Ethical Decision

Ethical Decisions

July 8, 2012

Ethical Decisions

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.