A
Model for Ethical Decision Making in Business:
Reasoning, Intuition, and Rational Moral Principles
Academic-Business
Leaders
Names such as Ken Lay, Jeff Skilling, and Arthur
Anderson have become American icons of the business world. Ethical practice in corporations has seemed
to take a back seat in recent years.
Business leaders today and those of the future will face many decisions
that require them to choose between what is ethical and what is not. How business leaders make their decisions
will effect companies and organizations in the long run, therefore it is vital
to have an understanding on how decisions are reached.
Theory
Development
The theory of rational egoism developed in this
article, A Model for Ethical Decision Making in Business: Reasoning, Intuition, and Rational Moral Priciples, is developed from the preceding theory of ethical decision making. The rational egoism theory was developed from
the model building approach of 19 oil company CEO’s who were asked a series of
questions. The purpose of this study was
to find how CEO’s arrive at decisions when given a problem or situation.
Key
Findings\Model Building Research
Based on the finding by researcher Jaana Woiceshyn, through
rational egoism people arrive at decisions through rationality (316). The
conventional definition and way of thinking when we hear the word egoism is
someone who is only for themselves and their wellbeing, a selfish sort of
person. However rational egoism draws on
this concept yet puts it into a different perspective. In a sense the theory begins with the idea
that people have basic needs that must be met for example water, shelter, and
food. Key findings by Woiceshyn portray that
egoism has its virtues; productiveness, honesty, justice, independence,
integrity, and pride (316). From these
virtues an egoistic self-centered way of thinking remains, but that person or
business leader will arrive at an ethical decision, because in the long term it
will benefit them to do what is right.
An example given pertains to the virtue of honesty. A business leader will come to the decision
that it is not right to lie to customers because in the end they are only hurting
themselves in the long run. Therefore
although the business leader made the ethical decision, he or she did it for
reasons of rational egoism. The general
idea stands that egoism is a selfish way of thinking, yet being rational leads
to ethical decision making, and therefore may not be as harmful to the
organization as once thought by the business community.
Implications
The implications given from the rational egoism
theory is that being selfish when arriving at decisions is not necessarily
harmful to an organization. In the
business community when executive leaders act out of egoism it can lead to the
good of the whole organization in the long run.
Although egoism has been presumed to have harmful effects, business
leaders of today and tomorrow can rethink that notion and begin to embrace
rational egoism.
References:
Woiceshyn, Jaana.
A Model for Ethical Decision Making in Business: Reasoning, Intuition, and Rational Moral
Principles. 2011. Journal
of Business Ethics. 2011. Vol
104. Issue 3. p311-323.
This is an interest take on an often negatively charged subject or egoism. Clearly there are many times when being egotistical is a negative characteristic and, in pursuing the best benefit for oneself, negatively impact the organization as a whole. The idea of rational egoism appears to be beneficial, and when comparing to ones own life, would be. We all have certain needs and our egos drive us to success if achieving those needs as mentioned and including water, shelter, etc. Having the self-control to act rationally based on our desires/egos we can be successful and mindful of the our impact to ensure our success while mitigating negative impacts. Even more beneficial would be aligning our egos with that of the organization so both are positively impacted in the long run. Interesting viewpoint...thanks for sharing.
ReplyDeleteLuke
I have to say this is very interesting. For year egoism has always been a negative of one’s personality. This article brings out a very interesting point about rational egoism although there are basic needs that have to be met it but also considers what best in the long run. I like the idea. My question is how does one know if the egoism is rational or not?
ReplyDeleteWell to answer your question Maricela I think egoism is being selfish and doing what you want despite how it effects those around you. You know if it is rational egoism when the decision you make it ethical and right. Although it may not be the decision you want to make it is the best decision because it is ethical and will lead to no consequences for yourself.
ReplyDeleteI think that a few things can contribute to this idea. The first would be a financial tie to the company. An executive owning shares in the company, or receiving bonuses related to the company's performance, would support this. The second would be a cultural tie to the company. If executives truly care about the company and its wellbeing then they would greatly support this idea. I think that where this idea falls short is executives looking too much at the near future and a big payout. I think that recent events with the economic downturn show that some executive’s decisions benefited them rather well and failed to benefit the company.
ReplyDelete