Ethics are principles of conduct within a society and strongly apply to business settings as well. Widespread adoption of social media and the issue of transparency now is critical in a business environment and communication within consumers. Violation of ethics by companies is carefully observed by government regulators and the public – both challenging a company’s reputation. Ethical questions will arise in business situations and identifying the issue and addressing them is key to competent and ethical business decision-making.
An ethical dilemma is a situation where ethical decision-making involves making a choice between alternatives that are not obvious or evident, usually in a gray area between ethically right and wrong. In an ethical dilemma, choices are blurred, and outcomes may result in unfair consequences to one or perhaps all the stakeholders involved. This may occur in cases of competitive interests, such as in a firm, employees seek higher compensation and benefits while its investors and management want to maintain lower costs, with both having a valid ethical position. When placed into an ethical dilemma in business contexts, the decision-maker has to rely on procedure or policy to come to a resolution. These may be rigid and result in seemingly unfair outcomes.
Ethical dilemmas can be extremely complicated sometimes, with neither decision being ethically correct. For example, if a business finds out that an organization in its supply chain uses child labor, it logically and legally may have to either find another supplier or demand to stop using child labor. However, this may result in loss of the only income and source of food for the child and their family, leading to greater poverty or starvation.
Such ethical dilemmas are inherently challenging. Ethical dilemmas can be solved in one of three ways. One can refute the paradox and after careful analysis, logically refute the dilemma. A value theory approach can be applied by determining which solution is essentially the ‘lesser evil’ and can offer the greater good. In some cases, as well the dilemma can be reconsidered and lead to the rise of alternative solutions.
An ethical lapse can be viewed in two ways, as either a clearly unethical decision or a mistake that resulted in an unethical outcome – either way it is a decision which is unethical. An ethical lapse can be an error in judgment made during an ethical dilemma as well. Therefore, an ethical lapse is not necessarily a characteristic of complete lack of integrity, but rather can be viewed as an ethical ‘blind spot’ or oversight. Ethical lapses can be classified in several categories. A lapse from subjectivity occurs when an unethical action is allowed due to the fact that morality cannot be defined – such is in more minute aspects where personal ethical codes differ from person to person. There is also a lapse of conscience where an individual goes against something, they know to be unethical, potentially as a result of carelessness or an attempt to gain something.
An important ethical lapse is the authority fallacy which results in an unethical action because it has not been deemed unethical by a notable authority. For example, decisions in business are often defined by corporate codes. If the action is not listed as wrong in such policies, people may choose to act unethically due to this fallacy. Ethical lapses are commonly seen as individual and rare errors. When an individual or company routinely causes harm, it is no longer just an ethical ‘lapse’ but an exemplification of unethical standards.
Ethics are fundamental in business and life situations as they guide competent decision-making. In many cases, decisions involving ethics can have profound consequences on stakeholders as well as the legal liability or public reputation of a company. Business decision-making must also rely on ethical standards due to the evident trickle-down effect to a firm’s employees, supply chains, and consumers. In the current business and social climate, companies that are transparent and prioritize ethical business practices, which ultimately encompasses these ethical dilemmas, are commonly widely supported and can find success.