Dealing with ethical dilemmas in business

June 21, 2023

Ethics is a word derived from the Greek vernacular “ethos", which, in turn, means "way of life". Philosophically, ethics focuses on the behavior of a human being within a social environment.

Unlike precise sciences such as mathematics, ethics is based on moral values which, in turn, are influenced by several variables. Hence, when examining a particular case, it is crucial to take into account all the intricacies, as even a single specific detail can have a profound impact on the ethical assessment and outcome.

Therefore, ethical dilemmas are commonplace, whether in personal or professional spheres, as they arise when there is a conflict between two or more ethical principles.

The american teacher Rushworth Kidder, founder of the Institute for Global Ethics, recognizes four types of ethical dilemmas, which include several examples:

1. Short-term vs long-term.

2. Individual vs community.

3. Truth vs loyalty.

4. Justice vs mercy.

On the other hand, Forbes magazine chose eight ethical dilemmas that can affect businessmen according to the list below:

1. Supporting other businesses when money is tight – Even if a company does not have abundant resources to fulfill its social function, there are alternative means to do it such as through coaching or sharing services.

2. Compromising on product quality – Even if there is an avid appetite for profit, compromising product quality can mark the beginning of the end for a business. While there might be a short-term perception of increased profitability, the reality is that it often leads to a significant decline in sales over the course of the medium and long-term.

3. Offshoring your manufacturing – In the pursuit of sustained development, entrepreneurs may choose to establish production in countries with more favorable labor, tax, and infrastructure conditions, despite their initial intention of supporting the local economy.

4. Letting clients go – While customers, especially those who generate high profitability, are important, there are instances where certain customers impose excessive demands that render the sale of products practically unfeasible. Therefore, it is necessary to reconsider the extent to which it is worthwhile to comply with such demanding requirements.

5. Responding to employee social media behavior – The widespread reach of the internet today is so crucial that the inappropriate behavior of employees on social networks can greatly jeopardize a company's image and reputation. As a result, entrepreneurs need to be vigilant and prepared to address such issues when they arise.

6. Keeping employees because of seniority – While it is natural for an entrepreneur to appreciate and acknowledge those who have contributed to their growth, it is important to recognize that not everyone may possess the necessary skills and qualifications to take the business to the desired level.

7. Accepting job applicants from competitors – When considering the acceptance of a candidate who has a history of criticizing their previous workplace, sharing confidential information, or diverting clients from their former employer, despite the potential competitive advantage they may offer, it is crucial to recognize that they may exhibit similar behaviors in the future towards your own business.

8. Creating honest marketing – This is the best way to build credibility, which is a fundamental pillar for the sustained growth of any business.

Although the examples above are focused on the ethical dilemmas faced by entrepreneurs, there are countless other ethical dilemmas that occur in a professional work environment. Let us move on to the examples below:

1. Unethical leadership – Regrettably, some managers have no ethical boundaries when it comes to achieving their goals, resorting to practices such as bribery, fraud, or collusion. The question for the subordinate is whether to accept such practices in order to secure their employment or not.

2. Taking credit for the work of others – Especially in teamwork, it is often the case that one or two individuals stand out and achieve the desired result, but unfairly the entire team may be credited for it.

3. Personal values and corporate values – It is not uncommon for conflicts to arise between an individual's personal values and the values upheld by the organization, leading employees to reassess their own beliefs or consider leaving the company.

4. Personal business management in working hours – While it is clear to most people that engaging in business activities that directly compete with one's own company is unacceptable, some individuals may struggle to grasp the idea that it is equally inappropriate to utilize work hours to address issues related to a completely separate personal business unrelated to the company's operations.

5. Harassment and discrimination – These issues unfortunately remain prevalent in work environments, where, under an inappropriate pretext, professionals are neglected, humiliated or unfairly oppressed.

6. Ownership and use of intellectual property – Collaborators frequently find it difficult to understand that the company that pays for their efforts owns the products of their labor.

7. Unattainable goals – Setting unachievable or overly demanding goals, instead of driving the business towards high-level growth, can demotivate employees and even push them towards engaging in illegal or unethical behavior.

8. Lying on a resume – Candidates often aspire to showcase the strongest educational background and skills on their resumes. However, it is important to note that lying on a resume can have severe consequences for the candidate's credibility, especially if the deception is uncovered.

9. Confidentiality and disclosure – The duty of confidentiality is often violated by a relationship of friendship, kinship, or other even less noble reasons such as personal gain.

