?

PLUS presumes effective communication with all employees so there is a common understanding of:

* the organization's policies and procedures as they apply to the situation.
* the applicable laws and regulations.
* the agreed to set of "universal" values - in this case Empathy, Patience, Integrity, Courage (EPIC)
* the individual's sense of right, fair and good springing from their personal values set.

PLUS also presumes a formal mechanism, provided by the organization, to allow employees access to a definitive interpretation of the policies, laws and universal values when their own knowledge of these PLUS factors is insufficient for them to make the decision with a high level of confidence.
The PLUS filters work as an integral part of steps 1, 3 and 6 of the decision making process. The decision maker applies the four PLUS filters to determine if the ethical component(s) of the decision are being surfaced/addressed/satisfied.

* Step 1
Define the problem (PLUS surface the ethical issues)
Does the existing situation violate any of the PLUS considerations?
* Step 2
Identify available alternative solutions to the problem
* Step 3
Evaluate the identified alternatives (PLUS assess their ethical impact)
Will the alternative I am considering resolve the PLUS violations?
Will the alternative being considered create any new PLUS considerations?
Are the ethical trade-offs acceptable?
* Step 4
Make the decision
* Step 5
Implement the decision
* Step 6
Evaluate the decision (PLUS surface any remaining/new ethical issues)
Does the resultant situation resolve the earlier PLUS considerations?
Are there any new PLUS considerations to be addressed?

The user should realize that the PLUS filters do not guarantee an ethical decision. They merely ensure that the ethical components of the situation will be surfaced so that they might be considered.

While PLUS suggests a process for assessing the ethical impact of a decision, ultimately whether or not the decision meets the ethical standards of the organization or the individual decision maker is a matter of personal responsibility. After all, ethics is about choices

thus ethical decision making models are indeed helpful in corporate image building&long term profitability

9.2 www.

Dr. K.Elangchezhian
Professor & Head
College Of Management Studies
Vellore Institute Of Technology, Deemed University
D. Malmarugan
Be, MBA, (Phd)
Ugc Net Lecturership In Management,
Research Scholar
Vit Vellore
Sona College Of Technology
Phone : 0427-2386293
Email id: /

Source : E-mail

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