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Managers: Why You Can't Just "Go With Your Gut"

Updated on February 17, 2016
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Ethics Begin Within

Ethics begin within.

Whether through upbringing, cultural ethics established around you, rules, or laws-- ethics begins with treating others how you would want to be treated.

Per George & Jones (2011) “Ethics are the inner guiding morals, principles, values, and beliefs people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave” (p. 107).

This is a start to dealing with ethical dilemmas in management. But ethics can be relative to culture or upbringing, thus, as managers, we need to broaden our ethical viewpoints to ensure all potentially impacted parties are considered before deciding.

Ethics play a large role in both personal and professional lives. Each time a person is confronted with an ethical dilemma he must make a choice to do the right thing, or the wrong thing.

However; choosing what to do is not always black and white. Some ethical dilemmas are far more complex than deciding whether or not to tell someone they dropped a dollar, or to keep it. Many factors must be taken into consideration, including the consequences of the actions the decision will make on others. This especially applies to an organization facing an ethical dilemma, as well as its managers.

Dilemmas: The Guide To Make a Decision

When an ethical dilemma arises, many factors must be considered: what are the laws governing the issues, how will the decision affect stockholders, how will it affect stakeholders, and how will it affect the community (Jones & George, 2011). Stakeholders include employees, investors, customers, suppliers and distributors. As such, when considering the impact on these different groups, the decision is not so easy. The decision a manager makes can impact company goals, its reputation, the community, and customers. This ripple effect can cause harm to people. For these reasons, ethics must have the lead when a manager is choosing to make a decision.

Per George & Jones (2011) “When companies act ethically, stakeholders support them” (p. 117). The support of stakeholders is paramount to a company’s success. Employees facilitate the achievement of goals, investors support capital, customers have buying power and commit to companies they trust. In turn, companies must establish rules and codes of conduct that will create an ethical culture that is seen by all stakeholders. George & Jones (2011) further state “Organizational Ethics are the guiding practices and beliefs through which a company and its managers view their responsibility toward their stakeholders.

Creating an ethical culture can be achieved by creating mission statements, codes of ethics, and rules that foster ethical behavior. When employees have a sense of ethics in a company, their behavior aligns with those guidelines. These guidelines should be considered when a manager is faced with a dilemma. There are four areas to abide by when considering ethical behavior:

  1. the utilitarian rule that is founded upon determining the result will be the greatest good for the greatest number of people,
  2. moral rights which states that whatever decision is made, it will not infringe on the basic rights of people,
  3. the practical rule which states the decision would be accepted by society,
  4. justice which advocates that both harm and good would be equally distributed amongst people without discrimination

In these rules, a decision maker must ask himself “will this be the best option for most people, will it infringe on basic rights of people, will the community find it acceptable, and if there is harm, will it be indiscriminately distributed equally?”

There are four approaches to handling an ethical dilemma:

  1. the obstructionist approach which is not socially responsible
  2. the defensive approach which is when a manager stays within the law and abides by legislative requirements, but they are not socially responsible
  3. the accommodative approach which embraces social responsibility and law following
  4. the proactive approach, which is a socially responsible approach to ethics that takes into consideration the needs of its stakeholders, and stockholders, and uses its resources to promote social responsibility. This type of company researches ways to improve their impact on society positively to exemplify its outstanding ethics.

In addition to ethics rules and approaches there exists a moral stakeholder theory for corporate responsibility. In the principles of corporate rights, a company cannot violate legitimate rights of others to decide own future. And in the theory principles of corporate effects, an organization and management must be accountable for their own decisions as they impact others (Evan & Freeman, 1993). Simply put a company cannot choose to harm others or infringe on their rights for their own benefit, and if they do they should be accountable.

Conclusion

I would like to say everyone has a good moral fiber that guides ethical behavior, decisions, and results. However; that is not the case. If one is uncertain what to do, remembering the obligation he has to the community, to stakeholders, and stock holders can be a start. Understanding justice, moral rights, practicality, and utilitarian focus paired with analytical decision making and social responsibility can assist as well. In the end, that person owes it to a lot more than just the above mentioned groups; he owes it to himself to do the right thing.

References:

Picture: charterforcompassion.org

Jones, G., & George, J. (2011). Contemporary Management. New York City: McGraw-Hill Irwin.

Evan, W. &Freeman, E. (1993). A stakeholder theory of the modern corporation: Ethical Theory and Business. Englewood

Cliffs, NJ: Prentice Hall

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