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In addition to juggling the myriad present challenges to an organization and its people, stakeholders in an economy must look toward the future of organizations and management. The impact of decisions now on the future of an organization and its stakeholders requires consideration of the ethics involved in leaving a viable economy to future generations. In this lesson, we will revisit the purpose of an economy and consider how ethical approaches to decision-making and economic activity will set direction for the future.

Learning Objectives

By the end of Lesson, you should be able to:

1. Discuss the role that ethical decision-making plays in planning for the future.

2. Explore the implications of considering future generations as part of the individual/group conflict.

3. Illustrate how a systematic approach to futures planning can better prepare an organization for its future.

Content

The Individual-Group Tug of War

Now that we have looked at a number of different ethical dilemmas related to people and organizations, we know that the conflict between individual autonomy and group interests is a recurring pattern in these dilemmas. It is unlikely, and probably not very desirable anyway, that any economy will ever commit totally to protecting either individual interests or group interests, to the exclusion of the other. At one extreme, we would remove the purpose of an economy—to enable people in a group to get what they want. At the other extreme, we would remove most of the motivations to work. What we may be able to hope for, however, is an ethical manner of maintaining them in tandem. Nonetheless, when choices must be made between mutually exclusive alternatives, it is inevitable that one will have to be sacrificed to the other. To what extent can we acknowledge these mutually exclusive choices in strategic planning, and perhaps mitigate their effects insofar as they precipitate ethical dilemmas for decision-makers?

In this respect, individual organizations and the people within them may well follow the course that the United States as a nation (in the person of its government) has adopted in balancing the demands of group security with the preservation of individual freedoms. This balancing act has created a long series of decisions that are never entirely satisfying for either purpose from a utilitarian perspective, and that bend the categorical imperatives involved without breaking them. Such a dialectic, which moves back and forth between the two priorities, is likely to characterize management practice as well. Surely, that is the way professionals and organizations engaged in economic activity are managing the conflict now, making the best possible decisions they can under the circumstances.

Ethical Challenges to Strategic Planning

The problem with occupying the middle ground as a permanent strategy is that, sooner or later, the logical contradiction between the two alternatives forces a choice. One alternative in a dilemma is always "to do nothing." This may mean trying to hold onto the middle ground. As the situation grows more urgent, however, the space between a rock and a hard place shrinks to the point where there is no room for us to stand. In addition, as we have seen in most cases, "doing nothing" amounts to making a passive choice in favor of one of the alternatives for action anyway. The issue facing organizational leaders and those who manage the organization at a practical level is whether or not they choose to take responsibility for those choices, rather than "letting them happen."

One of the forces creating pressure to eliminate the middle ground is the pace of science and technology. New possibilities that emerge from research and development nearly always raise the question, "Just because we can, does that mean we should?" The lag between having the means in hand and realizing the full implications of using it arises, in particular, when research and development are undertaken with a commercial interest in mind. When knowledge becomes intellectual property, issues of self-interest and social responsibility come immediately to the foreground. They call for answers to questions about which one is the higher priority.

The alternatives are straightforward.

This question revolves precisely around the core conflict we have seen in many of the dilemmas we have studied; namely, the necessary trade-off between efficiency in what we accomplish and care for how we accomplish it, even if at the expense of efficiency and the fundamental business purpose of the organization.

When financial goals are tied to the purpose for which a business operates, and they must occur on a timeline that does not allow for reflection on moral consequences, it is often external stakeholders who raise these questions. In an open society where information flows easily, stakeholders in the environment—those who may have no interest in the financial goals of the organization, but great interest in the ethical aspects—tend to speak up. The entire PR or public information function of an organization exists to manage that reality.

Perhaps this is indeed where the future of business and management in the U.S. is headed—trying to hold the internal goals of the organization in tandem with pressures from outside the organization. It is in the nature of leadership and management to ride the fence between internal and external stakeholders and conditions. If the mission is to decide how those divergent interests will be managed, leaders must take a degree of responsibility for both.

Regard for where any aspect of an organization's strategy should head means following proposals to their logical conclusion, and seeing where the greater responsibility may fall. These steps can be taken in analyzing the ethical dilemma. Consider the following:

1. Whose problem is this? (Section I) We need to know if the decision-maker is the government, for-profit or nonprofit organizations, key leaders or innovators, customers, or others with any number of diverse goals and interests. We will not be able to judge the priorities or the standards against which these possibilities will be evaluated if we don't know whose priorities they are, and what alternatives there are from which to choose.

2. What relevant evidence should we consider in weighing any course of action? (Section II)  This aspect is quickly disposed of if we only pay attention to one type of information or perspective. For instance, decisions about the use of an organization's resources can certainly be made strictly on the basis of financial or other such data. The risk lies in failing to take account of individual motivations, social considerations, scientific or technical data, etc. These other frames of reference must be understood, even if it is ultimately decided that the most important evidence we should give greatest weight to lies elsewhere. Otherwise, we do not even fully take account of the financial picture. Since the costs of these other aspects do not disappear in the face of short-term gains simply because we fail to consider them, they are very likely to pop up elsewhere and affect the outcomes we had in mind.

