What is ethical reasoning? And how do leaders go about using it?

Throughout the month of January, we have mused on the concept of “ethical reasoning,” which is the ability to develop, evaluate, and incorporate ethical arguments from a range of ethical perspectives. The topic of ethical reasoning is particularly important in organizations, because they are comprised of individuals who bring with them a variety of backgrounds, attitudes, and beliefs. It is the responsibility of the organizational leaders to balance these ethical orientations with the organization’s norms. What is ethical reasoning, and how do leaders go about it? How do they manage conflicts between individual and collective ethical orientations? What skills are critical to setting the shared ethical code, and, most importantly, what are the organizational risks when this process breaks down??

Ethical questions surround us at all times. At the most basic, they are judgments of what is right and what is wrong, what is good and what is bad. Ethics encompasses concepts like justice, virtue, our responsibilities to our community members, fairness, and equity – ethical codes are often highly personal and tightly held. Ethical reasoning extends the scope away from an individual’s own beliefs towards considering others’ opinions when reflecting on ethical issues and dilemmas. Within organizations, this is the foundation of fostering an inclusive and productive environment in which all members, regardless of role, feel their contributions and perspectives are welcomed and valued.?

Sounds easy, right? Unfortunately, in most cases, it’s much more challenging than most of us expect. Why is this? There are a few reasons, most of which boil down to the simple fact that organizations are, at heart, collections of humans, and humans, no matter how well meaning, are fallible. Let’s start with the most common reasons leaders fail to recognize or respect other ethical perspectives:?

• Reason #1: We believe everyone in the organization shares the same ethical code. Many, if not most, members of a society assume that there is one “true” set of ethical principles that everyone, by virtue of being a part of that society, obeys. In the United States, this is often ascribed to “Judeo-Christian values.” But what exactly does that mean? Is there a generally accepted set of ethical standards among all who subscribe to a Christian or Jewish faith? And what about faith traditions that aren’t included in that group (e.g., Islam, Hinduism, Shintoism, Wicca, etc.)? How does this incorporate those without a professed faith? The challenge of this assumption is that, by making it, organizational leaders often fail to do two important things:?
• Enumerate an explicit ethical code for the organization – If we assume that everyone in our organization is on the “same ethical page,” so to speak, why do we need to explain or codify our collective ethical expectations??
• Take into account diverse ethical perspectives – Presuming we all agree on ethical standards leaves no room for discussion of differences in opinion or belief while, at the same time, failing to specify what our shared perspective actually entails.?
• Reason #2: We don’t consider the ethical dilemmas that can be integral to organizational decision-making. One of the primary responsibilities of organizational leaders is making – and standing by – hard decisions. After all, the outcomes of those actions can be life-altering for people, and often not in a positive way. Shakespeare’s King Richard captured it so eloquently when he lamented that “uneasy lies the head that wears a crown” (Henry IV, Part 2, act 3, scene 1). Of course, leaders must inure themselves to a degree to make the tough decisions required by their positions. However, too often, the litmus test for whether a choice is “right” or “wrong” fails to include the ethical considerations. In for-profit businesses, it (too often) comes down to “which choice makes more money/decreases expenses/generates more shareholder value?” While public organizations are not driven by a profit motive, similar dynamics can arise in which popularity of an idea (with the public, a party base, or major donors) can trump other considerations.??

Of course, in making decisions, we must think about whether the expected outcomes will benefit our organization and its constituencies – businesses must make a profit, public agencies must provide services. However, too often, these become the only considerations, and we forget to ask whether we should do something, if doing it will require violating our shared ethical norms, and why we are willing to consider breaking those covenants. Because that willingness to cross ethical lines can only make us more likely to do so the next time.?

• Reason #3: We justify exceptions to the code. Humans are very good at convincing ourselves that the rules don’t apply in “just this one case” or to specific groups (which often, conveniently, include us). At times, exceptions make sense – there are few, if any, rules that can cover all possible permutations of a situation. That said, it’s very tempting to find reasons to deviate from that center when it benefits our organizations or ourselves. This isn’t just a leadership challenge: research has shown that most occupational fraud cases start with a single employee telling themselves that stealing from their employer is defensible because they’re undervalued or underpaid, they’ve worked hard and deserve the money, they need a stop-gap to get them through the month and they will repay it next month, or taking the money will benefit them more than it will hurt the organization.?

And what about leaders themselves? Creating an environment in which the rules apply to everyone except the C-suite, company owners, or favored organizational members rarely ends well. Some of the most egregious business fraud cases in the past few decades (Enron, Madoff, Wells Fargo) grew out of atmospheres in which leaders allowed – and justified – ethical violations for personal or organization gain. These kinds of lapses can start quite small and inadvertently…”we’re under a tight deadline…all of our competitors do it…it’s just the cost of doing business”… but someone else always notices, reinforcing the lesson that ethical standards are fungible, and lapses will be tolerated for the “right” reasons.?

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How, then, do leaders employ ethical reasoning to protect their organizations? They focus on these competencies:?

• Create a shared code of ethics for the organization and review it often with your team so that every employee is aware of shared values and understands how it applies to every role within the organization;?
• Commit to creating and maintaining an environment in which diverse points of view are not just welcomed, but expected, valued, and considered equally with those of leadership;?
• Understand how to distinguish ethical claims from other types of claims (such as descriptions) and to weigh the evidence or support for each when making decisions;?
• Empower an organizational member (i.e., an “insider”) to challenge assumptions and advocate for other perspectives; and?
• Communicate both the normative as well as tangible (i.e., financial) bases for decisions or organizational actions.?

An additional competency that leaders are uniquely responsible for bringing into organizational decision-making is the ability to think holistically. Being able to perceive patterns in the organization’s ecosystem from their vantage point at the top of the hierarchy enables smart leaders to predict the outcomes of their decisions. This, in turn, allows them to weigh those outcomes against the organization’s values and goals. Is it easy, no? But accepting and wearing the crown of leadership never was for the faint of heart.?

During the month of February, we will explore holistic thinking in more depth. We’ll start with having a future-oriented mindset so that leaders can help their teams better understand what they are working toward – think vision casting, mission driven decisions, and goal setting. Toward the end of the month and in to March, we’ll focus on another aspect of holistic thinking – having a systems perspective. Understanding how all the parts of the organization work together to achieve your goals, or how these parts might overlap for collaboration, or to pull apart for more efficiency, can help a leader make better decisions and the organization to be more effective.?

We hope you’ll join us as we continue to explore 52 different competencies of managers and followers.?