Ethical Decision-Making in Management: Company Practices & Analysis

This report examines the ethical decision-making processes within a mid-sized organization, comparing them to Trevino and Nelson's eight-step model. It details the company's approach to data gathering, resource consultation, alternative analysis, and impact assessment, highlighting the importance of considering regulations and stakeholder effects. The report also explores the responsibilities of employers regarding company reputation, resources, financial management, and honest data provision. An ethical problem related to the misuse of company resources is presented, along with the associated costs. The analysis identifies steps from Trevino and Nelson's model that the company utilizes and those it does not, offering recommendations for enhancing the ethical decision-making process. The report concludes by emphasizing the significance of ethical conduct in maintaining company reputation and ensuring responsible resource allocation.

Running Head: ETHICS FOR MANAGERS
Ethics For Managers

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Contents
Introduction......................................................................................................................................2
Overview of the Company...............................................................................................................2
Ethical Decision-Making Process of the Company.........................................................................3
An Eight-Step Guide to Ethical Decision Making..........................................................................5
Trevino and Nelson’s steps used in the Company...........................................................................7
Trevino and Nelson’s steps not used in the Company.....................................................................7
Recommendations for a Good Ethical Decision-Making Process...................................................8
Use of Company Resources.............................................................................................................8
Use of Company Reputation........................................................................................................9
Use of Financial Resources..........................................................................................................9
Providing Honest Information/ Data..........................................................................................10
Ethical Problem.............................................................................................................................10
Cost of misuse or abuse of company resources.............................................................................11
References......................................................................................................................................14

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Introduction
Ethical decision making is nothing more than the ethical arguments a management of any
organization uses to solve an ethical dilemma. An ethical dilemma is a situation where there is
no clarity between right and wrong. Three aspects are examined by ethical decision making: the
ethic of care, the ethic of obedience and the ethic of reason. Empathical and emotional
intelligence are engaged in the decision making by the ethic of care. Letter of law along with the
moral and spiritual values are looked into by the ethic of obedience. Thirdly, the rational brain is
engaged by the ethics of reason. In other words, this three-dimensional approach engages both
emotional and intellectual intelligence and requires slow thinking. The social dimension is also
considered to be an important ingredient for the process of ethical decision making (Cianci,
Hannah, Roberts & Tsakumis, 2014).
This report provides details regarding the interview conducted with a middle size
organization for gaining knowledge about ethical decision-making steps adopted by it. The steps
used within the organization are compared with the eight steps of sound ethical decision making
suggested by Trevino and Nelson. Furthermore, the responsibilities of the employers in the areas
of company reputation, resources, financial resources and information/ data have also been
looked into in this report.
Overview of the Company
The company reviewed for this paper is a public company founded in the year 1976. The
company is also listed on the board of Bursa Malaysia. It is the leading performer of the
infrastructure industry having fundamental capabilities of engineering and construction. A 50-50
joint venture was also created by this company with MMC Corporation Berhad whose main
activity is the construction of large-scale infrastructure. The vision of the company states more
precisely that it aims to provide solution to large-scale property development and public
infrastructure. Its mission is to bring the needed improvement in the living standard of the
customers by developing the infrastructure facilities. It further emphasizes on creating added
value, innovation and superior quality products for the business. The main projects undertaken

