Ethical Dilemmas in Business: Causes, Examples & Resolution
This paper examines the concept of business ethics and the ethical dilemmas that arise within modern organizations. It opens with a literature review drawing on multiple definitions of business ethics from academic and institutional sources, including perspectives that question whether business ethics is anything more than a theoretical construct. The paper then categorizes common ethical concerns identified by the Institute of Business Ethics—such as bribery, discrimination, and environmental stewardship—and presents seven illustrative dilemmas drawn from Martin Cohen's 101 Ethical Dilemmas. Finally, it outlines a two-part philosophical framework for resolving such dilemmas by evaluating both the consequences of proposed actions and the moral character of the actions themselves.
- Introduction: Globalization and forces reshaping business ethics
- Literature Review: Definitions and debates on business ethics
- The Ethical Dilemma of Business: Common dilemmas and seven illustrated examples
- Resolving Ethical Dilemmas in Business: Philosophical framework for ethical decision-making
- Conclusion: Key takeaways and call for adaptive ethical leadership
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What makes this paper effective
- The paper grounds its argument in a variety of authoritative definitions before moving to analysis, giving the reader a solid conceptual foundation before engaging with specific dilemmas.
- It acknowledges a dissenting view — that business ethics may be an oxymoron — which adds intellectual balance and prevents the discussion from appearing one-sided.
- By listing and briefly explaining seven concrete dilemmas from Cohen's work, the paper makes abstract ethical concepts tangible and relatable to real organizational situations.
Key academic technique demonstrated
The paper demonstrates effective use of a literature review as scaffolding. Rather than simply defining business ethics once, it juxtaposes multiple institutional and scholarly definitions, then uses that range of perspectives to set up the subsequent analysis of dilemmas and resolution strategies. This technique shows how synthesizing sources can build a richer conceptual framework than any single source allows.
Structure breakdown
The paper follows a clear four-part progression: (1) a contextualized introduction linking globalization to new ethical demands; (2) a literature review comparing definitions and theoretical debates; (3) a typology of common ethical dilemmas with seven concrete examples; and (4) a practical resolution framework based on evaluating consequences and the moral character of actions, closing with a call for leaders to develop adaptable ethical judgment.
Introduction
Globalization and market liberalization have radically changed the business community. Although they have been primary drivers of these changes, they have not been the sole generators of transformation. Other contributing forces include the economic growth of past centuries, improved living standards, outsourcing operations, an increased focus on customers and personnel, and heightened competition among economic agents. All of these developments have introduced new concerns and, consequently, new legislation. A relevant example of an emerging feature within the business community is the expectation that organizations operate in accordance with the norms of business ethics.
Literature Review
The specialized literature on business ethics is rather comprehensive, containing numerous definitions of the concept, examples of corporate situations, and a wide variety of related topics. Some of the most significant definitions are presented below.
Crystal (2008) defines the concept as follows: "Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings with a single customer."
The Institute for Business Ethics offers a broader institutional perspective: "Business ethics is the application of ethical values to business behaviour. It applies to any and all aspects of business conduct, from boardroom strategies and how companies treat their employees and suppliers to sales techniques and accounting practices. Ethics goes beyond the legal requirements for a company and is, therefore, about discretionary decisions and behaviour guided by values. Business ethics is relevant both to the conduct of individuals and to the conduct of the organisation as a whole."
The University of Illinois at Chicago provides a concise academic definition: "Business ethics consists of a set of moral principles and values that govern the behavior of the organization with respect to what is right and what is wrong."
Other sources, however, suggest that business ethics may not exist beyond theoretical frameworks. As Crane and Matten (2007) note, "Business ethics, it has been claimed, is an oxymoron. [...] To say that business ethics is an oxymoron suggests that there are not, or cannot be, ethics in business: that business is in some way unethical."
