Ethical decision making is a process that involves making choices based on provided alternatives in a way consistent with ethical principles. Application of the ethical tenets during decision-making includes eliminating unethical options to enhance chances of selecting the most acceptable ethical alternative. Ethical decisions set the ground rules for the generation and sustenance of trust, responsibility, fairness and caring, and a lot of respect for the organization's goals. Besides, they are also useful because they accomplish the desired objectives towards achieving the fundamental goal or goals. Ethical decision making assumes commitment, competency, and consciousness in evaluating choices based on their ability to an organization's most important goal. As such, this paper discusses a case where the decision reached was not based on ethical principles, how the decision-makers could have reached an ethical decision, and a plan of action for the future.
Anecdotal Information
This incident happened at my current workplace. The company was in dire need to increase the overall revenue generation (increase profitability); after evaluating the possible strategies, all revenue increment opportunities were found to be fully exploited. After a rigorous exercise involving board meetings and consultations with workers, decisions reached did not prove amicable to the board of directors. Amongst the possible strategies on board for consideration to raise the company's profitability were raising the cost per product, utilizing economies of scale, and laying off some employees. The leadership board finally agreed to increase its profitability by laying off some workers to reduce the wage burden. In my view, this decision was not decided upon based on ethical principles. The leadership board should have considered other strategies like managing costs at the vital cost areas to protect its employees' welfare. The critical cost areas include suppliers, premises, finance, and the production sector.
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The decision to lay off some employees was not rational because it did not take into consideration the welfare of employees. According to Utilitarianism, an ethical principle, the decision agreed on should be for the better good of every person working at the organization. In this case, the decision made is not for every person's (members of the company including support staff and the management) good since some employees lost their jobs, and some workers left behind after the layoff became demotivated, thus reducing the company's overall productivity. Another ethical principle is Universalism. According to this ethical principle, the welfare and risks associated with a decision should be considered before the final agreement is reached ( Elango et al., 2010 ). For instance, some employees' risks of losing their jobs are sufficient to opt for other company profitability strategies. Consequently, the decision to lay off employees was not based on ethical principles because employees lost their jobs, which were their source of income. The decision was not considerate of every person's affairs; it was a biased one since the leadership committee agreed to make profits at the expense of workers laid off.
Implications of the event
The company's remaining employees had increased roles after the layoffs were done, which also resulted in increased responsibilities to the supervisors. The layoffs led to decreased productivity and reduced worker morale. Notably, some employees volunteered to resign from their positions when their colleagues were laid off; this resulted in the company experience decreasing profits in the short-term. Employees who did not experience the layoff have no psyche and the zeal to provide maximum cooperation towards their goals. Besides, the company started experiencing voluntary turnover of employees, indicating the impacts of unethical decisions.
On the other hand, I was immensely dissatisfied with the decision to lay off employees since it was not ethical. The leadership team that agreed on the decision was not considerate of the employee's affairs; the employees laid off were not given sufficient time to prepare to leave their jobs since the notification was issued one month earlier. These actions do not represent rational and ethical principles. I was deeply concerned with the entire incident; however, my position at the company did not allow me to question any decisions agreed upon by the leadership team. There are numerous strategies that the company could embrace and ensure universality without having some employees on the losing end.
How the situation could have been handled
Considering the essentiality of Universalism as an ethical principle, the leadership board should consider other strategies to increase its profitability. For example, instead of laying off employees, the company could have concentrated more on increasing sales. This includes selling more to existing customers, and finding more similar customers to do business together. This form of the decision would have protected employees' welfare and reputation regarding laying off employees. Besides, it could indicate how the company values the needs of employees, and their responsibilities. Concentrating more on sales also shows that the leadership board incorporates a humane decision when deciding a course of action.
