Ethical Decision-Making - Coursework Example

Ethical Decision Making Name Class Unit Introduction Ethics refers to what is good and right for the human being. There has been growing attention to ethics in organisations. There has been development of several ethical decision making models in organisations. The management is faced with situations which require coming up with a sound ethical decision (Johnson, 2007). There are situations where an ethical dilemma faces an organisation leading to examining the situation and coming up with appropriate decision. Ethical decision making model can be classified into seven steps. The steps are; identifying the problem, applying a code of ethics, determining the nature of dilemma, coming up with potential cause of action, determining the course of action, evaluating the selected course of action and implementing it. In most cases, there are several courses of actions that can be used in ethical decision making. When making a decision, an organisation is supposed to look at all the stakeholders’ interests (Frey, 2000). Ethics should thus be followed with reference to the organisation culture and the decision making. It has been observed that firms which are ethical are able to gain success through customer loyalty. The ability to recognise an issue in the organisation and identify the presence of ethical issue determines the effectiveness of an ethical decision. Ethical maturity is needed when dealing with situations which require ethical decision (Greenwood, 2002). This essay discusses how ethics influences an organisation in decision making process. This is done through looking ethical issues at location, suppliers, human resource management and industrial relations. Of late, there have been a lot of monitoring on the organisations actions. In some instances, organisations have made decisions that have led to catastrophic results to their stakeholders. One of a good example of a managerial decision making that led to wrong consequences was Enron and Tyco being declared bankrupt. The actions by the managers led to loss of employment and funds (Sims & Brinkmann, 2003). The managers made unethical decisions which had negative impacts on the organisation. In most cases, the decision makers justify their actions claiming they acted on the interest of their shareholders. This leads to discussion on what are ethical behaviours and what are not due to varying points of views (Greenwood, 2002). An organisation can use different types of frameworks in making decisions. Ethics in organisations are used to define what right action is. Ethics in organisations may be described as ethical reasoning, welfare or the moral philosophies (Sternberg, 2000). The extent to which the decision makers utilise ethical frameworks determines how ethical their decisions are. The actions taken may be in the interests of the organisation or to community good. Rational decisions are highly applauded in management. This is due to fact that the decision maker has the ability to revisit the matter until they are satisfied it maximises all issues needed. The problem arises sue to fact that rational decision making is based on ideal situation. The inclusion of ethics in organisation decision making can lead to increase in conflict. This occurs when different approaches are taken on ethical issues. The ethical issues used in an organisation are supposed to be transparent to avoid conflict (Frey, 2000). Organisation human capital can be a source of competitive advantage if well nurtured and deployed. Human resource management has to make decisions on recruitment, deployment and training of the workforce. The human resource management has been implicated in unethical practices such as the use of child labour, unfair working conditions, exploitation of labour markets and increasing the employees stress (Greenwood, 2002). For example, some of the firms have been involved in scandals where they outsource in cheap labour market without looking at working conditions. Poor ethic in human resource management leads to the employees becoming demoralised. There have also been cases where organisations have been charged with abuse of rights. KFC and McDonald’s were accused of abusing animal rights. The human resource department have to ensure that they allow a healthy competition. This is through ensuring that the decision made on strategies is not threat to fair competition. An example is the aggressive treatment to the competitors’ decision that was adopted by Wal-Mart (Greenwood, 2002). Organisations are supposed to treat their employees fairly and act without discrimination. This is a set by laws which prohibit unfair practices (Sternberg, 2000). The human resource department follows objectives that ensure that they recruit and select their employees in a fair and just process. They have to ensure that they give equal opportunities when promoting and developing their employees. Thus, human resource department has a role to ensure that they uphold ethical values that contributes to organisation success. The human resource department has to act as role model in making ethical decisions in an organisation. They have to maintain a high level of trust with the stakeholders through acting ethically to protect their interest as well as those of the organisation (Frey, 2000). Stakeholders in organisations have to be accorded their rights in decision making. Rights in an organisation are supposed to be accorded to all individuals (Werther & Chandler, 2006). A lot of individuals have a stake in the organisations and hence have to be catered for when coming up with decisions. The employees, suppliers, customers and community have to be catered for in making a decision. This implies that when making an organisation decision, they should all be consulted appropriately. This implies that an organisation has to start by identifying their stakeholders. After identifying them, the organisation should make them know that their views are needed (Johnson, 2007). Decision makers operate in a time constrained environment. There are issues with limited information or a lot of it. Channels used in coming up with decisions are also not perfect which makes it hard to make an ethical decision (Sternberg, 2000). Despite this, there are means in which effectiveness of a decision can be improved. Balancing stakeholders’ interest is needed when coming up with an ethical decision. Despite the need, there are constrains which makes it hard to achieve the balance. These are resource divisibility and the stakeholders’ saliency. Stakeholders are always competing on the organisation resources. In purchasing and supply management, ethical decision making is vital. The organisations which engage in supplying material are supposed to be very ethical in their practice and decision making. For example, making a decision to bribe is punishable under law. The organisations are supposed to be well versed on what ethical decision making entails. The organisation is supposed to ensure that there are no self interests that may