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What Causes an Ethical Dilemma in Conducting Business?

by Audra Bianca ; Updated September 26, 2017
Scales

Managers have to weigh different obligations when making decisions. Policies and procedures, ethics guidelines, directions from superiors, customer needs and strategic goals all affect the final outcome. Although you may know all these guidelines, you may feel intense pressure to get results. This contrasting pressure between the ethics policies your business has in place and the need to produce short-term results can cause ethical dilemmas.

Cost-Benefit Analysis

If a business culture is committed to achieving the bottom line at all costs, then the cost-benefit analysis may cause leaders to decide that certain risks, however unethical, are acceptable. The Ford Pinto case of the 1970s saw the parent company accept the risk of motorists getting injured as the result of a design flaw. The design team knew from pre-production tests of the tendency for the Pinto's fuel tank to rupture following a rear-end impact. Ford's leadership decided to move forward because the most important thing was to maintain the production schedule. In this case, the end result was deemed more beneficial than the cost of paying claims for people who might be injured or killed in vehicle fires.

Ignorance is Bliss

Another reason that managers and employees may find themselves in ethical dilemmas is because they're not held accountable by superiors. A boss could choose not to do anything about an employee's unethical behavior because it may be more personally beneficial to look the other way, such as if a boss doesn't question the ethics of a top salesman because his own bonus is tied to his team's performance. It's not enough for an organization to have rules and procedures and an ethics code. Such guidelines will only be effective when enforced by people with appropriate authority.

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Conflicting Values

Ethical dilemmas may occur because of conflicting values between two or more people in an organization. One manager may value product quality over quantity while another manager may value thriftiness. These managers may discuss changing to a cheaper supplier for a material used in production because of the potential to save money. However, the first manager may object because he knows the cheaper material will produce a product of lesser quality, which is not good for customers. Without a culture of shared values, the least ethical choice may be approved.

Limited Resources

Sometimes, ethical dilemmas arise when you have a decision to make and limited resources, making it necessary to choose only one of two satisfactory options. You may experience a moral conflict because you feel unable to choose one person over the other. For example, say you have one job promotion to offer a member of your team. Two candidates are equally qualified. One employee has more seniority and has been waiting in line longest for a promotion, and the other has a better attitude and needs the promotion to better provide for a large family. Picking either person will leave the other feeling that they were passed over unfairly, but you're limited by the company's resources.

About the Author

Audra Bianca has been writing professionally since 2007, with her work covering a variety of subjects and appearing on various websites. Her favorite audiences to write for are small-business owners and job searchers. She holds a Bachelor of Arts in history and a Master of Public Administration from a Florida public university.

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