Paine Ethics Framework.
2) Choose an ethical dilemma that is relevant to the Online Education emerging industry (examples of online schools emerging are Capella University, University of Pheonix, etc..) and using the concepts in Paine’s article attached “Ethics: a basic framework”, describe and defend your recommended course of action addressing the following questions: Is the action consistent with the actor's basic duties? Does it respect the rights and other legitimate claims of the affected parties? Does it reflect best practice? Is it compatible with the actor's own deeply held commitments?
Ethics: A Basic Framework
Markets are sometimes described as “amoral,” but market participants frequently make ethical
judgments about the people and practices they encounter in the marketplace. Indeed, most market
actors prefer doing business with companies and individuals they can trust, and few—at least in a
free and open society—willingly submit to treatment they regard as unethical. Wronged, injured,
slighted, or ignored, many will take their business elsewhere, and some will actively seek redress
through the courts, media, legislature, or other channels. Some will even “reward” or “punish”
companies for their conduct toward third parties—for example, investors who favor good corporate
citizens or customers who shun human rights violators.
A growing body of research points to these and other links between ethics and performance.
Researchers have found, for example, that greater creativity is associated with fair rewards, mutual
helpfulness, and honest information;1 that employees are more likely to share knowledge in an
environment of trust;2 that avoiding misconduct and practicing good corporate citizenship contribute
to a positive reputation;3 and that firms convicted of wrongdoing often experience lower returns in
succeeding years.4 Of course, these findings do not prove that ethics always “pays.” Indeed, such a
conclusion would be mistaken. But this and other research does show that a company’s ethics has
important implications for its functioning as an organization, its ability to manage risk, its reputation
in the marketplace, and its standing in the community.5
Despite these findings, ethical analysis has not traditionally been a defined part of management
decision making. In most well-run companies, financial, legal, and competitive analyses are explicit
and routine. Ethics, by contrast, is often left to instinct or “gut feel” and managed on an ad hoc basis as
problems arise. As social science research indicates, many people make ethical judgments on the
basis of instinct and emotion.6 If they use reason and analysis at all, they do so after the fact—to
justify their instinctual response rather than to formulate or test their judgment.
Instinct, of course, is an important guide to action and should rarely be ignored. But people’s
instincts frequently differ, and few people have such well-honed instincts that they automatically see
the ethical issues involved in, say, a complex financial restructuring, a new business model, or a
technology breakthrough. While instinct alone may work well enough in relatively simple, familiar
situations, a more structured approach to identifying and addressing ethical issues is essential for
business leaders today. This note outlines one such approach.
A Framework
Scholars have long debated the definition of ethics.7 It has been defined as narrowly as “the study
of right and wrong” and as broadly as “the general inquiry into what is good.”8 Our framework
draws from only a small part of this vast territory. It involves four fundamental questions that an
actor—individual, company, or group—should consider when evaluating a possible course of action:
• Is the action consistent with the actor’s basic duties?
• Does it respect the rights and other legitimate claims of the affected parties?
• Does it reflect best practice?
• Is it compatible with the actor’s own deeply held commitments?
These questions elicit different types of ethical norms or standards. The first two questions bring
out basic requirements—the ethical minimum that would be expected of anyone in the situation. The
third and fourth raise considerations that are somewhat more discretionary though nonetheless
important for companies and individuals who view themselves as leaders, given that leadership,
almost by definition, means doing more than the minimum. Effective use of this framework requires
an understanding of four concepts from ethical theory, each associated with one of the questions:
Duties A basic moral duty is a requirement to act—or not act—in a certain way. Duties are
typically owed to other parties—the company, colleagues, customers, the general public—though
duties to oneself are also important. A distinction is sometimes drawn between “perfect” duties,
which involve specific obligations to particular parties (e.g., to keep a promise), and “imperfect”
duties, which are more general and open-ended (e.g., a duty of charity). Although any competent
actor is presumed to be capable of fulfilling basic duties, specialized knowledge and expertise are
often required. Many basic moral duties have been written into law or otherwise codified. For
example, duties to respect property, refrain from fraud, and avoid certain injuries to others are
enforced by many legal systems, and similar provisions are found in many codes of business conduct.
Basic duties are not always explicit; they may also reside in tacit understandings of what human
beings owe to one another. Because basic duties reflect widely held expectations, actions that breach
these duties may give rise to criticism or blame. They may also subject the actor to demands for an
apology or compensation for injuries caused by the offending action.
