What is a function of many factors including corporate policies on ethics top management leadership on ethical issues?

Managers make decisions on a daily basis that affect their entire organizations. Not only do their decisions impact their own jobs and livelihoods, but they also have consequences (positive or negative) for the business as a whole, including personnel, customers and the community in general. Management ethics are a crucial component of safeguarding individuals and groups from the potential negative consequences of poor managerial decision making.

As students in Master of Business Administration (MBA) programs prepare to take on leadership roles in their organizations, they can learn through coursework and case studies how to make ethical decisions that are in the best interest of their businesses, their employees and the community beyond.

Ethics in business relate to how an organization or corporation handles situations that require moral decisions. Doing business requires making countless decisions on a daily basis — decisions about which vendor to use for various services, which customers to contact, where to target advertising or how to focus on long-term goals. Many of those decisions do not require "right" or "wrong" considerations; they are morally neutral and require strategic thinking, not ethical deliberation.

Some decisions, however, involve choices that could impact people inside or outside the organization in potentially negative ways. In those instances, businesses must have leaders who can make ethical choices that put people ahead of the bottom line. Management ethics involves leaders protecting their employees, customers and society as a whole from any negative consequences that could arise from the actions of their businesses. Management ethics can factor into issues including coworker interactions, conflicts of interest, customer safety, honest advertising, customer information security and the responsible use of corporate resources.

The effects of managerial decision making go beyond any single, isolated decision. Of course, managers must make ethical decisions about each situation that arises; however, so much more than individual outcomes are at stake when a manager makes either an ethical or unethical decision.

How managers respond to moral dilemmas affects how their team members will respond to similar dilemmas in the future. Top leadership in a company can set the tone for ethical leadership, and managers can set a similar tone for employees' actions. If employees see their managers acting ethically in difficult situations (and receiving support from their leadership for doing so), they are much more likely to make ethical decisions themselves. In this way, management ethics has a critical impact on overall business ethics within an organization.

Managers can take practical steps to build ethical teams. They can periodically review organizations' codes of ethics or codes of conduct with their teams, or they can encourage their team to develop their own codes of ethics for department-specific situations. Managers can encourage open communication about ethical concerns among their teams and establish ways for individuals to report concerns without fear of retaliation. By taking time for regular assessment of their teams' business ethics, managers can help team members grow as individuals, which improves the team.

Ethics in management is the responsibility of each manager. Graduate students in online MBA programs can take advantage of coursework in management ethics to build a solid foundation in the principles of ethical leadership they will need throughout their management careers.

Learn more about Southeastern Oklahoma State University's online MBA with a Concentration in Management program.

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CHAPTER 5Ethical Decision MakingSUMMARYThis chapter summarizes our current knowledge of ethical decision making in business andprovides a model so you may better visualize the ethical decision making process. Although it isimpossible to describe exactly how any one individual or work group might make ethical decisions,we can offer generalizations about average or typical behavior patterns within organizations. Thesegeneralizations are based on many studies and at least six ethical decision models that have beenwidely accepted by academics and practitioners. Based on this research, we present a model forunderstanding ethical decision making in the context of business organizations. The modelintegrates concepts from philosophy, psychology, sociology, and organizational behavior. Thisframework should be helpful in understanding organizational ethics and developing ethicalprograms. Additionally, we describe some normative considerations that prescribe howorganizational decision making should approach ethical issues. Principles and values are used byorganizations as a foundation for establishing core values to provide enduring beliefs aboutappropriate conduct. Therefore, we provide both a descriptive understanding of how ethicaldecisions are made as well as a normative framework to determine how decisions ought to bemade.LECTURE OUTLINEI.A Framework for Ethical Decision Making in BusinessA.This model of the ethical decision-making process in business includes ethical issueintensity, individual factors, and organizational factors such as corporate culture andopportunity. All of these interrelated factors influence the evaluations of and intentionsbehind the decisions that produce ethical or unethical behavior.B.Ethical Issue Intensity1.The first step in ethical decision making is to recognize that an ethical issue requires anindividual or work group to choose among several actions that various stakeholders inside oroutside the firm will ultimately evaluate as right or wrong.2.Ethical awarenessis the ability to perceive whether a situation or decision has an ethicaldimension.3.Ethical issue intensitycan be defined as the relevance or importance of an event or decisionin the eyes of the individual, work group, and/or organization.a.The intensity of an ethical issue relates to its perceived importance to the decisionmaker.4.Individuals are subject to six “spheres of influence” when confronted with ethical choices—the workplace, family, religion, legal system, community, and profession—and the level ofimportance of each of these influences will vary depending on how important the decisionmaker perceives the issue to be.a.The perception of ethical issue intensity can be influenced by management’s use ofrewards and punishments, corporate policies, and corporate values to sensitizeemployees.

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