...J Bus Ethics (2011) 104:311–323 DOI 10.1007/s10551-011-0910-1 A Model for Ethical Decision Making in Business: Reasoning, Intuition, and Rational Moral Principles Jaana Woiceshyn Received: 11 February 2011 / Accepted: 16 May 2011 / Published online: 28 May 2011 Ó Springer Science+Business Media B.V. 2011 Abstract How do business leaders make ethical decisions? Given the significant and wide-spread impact of business people’s decisions on multiple constituents (e.g., customers, employees, shareholders, competitors, and suppliers), how they make decisions matters. Unethical decisions harm the decision makers themselves as well as others, whereas ethical decisions have the opposite effect. Based on data from a study on strategic decision making by 16 effective chief executive officers (and three not-soeffective ones as contrast), I propose a model for ethical decision making in business in which reasoning (conscious processing) and intuition (subconscious processing) interact through forming, recalling, and applying moral principles necessary for long-term success in business. Following the CEOs in the study, I employ a relatively new theory, rational egoism, as the substantive content of the model and argue it to be consistent with the requirements of longterm business success. Besides explaining the processes of forming and applying principles (integration by essentials and spiraling), I briefly describe rational egoism and illustrate the model with a contemporary moral...
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...Chapter 5 – Business Ethics and Ethical Decision Making – Summary Business ethics comprises principles and standards that guide individual and work group behavior in the world of business. Stakeholders determine these conventions, and they may change over time. The most basic of these standards have been codified as laws and regulations. Business ethics goes beyond legal issues. Because individuals and groups within a company may not have embraced the same set of values, ethical conflict may occur. Questionable decisions and actions may result in disputes that must be resolved through some type of negotiation or even litigation. Codifying ethical standards into meaningful policies that spell out what is and is not acceptable gives businesspeople an opportunity to reduce the possibility of behavior that could create legal problems. Business decisions involve complex and detailed discussions in which correctness may not be clear-cut. It is important that a shared vision of acceptable behavior develop from an organizational perspective to create consistent and reliable relationships with all concerned stakeholders. Understanding the ethical decision-making process can help individuals and businesses design strategies to prevent misconduct. Three of the important components of ethical decision making are individual factors, organizational relationships, and opportunity. Significant individual factors that affect the ethical decision-making process include personal moral...
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...Alibaba is just getting started. Everything about the Alibaba story is unconventional. Beginning with its founder, Jack Ma, who gained global celebrity status these past 10 days, as his image became ubiquitous on business news channels and media outlets across America. We got to know Jack Ma before the onslaught, beginning over a year ago in China, where he talked with us about his relationship with the Chinese government, and his unorthodox business philosophy, which surprisingly, gives shareholders almost no say over how he runs the company. Jack Ma: If you want to invest in us, we believe customer number one, employee number two, shareholder number three. If they don't want to buy that, that's fine. If they regret, they can sell us. Lara Logan: In the U.S., the shareholder is usually first. Jack Ma: Yeah. And I think they were wrong. The shareholder, good. I respect them. But they're the third. Because you've take care of the customer, take care of the employees, shareholder will be taken care of. Ma's unconventional view didn't stop Wall Street from pouring $25 billion into his company, now listed on the New York Stock Exchange as "BABA." It's an Internet shopping behemoth, a collection of online marketplaces where buyers and sellers connect to do business. Most of the company's money comes from advertising and small transaction fees. On its most popular website, Taobao, users talk to each other, barter and engage in a way that doesn't happen...