Rights Moral duties go hand in hand with moral rights. A right is often the converse of a duty.
For example, one party’s property right corresponds with other parties’ duty not to steal. Similarly,
one party’s right to know typically corresponds with another party’s duty to inform. A right is thus
an entitlement to certain behavior from other people.9 Rights are sometimes categorized as “positive”
if they require others to commit resources or take affirmative action (e.g., the right to education) and
“negative” if they require others to forbear from certain actions (e.g., the right to privacy). Even
though rights and duties are correlated, it is sometimes useful to focus on the rights side of the
equation as rights are sometimes better defined than the related duties. Like basic duties, basic rights
are often written into law or formal codes such as the Universal Declaration of Human Rights. Like
failure to fulfill basic duties, failure to respect basic rights may be cause for blame, and rights
violators may be penalized or required to compensate for harm caused by their actions.
Best practice Beyond basic rights and duties, most ethical systems also posit certain principles
or standards of excellence. In ethical theory, these are sometimes referred to as “ideals,” “values,” or
“aspirations.” They might also be termed “best practice” standards since they represent conduct that
is desirable but not necessarily obligatory. The distinction between behavior that is ethically required (the “musts”) and behavior that is good but not mandatory (“shoulds” or “good-to-dos”) is not
always clear. One test is how the behavior would be received. Conduct that exemplifies best practice
will often elicit praise or admiration even though its absence would not merit criticism or blame. For
instance, honoring an agreement that it is not binding may earn the actor “moral credit” even if
failure to carry out the agreement would have been excused. Similarly, a company that provides
information beyond the requirements of law and basic honesty may garner praise for its candor even
though nondisclosure would not have been blameworthy.
Commitments Most individuals and organizations take on moral commitments that stand
outside—or go beyond—the publicly defined rights, duties, and standards that apply to all. These
self-chosen, or subjective, commitments may be rooted in an individual’s personal values and beliefs,
the culture and practices of the organization, or the needs of the larger society. For example, a
manager may believe deeply in honesty—telling it “straight” when most others would spin or shade
the truth. Or a company may define itself around a commitment to the environment, employee
development, or extraordinary service to the customer. Such commitments typically represent an
important aspect of the actor’s identity. Thus, although falling short on these commitments may not
generate external criticism, it can be quite damaging to the actor’s self-concept and may even lead to
the actor’s impaired functioning.
Applying the Framework
This framework sounds simple, but applying it can be difficult. In using it to evaluate a possible
course of action, challenges arise at each step in the process.
Understanding the facts A crucial first step is to understand the proposed course of action.
This may seem obvious, but in many cases decision makers do not fully understand the nature or
consequences of actions they are contemplating or even their own ultimate purpose in acting.
Confident in their own good intentions and focused on their own narrow objectives, they often
overlook collateral effects, alternative interpretations, and likely impacts on others. Yet, such
considerations are integral to a reliable analysis. Without them, it is impossible to determine whether
an action is harmful, fair, or even legal—or to predict its effectiveness in furthering the actor’s own
aims. Understanding key aspects of the action—its intended purpose, its proper description, and its
likely consequences—is thus an essential step in the analytic process.
A useful tool for this purpose is what is sometimes called “stakeholder analysis” or “stakeholder
impact assessment.” 10 Stakeholder analysis has two basic components: identifying the parties likely
to be affected by the action (that is, those with a “stake” to consider); and, for each party, mapping
the action’s likely consequences—both positive and negative, short term and long. With the likely
outcomes for various stakeholders thus arrayed, the proposed action can be more thoroughly and
systematically evaluated against the relevant ethical standards (duties, rights, best practices, and
commitments). This process may also reveal opportunities to mitigate unnecessary harms or enhance
the planned action’s benefits. The workbook provided in Exhibit 1 can be used to guide this analysis.
Identifying relevant standards A second challenge is defining what ethical standards to
apply. Because ethical norms are often tacit rather than explicit and because they derive from varied
sources—reason, law, philosophy, religion, custom, and perhaps even biology—deciding on the
appropriate standards in a given situation is not always straightforward.
11 One starting point will be
the company’s own code and relevant industry standards. Another useful point of reference is the
Global Business Standards Codex, a compilation of standards commonly found in leading codes of
conduct for business around the world.12 Although the codex does not differentiate between basicduties and best practices, it provides a list of widely accepted standards to govern a company’s
dealings with its stakeholders, including precepts such as obey the law, forgo bribery and deception,
disclose conflicts of interest, practice fair dealing, safeguard health, and protect the environment.13
The creators of the codex found that most of the commonly occurring standards were elaborations of
just eight basic principles. A summary of the standards associated with each is found in Exhibit 2.