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by the company are bridges, management of storm water, railways, airports, dams, bridges and
properties (Gamuda, 2015).
The company believes in offering employment to people irrespective of their social
background, gender or race. Approximately 70,000 jobs have been generated by the company. It
provides opportunities for highly trained professionals, skilled workers, less skilled workers,
students, coming from all parts of the world (Lam, Jaaman & Lam, 2017). The company
received many awards such as the Excellence Award for Property Development, top rank
Developer of the year 2017 and Malaysian Best Managed Property Award. The company further
maintains a separate complaint department for the perfect grooming of the company’s
employees. It also considers the social responsibility required to be undertaken by investing in
energy and waste management. Furthermore, the 3C’s approach (Competitiveness, Capability
and Capacity) is followed by the company for the achievement of sustainable growth. The
company aims to strengthen its delivery capacity with the help of making investment in plants
and technologies. It also develops the workforce for the purpose of enhancing its plant
capabilities along with innovation and implementing new information technologies for
construction purposes. Competitive approach has been adopted by the company along with
effective innovation, improved productivity and reliable services.
Ethical Decision-Making Process of the Company
Gathering and analysis of the data – the entire procedure of understanding the areas
where the applicability of the ethical principles can be undertaken. It first gathers the information
that might explain why a decision necessary. Understanding the data helps a company in
assessing how their decision will change the functioning of the company or its relationship with
its stakeholders. It is the foremost important step in the decision-making process through which
the company analyses all the data and tries to understand it. This step is imperative since the
decision might lead to changes in work processes and service for and to customers. Before taking
any decision related to their business, the company analyses in depth the data and information on
which decision is based.
Consulting Resources and Seeking Assistance – After understanding the necessity of
taking a decision, the gathered information need to be evaluated. In many cases, information can

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be gathered from internal sources. However, in many cases company need assistance from
outside environment. It might also be a good idea to contract an external expert to put the data in
perspective and interpret the information without bias or prejudice. In this next step, the
company prepares a strategy with the help of people and resources around them. A strategy for
the effective tackling of the issue can only be created after consulting from other sources
irrespective of the presence of qualified HR professionals, co- workers or policies and handbooks
(Dane & Sonenshein, 2015). After analyzing the information, the company develops various
options regarding the decision it must make. Having various alternatives helps the company to
choose the best solution for its problem. Alternatives help companies in enhancing their
understanding of various things. After identifying various alternatives, each alternative is
assessed based on their merits, based on their positive and negative impact. This step helps the
company in identifying those options that offer the greatest chance of success in a particular
context. Sometimes it is possible that two options are providing the same level of benefit, in this
case, company access with executive leaders to decide which choice is best for the company.
Thinking About the Lasting Effects – During the identification of the problem and
seeking viable resources, the important point to be considered is the effect it will have on others.
For example, if employees are having issue in reaching office on time, then the manager can
introduce a policy that will change the reporting time of the workers. However, it will result in
the detrimental impact on the clients and other workers (Iphofen, 2016).
Considering Regulations in Other Industries – The development of ethical strategies is
undertaken by the company by considering the standards, regulations and good practices
established by other companies in their sector. The company considers how specific issues are
handled by other companies which assist in learning from their successes and failures. This plays
an important role in making informed decision by the company. The company can also
benchmark itself with similar companies.
Decision Making – After making extensive research, consulting the experts and assessing
the alternatives, final decision is made by the company. According to these experts, a decision is
only a choice until they put it into action. It is advisable to see if the required resources are
indeed available. Before taking any decision, the company conducts a meeting with managers
and leaders of the team to explain the decision to them. It is imperative to share the decision and

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to make everybody understand how this decision will affect the customers or other impacted
stakeholders. For the purpose of resolving widespread ethical issues that have turned into a major
problem of the workplace, decisions are brought to the team at large (Heyler, Armenakis, Walker
& Collier, 2016).
Implementing and Evaluating – The last step in decision-making process, is the evaluation. Did
the company get the outcome it expected and hoped for? What can it learn from the experience?
The lessons learned become sometimes the first step of a new round of decision-making,
especially when the outcome was not to the company’s satisfaction. Selected company checks
the impact of a decision on affected parties as well as on the company. They see whether the goal
is achieved or not accordingly. Based on their findings, they will continue, adjust or abort. In the
last two cases, a new decision-making cycle will be made.
An Eight-Step Guide to Ethical Decision Making
Trevino and Nelson developed a guide to effective decision making which has
incorporated the basic tests found in other ethical tests. The steps are as follows:
Gathering the facts – Gathering the relevant facts should be given first priority at the time of
making an important business decision. Information regarding a number of aspects should be
obtained such as the legal issues involved, rules and regulations of the company governing the
decision. Person making the decision should also have the authority for the same (Goodwin &
Wright, 2014). Gathered facts must be accurate and free from bias. An authorized person needs
to be appointed for gathering facts (Brennan, 2013). The responsible person must be loyal in
gathering facts. Gathering facts is necessary for an informed decision. Based on collected
information, organizations further move to next step (Joebrennan, 2013).
Defining the Ethical Issue – The ethical issues involved in the decision-making process have the
possibility of being more complicated than expected. The concerned authority making the ethical
decision should consult with other person in order to get some help. Common ethical problems
involved in the ethical issues are job discrimination, lying to customers, sexual harassment, using
corporate resources for personal advantage, overstating the capabilities of the product or service,
accepting or offering bribes or kickbacks (Holtzhausen, 2015).

