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Ethics and Decision Making

Contents How are ethical decisions made? Role of moral philosophies in decision making Suggestions for ethical decision making Ethical organization

Ethics and Decision Making


Contents Ethical issues that arise for managers Difficulties in decision making How to use ethical reasoning? Levels of decision making and business decision making Power and political action in organization

How are ethical decision made

Based on ethical issues that arise out of everyday business decision An individuals personal beliefs and the moral atmosphere of the organization in which one works Way an individual exhibit his behaviour Based on the structure and decision making involves the determination and weighing of four factors

How are ethical decision made

End (outcomes sought), means (mehtods employed), motives ( urge makes the decision making) and foreseeable consequences ( final outcome) Any of the above four was wrong the entire actions was immoral Eg. Small garment manufacturer selects a small place where there is no industry and make improvement in the place Similarly ten commandments of legal and ethcial intelligence gathering by company

Role of moral philosophies in decision making


Philosophies are a set of principles setting forth what is believed to be right way to behave A philosophy is a study of the general principles of a subject such as morality Role that is moral confirms to a standard of acceptability Individuals learn the principles through association by family members, social groups and formal education They believe in this philosophy seeks the greatest satisfaction for the largest number of individuals

Suggestions to improve ethical decision making

Top management can improve behaviour Codes of ethics improves decision making Interaction with peers and other categories Control system

Ethical organization

An organization is not just a group or mass of people, has as structure which enables to make collective decision and act on those decision People are moral agents actions are governed by rules explicit or implicit which can be subjected to ethical appraisal Spectrum showing moral rights of different individuals: Eg. Children who may be selfish or act unfairly we accept that they would gradually acquire full moral responsibility for those actions

Ethical organization

Eg., animals on the other hand may be courageous or altruistic. We accept in them a degree of anthromorphism in extending moral language to far in their direction Rocks, trees stones do not have moral philosophies

Ethical organization

Question is how where does the organization fall in the spectrum? Let us analyze the organization and give three answers Organization may be clubs, societies, incorporated bodies, companies these being moral end while stones, books, trees belong to non-moral end

Ethical organization

It would be absurd to require an organization to act justly as it would be to expect the sea to be responsible Answer two: organization may be agents which it makes same or blame for these actions They are not exactly the same way as human beings have obligations

Ethical organization

Cannot be laid on organization because they are not effective or efficient entities Eg. Bank should operate according to the financial principles and not impose its political or social values on the community Answer three: organization have sufficient structural complexity to be agents whom it makes sense to call to account for their action and the consequences of those action

Ethical organization

Some organization have flat, relatively internal and open structure whilst others may be rigid hierarchical and formal Now whether an organization can take decision readily or with extreme difficulty, whether they do so with full consent of all involved or in the teeth of opposition and dissent

Ethical organization

So, if a body can take decision and implement them it must be responsible for those decision and the consequences It may not be possible for such organization to be responsible in the way that people can be but they can be responsible in a way appropriate to organization

Ethical organization

Virtue of business organization is being profitable and socially responsible Organization as such takes as its premise assertion something more sophisticated that organization are made up of people and that they have no real existence of their own apart from the people out of which they are constitiuted

Ethical organization

It goes like saying rainbows do not exist. Rainbows are made out of the sunlight refracted through raindrops and that were it not for the existence of rain drops and sunlight there would be no rainbows

Ethical issues that arise for Managers

Conduct of business is a matter of concern for everyone with a stake in ethical management Ethical issues in business are closely tied t important matters of public policy and the legislations and judicial processes of the government

Difficulties in decision making

In spite of good ethical practices ethical problems do occurs in business some of the main reasons are: Cross cultural contradictions Personal gain/ dubious character Competitive pressure Managers values and attributes Individual values in conflict with organization goals

How to use ethical reasoning?

Identify the nature of the ethical problem Decide which course of action is likely to produce most ethical results Three methods of ethical reasoning are: Utilitarianism Rights Justice

How to use ethical reasoning?

Critical determining factors of ethical action of different methods Main factors are : compare benefits and cost, respecting rights and distributing fair shares Action in values net benefit exceed net costs, basic human rights and benefits and cost are fairly distributed

How to use ethical reasoning?

Limitations difficult to measure human and social cost, difficult to balance conflicting rights and lack of agreement and difficult to measure

Levels of decision making

Level of organization- problem of harassment Level of individual- whether to live with difficult boss or to blow the whistle Level of business system problems resulting from accepted business practice Single company cannot change single handedly because of competition

Power and political action in organization

Politics is a network of interactions by which power is acquired transferred and exercised on others Politics transcends traditional organizational boundaries Power is the medium of exchange in politics just as the $ in the medium of exchange in economics

Power and political action in organization

Shrewd politicians acquire power and transfer it to others when it can purchase something of value Managers must recognize the political forces n their organization some may choose to behave essentially as politicians Degree of politicking is a fact of organizational life regardless of the caliber of people involved or the degree of formalization of organizational rules and regulations