Decision Making + Ethical Behavior and International Business

“A company’s value is just the sum

of the decisions it makes and executes”

Decision Making, simply defined as a mental process of selecting the course of action among several exposed alternatives, has been a focus on strategy about five decades. Noorderhaven (1995) defines it as “the process of selection of and commitment to a purpose or plan of action”. This process is becoming more vital to the everyday function of the organization, and the Decisions have to be made in an increasingly complex structure and turbulent world dynamic. No matter how complex this process turned, it is mandatory, being the concept that enables the organization to plan for the future while assessing the present through utilizing a number of systematic tools such as brainstorming, affinity diagramming, force-field analysis, flow charting, planning matrix, unilateral decision making, consultative decision making, voting decision making, and consensus decision making (Akdere, 2009)

Decision making is summated to 2 defining factors: 1. Complexity and 2. Time Presure. Complexity refers to the number and interdependencies of different components that exist in any decision-making process. And Time play a role when the clock is ticking, particularly when stress comes into the picture, sports are a good example for this. As DM is seen as a process, applied in every possible field, it is sensible to be adapt as is needed, that why we can find several models, created in the academic area. Those are models depending on how much de Decision Maker face the Complexity and Time pressure levels: Rational Model, Incremental Model, Boundedly-rational Model, Garbage can model, Delphi Method, Nominal Group Method, and The Environmental scanning method. There is another Method, frequently use, the Management science method. It uses sequential decision-making steps in a clear and precise way (procedure): 1) Define the problem. 2 ) Identify alternatives. 3) Develop some criteria. 4) Evaluate alternatives 5) Choose an alternative. 6) Implement the decision. 7) Analyze the results.

This Matrix graphically explain when to choose a method depending on the Complexity and the time pressure to take de Decision:

Rahman, N., & de Feis, G. (2009). Strategic decision-making: models and methods in the face of complexity and time pressure.

One important issue at DM, that is quiet sensible due to the multicultural differences, is the Ethics Reasoning when making decisions. It is stated that culture background may affect ethics perceptions. Thus, depending on cultural character, an individual can differ in his sensitive to ethical perception in different kind of situations. Cultural differences make people recognize an ethical dilemma depending on “the cognitive conception of what is good or right”.The Global Business environment faces a great challenge: Balance standardized policies with appropriate consideration of norms in diverse cultural context.

Case of Ehitcal DM

Ethics in international business: multinational approaches to child labor

The Case focuses on explaining the corporate codes of ethics in Child Labor Area, are use to enforce the treatment of this issue in the Strategic International Human Resource Management. This case paper studies how 50 multinationals adopt “Universal Ethical Norms”. This analysis attempt to show the adopting process of the norm and the ethical dilemmas that show up in the road, due to the diversity of the context were the case is presented (multicultural character of the companies)

The principal dilemmas were presented, for every context, in profitability and business wealth fare implications. As seen in the next table (see the table at Page 51: http://wase.urz.uni-magdeburg.de/evans/Journal%20Library/Ethical%20Management%20and%20Trust/Ethics%20and%20Child%20Labour.pdf)

This study concluded that a limited number of multinationals, indicated in the case material in this article, have adopted an active policy with explicit codes and policies, while others follow with rather general statements. External pressure, either on the industry as a whole or on individual companies, has sometimes played an important role in this regard. Clear examples are Nike concerning labor conditions from the early 1990s and Shell, forced to overhaul its overall ethical and environmental positioning following Nigeria and the Brent Spar.

Source: http://wase.urz.uni-magdeburg.de/evans/Journal%20Library/Ethical%20Management%20and%20Trust/Ethics%20and%20Child%20Labour.pdf

Wath: DM BP Petroleum Spill (Parody), Importance of DM

http://www.youtube.com/watch?v=2AAa0gd7ClM

Wacht: Explaining Ethics, Tangled?

http://www.youtube.com/watch?v=l-nz0kojLv8&feature=related

http://www.youtube.com/watch?v=ENPHak5fuO0&feature=related

http://www.youtube.com/watch?v=0vbI-P6mFbg&feature=related

References:

Fox, M., Tost, L., & Wade-Benzoni, K. (2010). The Legacy Motive: A Catalyst for Sustainable Decision Making in Organizations. Business Ethics Quarterly, 20(2), 153-185. Retrieved from Business Source Complete database.

Blenko, M., Mankins, M., & Rogers, P. (2010). The Decision-Driven Organization. (cover story). Harvard Business Review, 88(6), 54-62. Retrieved from Business Source Complete database.

(2010). How we do it: Three executives reflect on strategic decision making. (cover story). McKinsey Quarterly, (2), 46-57. Retrieved from Business Source Complete database.

Akdere, M., & Altman, B. (2009). An Organization Development Framework in Decision Making: Implications for Practice. Organization Development Journal, 27(4), 47-56. Retrieved from Business Source Complete database.

Rahman, N., & de Feis, G. (2009). Strategic decision-making: models and methods in the face of complexity and time pressure. Journal of General Management, 35(2), 43-59. Retrieved from Business Source Complete database.

Burciu, A., & Hapenciuc, C. (2010). Non-Rational Thinking in the Decision Making Process. Proceedings of the European Conference on Intellectual Capital, 152-160. Retrieved from Business Source Complete database.

Amber Levanon Seligson and Laurie Choi, 2006 Ethics Resource Center, Critical Elements of an Organizational Ethical Culture

Salvador, R., & Folger, R. (2009). Business Ethics and the Brain. Business Ethics Quarterly, 19(1), 1-31. Retrieved from Business Source Complete database.