It is often said that honesty is the best policy. This statement emphasizes the importance of honesty, while also implying that the most important reason to be honest is because it is in your best interest. Another good saying is, “Good ethics equals good business.” When deciding between two alternatives, one obviously right and one obviously wrong, the choice is easy. In these cases, good ethics is good business. The less-easy problems arise when managers face genuine ethical dilemmas. Not only do they have a problem to solve, they must solve it with the added baggage of being ethical.
Making ethical decisions
When making ethical decisions, managers need to adjust their thinking and divide up the decisions they need to make. These decisions can be divided into the following three categories:
1. Ethically neutral decisions. An example of an ethically neutral decision is what kind of tile to use in the locker room or what color shirts your staff members should wear.
2. Ethically obvious decisions. Ethically obvious decisions are usually easy to classify. The decision of whether management should expose workers to toxic material or put members in an unsafe situation are obvious.
3. Ethically ambiguous decisions. In reality, most business decisions are ethically ambiguous — not black or white. For example, most alternatives to a decision also have pros and cons. None are necessarily “right” or “wrong.” Because the alternatives have pros to them too, these could be considered “right-right” decisions. An example could be where to locate a new facility. One location might offer the advantages of an adjacent river and few local environmental regulations, but may be possibly harmful to the environment. The other location might be an existing building that could be readily adapted to the planned use, but with many burdensome and costly environmental regulations.
The changing frontier
When faced with an ethically ambiguous, or right-right decision, the current economic environment will play a major role in where the line between ethical and unethical business will be. For example, when times are good and employment is high, people have the luxury of being moral. In times of layoffs, downsizing and cost cutting, the focus becomes the bottom line.
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