chapter – 5 ethical decision making

8/10/2019 Chapter 5 Ethical Decision Making

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Chapter-5

ETHICAL DECISION MAKING


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Management

The real identity of a manager is to makedecisions regularly .

The very speed of change introduces a new

element into management, forcing managersto make more and more decisions at a fasterand faster pace.

Now a days management simply has become

the process of decision making. All the partsof management pass through decision makingtoward goal achievement like


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Management

What ever decision of any kind has been taken

by any manager has some ethical implications

ManagementPlanning

Organizing

leading

controlling

Decision making Goal achievement


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ETHICAL DECISIONS(INDIVIDUAL/COMMUNITY) IN ORGANIZATION

Most people believe that when they work in

group /community, it matters about who are

ethical / unethical.

They find that if they are ethical by

themselves, they might be considered as

ethical, or ethically poor or unethical by

others


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Reinhold Niebuhr (1932), a famous

American Theologist, felt that ethical standard

fails when Individual work together in a group

because their egoistic impulse get

compounded. There can be complex

psychological reasons for varying levels of

ethicality of groups.


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Gandhi also realized and often tread to lonelypath.

Tagore too extolled in his famous Bengali

poem Ekla Chalo Re (Strike the lonelyfurrow).

On the other hand Karl Kautsky (1906, theMarxist philosopher, observed that the larger

the conglomeration of people, the higher istheir ethicality).


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So by seeing this history, we find whether aperson works alone or be a part of a group butethics is in the roots.

Neither we can say Tagore philosophy isalways right nor we can say karl kutskysviewsmatch with reality.


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A typical characteristic of the functioning of a

group or organization is that each member

has different role to perform.

As they perform different functions with

different responsibilities so they cannot be

evaluated on same yard sticks.


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As organizations are not simply mass of

people working together but they are an everpresent feature of human culture in which

persons interact for objectives. The people who work in the organizations are the

moral agents, they make collective decisions andact on them, they follow certain rules explicit/implicit, codes of conduct, regulations and theiractions based on the followed behavior can besubjected to ethical appraisal.


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STRUCTURE OF


Identify the problem

Generate alternative solutions

Evaluate Alternatives using cost - benefitapproach

Select the solution

Implement the chosen solution


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HOW TO USE ETHICAL REASONING

An individual can use the following methods

of ethical reasoning

1. Utilitarian Criteria

The goal of utilitarian is to provide greatest

good for greatest number which is guided by

the value, Utility. Decisions are purely made

on the basis of their outcomes or

consequences


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Utilitarian Criteria

To be on safer side decision makers choose

utilitarian criteria which helps them to go

for some important decisions like :

termination

closing down plants

laying off large no. of employees raising prices in the best interest of the

organization


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2. Rights Criteria

The focal point of decision making processshould be Rights Decisions should beconsistent with fundamental rights andliberties as laid in the constitution like-right tospeech, right to due process.

ExampleAs whistle blowing is the latestphenomenon occurring in the modern

corporate world of 21st century. So if decisionmakers use rights criteria, a good protectioncan be given to whistle blowers, when theyblow the whistle against some wrong doers.


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3. Distributive Justice Criteria

It sees justicevalue as almost likely outcome

of an ethical process of decision making. The

essential feature of this concept is

transparency and full participation of thoseaffected in the decision process.

This requires individuals to impose and

enforce rules fairly and impartially, so there isequitable distribution of benefits and costs.


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Decision making

As in general the most important factors

which make the structure of decision making

are:

Ends

Means

Motives

Foreseeable outcomes


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Decision making

Ethical and unethical actions are largely a

function of both the individuals

characteristics and the environment in which

he works

The following criteria explains the

ethical/unethical decision making behavior


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Stage 1: Moral Development

The general belief is that a personsvalues areformed during his childhood and do notchange subsequently. The ability to deal withmoral issues develops as they move through

their lives. The process of examining ones moral

standards and of applying them to concretesituations includes two parts:

1. A persons ability to use and verticallyevaluate his/her moral standards, whichdevelops in the course of personslife.


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Stage 1: Moral Development

2. Reasoning processes through which thesemoral standards are employed and evaluated.The highest ones moral development is theless dependant he is on outside influence.

For ExampleManagers with higher stage ofmoral development place increased values onthe rights of others and regardless ofmajoritysopinion, they are likely to challengeorganization practices which they believe arepersonally wrong.


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Stage 2: Organizations Environment

Whether the work ethics/organization ethics

align with personal ethics.

Does the organization encourage and support

ethical behavior by rewarding it or discourage

unethical behavior by punishing it?


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Stage 3: Locus of Control

Locus of control is a particular personality traitwhich measures the extent to which peoplebelieve they are self-responsible for thehappenings and events in their lives.

Internal believes what happens to them inlife is fully because of their own actions.

Internal believes in themselves; follow their

own internal standards of right / wrong toguide the behavior.


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PROBLEMS IN


If we say or assure that unethical behavior inorganization is just because of some wrong doersor some greedy people, some bad individualswho are always behind money, then some where

we would be wrong. Now-a-days, people who look decent, who seem

to be ethical, do involve in unethical practices,though they dont think of doing anything illegal

or immoral but they get backed into doing something unethical by systems and practices of theirown firms.


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PROBLEMS IN


The sources of ethical problems are variousand varied:

Due to globalization, as companies deal with

other countries where cross culturaldiversity issues arise, Managers find it verydifficult to standardize ethical standards asthey do change as society change.

Some times the decision makers do not followwhat they must follow as they have conflict inindividual values v/s organizational goals.


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PROBLEMS IN


If the decision makers/managers/policymakers who are greedy, look for short cutroutes to earn in earliest possible time, theyhave an upper hand on the moral values,therefore ethically the decision process wouldbe corrupt.

Competitive pressure is also the main causewhich forces decision makers to choosesuch path where they have to kill their morals,values and move on unethical path just tocope up with the competition.


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PROBLEMS IN


Poor decisions without deep thinking ofimplications.

Ambiguous situations create problem which

put the manager in dilemma as to whichdecision they should make and follow.

Pressures of budget systems.


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GUIDELINES FOR MANAGER FOR

ETHICAL DECISION MAKING Individual codes of conduct

Here we mean by a mans personal code of ethics.What one finds moral, right and ethical. He/she willchoose that option.

Industry ethical codes The ethical climate in the industry provides

inspirational guidelines and a list of do notslike

Non deceptive advertisements

Fair dealing with customers Safety measures

Quality products


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Professional managers who are more ethicaldo not go for any compromises.

Sometimes govt. rules and regulations bound

people to follow all laws as well as ethics. Corporate code of ethics

Companies own rules, values and beliefs guide

managers to follow ethics path in decisionmaking.


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If the decision makers understand the

following process they would definitely follow

ethics

Larger the organization ,higher the ethical

conduct and it results in great public image

which means Long term survival goodwill and

high profits

chapter – 5 ethical decision making

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