The Essay On Ethical Decision Making For Effective Management.

Definition of Ethics and Ethical Decision Making

Discuss about the Managing People and Organization for Literature Review. 

The term ‘ethics’ can be defined as the moral principles of an individual that govern his behavior while conducting an activity (Mackenzie, Golembiewski & Rahim, 2018). Ethical decision making refers to the process of selecting a particular consequence among several alternatives on the basis of ethical principle of an individual. While making an ethical decision, it is highly crucial to eliminate as well as perceive unethical options and select the action which can be considered to be best on the basis of ethics. Ethics plays a major role when it comes to crucial decision making processes by the managers.  Managers are considered to be the pillars of an organization and hence a manager posses immense power along with great responsibilities. Considering the fact that managers play a major role in leading the organization, unethical decisions taken by a manager will impose highly negative impact on the organization (Johnson, 2017). Besides that, employees who are work under an unethical manager will get demotivated and as a result employee attrition can take place in the organization. Hence, managers are entitled to make decision only to serve the interests of the shareholders of an organization and to maximize the profit as well as reputation of the organization.   In this essay, literature review of articles associated with the importance of ethical decision making to effective management will be performed. The thesis statement of this essay is Ethical decision making is a highly crucial capability that must be possessed by an individual to be an effective manager.  Along with the literature review, this assignment also contains the evaluation of my own capability of making ethical decisions as a manager. The evolution will be followed by a plan which has been designed by me for further development of my skills and compatibility as an ethical as well as effective manager. 

Business ethics also known as professional and corporate ethics can be defined as form of applied ethics which assess the principles as well as the moral ethics that guide decisions of the management. Ethical issues include the obligations a company has towards its suppliers, consumers as well as its employees. Ethical decisions are taken by managers when it comes to conflict situations or obligation associated with strategic or economic choices.  According to Ferrell and Fraedrich (2015), various environmental challenges as well as pressure is faced by an organizational leader which in turn put them in ethical risk. Keeping in consideration the dynamic of an organization, the ethical risk is often found to be highly demanding. Moreover, factors like globalization, work force diversity, decentralization and legislative complex has all resulted in an increased amount of complexities in the ethical decision making process of managers. Other ethical issues that are frequently faced by the managers include advertising himself or herself for personal benefit, sourcing of raw materials, dilemmas associated with the maintain the privacy of resources, relation of the pay of top executives to the rest of the company and during communication with stakeholders.  According to the researcher, emotion is a highly crucial factor that affects ethical decision making of a manager. Majority of leaders who are under ethical risks are found to take decision under conditions of equivocality as well as uncertainty. This type of ethical decision making is often found to impose highly negative impact on the organization and hence requires special compensating tactics. Another method by which managers make ethical decision is by self reflection. When leaders are comforted with ambiguous as well as complex circumstances, several of them are found to be drawing personal experiences in order to assess the situation as well as to deal with it. However, in case the environment of the organization is potent, managers are less likely self reflect since it will include self-awareness. 

Role of Ethics in Managerial Decision Making

The prosperity of an organization is highly dependent on the ethical decision making of the managers. For instance, during conflict within an organization, ethical decision of the manager can alleviate the issue and enhance the tryst as well as the loyally of the employees towards the manager. This in turn, enhances the employee retention capabilities of the organization as well as its revenue. 

According to Crossan, Mazutis and Seijts (2013), it is crucial for mangers to obtain proper ethical training since ethics plays a major role in shaping the success of an organization in the long run. Appropriate ethical skills of managers help them to seize the opportunity of creating a climate that bears the potential of strengthening the relationships and reputation on which the success of the organization depends. Shapiro and Stefkovich (2016), states that several organizations are implementing the compliance based ethic programs to improve the ethical decision making of the manager. The mentioned ethic program is created by corporate council and the goal of the mentioned program includes prevention, detection as well as provision of punishment for legal violation. However ethical decision making is much more than avoidance of illegal acts. Moreover, providing managers with a rule book is not going to enhance the moral sense of that individual.  Hence in order to enhance the ethical decision making skills of the managers, it is crucial for the organization to implement a comprehensive approach that goes beyond the often punitive legal compliance stance.

According to Kacmar et al. (2013), leaders must possess commanding power to take decision during critical ethical dilemma.  Commanding power is referred to decisions that are taken by the manager without consulting with anyone. However negative it may sounds, this skill is crucial since it helps the leader to take decision specially when it comes to crisis decision or monitory decisions. Cianci et al. (2014) states that, some of the major ethical decision making skills that must be followed by an individual includes being a leader who is not deceitful, equal treatment for all employees, Making informed decisions without favoritism and operating within the law. 