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...workforce and their decision-making capabilities. Many times the ethicality of such decisions have been questioned because of the profit driven strategies of these organizations. As Nobel Prize winner economist Milton Friedman quotes, “An executive’s responsibility generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” The decision-making process and hence ethicality of the decisions in such organisations is greatly influenced by the culture of the workforce. Bartels (1967) was one of the first to note the importance of the role of culture in ethical decision-making. There are different studies which discuss the diversity of ethical decision-making based on different perspective for example, Vitell, Nwachukwu and Barnes, 1993 discuss the effect of culture on ethical decision-making with the help of Hofsted’s typology while Patel and Schaefer, 2009 discuss the same with the help of Douglasian Cultural Theory (CT) perspective in the Indian context. Summary Patel and Schaefer’s article discusses the impact of culture on ethical decision-making from a Douglasian Cultural Theory (CT) perspective. It explains the dynamic ethical behaviour of the individual with four solidarities of CT. The Article also discusses the business ethics in the Indian context. Authors argue that applying static conception of culture to the process of ethical...
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...Values and Ethical Decision Making MGT/521 July 22, 2012 Week Three Abdelmagead Elbiali Values and Ethical Decision Making Ethical decision-making involves considerations about our deepest values and commitments. It allows us to think about our relations to others and what we owe to them. While ethical decisions are often our highest priority, in the real world, they often have to be balanced against other concerns. For example, business concerns involve generating a profit and maximizing individual or corporate gain. One of the biggest problems for modern businesses is how to balance ethical goals with business goals. Should a company like Verizon work with Chinese companies in securing corporate goals? Chinese finds acceptable certain practices that American culture shuns, such as child labor. By working with these Chinese companies, Verizon can secure goods more cheaply and maximize corporate profit, but on the other hand, ethical principles would be violated. As individuals, we must simultaneously make ethical and business decisions. Resourceful thinking, we can formulate goals that share a considerable overlap with the goals of business and ethics. * Tina’s Decision-making Process * Based on the outcome of the Ethics Awareness Inventory, what is the most...
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...Business Ethics: The Responsibilities of Employees and Employers Debra J. Scott Columbia Southern University Business Ethics: The Responsibilities of Employees and Employers Ethics are an extremely important aspect of every successful business; they are crucial on the end of the employer as well as every employee. Employees and executives need a clear definition of business ethics and a clear explanation of the significance of ethics in relation to the position and to the business as well. It is shown to be beneficial to employees and executives to use a decision making process in the development of making important decisions; there are many approaches as well as many consequences to making ethical decisions. Good ethics start with the employer and how they handle and execute their ethics and provide a good working example for their employees. There are many viewpoints on what ethics are, especially in relation to business, “Ethical obligations are a set of “ought to” standards that define a moral course of action and draw a line between right and wrong” (Lohrey). Business ethics can be comprised of written and formal guidelines in relation to an organization’s morals. Many businesses use their code of conduct or credo as their guidelines to communicating their organizational ethics, “Business ethics manifests both as written and unwritten codes of moral standards that are critical to the current activities and future aspirations of a business organization. They can differ...
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...My View of Business Ethics Summary Paper of My ‘Ethical Position’ From My Experience, Knowledge And What I Have Gleaned From The Business Ethics Class. ABSTRACT The ability to recognize and deal with complex business ethics issues has become a significant priority in twenty-first century companies. In recent years, a number of well publicized scandals resulted in public outrage about deception and fraud in business and a demand for improved business ethics and greater corporate responsibility. The publicity and debate surrounding highly visible legal and ethical lapses at a number of well known firms, including AIG, Countrywide Financial and Fannie Mae, highlight the need for businesses to integrate ethics and responsibility into all business decisions. The field of business ethics deals with questions about whether specific business practices are acceptable. For example, should a salesperson omit facts about a product’s poor safety records in sales presentation to a client? Should an accountant report inaccuracies that he or she discovered in an audit of a client, knowing the auditing company will probably be fired by the client for doing so? Should an automobile tire manufacturer intentionally conceal safety concerns to avoid a massive and costly tire recall? Regardless of their legality, others will certainly judge the actions taken in such situations as right or wrong, ethical or unethical. By this very nature, the field of business ethics is controversial...
