This paper aims to clarify ethical dilemmas within the financial sector according to the concept of moral discernment. To achieve the goal of this paper, two ethical theories, namely deontology and utilitarianism, are briefly explained. Then, two banking industry-specific situational ethical conflicts are illustrated. The first conflict, mis-selling of financial products, is analyzed by the concept of deontology. The second conflict, the use of artificial intelligence in credit scoring is analyzed from a utilitarianism perspective. Additionally, various ethical concepts are introduced to give practical measures on how firms can cope with these situational conflicts.
Todays’ business world is often characterized by “VUCA” – volatility, uncertainty, complexity, and ambiguity. In such a world, managers are faced with constantly changing challenges that can lead to ethical conflicts within business environments. Therefore, more than ever before, guidelines are needed to prevent business behavior that destroys relationships between stakeholders. As the internet and in particular social media increase transparency, ethical behavior within companies is of significant priority to build and hold relationships that are both profitable and sustainable.
At least since the global economic crisis in 2008, the banking industry is in strong criticism due to unethical and partially illegal actions. Even though this strong criticism created high pressure on regulators and banks to prevent these business practices, banking scandals do not seem to subside. Thus, it cannot be denied that the banking industry has problems dealing with moral conflicts.
Table of Contents
List of Abbreviations
1. Introduction
2. Ethical concepts
2.1 Deontology
2.2 Utilitarianism
3. Conflicts in the Banking Industry
3.1 Mis-selling of Financial Products
3.2 Artificial Intelligence in the Credit Scoring Process
4. Critical Discussion and Conclusion
Reference List
- Quote paper
- Gabriel Socha (Author), 2019, Situational Conflicts in the Banking Industry. An Analysis from a Business Ethics Perspective, Munich, GRIN Verlag, https://www.grin.com/document/490852
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