3 Frameworks for Ethical Decision-Making

View all blog posts under Articles | View all blog posts under Online Master of Business Administration

Person playing a strategic game of chess

Business leaders and their organizations need to be consistent in their ethical decision-making processes. A company’s chosen course of action has ramifications that affect all aspects of business infrastructure including consumer relationships, marketing, financial investments, and more. An organization’s ethics can be kept at the forefront of the managerial process throughout all levels by utilizing a decision-making framework.

A decision-making framework is an easily employable tool designed to ensure ethical actions in a company’s choices. A solid framework should address issues that an organization faces regularly. The decision-making framework does not provide a step-by-step checklist, but rather an overview of the key points that will assist in finding ethical solutions to problems that arise daily. There will always be unique conflicts that require out-of-the-box thinking and the following frameworks each provide a unique approach.

Virtue Ethics

Virtue ethics is a modern method based on the tenets of Aristotle’s ethics, requiring that decisions be made according to an understanding of a person’s character and moral virtue. Business leaders employing this set of ethics-based criteria must ask themselves how their organization will be perceived based on the choices they make. When virtue ethics are applied to a business-minded framework, personal virtues such as honesty, trustworthiness, and discipline intersect with business skills such as critical thinking, communication skills, and financial competence. This model for decision-making can be beneficial to business leaders as they build long-term, significant relationships with stakeholders, employees, customers, and the community. These relationships have a direct influence on a company’s profitability, growth, and longevity. Virtue ethics deals more with maintaining transparent relationships as opposed to solving conflicts or deciding on strategic business moves, so it may be less effective as a strategy for addressing daily business concerns.

Consequentialist Theory

The consequentialist theory represents a moral framework for discovering an ethical course of action based on end results. Prior to making a decision, the outcomes are considered pragmatically. Once the desired outcome is chosen, the framework reveals potential actions towards 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 affecting 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 lies about their product or service when marketing to customers, the influence on a consumer’s purchasing habits can have long-lasting outcomes.


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

  • 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 interests lie?
  • Next, business leaders must take to assess the decision-making path they have chosen before acting. They can consider additional perspectives, brainstorm alternative solutions, and they can also address unhelpful influences.
  • The third step entails action. 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.
  • 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 business decisions in the future.

Ethical decision-making enables companies to do more than maintain their image. The use of frameworks allows them to find the most effective courses of action while holding fast to their core values and beliefs. Business managers with an MBA have learned about ethical frameworks and frequently use them in their decision-making processes. They take advantage of framework benefits to communicate an ethical vision throughout their organization and promote strategic decision-making.

Learn More

At Ohio University, we understand how important an MBA can be to advancing your career. We also know that your MBA should be affordable, engaging, and academically-rigorous. That’s why we have designed an online MBA that is comprehensive and challenging, yet flexible to fit your lifestyle. When you earn your MBA online from Ohio University you are making a conscious decision to improve your professional value and position yourself for current and future business opportunities.

Recommended Readings:

Ohio University Blog, “How Telecommuting Can Save Businesses Money”
Ohio University Blog, “6 Tips for Managing Leadership Change Through the Succession Plan”


UK Cen, “Ethical Framework”
CFA Institute, “Decision Framework”
CFA Institute, “Ethics”
Faculty Focus, “Ethical frameworks for academic decision making”
Semantic Scholar, “The Virtue of “Virtue Ethics” in Business and Business Education”