What Is an Ethical Decision-Making Model?
Business integrity is essential to success. Organizations that place a premium on consistently and demonstrably operating above board have a tendency to have stability in other key aspects of proper corporate function, from the company’s workforce to their public reputation. The backbone of this integrity is business ethics. While the concept periodically evolves to match the pulse of the current business landscape, its core tenet of providing principled guidance for key decisions and behaviors remains unchangeable.
Organizations aiming to operate in an ethical, integrity-driven fashion typically turn to an ethical decision-making model to provide such guidance. These models offer different approaches and perspectives to achieve the overarching goal of making decisions that safeguard corporate integrity. It is important for educated business leaders to carefully consider the models to determine which works best in the context of the situation driving the decision. In some cases, it can also serve as a reflection of the individual’s moral compass.
Ethical Decision-Making Models Defined
An ethical decision-making model is an implementation that leaders across numerous industries can use to logically process and work through ethical dilemmas and deliver ethically-sound decisions. In business, these decisions—large or small—can be used to protect business integrity. This can ultimately help businesses produce operational and growth strategies that stay focused on doing things honorably and principled—rather than in a way that appears underhanded and unscrupulous.
These models are driven by ethical principles: foundational elements that can serve as guideposts to ensure business practices and the decisions that spur them remain honest and forthright. These principles can include accountability, compassion, fairness, loyalty, respect, and transparency. They can govern the decisions a business makes as well as guide communication surrounding those decisions. They can also serve as core principles of business writing and communication, in general.
The Risks of Working Without Ethical Decision-Making Models
The goal behind utilizing any type of ethical decision-making model is to make sure a business acts with integrity. Without a model that strives to keep ethical decision-making in place, a business can run the risk of making decisions that ultimately cause harm to its workforce, its reputation, or the business itself. In some cases, a lack of ethical decision-making can cause collateral damage to other businesses.
A prime example of what could happen without ethical decision-making models in place involves the American energy and commodity services company Enron Corporation. In 1998, the Texas-based company made a litany of unethical choices that ultimately resulted in withholding information on massive losses and budget-draining assets from shareholders. These actions created a false narrative of the company being significantly more profitable than it was in reality. When Enron’s actions were revealed in 2001, they went bankrupt and later went fully out of business in 2006.
The massive fallout involved criminal charges and prison time for key Enron executives and also took down the company’s accounting firm Arthur Anderson—which shuttered due to its involvement in the scandal.
Ethical Decision-Making Model Examples
There is no singular model for a leader to use to resolve an ethical decision. These models reflect the situational awareness that may be involved with specific decisions, as the context surrounding an ethical dilemma may require leaders to use a different framework to reach the most ethical decision possible. The following are key examples of ethical decision-making models professionals can utilize.
1. Utilitarian
The utilitarian model builds its approach to resolving ethical dilemmas by focusing on what decisions will optimize benefits and minimize damage. This approach can be used to design holistic strategies that focus on growing a business’s bottom line in a manner that doesn’t disrupt the employee experience or convey a poor message to its customers. These strategies may include elements like cultivating a respectful company culture or maintaining a socially responsible reputation.
2. Rights
The rights model emphasizes respect for an individual’s moral rights within the context of the decision. It acknowledges that employees have the ability to make their own choices, and any decision that interferes with this ability is not a good decision. This approach can compel businesses to be more transparent with the decision-making process, and it can also produce a more organic environment for collaboration.
3. Fairness/Justice
The fairness/justice approach to ethical decision-making allows for consideration of how fair the decision is to the people impacted if it is made. This approach examines if a decision can have short-term or long-term ramifications that can hinder an individual’s success or growth within a company. Applying the fairness/justice model can be important to a business that is incorporating diversity, equity, and inclusion (DEI) strategies within various business decisions.
4. Common Good
The common good model focuses on whether the decision will be the best decision for the community as well as the individual making the decision. It expands a company’s “big picture” goals to incorporate elements that can move beyond company doors—such as getting involved in community service initiatives or environmental programs.
5. Virtue
The virtue model considers how the decision would reflect upon the moral character of the individual making the decision. This model, when applied, can coincide with the development of an individual’s reputation within a business context. This reputation can connect to other elements of a corporate environment, such as company culture.
Ideally, the result of these approaches is a decision that maintains business integrity. This integrity can take on numerous forms, from maintaining a reputation for fairness among a company’s workforce to keeping a forthright reputation in the public eye.
Lead in the Right Way
Ethical decision-making is important for proper business growth. If key decisions are made in an unethical fashion, a business may run the risk of facing consequences that can have an adverse effect on its reputation, growth, and stability. These decisions are not made arbitrarily; they require individuals to apply the right ethical decision-making model at the right time. When they do, these individuals can position themselves to be strong, trusted leaders.
The Business Ethics & Writing Certificate program offered by Suffolk University’s Center for Continuing & Professional Education can help you cultivate the skills required to be such a leader. Our program is designed to help you build expertise in the understanding of how business and ethics intertwine, allowing you to make sound ethics-driven decisions with confidence. Learn how we can help you make a vital difference in the corporate world.
Sources:
Dentalcare.com, “Ethical Decision-making Models”
Indeed, “15 Ethical Principles in Business (With Definitions)”
Investopedia, “Enron Scandal: The Fall of a Wall Street Darling”
Investopedia, “The Importance of Business Ethics”
Investopedia, “Utilitarianism: What It Is, Founders, and Main Principles”
MasterClass, “Rights Approach: How to Make Ethical Decisions”
People Centric Consulting Group, “5 Models for Ethical Decision-Making”
Tools Hero, “Ethical Decision-Making”