EIGHT STEPS IN ETHICAL DECISION MAKING PROCESS

The following are the eight steps in ethical decision making.

1. Collection of facts & figures: Collecting all relevant facts & figures is a challenging job for any manager.
Though difficult this can be done with the cooperation of others.

2. Defining ethical issues: Foe making ethical decision , ethical issues have to be identified & well
defined. Other issues have to be separated from ethical issues. One cannot mix up various issues like
economic issues with ethical issues.

3. Affected parties: It is necessary to identify the affected parties. Some are benefitted & some others
are affected. Some are directly affected & some are others are indirectly affected.

4. Examination of consequence: Any ethical decision has to produce both short term & long term effects.
Examples like welfare measure like “no work, no play “ many produce some problems in the short run
but in the long run these problem can be solved. A decision maker has to examine all the short term &
long term effects.

5. Identification of obligations: While executing ethical decisions the manager have to make certain
obligation. Example are when a project is constructed people have to be evaluated & measures have to
undertaken for the alternative settlement of people, keeping up the promise & building trust are
important in making ethical decision.

6. Character of manager: The decision maker manager should look into his past achievement, mental &
ethical strengths as well as future prospects. Ethical decisions are implemented based on the moral
strength of the manager. Therefore only those decisions which can be really implemented should be
made. There should no regret at a future date for the present decision.

7. Creative thinking: While making an ethical decision a manager should try to use their creative
thinking. A good manager should find out the reasons for unethical behaviour & try to remove these
defects in an organization. There are different solutions for any ethical issues. Good counseling by
professional counselors can eradicate the problem at the root itself.

8. Guts of managers: The execution of any ethical decision ultimately depends on the guts and strong
will-power of the manager. Managers require moral strength and will power for implementing of ethical
decision.

Challenges of Ethical Decision-Making:-

1) Will this action produce the greater benefit to all avoiding least harm to anybody?

2) Are the rights and dignity of people protected?

3) Is it fair to all stakeholders?

4) Is it a common ground approach to the achievement of the original goals by working together?

5) Does this ethical decision embody the best human values so that it can be adhered in future also?

Guidelines to Moral Decision-Making:-

1) Recognition of the moral dimension of the issue.

2) Identification of the various parts who are involved in the issue.

3) Finding out the values like trust, autonomy, fairness and justice.

4) Comparison of advantages (benefits) with disadvantages (costs) by implementation of the current

ethical decision.

5) Finding out similar cases and decision taken on those cases.

6) Discussion of the decision taken with others to gather opinions and reaction.

7) Examining the decisions taken with reference to legal and organizational rules.

8) Finally, the manager has to find out how far s/he is comfortable with the decision taken and
implemented.

Some Ethical Values to be Studied with Reference to Ethical Decision-making:-

AUTONOMY:

It means the freedom to make one’s own decisions. Under the broad framework, the employees can
have limited freedom.

BENEFICENCE:

Doing what is best in the given situation. Prompt reporting duty and using the work time for the
productivity of the organization.

JUSTICE:

Being fair to all and treating employees equally.

NON-MALEFICENCE:

Avoiding harm by deciding not to spread gossip.

Similarly in all discussion , the ethical values like compassion , confidentiality, fidelity, honesty & respect
have to be followed.
Methods of Ethical Decision-making in Organization:-

1) Bounded rationality: In this method, decisions are taken on the basis of some simplified model based
on rational thinking. A few variables like truth, honesty & sincerity are taken into account for making
ethical decisions.

2) Intuitive decision-making: Many decisions, in general, and ethical decisions, in particular, are taken by
conscious process. This process is dependent on the intuitive efforts of the manager. The manager goes
on mentally reviewing a lot of related events and arrives at a decision.

3) Heuristics: Heuristics refers to short-cuts in decision-making. Based on the information available,

decisions are taken into account. Some other times analogies are drawn and decisions are taken. We
have to find similar situations and similar cases. It should be noted that heuristics is not the effective
method of ethical decision-making.

4) Escalation of commitment: Increased commitment to previous decisions helps us to make ethical

decision based on previous commitment. Strictly speaking, a previous decision cannot be effective in the
present context also because a lot of changes take place in short duration of time.

CONSTRAINTS IN ETHICAL DECISION MAKING

1. Performance evaluation: It is not giving adequate importance to ethical practices, perform or perish is
the only maxim of performance evaluation.

2. Reward system: The existing reward systems are not giving importance to intangible ethical practices.
The reward systems focus only on tangible achievements.

3. Formal rules & regulations: The formal rules are not framed recently. These rules are copied from
other organizations. These rules do not have a provision for ethical practices.

4. Time constraint: In a fast moving world it is difficult to introduce ethical decisions because people are
not able to wait.

5. No historical precedence: There is no precedence based on ethical values. Most of the decisions are
from a practical platform.

6. Cultural difference: There are different ethical practices in different cultural environment. Relativism is
playing an important role in ethical management.

CRITERIA OF GOOD ETHICAL DECISION

1. Utilitarianism : Seeking the greatest food for the greatest number

2. Rights: Protecting the basic rights of individual.

3. Justice: Imposing & enforcing rules in a impartial way.

In fact many ethical decisions are far superior to the ordinary decisions. They are sometimes taken
according to the local cultural norms.

Preparation, concentration, incubation, illumination & verification are the important stages of creative
ethical decisions.

WHY DECISIONS FAIL

1. Copying of other decisions.

2. The decision may be good but difficult for implementation.

3. Not effective participation by all.

4. There are cultural differences in making & implementing ethical decisions. Examples are that
Americans are faster in implementing ethical decisions whereas Indians are slow in making &
implementing decisions.

INTEGRATING ETHICAL DECISION MAKING INTO THE FIRM

1. Developing a code of ethics & following it.

2. Establishing a procedure for reporting violations.

3. Involving employees in identifying ethical issues.

4. Monitoring ethical performance

5. Rewarding ethical behaviour.

6. Publicity to ethical efforts.

7. Analysing the various values involved such as honesty & good conduct.

8. Discussion with legal experts.