Week 15: Ethical Considerations in Strategic Decision Making
Learning Objectives
By the end of this session, participants will be able to:
Explain the importance of ethics and corporate social responsibility (CSR) in strategic decision-making.
Identify common ethical dilemmas encountered in business strategy.
Apply ethical frameworks to evaluate strategic options and their consequences.
Balance profitability goals with ethical, social, and environmental considerations.
Section 1: Ethics and Corporate Social Responsibility in Decision Making
Lecture Overview
Ethics in Strategy: Ethics refers to moral principles that guide behavior and decision-making. In business strategy, ethical thinking goes beyond legal compliance—it ensures long-term trust, brand reputation, and stakeholder confidence.
Corporate Social Responsibility (CSR): CSR represents a company’s commitment to operate sustainably and contribute positively to society. It integrates environmental, social, and governance (ESG) goals with business operations.
Key Points
Ethical strategy aligns with core values, transparency, and fairness.
CSR initiatives strengthen relationships with customers, employees, communities, and regulators.
Ethical failures often result in legal penalties, reputation loss, and stakeholder backlash.
Modern investors increasingly use ESG scores in evaluating business sustainability and performance.
Discussion Prompt
How can ethical practices enhance a company’s competitive advantage rather than limit profitability?
Section 2: Balancing Ethical Considerations with Business Objectives
Lecture Overview
Strategic leaders must often weigh profit motives against moral obligations.
The key challenge is finding equilibrium between what is profitable, what is legal, and what is right.
Frameworks for Decision Balancing
Utilitarian Approach – Choose the option that maximizes benefits and minimizes harm for the greatest number.
Rights Approach – Respect and protect the moral rights of all stakeholders.
Justice Approach – Ensure fairness, equity, and impartiality.
Common Good Approach – Focus on shared values that benefit society as a whole.
Virtue Approach – Align actions with core virtues such as honesty, integrity, and compassion.
Practical Strategies
Establish a corporate ethics code and review it during major strategic decisions.
Conduct ethics impact assessments similar to financial or environmental assessments.
Encourage whistleblowing and transparency without fear of retaliation.
Integrate CSR metrics into executive performance evaluations.
Activity
Divide participants into small groups. Each group identifies one real company that successfully integrated ethical practices into its strategy (e.g., Patagonia, Ben & Jerry’s, Unilever). Discuss how ethics supported its business objectives.
Section 3: Case Studies on Ethical Dilemmas in Strategic Decisions
Case Study 1 – Data Privacy vs. Innovation
A tech company wants to collect user data to enhance AI-driven personalization. The marketing team argues that deeper data leads to better customer experience.
The legal team warns of privacy violations and potential breaches of trust.
Discussion Questions:
How should the company balance innovation with privacy?
What are the long-term brand implications of each choice?
Case Study 2 – Global Sourcing and Labor Ethics
A fashion brand discovers that one of its overseas suppliers uses underpaid labor.
Cutting ties would disrupt supply chains and increase costs; continuing the relationship would violate the company’s CSR commitments.
Discussion Questions:
What options are available to leadership?
How can transparency and remediation be incorporated into the solution?
Case Study 3 – Environmental Trade-offs
An energy company is planning a new project that promises major economic gains but has potential environmental impact.
Discussion Questions:
How should the firm evaluate profit vs. environmental responsibility?
What role should stakeholder engagement play in the decision?
Section 4: Reflection and Application
Reflective Exercise
Think of a recent strategic decision in your own organization (or one you’ve studied). Identify where ethical considerations played a role—or should have.
What were the competing objectives?
What ethical frameworks could have been used?
What would you do differently now?
Section 5: Key Takeaways
Ethical leadership is a strategic asset, not a constraint.
CSR and ethics must be embedded into strategy formulation, not added afterward.
Companies that balance profitability with responsibility build resilience and public trust.
Transparency and stakeholder dialogue are essential in resolving dilemmas.
Suggested Readings
Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach.
Carroll, A. B. (1991). “The Pyramid of Corporate Social Responsibility.” Business Horizons.
Treviño, L. K., & Nelson, K. A. (2017). Managing Business Ethics.
Harvard Business Review: “How Good People Make Tough Choices.”
