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Kenny Wisuda Priyanto

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Student Number: Email: KennyWisuda.Priyanto@uon.edu.au

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G S B S 6 0 0 1 Managing Under Uncertainty

Campus of Study: Singapore

12/11/2021
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1429
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Introduction
The global crisis makes all organizations need to react to solve their problems. The global crisis
can affect the internal and external that can affect their company. The global crisis also can
become an opportunity for the company to take the momentum to make benefits to the company.
this essay will discuss the rational and ethical decision-making about their positive and negative
impact in the global crisis and give the comparison between them
.
Rational Decision Making
Rational decision-making is important in managing the global crisis. Complex problems can be
solved by ecological rationality (Coccia, 2020). The decision-making that will be made should
on best possible outcome with a high probability of the success rate. The company can make
rational decision-making during the global crisis. In Coccia’s paper 2020, rational crisis
decision-making is based on common sense, trial and error, and experience. even, not all global
crises can happen the same as in the past, the application of common sense in the decision
making such as eliminating the problem with the best possible outcome and choice will help the
company.

A rational decision can be made because there is evidence to make the decision. The rational
decision under uncertainty such as the COVID-19 pandemic come from scientific evidence from
the experts (Berger et al., 2020). Rational decision-making can base on the support of the
evidence from the experts. The real-time data from the field itself can help in the global crisis
because the crisis can make the behavior of the society changes. For example, in the COVID-19
outbreak, people change behavior such as avoiding public transport, online shopping, etc (Long
& Liu, 2021). With sudden changes, the new data will be effective in making decisions making.

The rational choice is good for sustaining the business in the COVID-19 pandemic. Small and
medium businesses have a high risk of bankruptcy in the COVID-19 pandemic. The rational
decision will give a better opportunity for small and medium businesses to survive in the
pandemic era because of the rational choice concern about safety and securities (Sajuyigbe et al.,
2021). Small and medium companies prefer to decide to increase their survival rate in the crisis.
Rational decision-making can help increase the survival rate.
However, even rational decision-making has advantages to the companies during the global
crisis, it also has disadvantages. If the rational choice is made by research, it will quite hard for
the small and medium companies during the global crisis. Because the rational choice based on
research will be costly (Vlaec, 2018). In the global crisis, small and medium businesses want to
reduce their cost. If they do the research, they will incur more costs. even they have the research
by the experts, not all the decisions that make from the research have a hundred percent success
rate. if they fail, it will waste their money.

Then, rational decision-making during the global crisis will give the company hard time. During
a crisis such as the COVID-19 pandemic, the rationality will change (Dewick, Hofstetter, &
Schoder, 2021). From Dewick, Hofstetter, & Schoder’s paper in 2021, the companies will be
questioning the current tools and technique effectiveness. The company will change its
perspective because of the sudden change situation. The logic behind rationality will change. It
will make the companies cannot make the decision based on the old rational perspective, but if
they develop or use new tools and techniques, the companies need to consider the cost, success
rate, and how in the future these new tools and techniques will be used. There is too much
uncertainty.

Also, as we know the global crisis such as the COVID-19 outbreak is sudden changes. It will
make companies hard to react due to the situation and the time given. Rational decision-making
uses the research takes time (Vlaec, 2018). Then, in the crisis with the restriction of time, the
situation is the uncertain and high volatile situation (Coccia, 2020). The research that was
already done, might be not effective after a few months during the crisis. The managers need to
take time to do the research and think of the best possible action, however, the situation needs to
take a quick solution and the situation can be changed suddenly. Rational decision-making might
not effective if the decision makes in rush due of do not have the proper evaluation of the data.

Ethical decision making

Ethical decision-making is also a choice decision choosing the global crisis. Many of the
companies resisted unethical business action during COVID-19, as the results the consumer
willing to donate to the companies that do ethical practice because they are proud of the brand
that they use (He & Harris, 2020). The ethical action from the company can make the consumer
of their products concerned about the company situation. Ethical decision-making will make
people support the company's action. The ethical action that can be used in the company such as
the company preparing the safety tools and equipment during the crisis and donating food for the
people in need.

