4 Ethics in Managerial Decision Making

4 Ethics in Managerial Decision Making

1. Holistic view of decision making

   • Formulation of the problem
   • Outlining a goal and outcome
   • Generation of alternative courses of action
   • Analysis and evaluation of alternatives
   • Election of one alternative
   • Implementation of the action
   • Evaluation of the outcome

2. 4 interrelated dimensions

   • Instrumental dimension
     • business results sought in performing action
       • cost benefit analysis
   • Relational Dimension
     • Future relations with people affected by decision
       • pros and cons of future relations
   • Internal dimension
     • learning produced by decision and action
       • development and degradation of internal capabilities
   • Ethical dimension
     • evaluation of alternatives and influence of the intentionality
       • Eg. Arbitrage guy trying to advantage one group of people
       • right or wrong, better or worse
   • Interdependent. When one group advantaged, typically another disadvantaged.
     • Evaluations will be congruent and conflicting

3. Decision making

   • bounded rationality
     • mind has limits, information and time limits
   • holistic decision making tries to use prism approach and consider options
   • Practical wisdom + ethical knowledge= Practical rationality in a particular situation leads to moral judgement
   • Gut feeling does have a place in decision making
     • Is wisdom a factor? is so, why do smart people make bad decisions?

4. Triple font of morality theory

   • 1. intention 2. Action 3. consequences
     • only if all of these are good then morally good decision
   • better course of action?
   • intention honest?
   • action intrinsically wrong?
   • action contrary to fair law?
   • does action respect other moral responsibilities
   • will bad side effects be minalmalised
   • are unavoidable bade effects disproportionate
   • NO= morally right!