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Ethical issues in risk management for business

Each of these cases raises risk issues that cannot be settled by process alone but require substantive debate focusing on the fragile ethical values embedded in the surrounding socio-technical system. The stakeholders have at times worked together but more often engage in conflict over seemingly incompatible yet essential interests. Private industry has designed these projects to respond to real, market-based needs. For example, Puerto Rico desparately needs clean, renewable and sustainable sources of energy to protect its fragile environment and reduce its dependency on foreign oil. Yet other stakeholders, especially a public with complex and vital interests, have banded together to oppose these and other initiatives. Local residents demand a right to a livable environment, raise health and safety concerns, and assert civil rights based on distributive justice, free and informed consent, and due process. Past experiences with ambitious but poorly designed and executed business and government projects have consumed social capital and undermined public trust. Continuing development under these conditions has proven difficult. The Puerto Rican government has consistently been in the middle attempting to mediate between these contending parties. Can government play the role of "honest broker" and help lead conflicting stakeholders to political and social consensus? Can government lead the substantive ethical debate into applications of distributive justice, informed consent, and sustainable environmental value? Or should it step out of the way and let the public and private industry fight it out on their own? What role do free (or semi-controlled) markets have to play in mediating this conflict? This module will help you explore these problems through the prism of risk. You will study the different aspects of risk and learn about their ethical and social implications. The final objective is to help you manage risk ethically through responsible assessment, perception and communication.

What you need to know …

Working responsibly with risk requires careful integration of substantive ethical issues, distinguishing different senses of risk, and mastering the skills required in morally responsible risk communication. In other words, it is more than just implementing a mechanical process that imposes unwanted consensus on disparate groups and individuals. (See Sandel for an argument that past ethical controversies such as slavery had to be settled by means of substantive debates rather than procedural maneuvers.) Ethics is important to risk because scientific risk assessment is value-laden. Values permeate decisions such as choice of method as well as decisions on how to distribute the burden implied by the uncertainty involved in risk assessment and management. This section will introduce you to basic moral concepts involved in risk and offer information on how risk is assessed, managed, perceived, and communicated.

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Source:  OpenStax, Business ethics. OpenStax CNX. Sep 04, 2013 Download for free at http://legacy.cnx.org/content/col10491/1.11
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