CHARACTER FORMATION 2

LEADERSHIP, DECISION MAKING,

MANAGEMENT AND ADMINISTRATION
Analyn D. Tabutol, RCrim

Midterm Topics:
 Decision making Process
 Legal decision making
 What are the ethical decisions that impact any organization?
 The importance of confidentiality in mentoring
 The advantage of being ethical.
 Values and culture in ethical decision making

WHAT IS DECISION MAKING?

The Decision-Making Process: Quite literally, organizations operate by people making decisions. A manager
plans, organizes, staffs, leads, and controls her team by executing decisions. The effectiveness and quality of those
decisions determine how successful a manager will be.
Managers are constantly called upon to make decisions in order to solve problems. Decision making and
problem solving are ongoing processes of evaluating situations or problems, considering alternatives, making choices,
and following them up with the necessary actions. Sometimes the decision-making process is extremely short, and
mental reflection is essentially instantaneous. In other situations, the process can drag on for weeks or even months.
The entire decision- making process is dependent upon the right information being available to the right people at the
right times.
The decision-making process involves the following steps:
1. Define the problem;
2. Identify limiting factors;
3. Develop potential alternatives;
4. Analyze the alternatives;
5. Select the best alternative;
6. Implement the decision;
7. Establish a control and evaluation system.

Define the problem: The decision-making process begins when a manager identifies the real problem. The definition
of the problem affects all the steps that follow; if the problem is inaccurately defined, every step in the decision-
making process will be based on an incorrect starting point. One way that a manager can help determines the true
problem in a situation is by identifying the problem separately from its symptoms.
One of the best known methods for developing alternatives is through brainstorming, where a group works together
to generate ideas and alternative solutions. The assumption behind brainstorming is that the group dynamic stimulates
thinking-one person's ideas, no matter how outrageous, can generate ideas from the others in the gore long, lots of
suggestions Ideally, this spawning of ideas is contagious, and and ideas flow. Brainstorming usually requires 30
minutes to an hour. The following specific rules should be followed during brainstorming sessions:
Concentrate on the problem at hand. This rule keeps the discussion very specific and avoids the group's tendency to
address the events leading up to the current problem.
Entertain all ideas. In fact, the more ideas that comes up, the better. In other words, there are no bad ideas.
Encouragement of the group to freely offer all thoughts on the subject is important. Participants should be encouraged
to present ideas no matter how ridiculous they seem, because such ideas may spark a creative thought on the part of
someone else.
Refrain from allowing members to evaluate others ideas on the spot. All judgments should be deferred until
all thoughts are presented, and the group concurs on the best ideas.
Although brainstorming is the most common technique to develop alternative solutions, managers can use
several other ways to help develop solutions. Here are some examples:
Nominal group technique. This method involves the use of a highly structured meeting, complete with an agenda,
and restricts discussion or interpersonal communication during the decision-making process. This technique is useful
because it ensures that every group member has equal input in the decision-making process. It also avoids some of
the pitfalls, such as pressure to conform, group dominance, hostility, and conflict, that can plague a more interactive,
spontaneous, unstructured forum such as brainstorming.
Delphi technique. With this technique, participants never meet, but a group leader uses written questionnaires to
conduct the decision making.
No matter what technique is used, group decision making has clear advantages and disadvantages when
compared with individual decision making. The following are among the advantages:

