Decision making and ethical behavior

Managers control and lead their workforce by making decisions, sometimes the decision making process is really short but in other situations it can take weeks or even months.   The process takes the following steps to be completed:

Define the problem-identify the objective of the decision-gather data and develop potential alternatives-analyze them-select the best alternative-implement decision and establish an evaluation system.

When defining the problem managers should analyze if the problem is really the problem because most of the times problems are only the symptons, not the real problems.

There are several decision-making models and they vary from very rational (rational model) to nonrational ones like the garbage can model. Decision making is not only for managers when leading employees, groups can also use several techniques when taking decisions like: brainstorming, NGT, Delphi technique, devil's advocacy and dialectical inquiry. But they should be aware of some difficulties that may arise and affect decision making in an unconstructive way, such as groupthink, in which members avoid critically evaluating information and simply form quick opinions that go with the group consent.

Managers should know that risk is inherent in any organization, so it is important that they develop appropriate risk management skills without hampering creativity, which is a key element when solving problems and developing new products and ideas.

Managers should also be aware of the ethical issues when making decisions, because as we saw in the film ´´the corporation´´ brand image and customer trust in a company can be seriously damaged when managers don´t do the right thing. To make ethical decisions managers should have the following characteristics:

-They must be able to identify ethical issues

-They must have the confidence to look for different opinions and decide what the right thing to do is.

-They must be disposed to make decisions even if the ethical issue doesn´t have an explicit solution.

There are some individual characteristics that affect ethical behavior and they are: locus of control, Machiavellianism and cognitive moral development.

-Locus of control: this characteristic affects individual behavior because a person with an internal locus of control will believe that his behavior is under his control, therefore he/she is more willing to make more ethical decisions and less willing to hurt others.

-Machiavellianism: it is a term usually used to describe people that manipulate and even mislead others in order to obtain benefits for their own.

-Cognitive moral development: this theory proposes that there are levels of growth in the moral development of humans. 

  I found this really useful checklist that managers should use in ethical-decision making processes: (when finding it difficult to identify a situation as ethical or unethical)

1. Is it legal?
2. Is it fair to all concerned?
3. Would I want someone else to act this way to me?
4. How would I explain my actions to someone else?
5. How will it make me feel about myself?

QUESTION

How can organizations effectively manage both risk taking and escalation of commitment in the decision making behavior of employees?

Like groups, organizations can use a technique similar to the devil´s advocate, by choosing a person that calls the attention of the group members whenever their decisions are becoming too risky. but it would be better if that person is not someone from the group, because then he/she would be in a neutral position and free from group pressures. To prevent escalation of commitment organizations should split the responsibility for the decisions between different individuals, or whenever a manager notices that an employee is comitting too much resources and time to a failing course of action, the manager should provide the employee with an attractive exit.

REFERENCES 

Garret, Jan.theories of cognitive and moral development. Theory of Moral Development in Six Stages.Retrieved on March 4th,2011 from  http://people.wku.edu/jan.garrett/cogmordv.htm

De Bono, E. The risk of creativity(2006).Retrieved on March 4th,2011 from: http://www.management-issues.com/2006/9/19/opinion/the-risk-of-creativity.asp

Ross, Glengarry. Ethical and legal considerations in selling.checkpoints in ethical decision making. Retrieved on March 4th,2011 from
http://www-rohan.sdsu.edu/~renglish/377/notes/chapt03/index.htm

free management library.basic guidelines to decision making and problem solving.(Online).Retrieved on March 4th,2011 from http://managementhelp.org/prsn_prd/prb_bsc.htm

Lankard, Bettina A.Resolving ethical dilemmas in the workplace: A new focus for carrer development.(Online) Retrieved on March 4th,2011 from http://www.ericdigests.org/pre-9220/focus.htm

managing risk.(Image).Retrieved on March 4th,2011 from: http://www.crisisriskmanagement.com/

excutives shaking hands: unethical practices.(Image).Retrieved on March 4th,2011 from:
http://www-rohan.sdsu.edu/~renglish/377/notes/chapt03/index.htm