According to Kacmar et al. (2013), there are some basic skills that must be possessed by a leader in order to make an effective ethical decision. For instance, a leader must have enough emotional stability to take effective ethical decision. Managers who lack emotional stability are often found to be take tresses while in ethical dilemma and as a result ends up making a decision that is unethical. Lawton and Páez (2015), stated that leaders who are characterized to be honest, trustworthy, caring as well as principled individuals are found to be making ethical, fair and balanced decisions. Along with that, leaders with the capability to cope with stress as well as anxiety occurring due to unethical situation are found to have better ethical decision making skills compared to the leaders who lack the above mentioned capability.  Individuals who suffer from neuroticism that includes anger, worry, stress, impulsiveness, insecurity, stress as well as lust for money are found to make decision based on their personal benefits.

Importance of Ethical Decision Making in Organizations

From the above discussion, it can be concluded that ethical decision skill of a manager doe impose immense impact on the organization.  Ethical decision making has direct relation with the effective managerial practice. Due to increased amount of complexities in organizations, managers are found to be suffering of increasing number of ethical issues. While unethical decision taken by the manager can results in employee retention and loss of overall revenue of the company, ethical decision making in an organization often results in prosperity of that company. When it comes to ethical skill, comprehensive approach is found to be more effective than compliance based approach. Apart from that some of the personality based skills that a leader must have to make ethical decisions are emotional stability, honesty, trustworthiness, caring attitude and well as principality.  

For understanding and gaining a fair piece of knowledge regarding my personal set of skills, personality and other psychological strengths, I have undertaken IPIP Big-Five Factor Markers, the measure of the big five personality traits (Goldberg, 1992). I have used this personality test to analyze the five main levels of factor present in me. These factors include Extroversion, Emotional Stability, Agreeableness, Conscientiousness and Intellect or Imagination (Ferrell & Fraedrich, 2015). The personality test helped me to analyze the level of social skills, self regulation that is present in me in the context of a managerial practice of a business organization. It is extremely essential for a manager of a business organization to make some ethical decisions for sustaining the workplace environment of a company (Shin et al., 2015). In case of managers, for effective management and leadership for being effective, it is important to keep in mind that the management procedure is built on a solid foundation with a clear and targeted mission, a specific vision for the future, an effective strategy and friendly workplace culture and environment to succeed. One of my key strengths according to the personality test I took is my extrovert attitude. The test result showed that I scored 54 percentile on the factor level of extroversion (Appendix II). I believe my extrovert nature is advantageous since it does not stop me from developing some of the top quality plans or state any o my opinions or suggestions before the employees of the organization during any meeting or before the directors and other team members in managerial meetings. This nature, I believe will definitely help me to proceed towards the pathway of achievement and growth as a manager of a business organization. The test furthermore stated that my emotional stability is as low as 11 percentile. This factor, is one of my greatest weaknesses as a manager of an organization due to excessive emotional nature and the behavior of unstability of emotion. This is because though emotional traits of manager is considered in a business organization during transition period but the impulsive nature of a manager is a big drawback for taking any ethical decisions of an organization. I believe this nature in me forces me to make decisions on the basis of my personal feelings, frustration, sadness and more. The factor in me is a major drawback since unbalanced and unstable emotional base tends a manager or a leader to make unethical decisions for the employees of the organization. Another factor which is a factor of strength in me is the factor of agreeableness. I scored 40 percentile in agreeableness. I often have this nature to agree in any situation over any random talks and decisions after analyzing and thinking about the topic from my perspective. This attitude in me helps me to gain attention and enables to create a comfort relation with the other team members and they can easily come up to me and share their ideas. This quality will definitely help me to make ethical decisions. I scored only 9 percentile in the factor of conscientiousness. It has often happened that I forgot to check the market statistics for the month and have resulted the competitor of my organization to succeed more than mine due to the lack in my conscientiousness. This is a major weakness in me which will definitely ham the profit margin of the business organization I am serving and threat my position as a manager in the company. I definitely need to work on my intellect and imagination skills to succeed as a manager in the business organization I am serving. 

Factors Affecting Ethical Decision Making by Managers

I need to focus on the skills and the targeted goals that are essential for succeeding in becoming an effective manager of a business organization who has the ability to make relevant ethical decisions for the benefit of the organization.

The figure below illustrates the steps required to succeed in the process of development of business organization as an effective manager.

