CH #6 Ethical Decision Making

Ethical Awareness

the ability to perceive whether a situation or decision has an ethical dimension

Ethical Issue Intensity

the relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization

• personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressures prevailing at a particular place and time

Moral Intensity

individuals’ perceptions of social pressure and the harm they believe their decisions will have on others

Locus of Control

individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements

External Control

individuals who see themselves as going with the flow because that is all they can do

• life events are due to uncontrollable forces

Internal Control

individuals who believe they control the events in their lives by their own effort and skill

• view themselves as masters of their destinies and trust in their capacity to influence their environment

Corporate Culture

a set of values, norms, and artifacts, including ways of solving problems that members (employees) of an organization share

• ie mission statements and objectives

Ethical Culture

acceptable behavior, defined by the company and industry

• reflects the integrity of decisions made and is a function of factors, including corporate policies, top management’s leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior

Significant Others

those who have influence in a work group, including peers, managers, coworkers, and subordinates

Obedience to Authority

a reason employees resolve business ethics issues by simply following the directives of a superior

Opportunity

the conditions in an organization that limit or permit ethical or unethical behavior

Business Ethics Intentions, Behavior, and Evaluations

Ethical business issues, dilemmas involve problem-solving situation where the rules governing decisions are often vague or in conflict

Ethical Decision-Making Models…

does not help in determining if a business decision is right or wrong

• its intended to provide insights about ethical decision making

• business ethics involves value judgements and collective agreement about acceptable pattern of behavior

Normative Approach

how organizational decision makers should approach an issue

Instrumental Concern

focuses on positive outcomes, including firm profitability and benefits to society

Institutional Theory

theory that organizations operate according to taken for granted institutional norms and rules

• government, religion, and education are institutions that influence the creation values, norms, conventions

Equality Principle

states that each person has basic rights that are compatible to the basic liberties of others

Difference Principle

states that economic and social equalities or inequalities should be arranged to provide the most benefits to the least advantaged members of society

Top-level support is important for ethical behavior because…

it helps employees engage in their personal approaches to ethical decision making

Value Principal