Ethical Decision-Making in Business: Personal Evaluation and Analysis

This essay delves into the critical domain of ethical decision-making within the business landscape. It commences with an introduction that highlights the increasing significance of ethical considerations in modern management, exemplified by the adoption of green policies and individual actions such as whistleblowing. The essay underscores the role of ethical decision-making in fostering effective management, including enhanced consumer preference and employee engagement. A comprehensive literature review follows, exploring various ethical decision-making frameworks and transformative skills for managers. The essay then evaluates personal ethical decision-making capabilities and concludes with a SMART goal plan. The literature review covers the skills required for ethical competence, including diverse ethical assessment frameworks and visualization of different perspectives. It discusses five common approaches to ethical decision-making: utilitarian, rights, fairness, common good, and virtue. The essay emphasizes the influence of individual differences, interpersonal variables, and organizational variables on ethical behaviors, highlighting the impact of personality traits and ethical dilemmas within organizations. The essay provides examples of ethical failures in companies like Enron and Volkswagen and concludes with a self-evaluation of the author's ethical values and decision-making approaches.

Running head: ETHICAL DECISION-MAKING IN BUSINESS
ETHICAL DECISION-MAKING IN BUSINESS
Name of the Student
Name of the University
Author note

ETHICAL DECISION-MAKING IN BUSINESS
Introduction
Ethical decision-making as a term has evolved from this consideration. Managers across
organizations are aware of this term and it gains increased importance with each passing day. It
refers to the process by which the unethical alternatives are filtered and options that are more
ethical are chosen for organizational management. One of the recent and most visible examples
of ethical decision-making is the adoption of the green policy by businesses (Dane &
Sonenshein, 2015). A part of the larger corporate social responsibility (CSR) that businesses
include within their organizational policies, green policy is an example of ethical decision-
making. Ethical decision-making is not confined to the decisions made by the group or the
organization but it is also taken by the individuals on certain occasions. Whistle blowers are
good examples of individual ethical decision-makers (Baker, 2017) (Appendix C).
Ethical decision-making has an important role to play in ensuring effective management
as well. The vitality of ethics in decision-making – either in-group or individually – is realized
when it is compensated or rewarded with increased consumer preference and consequent rewards
(Vahlne & Johanson, 2017). Ethical decision-making also helps managers maintain equilibrium
within the organizations where each employee feels valued. An instance of a good ethical
decision made by a manager might include the provision for pregnant female employees to work
as per their convenience and comfort. It could be included within the sphere of good managerial
practice. Further, when managers succeed in maintaining a positive relationship with the
employees, it leads to increase employee engagement and subsequent profit for the company as
well.

ETHICAL DECISION-MAKING IN BUSINESS
The given essay provides a review of the literature on ethical decision-making in business
and its contribution to organizational efficiency. The essay will primarily discuss the
transformative skills of managers in decision-making and the external factors that influence
decision-making. The succeeding sections of this essay will focus on the evaluation of personal
ethical decision-making capabilities followed by the SMART goal plan.
Literature review
Ethics in everyday life define the personality of individuals and distinguish them from
others. In any scenario, ethics holds an important position because it shows the way people have
been brought up. In the past, ethics and morality formed the basis on which every political and
social decision, even economic decision was made. Many theorists and scholars over the years
have proposed various skill sets that enable individuals to realize and execute ethical decisions.
Wittmer (2016) states that the literature on ethical decision-making is scarce and previous studies
did not encompass every element. Certain skills – both hard and soft skills – are required to be
ethically competent, state the authors. The first and crucial skill is the ability to apply diverse
ethical assessment frameworks before deciding on a course of action. Another skill is the ability
to visualize the different perspectives on each action taken (Howard, Tang & Austin, 2015).
Apart from possessing these skills, theorists believe that individuals must also know about the
various approaches that define ethical decision-making. In all, five common approaches to
ethical decision-making include the utilitarian approach, the rights approach, the fairness
approach, the common good approach and the virtue approach (Shapiro & Stefkovich, 2016).
The utilitarian approach states that individuals must make decisions depending on the
harms and benefits it could cause to someone. In simpler words, utilitarianism states that any

ETHICAL DECISION-MAKING IN BUSINESS
decision, which is morally right, produces benefits for everyone (Letwin et al., 2016). However,
the approach has limitations in that it fails to take into account the benefits of everyone involved
from the ‘morally right’ decision. In the contemporary and complex world, a morally right
decision for one individual might be unethical for another individual. The rights approach on the
other hand, bases itself on the moral rights of individuals. This approach states that some rights
of the people must be acknowledged even if it not considered legal or constitutional. The fairness
approach deals mostly with justice. Decision-making in life is largely based on the idea of
justice. It refers to the treatment individuals receive based on certain characteristics. The
common good approach is somewhat similar to the fairness approach barring the fact that
common good refers to equal treatment or benefit for all whereas fairness does not ensure
equality for all. The fifth and the final approach is the virtue approach that describes there are
some ideals to which people should dedicate and commit. Virtues are the goodness that people
possess.
In ethical decision-making, these approaches assist in establishing the ground on which
decisions that are more important could be made. Lawton and Páez (2015) comment that the two
approaches in particular – fairness approach and common good approach are helpful in making
organizational decisions. In the business context in particular, ethics is one of the most crucial
elements of organizational management. Organizations are relied on the response they receive
from their clients and customers who form their stakeholders’ base. Therefore, the decisions
made within the organizations are taken considering the interests of both the shareholders and the
larger community. According to Lehnert et al. (2016) ethical decision-making in the context of
business, involve three categories that succeed the ethical decision behaviors. The three
categories include individual differences, interpersonal variables and organizational variables.

