Essay on Ethical Decisions Making in Business

Essay on Ethical Decisions Making in Business !

Ethics can be defined as, “the code of moral principles that sets standards of good or bad or right or wrong in one’s conduct and thereby guides the behaviour of a person or a group”⁽¹⁾. The “code of moral principles” is very subjective in nature and depends much upon the value system of the individual.

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But how do you determine the validity of the value system or make an objective judgement about ethical behaviour? R. Baumhartasks a number of questions related to ethical behaviour. For example, is there a set standard against which the ethical standards can be measured?

Is there a “situational code” of ethics according to which the ethical merits of an activity can be evaluated? Is the evaluation of ethical and unethical conduct consistent among various cultures and countries? Does it vary from individual to individual? Who decides as to what is right and what is wrong? Is it the individual, the family, the organization or the community?

Another difficulty in making judgements about ethical behaviour is whether to judge the “act” itself or to judge the consequences of the act. For example, if a person lies to save his life, is it the lie that has to be ethically evaluated which would be considered unethical or, is it the end- result of this act, which is a life saved, which would be considered ethical? What if the lie was meant to save somebody else’s life?

Would the act then become even more ethical? Similarly if a person sees a $100 bill on the pavement of a street, should he pick it up when it really does not belong to him? Would picking it up be considered unethical? What if he picks it up and gives it to a poor person? Would the consequence of this act make the act itself ethical? These questions cannot be easily answered.

Ethical decisions always involve fundamental moral principles of right and wrong. The fundamental moral standards are based on Velasquez as follows:

1) Moral standards protect the human well-being. Activities such as murder, cheating, drug dealing, and price fixing and so on may be considered immoral because of their negative impact on the well being of society.

2) Some moral standards have been incorporated into law. For example, there are laws pertaining to truth in advertising, laws against monopolizing the market, laws against adulteration of the product and so on. These laws are based an moral standards of the society and are enacted into laws because the laws can be easily enforced. However, legal authorities cannot set the moral standards.

3) Moral standards should be above self interests. Thus, cheating on taxes would be considered immoral even if it benefits the individual financially.

4) Moral standards should not be a function of the situation. What is considered morally wrong must be wrong in all situations. The practice of bribery, for example, in moral terms, should not differ from company to company or from place to place but should be morally wrong in all situations.

5) Moral considerations are tied with emotions. People are generally remorseful if they have done something that they consider as morally wrong. Similarly, you become emotionally respectful to those who have high moral standards such as priests and saints and emotionally indignant for those who have morally low standards such as child molesters or cheaters.

A person’s ethics reflect the sum total of his experiences, education and the value system in which he was brought up. As Professor Hosmer puts it:

“Moral standards differ between individuals because the ethical system of belief – the values or priorities, the convictions that people think are truly important and upon which their moral standards are based – also differ.

These beliefs depend upon each person’s family background, cultural, heritage, church association, educational experience and other factors.”

While it is difficult to categorize ethical and non ethical conduct on the basis of any strict guidelines, studies have shown that on the basis of acceptable moral standards, elderly people have higher ethical standards than the younger generation. This may be due to the changed ethical climate, where materialistic possessions as a measure of success have shifted priorities in ethical terms.

A survey of 421 employees was conducted by Paul Serwinekto measure the effect of age, gender, marital status, education, family size, geographical area or years in business on ethical decision making. Each respondent was asked to rate the acceptability of such ethical situations as “doing personal business on company time” or “calling in sick to take a day off for personal use” and so on.

In virtually every case, the older group viewed the ethically questionable decision as more unacceptable. Other variables in the study were poor predictors of what was strictly ethical and what was not. In general, however, a number of factors play a part in building ethical values in an individual.