3 Ethical Decision-Making Frameworks

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Business leaders and their organizations need consistency in their decision-making frameworks. A company’s chosen course of action could have ramifications that affect all aspects of business infrastructure, including consumer relationships, marketing, and financial investments. Organizations can employ ethical decision-making frameworks to keep their ethics as a priority throughout their managerial processes.

A graduate education may be a productive way to become well-versed in the foundation, nuances, and employment of ethical works, especially as they relate to business management. An online MBA program can prepare graduates for ethical decision-making in different organizational settings.

3 Ethical Frameworks

Ethical frameworks are designed and implemented to ensure that the choices and actions of an organization or company reflect and uphold its ethics. Rather than providing step-by-step processes, frameworks outline the key aspects of ethical solutions to routine problems. The following frameworks provide approaches to unique problems that may require innovative solutions.

1. Virtue Ethics

Virtue ethics concerns itself with the intentional development of personal morality, rather than an organized set of moral rules. Business leaders who use virtue ethics in their decision-making should be aware of how their decisions reflect the values and character of their organization.

In a business framework, virtue ethics may help build relationships with employees, clients, stakeholders, and the community using personal virtues such as integrity, honesty, empathy, and discipline. These personal virtues then often intersect with business skills and financial objectives.

Unfortunately, though it sounds simple in concept, virtue ethics may be difficult to apply. Defining what qualifies as “good” or “right” when it comes to moral character is not universal, so the framework could neglect how much consideration and reasoning must go into weighing moral concerns.

2. Consequentialist Theory

The consequentialist theory represents a moral framework for discovering an ethical course of action based on results. Before making a decision, the outcomes are considered pragmatically. Once the desired outcome is chosen, the ethical decision-making framework reveals potential actions toward achieving that end. The goal is to choose an action plan that produces the most good.

By this process, the consequentialist theory is morally beneficial. It provides decisive transparency, as steps are aligned with the ethically reflective goal. This utilitarian approach works well with decisions that affect large groups of people, because it maximizes positive consequences for some and minimizes unfavorable consequences for others.

However, there are disadvantages to this theory. Calculating the consequences of actions can be difficult due to unforeseen circumstances. These uncertainties may result in bringing about more harm than good. The implication here is that the end justifies the means — this may result in compromising the happiness of the minority for the overall benefit of the majority.

In business management, these decisions do not necessarily cause harm to large groups of people, though they can influence a company’s financial standing and longevity. If a company is not truthful about its product or service when marketing to customers, this is not ethical work, and the influence on consumers’ purchasing habits can have long-lasting outcomes.


This four-step framework is designed for managers to address situations with variables that may not line up with the day-to-day challenges facing an organization.

  • Identify: The first step is to identify each scenario from an ethical standpoint as a means of finding the best course of action. This is achieved by asking a set of questions. For instance, which ethical principles are at stake? Or, who will be directly affected by these decisions? Lastly, what are the important facts and where do the conflicts of interest lie?
  • Consider: Next, business leaders must take time to assess the decision-making path they have chosen before acting. They can consider additional perspectives, brainstorm alternative solutions, and address unhelpful influences.
  • Act: This is done by following through with the actions that have been decided on, or if a higher authority is required, by elevating the issue to the appropriate management level.
  • Reflect: Finally, decision-makers are called on to reflect on the overall outcomes of their actions. In short, what can they take away from this process? This will allow for a greater understanding of the strengths and weaknesses of the team members and leaders when making future business decisions.

Ethics, Leadership, and Your Education

Business leaders can utilize ethical decision-making frameworks to find the most effective courses of action while holding fast to their core values and beliefs. They can take advantage of these frameworks to communicate an ethical vision throughout their organization — and to promote more strategic, sustainable, and equitable decision-making.

Learning about ethical frameworks in an academic setting is a sound strategy for becoming a successful and morally conscious business manager. With courses such as Ethics in Leadership and Building and Developing Customer Relationships, Ohio University’s Online Master of Business Administration is intended to instill high character in future business leaders by emphasizing the importance of ethical decision-making, ethical works, and empathy in the global business landscape.

Explore the curriculum to find out how to pursue your professional goals today.

Recommended Readings

5 Entrepreneur Tips for Starting a Successful Business

6 Tips for Managing Leadership Change Through the Succession Plan

Instilling Student-Athletes with a Sense of Ethical Responsibility


CFA Institute, “Ethical Decision Making

CFA Institute, “Ethics for the Investment Management Profession

Foreign Policy Research Institute, “A Framework for Ethical Decision Making”

Semantic Scholar, “The Virtue of Virtue Ethics in Business and Business Education”

UKCEN, “Ethical Framework”