- Normative considerations
- Institutions and normative values
- Core values in ethical business decisions


[SLIDE 1]

Normative approaches refer to how decision makers within an organization approach an issue.

Descriptive approaches take a look at how decision makers approach ethical decision making.

An instrumental concern is a focus on a company's positive outcomes, like how it benefits society and its profitability.


[SLIDE 2]

In institutional theory, organizations take for granted the institutional norms and rules that they operate by. Organizations face normative pressures to act a certain way. These pressures can be internal or they can be external (family, friends, other institutions).

In order to be successful, organizations must comply with institutional norms and beliefs. To do otherwise could result in failure. Some organizations create policies to address institutional norms and beliefs, and employees who fail to follow these policies could be subject to disciplinary measures.

Competition is another important factor that organizations must consider in ethical decision making. Competition affects a company's operations as well as the risks it takes. If there is a high level of competition in a particular industry, there is a high probability that competitors will aggressively seek any advantage they can to be profitable. This could result in the normalization of unethical and illegal behavior.


[SLIDE 3]

Social institutions are additional factors that impact an organization's normative values. They can include education, religion, and the family unit. Social institutions are important in the formation of an individual's moral philosophies and personal values -- values that they use in making ethical decisions at work .

When normative values -- political, economic, and social institutions -- become part of the organizational culture, organizations tend to be more socially responsible.


[SLIDE 4]

John Rawls, a researcher and philosopher, conducted a thought experiment using a concept he called the veil of ignorance. The veil of ignorance refers to how someone develops principles if that person's future position in society is not known. Rawls believed that there are some principles that are universally accepted, regardless of whether someone is rich or poor. The veil of ignorance helped him determine these universal principles that were not based on one's wealth or social status.

John Rawls created two principles of justice: the equity principle and the difference principle. In the equity principle, each person has basic rights that are compatible with others' basic liberties.

In John Rawls' difference principle, economic and social equalities should be organized so that they provide the most benefit to those in society who are least-advantaged.