I have followed the SMART guidelines in the context of evaluation of the knowledge and the skills that are required to identify my goals or the targeted achievements. Some of the basic questions that I asked myself using the SMART Goal guidelines are:

• My Initial Goal: My goal is to become an effective manager of a business organization with the qualities of making ethical decisions for the company I am serving. Furthermore as per the personality test, I need to work on my factor of emotional stability which comparatively low as 11 percentile. Emotional stability is an important factor while undertaking any organizational decisions (Ruiz-Palomino & Martínez-Cañas, 2014). Hence I need to improve and control my emotions.
• Specific: One of my specific goals is to gain trust of the employees. I believe it is very important for a manager to gain trust of the employees of the organization. After then only I can become an effective manager of the business organization. The hurdles of gaining trust from the employees can be biased decisions, person specific preferences, lack of understanding and active listening of the employee concern and most importantly lack of respect towards the employees.
• Measurable: The measurements of effective management skills include Manger’s performance, employee satisfaction rate, employee motivation and performance scale and finally the profit margin of the company. I believe my goal of succeeding as an effective manager can also be measured b the rate of employee retention in a year.
• Achievable: My goal can be achieved by controlling my vulnerable state of emotions, my impulsive nature, gaining employee trust, recognizing organizational issues, interpreting and evaluating information and considering all the employees as equal.
• Relevant: Ethical decisions are essential for the development of the organizational structure (Lawton & Páez, 2015). Some of the factors that contribute to the importance of ethics in the organization include development of positive corporate culture, increasing consumer confidence, reduction in origination’s financial liabilities, increased productivity of the organization and increased employee retention (Welsh & Ordóñez, 2014).
• Time Bound: I don’t think there can be any realistic deadline for my behavioral changes. I need to work on my nature, my emotions and the factors which are hurdles on my pathway of succeeding as an efficient manager with the qualities of ethical decision making.
• SMART Goal: To achieve high emotional stability, higher intellect level and conscientiousness so that I can take ethical decisions for a business organization as an effective manager.

Conclusion

Managers play an important role in shaping the values and ethics of a business organization. The success of a company majorly depends on the leadership and managerial skills of the manager of the organization. It is thus important for any business organization to abide by the rule of law or ethical framework for engaging themselves in a fair practice that will result in effective success. The essay illustrates my personal evaluation of the skills and knowledge that I need to gain or improve as per the personality test and the guidelines of the SMART Goals  for succeeding as an effective manager and a leader of a business organization. 

References

Cianci, A. M., Hannah, S. T., Roberts, R. P., & Tsakumis, G. T. (2014). The effects of authentic leadership on followers' ethical decision-making in the face of temptation: An experimental study. The Leadership Quarterly, 25(3), 581-594.

Crossan, M., Mazutis, D., & Seijts, G. (2013). In search of virtue: The role of virtues, values and character strengths in ethical decision making. Journal of Business Ethics, 113(4), 567-581.

Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.

Goldberg, Lewis R. (1992) "The development of markers for the Big-Five factor structure." Psychological assessment 4.1: 26. https://dx.doi.org/10.1037/1040-3590.4.1.26

Huhtala, M., Tolvanen, A., Mauno, S., & Feldt, T. (2015). The associations between ethical organizational culture, burnout, and engagement: A multilevel study. Journal of Business and Psychology, 30(2), 399-414.

Johnson, C. E. (2017). Meeting the ethical challenges of leadership: Casting light or shadow. Sage Publications.

Kacmar, K. M., Andrews, M. C., Harris, K. J., & Tepper, B. J. (2013). Ethical leadership and subordinate outcomes: The mediating role of organizational politics and the moderating role of political skill. Journal of Business Ethics, 115(1), 33-44.

Lawton, A., & Páez, I. (2015). Developing a framework for ethical leadership. Journal of Business Ethics, 130(3), 639-649.

Mackenzie, K. D., Golembiewski, R. T., & Rahim, M. A. (2018). Introduction. In Current Topics in Management (pp. 9-24). Routledge.

Ruiz-Palomino, P., & Martínez-Cañas, R. (2014). Ethical culture, ethical intent, and organizational citizenship behavior: The moderating and mediating role of person–organization fit. Journal of business ethics, 120(1), 95-108.

Shapiro, J. P., & Stefkovich, J. A. (2016). Ethical leadership and decision making in education: Applying theoretical perspectives to complex dilemmas. Routledge.

Shin, Y., Sung, S. Y., Choi, J. N., & Kim, M. S. (2015). Top management ethical leadership and firm performance: Mediating role of ethical and procedural justice climate. Journal of Business Ethics, 129(1), 43-57.

Singhapakdi, A., Vitell, S. J., Lee, D. J., Nisius, A. M., & Grace, B. Y. (2013). The influence of love of money and religiosity on ethical decision-making in marketing. Journal of Business Ethics, 114(1), 183-191.

Thiel, C. E., Bagdasarov, Z., Harkrider, L., Johnson, J. F., & Mumford, M. D. (2012). Leader ethical decision-making in organizations: Strategies for sensemaking. Journal of Business Ethics, 107(1), 49-64.

Welsh, D. T., & Ordóñez, L. D. (2014). Conscience without cognition: The effects of subconscious priming on ethical behavior. Academy of Management Journal, 57(3), 723-742.