Elizabeth M. Vallance (1995) acknowledges the existence of business ethics but highlights the importance of distinguishing between "a consciousness-raising activity, encouraging managers to be good" and "a rigorous, analytical tool."
The Ethical Dilemma of Business
The ethical dilemma of business is a general term applied to a wide range of situations that can arise within the business community and threaten the ethical integrity of an organization. As suggested in the previous section, such dilemmas can occur at all organizational levels — including employee-employer relations, organization-customer relations, employee-employee relations, and interactions with any type of organizational stakeholder.
The Institute of Business Ethics identifies the most common issues addressed within the business community. These include:
The primary areas of concern are discrimination, environmental issues, employees speaking out, and harassment.
Martin Cohen has written extensively on this subject in his book 101 Ethical Dilemmas, in which he states: "Ethics is about choices which matter, and choices which matter are dilemmas." This paper does not attempt to exhaustively present all ethical dilemmas within the business community, but limits itself to seven illustrative examples drawn from Cohen's work:
The Lifeboat — A situation in which only a few can succeed or survive, raising the question of how many more can be saved or helped to succeed at the risk of one's own loss.
The Internet Bargain — A situation in which a person purchases a product and the invoice incorrectly states that it has already been paid. The question is whether the person will declare the mistake or keep both the product and the money.
The Toaster — A situation in which one party is aware of the uselessness or wrongfulness of another party's actions. When presented with an opportunity to act without the first party's knowledge, the question concerns what course of action the second party should take.
The Liar — This dilemma is built on three premises: lying is immoral, everybody lies, and there are good reasons for lying. In a situation where one person lies and the truth would harm others, the dilemma is whether the person should continue lying or confess.
Free to Do Otherwise — A situation in which a general solution is proposed for a broader population, but some individuals feel it does not apply to them personally. The dilemma is whether those individuals should do what is best for the group or for themselves.
The Ascetic Tale of Chrysippus the Stoic — A situation in which one must determine whether a given pleasure is good or bad and choose accordingly.
The Pirate — A situation involving two colleagues, one of whom is saving up to purchase an expensive software program from the company and another who steals it. The dilemma is whether the first colleague should do nothing, report the theft, or steal the product herself (Cohen, 2003).
Conclusion
The multifaceted changes of recent decades have generated significant transformations within the business community. One effect of these modifications is that organizations now place an increased emphasis on how they conduct operations beyond what is strictly required by legislation. This often gives rise to ethical dilemmas.
The specialized literature on ethical dilemmas is rather extensive, offering readers wide access to resources. A highly relevant work in this field is Martin Cohen's 101 Ethical Dilemmas. Of the dilemmas presented in that volume, this paper has discussed seven: the lifeboat, the internet bargain, the toaster, the liar, free to do otherwise, the ascetic tale of Chrysippus the Stoic, and the pirate.
The Institute of Business Ethics has identified that the most pressing concerns center on environmental responsibilities, harassment, and discrimination.
The most appropriate course of action when addressing business ethical dilemmas is to work through questions relating to both the measures to be taken and the consequences of those measures. Ultimately, all leaders must recognize that the literature will not offer them a perfect solution. In resolving ethical problems, they must deepen their theoretical knowledge and develop the skills needed to adapt and apply theory to specific situations within actual business contexts.
Cohen, M., 101 Ethical Dilemmas, Routledge, 2003.
Crane, A., Matten, D., Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization, Oxford University Press, 2007.
Crystal, G., What Is Business Ethics? Wise Geek, 2008, http://www.wisegeek.com/what-is-business-ethics.html. Last accessed on December 8, 2008.
Vallance, E.M., Business Ethics at Work, Cambridge University Press, 1995.
Website of the Institute for Business Ethics, Last accessed on December 8, 2008.
Resolving an Ethical Dilemma, Center for Ethics and Business, Last accessed on December 9, 2009.
What is Business Ethics, University of Illinois at Chicago, Last accessed on December 8, 2008.
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