STEP 6: Porter's Five Forces/ Strategic Analysis Of The Trevino Nelson Ethical Decision Making Case Study: To analyze the structure of a company and its corporate strategy, Porter's five forces model is used. What about a pregnant womanshould she count as two people? - Step 6: Implement the decision. She has an absolute advantage on technical issues, but her comparative advantage is in dealing with external constituencies, and more value will be created when she focuses her attention there. The list of moral rightsincluding the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so onis widely debated; some argue that non-humans have rights, too. Chapter 3: Deciding Whats Right: A Psychological Approach The model offers insight into First, organizations could use assessment of how managers think about ethical dilemmas and cognitive moral development when selecting provides a way to typologize real world decision- managers for positions in which ethical decision making phenomena based on Kohlberg's empiri- making is an important part of the job. We come much closer to rationality when we use System 2. The authors offer eight steps to integrate these three types of analysis: (1) Gather the Facts, (2) Define the Ethical Issues, (3) Identify the Affected Parties, (4) Identify the Consequences, (5) Identify the Obligations, (6) Consider Your Character and Integrity, (7) Think Creatively about Potential Actions, and (8) Check Your Gut. Journal of Business Ethics 50(3): 253262, Singhapakdi A., Vitell S. J. The authors go on to describe how an ethical culture may develop and change, from ethical to unethical or vice-versa. I hope that the North Star Ive described influences you as a leader. (1991) Research Note: Selected Factors Influencing Marketers Deontological Norms. In academics, there is a growing effort to promote open science (Nosek et al., Reference Nosek, Alter, Banks, Borsboom . This is easy to see in a common family negotiationone in which Ive been involved hundreds of times. Unlike the utilitarian lens, which sums up and aggregates goods for every individual, the common good lens highlights mutual concern for the shared interests of all members of a community. Figure 10.1 Interactions model of ethical decision-making in organisations Source: Trevino, 1986. It is influenced by the characteristics of individuals (e.g., personal differences, cognitive biases) and by the characteristics of organizations (e.g., group pressures, culture). Rational decision model. Define the ethical issues 4. Selecting the right job, house, vacation, or company policy requires thinking clearly about the trade-offs. The Free Press, New York, Jones E. E. (1985) Major Developments in Social Psychology During the Past Five Decades. Use of corporate resources: because you represent your company, your actions can be regarded as those of the corporation. By that calculus, if the car must choose between sparing the life of its single occupant and sparing the lives of five people in its path, it should sacrifice the passenger. Suspecting that women were being asked more often than men to perform tasks like these, Linda asked four of her female colleagues to meet with her to discuss her theory. A . Fairness, benevolence, self-interest, and principles (or rules) may all form the basis for climates that affect employee behavior. Justice is the idea that each person should be given their due, and what people are due is often interpreted as fair or equal treatment. Imagine that you and your partner decide one evening to go out to dinner and then watch a movie. In: Lechona T., (ed. The ethical concern in this situation is the clinician's defense of the patient's diagnosis. (For further elaboration on the rights lens, please see our essay, Rights.). Home. For centuries philosophers have argued over what constitutes moral action, theorizing about what people should do. Even when they know that the size of the pie isnt fixed, many negotiators worry that if they share the information needed to create value for all, the other party may be able to claim more of the value createdand they dont want to be suckers. 7 In this framework, the ethical decision-making . Some work involves frequent moral conflict. The second problem is that the different lenses may lead to different answers to the question What is ethical? Nonetheless, each one gives us important insights in the process of deciding what is ethical in a particular circumstance. Systematic cognitive barriers can blind us to our own unethical behaviors and decisions, hampering our ability to maximize the value we create in the world. 