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  Groups provide a broader perspective.
 Employees are more likely to be satisfied and to support the final decision.
 Opportunities for discussion help to answer questions and reduce uncertainties for the decision makers.
These points are among the disadvantages:
 This method can be more time-consuming, than one individual making the decision on his own.
 The decision reached could be a compromise rather than the optimal solution.
Individuals become guilty of group think - tendency of members of a group to conform to the the prevailing
opinions of the group.
Groups may have difficulty performing tasks because the group, rather than a single individual, makes the
decision, resulting in confusion when it comes time to implement and evaluate the decision.
So, are two (or more) heads better than one? The answer depends on several factors, such as the nature of the
task, the abilities of the group members, and the form of interaction. Because a manager often has a choice between
making a decision independently or including others in the decision making, she needs to understand the advantages
and disadvantages of group decision making.
The purpose of this step is to decide the relative merits of each idea. Managers must identify the advantages
and disadvantages of each alternative solution before making a final decision.
Evaluating the alternatives can be done in numerous ways. Here are a few possibilities:
 Determine the pros and cons of each alternative.
 Perform a cost-benefit analysis for each alternative.
 Weigh each factor important in the decision, ranking each alternative relative to its ability to meet each factor,
and then multiply by a probability factor to provide a final value for each alternative.
Regardless of the method used, a manager needs to evaluate each alternative in terms of its
 Feasibility-Can it be done?
 Effectiveness - How well does it resolve the problem situation?
 Consequences - What will be its costs (financial and nonfinancial) to the organization?
After a manager has analyzed all the alternatives, she must decide on the best one. The best alternative is the one
that produces the most advantages and the fewest serious disadvantages. Sometimes, the selection process can be
fairly straightforward, such as the alternative with the most pros and fewest cons. Other times, the optimal solution
is a combination of several alternatives.
Sometimes, though, the best alternative may not be obvious. That's when a manager must decide which alternative
is the most feasible and effective, coupled with which carries the lowest costs to the organization. (See the preceding
section.) Probability estimates, where analysis of each alternative's chances of success takes place, often come into
play at this point in the decision- making process. In those cases, a manager simply selects the alternative with the
highest probability of success.
Managers are paid to make decisions, but they are also paid to get results from these decisions. Positive results
must follow decisions. Everyone involved with the decision must know his or her role in ensuring a successful
outcome. To make certain that employees understand their roles, managers must thoughtfully devise programs,
procedures, rules, or policies to help aid them in the problem-solving process.

Make re-planning based on results of evaluation.

Detailing Types of Plans
Plans commit individuals, departments, organizations, and the resources of each to specific actions for the
future. Effectively designed organizational goals fit into a hierarchy so that the achievement of goals at low levels
permits the attainment of high-level goals. This process is called a means-ends chain because low- level goals lead
to accomplishment of high-level goals.
Three major types of plans can help managers achieve their organization's goals: strategic, tactical, and
operational. Operational plans lead to the achievement of tactical plans, which in turn lead to the attainment of
strategic plans. In addition to these three types of plans, managers should also develop a contingency plan in case
their original plans fail.
Operational Plans
The specific results expected from departments, work groups, and individuals are the operational goals. These
goals are precise and measurable. "Process 150 sales applications each week" or "Publish 20 books this quarter" are
examples of operational goals.
An operational plan is one that a manager uses to accomplish his or her job responsibilities. Supervisors,
team leaders, and facilitators develop operational plans to support tactical plans (see the next section). Operational
plans can be a single-use plan or an ongoing plan.

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Tactical Plans
A tactical plan is concerned with what the lower level units within each division must do, how they must do
it, and who is in charge at each level. Tactics are the means needed to activate a strategy and make it work.
Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans. These
plans usually span one year or less because they are considered short-term goals. Long-term goals, on the other hand,
can take several years or more to accomplish. Normally, it is the middle manager's responsibility to take the broad
strategic plan and identify specific tactical actions.
A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in mind,
rather than with the goals of specific divisions or departments. Strategic planning begins with an organization's
mission.
Strategic plans look ahead over the next two, three, five, or even more years to move the organization from
where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among
all levels of management within the organization. Top-level management develops the directional objectives for the
entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top
management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower
level planning.
Contingency Plans
Intelligent and successful management depends upon a constant pursuit of adaptation, flexibility, and mastery
of changing conditions. Strong management requires a "keeping all options open" approach at all times that's where
contingency planning comes in.
Contingency planning involves identifying alternative courses of action that can be implemented if and when
the original plan proves inadequate because of changing circumstances.
Keep in mind that events beyond a manager's control may cause even the most carefully prepared alternative
future scenarios to go awry. Unexpected. problems and events frequently occur. When they do, managers may need
to change their plans. Anticipating change during the planning process is best in case things don't go as expected.
Management can then develop alternatives to the existing plan and ready them for use when and if circumstances
make these alternatives appropriate.

