Issue Factors – An Overview

In this chapter, we will explore issue factors in more detail, specifically how they influence ethical decision-making and management. To get started, it is good to understand that the higher each of these factors are, the more likely ADDFSADFSDF:

• Agreement on “right” – if there is a generally agreed upon “right” answer, then the person making the decision will be more likely to choose what is “right”
• Relationship to those potentially negatively impacted – the closer the decision-maker is to the people who might be impacted by an unethical decision, the more likely they are to act ethically.
• Intensity of the negative impact – the more devastating the negative impact would be on those affected, the more likely someone is to choose the “ethical” action.
• Timing of the negative impact – if the negative impact from a decision will be seen sooner (rather than delayed greatly), then the decision-maker is more likely to take ethical action.
• Likelihood of the negative impact – the higher likelihood that there will actually be a negative impact, the more likely the person will take action to be ethical.
• Number of those negatively impacted – the higher number of people will actually be negative impacted, the more likely the person will take action to be ethical.

Like Personal Factors, Issue Factors are areas over which managers have little to no control. However, like with Personal Factors, managers can equip their employees’ to be more capable by doing ethical training in areas, such as personal values development and application, training on the organizational values (including case studies and simulations so that employees can practice), and as applicable, training in any professional ethics standards in their industry.

These types of trainings would create the groundwork for employees to:

• Feel more confident in know whether there was a company agreement on what is right – in other words, the company’s expectations would be clear;
• Understand the possible intensity, likelihood, and timing of negative impact – case studies and simulation trainings help employees see these before facing them in the real-world
• Identify the number of those negatively impacted – cases and simulations again can help them have “experience” with identifying this prior to need to identify it in their actual role.

If managers make ethics training a part of the organizational practices, it may not dictate that employees will be ethical but it can equip them with skills that aid in their ethical decision-making. Nevertheless, it is not always feasible or even possible for managers to do these trainings. Thus, it is important for us to understand the impact of the Issue Factors on ethical decision-making, regardless of what managers can do. To this end, in the sections below, each factor is defined and its impact on ethical decision-making described.

An Important Consideration in Knowing How to Analyze a Choice Using the Issue Factors

When looking at an ethical decision and using these factors, we need to decide which alternative we are evaluating. Otherwise, it can get confusing. For example, if Sandra is a CEO of a large manufacturing company and she is facing the choice of outsourcing to the work to another country that has more relaxed labour laws or keeping the goods production in Canada with higher labour law expectations, Sandra would want to decide which choice to test using these factors and who the potential negatively impacted persons might be. That being the case, we will assume that Sandra wants to examine the issue factors based on the choice of outsourcing the goods production. This example is explored in each of the Issue Factors sections below.

Issue Factor – Likelihood of Negative Impact

When looking at the Likelihood of Negative Impact, we are examining how likely the decision will negatively impact people affected by the situation.

The Likelihood of Negative impact:

• IS how likely are those impacted to be harmed.
  • • High Likelihood of Negative Impact is that they will be harmed (it doesn’t matter how big the harm is; it is just will they be harmed?)
    • If there’s high Likelihood of Negative Impact, then they will be harmed in some way.
    • MEANING,
      • o High Likelihood of Negative Impact = they will be harmed (big or small)
      • o Medium Likelihood of Negative Impact = it is a clear possibility, but not for sure that they will be harmed (big or small harm)
      • o Low probability of ham = they will not be harmed in any way.
• IS NOT about the amount of harm they experience; the amount of harm is Intensity of the Negative Impact (see it below).

In the Sandra example, we would look at how likely the negative impact would affect the workers in the foreign factory (with lax labour laws) as they are the direct stakeholders of this decision. We might also look at the shareholders, board, and company as they could be impacted. The following will analyze the Sandra situation with that in mind.

• FACTORY WORKERS ABROAD
  • How likely are those impacted to be harmed?
  • HIGH or LIKELY because they will be expected to work under the strenuous work conditions.
• SHAREHOLDERS, BOARD, and COMPANY
  • How likely are those impacted to be harmed?
  • LOW or UNLIKELY because they will benefit from the savings of outsourcing. They would only be affected if this somehow became a scandal. This is unlikely to happen though because outsourcing to coutnries with more lax laws is a fairly common practice.
• CONCLUSION – Susan is likely to see this as moderate or somewhat likely when she balances the answers between the two main groups. Therefore, she would not be strongly encourage by this factor to act ethically, which we assume means causing no harm (i.e., not outsourcing).

