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Identify and explain the rules for ethical decision making. Based upon local and global

factors, why should managers behave ethically?

There are four ethical decision making rules. The ethical decision making rules are utilitarian, moral rights, justice, and practical rules. These rules are helpful guiding principles that assist managers when deciding on the appropriate way to behave in situations where it is necessary to balance a company’s self- interest and the interests of its stakeholders.

The utilitarian rule is that an ethical decision is a decision that produces the greatest good for the greatest number of people. Under the moral rights rule, an ethical decision is one that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it. The justice rule is that an ethical decision distributes benefits and harms among people and groups in a fair, equitable, or impartial way. The practical rule is that an ethical decision is one that a manager has no hesitation or reluctance about communicating to people outside the

company because the typical person in a society would think it is acceptable.

In reference to the to the utilitarian rule managers must decide which is the most ethical

course of business action. Thereafter, managers consider first how different possible courses of

business action would benefit or harm different stakeholders. Managers must choose a course

of action that provides the most benefits, or conversely the one that does the least harm, to


From a moral rights perspective, managers should compare and contrast different

courses of business action on the basis of how each course will affect the rights of the company’s

different stakeholders. Managers should then choose the course of action that best protects and

upholds the rights of all stakeholders. There is a wise saying “Do unto others as you would have...
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