Ch 6 slide

• Ethical decision making


  A comprehensive model for ethical decision making in business

  
• Ethical issue intensity


  The relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization
• Ethical awareness


  The ability to perceive whether a situation or decision has an ethical dimension

  
• Moral intensity


  Individuals' perceptions of social pressure and the harm they believe their decisions will have on others
• Ethical decision making


  • People often base their decisions regarding ethical issues on their own values and morals of right or wrong
  • Although an individual's intention to engage in ethical behavior relates to individual values, organizational and social forces also play a role

  
• Individual factors influencing ethical decision making


  • Gender
  • Education
  • Nationality
  • Age
  • Locus of control
• External control


  Individuals with this locus of control see themselves as going with the flow because that is all they can do (life events are due to uncontrollable forces)
• Internal control


  Individuals with this locus of control believe they control the events in their lives by their own effort and skill; they view themselves as masters of their destinies and trust in their capacity to influence their environment
• Organizational factors influencing ethical decision making


  • Corporate culture
  • Ethical culture
  • Significant others
  • Obedience to authority

  
• Corporate culture


  A set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share
• Ethical culture


  Acceptable behavior, defined by the company and industry
• Significant others


  Those who have influence in a work group, including peers, managers, coworkers, and subordinates
• Obedience to authority


  A reason employees resolve business ethics issues by simply following the directives of a superior
• Opportunity


  The conditions in an organization that limit or permit ethical or unethical behavior
• Immediate job context


  Where individuals work, whom they work with, and the nature of the work
• Opportunity can be deterred with formal codes, policies, and rules adequately enforced by management
• Misconduct can still occur without proper oversight
• Opportunity also comes from knowledge, exploiting knowledge
• It is important to train and empower employees to make good decisions "on the spot," regardless of a specific rule or policy
• Ethical business issues, dilemmas


  Problem-solving situations where the rules governing decisions are often vague or in conflict
• When intentions and behavior are inconsistent with their ethical judgment, people may feel guilty
• The next step is changing the behavior to reduce such feelings
• The road to success depends on how the businessperson defines success
• Ethical decision-making process


  Individual's intentions and the final decision regarding what action he or she will take are the last steps
• Guilt or uneasiness


  First sign that an unethical decision has occurred, when a person's behaviors are inconsistent with ethical judgment
• Ethical business issues and dilemmas involve problem-solving situations where the rules governing decisions are often vague or in conflict
• When intentions and behavior are inconsistent with their ethical judgment

  People may feel guilty
• Success


  Drives intentions and behavior in business either implicitly or explicitly
• An ethical decision-making model does not help in determining if a business decision is right or wrong

  
• Ethical decision-making model


  Intended to provide insights about ethical decision making in businesses

  
• Business ethics involves value judgments and collective agreement about acceptable patterns of behavior

  
• Normative approaches


  How organizational decision makers should approach an issue

  
• Descriptive approach


  Examines how organizational decision makers approach ethical decision making

  
• Instrumental concern


  Focuses on positive outcomes, including firm profitability and benefits to society
• Institutions that influence the development of values


  • Political
  • Economic
  • Social
• Political institutions influence the development of values as organizations must comply with these types of institutional norms and belief systems to succeed
• Normative business ethics takes into account the political realities that exert pressure outside the legal realm in the form of industry standards
• Legal issues such as price fixing, antitrust issues, and consumer protection are important in maintaining a fair and equitable marketplace and must be major considerations for businesses when making ethical decisions
• Competition affects how a company operates as well as the risks employees take for the good of the firm
• Social institutions include religion, education, and individuals such as the family unit