MEANING OF ETHICAL DECISION MAKING: Ethical decision making in todays business and personal world,ethcal decision are made

on a daily basis.Most of these decision are based on company ground rules.the others are based onpersonal ground rules. All decision can have a number of ground rules that help us determine whether our decision is ethical or unethical.Each decision whether it is based on company or personal ground rules will have its own set of implications.ethics refers to principles that define behavior as right, good & proper.such principles do not always dictate a single moral course of action,but provide a means of evaluating & deciding among competing option. Ethics can be defined as how a moral person should behave (Josephson). This definition leaves a lot of room for interpretation on the part of the reader, but that is only because ethics themselves are very vague. While not as clear-cut as values, ethics deal more with an individuals beliefs using their own religious, spiritual or moral code. Sometimes all of these forces of influence come into play, sometimes only one or two, and rarely will two people agree entirely on an ethical decision. There will always be details that will differ from one person, and one group, to the next. What is important in making ethical decisions is that the decision is based on an ethical code, which can be clearly defined as to its nature in relation to a common good.
When striving to achieve an acceptable ethical decision, it is important that all parties involved understand the basis upon which the decision will be based. It is important to set up ground rules for the decision, and it is equally important that these ground rules are clearly understood. Because the concept of ethics is so loosely based, what may well be an ethically acceptable decision in one culture may be horrific to another.

STEPS IN ETHICAL DECISION MAKING: These are some steps helpful in thinking through how to respond to an ethical dilemma, taking action, and assuming personal responsibility for our response. These steps may help us to identify important aspects of a situation, consider positive and negative consequences of the ways in which we might respond, and discover better approaches. The Canadian Psychological Association emphasized the value and importance of such steps by including 7 in their original ethics code (1986), and increasing the number to 10 in subsequent editions (1991, 2000). In the list below, asterisks mark steps that are versions of those that appear in the CPA code. Although there are 18 steps listed below, not every step will be relevant to every situation, and the steps may need to be adapted to fit particular situations.

1. Identify the situation that requires ethical consideration and decision-making.

What is the clearest possible statement of the ethical question or issue? Are there other valid ways to define the situation? Do the definition's scope, perspective, assumptions, or wording make it needlessly hard for us to understand the situation and decide what to do? Do they hide or distort important aspects?

2.* Anticipate who will be affected by your decision.

No one lives in a vacuum. It is rare that our ethical decisions affect only a single client or a single colleague and no one else. A client may show up for a session drunk. How you define your responsibility may influence whether the client drives home drunk and kills a pedestrian. A colleague may begin to show signs of Alzheimer's. The choices you make may affect the safety and well-being of the colleague and the colleague's patients. An insurance claims manager may refuse to authorize additional sessions for a client you believe is at risk for killing his wife and children and then committing suicide. Your supervisor may agree with the manager that no more sessions are needed. How you determine the most ethical path may help decide whether the family lives or dies.

3. Figure out who, if anyone, is the client.

Is there any ambiguity, confusion, or conflict about who the client is (if it is a situation that involves a therapist-client relationship)? If one person is the client and someone else is paying your fee, is there any divided loyalty, any conflict that would influence our judgment?

4. Assess our relevant areas competence-and of missing knowledge, skills, experience, or expertise-in regard to the relevant aspects of this situation.
Are you well-prepared to handle this situation? What steps, if any, could you take to make yourself more effective? In light of all relevant factors, is there anyone else who is available that you believe could step in and do a better job?

5. Review relevant formal ethical standards.

Do the ethical standards speak directly or indirectly to this situation? Are the ethical standards ambiguous when applied to this situation? Does this situation involve conflicts within the ethical standards or between the ethical standards and other (e.g., legal) requirements or values? In what ways, if at all, do the ethical standards seem helpful, irrelevant, or misdirected when applied to this situation?

6. Review relevant legal standards.

Do legislation and case law speak directly or indirectly to this situation? Do the legal standards speak to this situation in a way that is clear? Are there conflicts within the legal standards or between the law and other requirements or values? Do the relevant laws seem to support-or at least allow-the most ethical response to the situation, or do they seem to work against or block the most ethical response? Would it be helpful to consult an attorney?

