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Chapter 1

Ethics and Ethical Decision-making in the Management of Contemporary Organizations

June 11, 2017

Ethics and Ethical Decision Making

Ethics refers to guidelines that have been established by the society that determines what conduct is considered as acceptable. Based on these standards, certain actions are considered as right or wrong. Although these values might differ in their application, there are universally accepted(Craft, 2013). Examples of ethical standards include the fair treatment of people regardless of their racial background. Similarly, it is ethically expected that people should obey the laws and regulations set by the authorities while also caring for the natural environment. Ethics also relates to the approach that individuals take to develop their personal ethical standards. In the course of one’s task, they can deviate from what is considered ethical.

As such, there is need to regularly examine one's behavior and evaluate them against acceptable standards. In the case of any deviation, appropriate changes should be made to conform to the expectations of the society (Tsalikis & Fritzsche, 2013). However, it is important to state that ethics does not automatically imply that one should follow the laws and cultural norms within the society. In some countries, men are given preferential treatment that women. While this behavior is accepted in these nations, such discriminatory behavior is ethically wrong. Another example relates to the death sentence that is still practiced in some countries. While this is stipulated in the law of these nations, it is ethically wrong to kill another person regardless of what they have done.

Ethical Decision Making

Ethical decision making involves assessing the various alternatives that can be employed, determining the ethical element and then making a decision that considers all these factors. The outcome should, therefore, be favorable to various stakeholders and not only to the parties directly involved. Various approaches are used to assess ethics. First is the utilitarian approach. According to this view, ethical decisions are those that generate positive results for the majority of the affected parties (de Los Reyes, Kim & Weaver, 2016). In this regard, negative results are also expected, but the main aim is to minimize these effects. As such, a balance should exist between any right or wrong that arises because of such decisions. Additionally, the utilitarian view focuses on the consequences that result out of each decision. Second is the rights approach. Based on this argument, ethical decisions are those who respect and protect the moral rights of affected parties. The underlying logic in this regard relies on the fact that all human beings should be treated with dignity, regardless of their prevailing circumstances. It is, therefore, wrong to use others for one's selfish needs. Additional moral rights that should be guaranteed to all human beings is privacy, the need to be told the truth and the freedom to make their choices.

The third is the fairness approach whereby it is ethically expected that all people should be treated equally. In case this is not applicable, there should defensible standards used to justify the unequal treatment. An example is within an organization whereby employees are paid different salaries based on their output. As such, this specification is defensible since all the workers have the opportunity to get high income if they work harder(Bagdasarov et al., 2016). However, paying employees who do the same job different salaries is considered unethical. Fourth is the common good approach which explains that actions that are ethical are those that lead to the well-being of the entire community. As such, compassion and respect for others plays a critical role for all people within the society, regardless of their position. Fifth is the virtue approach. According to this approach, there are underlying attributes that are essential for the existence of humanity. Examples of these include fairness, honesty, compassion, and love. Ethical decisions should, therefore, revolve around these attributes.

Ethics in contemporary organizations

Ethics plays an integral role in the operation of modern organizations. As such, there are various areas whereby ethics can be applied to these firms. The first area is in regards to employee relations. This focuses on how the business treats its workers. All employees should be treated equally, and they should be adequately remunerated for their work. Other factors that should be considered include gender equality in the allocation of duties and cultural tolerance (Sinnicks, 2014). The second area is in regards to how an organization treats its customers. Clients are the main reason for the success of many organizations. Ethical treatment will, therefore, include offering high-quality products, meeting customer expectations and being responsive to their needs and requirements. Setting reasonable prices also forms part of ethical decision making (Sinnicks, 2014). The third area is in regards to its vendors. Most firms require the services of suppliers to provide ready-made or raw materials. There should be an ethical relationship between both parties which ensures timely payment for goods and honest agreements. This has led to the rise of sustainable supply chains whereby firms are interested in the welfare of all individuals contributing to the company. While each of these areas might seem different, they are closely linked and contribute to the success of the firm. There should be proper communication by the management to ensure ethical decisions are made and implemented within the enterprise.

