Ethical Decision Making

Running head: ETHICAL DECISION-MAKING 1

Ethical Decision-Making in Organizations

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A good leader considers ethics the backbone of every decision made at a personal level.

Such leaders project their values into the decisions they make, thus showing the world that those

decisions made encompass their personal values. A person’s personality and identity are held

together by their values. It also goes without say that one’s personal values and decision making

are intimately connected. A right decision should be aligned with the personal beliefs and

morality standards of the individual who makes them. Before making a decision, it is paramount

that a person asks himself or herself several questions. Is the decision going to have long-term

positive impacts or will it cause harm? Would it make the world a better place? Good leaders

make decisions that uplift and encourage others, which don’t cause harm to people or the

environment. An individual’s principles, values, and ethics drive the decisions they make as

humans. More importantly, as we move up in the society, the decisions we make affect the social

environment around us. The manner in which we decide to define our personal ethics both at a

personal and organizational level significantly affects our present and the future of the people

around us. Ethics can be defined as the moral principles that govern our daily operations

depending on what people perceive as right or wrong.

Diversity substantially increases the ethics of decision making. Each person is brought up

with a different set of values and worldviews. Therefore, different people tend to come up with

differing decisions on what they consider and what they don’t consider ethical. For instance, an

individual who values life equally would make decisions that are radically different from those

of a person who believes human life is more superior to plant or animal life. Another example

would be that of a utilitarian person. Such a person would make decisions for the good of

everyone in the society as opposed to helping the few needy cases. The above examples indicate

that the decision-making process can be a gray area, with different perceptions of what is right or

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wrong. Ethics may mean many different things to different people. For instance, for many

people, their religious or spiritual beliefs form the basis of their decision making. For others,

ethics may be based on their understanding of what is right or wrong. Therefore, it is important

to constantly evaluate one’s principles and ethics and try as much as possible always to abide by

them.

According to Thiel et al. (2012), personal, situational or environmental constraints can

affect a leader’s ability to adequately interpret and come up with the best solution for an ethical

dilemma. Personal limitations and schemas can help leaders demystify the complexities of their

environment. On the flipside, this selective attention may lead to biased interpretations since the

decision maker may overlook certain critical aspects of the situation at hand. Other personal

characteristics such as low-ego, external locus of control and law field dependence may impede

ethical decision making resulting in erroneous decisions that may be full of bias. Furthermore,

researchers posit that personality characteristics such as narcissism can negatively affect ethical

decision making.

People from different backgrounds have different norms and values which tend to

influence how they make their decisions. These norms are usually embedded in their cultural

values which determine what is right or wrong and the interpretation of complex situations. An

individual who was instilled with the values of honesty and integrity when growing up will most

likely follow ethical decision-making approaches when faced with a situation compared to a

person whose background and upbringing did not stress the importance of such traits. More so,

factors embedded in an individual’s personal ethics such as cognitive biases may impact the

outcome of the decision-making process. Cognitive biases influence individuals to over rely on

past experiences or expected outcomes while dismissing data or outcomes that are perceived as

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uncertain hence losing the bigger picture. Apart from cognitive biases, another influence on

decision making is personal relevance. When people believe that a decision making process

solely lies on them, they tend to take the wheel. Jones (2001) argues that people will tend to vote

more readily when they believe that their opinion is aligned with that of the compact majority.

Making decisions in an organization occurs at all levels. Different approaches to decision

making should be taken depending on the situation at hand. While the basic principles governing

decision making are the same, many tools and techniques can be adopted by different

organizations. One such a technique is referred to as self-reflection. When leaders are faced with

a complex situation, they may infer to their personal experiences to address the situation

effectively. Researchers argue that reflection on both personal and learned experiences

significantly affect decision making. Some researchers belong to the school of thought that self-

awareness or self-regulation tends to lessen personal influences on human behavior when making

decisions. This technique of decision making is particularly useful when a leader is faced with a

complex situation. The pressures associated with complex situations impede leaders’ ability to

draw upon past experiences and self-reflect. Therefore, self-reflection can enhance a leader’s

ability to make ethical decisions by drawing insight from past experiences. While reflecting on

past experiences improves a leader’s ability to make ethical decisions, making informed

predictions of the future by assessing the current situation also helps in solving complex

situations. This technique is referred to as forecasting. Worthwhile to mention, self-reflection

and forecasting are intertwined concepts since self-reflection is always a fundamental process to

solving complex situations in the future. By forecasting, leaders can predict the consequences of

their decisions and the associated implications in the future.

