Ethical decision-making in business has been a subject of study in recent years due to the occurrence of corporate scandals involving issues of corruption within large organizations with the likes of Adelphia Communications Corp, Enron, Tyco Ltd, and a number of equally infamous similar cases over the last couple of decades. This essay writer paper aims to understand the connection between the decision making process among top management personnel and the ethical behavior system, and what could be the possible driving factors that lead to individual choices when faced with a dilemma that could result in a negative moral or ethical implication in the field of business.
Ethics and Decision Making: The Corporate Perspective
There are many available literatures currently, as well as a number of studies, concerning the implications of incorporating ethical standards into decision making and the contributing factors that lead to these corporate decisions in business. However, this amount of information still fails to shed light on why instances of corruption in business, and in politics for that matter, are still rampant today. This is evidenced by the continuance of this issue to be a subject of discussion among various platforms. This has also affected the lives of many people who have become unwitting casualties of corporations that are hard-hit and suffers from, or in some cases does not survive at all, the domino effect caused by irresponsible, unethical, and immoral decision making and illegal practices among executives and managers in the top rungs of the corporate ladder.
In a nutshell, ethics is a set of behavioral standards and principles that an individual chooses from when faced with a situation that requires a decision, a deliberate action, or reaction. Understanding ethical behavior in business is a challenge as it could stem from a vast number of potential sources. This could include, but is certainly not limited to, the psychology that drives it, an individual’s cultural background, moral worldview, religious orientation and beliefs, goals and expectations, norms and virtues, as well as the ethical intensity of the issue at hand. It begs the question whether decision making is governed by a thinking process that is not associated with or is separate from the regular decision making process used in normal day-to-day activities, what kind of reasoning is being employed, what general factors affect such choices, and if so, what makes it different or special in some form as compared to when making decisions for situations that does not have or could result in moral implications (Elm & Radin, 2011).
Theorists over the years have presented their own postulations with regards to the relation between ethics and the decision making process. Some of which have been the subject of debate and researched time and again to prove, and in certain occasions disprove, such theories. Some of the most commonly known ones, including the Christian worldview in reference to the subject and whether biblical ethics can be considered to be in conformance with the modern ethical worldview, will be tackled in brief in the following sections of the paper.
Theories on Ethics and Ethical Behavior – An Overview
Kohlberg’s cognitive moral judgment posits that moral reasoning is a cognitive process where an individual uses a cognitive framework that develops in stages as a person gains life experiences (Elm & Radin, 2011). This progression, upon reaching maturity, becomes the core ethical foundation and governing moral principle in a person’s moral reasoning when faced with situations where important decisions are called for, whether in business, career or in personal dilemmas.
It has been a long-standing assumption that decision making is largely influenced by the Rational Choice Theory, and its more recent counterpart, the Image Theory (Morell, 2004). Rational choice pertains to the decisions made by an individual based on his or her own objectives and personal perception of maximum gain; where, in business settings, this is driven by the fulfillment of the company’s targets, profits, and organizational objectives. Here, the assumption is that the decision maker’s judgment and choices are dispassionate, and the action or decision brought about by the “rational choice” is devoid of emotion and does not often have to be the decision maker’s own reflection of morality or ethical perception. In contrast, image theory, also recognized as a cognitive naturalistic approach to decision making, is the belief that decisions and behaviors are influenced by the decision maker’s personal values, virtues, schema, and principles. These are not solely motivated by specific targets or tied to gains, unlike the theory of rational choice where this is a major motivator. With image theory, emotion plays an important role in the decision making process (ibid.).
Among a slew of approaches to decision making, there are three most commonly cited ethical frameworks that it is associated with in relation to business ethics: the utilitarian approach, the Kantianism or duty-based approach, and virtue ethics. The latter is the decision making approach largely attributed to image theory. The previous two, with particular emphasis on utilitarianism, are the approaches used in making normative or rational choices where a decision maker is driven to give systematic solutions by applying precedence closely related to the present dilemma, doing what is expected of them based on a code of conduct and other corporate guidelines, or following the “common good” motivation where a win-win solution is a desired outcome, to problems they are faced or presented with (De Cremer, et al, 2010).
The ideology of individualism and collectivism are two concepts that has significant impact in business decision making where, other than cultural influence, they share three elements: 1 perception of a moral dilemma (the moral domain), 2 processes of moral reasoning (judgment), and (3) behavior, but the variables differ when it comes to how conflicts or situations are perceived (Husted & Allen, 2008). In broad strokes, individualism is decision making that favors the individual, and collectivism is decision making that favors the collective. This is a seemingly simplistic view of these concepts but it does have its complexities as most will argue that the most ethical corporate decisions must favor the common good rather than benefit for a few, or in this particular concept, a singular person. Different cultures have different perception of what is “good” or “bad” decision. For example, Western cultures may perceive building up an individual in an organization as favorable, but Asian cultures would prefer cooperation among groups in an organization and that decision making is a group effort and must also, in effect, benefit the collective. However, both outlooks, when used strategically as a management style can benefit the organization as a whole.
