Ethical Decision Making

Humans rely on two modes of thinking when they are making normal decisions, an intuitive mode and a controlled mode. The controlled mode is especially important when making ethical decisions using (Rest, Moral Development: Advances in Research and Theory, Praeger Publishers, 1986) ethical decision-making process. In today’s complex society, decisions are made by various institutions that are hierarchical in nature with top-down leadership. The decisions made by leaders of these institutions can be influenced by bounded rationality, motivated by prospects of gains or losses and their unconscious biases including that of their management decision-making teams. To minimise these human failings, any decision-making framework needs to be based on moral reasoning premised on normative ethical theories that fosters good governance, trust-based reciprocity among stakeholders affected by the decision leading to Pareto-optimal outcomes. In order to facilitate Pareto-optimal outcomes, legal and regulatory institutions were created to constrain the decisions of other informal institutions to conform to fairness of outcome for all stakeholders affected by them.