DECISION MAKING PROCESS

Decision making is a daily activity for any human being. There is no exception about that. When it comes to
business organizations, decision making is a habit and a process as well.
Effective and successful decisions make profit to the company and unsuccessful ones make losses. Therefore,
corporate decision making process is the most critical process in any organization.
In the decision making process, we choose one course of action from a few possible alternatives. In the
process of decision making, we may use many tools, most critical process in any organization. techniques and
perceptions. In addition, we may make our own private decisions or may prefer a collective decision.
Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or
conflict with another party.
Let's have a look at the decision making process in detail.
Steps of Decision Making Process: Following are the important steps of the decision making process. Each step may
be supported by different tools and techniques.

Decision Making Process

Step 1: Identification of the purpose of the decision: In this step, the problem is thoroughly analyzed. There are a
couple of questions one should ask when it comes to identifying the purpose of the decision.
 What exactly is the problem?
 Why the problem should be solved?
 Who are the affected parties of the problem?
 Does the problem have a deadline or a specific time-line?
Step 2: Information gathering: A problem of an organization will have many stakeholders. In addition, there can
be dozens of factors involved and affected by the problem.
In the process of solving the problem, you will have to gather as much as information related to the factors
and stakeholders involved in the problem. For the process of information gathering, tools such as Check Sheets' can
be effectively used."
Step 3: Principles for judging the alternatives: In this step, the baseline criteria for judging the alternatives should
be set up. When it comes to defining the criteria, organizational goals as well as the corporate culture should be taken
into consideration.

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 As an example, profit is one of the main concerns in every decision making process. Companies usually do
not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should. be
identified related to the problem in hand.
Step 4: Brainstorm and analyze the different choices: For this step, brainstorming to list down all the ideas is the
best option. Before the idea generation step, it is vital to understand the causes of the problem and prioritization of
causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram
helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the causes
with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in hand.
Step 5: Evaluation of alternatives: Use your judgment alternative. In this step, experience and effectiveness
principles and decision-making criteria to evaluate each of the judgment principles come into play. You need to
compare each alternative for their positives and negatives.
Step 6: Select the best alternative: Once you go through from Step I to Step 5, this step is easy. In addition, the
selection of the best alternative is an informed decision since you have already followed a methodology to derive and
select the best alternative.
Step 7: Execute the decision: Convert into a plan or a sequence of activities. Execute your plan by yourself or with
the help of subordinates.
Step 8: Evaluate the results: Evaluate the outcome of your decision. See whether there is anything you should learn
and then correct in future decision making. This is one of the best practices that will improve your decision. your
decision making skills.

WHO ARE AUTHORIZED TO MAKE DECISIONS?

