Ethical Decision-Making Models to Know for Business Ethics

Ethical decision-making models guide us in navigating complex choices in business and finance. They help balance individual rights, community welfare, and stakeholder interests, ensuring that our actions align with moral principles and promote fairness and justice in various contexts.

1. Utilitarian Approach

   • Focuses on the outcomes of actions, aiming to maximize overall happiness or utility.
   • Evaluates the consequences for all stakeholders involved.
   • Often summarized by the phrase "the greatest good for the greatest number."

2. Rights-Based Approach

   • Emphasizes the importance of individual rights and freedoms.
   • Asserts that certain rights are inherent and must be respected regardless of outcomes.
   • Protects individuals from harm and ensures fair treatment.

3. Fairness or Justice Approach

   • Centers on the equitable distribution of benefits and burdens.
   • Advocates for impartiality and consistency in decision-making.
   • Seeks to address inequalities and promote social justice.

4. Common Good Approach

   • Focuses on the welfare of the community as a whole.
   • Encourages actions that contribute to the collective well-being.
   • Recognizes the interconnectedness of individuals within society.

5. Virtue Approach

   • Highlights the importance of moral character and virtues in ethical decision-making.
   • Encourages individuals to act in accordance with their values and principles.
   • Aims to cultivate good character traits that benefit both the individual and society.

6. Ethical Egoism

   • Advocates for actions that promote one's own self-interest.
   • Suggests that individuals should prioritize their own well-being in decision-making.
   • Raises questions about the balance between self-interest and the interests of others.

7. Care-Based Ethics

   • Emphasizes the importance of relationships and empathy in ethical decision-making.
   • Focuses on the needs and well-being of others, particularly vulnerable individuals.
   • Encourages a nurturing approach to ethics that values compassion.

8. Duty-Based Ethics (Deontology)

   • Centers on adherence to moral rules and duties regardless of outcomes.
   • Asserts that certain actions are inherently right or wrong based on ethical principles.
   • Promotes accountability and responsibility in ethical behavior.

9. Social Contract Theory

   • Proposes that ethical norms arise from an implicit agreement among individuals in society.
   • Emphasizes mutual benefit and cooperation for social order.
   • Highlights the importance of consent and collective responsibility.

10. Stakeholder Theory

    • Recognizes the interests of all parties affected by business decisions.
    • Advocates for balancing the needs of various stakeholders, including employees, customers, and the community.
    • Encourages ethical considerations in corporate governance and decision-making.

11. Moral Relativism vs. Moral Absolutism

    • Moral Relativism posits that ethical standards are culturally based and subjective.
    • Moral Absolutism asserts that there are universal moral principles that apply to all individuals.
    • The debate influences how ethical dilemmas are approached in diverse contexts.

12. The Potter Box Model

    • A framework for ethical decision-making that includes four steps: Definition, Values, Principles, and Loyalties.
    • Encourages a systematic analysis of ethical dilemmas.
    • Aids in clarifying the complexities of ethical issues.

13. PLUS Ethical Decision-Making Model

    • Stands for Policies, Legal, Universal, and Self.
    • Guides individuals to consider policies, legal implications, universal principles, and personal values.
    • Aims to ensure comprehensive ethical evaluations in decision-making.

14. Blanchard and Peale's Three Questions

    • A practical tool for ethical decision-making that asks: Is it legal? Is it balanced? How does it make me feel?
    • Encourages reflection on legality, fairness, and personal integrity.
    • Aids in assessing the ethical implications of decisions.

15. The Seven-Step Guide to Ethical Decision-Making

    • A structured approach that includes: Identify the problem, Gather information, Evaluate alternatives, Make a decision, Implement the decision, Monitor the outcome, and Reflect on the process.
    • Promotes thorough analysis and reflection in ethical decision-making.
    • Encourages continuous improvement in ethical practices.