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Identifying the Affected Parties – While taking any decision, it is necessary to identify those
people who will be impacted by the effects of the decision. Decision-making can affect the
customers, suppliers as well as employees of the organization. This step helps in defining which
parties will benefit and suffer from the decision. Decision making in an organization can affect
thousands of people. For example, if a company is taking the decision to shift the plant to a low-
wage country or a country with less stringent environment or labour laws. In this case, many
employees lose their jobs, and even suppliers lose their customers (Trevino & Nelson, 2016).
Identifying the Consequences – Once identified, the next step is to analyze the consequences of
the decision for each affected party. It is not possible to identify all consequence. It is however
feasible to identify most consequences that have maximum probability and have high negative
impact. The consequences having the highest probability of occurrence and potentially the most
damaging outcomes should be identified with utmost priority. In this analysis, both long-term
and short-term consequences must be quantified and taken into consideration. A short-term risk
or negative result sometimes can turn into a benefit for longer term. It might be possible the
company that is closing a plant now, will lead to the survival of the company in the future
(Harper, 2015).
Identifying the Obligations – Obligations are those actions to which companies are bound to
legally. The obligations and reasons for each complex decision should be identified. The
obligations dependent on the nature and type of business. The company’s goal can only be
achieved when the obligations are fulfilled. Compliance with the obligations strengthens a
company’s reputation in the market and protects it from legal and financial harm. An
organization can expand its business only through the strengthening of its reputation in the
market (Nelson, Smith & Hunt, 2014).
Considering the Character and Integrity – In this step, decision is analyzed based on the mindset
and values of those taking these decisions or actions. When an ethical dilemma is experienced,
the first thing to be considered is the judgment of the people regarding the integrity and character
of the business. The decision will be right only when the business is proud of publicly disclosing
the actions undertakes and decision made while facing an ethical dilemma (Romiszowski, 2016).
Considering this step is so important because customers nowadays assess the ethics of a
company, product or decisions when considering buying products or using services.

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Thinking Creatively Regarding the Potential Actions – The companies are required to put
themselves in the creative thinking mode when faced with an ethical dilemma. Several options
should be considered rather than making decision from only two choices. Broad thinking will
assist the organization in evaluating various solutions for implementing change. Diversity should
be adopted in the company. It guarantees different points of views and more scenarios to choose
from (Thome & Ferrell, 2015).
Checking the Intuition – In other words: What does your gut tells you? Intuition is gaining
reliability as a basis for good business decision making. In ethical choices, if the gut is bothering
the company, it means something is not right. In fact, it may be only clue that the company has
facing an ethical dilemma to deal with. It can be a source of sympathy for those affected by a
decision. So, it is important to pay attention to the guts. But, don’t let the guts make the
decision for the company. Sometimes the decisions based on intuitions can put the company into
troubles as they may prove to be wrong (Shapiro & Stefkovich, 2016). Once the company
discovers that it is facing ethical dilemma, it can use the coherent decision-making tools to guide
the decision making.
Trevino and Nelson’s steps used in the Company
The company is familiar with and has considered the steps suggested by Trevino and
Nelson as it assists in making effective ethical decisions. The first two steps of the ethical
decision-making process of Trevino and Nelson has been covered by the company. The company
first defines the problem and makes use of a number of sources for the purpose of collecting the
needed data and information. Then it assesses and analyses the information before concluding
and making any decision (Betsch, 2014). Moreover, the company also thinks of the effect that
will result from such decision which is also suggested by Trevino and Nelson. The parties who
may suffer, or benefit, from the effect of such decisions can be the shareholders, customers,
employees, government and neighboring communities. In other words, the pros and cons of the
decision are carefully assessed by the company, same as that provided by the eight-step guide of
Trevino and Nelson (Schwartz, 2016).