2. And in too many countries, finding collective value is no longer a national goal. Gather the facts 3. To have a fully aligned ethical culture, the systems must all send employees consistent messages that point in the direction of ethical behavior. Journal of Applied Psychology 63(4): 451457, Hegarty W. H., Simms H. P. Jr., (1979) Organizational Philosophy, Policies, and Objectives Related to Unethical Decision Behavior: A Laboratory Experiment. Ethical debacles are a regular occurrence, so business ethics is far from a fad. Ethical: responsible executives have an ethical duty to care about multiple stakeholders because it is the right thing to do. Section IV: Organizational Ethics and Social Responsibility This utilitarian view, Bazerman argues, blends philosophical thought with business school pragmatism and can inform a wide variety of managerial decisions in areas including hiring, negotiations, and even time management. According to Northouse (2015), "Ethics are concerned with the kind of values and morals an individual or society finds desirable or appropriate" (p. 262). Requests for reprints should be sent to Linda Klebe Trevino, Department of Management, Texas A&M University, Col-lege of Business . Academy of Management Review, 11, 601-617. Part 3. ETHICAL DECISION MAKING PROCESS 1. The model combines individual variables (moral develop-ment, etc.) and how to improve the ethical decision making capabilities of their employees. This often involves analyzing multiple solutions at once to choose the one that . Ethical decision-making (EDM) descriptive theoretical models often conflict with each other and typically lack comprehensiveness. Its an ongoing phenomenon that must be better understood and managed and for which business professionals must be better prepared. The 2008 financial crisis has created an environment of outrage and mistrust like no other. From the Magazine (SeptemberOctober 2020). As with awareness, neuroscience research is finding that ethical judgment is a unique form of decision-making. Before a model can be utilized, leaders need to work through a set of steps to be sure they are bringing a comprehensive lens to handling ethical disputes or problems. Do I know enough to make a decision? Whatever your organization, Im guessing its quite socially responsible in some ways but less so in others, and you may be uncomfortable with the latter. A neurocognitive model of the ethical decision-making process: Implications for study and practice. Many view it as an economic idea; I think of it as a guide to ethical behavior. . All the leading books on managerial negotiations highlight the need to create value while managing the risk of losing out. The Ethical Decision-Making Process. If the goal is simply to maximize value, the automobiles should be programmed to limit collective suffering and loss, and the people in the car shouldnt be accorded special status. Have I identified creative options? Identify the affected parties (stakeholders) 5. Reynolds, S. J. Its approach is pragmatic, assuming that organizational ethics is about human behavior. by. Are the concerns of some of those individuals or groups more important? The location of your home or its size? Managers who care about the value they create can influence others throughout the organization by means of the norms and decision-making environment they create. Primary contributors include Manuel Velasquez, Dennis Moberg, Michael J. Meyer, Thomas Shanks, Margaret R. McLean, David DeCosse, Claire Andr, Kirk O. Hanson, Irina Raicu, and Jonathan Kwan. Throughout the text, Trevio and Nelson introduce practical suggestions to guide organizational culture toward this goal (e.g., audits of cultural systems)and address difficulties and pitfalls that lead to the breakdown of ethical systems. What individuals and groups have an important stake in the outcome? The crisis launched an epidemic of cynicism about business, especially in the U.S., built on the medias long-standing infatuation with corporate villainy. An interactionist model of ethical decision making in organizations is proposed. This is a preview of subscription content, access via your institution. These two ethical decision-making model steps are identical to each but differ on the detailed instruction on how the steps are to be done or used in actual case. volume73,pages 219229 (2007)Cite this article. moral. This comparatively trivial example illustrates how to create value by looking for trade-offs. Seven Steps to Ethical Decision Making. The Forester-Miller and Davis essay presents a five-step paradigm for making ethical decisions. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Trevino, Linda Klebe; Nelson, Katherine A., 1948- . But to the extent that you care about others and society at large, your decisions in negotiation should tilt toward trying to create value for all parties. Capitalism will succeed only when firmly tethered to a moral base, which Adam Smith knew well. Most of us are ethically inconsistent as well. Journal of Marketing Research 30(1): 7890, Janis I. L., Mann L. (1977) Decision Making: A Psychological Analysis of Conflict Choice and Commitment. Ethical decision making in organizations: A person-situation interactionist model. Tversky, A., & Kahneman, D. 1982. The authors offer further frameworks to examine how leaders create, maintain or change culture: Beyond specific systems, employees perceptions of broad climates within the organization are extremely fundamental and influential. California Management Review 41(4): 4564, Ferrell O. C., Gresham L. G. (1985) A Contingency Framework for Understanding Ethical Decision Making in Marketing. In: Lindzey G., Aronson E. (eds), The Handbook of Social Psychology. Journal of Macromarketing 9(2): 55G64, Forte A. John Wiley & Sons, Inc.,5th ed. But the largest influence on corporate ethics programs has been from the U.S. This review spotlights research related to ethical and unethical behavior in organizations and discusses recent advances in the field, proceeding from a more macro to a more micro view on (un)ethical behavior and covering ethical infrastructures, interpersonal influences, individual differences, and cognitive and affective processes. Consider two questions posed by the psychologist Daniel Kahneman and colleagues: Their research shows that people who are asked the first question offer about the same amount as do people who are asked the second question. Most employees look outside themselves for guidance about how to think and act. Ethical decision-making style: people prefer prescriptive ethical theories based on our tendencies toward idealism (concern for others welfare) or relativism (emphasis on situation-dependency). 