Finding Virtue in the Finance Industry – Incorporating Ethical Strategies for Decision Making
Author: Clifford Louis – Editor in Chief – Friday’s for Future – Pakistan
As a business owner and leader, you’re going to have to make a lot of important decisions for your company. On everything from marketing to sales, operations to human resources, your team will look to you for guidance and ask which direction they should go in. In addition to keeping profitability in mind, you also have look at decisions from an ethical standpoint. The role of ethics in decision making affects how you approach decisions, how you decide which action to take and whether or not you need to consult someone else for their viewpoint.
Define the Problem Clearly
According to the ethics resource center, it’s vital to include a decision making framework when you’re dealing with ethical questions in your business. This is a process or set of rules that helps you determine how to make the best decision. The first step of the ethical decision making process is to understand what problem or dilemma you’re up against. Keep in mind that this may not be the same as the question asked of you to make a decision
Status suggests that this step is really about helping leaders to understand where they need to apply ethical principles. Not all important decisions will have ethical considerations, but leaders need to know which ones do. They may not always stand out and be obvious. For example, when deciding which new product lines to sell in your store, one of the options may include liquor and cigarettes. While they are profitable choices for many retailers, it might not fit in with your company’s ethical values.
Do Your Research
After identifying what the ethical problem is, you need to conduct research into the issue. This is where it’s important to look for resources within and outside your company that can provide specific expertise related to the decision you need to make. It may include consulting with other business executives at your company, talking to Human Resources professionals or even reviewing your company policy handbooks, according to Status.
Ethical decision making in organizations isn’t always easy, as the right answer may not be clear. However, seeking viewpoints that are different from your own can provide you with a wider perspective and bring up elements you had not previously considered. This step is about gaining clarity and understanding more about the ethical dilemma.
Consider Your Options
Now it’s time to brainstorm solutions for your problem. In this step, it’s vital to look at what has previously been done at your company in addition to out-of-the-box solutions. Consider similar previous scenarios and how they have been handled, so you can get an idea of the outcome. However, you also have to look outside your business to the larger industry and see what others are doing in these kinds of situations.
For example, if the problem you’re facing is having to layoff employees due to low profitability, solutions may include taking a personal pay cut, asking all employees to take a pay cut in order to avoid layoffs and turning to other types of payment like stock options.
Evaluate Your Potential Solutions
Once you have selected a few possible answers to your ethical question, it’s time to evaluate each solution. HubSpot suggests understanding the positive and negative aspects of each. Focus on the outcome of each decision and how it will affect your business in the short and long term. Not only that, but how will each decision affect people within your company, your customers and your partners?
You’ll also need to consider the likelihood of each negative consequence. For example, if two solutions have several negative consequences, and one solution only has one negative consequence, you may lean toward that one. However, if that negative consequence is more likely to happen than the others, then this may not be a good choice.
Come to a Decision
Now that you’ve done the research, brainstormed solutions and evaluated the many options, it’s time to come to a decision. This is the hardest step in the ethical decision making framework because it has lasting effects for your company. It’s important to feel confident in your choice because you have weighed all your options carefully.
It’s also important to share your decision, and the reasoning behind it, with the right stakeholders in your business. Some ethical decisions can be shared publicly with the whole team while others may require some discretion and privacy. Decide who needs to know the details and be as transparent as possible.
Implement Your Decision and Evaluate Its Effects
Once you’re confident in your choice, work with your team to bring your decision to reality. This may include developing a business strategy, creating an action plan, devising a new company policy or holding a meeting about the new changes. Put your ethical choice into practice and then review the effects it has on your business.
Even if you have spent a lot of time researching the possible ramifications and know how everything will pan out, it’s best to review your decision once it has been implemented. Were there any curveballs you didn’t foresee, or did the outcome differ from your expectations? Did your business improve as a result of the decision, or did it suffer? Analyze your choice so that you can use this information to make your next ethical decision.