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Trevino and Nelson’s steps not used in the Company
Differentiation between the short and long-term consequences is an important step in the
ethical decision-making process suggested by Trevino and Nelson, however, it is not undertaken
by the chosen organization. It also does not make in- depth analysis of the legal obligations
associated with the ethical problem. The selected company also seems to have little concern
about their public image. Where Trevino and Nelson advocate for creative thinking during the
decision-making process, the concerned organization is more rigid and does not allow creative
thinking (Lehnert, Park & Singh, 2015). In my opinion, companies that are not involved directly
in consumer products can afford to ignore public opinion. It is probably more difficult for a
company that sells their products directly to the consumers, e.g. Nike or Coca Cola.
Therefore, it is fair to say that there are a number of factors which are not undertaken in
the ethical decision-making process of the concerned company.
Recommendations for a Good Ethical Decision-Making Process
The reviewed company should adopt an ethical decision-making process by considering
all the major factors covered by Trevino and Nelson. It is recommended that the company
identifies the need to make ethical decisions and searches for relevant information so that an
informed decision can be made. The collection and analyses of the correct information will assist
the company in formulating alternatives to choose from. The alternative to be selected should be
the one which contributes the most towards the organizational goals. The one leading towards
negative consequences should be left (Snyder & Diesing, 2015). The alternative that protects and
strengthens the integrity of the company should be selected by the organization. After the
selection of the best alternative, the decision should be socialized, executed and implemented. At
the end, the company should review and evaluate the outcome and impact of its decision. The
company should assess whether the action taken has effectively addressed the organizational
needs. If the predetermined targets are not met, then the target, the strategy and the provisioned
means should be revised. If needed, a better plan should be framed (O’ Connor & Aranda, 2016).

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Use of Company Resources
A special relationship exists with the employer of the concerned company which is based
on the degree of loyalty. As a corporate representative, actions are considered as the actions
undertaken by the company. Following are an employee’s responsibilities towards the employer:
Use of Company Reputation
As a corporate representative of the company, it is my responsibility to aim at increasing
the reputation or goodwill of the company by way of working in a way such that the satisfaction
of the customers can be enhanced. If not possible, it should be ensured that no such act is done
which causes a detrimental effect on the reputation. Furthermore, it is the duty of every
employee, that the reputation of the company is not used by the employees for their personal
purposes (Flach, 2014). Furthermore, it is every employee’s responsibility to undertake internal
reputation building by shaping the behaviors and activities such that it formulates corporate
reputation. Reputation building is not a responsibility which is specifically mentioned in the job
description of the employees but it a part of external role behavior. It is also the duty to create
awareness among the newly joined employees regarding their responsibilities to build and
maintain the reputation of the company. In this way, all the employees will be able to contribute
towards the achievement of the corporate goals by the organization with the help of its reputation
in the marketplace (Flammer & Luo, 2017).
Use of Financial Resources
The term financial resources can be defined as the money available with the business in
the form of credit lines, liquid securities and cash for meeting its expenses. Sufficient financial
resources are required to be maintained by every business for the purpose of operating in an
efficient manner and promoting its success. Being a part of the company, it is every employee’s
duty to not disclose the confidential financial information of the company to outsiders or the
industry competitors. In other words, each and every employee should maintain loyalty towards
the company (Harper, 2015). An employee helps the company in fulfilling corporate social
responsibilities - an employee supports the efforts of his company to take up its corporate social
responsibilities, e.g. by undertaking society healthcare responsibility, sponsoring matches,
assisting poor children to get a good education, provide good ambiance and clean environment to
the downtrodden community (Pedersen, 2015). In this way, the company can use its funds for