Fiduciary principle: Act in the best interests of the company and its investors.
Property principle: Respect property and the rights of those who own it.
Reliability principle: Keep promises, agreements, contracts, and other commitments.
Transparency principle: Conduct business in a truthful and open manner.
Dignity principle: Respect the dignity of all people.
Fairness principle: Deal fairly with all parties.
Citizenship principle: Act as responsible members of the community.
Responsiveness principle: Be responsive to the legitimate claims and concerns of others.
While many of these principles—and their associated standards—have roots in numerous ethical
traditions, their significance and interpretation can vary enormously across different social and
cultural contexts. So it would be simplistic to call them “universal values.” Still, given their
widespread endorsement, they provide a useful point of reference.14
Maintaining objectivity All forms of analysis are vulnerable to the prejudices of their users.
To correct for self-serving and other biases in ethical analysis, many “tests” of ethical judgment have
been offered. Three of the best known and most useful are:
Visibility: Would I be comfortable if this action were described on the front page of a respected newspaper?
Generality: Would I be comfortable if everyone in a similar situation did this?
Legacy: Is this how I’d like my leadership to be remembered?
These tests evoke varied perspectives for evaluating our judgments.15 The “visibility” test—also
called the “transparency,” “sunshine,” or “newspaper” test—reminds us to consider how our actions
may be viewed by others. The “generality” test asks us to consider what would happen if our actions
became the general practice.16 Would society benefit? Would we want to live in such a society?
The
legacy test appeals to the decision maker’s own future self-evaluation. Although these tests are
presented as hypothetical, their importance for leaders is often real—given that leaders’ actions are
frequently reported in the press, replicated by others, and even, in some cases, recorded in history.
As this discussion indicates, ethical analysis requires rigorous thought and careful deliberation. In
many cases, it will also require research and information gathering—on law and regulation, codes of
conduct, customary practice, expert opinion, stakeholder concerns, public opinion, and other matters.
Of course, ethical analysis is, to some extent, situational across time and cultures. As with legal and
economic analysis, reasonable people will disagree, and errors will be made. But the magnitude of
the errors can be substantially lessened and better decisions made if the method is consistently and
carefully applied.
Exhibit 2 Widely Endorsed Standards of Corporate Conduct
Principles What they require What they prohibit
Fiduciary
Diligence, candor, loyalty to company
Disclosure of conflicts of interest
Prudence, intelligence, best efforts
Unauthorized self-dealing
Self-benefit at expense of company
Negligence, carelessness, half-hearted effort
Bribery, inducing breach of fiduciary duty
Dignity
Protect human health, safety, privacy, dignity
Respect fundamental human rights
Affirmative action to develop human capacities
Special concern for the vulnerable
Coercion, humiliation, invasion of privacy
Injury to health, safety
Force, violence, harming the innocent
Violations of basic human rights
Property
Respect for others’ property
Safeguarding own property
Responsible use of own property
Theft, embezzlement
Misappropriation of intellectual property
Waste
Infringement on others’ property
Transparency
Accuracy, truthfulness, honesty
Accurate presentation of information
Disclosure of material information
Correction of misinformation
Fraud, deceit
Misrepresentation
Materially misleading nondisclosures
Reliability
Fidelity to commitments, keeping promises
Fulfilling contracts, carrying out agreements
Care in making commitments—not more than
can deliver
Breach of promise
Breach of contract
Going back on one’s word
Fraudulent promises
Fairness
Fair dealing (in exchange)
Fair treatment (opportunity, pay)
Due process (notice, opportunity to be heard)
Fair competition (conduct among rivals)
Preferential or arbitrary treatment
Unfair discrimination
Unfair competitive advantage
Suppressing competition
Citizenship
Respect for law and regulation
Share in maintaining the commons
Cooperation with public officials
Civic contribution
Recognizing government’s jurisdiction
Illegality, indifference to the law
Freeloading, free riding
Injury, damage to society, the environment
Improper involvement in politics or
government
Responsiveness
Readiness to listen
Responding to complaints and suggestions
Addressing legitimate concerns of others
Indifference to legitimate claims and claimants
Neglect of serious concerns