10. Gossip about co-workers – Gossip, which often stems from a desire to appear well-informed or intentionally defame others, typically leads to disastrous consequences.

Therefore, when faced with an ethical dilemma in the work environment, the following precautions must be taken:

  1. Reflect on the dilemma: Try to understand clearly what the ethical dilemma is. Analyze the different perspectives involved and the possible consequences of each course of action.
  2. Know the company's policies and values: Familiarize yourself with the policies, corporate values, and ethical principles of the company you work for. Understand the guidelines and principles that must be followed and consider how they apply to the situation at hand.
  3. Seek guidance: Seek guidance from superiors, trusted colleagues, or human resources professionals whenever possible to share, and weigh their suggestions. Discussing the dilemma with people who have relevant experience or knowledge can provide valuable insights and help clarify the best approach.
  4. Analyze the consequences: Consider the possible consequences of each available course of action. Think about the implications for yourself, others involved, the company, and ethics in general. Consider short-term and long-term alternatives, in addition to the one that favors more positive results over more negative ones.
  5. Follow your conscience: Listen to your inner voice and follow your personal ethical principles. Remember that it is important to act consistently with your core values, even when facing external pressure.
  6. Look for alternative solutions: Explore alternative and analogous options and solutions to known situations that might ethically resolve the dilemma. In certain situations, it is possible to discover a third way that respects the values at stake and mitigates potential harm.
  7. Communicate properly: If necessary, communicate your position to the relevant parties involved in the dilemma. Express your ethical concerns in a clear, transparent, objective, and respectful manner. If possible, offer constructive suggestions for resolving the dilemma ethically.
  8. Document everything: Keep a detailed record of every step of the process, including dates, locations, people, conversations, and decisions made. This documentation may be useful in the future should repercussions or unexpected consequences arise from your decision.
  9. Seek external support: If the situation persists, or if you believe that a serious ethical violation has occurred, it may be necessary to seek external advice, such as legal counsel, an ethics hotline, or an appropriate regulatory agency.

It is necessary to consider that, like ethics itself, each ethical dilemma can reach a result influenced by a variable that does not exist in another analogous ethical dilemma, for example, the agent's intention, the company's values and so on.

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Dealing with ethical dilemmas in business

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Ethics is a word derived from the Greek vernacular “ethos", which, in turn, means "way of life". Philosophically, ethics focuses on the behavior of a human being within a social environment.

Unlike precise sciences such as mathematics, ethics is based on moral values which, in turn, are influenced by several variables. Hence, when examining a particular case, it is crucial to take into account all the intricacies, as even a single specific detail can have a profound impact on the ethical assessment and outcome.

Therefore, ethical dilemmas are commonplace, whether in personal or professional spheres, as they arise when there is a conflict between two or more ethical principles.

The american teacher Rushworth Kidder, founder of the Institute for Global Ethics, recognizes four types of ethical dilemmas, which include several examples:

1. Short-term vs long-term.

2. Individual vs community.

3. Truth vs loyalty.

4. Justice vs mercy.

On the other hand, Forbes magazine chose eight ethical dilemmas that can affect businessmen according to the list below:

1. Supporting other businesses when money is tight – Even if a company does not have abundant resources to fulfill its social function, there are alternative means to do it such as through coaching or sharing services.

2. Compromising on product quality – Even if there is an avid appetite for profit, compromising product quality can mark the beginning of the end for a business. While there might be a short-term perception of increased profitability, the reality is that it often leads to a significant decline in sales over the course of the medium and long-term.

3. Offshoring your manufacturing – In the pursuit of sustained development, entrepreneurs may choose to establish production in countries with more favorable labor, tax, and infrastructure conditions, despite their initial intention of supporting the local economy.

4. Letting clients go – While customers, especially those who generate high profitability, are important, there are instances where certain customers impose excessive demands that render the sale of products practically unfeasible. Therefore, it is necessary to reconsider the extent to which it is worthwhile to comply with such demanding requirements.

5. Responding to employee social media behavior – The widespread reach of the internet today is so crucial that the inappropriate behavior of employees on social networks can greatly jeopardize a company's image and reputation. As a result, entrepreneurs need to be vigilant and prepared to address such issues when they arise.

6. Keeping employees because of seniority – While it is natural for an entrepreneur to appreciate and acknowledge those who have contributed to their growth, it is important to recognize that not everyone may possess the necessary skills and qualifications to take the business to the desired level.