Issue Factor – Timing of the Negative Impact

When we look at the timing of the negative impact, we are examining how soon will those affect experience the negative impact. In other words, Timing of the Negative Impact:

• IS how soon they will feel the harm
  • • • • High is that they will feel the harm immediately
        • Medium is that they will feel it gradually in the near future
        • Low is that they will feel it some time in the future and it is unclear when they will feel it
• IS NOT about the amount of harm they experience; the amount of harm is Intensity of the Negative Impact (see it below).

In the Sandra example, we would look at how soon the foreign factory workers would be impacted (with lax labour laws) and how soon the other group (the company) would feel a negative impact.

• FACTORY WORKERS ABROAD
  • How soon would the feel the negative impact?
  • HIGH or FAIRLY SOON because they will feel the impact as soon as the decision is made and the job initiates.
• SHAREHOLDERS, BOARD, and COMPANY
  • How soon would the feel the negative impact?
  • LOW or MUCH LATER because they would only be affected if this somehow became a scandal and they were slowly to lose customers over the scandal. When companies make mistakes, the impact on customers usually takes time before it is felt..
• CONCLUSION – Susan is likely to see this as moderate or somewhat soon when she balances the answers between the two main groups. Therefore, she would not be strongly encourage by this factor to act ethically.

Issue Factor – Agreement on “Right”

When we look at Agreement on “Right,” we are trying to identify the stakeholders believe this is a clear-cute issue for what what is “right” and what is “wrong” is obvious to all. In other words, Agreement on “Right”:

• IS whether that group of people would view the situation as morally wrong or right.
  • • • High Agreement on “Right” means that the issue is black and white – clearly has a right and wrong from everyone’s perspective.
      • If there’s high Agreement on “Right”, everyone clearly agrees that the behavior on what right and wrong are for the situation.
• IS NOT whether they would like the decision or not.
  • • • They can all believe it is ethically wrong (high Agreement on “Right”) and not like it.
      • Conversely, they can have no idea if it’s right or wrong (low Agreement on “Right”), but all agree that they don’t like it.

Going back to the Sandra example, we would look at what the stakeholders as a whole would say.

• FACTORY WORKERS ABROAD
  • How clear-cut is the “right” (vs “wrong”) in this situation?
  • LOW or UNCLEAR because some of the factory workers would say that the labour conditions are just part of life (unavoidable) and have to be accepted for them to maintain their status quo financially. Other workers would argue that their conditions are unethical and clearly unjust. There would not be clear agreement on what the “right” is.
• SHAREHOLDERS, BOARD, and COMPANY
  • How clear-cut is the “right” (vs “wrong”) in this situation?
  • MODERATE or SOMEWHAT because most people in these groups would usually feel that this is just part of doing business and unavoidable. A small group, however, might feel that using a labour force with unfavourable conditions is wrong. So, there is not an agreement for these stakeholders overall on what is “right.”
• CONCLUSION – Susan is likely to see moderate to low agreement on what is “right,” and therefore, is not likely to be influenced to do what is the ethical choice.

Issue Factor – Number of Those Negatively Impacted

For the number of those negatively impacted, we are looking at the volume of people affected. The higher the number of those affected, the more likely someone is to act ethically towards those impacted. Specifically, Number of Those Negatively Impacted:

• IS about how many people will be impacted, so if it’s only 30% of people in a small company, the greatness of hard would be low.
  • • • • • However, if it was 30% of 1000s of people, then Number of Those Negatively Impacted would be high.
          • So, you’re looking at the overall number of people affected.
• IS NOT the same as Intensity of the Negative Impact (see below for differentiation).

Returning to the Sandra example, we would look at the number of stakeholders impacted negatively. Unlike the other categories, this category is often more objective and less influenced by the person’s role. Thus, for the Sandra example, we do not need to consider various stakeholders’ opinions.

• NUMBER OF THOSE NEGATIVELY IMPACTED – How many people will be negatively impacted? Is this a significant number?
  • HIGH or LARGE NUMBER because there will be many factory workers, possibly 150-200, who have to endure unfavourable condition. This number is very significant compared when compared to the smaller number of people in Sandra’s company that has only have a total of 100 employees.
• CONCLUSION – The Number of Those Negatively Impacted is high; and therefore, likely to influence Sandra to choose the ethical choose of not outsourcing to a place that has unfavourable working conditions.