7. Review the relevant research and theory.

Is there new research or theory that helps us to conceptualize, understand, or respond to the situation? One occupational hazard of a field with such diverse approaches-cognitive, psychodynamic, behavioral, feminist, psychobiosocial, family, multicultural, existential, to name but a few--is that we often lose touch with the research and theory emerging outside our own theoretical orientation.

8.* Consider how, if at all, your personal feelings, biases, or selfinterest might affect your ethical judgment and reasoning.
Does the situation make you angry, sad, or afraid? Do you find yourself eager to please someone (or an organization)? Do you desperately want to avoid conflict? Do you find yourself concerned that doing what you believe is most ethical will get you into trouble, will make someone mad at you, will be second-guessed by colleagues who disagree with you, or would be hard to square with the law? Will doing what seems ethically right cost you time, money, referrals, prestige, a promotion, your job, or your license?

9. Consider what effects, if any, that social, cultural, religious, or similar factors may have on the situation and on identifying ethical responses.
The same act may take on sharply different meanings in different societies, cultures, or religions. What seems ethical in one context may violate fundamental values in another society, culture, or spiritual tradition. Are you overlooking any relevant contexts? Does the situation include social, cultural, religious, or similar conflicts?

10. Consider consultation.

Is there anyone who would likely provide useful consultation for this specific situation? Is there an acknowledged expert in the relevant areas? Is there someone who has faced a similar situation and handled it well-or who might tell you what does not work and what pitfalls to avoid? Is there someone whose perspective might be helpful? Is there someone whose judgment you trust?

11.* Develop alternative courses of action.

What possible ways of responding to this situation can you imagine? What alternative approaches can you create? The initial possibilities that occur to us may strike you as "not bad" or "good enough," but much better responses may occur to you if we keep searching.

12.* Evaluate the alternative courses of action.

What impact is each likely to have--and what impact could each have under the best possible and worst possible outcome that you can imagine--for each person who will be affected by your decision? What are the immediate and longer-term consequences and implications for each individual--including yourself--and for any relevant organization, discipline, or society? What are the risks and benefits? Almost any significant action has unintended consequences--what might they be for each possible course of action?

13. Try to adopt the perspective of each person who will be affected.
Putting yourself in the shoes of those who will be affected by your decisions can change your understanding and help you discover what you believe will be the most ethical response to a difficult situation. You can ask yourself: what would each person consider the most ethical response? In this way you can try to to compensate for some of the distortion that may occur from seeing things only from your own perspective. One example is what Jones (1979; see also Gawronski , 2003; Gilbert & Malone , 1995; Weary, Vaughn, Stewart, Edwards, 2006) called "correspondence bias." Although we often explain our own behavior in specific situations as due to external factors, we tend to attribute the behavior of others to their dispositions. Another example is what Meehl (1977) called a "double-standard of morals" (p. 232). We tend to hold explanations provided by other people to much more scientifically and logically rigorous standards than we use for our own explanations.

14.* Decide what to do, and then review or reconsider it.

Once you have decided on a course of action, you can--if time permits--rethink it. Sometimes simply making a decision to choose one option and exclude all others makes you suddenly aware of flaws in that option that had gone unnoticed up to that point.

15.* Act on and assume personal responsibility for your decision.

In some cases, trying to weigh ethical options, reconcile ethical conflicts, and discover the most ethical response--the steps leading up to taking action--are the hard part. Once the decision is made, acting is relatively easier. In other cases, thinking through the situation may seem relatively easy-acting is hard. The most ethical response may seem to come at overwhelming personal risk or cost. When risks or costs overwhelm us, it is a natural temptation to blur or evade personal responsibility.

16.* Evaluate the results.

What happened when you acted? To what extent, if at all, did your action bring about the expected consequences? To what extent, if at all, were there unforeseen consequences? Knowing what you know now, would you have acted in the same way or chosen a different response to the situation?

17.* Assume personal responsibility for the consequences of your action.

If your response to the situation now seems-with the benefit of hindsight-to have been wrong or has caused negative consequences, what steps, if any, do you need to take to address the consequences of your decision and action? If it seems to have been incomplete, what else needs to be done to address the situation? Have your actions and their consequences brought about new ethical challenges?

18.* Consider implications for preparation, planning, and prevention.

