Ethical decision-making in organizational contexts

Ethical Decision Making:

Ethics refers to principles that define behavior as fair and proper and they are concerned with how a moral person should behave when it comes to making an ethical decision (Josephson Institute of Ethics, 2002). Evaluating and deciding among competing options is often key in making a fair choice since principles do not always dictate a single "moral" course of action.

The decision of whether to lay off workers to enhance profits or to cut corners on quality to meet a deadline are examples of some choices regarding ethics business owners may face (Poznak Law Firm, 2003). The use of extremely low-wage foreign workers, especially in the garment industry, is a current concern and the subject is a complex one.

There are many valid differences of opinion regarding what constitutes ethical behavior and how ethical decisions should be made and the subject is a complex one (Poznak Law Firm, 2003). There are always pros and cons involved with any choice and the decision itself can be quite time consuming. When it comes to deciding whether or not to use cheap labor to cut costs, businesses must examine the ethics behind their decision-making processes.

Approaches to Ethical Decision-Making

Four approaches that business owners commonly use to analyze ethical dilemmas are the utilitarian approach, which focuses on taking the action that will result in the greatest good for the greatest number of people; the moral rights approach, which is concerned with moral principles, regardless of the consequences; the universalist approach, in which one determines whether a particular action should apply to all people under all circumstances and whether you they would be willing to have someone else apply the rule to them; and the cost-benefit approach, which balances the costs and benefits of taking vs. not taking a particular action.

Unfortunately, some companies are forced to hire employees at minimum wage and hold them at that rate for as long as possible because the business's lack of profitability does not allow for greater compensation. If a business is losing money each month, increasing payroll expenses are sometimes not an option. However, these companies should at least consider cutting costs in other areas of business to pay their employees fairly.

Besides believing in the importance of ethics, ethical decision-making requires foresight and sensitivity to consequence of choices, the ability to evaluate complex and incomplete facts, and the skill to achieve the required goals behind the choice being made (Josephson Institute of Ethics, 2002). The decision maker must rank competing moral claims and be able to predict consequences. Economic, professional and social pressures can also obscure moral issues. The ability to make a sound choice often requires a framework of principles that are reliable and a procedure for implementing them to the dilemma.

Ground Rules

We all have the power to make decisions and we are morally responsible for the consequences of our choices (Josephson Institute of Ethics, 2002). The process of making ethical decisions requires commitment and the desire to do the right thing regardless of the cost. It also requires competency and an awareness to act consistently. Good decisions are ethical, acquiring and maintaining trust, and demonstrating responsibility and fairness. And while decisions need to be effective as well, ethical decisions establish a foundation for making better decisions by setting ground rules for our behavior.

The Josephson Institute of Ethics considers 'The Six Pillars of Character' as values essential to ethical decision-making. These are good foundations for the ground rules of any ethical decision. These ground rules are trustworthiness, respect, responsibility, fairness, caring, and citizenship. These values interrelate with one another every day to form opinions amongst society.

The qualities of honesty, integrity, reliability and loyalty help build trustworthiness (Josephson Institute of Ethics, 2002). However, it is honesty that is perhaps the most fundamental of ethical values and it a broad value that involves communication and conduct. Respect prohibits violence, humiliation, manipulation and exploitation and it reflects notions such as civility, courtesy, decency, dignity, autonomy, tolerance and acceptance. To 'do unto others as you would have them do unto you' sums up this pillar of character.

The ability to respond to expectations by being accountable and pursuing excellence shows responsibility (Josephson Institute of Ethics, 2002). The basic concept of fairness seems simple, yet in daily life can be surprisingly difficult to apply it. It implies devotion to a balanced standard of justice without one's own feelings getting in the way. Caring is the heart of ethics and shows concerned with the welfare of others. Ethics is about forming good relations with other people and compassion and generosity are forms of caring in the highest standard. Citizenship involves giving of oneself to the community in a selfless manner. It includes the knowledge and understanding of the laws and the importance of duties.

In regard to the ethical decision of hiring low-wage workers in a business to cut costs, trust is one ground rule that plays a major role. Trust is a key indicator for economic growth, and is largely a matter of ethics (AmCham, 2003). While ethical behavior is desirable in its own right, it also has an instrumental value as a factor of corporate competitiveness. Therefore, an ethical decision is also a business decision, in the case of deciding whether or not to hire low-wage workers.

Conclusion

Companies where the business environment is ethical have a greater degree of trust and are more predictable, so business is less risky. Investors, employers, and employees spend more time and money meeting and beating the competition by producing products and providing high quality services to their customers than worrying about how to cut costs and exploit workers. Unethical behavior leads to low wages, unemployment and poverty. It also ultimately causes a breakdown in trust on a national level, changing the ground rules, as we know them.