Evaluate the role that personal ethics plays in making decisions..
After reading the articles and viewing the videos in this week’s resources, prepare a paper in which you address the following: Demonstrate your understanding of decision-making.
Evaluate the role that personal ethics plays in making decisions.
Analyze the decision-making techniques that can be applied in different types of organizations.
Select an organization where unethical decision-making resulted in negative consequences.
Using two decision-making techniques, compare and contrast how using the techniques may have resulted in a positive consequence.
Support your paper with minimum of three (3) scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 5-7 pages not including title and reference pages.
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.
Leader Ethical Decision-Making in Organizations: Strategies for Sensemaking
Chase E. Thiel • Zhanna Bagdasarov • Lauren Harkrider • James F. Johnson • Michael D. Mumford
Published online: 4 April 2012 Springer Science+Business Media B.V. 2012
Abstract Organizational leaders face environmental challenges and pressures that put them under ethical risk. Navigating this ethical risk is demanding given the dynamics of contemporary organizations. Traditional models of ethical decision-making (EDM) are an inadequate framework for understanding how leaders respond to ethical dilemmas under conditions of uncertainty and equivocality. Sensemaking models more accurately illustrate leader EDM and account for individual, social, and environmental constraints. Using the sensemaking approach as a foundation, previous EDM models are revised and extended to comprise a conceptual model of leader EDM. Moreover, the underlying factors in the model are highlighted—constraints and strategies. Four trainable, compensatory strategies (emotion regulation, self-re?ection, forecasting, and information integration) are proposed and described that aid leaders in navigating ethical dilemmas in organizations. Empirical examinations demonstrate that tactical application of the strategies may aid leaders in making sense of complex and ambiguous ethical dilemmas and promote ethical behavior. Compensatory tactics such as these should be central to organizational ethics initiatives at the leader level.
Keywords Cognitive strategies Ethical behavior Ethical decision-making Leadership Sensemaking
Corporate and ?nancial misconduct amidst the recent world ?nancial crises, such as the predatory subprime lending practices of Ameriquest, Goldman Sachs, and IndyMac Bank, have left few wondering whether ethics in leadership should be of greater focus moving forward (Muolo and Padilla 2010; Paletta and Enrich 2008). Government and public of?cials including the Securities and Exchange Commission and The United States Senate have questioned organizational leaders over their dubious and, seemingly, misguided decision-making (Pulliam et al. 2010; Securities and Exchange Commission 2010). They wonder how such gross misconduct could occur even when organizational policies and guidelines exist to safeguard against unethical practices. Is it because today’s leaders have less integrity and are prone to behave unethically? Under the rationalist or moral reasoning approach to leader ethical decision-making (EDM) such a conclusion might be accepted. EDM theories grounded in moral reasoning arguments posit that leaders ?rst recognize ethical problems and then apply their moral code or principles to ethical situations (e.g., Jones 1991; Kohlberg 1981, 1984; Rest 1986)—suggesting that leaders today are either ignorant of the ethical dilemmas present in complex organizations or that leaders possess values or internal codes of conduct that are ‘‘less ethical.’’ The limitation of this theoretical approach, as demonstrated by Sonenshein (2007), is that ethical awareness is grossly misunderstood and under simpli?ed. Moreover, intuitive processes are not recognized or integrated. Sonenshein and others have provided an alternative framework, one grounded in sense making, which lays a foundation for attributing constraining factors to leader EDM and for proposing compensating strategies. Rather than suggest ethical misconduct occurs because leaders today possess less ethical values, ethical misconduct may stem from the dif?culties leaders have with accurately making sense of the dynamic business environment or other cognitive limitations. Sensemaking is the complex cognitive process engaged in when one is faced with complex and high-risk situations (Drazinetal. 1999;Weick1995).Individualandsocialfactors appreciably in?uence sensemaking as environmental complexity increases. Given that contemporary organizations are de?ned by less structure and are generally more ?uid and transitional(Barkemaetal.2002;SchneiderandSomers2006; Uhl-Bien et al. 2007), current leaders may be more prone to unethicalbehaviorbecausetheyfaceethicaldilemmasthatare simply more dif?cult to navigate. Sonenshein’s (2007) model addresses the pervasiveness of organizational uncertainty and equivocality and the processes through which individuals manage these conditions. Throughout this paper we arguethat leader EDM is better understood through a sensemaking perspective, which incorporates how leaders uniquely construct and make sense of ethical issues amidst complex environments.Wealsoarguethatleadersareunderexceptionalethical risk that requires accurate sensemaking for EDM to be effectively executed. While sensemaking models of EDM (e.g., Mumford et al. 2008; Sonenshein 2007) are instrumental in understanding leader EDM in contemporary organizations, they are, however, limited by a lack of emphasis on or incorporation of compensating tactics that promote accurate sensemaking, and subsequent EDM for leaders. These models also fail to adequately represent leader-speci?c ethical dilemmas and the unique ethical risks or constraints facing leaders. The purpose behind our model is to elaborate upon unique constraints facing leaders as an introduction to tactics that compensate for these constraints. Thus, the second purpose
of this paper is to describe four cognitive strategies that are thought to improve leaders’ ability to effectively make sense of their environments during EDM. These strategies are discussed relative to their in?uence on the relationship between leader constraints and sensemaking. Moreover, we highlight the tactics that in?uence strategy effectiveness. Relativetothesestrategies,wearguethatinsteadofpassively relying solely on individual values or moral codes at the leader level, organizations can take a more proactive approach, developing leaders’ sensemaking skills which should help them more comprehensively understand ethical issues and lead to more ethical decisions. Although many additional trainable strategies may exist for improving sensemaking, the scope of the current paper is limited to the four strategies depicted in Fig. 1 which have all shown empirical support for improving EDM. Ethical decision as de?ned by this model recognizesthree important dimensions (Stenmark and Mumford 2011). First, it includes a regard for the welfare of others, including intentionally helping and respecting the rights of others (Darke and Chaiken 2005). Second,itincludesanawarenessofsocialobligationssuchas respecting cultural norms and values as well as performing duties appropriate for a given social position (Schweitzer et al. 2005;U ¨nal et al. 2012). Finally, it involves recognizing personal responsibility (Mumford et al. 2008).