The situation could have been handled by expanding the company's market share by possibly inventing new products. Expanding a business's market is one lucrative idea business owners should consider when exploring their firm’s profitability. Despite being a risky venture, expanding into new markets can transform a business by considerably increasing the company's profitability ( Selart et al., 2010 ). For example, given the aforementioned case, the company could have conducted further research on the potential opportunities to introduce new products and services. In cases that incorporate new customers, the company could outsource preferred preferences and taste to establish a new product that fits a diverse population. When developing the new product, considering viability is an important step that impacts how customers adapt to the new product or service.
Boosting productivity is another measure the company could have chosen instead of laying off its employees. Increasing productivity includes minimizing the wastage costs; this helps the company remain competitive and retain its hard-earned reputation. First, boosting productivity begins with a company measuring and understanding its operational efficiency on an ongoing basis. It includes putting each system and process part of the company's production in place, thus enabling the company to get the most from its resources. The top leadership should lead in the quest for productivity management; it begins with communicating the productivity targets; this gives the entire staff a goal to aim.
Plan of Action for the future.
This organization needs a plan that will ensure future decisions are made in consideration of the ethical principles. The action plan explores four fundamental steps that will be followed to the latter when making any more decisions for the company. According to Richardson (2004), these steps include, getting started, opinion seeking, evaluation of both employees and leadership opinions, and confirmation of the final decision.
Step 1. Getting started
Betting started entails an in-depth approach to determine whether the company requires the expected change, whether the change is necessary or not. In this stage, the evaluation team members should conduct keen scrutiny to establish whether the change is vouched for or not. Some decisions are not necessary for companies and end up resulting in adverse impacts. Depending on the evaluation results, if the change's advantages outweigh the limitations, the change is vouched for and encouraged.
Step 2. Gathering Information
The process of obtaining opinions is a crucial step for the future action plan. Genuine views from employees and supervisors provide a brief overview of the workforce perspective regarding the change to come. When obtaining opinions, employees should be encouraged to provide honest opinions since the decision or change will affect their working environment and standards. Honest opinions give a rough idea of the employee’s expectations. When preparing forms to collect opinions, each level of command in a company should be allocated unique questions since different levels of management have varying working environments, duties, and responsibilities.
Step 3. Evaluation of the gathered information
The evaluation of various opinions provided determines whether the decision will go through or it will be ignored. Depending on the workforce team's opinions, it is imperative to make the right decision that favors employee welfare. This step decides whether the leadership team will go for the change or not. If employee’s express dissatisfaction with the expected change, it should not be pursued since it might negatively impact the company.
Step 4. Decision-Making
In this stage, the leadership committee should evaluate all responses and select a decision that favors a good number of employees' opinions. The team should first determine the current situation of the company before making their conclusion. Lastly, they should focus on the bigger picture, which is the company's future in terms of productivity and success.
In conclusion, ethical decision making is essential for companies and organizations. Ethical decisions reinforce the company's productivity and drive a company towards the expected change. In this case, the decision agreed to lay off some employees was not based on ethical decision-making principles. The leadership committee ought to have found other strategies to boost its productivity rather than laying off workers showing how the company did not value its presence and efforts. Leadership teams should always establish a unilateral decision that considers every employee's welfare in the company.
References
Elango, B., Paul, K., Kundu, S. K., & Paudel, S. K. (2010). Organizational Ethics, Individual Ethics, and Ethical Intentions in International Decision-Making. Journal of Business Ethics, 97(4), 543–561. doi:10.1007/s10551-010-0524-z
Richardson, C. (2004). Strategic Planning: Five Steps to a More Secure Future [Blog]. Retrieved 22 January 2021, from https://philanthropynewsdigest.org/columns/the-sustainable-nonprofit/strategic-planning-five-steps-to-a-more-secure-future.
Selart, M., & Johansen, S. T. (2010). Ethical Decision Making in Organizations: The Role of Leadership Stress. Journal of Business Ethics, 99(2), 129–143. doi:10.1007/s10551-010-0649-0