Did this situation and the effects of your response to it suggest any useful possibilities in the areas of preparation, planning and prevention? Are there practical steps that would head off future problems or enable you and others to address them more effectively? Would changes in policies, procedures, or practices help?
DEFINITION: According to the Oxford English Dictionary the term ethical may be defined as: of or pertaining to morality or the science of ethics; pertaining to morals (2002, p. 864). However, based on this definition, an ethical person may be different based on the country, culture, and ultimately, that persons perspective and the perspective of those people living in that persons environment. What one person may view as ethical in Asia may not be perceived as ethical in Australia and vice versa.

Fundamentally, unethical decisions are a function of the individual decision maker, who has low ethical principles; however, what is considered ethical or unethical may change based on a persons work environment, such as the country he or she lives or works within, the culture of that environment and what is considered to be the organisational norm.

Ethical Decision Making: How to Make Ethical Decisions in 5 Steps

What is ethical? Decision making can be hard enough but when we have to consider ethics and decision making we can tie ourselves up so tight we stop making decisions entirely. Here is a short guide to help you through the ethics maze and make effective decisions.

Consider this - is it ethical that CEO's get paid salaries hundreds of times greater than their most junior employees? You could argue a CEO contributes more to the overall wealth and health of the company and should be appropriately rewarded, however, others may say it is an unfair, indefensible abuse of power. I guess your answer depends how far up the management food chain you are! Ethical decision making affects more than our working life. What are you wearing today? Do you know the working conditions of the person who made it? Are you happy with that? And that cup of coffee you had at breakfast - who made the biggest buck from your purchase? Here is a short guide to help you think through ethical issues and make effective decisions. 1. Is it an ethical issue? Being ethical does not always mean following the law. And just because something is possible doesn't mean it is ethical, hence the global debates about bio-technology advances such as cloning. And ethics and religion do not always concur. This is perhaps the trickiest stage in ethical decision making, as sometimes the subtleties of the issue are above and beyond our knowledge and experience. Listen to your instincts - if it feels uncomfortable making the decision on your own, get others involved and use their collective knowledge and experience to make a more considered decision. 2. Get the facts What do you know, and just as importantly, what don't you know? Who are the people affected by your decision? Have they been consulted? What are your options? Have you reviewed your options with someone you respect? 3. Evaluate alternative actions There are different ethical approaches which may help you make the most ethical decision. a. Utilitarian Approach - which action results in the most good and least harm? b. Rights Based Approach - which action respects the rights of everyone involved? c. Fairness or Justice Approach- which action treats people fairly? d. Common Good Approach - which action contributes most to the quality of life of the people affected? e. Virtue Approach - which action embodies the character strengths you value?

4. Test your decision Could you comfortably explain your decision to your mother? To the man in the street? On television? If not, you may have to re-think your decision before you take action. 5. Just Do It - but what did you learn?

Once you've made the decision, then don't waste time in implementing it. Set a date to review your decision and make adjustments if necessary. Often decisions are made with the best information to hand at the time, but things change, and your decision making needs to be flexible enough to change too. Even a complete about face may be the most appropriate action further down the track. Ethical decision making in a business environment The issue of effectively integrating ethics into business decision making is a major area of debate confronting today's corporate leaders. Persistent media reports of unethical behavior by corporations, business executives, and governmental officials highlight the need for effective solutions to the ethics dilemma. The ethics dilemma derives from the perceived conflict between the traditional corporate objective of profit maximization and the overall desire for increased social welfare. Although ethically responsible business practices are generally desired, opinions about what these practices are and how they should be encouraged are diverse. The complexity of the current business environment complicates the development and implementation of resolutions to ethical issues facing industry. John Dobson's article outlines the nature of the corporate structure in which managers, and to some extent the shareholders, are not "free moral agents." Therefore, these groups are not "at liberty to make ethical decision." This lack of moral responsibility is contrary to prevailing opinions. For example, Richard DeGeorge (1986) explains that the diminished feeling of moral responsibility that may accompany decisions of a person or group acting as an agent for others does not suggest the absence of moral responsibility. He further states "Because a corporation acts only through those who act for it, it is the latter who must assume moral responsibility for the corporation." (p. 100) The article "Ethics of Shareholder Referendums; Corporate Democracy or Hypocrisy?" discusses changes in business conditions that have led to the increased use of the referendum process for approaching controversial decision making. However, using referendums for conflict resolution has its own set of problems. Dobson argues in favor of passing a law requiring corporations to seat a qualified ethicist on their board of directors as an alternative method of resolving the ethical dilemma. The implied role of this board member is to monitor and mediate conflicts between profits and ethics. Although the article provides a new approach to ethical problem solving, some basic problems remain. The concept of ethics is not adequately developed and he fails to discuss implementation of his solution. Agency theory is used as a basis for recommending the professional ethicist board member. Fama and Jensen (1983) discuss this theory which is based on the separation of ownership and control. Agency theory states that agency problems arise when the decision makers (generally composed of agents or management) do not share the wealth effects of their decisions (generally borne by the shareholders). Agency problems require the establishment of an effective control procedure. When the shareholders are not qualified for roles in the decision process, they often delegate the decision control to other agents, often a board of directors. Yet, the control is not effective unless it limits the decision discretion of the managers. In practice, the board has limited power and control [see The American Law Institute, (1982) for a delineation of the powers and functions of

