In any sort of business, gray areas are inevitable. It is therefore critical that businesses ensure they tend to these questionable spots in an ethical manner. A gray area could be considered any situation in which a decision must be made using rules that do not provide enough guidance.1 Understandably, no corporation is able to create a rule for each hypothetical scenario they may ever encounter. Having a broad set of guidelines that can be applied to most situations is more beneficial than a specific set of laws. A broader approach would provide guiding principles for any situation that can occur, whereas specific rules are limited to specific scenarios.
It is common among businesses to have similar broad guidelines within their establishments, yet these businesses often seem to respond differently when it comes to decision-making in certain situations. The subjectivity of broad rules creates an issue of indeterminacy within a business because these guides do not apply in a black and white manner. Business constitutions provide basic rules to follow within the company, as well as the framework on how to act in certain situations, but because these situations aren’t predictable, broad rules are often open for interpretation by the individual who finds themself in a gray area.
Depending on the individuals involved, the outcomes will differ. Ultimately, those outcomes and decisions are a representation of that company. Therefore, it is important to make good decisions to protect a business’s legitimacy and public image. Making these good decisions, then, relies on the ethics of each individual in charge of the interpretation. It becomes difficult to know what counts as a good, ethical decision.
When ethics are brought into the conversation of decision-making, it is important to note which of the following three approaches will be taken: deontology, consequentialism, or virtue ethics.
Deontology is a form of ethics based on following rules and duties. It is defined by the morality of an action – individuals are ethical so long as they follow the rules and duties defined. The difficulty with this approach is that it may cast an action as right or wrong without consideration of the outcome.2
Consequentialism, on the other hand, focuses on the results of an action. It can take a utilitarian form that aims to maximize the greatest good or total aggregate happiness for people and defines the rightness of an action by the outcome. This view may be too broad, as it would allow any action to occur, so long as an outcome is considered most favorable.3
The third approach, virtue ethics, identifies the right thing to do through the intention of a person. In other words, the right action is expressed in terms of the virtuous character of the agent.4 In this approach, the meaning of “good” relies on the noun it describes. An example would be if an accountant is fulfilling their duty well, they can be labeled as a good accountant.
When evaluating ethical gray areas, it is difficult to rely on a consequentialist approach in some scenarios because the outcome of a decision might be unknown, and a business should not risk a potential bad consequence. Additionally, a deontological approach risks overlooking harm dealt to a minority group in the process of reaching a favorable outcome for the majority. Virtue ethics, on the other hand, sidesteps these difficulties by acting from virtue.5
This approach also provides opportunities for the development of character as one practices acting in an ethical manner. Virtues, after all, are not instantaneously acquired based off of a first action. Character develops throughout an individual’s life, based on the experiences they have.
To connect virtues and rules in a business environment, the formulation of rules may be inspired by observations of virtue. In parallel, the development of virtue within the business environment may be directed by conforming to the rules.6
Having an ethical foundation rooted in virtue is critical to the success of navigating the gray areas that could make or break a business’s reputation. Do not overlook a business acting in an ethical manner: it can impact profitability and sustainability in the long run. Nonethical actions may provide short-term profitability, but usually they are not sustainable over the long-term.
Ethical business behaviors help retain customers by building trust and increasing positive reviews, maintaining good brand recognition, and creating a safe work environment for employees.7 This foundation will also provide the right environment for strengthening and protecting desirable traits within employees.
For example, if an accountant is faced with a situation where they can make a profit off of unethical business practices with a client, they may be more inclined to do so within an already corrupt firm that tolerates practices like this. On the other hand, in a firm that values what is good versus what is bad, the accountant may be less likely to do so. Their choices would be directed through the development of virtues that may not yet have been fully rooted in that individual.
Most decisions made in situations that are murky are usually done so by managers, supervisors, and CEOs. While it is important to hire employees with a strong sense of virtue and the character traits that enable them to make good decisions, it is also important to understand how to improve these traits.
Ethical gray areas are often influenced by conflicts of interest, pressure from management, a need to balance compliance with practical business concerns, personal client relationship pressure, and other factors.
Providing a foundation of ethics can enhance the way employees face gray areas. Setting the right example from above by prioritizing honesty and integrity is an easy way to promote values in the workplace. Leaders as role models in ethical decision making encourages other employees to attain virtues through a supportive and anticipated environment.8
Scenario-based training is another effective strategy. It moves employees beyond roleplaying through focused communication on specific situations. A creation of this safe space allows room for error without impacting real decision making. In the end, this type of training will help when an employee is faced with an ethical dilemma or gray area because they will have a stronger foundation in virtue and insight on the subject.
An additional strategy that businesses can adopt is having a strong code of conduct that clearly defines the protocols and expectations of employees. It is important to not only define what is expected, but also to show how to integrate your business’s values.
An effective tool to pair with training might include the use of digital tools or portals that encourage employees to post questions and share ideas when faced with difficult situations.
Gray areas challenge the ethics and morality of a business in many difficult situations. By prioritizing character development and core virtues, a business can overcome the complex circumstances in gray areas while maintaining profitability and sustainability in the long run. A culture that promotes a high-trust environment, where all aspects of ethics can be shared and learned from, is one that fosters growth.
1 “Ethical Considerations in Accounting: Navigating the Gray Areas,” Park University (May 23, 2025).
2 “Normative Ethics: Research Starters: EBSCO Research,” EBSCO (Accessed Dec. 17, 2025).
3 Ibid.
4 Rosalind Hursthouse and Glen Pettigrove, “Virtue Ethics,” Stanford Encyclopedia of Philosophy (Oct. 11, 2022).
5 Lorraine Besser-Jones, Michael A. Slote, and Robert Audi, essay in The Routledge Companion to Virtue Ethics, Routledge, New York, NY (2015), pages 529–541.
6 Ibid.
7 James Webster, “How Ethical Business Tactics Can Improve Profitability,” Forbes (Aug. 13, 2024).
8 Id., “Ethical Considerations in Accounting: Navigating the Gray Areas.”
Tamarah Abdullatif is a senior accounting major at Moravian University with a minor in philosophy and ethics. She can be reached at abdullatift@moravian.edu.
Heather Kuhns, DBA, is an assistant professor of practice in management at the Moravian University School of Business and Economics in Bethlehem. She teaches across marketing, management, and leadership disciplines. Kuhns also is owner/chief inspiration officer of zenspire communications. She can be reached at kuhnsh02@moravian.edu.
Mark Koscinski, CPA, DLitt, is an associate professor of accounting practice at the Moravian University School of Business and Economics, where he teaches undergraduate and graduate accounting courses. He can be reached at koscinskim@moravian.edu.