The Organizational Costs of Ethical Conflicts

Ethical conflicts are a common phenomenon in today's healthcare settings. As healthcare executives focus on balancing quality care and cost containment, recognizing the costs associated with ethical conflicts is only logical. In this article, we present five case vignettes to identify several general cost categories related to ethical conflicts, including operational costs, legal costs, and marketing and public relations costs. In each of these cost categories, the associated direct, indirect, and long-term costs of the ethical conflict are explored as well. Our analysis suggests that organizations have, in addition to philosophical reasons, financial incentives to focus on decreasing the occurrence of ethical conflicts. The cost categories affected by ethical conflicts are not insignificant. Such conflicts can affect staff morale and lower the organization's overall culture and profit margin. Therefore, organizations should develop mechanisms and strategies for decreasing and possibly preventing ethical conflicts. The strategies suggested in this article seek to shift the organization's focus when dealing with conflicts, from just reacting to moving upstream-that is, understanding the root causes of ethical conflicts and employing approaches designed to reduce their occurrence and associated costs. Such an effort has the potential to enhance the organization's overall culture and ultimately lead to organizational success.