(Week 6) Ch.6 Business Decision-Making, Ethics, and Moral Foundations Theory

Decision Making

Action or process of thinking through possible options and selecting one

Correct vs Ethical?

Maximizing shareholder wealth sometimes ethical

Stakeholder (Triple Bottom Line)

Overconfidence

Emotional Intelligence

Ability to understand and manage emotions in self and others (Self-Awareness, Self-Regulation, Empathy, Social Skills)

Measurement

Recognizing emotional expressions

Faith in Intuition

Tendency to believe that ideas that feel true are true. People with high FII don't seem more accurate, just more confident possibly more often wrong

Programmed Decisions

Repeated over time and rules and heuristics can be developed to guide these. Ex. Employee scheduling

Non-programmed Decisions

Novel, Unstructured, often with ambiguous or incomplete information

Rational Decision-Making Process

Recognize need to decide, Generate Alternatives, Analyze Alternatives, Select Best Option, Implement Selection, Evaluate Outcome

Bounded Rationality

Complex decision making cannot be fully rational because we can't explore/assess all alternatives

Escalation of Commitment

Remaining committed to decisions, even poor ones, even when doing so increases negative outcomes

Uncertainty

Many decisions are made in context of uncertainty, by leaders often don't admit this

Conflict Avoidance

Can hinder effective decision processes

Relational Conflict

Personal and involves attacks

Process Conflict

Related to the way to do something

Decision-Making Style

Maximizer, Satisfier, Flexifier

Better Decision Making Process Steps

Recognize need to decide, Generate Multiple Alternatives, Analyze Alternatives, Select Alternative, Implement, Evaluate

Divine Command Theory

Justifies ethics based on command from God

Utilitarianism

Justifies ethics by identifying action producing greatest good for greatest numbers

Individual Rights

Justifies ethics with appeal to entitlements

Virtue Theory

Strive for virtue (right motivation and habit), Virtue matters more than effect of any single act

Kant's Categorical Imperative

Each act or failure to act is right only if I would want to live in a society in which everyone acted the same

Role-based Ethics

Justifies ethics based on personal relationships and duties they seem to create

Cultural Agreement Theory

Follow guidance of ethical values shared widely across cultures

Intuition

Justifies moral conclusions, Removes your justification for criticizing others who uses same system, but have different feelings

Rene Girard's Mimetic Theory of Ethics

Historically: Guilt Awareness > Religious Rituals > Sense of Freedom from Guilt; Modern World: Guilt Awareness > Imitate Thoughts of others sins > Persecute/Marginalize 'Sinners' > Victimizing > Sense of Freedom from Guilt

Moral Foundations Theory

Reasoning about morality is not impactful on self, but instead used to justify pre-existing intuitions. Five Intuitions: Care, Fairness, Loyalty, Authority, Purity/Sanctity