Decision Making, Creativity, and Ethics

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CHAPTER 12

Decision Making, Creativity, and Ethics
Nike’s decision to manufacture shoes overseas has prompted critics to claim that it exploits workers in poor countries. Did Nike make a rational decision, and is the decision socially responsible?

1

Is there a right way to make decisions?

2 3 4 5 6 8 7

How do people actually make decisions? How can knowledge management improve decision making? What factors affect group decision making?

Should the leader make the decision, or encourage the group to participate?

How can we get more creative decisions?

What is ethics, and how can it be used for better decision making?

What is corporate social responsibility?

N

ike’s

first

Corporate Report,

Responsibility

published in October

2001, confessed that making Nike’s runners is “tedious, hard and doesn’t offer a wonderful future.”1 Readers may have been

startled to learn that employees in overseas factories making Nike products were being harassed by supervisors. Employees were also asked to work far more overtime than rules permitted. Finally, the company admitted to knowing far too little about dayto-day life in the factories, because it was not monitoring the situation closely enough. These admissions might have seemed shocking to anyone who would have expected Nike to deny what critics have been saying for years: Nike benefits from unfair labour practices in foreign-owned plants to which it subcontracts work. Nike’s decision to publish a corporate responsibility report is just one example of the many decisions companies face every day. The company has decided to improve conditions at its overseas operations. In this chapter, we describe how decisions in organizations are made, as well as how creativity is linked to decision making. We also look at the ethical and socially responsible aspects of decision making as part of our discussion. Decision making affects people at all levels of the organization, and it is engaged in by both individuals and groups. Therefore, we also consider the special characteristics of group decision making.

HOW SHOULD DECISIONS BE MADE?
After publishing its first Corporate Responsibility Report, Nike increased training for both managers and employees at its overseas operations. Managers were told that treating employees properly will lead to “improved productivity, reduced labour turnover and less sick leave.” Nike thus evaluated its problem, and came up with ways to resolve it in order to reduce criticism of its labour practices. How do individuals and companies make decisions? Decisions are the choices made from two or more alternatives. Decision making occurs as a reaction to a problem or an opportunity. A problem is a discrepancy between some current state of affairs and some desired state, requiring consideration of alternative courses of action. Opportunities occur when something unplanned happens, giving rise to thoughts about new ways of proceeding. Decision making happens at all levels of the organization. For instance, top managers such as those at Nike determine their organization’s goals, what products or services to offer, how best to finance operations, or where to locate a new high-tech research and development facility. Middle- and lower-level managers determine production schedules, select new employees, and decide how pay raises are to be allocated. Nonmanagerial employees also make decisions such as whether to come to work on any given day, how much effort to put forward once at work, and whether to comply with a request made by the manager. In addition, an increasing number of organizations in

1 Is there a right way to make decisions?
Nike Canada www.nike.com/canada/

decisions The choices made from two or more alternatives.

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Part 4 Sharing the Organizational Vision

recent years have been empowering their nonmanagerial employees with job-related decision-making authority that was historically reserved...
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