Ethical decision making in business: organizational positions on human rights and responsibility

Business Ethics

The organization should take a position that it is okay to pursue its actions on the issue. Hartman (2013) makes the point that the business, and the people within the business, should follow a path that emphasizes selfishness. This selfishness is an expression of individual liberty and should not be constrained by the wishes of others, so long as the actions do not harm others. Given that actions are apt to have unpredictable and unknown outcomes, the only reasonable response is either to never do anything, or to do what you need to do.

The company should have, however, an ethical code that helps to guide decisions. It not reasonable that the organization should approach a complex ethical dilemma with an ad hoc system of solutions, but rather it should focus on developing a system by which managers within the company should know what their course of action should be (Stevens, 2008). This is because within a company, managers are agents for the shareholders. Thus, managers cannot simply be left with the impression that they should do whatever is in their most selfish interests, because that might lead to short-sighted actions that are not in the best interest of the company.

Thus, the organizational position cannot be developed without having a fundamental code of ethics that would enable stakeholders throughout the organization to apply a common set of ethical principles. Enhancing shareholder wealth is a good starting point, but many organizations will take the idea further. In addition, there are different interpretations of what enhancing shareholder wealth might mean -- for example the debate between long-run and short-run shareholder wealth enhancement -- so the organization should always have a set of principles and a code by which to make such decisions.

Rhode (2006) argues that the organization should have a set of principles by which it conducts business, and that this set of principles should come from the leadership on downwards throughout the organization. Again, this highlights the need for the set of principles to be embedded in the corporate culture, and for the set of principles to be taught throughout the organization. It is entirely reasonable, then, that the position developed for the organization should be developed with the interests of many different stakeholders. Senior management, for example, must be involved, because the position will require buy-in from that level in order that the rest of the organization should take its cues from the behaviors and leadership of the senior management team.

Ethical decision-making, when done at the organizational level, therefore contains several different components. First, it is not myself, nor any single other person who can devise a moral or ethical framework by which decisions are made. Multiple stakeholders need to be involved, and there needs to be a consistent level of buy-in throughout the organization, which is to say that it should be embedded in the culture.