Ethics in decision making – what leaders need to know

Written by
Changeboard team

01 Aug 2019

01 Aug 2019 • by Changeboard team

Using ethics in decision making leads to actions that are both ethical and effective. See how and why to apply ethics to all your business decisions.

Why is ethical decision making important?

It leads to decisions that are ethical AND effective. For an organisation to flourish and maintain its trustworthy reputation, decisions need to be both.

When decision making on behalf of a company or organisation, you want those decisions to be ethical ones. Ethical decisions are more sustainable, and less likely to have an adverse impact on the organisation – whether it’s in terms of public perception, company morale, or falling foul of evolving legislation.

A good business decision is both effective and ethical.

Ethical decision making in organisational culture – what does it look like?

When a leader or organisation seeks to make ethical decisions, they are steering a path between a number of options.

The 3 Cs of ethical decision making are:


Aim to do what is ‘right’, even if a higher degree of risk/effort/cost/ is involved.


Remain consistently aware of the organisation’s core ethical values on a regular basis, not just when a particularly challenging situation demands it.


Foresee future risks, objectively evaluate supporting data using critical thinking, and put forward alternative actions as required.

Making decisions and solving problems using ethics

Using ethics to make decisions and solve problems (they’re not exactly the same thing) doesn’t result in a watertight correct/incorrect result. It’s not maths, it’s a state of progression as an individual and as an organisational whole.

Leaders making a business decision where ethics have to be considered can ask themselves these questions below. They won’t provide an ultimate answer, but they will help a decision maker dig deeper into available options in a way that considers not only the facts but also the ethics involved.

Questions to ask yourself in the ethical decision making process

  • How will a proposed action benefit or harm either an individual or the company as a whole? Which action leads to the greatest overall good and the least overall harm?
  • What basic human and moral rights do those people affected by the decision have? Which proposed action most closely takes those rights into account?
  • Which action is the most fair, either treating everyone equally or offering positive discrimination to those affected parties who need an extra boost the most in order to level the playing field?
  • Which action is for the common good of the organisation and its people as a whole?
  • Which course of action would make you feel better about yourself as a moral person?

What are the 5 ethical approaches to decision making?

  1. Utilitarianism
  2. Moral human rights
  3. Fairness and justice
  4. For the common good
  5. Virtue

Facts are accurate, but superficial and lacking in context until judgement is applied to them. Sales on a product or service may be down, or new hires may be moving on without sticking around to progress in the company, but what are the most effective and ethical ways to resolve such issues? How can facts – or problems – be turned into ethical company decisions?

The key questions for ethical leaders to ask raised above are all based on five major approaches to ethical decision. These approaches to ethical decisions have been developed by philosophers throughout history. They can be applied by anyone facing an ethical quandary – from parents to generals and HR leaders.

Which approach is the best fit for any challenges which your organisation might currently be facing?


In a nutshell: the most ethical actions result in more goodness being done than evil

Jeremy Bentham and John Stuart Mill created utilitarianism in the 19th century. They designed it as a means to help legislators consider the moral soundness of laws.

Adopt the utilitarian approach to ethical decision making in 3 steps:

  1. Identify potential actions and next steps
  2. Ask who will be affected and weigh up or calculate the potential benefit and harm of each action
  3. Choose the action that achieves the least harm and the greatest good for the highest number of people

Moral Human Rights

In a nutshell: Ask if an action respects the moral rights of everyone involved

The 18th century philosopher Immanuel Kant placed great value on a person’s right to choose for themselves, on the grounds that free will is what differentiates humans from objects.

In line with the Rights approach, a person’s human dignity depends on:

  • The right to be told the truth about anything that might affect or impede their choices
  • The right to say, do, believe and think anything without fear of harm, so long as it doesn’t harm the rights of others
  • The right to promises being kept if people have freely agreed to a contract or agreement

With this Kantian approach to business ethics, decisions will be considered ethical if they do not impact on the human rights of employees, clients, consumers or stakeholders involved.

Fairness and Justice

In a nutshell: In a fair world (or organisation) does everyone get treated the same? Or should they be treated differently, according to their needs and circumstance?

The Greek philosopher Aristotle said that “equals should be treated equally and unequals unequally”. It sounds a bit like the terrifying excesses of George Orwell’s Animal Farm, but asks a leader to consider what a fair action looks like. Does fairness mean everyone gets treated the same? Or does a truly fair company policy show positive discrimination, as in the case of diverse hiring practices?

There is the argument that favouritism singles people out for success without ethical justification, and negative discrimination holds back people who are marginalised. There is also the argument that positive discrimination levels the playing field, helping those who are marginalised access training, experiences and opportunities that they would not otherwise have had, leading to a reduced need for positive discrimination in the future.

For the Common Good

In a nutshell: The good of the individual is linked to the good of the organisation

We are all bound by the pursuit of common goals in an organisation – and, according to modern ethicist John Rawls, what’s good for an individual benefits an organisation as a whole. To use his precise words, the common good can be described as “certain conditions that are… equally to everyone’s advantage.”

Leaders who make ethical decisions for the common good of all appeal to colleagues to view each other as members of a greater whole. In an organisation that works towards the common good, we are asked to consider what kind of organisation we want to become, and how we can collectively achieve that goal.


In a nutshell: Develop ethical traits as an individual using self-reflection and resilience

Virtue is a state of mind or character trait that an individual can develop to act in ways that will help a person fulfil their highest potential. In a business environment, virtues might include integrity, courage, prudence, altruism and fairness.

Developing a virtue requires honest self-reflection and requires a leader or colleague to ask: “How should I act in order to develop my character and the ethical yet tangible success of our team/business as a whole?”

Ethics can be used in combination with technical decision making techniques to help leaders come to informed, ethically sound conclusions about next steps.

No-one said it would be easy - but if you're reading this article, your intention is to explore and challenge possibilities, not take the path most trodden. And it's that kind of virtue, or trait, that indicates your perspective is what an organisation needs.