Framework of Ethical Decision Making

Framework of Ethical Decision
Making
Ethical Decision Making
• Managers and executives make hundreds of
decisions in an organization
• Many of these decisions may be morally and ethically
justifiable
• While some of them may be unethical and even
illegal.
• Social thinkers would like businessmen to improve
their ethical standards. This is vital in the context of
present day business and social environment.
• Now the question is “how to improve ethical decision
making in business?”
• Ethical decision making is a cognitive process
that considers various ethical principles, rules,
and virtues or the maintenance of
relationships to guide or judge individual or
group decisions or intended actions.
Ethical Models that guide decision
making
• There are several ethical theories that have been developed
by philosophers over the years.
• These theories offer certain benchmarks to set organizational
or professional standards, and more importantly help to
develop a basis for normative judgment.
• It must be stressed here that business theorists have not
made much use of these theories that could offer models of
ethical decision making.
i) Ethical theories and their relevance to business research are
not easily understood by business theorists
ii) Ethical theories are difficult to put in practice.
1. Right theories
• Stressed personal rights
• Both the proponents focused on the entitlement
of individual as person with dignity and held the
view that ethical decision should protect the legal
and moral rights that an individual is entitled to.
• Acc to ethicists these individual rights would
include the rights to a) free consent b) freedom c)
free speech d) privacy
• These moral rights are important, normative,
justifiable claims and are derived from the nature
of the members of the moral community.
2. Justice Theories
• These theories advocated that all persons should
be guided by fairness, justice, equity and by a
sense of impartiality.
• In the modern context, ethical decisions should
result in a situation where all human beings are
treated equally, and in case some are treated
unequally, it must be based on some defensible
reasons.
• It is in the nature of things that all persons cannot
, and should not be treated equally.
• A Supreme Court Judge and daily age earner
3. Utilitarianism
• This theory holds the view that an action or
decision is right if it maximize utility or produces
the greatest good for the largest number of
people.
• Utilitarianism employs a teleological approach to
ethics and asserts that behavior or actions should
be evaluated in terms of consequences. That is,
behavior that produce the greatest net gain for all
affected groups is considered moral.
4. The Virtue Approach
• Virtues are attitudes or character traits that enable us
to be and to act in ways that develop our highest
potential
• When a person evaluates various options before
making an action, he or she might pose such questions
as “what kind of person will I be if I do this?” or “is this
action consistent with my acting as an ethical person?”
• Stresses the importance of such eternal virtues that
human beings would always like to showcase in
persons who will be referred to as role models to
others.
5. The common Good Approach
• The common good approach like the justice
approach
• Underlined the societal view that life in a
community is good in itself and that it is every
person’s moral responsibility not only to
contribute, but also to enrich it.
• The common good approach draws everyone’s
attention to certain conditions such as effective
system of law and order, public education which
are imperative to promote the overall welfare of
everyone in society.
Ethical issue Intensity
Individual Factors
Influence business
Ethical or unethical
ethics evaluation and
behavior
intentions
Organizational Factors
Opportunity
Ethical issue intensity
• Ethical issue intensity can be defined as the
relevance or importance of an ethical issue in
the eyes of the individual, work group, and/or
organization. Ethical issue intensity reflects
the ethical sensitivity of the individual or work
group that faces the ethical decision making
process.
Individual Factors
• Gender―women are generally “more ethical”
than men.
• Education or work experience―the more
education or work experience that one has,
the better he or she is at ethical decision
making.
• Nationality―cultural appears to be significant
in affect of ethical decision making.
• Age―the older you are, the more ethical you
are.
• Locus of control― external control vs. Internal
control. –
external control, see themselves as going with
the flow because that’s all they can do. –
internal control, believe that they control the
events in their lives by their own effort and
skill
Organizational Factors
• The organization’s values often have greater
influence on decisions than a person’s own
values.
• The more ethical employees perceive an
organization’s culture to be, the less likely they
are to make unethical decisions.
Opportunity
• Opportunity describes the conditions in an
organization that limit or permit ethical or
unethical behavior. Opportunity results from
conditions that either provide rewards,
whether internal or external, or fail to erect
barriers against unethical behavior.
Ethical Decision-Making Process
• Recognize and identify the kind of ethical issue
you need to resolve
• Pause and think
• Make sure of your goals
• Get your facts
• Evaluate choices from different ethical
perspective
• Make a decision
• Act

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