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Ethics and Decision Making

Essay by   •  August 23, 2019  •  Case Study  •  3,028 Words (13 Pages)  •  12 Views

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In business, there comes a time when every decision maker is faces with an ethical dilemma. Ethical decision making is one of the hardest choice they make as it should consider every stakeholder involved in the process, while making sure that the companies do not compromise their position. The paper will be presented from David’s perspective from the case study. Using the case study, we will not only try and identify the moral issues but also will try to explain what David needs to do, to identify issues as an individual and also as a team member. It will also try and explain what possible barriers David and his team might face before making the decision. For the purpose of the study we will focus on two issues which require a single act.

The Ethical dilemma.

Before we start David, should define what are the ethical issues in the case study. Ciulla (2004) mentions that dealing with ethical issue is a reflective activity as well as a collective process. It is not only considering what is right and wrong in a scenario but also considering one’s right alongside other’s. This makes it complex and difficult in every sense. Ethics heavily relies on individual’s morals, which is influenced by many factors. For example, the personal circumstances of a person, exposure while growing up, values with which they grew up, etc. (Bishop, 2013). This make it quite difficult as a team to approach an ethical dilemma. Looking at the case study the ethical dilemma is whether to reinvest in business for rapid expansion or to assist the co-founders with their personal hardships.

Both sides

Both sides of the ethical dilemma have its pros and cons. Looking at the case study it is very clear that JustJobs as a company is ready to grow and expand. It has enough capital for its next project. This would be a perfect opportunity for the company to ask for more line of credit.

Amy’s argument to expand the company to increase the shareholders’ value is reasonable as it will increase the cash flow by attracting more investments. It is also an incentive for the company to continue their growth and keep the management under pressure to perform (Milano, 2012). Vermaelen (2017), suggest that MBA students are taught to increase the shareholder value to minimize the risk of takeover. Just by increasing the shareholder’s value as it makes the company look unattractive for the bidders. However, Denning (2011) & Vermaelen (2017) do not agree with the idea on working for shareholder’s value. Their argument is that working for the shareholders values are a short-term goal approach. It has developed into a means to extract the value of a company rather than adding value to it (Scott, 2016). Companies should understand that there are more stakeholders involved in functioning of an organization. There are employees, customers, suppliers, the powers of society, tax payers and other stake holders. They just cannot function with a model that only benefits the executives and the stakeholders because it raises ethical issues (Scott, 2016).

If JustJobs decides that they want to distribute the money among the founders then it will help three of the founders with their current situation. Bill and his wife will be able to pay for the medical treatment, Charles will be able to pay off the loan sharks and start over again and David will be able to afford a lifestyle which would help his kids. Distributing the money among the communities, it will also be an additional incentive/help for the community that has participated in the projects. It will ensure long term engagement from the communities and also will assist in maintaining the founding team members support (Vermaelen, 2017). However, it means that the company will not have the capital to grow, it will compromise its self to attract more investors and may affect the constant cash flow that the company has. It will also increase the company’s financial risk & liability and may look like they are reengineering company finances. It can be assumed that the executives are giving themselves a pay rise. When the company started they agreed to have a small salary which allowed them to minimize risk. By spending the cash assets, they might put their 10,000 employees in jeopardy as well (Cochrane, 2004).

Ethical Approaches

There are two ways we should approach an ethical issue. First by individual evaluation of the ethical issue and second by discussing as a group. In this case study a group approach would be ideal as it involves multiple stakeholders. However, it will be unwise if as a decision maker, David is unsure of where he stand with the ethical issue. So, to address the issue David should approach the ethical dilemma both ways.

Individual Approach

David needs able to identify if there is an ethical issue and whether it needs an ethical decision, in the case study. Moral sensitivity to a moral situation varies as individuals and there are many factors that influences them, including the social pressures, individual’s upbringing, age, etc. (Bazerman & Tenbrunsel, 2011). Bazerman (2014), explains that while approaching the ethical dilemma there needs to be careful consideration on identifying challenges and he is not influenced by his biases. Failing to identify the barriers can mislead most individuals.

a. Ambiguity/ Moral intensity

David needs to be clear about the decision he needs to make. During the decision-making process, if he feels there is a small suggestion that is something wrong about the decision, then he must reconsider. David should look into the situation both as a business partner and also as a colleague/ friend. He will need to answer how big is the issue. Often the scenario could provide strong hints but no convincing evidence when it comes to ethical issues (Barkan, Ayal & Ariely, 2015).

b. Motivated blindness/ Social consciousness

David should make sure that his vested self-interest in a situation will make it difficult for him to approach the situation without bias, no matter how well his moral integrity is. He would look around to see if there is support provided by people around him. Motivated blindness is why we like to care and provide the best possible care for our family (Barkan, Ayal & Ariely, 2015).

c. Conflict of interest.

David should know that his desires influences the way he will interpret available information. His desire to allow his family a better life style will definitely influence his decision making. According to Bazerman (2014), extensive research has been

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