Marketing and ethics

11/8/2018 An Ethical Decision Model

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2.3 An Ethical Decision Model

L E A R N I N G O B J E C T I V E

1. Understand one model for ethical decision making: a process to arrive at the most ethical op�on

for an individual or a business organiza�on, using a virtue ethics approach combined with some

elements of stakeholder analysis and u�litarianism.

Josephson’s Core Values Model

Once you recognize that there is a decision that involves ethical judgment, Michael Josephson would

first have you ask as many questions as are necessary to get a full background on the relevant facts.

Then, assuming you have all the needed information, the decision process is as follows:

1. Identify the stakeholders. That is, who are the potential gainers and losers in the various decisions

that might be made here?

2. Identify several likely or reasonable decisions that could be made.

3. Consider which stakeholders gain or lose with each decision.

4. Determine which decision satisfies the greatest number of core values.

5. If there is no decision that satisfies the greatest number of core values, try to determine which

decision delivers the greatest good to the various stakeholders.

It is often helpful to identify who (or what group) is the most important stakeholder, and why. In

Milton Friedman’s view, it will always be the shareholders. In the view of John Mackey, the CEO of

Whole Foods Market, the long-term viability and profitability of the organization may require that

customers come first, or, at times, some other stakeholder group (see “Conscious Capitalism” in

Section 2.4 "Corporations and Corporate Governance").

The Core Values

Here are the core values and their subcomponents as developed by the Josephson Institute of

Ethics.

Trustworthiness: Be honest—tell the truth, the whole truth, and nothing but the truth; be

sincere, forthright; don’t deceive, mislead, or be tricky with the truth; don’t cheat or steal, and

don’t betray a trust. Demonstrate integrity—stand up for what you believe, walk the walk as well

as talking the talk; be what you seem to be; show commitment and courage. Be loyal—stand by

your family, friends, co-workers, community, and nation; be discreet with information that comes

into your hands; don’t spread rumors or engage in harmful gossip; don’t violate your principles

just to win friendship or approval; don’t ask a friend to do something that is wrong. Keep

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promises—keep your word, honor your commitments, and pay your debts; return what you

borrow.

Respect: Judge people on their merits, not their appearance; be courteous, polite, appreciative,

and accepting of differences; respect others’ right to make decisions about their own lives; don’t

abuse, demean, mistreat anyone; don’t use, manipulate, exploit, or take advantage of others.

Responsibility: Be accountable—think about the consequences on yourself and others likely to

be affected before you act; be reliable; perform your duties; take responsibility for the

consequences of your choices; set a good example and don’t make excuses or take credit for other

people’s work. Pursue excellence: Do your best, don’t quit easily, persevere, be diligent, make all

you do worthy of pride. Exercise self-restraint—be disciplined, know the difference between what

you have a right to do and what is right to do.

Fairness: Treat all people fairly, be open-minded; listen; consider opposing viewpoints; be

consistent; use only appropriate considerations; don’t let personal feelings improperly interfere

with decisions; don’t take unfair advantage of mistakes; don’t take more than your fair share.

Caring: Show you care about others through kindness, caring, sharing, compassion, and

empathy; treat others the way you want to be treated; don’t be selfish, mean, cruel, or insensitive

to others’ feelings.

Citizenship: Play by the rules, obey laws; do your share, respect authority, stay informed, vote,

protect your neighbors, pay your taxes; be charitable, help your community; protect the

environment, conserve resources.

When individuals and organizations confront ethical problems, the core values decision model offered

by Josephson generally works well (1) to clarify the gains and losses of the various stakeholders,

which then raises ethical awareness on the part of the decision maker and (2) to provide a fairly

reliable guide as to what the most ethical decision would be. In nine out of ten cases, step 5 in the

decision process is not needed.

That said, it does not follow that students (or managers) would necessarily act in accord with the

results of the core values decision process. There are many psychological pressures and organizational

constraints that place limits on people both individually and in organizations. These pressures and

constraints tend to compromise ideal or the most ethical solutions for individuals and for

organizations. For a business, one essential problem is that ethics can cost the organization money or

resources, at least in the short term. Doing the most ethical thing will often appear to be something

that fails to maximize profits in the short term or that may seem pointless because if you or your

organization acts ethically, others will not, and society will be no better off, anyway.

K E Y TA K E A W AY

Having a step-by-step process to analyze difficult moral dilemmas is useful. One such process is offered

here, based on the core values of trustworthiness, caring, respect, fairness, responsibility, and

ci�zenship.

E X E R C I S E

1. Consider XYZ in the exercises for Sec�on 2.2.5 "Josephson’s Core Values Analysis and Decision

Process" and use the core values decision-making model. What are XYZ’s op�ons when they first

no�ce that two of their models are causing sudden accelera�on incidents that put their customers

at risk? Who are the stakeholders? What op�ons most clearly meet the criteria for each of the

core values?

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