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STAGE 2. UNDERSTAND THE SITUATION

In the second phase of the ethical decision-making process, you step back from immediate choices and focus on fully understanding the situation before you act. This stage is about gathering the right information, clarifying roles, and identifying the forces that shape the decision. Rushing forward without this understanding can lead to incomplete analysis, overlooked perspectives, and decisions that fail to address the root issue.

By working through the four guiding questions below, you create a clear picture of what is happening and why it matters.

What is the context?

Context refers to the circumstances surrounding the dilemma. This can include:

  • The industry and market environment
  • Legal and regulatory requirements
  • Company culture and policies
  • Social, cultural, and environmental factors
  • Current events or public pressures

Context helps you understand why the decision is challenging and what constraints or opportunities exist.

Who are the decision makers?

Every ethical situation involves individuals or groups with the authority, formal or informal, to make a decision. Decision makers might be a single executive, a management team, a committee, or even a regulator. Understanding who holds the power to choose is essential because these people will shape how the dilemma is addressed and which values guide the decision.

Who are the stakeholders?

Stakeholders are anyone affected by the decision, directly or indirectly. They may be employees, customers, shareholders, suppliers, community members, or even future generations. Ethical awareness means looking beyond the most obvious stakeholders to include those whose voices are less heard but whose lives could be significantly impacted.

What is the current ethical situation?

The current ethical situation describes the state of the issue as it stands today. This involves identifying what actions have already been taken, what is at stake for different stakeholders, and where the tension between competing values or priorities lies. Clearly describing the present circumstances, without rushing to solutions, ensures that you address the true conflict and its underlying causes.

Taking the time to understand the situation creates a strong foundation for ethical analysis. It ensures that when you move into evaluating alternatives, you are working from a complete, accurate, and fair assessment of all the factors at play.

Next Step

Your next step is to use this clearer picture to define the core decision that needs to be made and prepare to evaluate the options available.

Proceed to: Context

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Acting Responsibly: Ethical Decision-Making in Business Copyright © 2025 by Sobey School of Business, Saint Mary's University is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.