Geva, Aviva, Moral Decision Making In Business: A Phase-Model

A MODEL FOR ETHICAL DECISION MAKING

The Model Geva has proposed model for ethical decision models. The model has the following components 1. Introductory phase: framing the ethical issue 2. Phase 1: Principle-based evaluation 3. Phase 2: Virtue-based solution 4. Phase 3: Contract-based decision

Introductory phase: framing the ethical issue At this stage, “the decision maker must gather and process information about alternative courses of actions, their feasibility, their outcomes, and the tradeoffs between potential benefits and costs associated with them. The kind of reasoning used in the introductory phase of decision making is practical judgments, which is quite different from theoretical reasoning, such as deductive logic.”(Geva, p. 783)

Phase 1: Principle-based evaluation In this Phase, judgment is made in regard to the action to be taken. To evaluate the action, standards of morality and standard for operating in international business will be used.

To make a normative analysis of the action, this phase uses standards of morality, also called approaches to moral evaluation. The standards of morality suggested by Geva (4) are utilitarianism, deontology, and justice. Instead I will use the following standards proposed by Cavanagh, Moberg, and Velasquez (1995): utilitarianism, rights and duties, justice and caring. Rawls has indicated that deontology includes all theories except utilitarianism.

In addition to the standards of morality, one needs to add another item when engaged in international business. One has to consider the local practice which is relevant to the problem or the case but considered questionable in the home country. The question relevant to such practice, as suggested by Donaldson (pp. 104-105) is stated as follows: Could one engage in business in the host country without getting involved in such a practice.

The standards of morality and the question related to international business will be referred to in this paper as Standards.

If these Standards are in conflict some priority rules might be used to determine which standard has priority and resolve the conflict. If the conflict is not resolved, then go to Phase 2. If the conflict is resolved and If these Standards produce the same judgment on the action, then the judgment is considered ethical.

Before implementing the action one has to determine whether the action has no compliance problem and conforms to social contract norms. 2

Compliance problem means that the Standards produce an ethical judgment, but the actor is facing difficulty in making the action required by the Standard. When a compliance problem is faced, one has to proceed to Phase 2. Otherwise one would proceed to Phase 3.

If there is a conflicting judgment among the standards of morality, and the conflicting judgments cannot be resolved, the action need to be examine in Phase 2. A decision maker has to make a decision cannot stop at the conclusion that standards of ethics produce conflicting judgment on the action contemplated.

An example of an action which cannot be resolved at this stage is the firing of employees when a company faces a decline in economic activities.

Phase 2: Virtue-based solution The emphasis in this phase is on the actor and not on the action in an attempt to resolve the conflicting judgments obtained in Phase 1. At this phase, the problem or action is examined from a different point of view; namely, the actor using virtue ethics. At this phase the actor would use the creativity and imagination to redefine the problem in order to reduce or eliminate the ethical problem.

Geva presents four creative strategies to be used in this Phase: 1. The fresh solution strategy, the collective action strategy. 2. The collective action strategy. 3. The specification strategy 4. Institutionalizing ethics.

If the actor is successful, the action should be implemented if it conforms to social contract norms covered in Phase 3. Otherwise, the action cannot be pursued. Phase 3: Contract-based decision

Donaldson and Dunfee indicate that there are two types of social contract, one is hypothetical or macro and the other is extant or micro. The first refers to “hypothetical agreements among rational people”( Donaldson and Dunfee, p.19) and the second “refers to nonhypothetical, actual (although typically informal) agreements existing within and among industries, national economic systems, corporations, trade associations, and so on. For example, the ethical principles accepted by accountants or lawyers reflect “micro” or “extant” social contracts”( Donaldson and Dunfee, p. 19)

If the action conforms to the accepted standards of the reference group, then the action should be implemented, if not there is a need to find an acceptable norm before implementing the action. 3

Illustrations and Additional Comments Introductory phase: framing the ethical issue Example: Morality of random drug testing in the work place

1. Possibility: Is it really possible to establish a fair and accurate testing program? Do standard testing programs also detect the use of prescription drugs and over-the- counter drugs, and should the use of these drugs be taken into account? What safeguards against unfairly administered tests are necessary.

2. Alternatives. Are there alternative policies, other than random drug testing, to deal with on-the-job drug abuse? How is drug abuse related to job performance? Is drug use truly a significant problem in this specific workplace? 3. Conflicts. Does the potential harm attributable to drug use in this workplace outweigh the employees’ right to privacy? The right to due process? Is random drug testing in harmony with the company’s core values?

