Ethical Decision Making and Ethical Leadership

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Ethical Decision Making for Business 8e
Fraedrich/ Ferrell/Ferrell
C H A P T E R 5
CHAPTER 5

• Ethical Decision Making and Ethical Leadership

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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

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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

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Chapter Outline

• 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

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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

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Framework for Understanding the Ethical Decision
Making Process in Business

• Ethical-Issue Intensity
• Individual Factors
• Organizational Factors
• Opportunity
• Business Ethics Evaluations and Intentions

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Using the Framework to Improve Ethical Decisions

• 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

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Leadership in Corporate Culture

• Leadership The ability or authority to guide and
  direct others toward achievement of a goal
• Leadership styles influence organizational
  behavior

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Leadership Styles

• Coercive leaders
• Authoritative leaders
• Affiliative leaders
• Democratic leaders
• Pacesetting leaders
• Coaching leaders

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Types of Leaders

• Transactional leaders
• Transformational leaders

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Habits of Strong Ethical Leaders

• 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
  Organizations Values
• Ethical Leaders Are Transparent and Actively
  Involved in Organizational Decision Making
• Ethical Leaders Are Competent Managers Who Take a
  Holistic View of the Firms Ethical Culture