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the benefits of the society. Suggestions can be provided by the employees regarding the areas
where the company can make investment for obtaining better amount of profit. It is also the
responsibility to perform the finance relating operations in a strict manner and not making
manipulations of the accounts or the related processes. No employee should make personal
contracts in the name of the company and should earn only fair remuneration to which he/ she is
entitled (Crane & Matten, 2016).
Providing Honest Information/ Data
As an employee of the company, it is a responsibility to provide honest information/ data
to the employer and stakeholders. This will assist the company in making informed decisions.
Honesty is considered to be the best policy, it will not only offer better opportunities to the
employees but will also result in immense success of the company. Therefore, the employees are
required to follow the morally correct path. Furthermore, it is the employee’s responsibility to
protect the confidentiality of information regarding the company. The employees are also not
allowed to disclose any information to third parties or the competitors. An employee, however, is
required to disclose the financial position of the company in a truthful manner and without any
manipulation towards the management and shareholders. Since some employees are involved in
the internal operations of the business, they can also predict the future threats for the company. It
is their responsibility to make the company aware of such threats so that needed action can be
taken on timely basis. The stakeholders should also be provided honest and accurate information
regarding the profit and loss accounts of the company so that they can make an informed
decision. In other words, the shareholders and the stakeholders should be provided correct and
honest information so that they take decisions regarding whether to invest in the company or not
(Shekshnia, Ledeneva, & Denisova- Schmidt, 2017).
Ethical Problem
An ethical problem can be defined as a situation or problem that requires a person or
organization to make selection among right (ethical) or wrong (unethical) alternatives. The
smooth functioning of the organization is hindered by the ethical problems to a great extent. If
the responsibilities are not fulfilled by the employees, ethical problems or issues may arise. Such

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ethical problems may result from the actions which are not clarified by the company by listing it
into the policies of the company (Weiss, 2014).
Those are the issues, which requires a person to categorize the performance as right or
wrong. These problems cause the disturbance in the good functioning of the organization. If
responsibilities are not fulfilled according to the requirements, it may lead to an ethical issue.
Any action that is not included or described in the company policies and responsibility may lead
to be an ethical problem (Ruck, 2017).A company faces an ethical problem when an illegal
activity is performed by an employee that hampers the growth of the company as a consequence.
If an employee does not fulfill its responsibilities towards the organization, then the company
faces the ethical problem of whether to retain the employee for his qualifications or to terminate
his employment (Eshleman, 2014). Sometimes, unethical use of the company’s reputation is also
made by the employees which also puts the company into trouble and affects its growth. In such
circumstances, the company is required to consider the utilitarian theory which provides that
value can be created by the organization only by making the use of the best action. Any act or
work being done against the interest of the company will not provide utility to the company.
Therefore, it will result in ethical problem or issue for the company (Su, 2014).
Cost of misuse or abuse of company resources
The employer or the company gets severly affceted as a result of misuse or abuse of the
company resources by the employees. The misuse by the employees can be in any form such as
misusing the compter system of the company or violating the employee permissive use policy.
Moreover, sometimes the postage and office supplies are under theft by the employees. In some
cases, the employees start to run other competitive business out of the company after gaining the
needed knowledge for running the business by working in the company (Pettigrew, 2014). The
company has to bear the cost of such expenses incurred by the employees. Such instances often
result in weakening the financial reserves of the company . Furthermore, the company’s
expenses are increased by its misuse by the employees. Some employees also indulge in the
illegal activities which results in prompting other employees as well. Such activities ultimately
impacts the organztaion by decreasing its productivity. This in turn, also lowers the market value
of the shares of the company (Erskine, 2016). Technology used by the company is often abused