Ethical Issues in Engineering Economic Analysis

by David Koonce

David Koonce, IMSE Department

This module will be incorporated into an existing course on economic analysis.  Presently, this course focuses exclusively on the monetary analysis projects and alternatives.  In this module, the non-monetary issues regarding the ethical aspects of projects will be addressed.


1)    Knowledge of ethical aspects of economic decision making – upon completion of this course, students will be able to identify the ethical aspects, if any, of a planned project.

2)    Justify a decisions based on ethical grounds – upon completion of this course, students will be able to develop an ethical justification of an economic decision.


Early in the course, students will be given a case study which introduces an ethical concern.  In small groups, students will develop a response as to how they would act.  Upon completion of this exercise, I will lecture on some of the major ethical philosophies (Kant, Utilitarian).  Students will then be asked to return to their group and apply one of the approaches to justify their actions.  For homework, I will introduce a complexity like a superior who is complicit in some unethical behavior.  Students (individually) will then be required to submit a short written report documenting their decision and the process they used to determine the appropriate action.  (Estimated time: 70 minutes – 1.5 classes)

After the first activity, students will be introduced to NSPE Code of Ethics for Engineers.  A short quiz (available online) will be given.  Students will “self-grade” the exam and will not submit their answers.  (Estimated time: 50 minutes – 1 class)

Following the first two activities, 3-4 additional ethical scenarios will be introduced when the ethical topics coincide with the regular material.  For each instance, students will be given a written case and time to discuss in small groups.  Students will present the results of their deliberations to the class.  (estimated time: 50 minutes/scenario – 3-4 classes)

Ethical Issues Addressed

This list is a super set of the issues.  Due to time constraints, all may not be addressed.

1)    Bidding – Case will introduce a scenario in which the engineer has just won a bid.  As she begins planning for implementation, she determines that an error in design resulted in an under bid.  Correcting the design would introduce costs that push the bid above the next lowest bid.  Implementing the correct design would cause the company lose money on construction.  But, the flawed design would likely result in a new yearly maintenance contract that could be quite profitable.  (source: adapted from

2)    Cost of Life – This case will introduce students to decisions which will result in some loss of life.  For example, designing safety systems for a new automobile.  Tradeoffs:

a.     Driver/passenger safety vs. other vehicle safety (Hummer vs. Yugo)

b.     Safety vs. weight/economy

c.     Safety vs. cost

Students will identify ethical issues in each case.

3)    Business Process Engineering/Downsizing – As part of their job, an engineer may be required to redesign a process which causes other workers to lose their jobs.  What ethical issues are involved.  Case will introduce scenario in which good friend with a sick child will lose their job and potentially their insurance.  Students will determine what their recommendation will be.

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