From Rational to Sensemaking Models of EDM
Ethical dilemmas are ill-de?ned problems that have highstakes consequences. Navigating ethical dilemmas requires recognition and proper representation of multiple pieces of information. It also requires intuitive judgment about potential outcomes. Considering the multifaceted nature of ethical events, researchers have proposed moving beyond rational models to those that address intuitive and interpersonal components of EDM (Detert et al. 2008; Gaudine and Thorne 2001; Haidt 2001; Henik 2008; Mumford et al. 2008; Reynolds 2006; Woiceshyn 2011). These researchers have suggested that a sensemaking perspective better represents how individuals recognize and respond to ethical events in organizations. Moreover, rational models have been criticized for not adequately accounting for the issueconstruction processes that are ever-present in EDM and an over-emphasis on moral reasoning as the basis for ethical judgments. Sonenshein (2007) suggested that individuals may not always apply value-based moral reasoning. Moreover, increasing evidence shows that individuals often rely upon intuitions or are in?uenced by non-conscious processes in EDM (Haidt 2001; Woiceshyn 2011), and that moral reasoning is rarely the cause for ethical judgment, but rather imputed for post hoc explanations (Zajonc 1980). Recognizing the ill-de?ned nature of ethical dilemmas and the limitations of rationalist models for accounting for realworld ethical events, Sonenshein suggested that a more ?uid model was needed to more accurately portray how individuals make ethical decisions. Rationalist ethical models also underemphasize the importance of how leaders construct and interpret ethical situations in the ?rst place. Although Jones’ (1991) and Rest’s (1986) models list problem recognition as the ?rst component to determining ethical behavior, these models typically fail to address the variety of interpretations leaders can construct from a single problem (Mumford et al. 2008; Sonenshein 2007). Sonenshein (2007), conversely, suggested that individuals uniquely construct ethical issues based on the equivocal and uncertain environments and instantaneously make intuitive judgments. Sensemaking models of EDM may more accurately represent leader EDM, however. The actual sensemaking process is a multi-faceted process that can be executed more or less effectively (Weick 1995). During sensemaking, individuals engage in multiple complex cognitive processes. First, individuals recognize problems by comparing current and prior situational elements (Reiter-Palmon et al. 1997; Weick et al. 2005). Next, mental models are formed via interpretation of the current situation (Johnson-Laird 1983). Finally, the formation of mental models serves as a framework for information gathering, information evaluation, and contingency planning. Mental representations dictate the extent to which information is attended to and how one will react to that information. Additionally, both internal and external factors can in?uence the execution of these steps in EDM (Mumford et al. 2008).
The inclusion of sensemaking expands current ethical models by acknowledging that the construction of ethical problems from equivocal and uncertain environments is important for in?uencing leaders’ ethical behaviors and recognizes that leaders can construct unique interpretations of the same ethical situation. If sensemaking is faulty, the situation will not be adequately constructed, making it dif?cult for leaders to understand how to respond to the ethical issue. Therefore, relying on value-based moral reasoning to decide whether a course of action is morally right or wrong may not be the most important factor for predicting ethical behavior and may not even be possible in situationally strong complex environments; instead, adequately making sense of the situation is paramount for facilitating EDM and behavior.
Leaders Under Ethical Risk
From a constructivist viewpoint, sensemaking is critical to leader EDM because ethical dilemmas are inherently complex, have ambiguous implications, and are often dif?cult to recognize. Moreover, an organizational backdrop complicates recognition and representation of ethical events as these environmental circumstances are increasingly complex. For