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One of the most important leadership skills you can possess is a high moral intelligence.
It may appear that bad behavior is rewarded in the corporate world, but it is usually a very short-term phenomenon. In the long-term, good behavior tends to pay off.

What makes ethical dilemmas particularly difficult is that they often involve conflicts between two or more deeply held beliefs. Consider this admittedly simple example …

A friend of yours just had a baby. He’s the most homely baby you’ve ever seen. While holding her new baby boy in her arms, your friend asks, “Isn’t he the best looking baby you’ve ever seen?”

Now you value honesty. But you also believe you shouldn’t needlessly hurt someone’s feelings. You have an ethical dilemma!

Ethical dilemmas flow upward
All of us are leaders, even if it’s just personal leadership. However, when you start managing others, it’s crucial to have a framework in place to deal with ethical dilemmas. Leaders must learn to apply their values, aligned with the values of their organization, to these situations. Ethical decisions are often trade-offs between:

• Utility – the value delivered to the stakeholders in your organization

• Rights – entitlement to something

• Justice – equitable sharing of pain and pleasure

Because of these trade-offs, leaders must be prepared to deal with ethical dilemmas because these decisions tend to flow upward. So leaders must develop a framework to handle these inevitable challenges.

The benefits of an established framework
There are at least four benefits to putting a framework in place for making ethical decisions:

• Efficiency – decisions can be made more quickly

• Consistency – results in more systematic outputs

• Payback – builds emotional goodwill with your constituents

• Self-respect – you feel good about yourself when you look in the mirror

3 steps to solving ethical dilemmas

#1 – Know your values
There are certain values about which society agrees. For example, we tend to value honesty. Our discussion here isn’t designed to change your values – instead, it’s about applying them. Before you can apply them, you have to know what they are.

If you haven’t formally contemplated your values, or even if you haven’t thought about it for awhile, check out our article on core values.

Application: Create your list of core values.

#2 – Select a model
According to the book, Moral Issues in Business, ethical theories can be divided into two classifications: consequential theories (the formal term for these is teleological theories) and non-consequential theories (formal name is deontological theories).

The following is not a complete list of ethical theories, but it certainly covers the most significant ones for business people.

Consequential theories
With consequential theories, actions are judged by outcomes. If an action results in a positive result, it is morally right. If not, it is wrong.
Egoism – An act is moral if it promotes your best long-term interest.

Strengths	Weaknesses
– Useful for decision-making	– Ignores wrongs
– Flexible	– Ignores interest of others
	– Doesn’t build relationships
	– Inconsistent (i.e. right for me, wrong for you)
	– Can’t resolve conflicts of interest

Utilitarianism – An act is moral if it produces the great ratio of good to evil for everyone.

Strengths	Weaknesses
– Useful for decision-making	– May ignore wrongs
– Flexible	– May conflict with justice
– Recognizes interests of all	– Difficult to design rules
– Resolves conflict of interest

Situational – An act is moral if it creates the greatest amount of love.

Strengths	Weaknesses
– Humanizes decisions	– Lacks definite criteria for decision-making
– Rejects moral legalism

Non-consequential theories
According to non-consequential theories, a factor (single rule non-consequential theories) or factors (multiple rule non-consequential theories) other than the outcome should be considered when faced with an ethical dilemma.

Single rule

Golden Rule – An act is moral if you treat others the way you would wish to be treated.

Strengths	Weaknesses
– Personalizes decisions	– Needs modification to fit commerce
– Brings fairness into play	– We can’t know how others feel and think
– Carries childhood teachings into business

Categorical Imperative (Kant) – An act is moral if you would wish that everyone behaved in the same manner.

Strengths	Weaknesses
– Useful for decisions (i.e. do your duty)	– Doesn’t resolve conflicts of duties
– Recognizes responsibilities	– Subject to misinterpretation of duty
– Provides humanistic dimension	– Results of acting on duty can be disastrous
– Respects rights of others

Multiple rules

Prima Facie Duties (Ross) – An act is moral if you fulfill your duties; if there is conflict, fulfill the duty to which you are most obligated. Prima facie duties include, but are not limited to: fidelity, gratitude, justice, beneficence, self-improvement, and non-injury.

Strengths	Weaknesses
– List of duties is educational in itself	– Difficult to determine weight of duties
– Sensitive to consequences	– No basic agreement on moral principles

Maximin Principle of Justice (Rawls) – An act is moral if it provides an equal amount of liberty for you and others, except when social or economic inequalities exist. In that case, the worst-off in society should benefit more from the act.

Strengths	Weaknesses
– Shows inherent respect for individuals	– Concerned only with justice
– Encourages social responsibility by all	– Assumes a high level of rationality
– Shows concern for less fortunate	– Assumes acting without self-interest

Proportionality (Garrett) – An act is moral if, in engaging in it, you don’t will a major evil to you or anyone else and if you don’t will, risk or permit a minor evil to yourself or anyone else without a proportionate reason.

Strengths	Weaknesses
– Synthesizes most useful theories	– Definitions are vague
– Provides flexibility without immorality	– Highly subjective

You probably noticed that all of these theories have weaknesses. So you may think that selecting an ethical theory is an exercise in futility. However, once you select the ethical theory that you feel is most closely aligned with your core values, you’ll find solving ethical dilemmas much easier. You can recognize the weakness of your method, while feeling confident in your process.

Application: Choose the ethical theory which most closely aligns with your values.

#3 – Use a problem-solving process
Now you know your values and you have a model with which to apply them. The remaining piece is to follow an orderly process to solve the problem, because not all ethical dilemmas are as simple as your friend and her baby that we discussed earlier.

We recommend that you SOLVE IT! That’s our acronym for the timeless problem-solving process. When you follow a process such as this to solve an ethical dilemma, or any problem for that matter, you feel good about your ultimate decision. You know you’ve considered all of the alternatives and chosen the best alternative under the circumstances.