ETHICAL DECISION MAKING

The ethical decision making process in business includes ethical issue intensity, individual factors, and
organizational factors such as corporate culture and opportunity. All these interrelated factor influence
the evaluation of and intention behind the decision that produce ethical or unethical behavior.
Ethical Issue Intensity
Ethical awareness is ability to parceive whether a situation or decision has an ethical dimension. Costly
problems can be avoided if employees are able to first recognize wheter a situation has an ethical
component. Familiarizing employees with company values and training them recognize ethical
scenarios can help them develop ethical awareness.
Ethical issu intensity can be defined a the relevance or importance of an event or deciion in the eyes of
individual, work group and or organization. It is personal and temporal in character to accomodate
value, baliefs, needs perceptions, the special characteristics of the situation and the peronal presuress
prevailing at a particular place and time. Thus, ethical issue intensity involves individuals cognitive tate
of concern about an issue, or whether they have knowledge that an issue is unethical, that in turn indicate
their involvement in making choices. The identification of ethical issues often requires the
understanding complex business relationships.
Moral intensity realates to individual perceptions of social pressure and the harm they believe their
decisions will have on others. The perception of ethical issue intensity can be influenced by
management’s use of rewards and punishments, corporate policies and corporate values to sensitize
employees. Organization that consist of employees with diverse values and background must train
workers in the way the firm wants specific ethical issues handled. The perceive importance of an ethical
issue has a strong influenceon both ethical judgment and their behavioral intention. Therefore, ethical
issue intensity should be considered a key factor in the ethical decision-making process.
Individual factor
The moral philosophies of individuals, provide principles, value, and rules people use to decide what is
moral or immoral from a personal perpective. Values of individuals can be derived from moral
philosophies that are applied to daily decisions. However, these value can be subjective and vary a great
deal across different cultures.
Although an individual’s intention to engage in ethical bahavior relates to individual values,
organizational and sociel forces also play a vital role. Research regarding individual factors that affect
ethical awareness, judgment, intent, and behavior include gender, education work experience,
nationality, age and locus of control. Extensive research regarding the link between gender nd ethical
decision making shows that in many aspects there are no differences between men and women.
However, when diffferences are found, women are generally more ethical than men.
Education is also significant factor in the ethical decision making process. Nationality is the legal
relationship between a peron and the country in which he or she is born. Age is another individual factor
within business ethics. Locus of control relates to individual differences in relation to ageneralized belif
about how you are affected by internal versus external events or reinforcements. In other words, the
concept relates to how people view themselves in relation to power. Those who believe in external
control (externals) see themselves as going with the flow because that is all they can do. Conversely,
those who believe in internal control (internals) believe they control the events in their lives by their
own effort an skill, viewing themselves a masters of their capacity to influence their environment.
Organizational Factors
Although people can and do make individual ethical choices in business situations, no one operate in a
vacuum. Indeed, research has estabilished that in the workplace, the organization’s values often have
greater influence on decisions than a person’s own values. Ethical choices in business are most often
made jointly, in work groups and commitees, or in conversations and discussions with coworkers. Just
as a family guides an individual, specific industries give behavioral cues to firms. Within the family
develop what is called a culture, and so too in an organization.
Corporate culture can be defined as a set of values, norms, and artifacts, including ways of solving
problems taht members (employees) of an organization share. One way organizations can determine the
ethicalness and authenticity of their corporate cultures is having organization go back their mission
statement or goals and objectives. It also gives an organization an idea of how an ethical or unethical
culture may look. An important component of corporate or organizational culture is the company’s
ethical conduct. Corporate culture and ethical culture are closely associated with the idea that sinificant
others within the organization help determine ethical decisions within that organization.
Those who have influence in a work group, including peers, managers, cowokers, and subordinates, are
referred to as significant others. Obedience to authority i another apect of the influence significant others
can exercise. Obediense to authority help explain whay many employees resolve business ethics issues
by simply following the directives of a superior.
Opportunity
Opportunity decribes the conditions in an organization that limit or permit ethical or unethical behavior.
Opportunity results from conditions that either provide rewards, wheter internal or external, or fail to
erect barriers against unethical behavior. Opportunity relates to individuals immediate to job context
where they work, whom they work with, and the nature of the work. The immediate job context includes
the motivational “carrots and sticks’ superiors ue of influence employee behavior. The opportunities
that employees have for unethical behavior in an organization can be eliminated through formal codes,
policies, and rules adequaltely enforced by management. Opportunity also comes from knowledge and
for unethical behavior cannot be eliminated without aggressive enforcement of codes and rules.
Business Ethics Intentions, Behavior, and Evaluations
Ethical business issues and dilemmas involve problem solving situations where the rules governing
decisions are often vague in conflict. The result of the decision are often uncertain; it is not always
immediately clear whether the decision was ethical. Individuals intention and the final decision
regarding what action they take are the last steps in the ethical decisions making process. The work
environment culture has been found to impact recognation and judgment. When intentions and behavior
are inconistent with their ethical judgment, people may feel guility. The success depends on how the
buiness person defines success. The success concept drives intentions and behavior in buisness either
implicity or explicity.
Using The Ethical Decision Making Model To Improve Ethical Decisions.
The ethical decision making model presented cannot tell you if a business decision i ethical or unethical.
The model i not a guide for how make decision making processes in business organizations. Business
ethics scholars developing descriptive models have focused on regularities in decision making and the
various phenomena that interact in a dynamic environment to produce predictable behavioral patterns.
Normative Coniderations In Ethical Decision Making
A normative approach in business ethics revolves around the standars of behaviors within the firm as
well as within the industry. These normative rules and standars are based on individual moral values as
well as the collective values of the organization. Strong normative structures in organization are
positively related to ethical decision making. Ethical decisions are often embedded to recognize the
importance of core values in providing ideals for appropriate conduct.
Institutions As The Fondation for Normative Values
Institutions are important is estabilishing a foundation for normative values. In other words,
organizations face certain normative pressure from different intitutions to act a certain way. Normative
business ethics take into account the political realities outside the legal realm in the form of industry
standars. Different types of industries have different standars and policies which either increase or
decrease the ethicality and legality of their decisions. Social institutions impact a firm’s normative
values as well. They include religion, education, and individual such as the family unit. Converely,
when values from political, economic, and ocial intitution are embedded into the organizational culture
to provide incentives for approriate behavior, firms tend to act more socially responsible. This incentive
matches the normative intitutional value of giving back to the community.
Implementing Principles And Core Values in Ethical Decision Making
Political, economic, and social institutions help organizations determine priciples and value for
approriate conduct. Principles and values are important normative conideration in ethical deciion
making. John Rawls was one of the most influential philoophers in his research on how principles
support the concept of jutice. Rawl believed justice principles were beliefs that everyone could accept
a key element in our own definition of principles. While organizations might agree that they should
behave honestly,transparently, and responsibly toward stakeholders, they might differ on how to
implement these principles. Individual and organizational values can differ signicantly becaue of ethical
diversity among individuals. Organizational core values such as these are esential to ethical deciion
making in organizations. Organizations that have ethics program based on a value orientation are found
to make a greater contribution than those based simply on compliance, or obeying laws and regulations.
Understanding Ethical Decision Making
Our organizational ethical decision making framework demonstrates thye many factors that influence
athical decisions. Ethical issue intensity, individual factors, organizational factors, and opportunity
result in business ethics evaluation and decisions. Normative dimensions are also important to ethical
decion making. Normative perpectives set forth ideal goals to which organizations hould aspire.
Normative perspective also recognizes the existence of universal ethical behaviors, such as honesty and
justice.