Legal Decision Making: Child custody used to be the term that was used in relation to this; but now the term has
been changed to the legal decision-making authority. When you are discussing the parenting arrangements for a child,
this is now the term that will be used by the court.
The legal decision-making authority is determined as part of some form of legal separation, or in relation to
matters related to maternity and paternity. When one parent files a petition with the court, they are asking the court
to grant them the authority of legal decision- making for that child.
If the court agrees that a parent has such authority and they meet the statutory requirements to be determined
as a parent, then it is the court's responsibility to ensure that the individual is granted some form of legal decision-
making authority so that they can act on behalf of their child.
What Does Legal Decision Making Authority Grant?
According to the Arizona Department of Economic Security, legal decision making is defined as the court
granting authority to a person or persons to care for a minor child. It is giving that person the right to care for the
child on whatever term is set, whether that is for a weekend, during the summer, or even permanent; and gives that
person legal authority to make decisions day, a that are in the best interests of the minor. These may include such
things as religious choice, educational choice, medical treatment, and what extracurricular activities the child will be
involved in.
However, the legal decision making authority does not relate directly to the amount of time that a parent or
other person is granted. Instead, this is just about dealing with who has the authority to act on behalf of the child and
make decisions that are in the best interests of the child.
It should be noted that even if one parent has custody of the child during a certain period of time, like over a
weekend, that does not mean that they have legal decision-making authority. This is a very important point for any
parent to understand.
Example of Legal Decision Making: If a father is granted visitation with the child every other weekend in a month,
that may grant the father time that he can spend with the child, including bringing him or her to his home. He is given
authority to have "custody" of the child according to what most people view as the definition of this term.
However, this may not give the father the responsibility of the legal decision-making authority. This means
that if the child was hurt and needed medical care during that weekend period, the father may not have the authority
to take the child to the doctor and seek medical attention. He may be required to contact the mother and ask her to
meet at the medical facility, or he may be allowed to take the child to the doctor but all decisions on what kind of
treatment the child would receive would come down to the mother. This is if she has full legal decision-making
authority.
Types of Legal Decision Making Authority: Within t court system, there were actually two different kinds of legal
decision-making authority. They include: the

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Sole Legal Decision Making Authority
In this legal situation, one person, usually a parent, is given complete authority to act on behalf of the child
in all major decisions. They are the only person who can make such decisions, and is granted full authority by the
court to make decisions for the child related to education, medical treatment, religious choice, and the like.
Joint Legal Decision Making Authority
This form of legal decision-making is different because neither parent has a superior authority over the other
one. Both parents have the right to make decisions that are deemed in the best interest of the child, and if there is a
matter that is unable to be decided upon then it is the court that will have the final authority to judge what should
occur for the child. In essence, when parents agree to this kind of parenting authority, they give the ultimate authority
to the judge overseeing the matter
How Parenting Time Relates to Legal Decision Making Authority. When there is an arrangement for joint
custody, meaning that both parents have the child at specified times agreed upon or designated by the court, there is
usually some form of joint legal decision- making authority that is granted. This usually means that the parent who
has custody of the child at a specific time determines what the child does or how to handle emergency situations.
Courts will often designate that parents work out matters so that if such an emergency arises, there will
already be a pre-designated idea as to what to do in that situation.
However, there are many instances where one parent is given complete authority over the decision-making
process even when the child is visiting the other parent. This means even if the child is under one parent's care. it
does not mean that that parent has the decision-making authority.
Because of factors like these, it is important for parents to work together to resolve as many issues as possible
related to the care of their child or children. The more authority granted to the court, the least decision- making
authority that parents can have.

TYPES OF DECISIONS?
Decision rights 101: Before discussing the five attributes in more detail, it's helpful to first explain exactly what
"decision rights" means. At its most basic, decision rights" refers to an organization's rules and practices-whether
explicit or implicit around three questions:
Who are the individuals or groups empowered to make decisions? Decision rights models help outline an
organization's hierarchy of decision-makers or decision-making groups. When decisions must be made in groups,
decision rights models specify which cross- functional leaders must belong to each decision-making body. (The term
governance is often used to refer to decision rights related to cross-functional decision- making)

What decisions must be made?