ETHICAL DECISION-MAKING IN BUSINESS
The author further presents contradictions regarding the approaches to ethical decision-making in
business stating that multifarious approaches define the decision-making process. Ethical
behaviors are influenced by individual differences. Individual differences refer to the different
traits of personality that is unique to each individual. Sometimes, these unique personality traits
collide and prove a barrier to ethical decision-making. As Uhlmann, Pizarro and Diermeier
(2015) put it, the varying traits of personality result in the ethical dilemma while making any
decision. Many instances are there within organizations where managers as well as employees
are confronted with ethical dilemmas. The ethical dilemma also surfaces when the values upheld
within the organization contrasts with the values upheld by an individual employee. The
employee then enters into a dilemma of whether to support the organization in order to save his
or her job or whether to hold on to his or her own ethical values. When an employee is
mistreated at a company based on his or her racial or sexual orientation, it leads to a breach of
ethics on part of the organization. Ethical dilemma happens when other employees realize the
discrimination but struggle to decide whether to save their own job or support the discriminated
employee.
Personality is a factor that significantly influences the ethical decision-making process
within an organization (Ruiz-Palomino & Banón-Gomis, 2016). It depends on the personality of
the leader mostly whether the organizational decisions concern individual interest or the interests
of the larger community. Nei et al. (2018) studied the different personalities of managers and
leaders and found that negative personality like narcissism and cynicism resulted in poor ethical
decision-making whereas positive personality like conscientiousness and agreeableness produced
good outcomes. The findings further revealed that personality was linked to many of the social-
behavioral response patterns that might further make managers aware of the influence of

ETHICAL DECISION-MAKING IN BUSINESS
personality on ethical decision-making. Özbağ (2016) on the other hand analyzed the five factor
personality traits and its association with ethical decision-making and leadership. The author
provided instances of companies like Enron and WorldCom to show the ways in leaders react to
ethical scandals such as these. During the 2000s, Enron Corp, the energy company based in the
U.S. was accused of forging financial statements in order to hide its losses (Cbc.ca, 2018). Enron
CEO Jeffrey Skilling was charged with fraudulent activities that led to the company’s downfall.
WorldCom, the U.S. telecom giant received similar fate during the same period when the audit
team revealed that the company was not following accounting standards and forged its revenue
statements. WorldCom chief Bernie Ebbers was found accountable on all charges and was
sentenced to 25 years in prison along with former CFO Scott Sullivan (Theguardian.com, 2018).
Another very recent case of the German automotive company Volkswagen further sheds light
into the bad corporate decisions. In September 2015, the company came under scrutiny from the
U.S. environment protection agency for violating emissions standard. The CEO Martin
Winterkorn had to resign ultimately thus producing another chapter of failed ethical decision-
making (Bbc.com, 2018). These three cases presented glaring examples of breach of ethics of the
highest kind. The leaders in these two cases displayed the narcissist personality of leadership and
made decisions that were completely against ethics.
The above discussion shows that ethical decision-making within business organizations
are influenced by several factors. When an individual fails to reach a decision that concerns the
wellbeing of the self and others, it leads to ethical dilemma. Personalities of individuals largely
influence decision-making and the ethics associated with it.
Evaluation

ETHICAL DECISION-MAKING IN BUSINESS
In terms of possessing strong ethical values, I feel I lag behind many others. My
personality is somewhere around between the narcissist and the conscientiousness. I am a person
who thinks about his own interests first in any situation and then think about others. Nonetheless,
I must assert that I do not believe in thinking only about me but prioritize my interests. I am in
the boundary line between Adam Smith and Emanuel Kant’s philosophy (Appendix B). In the
above sections, I have mentioned about the skills and competencies that make a leader or a
manager ethically sound. I have also mentioned different approaches to ethical decision-making.
I have found that the approach I mostly follow in my life is the virtues approach, which demands
the individual to make decision based on his virtues. Virtues are good qualities that people
possess. I believe a decision that does not disturb any of my virtues, is ethical.
After analyzing the results of the questionnaire, I have found that the results are in favor
of what my personality is (Appendix A). However, the results also indicate that I am lagging
behind the qualities that make an effective manager. In the questionnaire, the question about
whether I have raised my voice against any unethical activities demonstrates my lack of
judgment. I say this because I have witnessed, on several occasions that a person is unfairly
treated but I felt that he deserved the treatment because he was from a different ethnic
background. At that moment, I thought I was right in not raising my voice against it but later I
realized that I was wrong. The results in contrast also indicate that I possess the capability to
make my own decisions, which is a requirement to be an effective manager.
As has been mentioned already in the previous sections, managers must have the ability
to apply varied frameworks of ethical assessment prior to take an action or making a decision. I
believe that I have this skill because I have been in situations where I needed to take the call for
the entire team during a class project. During the course of the project, I was faced with the

