BBA Study Material Ethical Decisions Making Notes

BBA Study Material Ethical Decisions Making Notes

BBA Study Material Ethical Decisions Making Notes

BBA Study Material Ethical Decisions Making Notes
BBA Study Material Ethical Decisions Making Notes


Organizations have a significant influence on an individual’s behavior and his decision-making. Individuals make innumerable decisions concerning business operations.These are the questions that need to be answered. BBA Study Material Ethical Decisions Making Notes

The chapter covers the subject of ethical decision-making. It answers questions like what is good decision making and how to make ethical decisions. It answers discusses the normative framework of decision-making.

Chakraborty (1985) suggests that management is decision-making. Decision-making has always been, is always, and shall always be, in the ultimate analysis; subjective. Modern thought asserts that every truth is relative and temporary. But this belief opposes the very nature of objective decision-making. Choices about ends and means are embedded in every decision area.  Our failures in decision making arise because of failure to maintain discrimination between relative and absolute values or truths.

Characteristics OF Good Decision Making

Decision making involves several steps. The decision to decide is perhaps the beginning. And then one is required to think, contemplate, write, talk, plan, execute, monitor and so on. Choices about ends and means are also embedded in every decision area. What are the characteristics of a good decision in these spheres?

Self-interest or self-orientation should not hinder clear perception of the essential nature or the problem and its effect on others (depersonalizing the decision process and de-emphasizing the status).

Decision problem should be grasped as much as possible-both in space and time. Decision should leave the decision maker in a state.

Nash’s Twelve Points Prescription

Nash, in the Harvard Business Review suggested a set of 12 questions that draw on traditional philosophical framework but avoid the level of abstraction normally associated with formal reasoning:

  • Have you defined the problem accurately?
  • How would you define the problem if you stood on the other side of the fence?
  • How did this situation occur in the first place?
  • To whom and to what do you give loyalty as a person and as a member of the corporation?
  • What is your intention in making the decision?
  • How does this intention compare with the probable results?
  • Whom could your decision or action injure?
  • Can you discuss the problem with the affected parties before you make your decision?
  • Are you confident that your problem will be valid over a long period of time, as it seems now?
  • Could you discuss without qualm your decision or action with others?
  • What is the symbolic potential of your action, if understood? If misunderstood?
  • Under what conditions would you allow expectations to your stand?

These 12 questions are a way to articulate an idea of the responsibilities involved and to lay them open for examination. These may or may not result in a policy but the process would help uncover ethical inconsistencies at the individual as well as the corporate level.

Framework For Ethical Thinking

How do we know if there is an ethical problem? A guiding criterion is, ‘Is this an action you need to keep hidden?’ If secrecy is required, is there an ethically defensible reason? Does the situation smell? If so, ethical attention is required. ‘Ethics should be distinguished from mere prudence-which is nothing but self-interest narrowly defined. Sometimes dong the right thing hurts.

There are three basic frameworks for ethical thinking:

  • Do what is best for the greatest number of people (consequence-based thinking)
  • Follow the applicable universal principle, e.g., don not lie (duty-based thinking).
  • Do what a good (virtuous) person would do (virtue-based thinking).

Consequence-Based Thinking

 It is utilitarian in its approach-do what produces the greatest overall good for all affected requires an assessment of consequences and a forecasting of outcomes. Here, conseguem can be measured in various ways: monetary costs and benefits, human welfare (utility) and pleasure or happiness. It tries to maximize net benefits of all foreseeable outcomes.

The possible limitations of consequence-based thinking are: .

  • Difficult to predict the consequences of actions; .
  • Can reduce ethics to economics;
  • People have different ideas of what makes them happy;
  • Ends do not always (or ever) justify the means if the means are normally unacceptable:
  • As with most classical ethics, there is no attention to life other than human.

Duty-Based Thinking

It is attributed to Immanuel Kant’s categorical imperative. It says that do not only that which you would want everyone to do, otherwise there is moral duty not to. Duty-based thinking respects people as ends in themselves. It considers ethics of duties-duty to obey universal principles (do not lie, harm, disrespect others, etc. and rights to be treated with respect (not to be lied to, harmed, etc.) Ideally, ethics is universal and impersonal do that which everyone must do no matter who they are and, where they are from.