1) gather the facts. She has co-authored two editions of the text ``Developing Managerial Skills in Organizational Behavior''as well authored or co-authored a significant number of professional articles and presentations related to management and management education. Journal of Business Ethics 43(4): 389394, Deal T. E., Kennedy A. The three main aspects of her model are explained below. Could this decision or situation be damaging to someone or to some group, or unevenly beneficial to people? System 1 is our intuitive system, which is fast, automatic, effortless, and emotional. Ethical decision-making is normative in nature, and ethical decisions are not solely driven by the goal of profit maximization. 2006b. This document is designed as an introduction to making ethical decisions. The authors believe that ethical behavior is closely intertwined with employee engagement and present a framework of three groups along an engagement continuum: There are four drivers of engagement: (1) line of sight (understanding the companys values, operations and strategic direction), (2) involvement, (3) information sharing, and (4) rewards and recognition. Ethical decisions are made using moral characteristics such as compassion and honesty, with a focus on the kind of people we are when we make a decision. But he also engaged in miserly, ineffective, and probably criminal behavior as a business leader, such as destroying the union at his steel mill in Homestead, Pennsylvania. Rules and consequences are considered in the context of assessing the actors integrity, as defined by a relevant moral community that holds you to the highest ethical standards. 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. The process described in the model is drawn from Janis and Mann's [1977, Decision Making: A Psychological Analysis of Conflict Choice and Commitment (The Free Press, New York)] work describing the decision process in an . People follow the behavior of others, particularly those in positions of power and prestige. We donate on the basis of emotional tugs when we consider charities in isolation; but when we make comparisons across charities, we tend to think more about where our contribution will do the most good. Scuba Certification; Private Scuba Lessons; Scuba Refresher for Certified Divers; Try Scuba Diving; Enriched Air Diver (Nitrox) This includes maximizing aggregate well-being and minimizing aggregate pain, goals that are helped by pursuing efficiency in decision-making, reaching moral decisions without regard for self-interest, and avoiding tribal behavior (such as nationalism or in-group favoritism). Chapter 2: Deciding Whats Right: A Prescriptive Approach We created a process whereby claimants use a short video taken with a phone to describe a claim. An ethical dilemma exists as the moral issue surrounds the abuse that was experienced by Precious and the emotional strain that her mother was experiencing by then. They have suggested a variety of different lenses that help us perceive ethical dimensions. Upgrading the Ethical Decision-Making Model for Business by David W. Gill (2004) Published in Business and Professional Ethics Journal 23.4 (Winter 2004): 135-151 One of my favorite statements about decision-making was in Woody Allens "My Speech to the . 5) identify the obligations. His company, Slice, sells short-term insurance to people who run home-based businesses. The deliberative system leads to more-ethical behaviors. Using this model helps avoid unethical alternatives and unattractive consequences. Automobile manufacturers need to reckon with such difficult questions in advance and program their cars to respond accordingly. providing a consistent case analysis based on the Five Components of Leadership Model, readers benet from a comprehensive approach to understanding ethical leadership. What are the relevant facts of the case? Trevinos model uses Kohlbergs stages of moral development in the cognition stage in providing a basis from which to examine the individual and situational factors that make his approach unique. What (if any) follow-up actions should I take. Journal of Business Ethics 6(3): 265280, Carson T. L. (2003) Self-Interest and Business Ethics: Some Lessons of the Recent Corporate Scandals. Journal of Business Ethics 25(3):158204, McCabe D. L., Trevino L. K., Butterfield K. D. (1996) The Influence of Collegiate and Corporate Codes of Conduct on Ethics-Related Behavior in the Workplace. The process described in the model is drawn from Janis and Manns [1977, Decision Making: A Psychological Analysis of Conflict Choice and Commitment (The Free Press, New York)] work describing the decision process in an environment of conflict, choice and commitment. Academy of Management Review 11(3): 601617, Trevino L. K., Brown M., Hartman L. P. (2003) A Qualitative Investigation of Perceived Executive Ethical Leadership: Perceptions from Inside and Outside the Executive Suite. In my view, leaders answering ethical questions like these should be guided by the goal of creating the most value for society. 