Decision-making and Business Ethics
Decision-making and Business Ethics
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Date Created: 11/15/15
Decisionmaking and Business Ethics BUS670 Professor Alexis Hooley Monday April 23 2012 Jennifer Lee Lee 1 Lee 2 Ethics is a sometimes nebulous and unclear aspect of business This is often a result of misinformation on the part of leaders and employees on how to handle themselves in an ethical manner In order to better understand how to implement appropriate decisionmaking it is important to first recognize what leads to poor decisionmaking understanding ways to avoid unethical requests and finally how to lead in an ethical manner There are many reasons for poor decisionmaking in business three of the most common are failing to remember goals overconfidence and a misunderstanding of the complexity of issues For example losing sight of goals for the sake of shortterm gain or forgetting goals completely is a dangerous thing and it can lead to poor decisionmaking Personally I have worked in a call center which had the longterm goal of being the most trusted service provider however when sales were not where they wanted them to be managers pushed harder for sales The result was bad orders and bad data entry This led to a bad customer experience and certainly did not support the longterm goal of the company This is an example of how losing sight of goals can severely lead to a loss of integrity for the company Similarly poor decisionmaking can come from overconfidence which can manifest in a few different ways For example one aspect of overconfidence is rationalization of small actions or small things This could mean believing that a few questionable calls if they are small will not impact the company in the long run or matter later Another aspect of overconfidence is confirmation bias As Mallor et al explain this is the idea that a decisionmaker believes we must be doing things the right way because all has gone well in the past 2010 p 116 As the text further explains the past however does not guarantee the future Another consequence of overconfidence is the believing that complex problems can be handled with simple solutions Lee 3 Often times if there is problem it needs to be fully researched so that complexity is not overlooked Overconfidence can manifest in many ways in business however it should be addressed to avoid poor decisionmaking A third reason for poordecision making is the simplification of complex issues Often poor decisionmaking is a result of a leader s inability to recognize the complexity of a problem In some cases as Mallor et al indicate the executive has not done all of the investigation an thinking required by the Guidelines of Ethical Decisionmaking and therefore has not discovered all the facts and considered all the reasonable course of action necessary to making a prudent decision p 116 In my own experience in the same call center that was previously referenced there were complaints of customer hold times Without thorough investigation the managers hired ten new representatives This increased the cost to the department however it did nothing to improve the hold times for the customer Had a more thorough investigation been done the managers would have realized that the hold time increases were caused by representatives taking extra personal time in between calls as well as the representatives putting customers on hold for inappropriate amounts of time There are many different reasons for poor decisionmaking and this has been a shortened highlight of just a few reasons Another aspect of ethical business practice however has little to do with the decisions themselves but rather with how those decisions are handled A question that unfortunately comes up too often in business is what do you do if you are asked to do something unethical There are a few things that can be recommended to avoid the unethical behavior The first recommendation is to buy some time This can give you the chance to find out more information and also this could provide the time necessary to find an Lee 4 alternative approach For example if there is a way to achieve the same goal without the unethical behavior then that would of course be a much more appropriate course of action A second suggestion to avoid unethical behavior is to find winwin situations As Mallor et al detail many times there are more than the two options of doing and not doing something p117 This means that investigation should be done to locate additional options Particularly what to look for are solutions which would achieve the boss s wants and also are not unethical in nature Sometimes however if a winwin cannot be located you may have to educate your boss that the directive is not appropriate for the firm A third method of avoiding unethical behavior is to prepare to lose your job There are some situations where the business cannot be helped as Mallor et al explain if a firm s executives and its internal governance are so corrupted that neither compromise nor reason can steer the firm away from an unethical and illegal course you must be willing to walk away from your job or be fired for standing up to your values p119 There are times when it is better to leave your job rather than submit to illegal activity Admittedly this can be difficult considering that bills must still be paid but if the firm is so far gone it is better to move on There are also some ways to avoid unethical behavior within a company by leading in an ethical manner One way to lead ethically is to do so by example meaning one must be ethical to lead ethically As the text explains quotfew underlings respect an unethical leader and many will be tempted to rationalize their own unethical conduct when they see their leaders acting unethically p 119 Furthering this same idea it is helpful to communicate the firm s core ethical values Executives focusing on communicating and emphasizing the firm s core values is essential to maintaining an ethical environment Even though a company has a written ethics Lee 5 code does not mean that leaders should not continue to bring them up again so the information stays fresh and is forefront in the minds of the firm s employees Finally a third way to lead ethically and increase compliance with core values is to show staff how it is in their best interest to do so The profitability of the firm can depend heavily on ethical behavior Illegal and unethical activity within a business can be costly to a company That cost could be going out of business completely Additionally ethical behavior should be encouraged by making it a prerequisite for salary increases and promotions Ultimately ethical behavior can have a huge impact on good decisionmaking and the profitability of the company Even small companies have core values that they must adhere to and it is important to always keep these values in mind Additionally poor decisionmaking can be fostered by overconfidence on the part of decisionmakers or an inability to recognize complex problems As an employee it is important to find ways to avoid unethical or inappropriate requests from superiors This can be done by buying the time necessary to find alternative methods identifying these alternative methods and presenting them as winwin situations and thirdly by always preparing for the possibility that you may have to leave or be removed from your job On the other side it is important to lead ethically as well For leaders and decisionmakers this means leading by ethical example communicating the company s core values and showing how ethical behavior is the best interest of all employees With a dedication to ethical behavior decisionmaking can be greatly improved and most of the time only small adjustments need to be made to maintain an appropriate business environment Lee 6 Works Cited Mallor J P Barnes AJ Bowers T amp Langvardt AW 2010 Business Law The ethical global and ecommerce environment 14th ed New York IrwinMcGraW Hill ISBN 9780073377643
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