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In addition to the above, framing is another concept, a step by step approach, that is thought to affect judgment process and decision making in any organization, wherein a decision maker evaluates a situation by how the particular problem or situation is presented to them (Awasthi, 2008). This is the first step with regards to this concept. A manager’s role is to achieve organizational goals in the most efficient manner possible, and to learn to prioritize activities according to the intensity of the problem and magnitude of impact it may have to the organization. Hence, desired outcomes are usually impersonal and the decision making approach may or may not be based on his personal values. To some degree, this can be likened to the rational choice approach. But this theory also allows an individual, a manager or decision maker, to formulate a judgment based on how he frames or understands a scenario, preferably according to organizational standards, and makes a judgment based on his own moral perceptions which, again to a certain degree, is similar to the image theory this time. In an organizational setting, this step then progresses to a “managerial intent” that eventually manifests itself into behavior or action that is intended to address the situation in question (ibid.). This alternative hypothesis challenges to question whether ethical decision making in business follows a certain one-size fits-all schema. Apparently, it does not. For example, a decision maker can invoke past experiences and incorporate it into his process in making judgments. Ultimately, this theory can be influenced by a myriad of approaches, not excluding a person’s religious beliefs and his perception of virtue. Various mechanisms come into play when it comes to framing. A decision can be formulated by using two or more theories mentioned previously instead of using an exclusive approach. To cite an example, one can make a managerial decision by ensuring the consideration of perceived benefits that can be attained – whether personal or organizational, and achieving the maximum level of satisfaction – which is not necessarily personal as the aim could either be the superordinate’s or subordinates’ satisfaction or both, while keeping in alignment with the decision maker’s moral values, thereby utilizing multiple frameworks in his decision making.
Ethics and The Christian Worldview
When it comes to religion, particularly Christianity, ethics is a moral order of what is right from wrong which is ingrained in Christian teachings, are expected to be followed as God’s law, and violation of which is subject to judgment or looked down upon, to say the least. This is better summarized in the following passage taken from the Bible: “Or do you not know that the unrighteous will not inherit the kingdom of God? Do not be deceived: neither the sexually immoral, nor idolaters, nor adulterers, nor men who practice homosexuality, nor thieves, nor the greedy, nor drunkards, nor revilers, nor swindlers will inherit the kingdom of God. And such were some of you. But you were washed, you were sanctified, you were justified in the name of the Lord Jesus Christ and by the Spirit of our God.” 1 Corinthians 6:9-11 (Bible, English Standard Version).
The Christian worldview of morality can be attributed to the belief that God exists and that all followers of this belief are to conform to a set of moral standards that are patterned from the Christian perception of God’s character. To quote the Bible, “All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteousness, that the man of God may be competent, equipped for every good work.” – 2 Timothy 3:16-17 (ibid.). Ethics then can be loosely referred to as human conscience when it comes to decision making. For certain individuals, this is a major basis for all aspects of making judgments both in personal and corporate settings. This is grounded in the belief that God’s word is above all worldly laws, and that human laws are patterned from the laws derived from God’s teachings.
Biblical ethics is a system of interpretation of the scripture in relation to morals and ethical behavior from a Christian perspective. This cannot be fully categorized into the previously mentioned theories in that they hold their own identity, so to speak. However, the ethical standards based on this system cannot be fully applied to the modern worldview of ethics and decision making in businesses and organizations that we know of today (Kim, et al, 2009). The basis of Christian ethics and moral theology, in general, is the assertion that morality and the differentiation between good and bad, or right from wrong, stems from the commandments made by God, which is considered to be a reflection of God’s righteousness from a Christian perspective. However, some of its principles have been a subject of criticism, especially where the accumulation of wealth is concerned as this can be construed in different ways in different business situations. It also seems ambiguous that it can be both viewed as a bad thing, as in the following verse: “And Jesus looked around and said to his disciples, “How difficult it will be for those who have wealth to enter the kingdom of God!”And the disciples were amazed at his words. But Jesus said to them again, “Children, how difficult it is[a] to enter the kingdom of God!It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” And they were exceedingly astonished, and said to him,[b] “Then who can be saved?”Jesus looked at them and said, “With man it is impossible, but not with God. For all things are possible with God.”” – Mark 10:23-27 (ibid.), and, contrarily, a blessing from God which man should strive for since poverty can be a hindrance to fully exercising faith whereas wealth is a manifestation of the same, as can be evidenced by this verse: “Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test, says the Lord of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need.I will rebuke the devourer[a] for you, so that it will not destroy the fruits of your soil, and your vine in the field shall not fail to bear, says the Lord of hosts. Then all nations will call you blessed, for you will be a land of delight, says the Lord of hosts.” Malachi 3:10-12 (ibid.). Nevertheless, with the following passage, “Whoever is greedy for unjust gain troubles his own household, but he who hates bribes will live.” – Proverbs 15:27, the bible maintains that in the process of accumulating wealth, a Christian must be conscientious in incorporating biblical laws, particularly in straying away from corruption, as well as ethos and morals into his daily practices and, in effect, his decision making and general behavior.
The ethical decision making process is not a pre-formed pattern or a pre-set standard that is to be followed over and over again expecting the same outcome each time. It is a series of deliberations with multiple factors affecting, influencing and molding it, for it to become an acceptable conduct in response to situations or conflicts, most specifically in corporate settings where consequences to wrong decision making can affect a large number of individuals, not only those who are directly connected to the organization but those around them as well. Decision making must not be limited to personal perceptions of what is right and wrong. In fact, it must not be limited at all. The decision making process among top management personnel and the ethical behavior system must ideally be closely connected. The concerned persons in an organization are expected to explore all avenues of the decision making process to ensure a conscientious outcome is reached. It does not have anything to do with labels such as religion, or culture. Moral judgment stems from a deliberate evaluation of situations and applying various possible concepts in relation to decision making that would result in the least negative moral and ethical impact in business, least of all corporate scandals that can ruin not only reputations, but innocent lives in today’s cutthroat field of business.
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