Possible limitations of duty-based thinking are:

  • Difficult to form intentions into a rule and then test it for universality;
  • Difficult to fully know intentions;
  • Feelings and emotions may have a role to play,
  • Sometimes consequences do matter and perhaps override initial duties);
  • As with most classical ethics, there is no attention to life other than human.

Virtue -Based Thinking

The basic theme is, would a person of good moral character do this? It recommends exercise of appropriate virtue and so on – honesty, generosity, justice, possible limitations are:

Applicable virtues depend on the context. What is honest depends in social tradition history and other factors.

  • Ethics under virtue-based-thinking relies on judgment, not precise formula.
  • Virtues are tied to integrity/character.
  • Decision-making models

Ethical Decision Making

In an organization a leader needs to be identified who should get adequate support while taking charge and performing his functions in any given situation. Effective managers are action-oriented people who resolve conflicts, are tolerant of ambiguity, stress and change and have a strong sense of purpose for themselves and their organizations. But thy should be aware of following dimensions of ethical decision-making :

  • In a given situation, a course of action is imminent,
  • Some sensitivity to the potential harms and benefits for others,
  • A systematic method for determining and annexing the ethical issues involved, and
  • Adding a needed dimension of ethical analysis to the deliberations involved in the decision making

A process of ethical enquiry will be of much help in making ethical decisions in business. This process of ethical enquiry is easily comprehensible to the corporate world. Such an approach is helpful for managers who are predisposed to behave ethically and who work in organizations that require or encourage ethical behavior. BBA Study Material Ethical Decisions Making Notes

Emotional Intelligent Leadership

Good leadership is the fulcrum of organizational success. Leaders must be ethical. Quality of leadership is significant. It depends on how a leader has been groomed over the years. There are so many factors that determine the extent to which one has acquired the best qualities of a good leader.

Ethical leadership can be discussed along three dimensions :

  • Leader’s intentions/motives for action : Motive of the ethical leader is guided by altruistic and not egotist intents. He is motivated by the concern for service for others in the organization and the society at large. He is influenced by affinitive motive, that is, he values warm and friendly relations with his followers. Thus, he values their feelings and emotions.
    BBA Study Material Ethical Decisions Making Note
  • Leaders influence strategy, i.e, leaders transformational strategy: He believes in empowerment as a strategy for change. He empowers followers in his efforts to bring a change in theory core beliefs and values to move the organization to wards its future goals.
  • Leader’s moral character formulation : Ethical leaders know that transformation begins with the self. In pursuit of this purpose, a leader observes the following practical principles :

 (a) The leader should have high purpose, a super-ordinate goal and priority for organizational vision.

 (b) He should practice prudence and justice for assessing the situation and take

decisions. This reinforces the moral character on the part of the leader.

(c) He should be a man of high self-esteem and take pride in his achievements.

 (d) He should be painstaking but exercise patience towards the realization of his vision.

It takes time and effort to overcome roadblocks. Hence, the quality of being patient is absolutely necessary. He must avoid short cuts and unethical means for quicker

A leader must be able to develop inner strengths which he needs to enable him to function as an ethical and moral person.Ethical leadership is vital for provided direction to the organization so that the organization is able to achieve its desired aims and objectives. Ethical leadership is more than doing routine management jobs like procurement, allocation of resources, monitoring and direction, etc. Ethical leadership assesses the followers; needs and expectations and influences them to strive to contribute to efforts, for the realization of the vision and expectations and influences them to strive to contribute to efforts, for the realization of the vision articulated the leader for the benefit of the total organization, including the stakeholders.

The leader’s vision should inspire and articulate the organizational mission which provides the foundation for the goals and objectives of the organization. It is also his duty to communicate to the followers the values and beliefs of the organization, which shape the culture of the place and the behavioural norms. Moreover, this is the basis of the strategies. policies and procedures supported by moral principles and integrity. Ultimately, all this give legitimacy and credibility to the vision. On the final analysis, these alone sustain the organization’s culture and reputation.

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