Ethical Decision Making and Ethical Leadership

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To improve ethical decision making in business, one must first understand how individuals make ethical decisions in an organizational environment. Too often it is assumed that individuals in organizations make ethical decisions in the same way that they make ethical decisions at home, in their family, or in their personal lives. Within the context of an organizational work group, however, few individuals have the freedom to decide ethical issues independent of organizational pressures.

The first step in ethical decision making is to recognize that an ethical issue requires an individual or work group to choose among several actions that various stakeholders inside or outside the firm will ultimately evaluate as right or wrong. Ethical issue intensity, then, can be defined as the relevance or importance of an ethical issue in the eyes of the individual, work group, and/or organization. it is personal and temporal in character to accommodate values, beliefs, needs, perceptions, the special characteristics of the situation, and the personal pressure prevailing at a particular place and time.

Ethical – issue intensity reflects the ethical sensitivity of the individual or work group that faces the ethical decision – making process. Research suggest that individuals are subject to six “spheres of influence” when confronted with ethical choices – the workplace, family, religion, legal system, community, and profession – and that the level of importance of each of these influences wiil vary depending on how important the decision maker perceives the issue to be. Additionally, the individuals sense of the situation’s moral intensity increase the individuals perceptiveness regarding ethical problems, which in turn reduces his or her intention to unethically. Moral intensity relates to a persons perception of social pressure and the harm the decision will have on others. The perception of ethical issue intensity can be influenced by managements use of reward and punishments, corporate policies, and corporate values to sensitize employees. In the words, managers can affect the degree to which employees perceive the importance of an ethical issue through positive and/or negative incentives.

When people need to resolve ethical issues in their daily lives, they often base their decisions on their own values and principles of right or wrong. The generally learn these values and principles through the socialization process with family members, social groups, and religion and in their formal education. Research regarding individual factors that affect ethical awareness, judgment, intent, and behavior include gender, education, work experience, nationality, age, and locus of control.

Education, the number of years spent in pursuit of academic knowledge, is also a significant factor in the ethical decision-making process. The important thing to remember about education is that it does not reflect experience. Work experiences is defined as the number of years within a specific job, occupation, and/or industry. Generally, the more education or work experiences that one has, the better he/she is at ethical decision making.

Nationality is the legal relationship between a person and the country in which he/she is born. Age is another individuals factors that has been researched within business ethics. In other words, the older you are, the more ethical you are. However, recent research suggest that there is probably a more complex relationship between ethics and age.

Locus of control relates to individual differences in relation to a generalized beliefs about how one is affected by internal versus external events or reinforcements. In other word, the concept relates to where people view themselves in relation to power. Those who believe in external control see themselves as going with the flow because that’s all they can do. They...
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