3. How do our options affect all stakeholder interests? (Section III)  If we take proper account of the interests of individuals and organizations; not only in these roles, but also in their roles as taxpayers, citizens, owners, and perhaps those with an interest as external stakeholders—the complexity of a situation mounts. This becomes especially true if concerned individuals play more than one role, and are challenged by reconciling individual, functional, and organizational interests that may not be consistent with each other.

4. How does this option affect the proper balance of rights and duties? (Section IV)  We need to assess whether neglect of duties to certain stakeholders is built into a course of action we are considering. Notice that scarcity always involves neglect of some duty, since scarcity implies that not everyone's needs can be fully met. However, scarcity is a condition of the marketplace, and creates the notion of value. As a result, economic decisions will always have an ethical aspect grounded in the notion of scarcity. Whose rights will prevail, and what duties will take precedence, at the expense of others? Particularly in matters of intellectual property and the commercialization of scientific discoveries or new technology, these issues take on considerable complexity.

5. What will be the consequences of business decisions, as far down the road as we can predict them (Sections V and VI)? Can we responsibly focus on short-term consequences and make decisions on the basis of how manageable they are? The reason long-range planning is a critical part of strategic planning is to prevent our neglecting to consider the long-term effects of present decisions. It is the opportunity to make sure we include them in a cost-benefit analysis or other assessment of the net effects of our decisions.

6. Where do categorical imperatives lie? (Sections V and VI) Where are the fundamental values any organization should serve, and how does this solution preserve and protect them? At the simplest level, these must have something to do with the purpose of the organization, or commitments it has made as to how it will do things in the course of conducting business. This consideration always raises the issue of how seriously an organization takes its mission, values, codes of conduct, and other founding documents that commit it to conducting itself in certain ways, as it works toward achieving its business purpose. This is the drag on efficiency we have seen over and over. It arises with the question of whether assets are an end in themselves, or a means to some other end that should decide an issue.

Reaching the Right Conclusion for All the Wrong Reasons

It is important to note that a conclusion that follows directly from the analysis one does can still be flawed because the analysis is flawed. You might use an analytical tool like our questionnaire and reach a desired conclusion. However, that could happen only if the analysis were loaded in the direction of reaching that conclusion. This usually happens when omissions in the process described above occur, and questions are not fully answered.

In the case of analyzing ethical dilemmas, the adage Garbage In, Garbage Out holds true. The same can be said of any strategic planning process. It reminds us of the importance of being as complete and accurate as possible in our information-gathering in preparation for the process. If our understanding of the situation and stakeholder interests is flawed, the validity of the conclusion is questionable. The quality of planning for the future will be driven by the quality of both the input and its management throughout our decision-making process.

The Pressures of the Future

Insofar as we wish to plan for the future of an organization and its business with ethics in mind, we need to look more closely at two related questions:

These are equally difficult problems. They focus on how strong a responsibility present stakeholders feel for creating an ethical system that will function as such, long after they are gone.

Most people would say that they feel an obligation to pass on to the next generation something at least as good, and, if possible, something better than what they inherited from the previous generation. However, what is really required, in order to do that, may be more than what the present generation is willing to pay. Indeed, it may be more than can be ethically expected of them.

This is particularly true in the United States, where sensitivity to individual autonomy and curbs on the ability of the group to compromise personal freedoms are fundamental priorities. Preserving a system that serves individual needs and is also viable for everyone becomes increasingly difficult.

A variety of pressures works against this priority of protecting and serving individuals. Scarcity of resources, increasing competition, staffing challenges, the extent to which technology drives how the system interacts with consumers, and many other factors may push the system toward meeting the interests of group security, perhaps at the expense of the individual. From the perspective of ethics, the question becomes whether adopting a utilitarian approach is necessary, or just easier. Must we head in that direction, in order for a viable system to exist at all?

In many ways, these questions center on the ethics of asking the present to pay for the needs of the future. In this sense, payment implies not only financial outlays, but also other kinds of sacrifices that would not otherwise have to be made. For instance, if we slow research and technology down to a pace that will enable us to more fully appreciate their implications, the price of attending to the ethical management of the present will be a delay in the realization of benefits for the future.

Summary

Scenarios that are suggested for solving organizational problems must not only be workable, but also ethical. Solutions can be generated by using a systematic method for analyzing problems, but the solution will only be as good as the quality of the input. Therefore, the challenge in planning for the future is twofold: 1) Creating an ethical basis for organizational behavior and development; and 2) Using an ethical planning process for doing so. Ethical strategic planning focuses on what types of sacrifices on the part of present and future stakeholders are appropriate and justifiable on moral grounds.

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