the Board of Directors]. The article fails to specify how the ethicist performs the control function. Fama and Jensen's (1983) argument supporting the arbitrator position of outside board members to solve agency problems between internal forces of management and shareholdcrs is not directly applicable. The ethicist is not mediating internal conflict between management directors and shareholder directors. The legal requirement for an ethicist is external, and the ethicist represents interests that are external to the firm. A well thought out framework to integrate profit maximization and social welfare maximization is necessary to obtain a pareto optimal solution for diminishing unethical actions. Two key factors must be included in this framework: 1) There must be clear understanding of what constitutes acceptable ethical behavior; 2) There must be an effective mechanism for ensuring the company follows ethical practices. We must understand what ethical behavior is before an effective mechanism to enforce ethical behavior can be developed. Traditionally, an ethic is value based and stems from socio-economic contexts. The major theoretical approaches to ethics frequently conflict and the evaluation of ethics may depend more on the framework than the issue. One test involved in Kantian theory involves a normative ethic. This ethic is one that, at a minimum, all rational people would find acceptable after carefully considering the pros and cons of an issue. The normative approach implies ethical behavior centered on the rights of others and follows the Golden Rule. This approach to ethical decision making allows considerable discretion as it relies on value based beliefs and attitudes. Therefore, even within the normative approach, inconsistent decisions .

FACTORS AFFECTING ETHICAL DECISION-MAKING

In general, there are three types of influences on ethical decision-making in business: (1) individual difference factors, (2) situational (organizational) factors, and (3) issue-related factors.

INDIVIDUAL DIFFERENCE FACTORS.

Individual difference factors are personal factors about an individual that may influence their sensitivity to ethical issues, their judgment about such issues, and their related behavior. Research has identified many personal characteristics that impact ethical decision-making. The individual difference factor that has received the most research support is "cognitive moral development." This framework, developed by Lawrence Kohlberg in the 1960s and extended by Kohlberg and other researchers in the subsequent years, helps to explain why

different people make different evaluations when confronted with the same ethical issue. It posits that an individual's level of "moral development" affects their ethical issue recognition, judgment, behavioral intentions, and behavior. According to the theory, individuals' level of moral development passes through stages as they mature. Theoretically, there are three major levels of development. The lowest level of moral development is termed the "pre-conventional" level. At the two stages of this level, the individual typically will evaluate ethical issues in light of a desire to avoid punishment and/or seek personal reward. The preconventional level of moral development is usually associated with small children or adolescents. The middle level of development is called the "conventional" level. At the stages of the conventional level, the individual assesses ethical issues on the basis of the fairness to others and a desire to conform to societal rules and expectations. Thus, the individual looks outside him or herself to determine right and wrong. According to Kohlberg, most adults operate at the conventional level of moral reasoning. The highest stage of moral development is the "principled" level. The principled level, the individual is likely to apply principles (which may be utilitarian, deontological, or justice) to ethical issues in an attempt to resolve them. According to Kohlberg, a principled person looks inside him or herself and is less likely to be influenced by situational (organizational) expectations. The cognitive moral development framework is relevant to business ethics because it offers a powerful explanation of individual differences in ethical reasoning. Individuals at different levels of moral development are likely to think differently about ethical issues and resolve them differently.

