Ethical decision making

From CEOpedia | Management online

Ethical decision making is the process of making decisions based on moral principles and values. Managers must consider their own personal values, as well as the values of the organization and those of the stakeholders involved. This involves identifying the ethical issues at play, analyzing the facts and evidence, considering potential alternatives, and weighing the potential consequences of each action. Ultimately, the decision should be based on an individual's sense of what is right and wrong, while respecting the rights and values of all involved parties.

Example of ethical decision making

  • A manager at a manufacturing plant is presented with an opportunity to use cheaper materials to produce the same product, but the materials are not as safe or reliable as the materials currently in use. The manager must weigh the potential cost savings against the potential risks to their customers and the company’s reputation. Ultimately, the manager decides to stick with the more expensive, but safer, materials, making an ethical decision that protects the safety and well-being of the company’s customers.
  • A company is looking to hire a new employee, and two candidates have similar qualifications. However, one candidate is more qualified, but is disabled and requires accommodations. The manager must decide whether to hire the more qualified candidate, or to make an exception and hire the candidate who requires accommodations, making an ethical decision about fairness and inclusivity.
  • A manager at a retail store is presented with a scenario in which the store is running low on a popular item, and a customer offers to pay more than the listed price in order to get the item. The manager must decide whether to accept the customer’s offer, or to stick to the store’s policy and maintain fairness to all customers. This is an ethical decision between profit and fairness.

When to use ethical decision making

Ethical decision making should be utilized in a variety of situations, from small-scale decisions to large-scale organizational dilemmas. It can be used in the following contexts:

  • When making decisions about personnel, such as hiring and firing decisions.
  • When making decisions about organizational policies and procedures, such as customer service policies.
  • When making decisions about financial investments, such as whether to invest in a particular company or industry.
  • When making decisions about marketing and advertising, such as whether to use fear tactics or unethical imagery.
  • When making decisions about customer service, such as how to deal with complaints or how to handle difficult customers.
  • When making decisions about corporate social responsibility, such as how to address environmental or social concerns.
  • When making decisions about research and development, such as whether to pursue certain projects or experiments.
  • When making decisions about pricing and product availability, such as whether to offer discounts or special deals.
  • When making decisions about customer data, such as how to store and protect customer information.
  • When making decisions about international business, such as whether to expand into certain markets or countries.

Steps of ethical decision making

  • Identify the ethical issue at hand: The first step in making an ethical decision is to identify the ethical issue or dilemma at hand. This involves understanding the facts of the situation, the stakeholders involved, and the applicable laws and regulations.
  • Analyze the facts and evidence: Once the issue has been identified, the decision-maker must analyze all of the facts and evidence related to the situation. This includes gathering information from stakeholders, researching applicable laws and regulations, and consulting with experts if necessary.
  • Consider potential alternatives: After the facts have been gathered and analyzed, the decision-maker must consider the potential alternatives. This involves brainstorming and evaluating a range of possible solutions and analyzing the potential consequences of each action.
  • Weigh the consequences: The decision-maker must evaluate the potential consequences of each action, including the potential impact on the organization, stakeholders, and the public. This is a critical step in ethical decision making, as the decision must be based on what is best for all involved.
  • Make the decision: Finally, the decision-maker must make the final decision. This should be based on their own personal values and beliefs, as well as the values of the organization and the stakeholders involved. The decision should be made with respect for the rights and values of all involved.

Advantages of ethical decision making

The advantages of ethical decision making are numerous. It encourages a culture of trust, transparency, and respect, which can foster collaboration and creativity among team members. It also helps to reduce risk and improve decision-making in difficult situations. Additionally, ethical decision making can:

  • Strengthen relationships and build trust with customers and other stakeholders, by demonstrating a commitment to doing what is right and fair.
  • Increase organizational efficiency, by avoiding costly legal and regulatory issues.
  • Improve employee motivation and morale, by ensuring that ethical values are upheld.
  • Increase public confidence and support, by demonstrating that the organization is responsible and ethical.
  • Enhance the organization's reputation and help build a positive brand image.

Other approaches related to ethical decision making

In addition to ethical decision making, there are several other approaches to making decisions that involve moral considerations. These include:

  • Utilitarianism: This approach states that the best decision is the one that produces the greatest good for the greatest number of people.
  • Rights-Based Approach: This approach is based on the idea that the rights of individuals must be respected, and the decision should be made that best protects and respects those rights.
  • Justice-Based Approach: This approach takes into account fairness, equality, and impartiality, and seeks to make decisions that are just and equitable for all involved.
  • Virtue-Based Approach: This approach focuses on developing and maintaining virtues such as integrity, honesty, and responsibility, and making decisions that align with these virtues.


Ethical decision making — recommended articles
Declarations of interest — Socially responsible business — Degree of freedom — Corporate social performance — Ethical factors affecting business — Transparency in business — Model of corporate governance — Need for approval — Certification of management system

References

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