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Ethical Decision Making

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The self-centeredness of modern organizations leads to environmental destruction and human deprivation. The principle of responsibility developed by Hans Jonas requires caring for the beings affected by our decisions and actions. Ethical decision making creates a synthesis of reverence for ethical norms, rationality in goal achievement, and respect for the stakeholders. The maximin rule selects the “least worst alternative” in the multidimensional decision space of deontological, goal-achievement and stakeholder values. The ethical decision maker can be characterized as having the ability to take multiple perspectives and make appropriate balances across diverse value dimensions. Modern organizations should develop a critical sensitivity to and empathy toward human and non-human beings with which they share a common environment.

Modern organizations are disembedded from their environmental and social contexts and usually consider the natural environment and human persons as mere means to accomplish their own purposes and goals. The dominating self-centered orientation of modern organizations produces ecological destruction and human deprivation.

Perverse decisions of modern organizations appear in such phenomena as decision under risk and discounting in space and time. Prospect theory and the general theory of discount can help us in describing and analyzing these phenomena.

The prospect theory developed by Daniel Kahneman and Amos Tversky is an empirically well-established theory that gives us a realistic picture about the main regularities of decision making under risk (Kahneman and Tversky 1979).

Prospect theory states that decision makers display risk aversion in choices involving sure gains. For example, they prefer gaining $1,000 surely over gaining $10,000 with a 10 percent chance.

Prospect theory also states that decision makers display risk seeking in choices involving sure losses. For example, they prefer losing $10,000 with a 10 percent chance over losing $1,000 surely.
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Document Type: Research Article

Publication date: 01 January 2006

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