Ethical Managerial Decision-making
Introduction
Why be ethical? This is the question that haunts generations of leaders and managers. Ethics, which is defined as morality’s effect on conduct, is increasingly becoming integrated in all aspects of organisational thinking. For instance, leaders and managers now regard social responsibility and organisational ethics as a reality that shapes expectations and standards. Organisational behaviour is also becoming more transparent than ever. Ethical leadership is the direction that modern organisations seek to pursue. Nevertheless, there are barriers toward ethical decision-making particularly for the managers. This paper aims to explore these barriers as well as how to address and resolve them.
Ethical managerial decision-making
Ethical behaviour deals with the morally-acceptable and commonly-held values which are consistent to personal perception of values (Sims, 2003). Ethical reflections are centered on issues on behavior and decision-making and such issues focus on values, rights and responsibilities. Managers are often faced with ethical challenges basically because managers have ethical obligations. Managers have the responsibility to recognise moral issues and develop moral sensitivities. The fact that whether good is right or right is morally accepted must be weighed by the managers in decision-making (Sharma and Bhal, 2004, p. 29). Potential barriers to ethical decision-making for managers could include strategy, structure, control and motivation though these barriers may exist in routine and broadly accepted organisational practices. Nonetheless, managers have to draw on values to support decision-making.
Barriers to ethical decision-making
Lane, Mendenhall and McNett (2004) state that organisational values are found on vision and mission statements which drive strategy. Strategy and ethics are linked through the idea of purpose. Managers understand purpose in quite personal ways as a guide for their personal action. For the mutual benefit of the organisation, managers’ actions are activated by agreement with others especially that correlates with the organisation. It would be necessary to note that managers are put in their position to diffuse responsibility. Managers do understand the purpose of their organisational activities in terms of their own personal engagement with and responsibility for them. Likewise, managers also understand purpose as it applies to their connection to others, in and beyond the organisation, people who agree to responsibilities related to their shared goals. The purpose of an organisation is ethical in nature and is influenced by culture. When such assumption is left in tacit, misunderstandings could arise (Sharma and Bhal, 2004). To be effective then, values should reside at the operational levels in the thoughts and actions of those who implement the strategy whom are the managers. It is important then for managers to understand others and own implicit culturally influenced ethical assumption.
Organisations are often structured as a collection of functions and roles that have decentralised operational responsibility. Holian (2002) relates that managers are then responsible on performance of subordinates’ performance. The diversity in functions and roles could have challenging ethical issue. Once the demarcation among these functions and roles became an issue, managers could miss the opportunity to make ethical decisions. Managers are in a response mentality as moral action may be a part of the problem’s solution of a different order than ethical decision-making. Because organisations are made integrated, managers are confronted with the challenge of the tendency to be problem-oriented which may confound ethical problems in the organisational level (Carroll, 1990).
According to Casali (2007), organisations may encourage managers to be unethical in forceful and implicit ways via disincentives. The reward of quantity over quality is an example of this as well as the bottomline pressure for profits at any cost, open door policies but closed door practices, punishment for reporting policy violations, promotion of managers known to be less ethical and patterns of deception throughout management. As such, the way performance maybe measured may put pressure on managers to act for the short term rather than to choose what might be the right approach for the organisation in the long run. Hence, the lesson for managers is to set and manage reasonable performance expectations (Vardi and Weitz, 2004).
Addressing and resolving the barriers
The executives and management must consider the ethical dilemmas in the workplace. A well-written and well-communicated acceptable code can help but it is impossible to regulate non-existence of unethical behaviour. The bottom line is there is no legal requirement to behave ethically (Ball, 2007). The challenge herein is the approach to disseminate the information about codes and to avoid concentration in a certain management level. It must be from top to bottom. If not, the result would be clogging on “continuous professional development, an open workplace culture and a clear and explicit code” (Ball, 2007).
Further, managers could also resort in examining the 5Ps of ethical power such as purpose, pride, patience, persistence and perspective. The purpose is the basis upon which the managers build its ethical behaviour. Pride makes every experience as a win-win reflection of their attitudes. Patience demonstrates a virtue of trust to organizational values and beliefs. Persistence is the long continuance of an effect while perspective refers to the long term goals of a manager relating to the work and the organisation and subordination.
Managers could engage in an ethical checklist prior to making a decision. Peale and Blanchard (1988) relate three questions for which a manager can clarify different aspects of organizational decision-making and ethical standard adherence. These are: 1) Is it legal? 2) Is it balanced? and 3) How will it make me feel about myself? An alternative would be that of UK Institute of Business Ethics’ three questions. First is through transparency – Am I happy to make my decision public? Effect is the second – Have I fully considered the harmful effects of my decision and how to avoid them? The third is of fairness – Would my decision be considered fair by everyone affected by it?
Conclusion
Decision-making, either for the business or the people, managers are confronted with specific barriers to ethical decision-making. Three of these barriers are strategy, structure and control and motivation. Specific ways that managers could address these barriers are through well-written and well-communicated acceptable code, the 5Ps of ethical power and the ethical checklist.
References
Ball, G 2007, ‘New Ethics Culture Needed in Business, Birmingham University Looks at the Issue of Business Ethics,’ The Birmingham Post, June 1.
Carroll, A B 1990, ‘Principle of Business Ethics: Their Role in Decision Making and an Initial Consensus,’ Management Decision, vol. 28, no. 8.
Casali, G L 2007, ‘A Quest for Ethical Decision Making: Searching for the Holy Grail, and Finding Sacred Trinity in Ethical Decision Making by Managers,’ Social Responsibility Journal, vol. 3, no. 3, pp. 50-59.
Holian, R 2002, ‘Management decision-making and ethics: practices, skills and preferences,’ Management Decision, vol. 40, no. 9, pp. 862-870.
Lane, H W, Mendenhall, M E and McNett, J 2004, The Blackwell handbook of management: a guide to managing complexity, Wiley-Blackwell.
Peale, N V and Blanchard, K 1988, The Power of Ethical Management, William Morrow.
Sharma, P and Bhal, K T 2004, Managerial Ethics: Dilemmas and Decision Making, Sage Publications, Inc., London.
Sims, R R 2003, Ethics and Corporate Social Responsibility: Why Giants Fall, Praeger Publishing, Westport, Connecticut.
Vardi, Y and Weitz E 2004, Misbehaviour in organisations: theory, research and management, Lawrence Erlbaum Associates.
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