SITUATIONAL (ORGANIZATIONAL) FACTORS.

Individuals' ethical issue recognition, judgment, and behavior are affected by contextual factors. In the business ethics context, the organizational factors that

affect ethical decision-making include the work group, the supervisor, organizational policies and procedures, organizational codes of conduct, and the overall organizational culture. Each of these factors, individually and collectively, can cause individuals to reach different conclusions about ethical issues than they would have on their own. This section looks at one of these organizational factors, codes of conduct, in more detail. Codes of conduct are formal policies, procedures, and enforcement mechanisms that spell out the moral and ethical expectations of the organization. A key part of organizational codes of conduct are written ethics codes. Ethics codes are statements of the norms and beliefs of an organization. These norms and beliefs are generally proposed, discussed, and defined by the senior executives in the firm. Whatever process is used for their determination, the norms and beliefs are then disseminated throughout the firm. An example of a code item would be, "Employees of this company will not accept personal gifts with a monetary value over $25 in total from any business friend or associate, and they are expected to pay their full share of the costs for meals or other entertainment (concerts, the theater, sporting events, etc.) that have a value above $25 per person." Hosmer points out that the norms in an ethical code are generally expressed as a series of negative statements, for it is easier to list the things a person should not do than to be precise about the things a person should. Almost all large companies and many small companies have ethics codes. However, in and of themselves ethics codes are unlikely to influence individuals to be more ethical in the conduct of business. To be effective, ethics codes must be part of a value system that permeates the culture of the organization. Executives must display genuine commitment to the ideals expressed in the written codeif their behavior is inconsistent with the formal code, the code's effectiveness will be reduced considerably.

At a minimum, the code of conduct must be specific to the ethical issues confronted in the particular industry or company. It should be the subject of ethics training that focuses on actual dilemmas likely to be faced by employees in the organization. The conduct code must contain communication mechanisms for the dissemination of the organizational ethical standards and for the reporting of perceived wrongdoing within the organization by employees. Organizations must also ensure that perceived ethical violations are adequately investigated and that wrongdoing is punished. Research suggests that unless ethical behavior is rewarded and unethical behavior punished, that written codes of conduct are unlikely to be effective.

ISSUE-RELATED FACTORS.
Conceptual research by Thomas Jones in the 1990s and subsequent empirical studies suggest that ethical issues in business must have a certain level of "moral intensity" before they will trigger ethical decision-making processes. Thus, individual and situational factors are unlikely to influence decision-making for issues considered by the individual to be minor. Certain characteristics of issues determine their moral intensity. In general, the research suggests that issues with more serious consequences are more likely to reach the threshold level of intensity. Likewise, issues that are deemed by a societal consensus to be ethical or unethical are more likely to trigger ethical decision-making processes. In summary, business ethics is an exceedingly complicated area, one that has contemporary significance for all business practitioners. There are, however, guidelines in place for effective ethical decision making. These all have their positive and negative sides, but taken together, they may assist the businessperson to steer toward the most ethical decision possible under a particular set of circumstances.

ETHICS & IMPORTANCE ETHICAL DECISION MAKING Ethics on a global scale relates to morals, the treatment of moral questioning, and acting in a morally correct, honourable way or manner. However, business ethics provides the guidelines with regards to acceptable behaviour by organisations in both their strategy formulation and day to day operations. Businesses and organisations have thus realised the importance of ethical standards necessary for both corporate success and maintaining or achieving a positive corporate image. Continued pressure from the consumer market, shareholders and other leading entities within businesses for more responsible and ethical business practices have forced many organisations to make a public commitment to ethical business by formulating codes of conduct and operating procedures and principles. This signifies organisations need to adhere to principles with regards to their actions such as corporate governance, personal and corporate accountability and corporate giving to name a few. These various principles and procedures can thereby formulate an ethical business environment and avoid common decision-making mistakes leading to substantial financial and social loss. The recent collapses of large-scale companies such as HIH Insurance Ltd. and One-Tel Ltd. highlight the importance of how such ethical issues are forcefully...