Business Ethics: Resolving Ethical Dilemmas in the Workplace

Introduction to Ethical Dilemmas in Business

An ethical dilemma is defined as a situation where "an agent has moral reasons for doing two different actions, but where doing both of those two actions is not possible" (McConnell, 2014). Businesses often find themselves in what they believe to be moral dilemmas, if only because of the way they are framing the issue. Not all dilemmas are genuine — some are driven by a lack of knowledge, imperfect information, or logical fallacies. Understanding how to identify and resolve authentic ethical dilemmas is therefore a critical competency for business professionals.

Analyzing Two Business Ethics Scenarios

In the first scenario, there is no genuine ethical dilemma for James. He perceives that he could jeopardize his security, yet ethics hotlines are intended to be anonymous. Furthermore, accounting fraud is a criminal activity, and the company stands to lose substantially if that fraud were discovered. James' fears are therefore irrational — as in the Enron case, once fraud is discovered, employees lose their jobs regardless. His only rational choice to preserve his future is to utilize the hotline or to otherwise report the irregularities.

In the second scenario, the company does face a dilemma, and it arises because of a lack of concrete information. The recall concept has emerged largely from the belief that the toy could bring harm to a child. This has yet to be proven — indeed, proving it would likely imply that a child has already been harmed — but at the same time, a company willingly losing money during its key holiday season over a perceived risk that may be overstated is not sound decision-making either. The company must learn more about the actual risk its toys pose to children rather than making a decision on a hypothetical, perceived risk. Facts make for good ethical decision-making; speculation does not.

In the real world, many companies face what they frame as ethical dilemmas when the underlying issue is actually one of public relations or incomplete information. When Apple faced controversy over Foxconn's labor practices, the controversy was driven largely by people who had never been inside a Foxconn factory, had never spoken with workers there, and had likely never visited China. They were applying Western contexts and values to a completely different company and culture. Apple was faced more with a public relations dilemma than a moral one, despite intensive media coverage (Bilton, 2014).

A Real-World Ethical Dilemma: The Fermata Entertainment Case

One genuine dilemma involves the disclosure of potentially damaging information. An instructive example comes from a company called Fermata Entertainment. An associate, Binta Niambi Brown, was closing a deal with a client when information surfaced that could potentially have scuttled the agreement (Giang, 2015). The senior partner was unavailable, so Brown was left to face the ethical dilemma alone. Revealing the information risked losing the deal, which would be damaging both to her company and to her career. However, not disclosing the information would essentially constitute a fraud on the client, who would be entering into an agreement under false pretenses. There is no specific legal guideline regarding the disclosure of information in private contract negotiations, making this a strictly moral dilemma.

The resolution came through honesty: Brown chose to reveal the information to the client. The client was still willing to proceed with the company. Deal negotiations continued, the issue was ultimately resolved, and an agreement was signed. Brown did not lose the deal, and her honesty paid dividends for years thereafter — both personally and for her organization.