Ethical Decision Issues In An Organization Essay


Discuss about the Ethical decision issues in an Organization.


There are several multinational organizations which have faced various ethical issues while taking their business decisions. It has been evaluated that with the increasing ramification of economic changes key managerial persons in business are more inclined towards taking their business decisions which are more profitable and taken for the best interest of the organization at large irrespective of the ethical issues. However, some business decision cannot successfully explain via individual traits because of behavior of free will (Pettey, 2013). Each and every organization has to consider business ethics while taking their business decisions. This could be defined with the example that Australian company Wesfarmers plc made investment of 10 million for promoting non charitable organizations for discharging its corporate social responsibilities. However, these acts have not resulted into higher cost of production of organizations which is not profitable nor provide any kind of benefits to organizations (Shapiro, Stefkovich and Gutierrez, 2014). Therefore, in context with the business, decision taken by Wesfarmers is not profitable for the organization but as per the ethical business terms, Wesfarmers Ltd has taken ethical decision by investing its money in non charitable funds for promoting social and environmental acts. However, there are other several cases which are faced by organizations which are somehow legal but not ethical. For instance, testing products on animals, selling landmines to oppressive regimes which are legally acceptable but as per the ethical term these things are strictly prohibited in business. There are several situations in which it becomes hard to determine what is wrong and what is right. For instance, when an organizations is facing drastic loss in its business functions due to sluggish market conditions it goes for divestment or retrenchment strategies. However, retrenchment of employees is valid as per the laws and business interest but in ethical term it becomes wrong. Employees who have given their lives in the best interest of organizations could not be fired on the basis of cost cutting strategies by the organizations. This business ethics decision could also be determined by using contract law example. For instance

If an organization has entered into contract with the other organizations for delivering of some goods and service on stipulated date and due to some avoidable reason, that other organizations failed to perform its promise then in that case first organizations could sue that other organizations and can ask for compensation (Yeager, 2015). However, as per the legal law, it is valid act but if ethical consideration is taken into account then in that case, first organization could wait for some day and can allow other party to perform its promise. Sometimes these ethical business decisions are influenced by the individual and situational factors. These both factors help decision makers to determine the ethical factors of the particular situations. There are several theories such as descriptive theory, normative theory which helps businessman to determine the ethical issues and dilemma of the case while taking business decisions. It is important to determine the importance of differences in individuals in shaping ethical business decision. Therefore, it is required to evaluate all the internal and external factors of the persons who are going to get affected by the business decisions for the effective level of business decision in organizations. there are several limitation of ethical business decision in organizations such as it decrease the productivity of process system, increase the complexity of business decision, increase in overall cost, create business decision process long and result to cultural bias while overcoming the ethical issues with different level of stakeholders. For instant, employees in the organizations comes from different culture and countries, therefore taking business decisions to set up organizational cultural policies and laws may result to influenced the employees who have different level of culture in organization (Thome, and Ferrell, 2015). These individual factors of employee’s explain the reason why some people may be more swayed than other into unethical business conducts. Now in the end it would be inferred that each and every key managerial persons should take into account all the ethical factors while taking business decisions. If they fail to manage their ethical factors while taking business decisions then in short term they might create value on their business decisions but in future it will destruct the brand image of company and result to non effective business functioning of organizations (Shapiro and Stefkovich, 2016).


Pettey, J.G., (2013). Ethical Decision Making. Nonprofit Fundraising Strategy: A Guide to Ethical Decision Making and Regulation for Nonprofit Organizations, pp.245-253.

Shapiro, J.P. & Stefkovich, J.A., (2016). Ethical leadership and decision making in education: Applying theoretical perspectives to complex dilemmas. Routledge.

Shapiro, J.P., Stefkovich, J.A. & Gutierrez, K.J., (2014). Ethical decision making. Handbook of Ethical Educational Leadership, pp.210-228.

Thome, D.M. & Ferrell, O.C., (2015). Antecedents of Ethical Decision Making in Sales Organizations. In Proceedings of the 1992 Academy of Marketing Science (AMS) Annual Conference (pp. 356-360). Springer International Publishing.

Yeager, A.L., (2015). Ethical decision making. The Journal of the American Dental Association, 146(8), pp.568-569.

How to cite this essay: