Ethical Decision Making through Leadership - Assignment Example

? Ethical Decision Making Through Leadership Businesses are prone to ethical dilemmas, and so leaders need to have the knowledge and skills on how to deal with such situations to ensure the business is not affected. Ethical decision making through leadership; one would ask what this is all about. It is about ethical leadership. Ethical leadership is a required response to ethical crisis within organizations. Ethical leadership is not just having good character and the right values. Ethical leadership takes into account the situation or the context that the constituents and the leader face, the leader, the leader’s processes and skills, the key stakeholders and followers, and the outcomes that result. A leader is a member of the organization with certain stakeholder groups. The leader and the stakeholder groups therefore, have common vision, purpose, and values for the benefit of the organization. These stakeholders however, have individual autonomy and individuality. These must be respected to maintain a moral community. An ethical leader, considering all these factors, is a representation of the vision, purpose, and values of the constituents and of the organization, within an understanding of ethical standards. They link the goals of the internal employees and the external stakeholders, with the goals of the organization (Freeman & Stewart, 2006). Waddoc (2007) indicates that ethical leadership is a combination personal and managerial qualities of morality. Being moral at personal level is all about personal honesty, integrity, and trustworthiness. Integrity encompasses forthrightness, truthfulness, and consideration for the organization and the society’s soundness. It also means adherence to any formulated codes in an organization. An ethical leader, following these descriptions should be one who can be trusted to make moral decisions for the organization. He should be able to have concern for people, do the right thing, have personal standards for integrity, and be open (Waddoc, 2007). The real meaning of ethics is being able to do the right thing under any circumstances. Being able to do the right thing is influenced by a variety of factors, for example the codes of an organization, the state of the ethical dilemma or situation, personal values, and so on. A leader is expected to reason well, and make the right decision concerning what is ethically right. This ability to make correct ethical decisions needs open learning from various sources. The leader will in the end achieve personal standards that will play a role in the process of decision making alongside other influences. The leader will have gained one important quality; being a moral leader. Personal traits that qualify one as a moral person however, are not enough to make one a moral leader. A moral leader means being a moral manager. Being a moral manager means recognizing one’s duty as a role model, defining what is ethically accepted within the organization, and communicating explicitly, openly, and frequently about organizational values and ethics (Waddoc, 2007). Ferrell, Fraedrich and Ferrell (2011) also echoes Waddoc’s message (2007), about organizational ethics. There is more to ethical decision making than the normal decision making involving family issues at home, and even about personal life. Ethical decision making in an organization integrates concepts from psychology, sociology, philosophy, and organizational behavior. There are different frameworks based on the authors’ perceptions and understanding of the process (Waddoc, 2007). According to Ferrell, Fraedrich and Ferrell (2011), the process of ethical decision making needs thorough understanding of how leaders make such decisions in an organization, and development of ethical programs. For a leader to have such capability to represent the organization, the stakeholders and other constituents, he or she needs skills and knowledge. Over some time various frameworks and knowledge about decision making have been identified. These are important in offering the knowledge and skills to the leaders. Ferrell, Fraedrich and Ferrell’s Model of Ethical Decision Making This model includes individual factors, ethical issue intensity, and organizational factors such as opportunity and corporate culture. These interconnected factors influence the intentions behind decision making to produce ethical or unethical behavior, and also influence the evaluations of such decisions. Ethical Issue Intensity: There are certain issues that are of real legal and ethical risks that are in reality ethical issues. There are issues that are communicated as being high in ethical importance triggering an increase in such issues’ intensity. The intensity of an issue influences the ethical judgments of employees while making decisions, as well as their behavioral intention. If an issue is considered to be of more importance, it is less likely that employees will engage in acts related to such an issue branding them unethical. For example, if establishing a company franchise in a specific region and employing foreigners is considered of high ethical intensity, managers of organizations would refrain from such activities. Intensity could also depend on the effect of an act to the organization, and the consumers. If an activity ruins a company’s reputation and places it out of business considering previous experiences by other companies, it may be considered of high intensity. An example is resolving