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					                                                     Ethical Decision Making 1




                       Ethical Decision Making

                       Dhanasekhar Damodaram

Course: MGT/350 – Critical Thinking: Strategies in Decision Making -UoP

                      Instructor: John R. Sessions

                         September 29, 2003
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                                    Ethical Decision Making

                                          Introduction

        Ethical decision-making is about acting with integrity and taking responsibility in

every decision one makes in personal and professional life. It is about doing one’s moral

duty keeping the values, principles and beliefs in mind. An ethical conflict arises when the

values, principles and beliefs are in conflict. In my workplace, everyone is expected to do

what is right by considering every aspect of business and make decisions by taking into

account every stakeholders needs.

        Recent high-profile corporate scandals like Enron, WorldCom have damaged

investor confidence in public companies. Fallout from these scandals includes lawsuits,

bankruptcies and some of the most wide-ranging corporate governance legislation ever.

While ethical behavior and decision making is important in its own right, it is very important

for business as it fosters customer and client trust and avoids such fallouts. It is very

important to have code of ethics and continue to live and make decisions by the code of

ethical conduct.

                                 Important of Ethical Decision

        It is important to remember that a strong value system based on integrity and

accountability is vital for the success of the individual as well as the organization. Never the

company’s reputation for integrity and business ethics should be taken for granted. To

maintain that reputation, everyone in the organization must follow all of the established

ethical codes and business guidelines and exercise good judgment in every decisions and

actions that involves them. It's no exaggeration to say that a company’s integrity and

reputation are in the employee hands. That includes every one including starting from the

senior management to first line of employees. If the aspect of ethics is left unattended, it will

impact the organizational health. On the contrary, effective ethics management will lead to

long-term business results and employee/customer satisfaction.
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        It is apparent from recent corporate compliance and ethical failures that the need to

focus organizations on compliance, business conduct and ethics has never been more critical.

Recent ethical failures by corporations, and the resulting crisis in public and investor

confidence, have had detrimental effects on our economy and society. Moreover, rapid

changes in the industry also present new ethical and legal challenges. It therefore becomes

very important to consider all aspects while interpreting a data and applying the ethical code

of conduct before making a decision.

                                   Ground Rules on Ethics

        Having said how important it is to make ethical decisions, in order to facilitate the

ethical decision making for everyone in the organization, it is important to have set of ethical

ground rules established. The responsibility of establishing such guidelines lies with leaders

in the organization. In my workplace, leaders set the standards for ethical excellence, not just

for products and services and "meeting the numbers." Ethics creates a framework for correct

actions and links corporate employees, customers, suppliers, shareholders, the community,

and future generations. The ethical element of leadership bonds these stakeholders together,

especially when times are tough.

        Good business ethics is the ability to reason and operate within a sound ethics system

with clarity and consistency. A well-defined ethics policy along with an outline of related

standards of conduct provides the framework for ethical, moral behavior within a company.

To build such a guideline, it is recommended to use the values recommended by “Six Pillars

of Character” developed by The Josephson Institute of ethics namely

         Trustworthiness: honesty, integrity, promise-keeping, loyalty


         Respect: autonomy, privacy, dignity, courtesy, tolerance, acceptance


           Responsibility: accountability, pursuit of excellence
                                                             Ethical Decision Making 4
        Caring: compassion, consideration, giving, sharing, kindness, loving


        Justice and fairness: procedural fairness, impartiality, consistency,

           equity, equality, due process


        Civic virtue and citizenship: law abiding, community service, protection

           of environment

       Keeping the above said ethical values as the framework; we can workout specific

guidelines that apply to the workplace. In our organization, we have a well-developed ethics

program, which is capable of nurturing ethically grounded policies and procedures,

competent ethics resources, and broader corporate support for ethical action. Our programs

seek to encourage all personnel to become attentive to the ethical implications of the work

they are engaged in. We have business conduct guidelines that address various aspects on

business including:

              Emphasis on personal judgment, responsibility, and accountability

              Ethical and lawful competition

              Focus on protecting organization’s intellectual property

              Duties to avoid conflicts of interest

              Respect for others

              Obligation to report unethical behavior

              All business dealings must be ethical and lawful whether it is selling, buying
               or representing an organization in any capacity

              Never make misrepresentations or dishonest statements to anyone

              Ensure honesty based clear communication

              Never make false or misleading statements

              Never involve in harmful disclosure of information

       These ground rules will help to make the individual realize that they are accountable

for every actions and choices they make. It is aimed to increase the individual’s commitment
                                                                   Ethical Decision Making 5
to personal, professional and organizational excellence. It is also important to ensure that the

employees understand that the main reason for having ethical policy and guidelines is not to

provide a cookbook solution for workplace actions, but to guide them in the decision-

making process for situations that involve ethical questions.

                             Ethical Implications of the decision

        We have seen in the recent past many organizations and key executives lose

customer trust and ultimately disappear due to ethical implications of their decisions. Enron

is one such example, where its corporate executives kept telling the employees that all was

well while shedding their shares as the market collapsed. The people assigned from Arthur

Anderson as Enron’s corporate watchdogs helped Enron executives hide the financial

problems instead of regulating the organization. The failure of Enron, Arthur Anderson and

similar ethical failures caused the market and U.S. millions of dollars. So it is very important

to make the right decision by applying critical thinking and taking the ethical and moral

values into consideration. Any successful and established company is distinguished by its

reputation and standing in the market. Once the company allows its business practices and

ethics to come under question, it loses its most valuable asset – the customer’s trust. The

firm Arthur Andersen stands as a testament to the fate of such companies.

                            Impact of decision on the ground rules

        Whenever an unethical decision is detected, it will have an impact on the ground

rules. With the growing complexity of the global organization and diverse cultures, the

ethical ground rules and guidelines needs to be updated frequently to cater and address all

the various possible scenarios. In the case of Enron, the decision made by the management

team didn’t follow any of the basic ethical codes, there by setting the organization and the

industry to fail. This failure has resulted in Securities and Exchange Commission (SEC)

bringing various reforms to promote corporate accountability in order to restore the public
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confidence. This corrective action applies to the corporate world as well. Whenever, an

unethical conduct is identified in the workplace, it is important to bring this to the attention

of all the staff and to remind them about the importance of following ethical guidelines. If

the identified misconduct is a new one, the ethical guidelines need to amend to address the

identified situation.

                                     Concluding Thoughts

        In conclusion, it is very important to be aware of the impact of ethical decisions.

Ethical decisions are made based on the standards an individual uses to decide what the right

conduct would be. These decisions almost, always, involve morality or societies accepted

norm of behavior. An ethical decision may or may not be legal and what is legally right may

or may not be ethical. Every decision or action an individual makes reflects his or her moral

and ethical standards. Therefore, it is very important to establish a standard code of ethics in

workplace to avoid any misrepresentation by individuals. Also, Ethics is not about staying

out of trouble; it is about building corporate strength. This needs to be emphasized in the

ethical programs run by the organization.

        .
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                                         Reference


M. Neal Brown, Stuart M. Keeley, Morgan W. McCall, Jr., and Robert E. Kaplan. Readings

       in Critical Thinking, [University of Phoenix e-text]. Needham Heights, MA. Pearson

       Custom Publishing, 2001

Donaldson, T., & Werhane, P. H. (Eds.). (2002). Ethical issues in business: A philosophical

       approach (7th ed.). Upper Saddle River, NJ: Prentice Hall.