Issue Factor – Intensity of the Negative Impact

When we look at the Intensity of the Negative Impact, we are looking at how devastating the impact is to those being negatively impacted. Meaning, Intensity of the Negative Impact:

• IS how concentrated the effect will be
  • • • • HIGH concentration would be a devastating impact that would be acutely felt by the people affected.
        • LOW concentration would be a small impact and maybe indiscernible impact to the people
• IS NOT about the number of people affected, as that is Number of Those Negatively Impacted (see above for differentiation).

For the example with Sandra, we would look at how intense the impact of poor working conditions would be on the factory workers.

• INTENSITY OF THE NEGATIVE IMPACT – How devastating to the factory workers would it be to have the work outsourced to their factory? The answer to this is harder to gauge. Here are a couple of interpretations.
  • LOW or LITTLE IMPACT – There is no additional negative impact on their lives than what they would already be experiencing.
  • MODERATE or SOME IMPACT – While they may work under these conditions already, any other funding to these factories impacts the workers’ physical and mental health in a moderate way.
• CONCLUSION – Because the interpretation is either low or moderate impact, Sandra is not as likely to do what is ethical.

Issue Factor – Relationship to Those Negatively Impacted

The Relationship to Those Negatively Impacted is all about how close the decision-maker is to those negatively impacted. To clarify, Relationship to Those Negatively Impacted:

• IS about how much they will have to interact with them.
  • • • • • There is HIGH Relationship to Those Negatively Impacted, for example, if
            • o The person works or lives around those negatively impacted (seeing them often)
            • o The person has to be the one to handle the impacted persons’ problems (directly manages the impacts from the “wrong” to those impacted)
• IS NOT how much they feel (emotionally) the impact of those negatively impacted.
  • • • • • A decision-maker who does not interact with those impacted often never has to face the impacts on those people, so they have LOW Relationship to Those Negatively Impacted (little to no contact).
          • A decision-maker who manages or works indirectly with those impacted, such as deals with complaints reported (not to them directly but through another source), has low to medium Relationship to Those Negatively Impacted.

In the Sandra example, we would look at how much contact or connection Sandra would have with the factory workers.

• RELATIONSHIP TO THOSE THE NEGATIVELY IMPACTED – How close is her relationship to those negatively impacted?
  • LOW or NO RELATIONSHIP – There is no known relationship or anticipated relationship between Sandra and the factory workers.
• CONCLUSION – Because she is not close to the factory workers, she is less likely to consider what is ethical for them.

Summary of Issue Factors

The higher the Issue Factors are when considered together, the more likely it is that someone will choose what is ethical, which we are considering as the option with the least harm to the least people. If the Issue Factors are all high, even an unethical person is likely to be influenced to make an ethical choose. The strength of the Issue Factors’ influence is stronger on their decision.

If all of the Issue Factors are low, the decision-maker will not be influenced by the Issue Factors as much. In these cases, the decision-maker will be more likely to choose what aligns with another area, such as Personal, Organizational Culture, and Organizational Structure Factors. The strength of the Issue Factors’ influence is low; therefore, an unethical person will be unethical and an ethical person will be ethical. The Issue Factors do not have a bearing on their decision.

The harder influence situations to understand the Issue Factors’ influences are when:

• Each of the factors is around moderate and
• Some factors are high and some factors are low.

Now, in the case of all the factors being moderate, there is a higher likelihood that the person will be moderately influenced since each factor has a consistently “moderate” influence. So, an unethical person could feel obligated to choose something more ethical because generally others would expect that choice.. The ethical person would feel perhaps more confident in choosing the ethical choice because generally others would agree with that choice.

In the case where some factors are high and some are low, there is not a clear-cut influence of the issue factors. However, some issue factors do tend to have a larger impact on decision-makers than others. Relationship to Those Negatively Impacted can have a large influence if the person has a close personal connection. Number of Those Negatively Impacted can also have a stronger influence because the sheer numbers make the person feel more responsible for the negative impact on those people. Finally, the Agreement on What is “Right” can make it obvious to the decision-maker what to do if there is high agreement on “right vs wrong” in the situation. While these factors should not be considered alone, they are worth noting as they tend to affect all decision-makers.