Ethical Decision Making in Business - Research Paper Example

Ethical decision making in Business Abstract Ethical decision making in business is a vital ingredient in the success of any business or organizations. It builds an outstanding brand name and company or business reputation attracting more customers into the business boosting profitability hence success. It is therefore paramount for companies to instill in their employees good business ethics. Employees in the company often make decisions on behalf of or for the company. These decisions are often based on certain framework, model or set standards upon which clearly laid down guiding principles that employees are required to adhere to are stipulated. “These principles give a direction on the accepted behavior form workers while undertaking decisions in day to day running of the business” (Ferrell, Fraedrich, & Ferrell, L. 2013). A company that has made clear and strong decisions and ethics has a good opportunity of achieving great business heights and expansion of markets. Ethical decisions in business are unique to different companies and are often interpreted differently by different individuals. For instance when a business organization hires new employees, the perception that the employees may have on the existing ethics may not be exactly the same as that which is held by older employees. Therefore, the way in which new employees approach decision making process may differ with the approach taken by older employees. Most business organizations draft their ethical business decision guidelines using their mission statement. Introduction Business ethics are used by business organizations to guide managers and the executive to act in a responsible manner. It limits misuse of power by providing guiding principles and standards expected of every director or the executive. It is important to note that the core function of business ethics is to provide a framework whose function is to provide a directive on individuals bestowed with the mandate of managing the business. The guidelines limits misuse of power that can cause a company great loss as unscrupulous individuals take advantage of weak organizational systems to profit from decision making. In addition, such individuals may cause the company legal obligations that can make the company bankrupt. It is not easy to create a business atmosphere that is ethically accepted. Companies often incur incredible amount of time and resources training the executive and employees in an effort to creating business ethics. Moreover, decisions made by the company may rarely be taken positively by the employees or even the executive in the implementation process. Fighting this negativity reaction may be a stumbling block to effective implementation of business ethics. Body Companies may implement other methods of educating the employees on matters concerning decision making in the business ethical environment. This method of training includes workshops and professional courses meant at educating workers on ethical decision making process. In addition, inviting experts to educate employees enables business organizations to review their goals and objectives in regard to their current operations. In so doing, the company progressively builds a strong business code of conduct in running of a business. Though the resources of the business environment may be very costly, it always helps the company to improve its status. In essence, Smart ethical decisions are very crucial to the continuity of the business as well as mastering marketing skills including finance and accounting. Ethical conduct needs an understanding and identification of issues associated with risks incurrence and uncertainties together with making decisions and choices pertaining to the business environment. It is very important to make economic decisions that can lead to improvement in the company’s status .The most important characteristic of the business is contentious and it has no special way of approaching and solving issues. It is found through research that an ethical person is of good use than unethical rich person. Organizations that fail to achieve good ethical standards among its workforce and in their decision making practice will most likely fail to achieve its objectives in the long run. This is solely because such companies often fall victims of ethical misconduct susceptible to legal misconducts. Ethical decision making is a process by itself and therefore some stages are involved in it. The first stage in decision making process is ethical dilemma where a certain situation is framed. The second stage involves identification of pertinent stakeholders. What is considered in this stage is the impact a certain planned course will have on the stakeholders and associated parties. The third stage will take into account values and norms attached to the intended action. Business ethics are made up of guiding principles meant to give direction to individuals or group of workers on what to o in the event that they make decisions for the company. These principles are normally set by the stakeholders and therefore subject to change from time to time as dictated by dynamic business environment. Some companies regard basic standards as laws and regulations hence business ethics are seen to be above legal matters. “Finally, pertinent legal and social requirements on the intended course must be considered” (Fernando, 2009). The following model represents a decision-making Model showing various processes involved in decision making Country/National Culture Situation framing Legal issue Ethical issue Ethical dilemma Demographic variables Occupational variables Ethical climate Ethical leadership The illustration shows that the main determinant of situation framing, ethical climate and leadership is the national culture. In addition, it is a common predictor of the connection between state framing, identification of pertinent stakeholders as well as intra and extra organizational factors. The above model is useful because from it, managers can distinguish across various nationalities or cultures ethics from law. It gives a clear picture of the exodus from normative advance into ethical approaches in business decision making process. There are five most common types of business ethics Utilitarian ethics- these are ethics that provide standards to act in a good manner so as to avoid harm to individuals or organization. The approach stresses on the need to choose an action that does more good and does not harm the stakeholders or community. It tries to avoid negative consequences through increased good and least harm in actions. Rights ethics-This is an approach that gives protection and respect to decent rights on all individuals based on the decisions made. The approach stresses on an action that is ethical and can best safeguard the rights of the affected parties. It is in best interest of this approach to see to it that human beings choose what is best and good to their lives. “This is because human life is a dignified one and must be treated as end but never ends that justifies the means” (Hartman, & Desjardins, 2013). In addition, the approach stresses on the need to make informed choices on such matters as knowing the truth, knowing the nature of life one would like to live and the right to privacy. Fairness (Justice Approach) ethics- This is sometimes known as just ethics. These are ethics that are meant to create a just and equal environment where human and environment is accorded due respect and fair treatment. Its main focus is equality or fair inequality for all based on a justified standard. It is an approach that dictates matters related to remuneration based on someone’s contribution to business entity. Common Good Ethics- These ethics give direction on matters related improving the society as a whole. The approach proposes that the basis for ethical reasoning lies with someone’s ability to interact with the community. This implies that ethical reasoning be based on love and respect for the less fortunate members of the society. The approach gives emphasis to marginalized groups of people for instance the disabled. Virtue ethics-These are tactical ethics that are meant to promote employees for the Company or business through such activities as training and workshops. “The disposition of virtues approach enables people to direct their actions towards maximization of their full potential of character” (Dubbink, Liederkerke, & Luijk, 2010). The virtue approach seeks to direct one to act in a manner that he or she would like to be. Conclusion In conclusion, some of the contents of the approaches discussed may not be agreeable to some cases. Therefore, the most important thing to do is to concentrate on the right decisions in the event that we are confronted with a specific situation. In addition, it is important for every organization to design a framework upon which ethical decisions will be based on. Further, business ethics requires the type of leadership management that is value-based. In this regard, Executives in the concerned organizations should always strive to have decisive actions based on careful planning and implementation of proper standards of conduct. Openness and effort making towards improvement of ethics in running an organization is important in the survival of a business. One ethical component in making ethical decisions in business is individual values. “This is because such values provide guidelines on decision making, actions and policies of organizations” (Kuntz, Kuntz, Elenkov, and Nabirukhina, in press). References: Kuntz, J.C., Kuntz, J.R., Elenkov, D.S., and Nabirukhina, A. (in press). Framing Ethical Cases: A Cross Cultural Investigation of Individual Differences, Organizational Climate, and Leadership on Ethical Decision Making. Journal of Business Ethics Dubbink, W., Liederkerke, R. ., & Luijk, H. (2010). European Business Ethics Casebook: The Morality of Corporate Decision Making. Berlin: Springer Netherland. Fernando, A. C. (2009). Business Ethics: An Indian Perspective. Prentice Hall Hartman, L. P., & DesJardins, J. R. (2013). Business ethics: Decision making for personal integrity and social responsibility. Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases. Mason, OH: South-Western/ Cengage Learning. Read More