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Barriers to Ethical Managerial Decision-Making

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This essay is an attempt to describe the hurdles like social and cultural system, whistleblowing, corruption, groupthink…etc that are being faced by the managers while making ethical-managerial decisions. This paper also provides some recommendations for dealing with these obstacles.

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Obstacles encountered by the managers while making ethical decisions

The managerial decision-making is not an easy task. When it comes to ethical issues the issue becomes more complicated as there are so many obstacles which affect the proper decision making. Business involves so many uncertainties, and making decisions is very difficult. Sometimes a manager may be required to take a decision which is against the ethics. Mangers are finding it difficult to make decisions in such a way that, it does not affect the interest of shareholders, debenture holders, creditors, employees, consumers…etc. Before taking ethical decisions they have to think deeply as it has strong influence on the well-being of the society, employees and consumers. (Trevino 2009). The main barriers that are included in ethical decision-making are social responsibility, clash of interests of different parties, corruption, safety of the customer when using company’s products, groupthink, whistleblowing etc. (Sims 2005, pp.651-662).

Some of the obstacles are briefly explained below

Social and cultural barriers

Social and cultural factors have a strong influence on the ethical decision-making. A decision that is being taken by the management may be harmful to the society or the society may think that it may hurt their feelings them. The society will protest against such decisions and ultimately will turn against the company. Some cultural factors may also act as hindrances in ethical decision-making. Cultural factors include ideals and traditions, religion, legal framework, respect for each other, loyalty, property rights…etc. (Vitell, Nwachukwu & James 2004, pp.753-760). There may be differences in the culture of different people, religions and locations. For example a decision of the management may harm the interest of a particular religion. Therefore, the management faces difficulty while taking a decision which involves ethical issues.

Clash of interests of different parties

The clash of interests is another major barrier in ethical decision-making. Sometimes some decisions may raise some questions such as, does it affect the interest of different parties like shareholders, creditors, customers…etc, is there any bias in decision making, is there any clash of private interest of the manager who makes the decision and the official or organizational interest…etc. It is commonly known fact that gaining benefits at others’ expense is unethical. All these acts as barriers for the managers while making ethical decisions. (Ethical decision making and conflicts of interest: a guiding checklist for councilors, officers and community committees).

Corruption

Corruption is another obstacle in ethical decision-making. The managers will really face a dilemma when there is corruption in an organization. Whether they have to think from the organization’s side or whether they have to think from the colleague’s side. For example “should a secretary keep quiet when a supervisor adds personal expenses to business-reimbursement claims?” (Guy 1990). Some managers may not be much aware of impact of their decisions. “They may fail to understand that their involvement in corrupt acts can lead to violation of fundamental stakeholder issues such as human rights.” (Roy & Mohan 2006).

Safety of the customer when using company’s products

The consumers are highly conscious of the safety of the products. The managers are expected to ensure the safety of products by way of achieving some certifications from product quality and safety checking organizations. If the managers make any adjustments with organization it is unethical. The managers may be facing a dilemma in such a way that there may be pressure from the side of the company to get the quality certificates. And at the same time the product might not be meeting the required standard or quality.

While making important decisions relating to the products, the production managers may have to face some obstacles like whether or not to use the quality mark during the process of testing (that means before getting the quality certificate), whether to keep or destroy the old records and some other problems related to the use of quality mark. (McBain & Balassone 2008).

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Groupthink

It is another barrier in the ethical managerial decision-making. Groupthink can be defined as “a collective pattern of defensive avoidance.” (Hart, Stern & Sundelius 1997, p.58).

There may be some groups of employees who create barriers in ethical decision-making. For example as part of the groupthink, fraud in accounting entries may be committed by the people who are responsible for keeping up-to-date and correct accounting records. By doing this the group may be availing some benefits. This is a kind of cheating of different stakeholders. They are doing an unethical activity of availing the benefits at the expense of others. The managers will really face it difficult to make decisions in situations wherein the groupthink is common.

Whistleblowing

Whistleblowing is the process of informing about the wrongdoing by an employee in an organization. The person who does whistleblowing is called whistleblower. This concept raises two questions – whether an employee needs to disclose the wrongdoings for the benefit of the organization or keep it secret for protecting the colleague. When an employee finds misconduct by colleague, he faces a dilemma. He has three options such as:

  1. Ignore it
  2. Deal directly with the wrongdoer,
  3. Report it to the concerned authority. (Barnett, Bass & Brown 2004, pp.1161-1174).

From the managerial perspective making decisions in such situations is very difficult.

Addressing the barriers in ethical managerial decision-making

The managers are supposed to deal with the obstacles in decision-making very intelligently and efficiently. About the cultural and social factors, managers have to be very much careful while making sensitive decisions affecting the society. They have to consult the leaders of the society before making such decisions. The managers also have to think from the point of view of society and also, they have to study the implications of their decisions in the society. The managers should be in a position to make decisions by taking into consideration the difference in the culture of different places and different people. If a manager is dealing with the personal interest and the organizational interest, there will not be any clash of interest. The barriers related to safety of products can be overcome in such a way that managers should not give permission to the concerned people for distributing or marketing the product before getting the quality certificates or before passing the quality test. The managers must create an organizational work environment where each worker works in co-operation with each other for attaining the organizational goal and thereby achieving the career goal of employees. The managers can easily deal with the problems of whistle-blowing by making a friendly working environment.

References

Barnett, Tim, Bass, Ken & Brown, Gene 2004, Religiosity, ethical ideology, and intentions to report a peer’s wrongdoing, Journal of Business Ethics, vol.15, no.11, pp.1161-1174, Web.

Ethical decision making and conflicts of interest: a guiding checklist for councillors, officers and community committees, 2009. Web.

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Guy, Mary, Ellen 1990, Ethical decision making in everyday work situations, Greenwood Publishing Group, Web.

Hart, Paul’t, Stern, Eric, K & Sundelius, Bengt 1997, Beyond group think: political group dynamics and foreign policy making, University of Michigan, Web.

McBain, John & Balassone, James 2008, Product safety case studies, Santa Clara University, Web.

Roy & Mohan, Achinto 2006, Corruption related decision making in the multinational business arena, UC Research Repository, Web.

Sims, Ronald, R 2005, Linking group think to ethical behaviour in organizations, Journal of Business Ethics, vol.11, no.9, pp.651-662, Web.

Trevino, Linda Klebe 2009, Ethical decision making in organizational: a person situation integrationist model, JSTOR, Web.

Vitell, Scott, J, Nwachukwu, Saviour, L & Barnes, James, H 2004, The effects of culture on ethical decision making: an application of Hofstede’s typology, Journal of Business Ethics, vol.12, no.10, pp.763-750, Web.

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