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A decision matrix is a tool that is used to evaluate all the possible options of a decision.

Under this method, a table is created with two columns, the first column representing all the

available options and the second one representing all the factors that affect the respective options

in the first table. Factors of more importance are then weighed, and a score is given to ascertain

which option is ideal for the problem at hand. One of the simplest decision-making technique

that has proved indispensable in solving ethical dilemmas is multi-voting. It begins with a round

of voting whereby the members of the decision team cast their votes for the shortlisted options.

The options with the highest number of cast votes are taken to the next round, and the process is

repeated until the final decision is agreed upon. Another effective tool is the nominal group

technique. Under this approach, the team divides itself into different groups and generates

solutions to the complex situation. The participants further discuss the shortlisted options to

narrow down on their choices. The groups then compare their options and vote on the best

possible choice. The option that wins the most votes is accepted as the group's decision.

A classic example of an infamous case that exemplifies poor and unethical decision

making is the Ford Pinto case. This was a car model produced in the 90s that were notorious for

its rear end collisions to cause a leak in fuel and burst into flames. At least twenty people lost

their lives in such tragic incidences before the firm decided to recall all cars sold to solve the

problem. A detailed look into this case revealed that at that time, Ford was under intense

competition from rival car manufacturing firms such as Volkswagen. Therefore, the firm had

rushed the car into production. In fact, engineers had brought to light the potential danger in the

production process but the company officials decided to overlook the problem and proceed

(Hoffman et al., 2014). This reveals the greed, callousness, and unethicality of the firm in matters

that could mean the death of its customers. On the contrary, looking at the situation from a

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modern lens-one that sheds light on how cognitive biases distort ethical decision making- may

help understand the reason why the firm decided to adopt the mentioned approach. By adopting

an approach considered as rational in any business school curricula, the firm conducted a cost-

benefit analysis and established that it would be cheaper to pay the lawsuits that to redesign the

car entirely. The methodology followed depicted how they argued and reached their choice. The

moral aspect of their choice was not in their equation. This approach took ethics out of the

question thus increasing the chances of unethical behavior in business practice. Dissecting

Pinto’s case decades after it occurred reveals a pattern that evidently continues to recur in

organizations. Organizational and psychological factors swayed the company officials from the

ethical dimension of the problem. However, the field of ethical decision making has substantially

grown and managers in decision-making positions are nowadays in a better position to

understand how their personal biases can generate skewed decisions and obscure the real

problem from view.

A decision maker using the consequentialist decision-making approach would have

assessed the consequences that would have affected the broadest number of people and groups

and tailor their decision to reduce harm and ensure that their actions were directed towards the

good of the consumers. A decision maker using the deontological approach would have decided

not to move on with the production process and recall the car once the fault was identified. This

is because the decision maker would base his or her argument based on a set of moral principles.

Such an individual would argue for the halting of the production process unless the rights of the

consumers using the faulty vehicles could be assured. All in all, the two approaches would have

resulted in the recall of all the defective Pintos thus saving the lives of the customers thus

avoiding a corporate scandal.

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References

Hoffman, W. M., Frederick, R. E., & Schwartz, M. S. (Eds.). (2014).Business ethics: Readings

and cases in corporate morality. John Wiley & Sons.

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.

Jones, T. M. (2001). Ethical decision making by individuals in organizations: An issue-

contingent model. Academy of management review, 16(2), 366-395.

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