employee employment and discrimination issues that portray a company as discriminative (Ferrell, Fraedrich and Ferrell, 2011). Individual Factors: Individual characteristics also influence decision making. People have different perceptions about situations, and certain behaviors. An employee for example, can take most of his or her time using a company’s computer for personal reasons, yet there is a lot of work that should be done. A CEO can lie to investors, and still be comfortable with it, arguing that such a lie is for the benefit of the company. In a business, personal ethical issues involve discrimination, honesty, conflict or interest, stealing of organizational resources, and nepotism. Certain professions have also linked individuals to specific characteristics that deem them generally unethical or ethical. Stock brokers, car sales persons, advertising practitioners, and telemarketers, are for example, perceived as having the lowest ethics by the public. It is however, noted that individual factors that affect ethical judgment, awareness, behavior, and intent, are gender, work experience, education, age, nationality, and locus of control. It is not easy to know an individual’s characteristics based on his or her nationality, but this kind of information can help an organizational leader make an informed decision. May be from experience, the leader will know the characteristics of the individuals. With combined knowledge about decision making, this assists the manager in the process (Ferrell, Fraedrich and Ferrell, 2011). Organizational factors: When making ethical decisions in a business, it should be understood that organizational values have greater influence than personal values, although personal values are also important. Ethical issues in an organization are approached based on what employees have learnt from the organization and from own backgrounds. Learning outcomes depend on personal values, exposure to different situations, and personal behavior considering what is ethical and what is not. An organization’s culture and structure still play a vital role in influencing ethical decision making. As a leader, one will have to recognize the appropriate decision making models that integrate with the organizational structure, and guide the organization through its activities in a manner that ensures its objectives are met (Ferrell, Fraedrich and Ferrell, 2011). Ethical decision making is also influenced by business intentions and business ethics evaluations. Some people will be faced with ethical dilemma situations, but make decisions according to situational factors. One knows what is ethically correct, and that which is not correct, but still hoes ahead with the unethical behavior. It is indicated that such actions are justified by thoughts such as: Taking an action for granted because of its expected benefits (When the benefits are expected to be great) When one is in need of money and has no chance to quit When one’s colleagues are comfortable getting away with the immoral act (keeping in mind the belief that it is okay) The fear of being sacked or not promoted Arguing that business is business with a different set of rules, and Arguing that someone else will do it anyway (Ferrell, Fraedrich and Ferrell, 2011). This framework provides knowledge and insights about ethical decision making in n organization. With such knowledge, it becomes very easy for a leader to develop ways in which such a process can be made. For example, the structure and culture of an organization influence ethical decision making. A leader can decide to incorporate policies that will change the culture of an organization to good ethical practices. This will enlighten the employees hence will know what is ethically right or wrong according to the organization. The existence of such policies also provides rules for solving ethical dilemma issues (Ferrell, Fraedrich and Ferrell, 2011). EDM Framework Another framework that can be used by ethical leaders is as described below. Brooks and Dunn (2009) note that frameworks act as a defensive base for ethical decision making. Leaders have to make defensible decision so that if one questions why he or she made a specific decision and not any other, he will have justifiable reasons to respond. In this other framework, traditional requirements for legality and profitability, philosophically important requirements, and those demanded by stakeholders are all incorporated. The framework provides approaches to applying and combining decision relevant factors into practical action, and insights into identification and analysis of the key components of ethical issues or situations. It therefore, serves the purpose of improving ethical decision making. This EDM framework, just like the previous one described above, proposes that the supposed ethical actions be compared against four standards. This is proposed so because of the findings that one standard alone cannot be sufficient for ethical decision making. A four standard approach ensures a comprehensive assessment of ethical behavior (Brooks & Dunn, 2009). The EDM framework therefore examines; Fairness involved The consequences in terms of costs and benefits The motivation or virtues expected, and Rights and duties affected (Brooks & Dunn, 2009). Motivation or virtues expected is a virtue ethics approach, while the other three standards are based on deontology, consequentialism, and justice; focusing on stakeholder impact analysis approach. Such an approach focuses on the effects of the