7. Accepting job applicants from competitors – When considering the acceptance of a candidate who has a history of criticizing their previous workplace, sharing confidential information, or diverting clients from their former employer, despite the potential competitive advantage they may offer, it is crucial to recognize that they may exhibit similar behaviors in the future towards your own business.

8. Creating honest marketing – This is the best way to build credibility, which is a fundamental pillar for the sustained growth of any business.

Although the examples above are focused on the ethical dilemmas faced by entrepreneurs, there are countless other ethical dilemmas that occur in a professional work environment. Let us move on to the examples below:

1. Unethical leadership – Regrettably, some managers have no ethical boundaries when it comes to achieving their goals, resorting to practices such as bribery, fraud, or collusion. The question for the subordinate is whether to accept such practices in order to secure their employment or not.

2. Taking credit for the work of others – Especially in teamwork, it is often the case that one or two individuals stand out and achieve the desired result, but unfairly the entire team may be credited for it.

3. Personal values and corporate values – It is not uncommon for conflicts to arise between an individual's personal values and the values upheld by the organization, leading employees to reassess their own beliefs or consider leaving the company.

4. Personal business management in working hours – While it is clear to most people that engaging in business activities that directly compete with one's own company is unacceptable, some individuals may struggle to grasp the idea that it is equally inappropriate to utilize work hours to address issues related to a completely separate personal business unrelated to the company's operations.

5. Harassment and discrimination – These issues unfortunately remain prevalent in work environments, where, under an inappropriate pretext, professionals are neglected, humiliated or unfairly oppressed.

6. Ownership and use of intellectual property – Collaborators frequently find it difficult to understand that the company that pays for their efforts owns the products of their labor.

7. Unattainable goals – Setting unachievable or overly demanding goals, instead of driving the business towards high-level growth, can demotivate employees and even push them towards engaging in illegal or unethical behavior.

8. Lying on a resume – Candidates often aspire to showcase the strongest educational background and skills on their resumes. However, it is important to note that lying on a resume can have severe consequences for the candidate's credibility, especially if the deception is uncovered.

9. Confidentiality and disclosure – The duty of confidentiality is often violated by a relationship of friendship, kinship, or other even less noble reasons such as personal gain.

10. Gossip about co-workers – Gossip, which often stems from a desire to appear well-informed or intentionally defame others, typically leads to disastrous consequences.

Therefore, when faced with an ethical dilemma in the work environment, the following precautions must be taken:

  1. Reflect on the dilemma: Try to understand clearly what the ethical dilemma is. Analyze the different perspectives involved and the possible consequences of each course of action.
  2. Know the company's policies and values: Familiarize yourself with the policies, corporate values, and ethical principles of the company you work for. Understand the guidelines and principles that must be followed and consider how they apply to the situation at hand.
  3. Seek guidance: Seek guidance from superiors, trusted colleagues, or human resources professionals whenever possible to share, and weigh their suggestions. Discussing the dilemma with people who have relevant experience or knowledge can provide valuable insights and help clarify the best approach.
  4. Analyze the consequences: Consider the possible consequences of each available course of action. Think about the implications for yourself, others involved, the company, and ethics in general. Consider short-term and long-term alternatives, in addition to the one that favors more positive results over more negative ones.
  5. Follow your conscience: Listen to your inner voice and follow your personal ethical principles. Remember that it is important to act consistently with your core values, even when facing external pressure.
  6. Look for alternative solutions: Explore alternative and analogous options and solutions to known situations that might ethically resolve the dilemma. In certain situations, it is possible to discover a third way that respects the values at stake and mitigates potential harm.
  7. Communicate properly: If necessary, communicate your position to the relevant parties involved in the dilemma. Express your ethical concerns in a clear, transparent, objective, and respectful manner. If possible, offer constructive suggestions for resolving the dilemma ethically.
  8. Document everything: Keep a detailed record of every step of the process, including dates, locations, people, conversations, and decisions made. This documentation may be useful in the future should repercussions or unexpected consequences arise from your decision.
  9. Seek external support: If the situation persists, or if you believe that a serious ethical violation has occurred, it may be necessary to seek external advice, such as legal counsel, an ethics hotline, or an appropriate regulatory agency.

It is necessary to consider that, like ethics itself, each ethical dilemma can reach a result influenced by a variable that does not exist in another analogous ethical dilemma, for example, the agent's intention, the company's values and so on.

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