Every individual is faces with ethical decisions every day in both their personal and professional lives. To avoid making unethical decisions, one must know what leads to poor decision making. Once a person knows what leads to the poor decision, they must find ways to resist making an unethical act. A person cannot make the right choice if they do not know how to avoid it. A leader must also know how to inspire ethical decisions within their staff. This paper covers ways to avoid making poor decisions and ways to making ethical ones.
Poor Decision Characteristics
While there are many ways one can be ethical, Mallor, Barnes, Bowers, & Langvardt suggest there are three essential traits one makes when a poor decision is made (1966/2010, p. 115). The fist common mistake of poor decision-making is when one forgets the goal that was previous set by him or herself or the organization. A person or the organization must keep all of their goals in mind when making decision, and many times individuals forget these goals. Overconfidence is another trait of poor decision-making. One aspect of overconfidence being that nobody will notice a little mistake made for correction later. For example, a manager may take a few dollars from the business expecting to put it back later and then a few more and later still more. However tomorrow never comes and before long, that first few dollars turns into hundreds or thousands. In the organization of my employment a small loan company as well as the owner’s stock car team on the side exists.
The loan company sponsors the racing, and a year ago, the organization moved from the Midwest to the heart of NASCAR country. Once the owner arrived, he decided to buy the best equipment for the race team using funds from the loan company. While the spending spree may have been ok in the past, the owner did not take into account that need of hiring and training of new employees. When the new employees made poor lending decisions, combined with his spending, the organization almost went bankrupt. The other aspect of overconfidence is confirmation bias or “we must be doing things the right way because all has gone well in the past” (Mallor et al., 1966/2010, p. 116).
The overconfidence shows in the example of the overspending by the owner of the organization’s statement: “Oh, it will all work out, because it always has”. The last trait of poor decision-making occurs when the issues are too complex and not realized for their complexity. Individuals may not realize the complexity of the issue and underestimate the issue. In the lending business, should we as an organization not know the laws of each state when it comes to lending, we can face serious legal issues should we make a loan to a resident of a state in which short term lending, such as we do, is illegal.
Resisting Unethical Acts
Resisting unethical acts, many times, is easier said than done. In order to do so, a person must first recognize that what they are about to do is unethical (Mallor et al., 1966/2010, p. 116). The first way to avoid making an unethical decision is to buy some time before acting. An individual must take some time, analyze the situation, and if need be, find other ways to accomplish the task at hand without being unethical. The next tactic is to seek out help from a mentor or support group. While an individual may not have the ethical solution to a problem at hand, many times others will.
There have been many times when I have sought the advice of others prior to making a decision, which I think may be unethical. Using the previous example of making a loan to someone in a state in which it is illegal, I may ask the advice of a co-worker before I make the loan. The last way to resist making an unethical act is to find a better solution in which everyone wins. This goes hand in hand with one buying some time before acting upon an unethical act. Analyzing the situation, and getting all the facts may lead to a decision in which one makes an ethical decision while meeting the requirements of the direction one has been given.
When leading other individuals, it is imperative that one be ethical themselves, in order to lead ethically. A person, who is unethical, is going to inspire unethical behaviors in others. When members of an organization see that nothing happens to their leaders, others will fall into the same unethical behavior and rationalize that what they are doing is ok as well (Mallor et al., 1966/2010, p. 119). Leaders must set the example of ethical behavior for others. Leaders must also communicate ethical values of the organization to the staff.
How can an individual know what they are doing is unethical in the eyes of the organization, if they do not know what is expected of them? The leader must continually communicate to the staff and remind them of what is ethical behavior. Another way to lead other ethically is to reinforce ethical behavior in the staff. When a leader sees an ethical decision made by a staff member, recognize their action. This will help that employee continue to make the right decision, and show others what is ethical behavior.
In order to be ethical, one must know what makes ethical and unethical decisions in their lives. Recognizing what makes an unethical decision, and ways to avoid making them, will help one to makes the right choice. Analyzing the situation, weighing other options and alternatives will help one to make an ethical decision. For a leader, these tools will also help their staff make ethical decisions as well.
Mallor, J., Barnes, A. J., Bowers, T., & Langvardt, A. W. (2010). Business law; The ethical, global, and e-commerce environment (14th ed.). New York: McGraw-Hill Irwin. (Original work published 1966)