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Make four questions central to all major business decisions

By JIM NORTZ
Business Ethics
Rochester Business Journal
February 1, 2013

More than 700 years ago, St. Thomas Aquinas turned his attention to a rather common but knotty moral question: "What's the right thing to do when an action will likely have both a good and a bad effect?" In his "Summa Theologica," Aquinas introduced a methodology to analyze such situations in the context of considering whether it is ever morally permissible to kill or seriously injure another in self-defense. He concluded that it may be permissible, although that moral license is not unconditional.
 
To justify such an action, Aquinas set forth four conditions that are commonly referred to as the "Doctrine of Double Effect." As you might imagine, this doctrine has been the subject of much scholarship and refinement in the centuries since it was proposed. One popular modern formulation reads like this:
 
"A person may licitly perform an action that he foresees will produce a good effect and a bad effect, provided that four conditions are verified at one and the same time:
 
"1. That the action in itself from its very object be good or at least indifferent;
 
"2. That the good effect and not the evil effect be intended;
 
"3. That the good effect be not produced by means of the evil effect;
 
"4. That there be a proportionately grave reason for permitting the evil effect."
 
In reviewing the literature on the Doctrine of Double Effect and discussing it with several philosophers, I discovered there is not universal agreement about whether it is a sound approach to discerning an ethical path. Nevertheless, I was intrigued by the doctrine's possible utility in the field of business ethics, because double effects are imbedded in virtually every business decision.
 
For example, building a new manufacturing plant may provide the good effects of creating jobs and expanding production capacity along with the bad effects of polluting the environment, increasing traffic congestion and putting investors' money at risk if the venture fails. As this example illustrates, making decisions about business ventures-where such double effects abound-is what business professionals are paid to do.
 
In the interests of codifying a business-friendly version of the Doctrine of Double Effect, I reformulated it to be more in keeping with the kind of analysis I've seen business professionals engage in over the years:
 
"When making a business decision in circumstances in which one can foresee both good and bad effects, select a course of action that, at a minimum, has the following attributes:
 
"1. Its intended purpose is to pursue a good end;
 
"2. It pursues the good end with ethical means;
 
"3. It takes reasonable measures to mitigate harm or risk of harm; and
 
"4. The intended good is in due proportion to the associated harm or risk of harm."
 
Before you dismiss this analytical framework as too academic for the nitty-gritty of the business world, consider for a moment how it focuses on the key issues involved in many important business decisions. For example, think about the battle lines drawn in New York's continuing debate over proposals to drill for natural gas in the Marcellus Shale formation with hydraulic fracturing, better known as "fracking."

Fracking advocates' position:
Fracking will produce the good end of creating much-needed jobs and contributing to our nation's energy independence.

Fracking opponents use unethical means to garner public support by using scare tactics based on faulty science.

Fracking is safe, and the industry will take reasonable steps to mitigate harm to property and the environment.

The good that fracking will bring about outweighs the associated harm or risk of harm.

Fracking opponents' position:
Fracking will produce a bad end by prolonging our nation's addiction to fossil fuels and contributing to global warming.

Energy companies are using unethical means to achieve their ends by buying political support through campaign contributions.

Fracking is unsafe, and the industry will not take reasonable steps to mitigate harm to property and the environment.

The good that fracking will bring about is outweighed by the associated harm or risk of harm.

As this example illustrates, whether you acknowledge it or not, questions related to good ends, ethical means, reasonable mitigation and whether the expected good is proportionate to the harm or risk of harm are the central issues associated with most important business decisions. So the question is not whether you should consider such issues in running your business. The question is whether it is better to consider them in a haphazard or a systematic way.
 
If you agree that a systematic approach is best, you might include the following four questions in your decision-making checklist, along with those related to financial and other considerations:
 
1. Are we pursuing a good end?
 
2. Are we using ethical means?
 
3. Are we taking reasonable steps to mitigate the harm or risk of harm that is likely to result from our actions?
 
4. Is the good we are pursuing in due proportion to the associated harm or risk of harm?
 
Seeking answers to these four questions will not guarantee success or ensure that others will regard your decisions as ethical. But it will focus your attention on the issues that lie at the heart of making sound and well-informed business decisions.
 
Jim Nortz serves on the board of directors of the Ethics and Compliance Officers Association and is a member of the Rochester Area Business Ethics Foundation. The opinions expressed in this article are his alone and may not reflect those of the ECOA or the RABEF. For more information about the RABEF, go to www.rochesterbusinessethics.com. Nortz can be reached at jimnortz@gmail.com.2/1/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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