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Ethical Dilemma

A problem in the decision-making process between two possible but unacceptable options from an ethical perspective

What is an Ethical Dilemma?

An ethical dilemma (ethical paradox or moral dilemma) is a problem in the decision-making process between two possible options, neither of which is absolutely acceptable from an ethical perspective. Although we face many ethical and moral problems in our life, most of them come with relatively straightforward solutions.


Ethical Dilemma


On the other hand, ethical dilemmas are extremely complicated challenges that cannot be easily solved. Therefore, the ability to find the optimal solution for ethical dilemmas is critical to everyone.

Every person can encounter an ethical dilemma in almost every aspect of his life, including personal, social, and professional.


How to solve an ethical dilemma?

The biggest challenge of ethical dilemma is that it does not offer an obvious solution that would comply with ethical norms. Throughout the history of humanity, people always faced ethical dilemmas, and philosophers aimed and worked to find solutions to the problems.

By far, the following approaches to solve an ethical dilemma were deduced:

  • Refute the paradox (dilemma): The situation must be carefully analyzed. In some cases, the existence of the dilemma can be logically refuted.
  • Value theory approach: Choose the alternative that offers the greater good and the lesser evil.
  • Find alternative solutions: In some cases, the problem can be reconsidered, and the new alternative solutions may arise.


Examples of ethical dilemmas

Some examples of thical dilemmas examples include:

  • Taking credit for others’ work
  • Offering a client a worse product for your own profit
  • Utilizing inside knowledge for your own profit


Ethical dilemmas in business

Ethical dilemmas are especially significant in professional life as they frequently occur in the workplace. Some companies and professional organizations (e.g., CFA) adhere to their own codes of conduct and ethical standards. Violation of the standards may lead to disciplinary sanctions.

Almost every aspect of the business can become a possible ground for ethical dilemmas. It may include the relationships with the co-workers, management, clients, and business partners.

The people’s inability to determine the optimal solution for ethical dilemmas in the professional setting may result in serious consequences for businesses and organizations. The situation may be common in companies that value results the most.

In order to solve ethical problems, companies and organizations should develop strict ethical standards for their employees. Every company must demonstrate its concerns regarding the ethical norms within the organization. In addition, the companies may provide ethical training for their employees.


More resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Business Ethics
  • Top Accounting Scandals
  • Types of Due Diligence
  • Whistleblower Policy

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!