Download Framework for Understanding the Ethical Decision

Ethical Decision Making for Business 8e Fraedrich/ Ferrell/Ferrell
C HAPTER 5
CHAPTER 5
Ethical Decision Making and
Ethical Leadership
Chapter Objectives
• To provide a comprehensive framework for ethical
decision making in business
• To examine the intensity of ethical issues as an
important element influencing the ethical decision
making process
• To introduce individual factors that may influence
ethical decision making in business
• To introduce organizational factors that may influence
ethical decision making in business
Chapter Objectives (cont.)
• To explore the role of opportunity in ethical decision
making in business
• To explain how knowledge about the ethical decision
making framework can be used to improve ethical
leadership
• To provide leadership styles and habits that promote
an ethical culture
Chapter Outline
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A Framework for Ethical Decision Making in Business
Using the Ethical Decision Making
Framework to Improve Ethical Decisions
The Role of Leadership in a Corporate Culture
Leadership Styles Influence Ethical Decisions
Habits of Strong Ethical Leaders
The Ethical Decision Making Process
• In business, people make decisions differently than at
home
• The ethical decision making process in business
includes ethical issue intensity, individual factors, and
organizational factors, such as corporate culture and
opportunity
Framework for Understanding the Ethical
Decision Making Process in Business
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Ethical-Issue Intensity
Individual Factors
Organizational Factors
Opportunity
Business Ethics Evaluations and Intentions
Using the Framework to Improve
Ethical Decisions
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It is impossible to objectively determine right and
wrong
Having a thorough knowledge about how ethical
decisions are made will not solve ethical problems
Ethical decision making in business does not rely
strictly on the personal values and morals of
individuals
Leadership in Corporate Culture
• Leadership: The ability or authority to guide and direct
others toward achievement of a goal
• Leadership styles influence organizational behavior
Leadership Styles
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Coercive leaders
Authoritative leaders
Affiliative leaders
Democratic leaders
Pacesetting leaders
Coaching leaders
Types of Leaders
• Transactional leaders
• Transformational leaders
Habits of Strong Ethical Leaders
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Ethical Leaders Have Strong Personal Character
Ethical Leaders Have a Passion to Do Right
Ethical Leaders Are Proactive
Ethical Leaders Consider Stakeholders’ Interests
Ethical Leaders Are Role Models for the
Organization’s Values
• Ethical Leaders Are Transparent and Actively
Involved in Organizational Decision Making
• Ethical Leaders Are Competent Managers Who Take
a Holistic View of the Firm’s Ethical Culture