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Decision Criteria in Ethical Dilemma Situations: Empirical Examples from Austrian Managers

Abstract

This article is the result of an empirical research project analyzing the decision behaviour of Austrian managers in ethical dilemma situations. While neoclassical economic theory would suggest a pure economic rational basis for management decisions, the empirical study conducted by the authors put other concepts to a test, thereby analyzing their importance for managerial decision making: specific notions of fairness, reciprocal altruism, and commitment. After reviewing some of the theoretical literature dealing with such notions, the article shows the results of an online survey working with scenarios depicting ethical dilemma situations. By judging such scenarios the respondents showed their preference for the named concepts, though with different degrees of confirmation. The results (with all limitations of an online survey in mind) support the theoretical work on the named concepts: Fairness elements (including Rawlsian principles of justice and an understanding of fairness as conceived by a reference transaction) play a major part in management decisions in ethical dilemma situations. Also, commitment as a behaviour that sticks to rules even if personal welfare is negatively touched, and reciprocal altruism as a cooperative behaviour that expects a reciprocal beneficial action from other persons have been concepts used by Austrian managers when analyzing ethical dilemmas. The article also tries to put the results into a comparative perspective by taking into account other studies on ethical decision factors conducted with, e.g. medical doctors or journalists, and by discussing intercultural implications of business ethics.

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Notes

  1. 1.

    Austrian Central Bank Jubilee Fund; project nr. 12939; ‘Management and Ethics in Austrian Companies. Empirical Analysis of Ethical and Economic Decision Bases’.

  2. 2.

    The qualitative interviews are not part of this paper, the literature research only insofar as it touches the theoretical concepts used for the survey.

  3. 3.

    The Austrian School of Economics has provided a lot of research dealing with these propositions, e.g. in Mises (1933) or Menger (1871, 1883).

  4. 4.

    Other important contributions to the question of economic rationality from economists are Friedman’s ‘as if’-proposition (Friedman 1953), Robbins’ deductive theory building (Robbins 1935), Mises’ ‘Praxeology’ (Mises 1949), Hayek’s ‘use of knowledge in society’ (Hayek 1945), or Homann’s application of economic rationality to ethical problems (Homann and Meyer 2005).

  5. 5.

    As Sen states: ‘A person is given one preference ordering, and as and when the need arises this is supposed to reflect his interests, represent his welfare, summarize his idea of what should be done, and describe his actual choice and behavior. Can one preference ordering do all these things?’ (Sen 1977, p. 102).

  6. 6.

    See above the description of Rawlsian creature in moral reasoning.

  7. 7.

    Folbre and Goodin (2004, p. 3ff.) explain why pure altruism is notoriously difficult to model in economic terms. This is due to the ‘paradox of mutual revelation’ concerning the difficulty to model an altruistic preference structure, and the problem of ‘masked preferences’ concerning the intentional misrepresentation of preferences for social reasons.

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Correspondence to Michael Litschka.

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Litschka, M., Suske, M. & Brandtweiner, R. Decision Criteria in Ethical Dilemma Situations: Empirical Examples from Austrian Managers. J Bus Ethics 104, 473–484 (2011). https://doi.org/10.1007/s10551-011-0922-x

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Keywords

  • Commitment
  • Ethical dilemma situations
  • Fairness
  • Management decisions
  • Reciprocal altruism
  • Sen