4. Effects. What possible problems may result from the decision to conduct random drug testing? May random drug testing lower employee moral? Induce employee discrimination? Spur new conflicts? Cause other negative side effects? Such questions require credible answers before the decision to conduct random drug testing can be morally assessed.

The type and scope of the information gathered define the decision maker’s problem space, which is assumed to have a crucial influence on how the moral problem is solved. There is no simple answer to the question “What are the relevant facts and how many are enough to permit a proper analysis of the problem at hand?” It is important, however, that information gathering not be confined to prevalent alternatives, but also expanded to take possible courses of action into consideration. A wider vision of the problem sets the stage for creative ethical solution when needed.”(Geva, p. 785). Utilitarianism

Utilitarianism “is a general term for any view that holds that actions and policies should be evaluated on the basis of benefits and costs they will impose on society. In any situation the “right” action or policy is the one that will produce the greatest net benefits for the lowest net costs(when all alternatives have only net costs)” (Velasquez, p. 72). Rights and Duties

“A person has a right when that person is entitled to act in a certain way or is entitled to have others act in a certain way toward him or her.” Velasquez, p. 87).

“Rights are powerful devices whose main purpose is that of enabling the individual to choose freely whether to pursue certain interests or activities and of protecting those choices.” Velasquez, p. 87). 4

“The most important moral rights……are rights that impose prohibitions or requirements on others and which thereby enable individuals to choose freely whether to pursue certain interests or activities.” Velasquez, p. 88). These rights have three features which are considered important.

“First moral rights are tightly correlated with duties.” Velasquez, p. 88).

“Second, moral rights provide individual with autonomy and equality in the free pursuit of their interests.” Velasquez, p. 89).

“Third, moral rights provide a basis for justifying one’s actions and for invoking the protection or aid of others.” Velasquez, p. 89).

Justice “Justice and fairness are essentially comparative. They are concerned with the comparative treatment given to the members of the group when benefits and burdens are distributed, when rules and laws are administered, when members of a group cooperate or compete with each other, and when people are punished for the wrongs they have done or compensated for the wrongs they have suffered.” Velasquez, p. 103). “Standards of justice are generally taken to be more important than utilitarian considerations.” Velasquez, p. 103).

“But standards of justice do not generally override the moral rights of individuals.” Velasquez, p. 103).

There are three categories of justice. “Distributive justice … is concerned with the fair distribution of society’s benefits and burdens.” Velasquez, p. 104).

“Retributive justice … refers to the just impositions of punishments and penalties upon those who do wrong: A “just” penalty is one that in some sense is deserved by the person who does wrong.” Velasquez, p. 104).

“Compensatory justice …concerns the just way of compensating people for what they lost when they were wronged by others: A just compensation is one that in some sense is proportional to the loss suffered by the person being compensated (such as loss of livelihood). Velasquez, p. 104). Care

“According to this “care” view of ethics, the moral task is not to follow universal and impartial moral principles, but, instead, to attend to and respond to the good of particular concrete persons with whom we are in a valuable and close relationship. Velasquez, p. 122).

“.. not all relationships have value and so not all would generate the duties of care. Relationships in which one person attempts to dominate , oppress, or harm another, 5 relationships that are characterized by hatred, violence, disrespect and viciousness, and relationships that are characterized by injustice, exploitation, and harm to others lack the value that an ethic of care requires.” Velasquez, p. 142).

“…it is important to recognize that the demand of caring are sometimes in conflict with the demands of justice.” Velasquez, p. 142). Virtue

“A moral virtue is an acquired disposition that is valued as part of the character of a morally good human being and that is exhibited in the person’s habitual behavior. A person has a moral virtue when the person is disposed to behave habitually in the way, and with the reasons, feelings, and desires, that are characteristics of a morally good person.” Velasquez, pp. 132-133).

“…the virtues can be seen as providing a perspective that surveys the same ground as the four approaches, but from an entirely different perspective. What the principles of utility, rights, justice, and caring do from the perspective of action evaluations, an ethics of virtue does from the perspective of character evaluations.” Velasquez, p. 132).

References

Donaldson, Thomas, The Ethics of International Business. New York: Oxford University Press, 1989.

Donaldson, Thomas and Thomas W. Dunfee, Ties That Bind. Boston, Massachusetts: Harvard Business School Press, 1999.

Geva, Aviva, Moral Decision Making In Business: A Phase-Model. Business Ethics Quarterly. Oct. 2000, v. 10, no. 4, pp. 773-803.

Velasquez, Manuel G., Business Ethics: Concepts and Cases. Upper Saddle River, New Jersey: Prentice-Hall, 1998.