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...Making Ethical Decisions When it comes to business ethics, businesses are concerned with morality and fairness in behavior, actions and the policies that take place within that business. Ethical issues arise at many different levels, but at the organization level these issues carry consequences for the organizations’ reputation and success in the community. How an ethical issue is handled within the organization may have serious organizational consequences. It is very important that corporations make sound ethical decisions and take into account that not only can it impact the business; it can also have a major impact on the community it serves and society as a whole. When making ethical decisions, there needs to be clarity. One must determine what the ethical issue/problem is and what needs to be decided. Organizations need to formulate several alternatives and eliminate any impractical, illegal and unethical solutions to the problem. Organizations should examine each option to determine which ethical principles and values are involved. Organizations also need to evaluate and recognize the impacts of their decisions. Organizations should take into consideration if any of the decisions they are making requires the sacrifice of any ethical principle and they should evaluate both the facts and assumptions of the issue at hand. Also, in making ethical decisions, organizations should consider the major overriding...
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...Understanding the Dilemma of Ethical Decision Making Understanding ethics and utilizing ethical business practices are key to the success in modern business. Traditional business organizations must take into consideration many more aspects of business today, than in the past when the focus was primarily on profits and making money for the shareholders. These ethical principles also influence non-profit and government organizations as well, taking into account the same ethical considerations that for profit organizations deal with. The modern concept of ethical organizations takes into account many issues, some of which include: • corporate social responsibility • the triple bottom line (economic, social and environmental) • ethical management and leadership • globalization • sustainability This list is not all inclusive. Ethics and ethical behaviors cover a wide range of factors and situations. Throughout the world there are many different definitions. With cultural, regional and society based interpretations of the concept. As such there are no world wide set of rules and no set standards of what is ethical. With the growing importance of ethics in the modern world, the fact that there are no set rules is fascinating. This begs the question, what is ethical? To understand this concept we must look deeper than the common definition of what an ethical organization is. There are so many factors that influence and affect an organizations ability...
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...Ethical Decision Making Ethics are principles that define behavior as fair and proper and they are concerned with how a moral person should behave when it comes to making an ethical decision (Josephson Institute of Ethics, 2002). Evaluating and deciding among competing options is often key in making a fair choice since principles do not always dictate a single "moral" course of action. The decision of whether to lay off workers to enhance profits or to cut corners on quality to meet a deadline are examples of some choices regarding ethics business owners may face (Poznak Law Firm, 2003). The use of extremely low-wage foreign workers, like in the Nike organization case, is a current concern and the subject is a complex one. There are many valid differences of opinion regarding what constitutes ethical behavior and how ethical decisions should be made and the subject is a complex one (Poznak Law Firm, 2003). There are always pros and cons involved with any choice and the decision itself can be quite time consuming. When it comes to deciding whether or not to use cheap labor to cut costs, businesses must examine the ethics behind their decision-making processes. Four approaches that business owners commonly use to analyze ethical dilemmas are the utilitarian approach, which focuses on taking the action that will result in the greatest good for the greatest number of people; the moral rights approach, which is concerned with moral principles, regardless of the consequences;...
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...justified to the right. Keep a Photocopy or Electronic Copy of Your Assignments: You may need to re-submit assignments if your mentor has indicated that you may or must do so. Academic Integrity: All work submitted in each course must be the Learner’s own. This includes all assignments, exams, term papers, and other projects required by the faculty mentor. The known submission of another person’s work represented as that of the Learner’s without properly citing the source of the work will be considered plagiarism and will result in an unsatisfactory grade for the work submitted or for the entire course, and may result in academic dismissal. | | MGT7019-8 | Dr. Chad McAllister | | | Foundations for Doctoral Study in Business | SIMMONSMGT7019-8-ASSGN#1 | | | All work submitted is original and my own intellectual property. I am open to guidance and instruction that enable me to achieve my educational goal of excellence. ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Faculty Use Only ------------------------------------------------- <Faculty comments here> ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- <Faculty Name> <Grade Earned> <Writing Score> <Date...
