values, ethics and business decisions from ethics to ethical rationality marc le menestrel
TRANSCRIPT
What does it mean to be ethical?
Are you an ethical person?
Do you work for an ethical company?
Is business ethical?
You feel good, full of
energy
You may not be very credible
And you may be blind to
risks
You are honest
It feels bad
But you are more aware
and anticipate
Looking at the good side
Looking at the bad side
Thinking Ethics as a Grey Zone
Your ethical judgments are bounded and biased by your emotions, your
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.
Purely
ethicalYou
are
here!
Purely
unethical
Enlighten your Ethical Blindspot
Which stakeholders can be harmed? How much? When?
Can this be wrong? According to law? To some ethical principle? If everyone
does the same? All the time?
Am I having bad feelings? A sense of discomfort? An early warning signal
inside?
Would this be better kept secret? Is this taboo? Could it be publicly known?
Which stakeholders can benefit? How much? When?
Is this right? Is this legal? Is this respecting ethical principles, code of values? Can this be universalized?
What good feelings do I have? What virtue do I incarnate? Why is this respecting
my personal integrity?
What would I like to be known? To be transparent? is transparent?
To which extent is this unethical? To which extent is this ethical?
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?
What Should you do?
Less ethical More Ethical
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ter
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Ethical Values
Bus
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There is no point of talking about ethics in business if we don’t talk about how much it costs
Ethics vs. Business Interest
First Discourse: Economic Rationality
Less ethical More Ethical
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Ethical Values
Rational
Business interest should be the sole and unique criterion of rational choice
IrrationalBus
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Second Discourse: Idealism
Less ethical More Ethical
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Ethical Values
Rational
Ethical values should be the sole and unique criterion of choice
Irrational
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Third Discourse: Corporate Social Responsibility
Less ethical More Ethical
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Ethical Values
Rational
Business interest and ethics should always combine
IrrationalBus
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Ethical Rationality
Less ethical More Ethical
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Ethical Values
Inte
rest
Ideal
Irrational
Priority
to
interest
Priority
to
ethics
Marc Le Menestrel, UPF & INSEAD, for
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 ethicsWe can rationally give priority to ethics, and sacrifice interest
A Framework of Ethical Rationality
1. Economic Analysis
2. Ethical Analysis
3. Ethical Dilemma
4. Dynamic Analysis
1. Economic Analysis
The rational actor (you, the team, the firm)1. Anticipates the consequences of the available actions2. Evaluates these consequences according to their interest for
the actor3. Identify the action that leads to the best consequence
Interest of the consequence
?
Step 1: What is the action that leads to the best consequence for you?
2. Ethical Analysis
To which extent is it ethical?
Emotions/Virtue:Do I feel good?Is this a natural way to act?
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?
To which extent is it unethical?
Emotions/Virtue:Do I feel bad?Is this an unnatural way to act?
Deontology/Idealism: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?
Step 2: What is the ethics of the action that leads to the best consequence for you?
?
Here you raise an ethical dilemma!
Here you justify your interest!
3. Ethical DilemmaStep 3: Facing the extent to which there is a dilemma
Prudence: Could the unethical aspects lead to unexpected negative consequences?
?
Unethical aspects of behavior
More ethical alternative
Vision: Can you find a more ethical alternative?
Imagination: If the consequences of the alternative affect your interest, cannot they be improved?
?
?
4. Dynamics Analysis
Ideal
If you are in the ideal position, you may not be lucky for very long
Irrational
Prioritytointerest
Prioritytoethics
Lack of transparencyLegal pressureLiabilitiesBad ReputationPR costsNegative motivationManagerial inertia
TransparencySocial involvement & supportNew scope of activitiesNew business processesLong term thinkingStrategic investmentPositive motivationLearning process
Increasing demands (legal, social)Credibility ambiguous Contentment, lack of vigilanceUnawareness, rationalization
If you give priority to interest, you will need reactive strategies to survive
If you give priority to ethics, you may find help for your proactive strategies
A Difficult Strategy…
Few ones are going to believe it, Outside or inside the company…
Ideal
Irrational
Prioritytointerest
Prioritytoethics
A Reactive Strategy…
We wait for change to become necessary
But it can be very dangerous…
Ideal
Irrational
Prioritytointerest
Prioritytoethics
A Proactive Strategy…
We are likely to be more credible,And more motivated for change…Visionary Leaders Welcome!
Ideal
Irrational
Prioritytointerest
Prioritytoethics
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