compromise ethical decision making. For example, a case may occur where a supplier has a family member in a key company being supplied. Hospitality which may be carried out with an aim of ruining the judgement should be avoided. Organisations being supplied should also be careful not to take any financial gift which might compromise ethical decision making (Frey, 2000). One way of ensuring ethical decision has been carried out is by encouraging open and transparent communication (Scott, 2002). The decision maker has to allow challenge and disagreements in order to come with the right decision. This implies that the decision being made considers opposing viewpoints before coming to the consensus. The way in which the final decision is communicated determines its reception. The justification of an ethical decision is also seen through making an open communication on the outcome. The variability in ethical decision making is influenced by the intensity of the ethical dilemma. Individuals respond differently to moral issues (Frey, 2000). Due to the reduction of trade barriers, businesses have become global. This has led to more insight into cross cultural management and ethics. Different cultures have different views on ethical decisions. A company located in New York has different views on ethical decision making as compared to a company in China. Disagreements often occur when making a decision in a multicultural setting. Each culture has its views on the world and society. Culture has an influence on the ethical values. This implies that culture has an effect on ethical decision making. Moral structures of individuals are where ethical decisions are based and are influenced by culture. For example, research has proved that managers who come from collective societies have higher levels of reasoning when faced with an ethical dilemma as opposed to those from individualist societies (Johnson, 2007). In an organisation, there are several types of ethical situations in decision making. The situations are; dilemma, distress, temptation and silence. Dilemma involves alternatives course of actions which can be used to solve an important issue. This is a situation where there are two competing alternatives which have the capability to fulfil a situation. Distress occurs when one is aware of the right decision to take but not empowered to take action. This is evident during the implementation phase of decision making (Scott, 2002). Temptation occurs where one is involved between choosing the right or wrong decision. For example, a situation may occur where one can benefit by making a wrong decision. A manager may benefit by making a decision that favour a supplier who will offer bribes. Silence is a situation which ethical values in an organisation are challenged, but no one is ready to talk about it. An individual who is in moral distress may decide to remain silence when an unethical issue is carried out (Johnson, 2007). Ethics are an important part of industrial and public relations. At the moment, public relations staffs are involved in firms’ strategic decision making process. They are involved in setting ethic standards and ensuring that organisations are able to comply. Maintaining ethics in an organisation forms a vital part. Public relations professionals are faced with ethical dilemmas in their jobs (Scott, 2002). This occurs in situations where their responsibilities are in conflict with loyalties. Ethical course of action has to be made in such situations. In an organisation, when faced with an ethical dilemma, they use a specific guide in addressing it. The first step is identifying the ethical issue which is leading to a conflict. The second step involves looking at both internal and external factors that may affect the final decision. This includes legal, political and social factors, among others that have an effect on the final decision. There is also need to look at the key values that exists in a dilemma. The third step involves looking at all the stakeholders who will be affected by the final decision made. Ethical principles that will guide decision making process are selected. The last step is making an ethical decision and justifying it (Johnson, 2007). Making an ethical decision in an organisation follows four steps. The first step involves recognising and defining ethical issue. After defining the issue, one is supposed to reflect on it. The third step involves deciding what to do while the last step is evaluating. Ethics forms an important part in decision making. Business has fallen due to unethical decision making. An example is the collapse of One.Tel in Australia. Wrong decision making led to collapse of the fourth largest Australian telecommunication company. To avoid these issues, individuals are supposed to be intuitive in making their decision. An individual can use intuition to recognise patterns that they have learned from past experience and avoid mistakes (Frey, 2000). Conclusion Ethics involves doing what is right to all. In organisations, ethics forms an important part in decision making. Organizations have a responsibility to the stakeholders who includes employees, suppliers and community. The decision made must be fair to all stakeholders. This leads to a need for ethical decision making. Human resource management has to make ethical decisions regarding the human resource. This is due to fact that human resource forms an important part of the organisation competitive advantage. The suppliers are also supposed to be ethical in their dealing with the organisations. Different cultures have different views on business ethics. This implies that the international organisation have to learn the culture of their area of operation. Ethics forms part of public relations hence help in enhancing industrial relations. When making ethical decisions, the steps to follow are; recognising and defining ethical issue. After defining the issue, one is supposed to reflect on it. The third step involves deciding what to do while the last step is evaluating. From the essay, it is evident that ethics influences organisation decision making process. References Greenwood, M 2002, “Ethics and HRM: a review and conceptual analysis”, Journal of Business Ethics, Vol. 36, no. 3, pp. 261–278. Frey, B. F 2000, “The Impact of Moral Intensity on Decision Making in a Business Context”, Journal of Business Ethics, Vol. 26, no.3, pp.181-195. Johnson, C. E 2007, Ethics in the workplace: Tools and Tactics for Organizational Transformation, Thousand Oaks, Sage Publication. Johnson, R 2003, HR must embrace ethics, People Management, Vol. 9, No. 1, pp.324. Scott, Elizabeth D 2002, “Organisational Moral Values”, Business Ethics Quarterly, Vol.12, no.1, pp.33-55. Sims, R. R & Brinkmann, J 2003, “Enron ethics”. Journal of Business Ethics, Vol.45, no.3, pp.243. Sternberg, E 2000, Just Business: Business ethics in action, Oxford, Oxford University Press. Werther, W.B & Chandler, D 2006. Strategic Corporate Social Responsibility Stakeholders in a Global Environment, London, Sage. Read More