Week 3 Questions

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Chapter5.EthicalDecisionMaking.pptx

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Part Three The Decision Making Process

Chapter 5 Ethical Decision Making

Learning Objectives (1 of 2)

Provide a comprehensive model for ethical decision making in business

Examine ethical issue intensity as an important element in the ethical decision making process

Introduce individual factors that influence business ethical decision making

Introduce organizational factors that influence business ethical decision making

Explore the role of opportunity in ethical decision making in business

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Learning Objectives (2 of 2)

Understand normative considerations in ethical decision making

Recognize the role of institutions in normative decision making

Examine the importance of morals and values to ethical decision making

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A Framework for Ethical Decision Making in Business (1 of 2)

Ethical awareness: The ability to perceive whether a situation or decision has an ethical dimension.

Ethical issue intensity: The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization.

Personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressures prevailing at a particular place and time.

Moral intensity: Individuals’ perceptions of social pressure and the harm they believe their decisions will have on others.

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Figure 5.1 – Framework for Understanding Ethical Decision Making in Business

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A Framework for Ethical Decision Making in Business (2 of 2)

Gender: In many aspects there are no differences between men and women with regard to ethical decision making.

Education: Those more familiarized with the ethical decision making process due to education or experience are likely to spend more time examining and selecting different alternatives to an ethics issue.

Nationality: Impossible to state that ethical decision making in an organizational context will differ significantly among individuals of different nationalities.

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Individual Factors (2 of 2)

Age: Older employees with more experience have greater knowledge to deal with complex industry-specific ethical issues. Younger managers are far more influenced by organizational culture.

Locus of control: How people view themselves in relation to power.

External control: Going with the flow. Life events are due to uncontrollable forces.

Internal control: They control the events in their lives by their own effort and skill.

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Organizational Factors (1 of 2)

Conditions in an organization that limit or permit ethical or unethical behavior.

Results from conditions that either provide rewards, whether internal or external, or fail to erect barriers against unethical behavior.

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Organizational Factors (2 of 2)

Internal rewards: Feelings of goodness and personal worth generated by performing altruistic or ethical acts.

External rewards: What an individual expects to receive from others in the social environment in terms of overt social approval, status, and esteem.

Individual immediate job context: Where an individual works, whom they work with, and the nature of the work.

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Business Ethics Intentions, Behavior, and Evaluations (1 of 3)

Ethical business issues and dilemmas involve problem-solving situations where the rules governing decisions are often vague or in conflict.

Not always immediately clear whether the decision was ethical.

No magic formulas that ethical business issues or dilemmas can be plugged into to get a solution.

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Business Ethics Intentions, Behavior, and Evaluations (2 of 3)

Even if they mean well, most businesspeople make ethical mistakes.

No substitute for critical thinking and the ability to take responsibility for our own decisions.

Guilt or uneasiness is the first sign an unethical decision may have occurred.

Change the behavior to reduce such feelings.

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Business Ethics Intentions, Behavior, and Evaluations (3 of 3)

This change can reflect a person’s values or morals shifting to fit the decision or the person changing his or her decision type the next time a similar situation occurs.

The road to success depends on how the businessperson defines success.

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Using the Ethical Decision Making Model to Improve Ethical Decisions

Ethical decision making model does not help in determining if a business decision is right or wrong.

Provides insights about ethical decision making in businesses.

Business ethics involves value judgments and collective agreement about acceptable patterns of behavior.

Gaining an understanding of the factors that make up ethical decisions helps in differentiating between an ethical issue and a dilemma.

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Normative Considerations in Ethical Decision Making (1 of 2)

How organizational decision makers should approach an issue.

Different from a descriptive approach that examines how organizational decision makers approach ethical decision making.

A normative approach in business ethics revolves around the standards of behavior within the firm as well as within the industry.

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Normative Considerations in Ethical Decision Making (2 of 2)

Normative rules and standards are based on individual moral values as well as the collective values of the organization.

The normative approach for business ethics is concerned with general ethical values implemented into business.

Concepts like fairness and justice are highly important in a normative structure.

Strong normative structures in organizations are positively related to ethical decision making.

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Institutions as the Foundation for Normative Values

Government, religion, and education influence creation of values, norms, and conventions.

Industry competition determined by:

Barriers to entry into the industry.

Available substitutes for the products produced by the industry rivals.

The power of the industry rivals over their customers.

The power of the industry rivals’ suppliers over other rivals.

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Implementing Principles and Core Values in Ethical Decision Making (1 of 3)

John Rawls: Believed justice principles were beliefs that everyone could accept.

Veil of ignorance by Rawls: Examined how individuals would formulate principles if they were uncertain about their future position in society.

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Implementing Principles and Core Values in Ethical Decision Making (2 of 3)

Principles of justice by Rawls

Liberty principle (equality principle): Each person has basic rights that are compatible to the basic liberties of others.

Difference principle: Economic and social equalities (or inequalities) should be arranged to provide the most benefit to the least-advantaged members of society.

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Implementing Principles and Core Values in Ethical Decision Making (3 of 3)

Companies convert basic principles into core values.

Provide the abstract ideals that are distinct from individual values and daily operational procedures.

Include operating in a sustainable manner, collaboration and teamwork, and avoiding bribery.

Provide a blueprint into the firm’s goals and how it views ethical decision making.

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Figure 5.2 – Principles and Values

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Understanding Ethical Decision Making

Top level support for ethical behavior is instrumental in helping employees engage in their personal approaches to ethical decision making.

Normative perspectives set forth ideal goals to which organizations should aspire.

Knowledge about ethical decision making helps in making good decisions.

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