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Ethical Decision Making and Ethical Leadership
C H A P T E R 5 Ethical Decision Making and Ethical Leadership
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The Ethical Decision Making Process
In business, people make decisions differently than at home Organizational pressures The ethical decision making process in business includes ethical issue intensity, individual factors, and organizational factors, such as corporate culture and opportunity Source: Triangle Images
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Framework for Understanding the Ethical Decision Making Process in Business
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Ethical Issue Intensity
Ethical issue intensity is the perceived relevance or importance of an ethical issue to the individual, work group, and/or organization Reflects the ethical sensitivity of the individual or work group Triggers the ethical decision process Moral Intensity relates to a person’s perception of social pressure and the harm the decision will have on others
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Individual Factors People often base their decisions regarding ethical issues on their own values and principles of right or wrong Research on gender and ethical decision making women are generally more ethical than males Education, Nationality, and Age are other individual factors Locus of control relates to individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements Can be external or internal
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Organizational Factors
Corporate culture is a set of values, norms, and artifacts that members (employees) of an organization share Those who have influence in a work group (e.g. managers, coworkers, subordinates) are referred to as significant others Obedience to authority helps to explain why many employees simply follow the directives of a superior Source: Digital Vision
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Opportunity Describes the conditions in an organization that limit/permit ethical/unethical behavior Relates to individuals’ immediate job context Where they work, with whom they work, and the nature of the work Opportunities for misconduct can be reduced by establishing formal codes, policies, and enforced rules Source: Triangle Images
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Items that Employees Pilfer in the Workplace
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Business Ethics Evaluations and Intentions
Ethical dilemmas involve decision rules which are often vague or in conflict Critical thinking plays a key role A person’s intentions and the final decision on what action to take is the final step in the process If intentions and behavior are not consistent with ethical judgments, the individual may feel guilt Most businesspeople will make ethical mistakes
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Using the Framework to Improve Ethical Decisions
It is impossible to objectively determine right and wrong Having a thorough knowledge about how ethical decisions are made will not solve ethical problems Business ethics involves value judgments and collective agreement about acceptable patterns of behavior Ethical decision making in business does not rely strictly on the personal values and morals of individuals Organizations take on a culture of their own, which have a significant influence on business ethics
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Leadership in Corporate Culture
Leadership: The ability or authority to guide and direct others toward achievement of a goal Leaders are key to influencing an organization’s corporate culture and ethics Leadership styles influence organizational behavior Including employees’ acceptance of/adherence to organizational norms and values. Source: © Jack Hollingsworth/Corbis
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The Managerial Role in Developing Ethics Program Leadership
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Leadership Styles Coercive leaders Authoritative leaders
Affiliative leaders Democratic leaders Pacesetting leaders Coaching leaders The most successful leaders do not rely on one style of leadership but alternate their technique based on the characteristics of the situation. Source: Stockybte
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Types of Leaders Transactional leaders create employee satisfaction through bartering for desired behaviors/performance Transformational leaders raise employees’ commitment and foster trust and motivation Transformational ethical leadership is best suited for organizations with high ethical commitment among employees and strong stakeholder support for an ethical culture
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Habits of Strong Ethical Leaders
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Challenges of Leadership
Being a leader today is more complex and difficult than ever.
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