What initial action should firms take when faced with ethical dilemmas?

Identifying issues is the foundational step for firms when faced with ethical dilemmas because it involves recognizing the specific ethical challenges that need to be addressed. Before any policies can be formulated, incentives offered, or experts consulted, organizations must first clearly understand what ethical issues are at stake. This can include recognizing conflicts of interest, understanding potential harm to stakeholders, and assessing the impact of decisions on the company’s values and reputation.

By identifying the ethical issues, firms can better navigate the complexities involved in making decisions that align with their ethical standards and values. This step is crucial as it sets the agenda for subsequent actions such as formulating policies to guide behavior, consulting with experts for more nuanced understanding, or offering incentives that align with ethical practices. Hence, a thorough identification of issues forms the basis for effective ethical decision-making in businesses.