Introduction
Ethics are moral
principles that guide a person's behavior All decisions have
an ethical or moral dimension for a simple
reason they have an effect on others. Managers and leaders
need to be aware of their own ethical and moral beliefs
so they can draw on them when they face decisions
Business Ethics
Business
ethics (also corporate or professional ethics) is a form of applied ethics that
examines the principles and moral beliefs that guide management decisions.
Ethical issues include the obligations a company has to its employees,
suppliers, customers and neighbors. In particular, business ethics is concerned
with situations when those obligations are inconsistent with economic or
strategic choices, or are in conflict with each other. Legal obligations are
not the same as ethical ones; laws are enforced through the threat or
imposition of punishment by a government or through civil litigation. All
individuals and organizations must follow the law, but complying with ethical
beliefs is voluntary, not coerced.
Business
ethics applies to all aspects of business conduct by individuals and
organizations as a whole. Ethical behavior is conduct that follows one’s
personal beliefs or shared organizational or institutional values. When
individuals take action on behalf of an organization, they represent its ethics
to society. Businesses are dependent on their reputations, so it is important
for them to have clear and consistent expectations regarding ethical standards
to guide employee behavior. Many employees prefer to work for organizations
that share their own moral beliefs. A company’s ethical practices can thus have
an effect on the recruitment and retention of employees.
In
recent decades there has been widespread attention to business ethics due to
highly visible cases of corporate malfeasance, such as the WorldCom, Enron, and
Tyco scandals. To protect their reputations, companies have begun to form more
comprehensive corporate policies concerning ethics. These policies generally
offer guidance to employees and state the expectations of the company. Some
companies require that employees sign a contract stating that they will follow
the procedures within the handbook.
To
be viewed by the public as having high moral standards, many companies have
created a position called the corporate ethics officer or the corporate
compliance officer. This person ensures their organization has statements of
ethical principals, clear guideline about acceptable and unacceptable
practices, and means of reporting ethical breaches. These executives also have
the specific responsibility of monitoring ethical behavior and addressing
breaches.
Decision Trees
Decision
trees are graphical representations of alternatives and possible outcomes. The
decisions are represented by the branches of the tree. Organizations and
individuals often use decision trees as part of their decision-making process
because they are a means for adding formal structure to information about a
decision. Identifying the range of possibilities and their potential
consequences helps clarify the decision and facilitates selection of an
alternative.
The process of
making ethical decisions requires:
·
Commitment: The desire to do the right thing
regardless of the cost
·
Consciousness: The awareness to act consistently and
apply moral convictions to daily behavior
·
Competency: The ability to collect and evaluate
information, develop alternatives, and foresee potential consequences and risks
Good decisions
are both ethical and effective:
·
Ethical decisions generate and sustain trust; demonstrate
respect, responsibility, fairness and caring; and are consistent with good
citizenship. These behaviors provide a foundation for making better decisions
by setting the ground rules for our behavior.
·
Effective decisions are effective if they accomplish what we
want accomplished and if they advance our purposes. A choice that produces
unintended and undesirable results is ineffective. The key to making effective
decisions is to think about choices in terms of their ability to accomplish our
most important goals. This means we have to understand the difference between
immediate and short-term goals and longer-range goals.