When the mention of the ethical decision on the company, it will be related to their corporate
social responsibility (CSR). In the ethical action, it will lead to the CSR investment because it
will not only affect the perspective of shareholders, but also all of the others stakeholders
(Manuel & Herron, 2020). The ethical behavior of the company will give the benefits of the
relationship of the shareholders and stakeholders. The company will easier to get assists from
internal and external. It also can increase the stock price (Manuel & Herron, 2020). So, the
ethical choice can give benefits in the financial performance.

During a global crisis such as the COVID-19 pandemic, CSR philanthropic action can make
public communication. CSR activities have greater attention in the COVID-19 pandemic (Shin et
al., 2021). In the hotel business, it could give a positive impact. The CSR activities such as safety
and security for the COVID-19 related issue could give their values. The customer can feel the
seriousness and commitment to the safety of the customers. It will attract customers during
pandemic situations. Moreover, it will increase the trust of the customers. It will make the
company have higher chance to generate more income during the crisis.

However, not all ethical decision-making can give benefits, some of them can cause harm also.
The ethical decision making based on legal responsibility that aims to protect the shareholder and
investor might give a negative impact on the company image (García-Sánchez & García-
Sánchez, 2020). This type of purpose use ethical decision will make harm to the company
brands. Such as dismissal of the employees to cut the costs. It might save the shareholders and
investors because of the reduced cost to the company, however, it will make the employees and
other stakeholders think that the company is inhuman because only think about the shareholders
and the investors.

Then, the ethical choice can affect financial performance in negative ways. Ethical decisions do
not always generate profit (Manuel & Herron, 2020). The ethical actions might need to use the
fund to proceed the actions. In a crisis, the company needs to reduce the costs. Because of it the
small and medium companies might hard to do the ethical practices during the crisis. Ethical
objectives only can realize with power and wealth (Sajuyigbe et al., 2021). Without sufficient
funds, ethical practices might have high risks. The company needs to take reasonable action
which the priority is survival in the crisis.

The other side effect of the negative impact of the ethical action can discourage the customers.
For example when a hotel provides room to the healthcare worker. Some people might think is a
good action and can increase the value of the firm. However, the customer might not want to
choose that hotel for their destination. The healthcare worker has a higher risk of exposure to the
CORONA virus. The customer will be worried of their safety

Conclusion
To sum up, rational and ethical decision have their own advantages and disadvantage during the
global crisis. Rational action is based on reasonable choice based on the data and experiences.
However, rational decision-making also can become drawbacks to the organization due to the
cost and the time constrain. Then, ethical decision-making can be useful in the attract of the
shareholders and stakeholders, but also have some negative impacts such as not always being
profitable to the company. From both of the decision-making rational and ethical perspectives,
there is no one better. The company needs to apply the decision-making based on their needs and
situation.
References

Berger, L., Berger, N., Bosetti, V., Gilboa, I., Hansen, L. P., Jarvis, C., Marinacci, M., & Smith,
R. D. (2020). Uncertainty and decision-making during a crisis: How to make policy
decisions in the COVID-19 context?. University of Chicago, Becker Friedman Institute
for Economics Working Paper, (2020-95). https://dx.doi.org/10.2139/ssrn.3647188

Coccia, M. (2020). Critical Decisions in Crisis Management: Rational Strategies of Decision

Making. Journal of Economics Library, 7(2), 81-96.
http://dx.doi.org/10.1453/jel.v7i2.2049

Dewick, P., Hofstetter, J. S., & Schroder, P. (2021). From Panic to Dispassionate Rationality—
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García-Sánchez, I. M., & García-Sánchez, A. (2020). Corporate social responsibility during

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He, H., & Harris, L. (2020). The impact of Covid-19 pandemic on corporate social responsibility
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Sajuyigbe, A.S., Eniola, A.A., Obi, J.N., & Peter, F.O. (2021). COVID-19 AND ITS EFFECT
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Shin, H., Sharma, A., Nicolau, J. L., & Kang, J. (2021). The impact of hotel CSR for strategic
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