Ethical Decision Making for Business 8e Fraedrich/ Ferrell/Ferrell

CHAPTER5
CHAPTER5

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

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

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

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

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

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

Types of Leaders
Transactional leaders
Transformational leaders

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