2. Ethical Decision Making Framework
Helps to understand – How decision are
taken within organization or in business
Factors that influence ;
Ethical Issue Intensity
Individual Factors
Organizational Factors
Opportunity
Business Ethics Evaluations and Intentions
Ethical or Unethical Behaviour
3. 1- Ethical Issue Intensity
Ethical Issue; “…..”
Intensity;
“perceived importance to the decision maker”
EII; “the relevance or importance of an
ethical issue in the eyes of the individual,
work group, and/or organization”
“reflects the ethical sensitivity of the
individual or work group that faces the
ethical decision making process”
Moral intensity; “person’s perception of
social pressure and the harm the decision
will have on others.”
4. Individuals cognitive state of
concern about an issue
Whether or not having knowledge
about an issue being ethical or
unethical
Indicates their involvement in making
choices
5. Characteristic and factors to intensity
Personal
Temporal
Values, beliefs, needs, perceptions, situations,
personal pressure at particular place and time
Senior employees
Individuals with administrative authority
Liability formula – Federal Sentencing
Guidelines
6. Individual factors
Six spheres that influence individual while
making ethical choices
Workplace
Family
Religion
Legal system
Community
Profession
There level of importance shall vary
depending on the perception of decision
maker about the issue.
7. Relationship
Individuals sense of situation’s
moral intensity increases
individual’s perceptiveness
regarding ethical problems
If an individual has high moral
sensitivity then his/her perception
about ethical problems will also
increase.
8. Other Factors – Organizational settings
Management’s
Incentive system
Reward
Punishment
Corporate policies
Values
Positive or negative incentive system can
increase or decrease the perception about
an ethical issue being important
Awareness level of individuals
9. 2- Individual Factors
How will you decide an issue to be ethical
or unethical in daily life?
Own values and principles
Socialization, religion and education
Workplace ethical issues;
Honesty
Conflicts of interest
Discrimination
Nepotism
Misuse/theft of organizational resources
10. Individual factors that affect ethical
awareness are;
Gender
Education
Work experience
Nationality
Age
Locus of control
11. 3- Organizational factors
Within organizational settings –
workplace is influential than
individual factors.
Corporate culture
Significant others
Obedience to authority
12. Corporate culture
Set of values, beliefs, goals, norms, and
ways of solving problems shared by the
members (employees) of an organization
of any size (for profit or non-profit).
Includes behavioural patterns, concepts,
values, ceremonies, and rituals that take
place in the organization.
It gives individuals meanings as well as
internal rules of behaviours.
Often expressed informally
Comments, wishes of top mgmt, dress code,
working hours, extracurricular activities etc.
13. Evaluations and Intentions
Ethical dilemma – problem solving
situation
Any concrete rules?
In fact, Decision rules are vague and
conflicting
So uncertain results of such situations
Then what is the key !
Critical thinking
Responsibility for own decisions
14. The edge to point of no return in
ethical decision making
Individual’s intentions
Individuals actions
If intentions and behaviours are
inconsistent with ethical judgement.
Guilt!
Which is first sign of unethical decision
15. How an individual can deal with the
state of guilt ?
Change their behaviour to reduce such
feelings
Shift to value system that fits to decision
taken
Change the decision next time
Some may quit
16. Role of Leadership in Developing
Ethics program
See exhibit 5-1 in your books
17. Leadership Styles
Leadership styles and attitudes can help
pinpoint where future ethical issue may
arise.
Leaders must have knowledge and
experience to make informed choices.
Empower and involve everybody
6 styles
Coercive, authoritative, affiliative, democratic,
pacesetting, coaching
18. Classification of Leadership styles
Transactional
Attempt to create employee satisfaction
through negotiation for desired behaviour or
levels of performance.
Ensure procedures and rules are in place
Relationship based on situations (crisis,
reaction, conflict) rather than ethical concerns
Transformational
Look for raising employees’ commitment level
and encourage trust and motivation.
Communicate sense of mission and vision
Enhance and generate new learning
Stimulate new ways of thinking
19. Corporate culture
Set of values, beliefs, goals, norms, and
ways of solving problems shared by the
members (employees) of an organization
of any size (for profit or non-profit).
Includes behavioural patterns, concepts,
values, ceremonies, and rituals that take
place in the organization.
It gives individuals meanings as well as
internal rules of behaviours.
Often expressed informally
Comments, wishes of top mgmt, dress code,
working hours, extracurricular activities etc.
20. Ethical Framework and Auditing
Corporate Culture
Concern
for
people
Integrative
ExactingApathetic
CaringHigh
Low
High Low
Concern for performance
21. Leaders Influence on Corporate
Culture
Use power and influence to shape
corporate culture
Status and power of leader directly
related to the pressure he/she can put on
others.
Five power bases to motivate individuals
ethically/unethically
Reward power
Coercive power
Legitimate power
Expert power
Referent power
22. Reward Power
To influence an individual behaviour
by offering something desirable.
Money, status, promotion etc.
Useful to change behaviour in the
long run.
23. Coercive power
Penalizes the actions or behaviours
Opposite to reward power
Useful in changing behaviour
Short run and situational
Not good in making long term
relationships
Continuous coercion
Power groups formation to counterbalance
Leaving organization
24. Legitimate power
A certain individual has right to
authority
Others have obligation to accept
People follow because;
Centralised structure of organization
Charismatic personality of leader
25. Expert Power
The person’s knowledge or the
perception that he/she posses
knowledge
Credibility with sub ordinates
Credibility and expert power
positively related to experience,
education and honours.
Physicians, lawyers, consultants
Advantage of others’ ignorance
26. Referent Power
Referential
Individuals with similar objectives
influencing each other by referring to
same objective.
To be successful – empathetic
By identification with others, the
decision maker gets confidence
27. Motivating Ethical Behaviour
Motivation – force within an
individual that focuses his/her
behaviour toward achieving a goal.
How motivation is created?
Motivation helps explain ethical
behaviour! How?
Organizational level
individual’s needs/hierarchy of needs
Motivation and ethical behaviour
28. Corporate Culture & Ethics
How corporate culture can/may
support for ethical/unethical
behaviour?
Ethical Conflict – the conflict
between the cultural values, in
theory and in practice
Who develops plans in organization?
Who acts on rules in organizations
Consistency in ethical culture.
29. Whistle Blowing
Whistle blowing - exposing an
employer’s wrongdoing.
Whistle blower – an employee who
discovers corporate misconduct and
chooses to bring it to the attention
of others.
Internal whistle blowing
External whistle blowing
30. Ethics of Whistle blowing
Brave, honourable and people of
integrity.
Save organization and society
Disloyal, not trustworthy, tattletale,
informers, sneakers, spies
Loose cannons and troublemakers for
personal gains and egos
31. When is whistle blowing ethical?
Company, through a product or decision will
cause serious and considerable harm to the public
or break existing laws.
A serious threat of harm, should report and state
the moral concerns.
Immediate supervisor doesn’t act. Employee
should exhaust internal procedures and chain of
command to the BoDs.
Having documented evidence that is convincing to
a reasonable and impartial observer.
Valid reasons to believe that revealing
wrongdoing to public will result in the changes
necessary to remedy the situation.
32. When is whistle blowing unethical
Potential for financial gains
Motivated by the opportunity financial gains
Media attention
Vendetta against company
Hard to evaluate one’s intentions but the
key is;
Sure about your facts and evidence
Irrefutable