Topic: BusinessDecision Making

Last updated: March 9, 2019

Every organization has its own unique defining culture.

This defined culture bring people from diverse backgrounds into an organization to form cohesiveness in achieving an organisational goal. Each culture well-structured serves as a guideline for each employee in an organization to live and act by. Therefore organisational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations (Ravasi & Schultz, 2006).

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For proper efficiency of an organizational culture, ethics must exist. Each individual ethics are known to be shaped by what is learnt from our home to what is learnt from the environment. These learnt behaviours serves as a benchmark to how things are perceived, received and reacted to. With the existence of an ethical culture in an organization, each employees are required to adhere to the fundamental rules placed in the organization.

According to Trevino & Nelson, 2011; ethics are the principles, norms and standards of conducts governing an individual or group. It is imperative as a manager to possess the right ethical conducts necessary to manage situations that may arise in an organisation to avoid conflict of interest. Therefore personal ethical standards are the morals and values we as individuals place on ourselves to serve as a guideline to how we should respond to an event or situation. An individual personal ethics includes: reliability, transparency, honesty, fairness etc. The objective of this study is to critically evaluate how an organisational culture causes managers to lose sight of their personal ethical standards.

IMPORTANCE OF A MANAGER’S PERSONAL ETHICAL STANDARDS IN AN ORGANISATION. A manager’s personal ethics can serve as a yardstick in influencing his employees. Whether a manager practices a good ethical culture or bad ethical culture; solely depends on the manager’s personal ethical standards. When a manager understands and align his or her own personal ethics with the organisations ethics and culture, his or her role seamlessly influences the people around him. It helps both the manager and the employees of an organisation define their strengths and weaknesses thereby cultivating the right attitude towards their job.

But if the manager hasn’t identified or understood his or her personal ethics, then an imbalance is occurs which may be detrimental to the organisation. For example, Standard Bank South Africa, code of ethics( page 17, 5.7: 5.7.3), clearly states that “we should never accept cash as a gift, and non-cash gifts or entertainment should not be accepted if the impression is created that an improper business advantage could be secured. In addition, we should follow business unit policy on prohibition or limits, in terms of value and infrequency, above which we should declare acceptance of non-cash gifts and entertainment”. This strict policy on declaration of gifts and other items was mandatory for all employees of the bank to adhere to. To effect cohesiveness with the organisation’s culture and ethics, it is the duty of the manager to educate his or her workers on how important it is to comply with declaring any gifts and items received to the management to avoid conflict of interests.

In doing so, it shows that the manager possesses good moral behaviour as an individual and his ethics are aligned with the organisation’s culture of being transparent and honest. On the other hand, if a manager fails to educate his or her workers on being transparent and honest, then the organisational culture loses its credibility and same goes for the manager.WHAT ARE PERSONAL ETHICS AND ITS INFLUENCE ON A MANAGER’S DECISION MAKING IN AN ORGANISATION.Personal ethics are the values and principles that guide us as individuals in relating to situations around us. This moral ethics help a manager distinguish between what is “Acceptable” and what is “Unacceptable” in an organisation. Effective Decision- Making is defined here as the process through which alternatives are selected and then managed through implementation to achieve business objectives (Drucker, 1967).

In every organisation, the vital decisions made by a manager is expected to be ethical at all times and they should be open to the beliefs of the management and to each employee if they wish to remain significant in their respective organisation. In doing so, the managers helps either himself or herself, the employee and the organisation as a whole maximize their potentials to reach a common goal. To effectively curb abuse of power and corruption in an organisation, a manager must endeavour not to use his position and affluence to influence any decisions made by the management. For example, in the early 1970’s, Ford motors, a rival to a Japanese car manufacturing company, developed a new model of car known as Ford Pinto. What distinguished this car from other cars manufactured was its unique engine capacity no more than 2000 pounds (907 kg), not a penny over 2000 and a delivery deadline of just 25 months” (Wojdyla 2011).

This car gave Ford motors an edge over other competing car manufacturing companies at that time. But soon Ford Pinto was discovered to have an issue with its fuel tank during the development stage which could cause to accidents leading to loss of lives. After a careful review of either recalling the cars which could cost approximately $113 million or pay a severance fee of approximately $49 million in any lawsuit received by the company; the company decided to go with the latter plan of paying severance settlement fee to the families affected. By so doing, the management of Ford motors concluded that paying for lawsuit was far more important than the millions of dollars they would lose and the safety of people lives; if the cars were recalled. Although, the management of Ford Motors used their influence as the leading car manufacturing company to settle lawsuit brought up against the company, but briefly lost their prestige as a reputable manufacturing company due to greed, lack of integrity, fairness and honesty .

The decisions made by the management of ford motors depicts a poor ethical standard of both the managers and employees of the company.


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