Value of Ethics and Decision Making in an Organization

There are numerous benefits that an organization gains when it adopts ethical decision making. Similarly, this can be reinforced by having an ethical code of conduct. Such guidelines are important in several ways. One is that it guides employees on how to deal with different situations when the next action that should be taken is not obvious. The same applies to the management who might be faced with a situation not previously encountered. Consequently, the chosen action should represent ethical decision making.Ethical decision-making also helps in the establishment of a brand. Managers that adopt this approach can build an environment of excellence and integrity in their organizations. This contributes to communicating all expectations to other stakeholders, including supplier, customers, and staff. The firm can, therefore, be easily recognized for the operational standards that have been set. Similarly, it leads to the establishment of corporate social responsibilities which ensure that an organization is also mindful about the wellbeing of other parties in the society. As such, this helps to enhance the reputation of the entity and build public trust.

Employees working in businesses whereby management are keen on ethical decisions are highly motivated and loyal to their employers (Lovett & Woolard, 2016). This is because all decisions are made while considering the impact that it has on all stakeholders. Similarly, the expectations towards the workers are reasonable, and they all receive fair remuneration based on their contribution to the organization. It, therefore, leads to a high level of morale among them, which translates to increased productivity for the firm.

Ethical decision making also contributes to increased business for an organization in the global environment. In each industry, there are thousands of players offering the same product. Based on this scenario, it is the organizations that have embraced ethical operations that have a competitive advantage. Several companies have experienced negative publicity for engaging in unethical practices. An example is Apple, which has faced backlash for multiple reasons. The first is in regards to its view on corporate social responsibility. Ever since the days of Steve Jobs, Apple has been dormant in the CSR sector. While other companies with the same profitability and earnings power contributed millions of dollars to charities or in sustainable activities, Apple hardly made any expenses for the similar purposes. Another reason for negative publicity around Apple is the source of its products. All Apple products are assembled in Asia because it is significantly cheaper. However, the company has been accused of using sweatshops that take advantage of desperate workers, thereby paying them low salaries (Tsalikis & Fritzsche, 2013). As a multinational company, it is expected that Apple should embrace ethical behavior in all its processes. It is, therefore, wrong for the firm to knowingly use unethical processes in its production activities. Although the company promised to look into the matter, such news results in negative publicity for the organization which can lead to lower sales. Consequently, adoption of ethical conduct among the management could have helped in creating positive publicity for the firm.

Ethical decisions have also resulted in an improvement in the overall business environment around the globe. In the past, firms engaged in unfair trade practices which only favored a few organizations. The result was the production of products that are below the expected quality, poor remuneration of employees and fixing of prices. While such incidences led to the growth of several companies it set back the majority of other stakeholders. Many employees were terminated from their employment based on flimsy reasons, and the markets became crippled of the existence of monopolies which affected the ability of consumers to purchase goods (Lovett & Woolard, 2016). However, with the introduction of ethical practices, there has been a change in business practices. This is because guidelines have been established which have set acceptable standards for various organizations. Some of these steps include the formation of unions which have played a critical role in improving the working conditions of employees. Similarly, different bodies have been set up which have established organizational guidelines that all organizations should follow. Consequently, it has resulted in the growth and success of more businesses.

Another example whereby an organization has been negatively affected by unethical behavior is about Facebook. In 2016, Facebook attempted to make changes which could have affected the privacy of its users. While users had the option of selecting privacy options, the new guidelines allowed Facebook to share this information with third parties. When news about this occurrence became public, the company was criticized because of this unethical decision. Ethically, an organization should uphold the privacy of its customers, and they should be consulted in case there is a need for any change. Eventually, the CEO of Facebook had to make a public statement whereby he made it clear that it was reviewing the policies causing an outcry from the public. Ethical decision making by the management is, therefore, essential in promoting the operations of any business globally.

References

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Craft, J. L. (2013). A review of the empirical ethical decision-making literature: 2004–

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De los Reyes, G., Kim, T. W., & Weaver, G. (2016). Teaching ethics in business schools: A

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