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Chapter 7: Ethical Thinking

Chapter 7: Ethical Thinking

Learning Objectives

By the end of this chapter, you should be able to:

  • identify ethical dimensions of business decisions
  • recognise competing stakeholder interests
  • distinguish legal decisions from ethical decisions
  • identify potential harms and unintended consequences
  • evaluate decisions using multiple ethical perspectives
  • incorporate ethical considerations into recommendations

Why This Matters

A recommendation can be:

  • profitable;
  • legal;
  • feasible;
  • strategically sound;

and still be ethically questionable. Business decisions affect people.

  • Employees.
  • Customers.
  • Suppliers.
  • Communities.
  • Shareholders.
  • Future generations.
  • The environment.

Ethical thinking asks us to consider those consequences.

Discover Your Mad Skills Principle

The fact that we can do something doesn’t mean we should do it.

Ethical thinking expands the definition of a successful recommendation. The question is no longer simply: "Will this work?" It becomes: "Will this create value without creating unacceptable harm?"

Deciphering Case Characteristics

Ethical thinking becomes especially important when cases involve:

  •  employee treatment;
  • customer data;
  • artificial intelligence;
  • environmental impact;
  • healthcare;
  • vulnerable populations;
  • government decisions;
  • discrimination;
  • supply chains;
  • social enterprises.

But ethics should not be treated as an "ESG section." Ethical considerations can exist in almost any business decision.

Something can be legal and still be ethically questionable. For example:

  • A company may legally collect customer information. But should it collect information customers don't reasonably expect to be used?
  • A company may legally outsource production. But should it do so if working conditions are unacceptable?
  • A company may legally automate jobs. But what responsibility does it have to affected employees?

These are ethical questions.

The Stakeholder Lens

Identify:

  • Who benefits?
  • Who bears the cost?
  • Who has power?
  • Who has little voice?
  • Who could be harmed?
  • Who has responsibility?

These questions can reveal ethical issues hidden inside seemingly straightforward business decisions.

Ethical Decision-Making Framework

When facing an ethical dilemma, ask:

  1. What happened? Establish the facts.
  2. Who is affected? Identify stakeholders.
  3. What values conflict? Identify the competing principles.
  4. What options exist? Don't assume there are only two.
  5. What are the consequences? Consider short- and long-term effects.
  6. What decision can we defend? Would you be comfortable defending the decision publicly?

Coach's Lens

Ethics should not be something teams add to the final slide because they think judges expect it. It should influence the recommendation. If you say: "We recommend automating 30% of the workforce," the ethical question isn't simply whether the plan saves money. You should consider:

  • who loses their jobs;
  • whether retraining is possible;
  • how the organisation communicates the change;
  • whether the productivity gains justify the disruption;
  • what responsibilities the organisation has to employees.

The best recommendations recognise these tensions rather than pretending they don't exist.

Common Mistakes

  • Treating Ethics as a Checkbox
  • Adding "ethical considerations" at the end of the presentation.
  • Assuming Profit and Ethics Are Opposites
  • Sometimes ethical decisions create long-term economic Value.
  • Ignoring Stakeholders
  • Focusing exclusively on shareholders.
  • Confusing Legal With Ethical
  • Legality establishes a minimum standard, not necessarily the best decision.
  • Moralising
  • Ethical analysis should be thoughtful rather than judgmental.

Competition Example

A company can reduce costs by moving production to a lower-cost supplier. Financial analysis shows a significant benefit. Further research reveals the supplier has questionable labour practices. The team now has a strategic choice. Options might include:

  • continue using the supplier;
  • reject the supplier;
  • require compliance standards;
  • establish an audit process;
  • develop alternative suppliers.

The ethical analysis doesn't eliminate the business decision. It makes the decision better informed.

Mad Skills Drill

Take a recommendation from a previous case. Identify:

  • three groups that benefit;
  • three groups that could be negatively affected;
  • one ethical concern;
  • one mitigation strategy.

Then ask, "Would you still recommend the strategy?" If not, what would you change?

Reflection Questions

  1. Have you ever ignored an ethical issue because it made the recommendation more complicated?
  2. Which stakeholder did your team focus on most?
  3. Which stakeholder received the least attention?
  4. Would you be comfortable defending your recommendation publicly?

Chapter Summary

Ethical thinking asks us to look beyond what is profitable or feasible. It asks: What is responsible? Strong case-solving competitors recognise that sustainable business decisions must consider both performance and consequences.

Key Takeaways

✓ Identify who benefits and who bears the cost.

✓ Consider stakeholders beyond shareholders.

✓ Look for unintended consequences.

✓ Build ethical considerations into the recommendation rather than adding them at the end.

Looking Ahead

Ethical thinking helps us evaluate what we should do. But many case decisions involve uncertainty. You may not have enough information to know which option will produce the best Outcome. That brings us to another essential competitive skill: Decision-Making Under Uncertainty.

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