decision on stakeholders and shareholders (Brooks & Dunn, 2009). Reamer’s Framework Another framework is described by (Reamer, 2013). According to this framework, there are seven steps to ethical decision making. These are: Identifying the ethical issues plus duties and work value that conflict Identifying the organizations, groups, and people, that will be affected by the decision Indentifying viable options, the participants involved and expected risks and benefits of each option Thorough examination of the options considering personal values, legal principles and codes of ethics, work practice principles and theories, and ethical principles, theories, and guidelines Consulting with appropriate experts and colleagues Making the decision and ensuring that the process is documented, and Monitoring, evaluating, and documenting the decision (Reamer, 2013). There is no precise formula for solving ethical issues. Different leaders can use different criteria and principles based on their understanding, values and beliefs, to guide their decision making under specific circumstances. Ethicists however, agree that ethical decision making should be approached in a systematic manner. This means following a series of steps to ensure that all features of the issue at hand are addressed (Reamer, 2013). This explains the existence of a number of ethical decision making frameworks like the ones described above. These frameworks can also be applied in different situations, for example, the third framework is specified for social work professional. Leaders can assess situations and decide on which frameworks are appropriate for decision making. The existence of these frameworks further justifies the importance of a leader in a decision making process in an organization. The Role Of A Leadership In Ethical Decision Making Leadership is the authority or the ability to direct and guide others toward achievement of organizational goals. Leadership therefore, has a significant effect on the outcome of ethical decision making process. The leaders are the ones with the power to enforce organization policies and rules, and the power to motivate others. They are the key to an organization’s ethical posture and corporate culture. The leaders’ styles of management therefore, affect many aspects of organizational behavior, which is responsible for ethical decision making by other employees. They play a very important role in influencing employees’ adherence to organizational values and norms. Among such values are the codes of ethics which will determine the kind of decisions made by employees, and other stakeholders (Ferrell, Fraedrich and Ferrell, 2011; Minett, 2006; Fitch, 2009). Take an example of what a study by (Yaman, R. H. and Minett, D. (2008) revealed. That there are certain leadership styles associated with manager’s age, and decision making systems. It was established that in the hospitality industry, most managers are either bureaucratic or manipulative. The choice of being a manipulative or bureaucratic leader correlates with the age of the manager. The older managers were found to be less likely to be bureaucratic or manipulative, therefore, less likely to use rule-based or utilitarian decision making styles. They were more inclined to personality or social contract ethic approaches (Yaman & Minett, 2008). This also brings in a point of consideration; there are theories as well, that guide decision making. Such are the utilitarian approach, the fairness of justice approach, the virtue approach, rights approach, and common good approach (Velasquez et al, 2009). There could be other theories, but as explained above, the leader’s personal characteristics, knowledge, experiences, and style, determine the approaches and frameworks used in the decision making process. References Brooks, L. J. and Dunn, P. (2009). Business and Professional Ethics: For Directors, Executives & Accountants. Mason, OH: Cengage Learning. Freeman, R. E. and Stewart, L. (2006). Developing Ethical Leadership. Retrieved on 7th December 2013 from: http://www.corporate-ethics.org/pdf/ethical_leadership.pdf Ferrell, O. C., Fraedrich, J. and Ferrell, L. (2011). Business Ethics: Ethical Decision Making and Cases. Mason, OH: Cengage Learning. Fitch, W. L. (2009). A Study Of Relationships Between Ethical Decision Making, Leadership Styles, And Demographics In Pennsylvania Superintendents. Dissertation. Retrieved on 7th December 2013 from: http://dspace.iup.edu/bitstream/handle/2069/182/Walter?sequence=1 Minett, D. (2006). Ethical Decision Making as an Indicator of Leadership Styles in Hospitality Management: An Empirical Investigation. Thesis. Retrieved on 7th December 2013 from: http://vuir.vu.edu.au/577/1/01front.pdf Reamer, F. G. (2013). Social Work Values and Ethics. Columbia University Press. Velasquez, M., Moberg, D., Meyer, M. J., Shanks, T., McLean, M. R., DeCosse, D., Andre, C. and Hanson, C. O. (2009). A Framework for Thinking Ethically. Retrieved on 7th December 2013 from: http://www.scu.edu/ethics/practicing/decision/framework.html Waddoc, S. (2007). Ethical Role of the Manager: Encyclopedia of Business Ethics and Society. Thousand Oaks, CA: SAGE. Yaman, R. H. and Minett, D. (2008). Leadership Styles And Ethical Decision-Making In Hospitality Management. A Presentation to the 26th EuroCHRIE Conference Dubai. Retrieved on 7th December 2013 from: http://pc.parnu.ee/~htooman/EuroChrie/Welcome%20to%20EuroCHRIE%20Dubai%202008/papers/LEADERSHIP%20STYLES%20AND%20ETHICAL%20DECISION-MAKING%20IN.pdf---X8 Read More