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...College for Financial Planning ETH 550—Business Ethics Master Course Syllabus I. Course Description Course Description This course is designed to achieve the following objectives: Explore the ethical dimension in the current global environment. Study and apply major normative ethical theories to business situations. Understand the relevance of stakeholders to business decisions. Improve ethical and moral decision-making processes. Analyze case studies that present ethical business dilemmas. Understand moral, amoral, and immoral decisions in business situations. Encourage ethical behavior and professionalism in all activities. Prerequisites There are no prerequisites for this course. II. Overview Overview The goal of this course is to teach students how to ethically interact in today's global business environment. III. Required and Recommended Text Required Text Modern Language Association of America. MLA Style Manual and Guide to Scholarly Publishing. 3rd ed. New York: Modern Language Association of America, 2008. ISBN 0-87325-699-6. Perkins, John. Confessions of an Economic Hit Man. Plume, 2005. ISBN 978-0452287082 (paperback). Weiss, Joseph W. Business Ethics: A Stakeholder and Issues Management Approach. 5th ed. South-Western, 2009. ISBN 978-0-324-58973-3 (paperback). How to Order Texts You may order textbooks online at www.cfpbookstore.com, by fax at 800-274-9105, or by telephone at 800-274-9104. Students interested in selling their textbooks...
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...Ethics in Action Decision making is part of every individual’s daily life. Individuals start making decisions at an early stage of life and as they get older poor decision making can come with serious consequences. Ethical decision making allows individuals to evaluate all possible alternatives and end results before making a final decision. The problem with decision making is that there are several factors that deter a person from making the right decision. The purpose of this paper is to identify three of the common characteristics that contribute to an individual’s poor decision making. I will also address three ways an individual can resist a request to act unethical as well as three ways to lead ethically. Common Characteristic of Poor Decision Making The three common characteristics of decision making are failing to remember goals, over confidence, and complexity of the issues. Goals are an important in every business, which is why it is crucial to remember business goals when making decisions. Every decision made needs to bring the business closer to achieving important goals and the decision also need to produce positive outcomes. When an individual or business fails to remember goals, they fail to reach their objective. Being overconfidence also affects one’s ability to make good decision. When an individual believe that everything will turn out okay without carefully analyzing everything to make sure it will work, they are being overconfident (Mallor, Langvardt...
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...CAN BUSINESS ETHICS BE TAUGHT? “It takes 20 years to build a reputation and five minutes to ruin it” claims billionaire Warren Buffett. “If we think about that, we will all do things differently.” Bernie Maddof and Martha Stewart had their reputation permanently ruined in the business world due to poor business decision making, likewise their involvement in financial crime and unethical business practices. If the above mentioned people had the opportunity of turning back the hands of time, they would have done things differently and be more ethical in their business practices. Sarbanes-Oxley Act of 2002 is a United States federal law that set new standard for ethical business practices for all U.S public company boards, management and public accounting firms. The bill was enacted as a reaction to a number of major corporate and accounting scandals which cost investors billions of dollars. Many experts think business Ethics can be thought and examined in business schools, but the question is, is it possible to enforce or instill the act of doing right things and making right decisions at all times in the business world? Ethics is a branch of philosophy dealing with values relating to human conduct with respect to the rightness and wrongness of certain actions and to goodness and badness of the motives and ends of such actions. Where as, Business ethics is the study and examination of moral and social responsibility in relation to business practices and decision-making...
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...Ethical Leadership •What are the components of a comprehensive framework for ethical decision making in business? Ethical Issue Intensity Business Ethics Ethical or Individual Factors Evaluations and Unethical Organizational factors Intentions Behavior Opportunity Ethical-Issue Intensity The first step in ethical decision making is to recognize that an ethical issue requires an individual or work group to choose among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong. The intensity of an ethical issue relates to its perceived importance to the decision maker. Ethical issue intensity, then, can be defined as the relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization. It is personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressures prevailing at a particular place and time. Senior employees and those with administrative authority contribute significantly to intensity because they typically dictate an organization’s stance on ethical issues. In fact, under current law, managers can be held liable for the unethical and illegal Moral intensity relates to a person’s perception...
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