Corporate Governance By Ethical Decision Making A Comprehensive Framework

5380 words - 22 pages

abstract:Ethical decisions serve as the primary basis for good corporate governance. What is required for this is not a theoretical analysis of how ethical decisions are made in corporate organizations but a road map providing guidance towards such ethical decision-making. The framework in this article, empirically developed, serves this purpose. This article has heavily drawn upon empirical research through focus group interviews and factor analysis of 43 items. Two new constructs, namely, Moderators and Navigators have been proposed through this article, which aims to strengthen the practical approach of ethical decision-making theory. Results of factor analysis have shown the presence of 7 steps in ethical decision-making, serving as an empirical base not present in any previous work.Keywords: Corporate Governance, Ethical Decision making, Moderatorsand Navigators,introductionTaking decisions in a corporate organization is a critical performance factor for a modern manager. More so, when such decision must appear, prima facie, as a 'correct' decision in the light of a strategic perspective. Managers confront ethical situations everyday, although seldom are the problems identified for them as ethical or moral ones (Wittmer, 2000). Corporate organizations pose major problems for anyone who tries to apply moral standards to business activities. In the mid-1960s and 1970s, the field of business ethics saw a basic shift in emphasis from personal responsibility to corporate responsibility.Jones (1991) opined, "despite this increased attention to ethics in organizations, theoretical and empirical examination of ethical decision-making in organization are in relatively short supply". Miner and Petocz (2003) have recommended for the development and researching of comprehensive ethical decision-making models "that are needed for fully informed professionals and lay decisions".existing models of organizational ethical decision-makingA number of ethical decision-making models exist in the literature. There is one group of model, which describes the ethical decision-making process in detail, like that of Dubinsky and Loken, 1989, Ferrell et al., 1989; Hunt and Vitell, 1986; Jones, 1991; Miner and Petocz, 2003. Another group of models adopt a macro approach and examines the antecedents of ethical decision. Such models include those of Ferrell and Gresham, 1985; Bommer et al., 1987; Trevino, 1986. However, as pointed out by Foo, Vitel and Desborde (1997), each of these models focuses on a different aspects of ethical decision-making and a consensus on the prescription for understanding and managing unethical behaviour in organization is not yet reached (Chau and Siu, 2000)However, though some post-model empirical researches have been undertaken, as in the case of Kohlberg's stages of moral development (Kohlberg, 1984) yet development of a model of ethical decision-making through empirical research is still lacking in the literature. Researchers like Manning...

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