Values, Ethics and Business Decisions From Ethics to

Values, Ethics and Business Decisions From Ethics to

Values, Ethics and Business Decisions From Ethics to Ethical Rationality Marc Le Menestrel What does it mean to be ethical? Are you an ethical person? Do you work for an ethical company? Is business ethical? Thinking Ethics as a Grey Zone Looking at the bad side Looking at the good side

You are honest It feels bad But you are more aware and anticipate Your ethical Purely Purely unethical ethica

l You are You feel good, full of energy You may not be very credible here! judgments are bounded and biased by your And you may be blindyour to emotions, risks

interest, your mental habits and self-image, your cultural context and work environment, etc. This psychological phenomenon is not necessarily intentional, but it can have significant consequences. It can be used by others to influence or even control you. With training and effort, you can develop, refine and structure your ethical consciousness. It requires to open your mind and be able to think beyond the justification of your ethical opinion. Enlighten your Ethical Blindspot To which extent is this unethical? To which extent is this ethical? Which stakeholders can be harmed? How much? When? Which stakeholders can benefit? How much? When?

Can this be wrong? According to law? To some ethical principle? If everyone does the same? All the time? Is this right? Is this legal? Is this respecting ethical principles, code of values? Can this be universalized? Am I having bad feelings? A sense of discomfort? An early warning signal inside? What good feelings do I have? What virtue do I incarnate? Why is this respecting my personal integrity? Would this be better kept secret? Is this taboo? Could it be publicly known? What would I like to be known? To be

transparent? is transparent? Some Ethical Questions Are you an ethical manager? Do you work for an ethical company? Is it ethical to close a profitable plant? Is it ethical to influence a government? Is it ethical to compromise on the safety of a product? Is it ethical to shape customers desires? Is economic progress ethical?

Is it ethical to work as hard as possible? Ethics vs. Business Interest Ethical Values More Ethical Better Worse Business-Interest Less ethical What Should you do? There is no point of talking about ethics in business if we dont talk about how much it costs

First Discourse: Economic Rationality Ethical Values Better More Ethical Rational Worse Business-Interest Less ethical Irrational Business interest should be the sole and unique criterion of rational choice

Second Discourse: Idealism More Ethical Irrational Rational Better Less ethical Worse Business-Interest Ethical Values Ethical values should be the sole and unique criterion of choice Third Discourse: Corporate

Social Responsibility Ethical Values Better More Ethical Rational Ir r Worse Business-Interest Less ethical at i on

a l Business interest and ethics should always combine Ethical Rationality Ethical Values Interest Better Less ethical Priority to More Ethical Ideal

Worse interest Irrational Priority to ethics Rational choices between interest and ethics are often kept hidden, but they are the most difficult: We can rationally give priority to interest, and sacrifice ethics We can rationally give priority to ethics, and sacrifice interest Marc Le Menestrel, UPF & INSEAD, for A Framework of Ethical Rationality 1.

Economic Analysis 2. Ethical Analysis 3. Ethical Dilemma 4. Dynamic Analysis 1. Economic Analysis Step 1: What is the action that leads to the best consequence for you? ? Interest of the consequence

The rational actor (you, the team, the firm) 1. Anticipates the consequences of the available actions 2. Evaluates these consequences according to their interest for the actor 3. Identify the action that leads to the best consequence 2. Ethical Analysis Step 2: What is the ethics of the action that leads to the best consequence for yo ? To which extent is it unethical? Emotions/Virtue: To which extent is it ethical? Do I feel bad?

Is this an unnatural way to act? Deontology/Idealism: Do I feel good? Is this a natural way to act? What sort of principle, rule or norm do I violate? What happens if everybody does the same? What happens if I always act like this? Utilitarianism/Consequentialism: What are the bad consequences for others? Would I suffer these consequences for myself? What are the bad consequences for the environment? Would the children of my children dislike these consequences?

Here you raise an ethical Emotions/Virtue: Deontology/Idealism: What sort of principle, rule or norm do I respect? What happens if everybody does the same? What happens if I always act like this? Utilitarianism/Consequentialism: What are the good consequences for others? Would I like these consequences for myself? What are the good consequences for the environment? Would the children of my children like these consequences? Here you justify your

3. Ethical Dilemma Step 3: Facing the extent to which there is a dilemma Unethical aspects of behavior ? ? More ethical alternative Prudence: Vision: ? Could the unethical aspects lead to unexpected negative consequences?

Can you find a more ethical alternative? Imagination: If the consequences of the alternative affect your interest, cannot they be improved? 4. Dynamics AnalysisIf you are in the ideal position, Increasing demands (legal, social) you may not be Credibility ambiguous lucky for very Contentment, lack of vigilance Unawareness, rationalization long Lack of transparency Legal pressure Liabilities Bad Reputation PR costs Negative motivation

Managerial inertia If you give priority to interest, you will need reactive strategies to survive Priority to interest Ideal Irrational Priority to ethics Transparency Social involvement & support

New scope of activities New business processes Long term thinking Strategic investment Positive motivation Learning process If you give priority to ethics, you may find help for your proactive strategies A Difficult Strategy Priority to interest Ideal Irrational

Priority to ethics Few ones are going to believe it, Outside or inside the company A Reactive Strategy Priority to interest Ideal Irrational Priority to ethics We wait for change to become necessary

But it can be very dangerous A Proactive Strategy Priority to interest Ideal Irrational Priority to ethics We are likely to be more credible, And more motivated for change Visionary Leaders Welcome! Conclusions

It is easy not to see ethical dilemmas: you just have to find a good justification for the action leading to the best consequence! It is not easy to see ethical dilemmas: it questions ourselves and it does not look fun It can be rational to be ethical sacrificing your interest, or to sacrifice ethics for your interest: the choice remains yours It is difficult, but helpful, to search for ethical dilemmas beforehand if you want to have a chance not to be trapped by them and anticipate their dynamics

Joan Miro, 1968

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