ETHICAL DECISION-MAKING IN BUSINESS
dilemma of whether to proceed with the task without the presence of one of the members or not.
I made the decision to go ahead because we had to finish before deadline. When the time of the
presentation came, I made sure that the absent member was also given some credit because she
had valid reasons for missing the project. In this case, I thought first about my own interest
because I wanted to be praised for finishing the project on time but I also made sure that others
were not left behind. The other skill to foresee the consequences of the decisions taken from
other’s perspective is a skill that I believe I need to work upon in future.
The results of the questionnaire also implied that I do not uphold my protected values
strongly. It has been found in the literature concerning ethical decision-making that certain
individuals tend to be blinded by their protected values and fail to make ethical decisions. These
protected values are inherent in an individual and have been passed on them by their families.
However, in certain situations, making the right decision challenges these protected values. In
my case, I had to make a decision for the team that did not align with my protected values. My
protected values ask me to give equal opportunity to everyone irrespective of ethnicity, class or
religion. However, when I made the decision to start the project without a team member, it
turned out to be against my values. The member incidentally belonged to different ethnicity and
my decision was projected as racially biased. Although I was able to clear, the situation but it did
challenge my protected values.
Plan
After evaluation, I have identified three goals that I need to achieve. I have prepared the
following SMART Goals Plan in order to achieve effective managerial skills for ethical decision-
making:

ETHICAL DECISION-MAKING IN BUSINESS
Goal 1:
Specific Meet people from different ethnic backgrounds and
understand their values. In order for me to make
correct judgments, it is important to rise beyond the
boundaries of discrimination and understand the
values different people hold. This would in turn
help me make ethical decision.
Measurable The goal can be measured by my response to
situations where I have to choose between the right
and the wrong. Such situations arise almost every
day in our lives and hence it would be easy to
measure the outcomes of this goal.
Achievable The goal is of course achievable as I am acquainted
with many people who are from separate ethnic
backgrounds. Further, the goal is achievable
because I have clear intentions to improve my
judgment capability.
Relevant The goal is relevant because it involves the initial
process of being an effective manager. Making
ethical decisions requires an individual to
understand the strongly held beliefs and values of
others.
Timely The goal is timely, as it would take me around 3 to
4 months to understand fully the nuances of others’
cultures.

ETHICAL DECISION-MAKING IN BUSINESS
Goal 2:
Specific Organize a business campaign and make a team
that will include students with different
personalities. In this way, I will be able to
understand the ethics related to business decision-
making.
Measurable The goal is measurable because it can be evaluated
through evaluation. The goal will be measured by
the response of the target customers who will be
other students, teachers and some local people.
Achievable Encouraging students to participate in the business
campaign and act as employees who are faced with
everyday ethical dilemma can help in achieving the
goal.
Relevant The goal is very much relevant as it is taken up at
the right time when students are just preparing to
move into the real world where it all matters.
Timely The goal will take possibly around 2 to 3 months to
complete. I will start working on it from the first
day of the next month.
Goal 3:
Specific Develop a professional secrecy-maintaining group
and analyze the response and activities of the

ETHICAL DECISION-MAKING IN BUSINESS
members involved including self. It is specific to
the ethical decision-making, as it will survey the
response of individuals in making decisions
whether to leak out secretes or maintain the
professional secrecy.
Measurable The goal will be measured by viewing the results of
the group’s response to maintain secrecy.
Achievable The goal will be achieved when all the members of
the group succeed in keeping the secret despite
being tempted to reveal it.
Relevant It is relevant to the ethical decision-making process
that managers engage in as maintaining secrecy is a
crucial ethical decision-making factor.
Timely The goal would take roughly around one month to
complete. I plan to work on this goal starting this
week.
Conclusion
In the end, I must assert that the analysis undertaken by me in ethical decision-making
helped largely to clarify certain assumptions I had previously held. In the essay, I delved upon
the issues of ethical decision-making in general life and within the context of business. The
primary focus of this essay was however to understand the decision-making processes that
managers take within business organizations. I used relevant resources from the web including
different journal articles to establish my analysis. The literature review that I did helped a lot in

ETHICAL DECISION-MAKING IN BUSINESS
comprehending the views and ideas put forth by other experts and scholars in this regard.
Although I knew about the importance of ethics in business, this analysis helped me have a
clearer understanding of the various approaches to it. Many authors have researched on the
different approaches to ethical decision-making and found out that managers differ in the way
they approach an ethical decision. With recent examples of Enron and WorldCom ethical
decision-making blunder, I was able to understand clearly the role of leaders in making
decisions. Personality of leaders, as I have understood after undertaking this study, matters most
in situations where ethics come into question. The analysis also provided a deep insight into the
ethical dilemmas faced by individuals in the workplace. I also evaluated my effectiveness as a
manager in making decisions and based on that, prepared a SMART objective plan in order to
improve.