2. Focusing on connecting intimate interpersonal duties to societal duties, an ethics of care might counsel, for example, a more holistic approach to public health policy that considers food security, transportation access, fair wages, housing support, and environmental protection alongside physical health. Aiming in that direction can move us toward increasing what I call maximum sustainable goodness: the level of value creation that we can realistically achieve. 1. System 2 is our more deliberative thinking, which is slower, conscious, effortful, and logical. The concept of bounded rationality, which is core to the field of behavioral economics, sees managers as wanting to be rational but influenced by biases and other cognitive limitations that get in the way. The chapter includes analysis of many of the more memorable business ethics cases (e.g. A true ethical dilemma puts two or more right values in conflict. Awareness will more likely arise if prompted by social environment, ethical language framing the situation, or the potential for serious harm to others. The model, illustrated through an HR case example, serves as a . Typically, negotiation analysis focuses on what is best for a specific negotiator. These scientists have shown that environment and psychological processes can lead us to engage in ethically questionable behavior even if it violates our own values. We may not agree on what constitutes the common good. These strategies include building trust, sharing information, asking questions, giving away value-creating information, negotiating multiple issues simultaneously, and making multiple offers simultaneously. Each of the lenses introduced above helps us determine what standards of behavior and character traits can be considered right and good. Conversely, using it wisely to increase collective value or utility is the very definition of ethical action. If so, how? Based on Kidder's checklist and the discussion above, Table 2 proposes a revised model for sequencing the ethical decision making process, identify- ing morally relevant issues, clarifying values, seeking ethical alternatives, and making and justifying ethical decisions in media ethics cases. Consider your character and integrity 8. The philosopher and psychologist Joshua Greene has developed a parallel two-system view of ethical decision-making: an intuitive system and a more deliberative one. If you are author or own the copyright of this book, please report to us by using this DMCA 3. Otherwise honest people may view deception in negotiation with a client or a colleague as completely acceptable. Thus, Trevino (1986) suggests that when the work requires an individual to engage in complex role taking and . People tend to fulfill assigned roles, which may reduce awareness of personal responsibility through deindividuation. 3) identify the affected parties. Because of this, teachers face ethical dilemmas in the course of their daily work. 3. (2004) Business Ethics: A Study of the Moral Reasoning of Selected Business Managers and the Influence of Organizational Ethical Climate. (1986) Ethical Decision Making in Organizations A Person-Situation Interactionist Model. The chapter lays out examples to illustrate how people have multiple ethical selves, behaving differently depending on context. 1. 7) thinking creatively about potential actions. ABSTRACT. (Sims 2005, pp.651-662). 1. - Step 3: Identify alternatives. it. 4. Im guessing that you largely agree with these goals, even if you hew to philosophies that focus on individual rights, freedom, liberty, and autonomy. 5. Similarly, in research with the economists Iris Bohnet and Alexandra van Geen, I found that when people evaluate job candidates one at a time, System 1 thinking kicks in, and they tend to fall back on gender stereotypes. Ethical Systems with situational variables to explain and predict the ethical decision-making behavior of individuals in organizations. Common Good - Decisions that protect the common good and promote higher well-being are the most ethical ones. Journal of Business Ethics 9(3): 233242, Trevino L. K. (1986) Ethical Decision Making in Organizations: A Person-Situation Interactionist Model. HBR Learnings online leadership training helps you hone your skills with courses like Ethics at Work. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. The authors suggest three reasons that corporations should care about social responsibility: Academy of Management Journal 42(1): 4157, Whipple T. W., Swords D. F. (1992) Business Ethics Judgments: A Cross-Cultural Comparison. The resulting integrated model aids in understanding the complexity of the decision process used by individuals facing ethical dilemmas and suggests variable interactions that could be field-tested. Trevino's person-specific interactionist model Trevino's (1986) model postulates that ethical decision-making within an organisation is based on the interaction of cognitions, individual moderators and situational moderators, as illustrated in Figure 10.1.