A decision inventory lists the decisions that an organization that is to say, its leaders, teams, and operating
units-must make. Note that a decision inventory does not need to be comprehensive to be useful. Rather, it should
identify the organization's most important decisions at various organizational levels-corporate management, business
unit leaders, etc. While it may also be helpful to identify certain subsidiary decisions at each of those levels, many of
these lower-order decisions can often be inferred from an understanding of the most important, top-level ones.
How do operating processes and tools help suppon decision-making? A decision-making process defines the
forums and procedures through which decision-makers across the organization make their decisions. Factors to
consider here include how often a decision-making body should convene, what stakeholders decision makers need to
consult, and what evidence (such as data, research, or expert analysis or guidance) might be useful and available to
inform these decisions.
Achieving clarity about the who, what, and how of decision-making doesn't happen by accident, however. In
our research, organizations with high organization design maturity were explicitly aware of the need to build decision
rights into their organization's designs. They deliberately set out to establish structures and procedures to enable
decision-making empowerment, influence and transparency, often prioritizing these elements even over defining the
business's daily workflows and functions.
What's so hard about decision rights? If decision rights are so important, why do more organizations not
sufficiently address them? Even many organizations that have recently gone through an organizational redesign effort,
a restructuring, or a merger or acquisition- events where decision rights should have been explicitly considered-often
struggle to articulate their decision- making accountabilities and processes. What makes decision rights such a
common blind spot?
One probable reason is that few people recognize decision rights as a distinct organizational design need in
its own right. We have found that many leaders tend to confuse decision rights with organizational structure, process,
and workflow, mistakenly assuming that the design of roles or work processes will also adequately define the
organization's decision-making practices. Because of this, many organizations remain effectively stuck in neutral,

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with management viewing decision-making as a result rather than as something that needs to be actively-and
proactively-addressed. The tacit assumption is that if an organization creates the right structures and processes, or
reconfigures its organizational charts, then decision-making will happen naturally and automatically, and financial
performance will improve. In reality, this is rarely-if ever-the case.
The bigger and more complicated the organization, the harder it can be to untangle existing decision-making
practices and design better ones. Overlapping responsibilities can muddle the question of "who makes decisions,
resulting in inefficiency and slower responses to business opportunities. In fact, a major institutional challenge is
often the tension between getting something done quickly versus collaborating, integrating, and bringing the whole
company along with "getting it done quickly frequently taking priority. Fast decision-making is often celebrated,
even when it's not necessarily effective or well-informed.
A third, potentially even more pernicious reason that many organizations have difficulty addressing decision
rights is resistance from senior executives. In some organizations, especially in traditional, more hierarchical
organizations, executives may want the identity of the individuals making decisions to be obfuscated, particularly for
top-level corporate decisions. Why? Because, in environments where decisions are made high up and out of sight,
executives find they can more readily exert outsized influence behind the scenes. Leaders can make decisions based
on personal interest instead of commonly understood evidence and analysis, and do so while avoiding clear
accountability for the outcomes. Simply put, executives may resist explicitly defining the decision-making process
because they fear diminishing their own power and influence.
Five ways to get decision rights right: Let's now return to the five attributes related to decision rights that
characterize organizations with high organization design maturity. What does each attribute look like, and what can
leaders do to help install them at their own organizations?
Simplify and clarify decision rights across the organization: At the risk of stating the obvious, the effectiveness
of an organization's decision rights practices depends critically on how clearly and simply those decision rights-the
who, what, and how of decision-making-are defined and communicated. Our research shows that clarity in decision-
making has the potential to double the likelihood of improving processes to maximize efficiency.
One well-known tool that can be helpful in designating specific decision-making roles is the RACI
framework, where "RACI" stands for Responsible, Accountable, Consulted, and Informed. In the context of decision
rights, leaders can use the RACI framework to understand and agree on:
Who is Responsible for executing the work? The responsible individual or individuals are those who carry out the
actions prescribed by a decision-not necessarily those who make the decision. Who is Accountable for the decision's
outcomes? The accountable role identifies the actual decision- maker, whether an individual or a group. Optimally,
each decision should have only one accountable role (that is, a single decision-making individual or group).
Who should be Consulted for input, information, insights, and perspectives? Along with identifying the
appropriate people to be consulted, a strong decision rights framework will also provide guidance on the consultative
process (that is, how these consultations should take place).
Who should be Informed about the decision and its outcome? These may include individuals in leadership
positions as well as other decision-makers whose own decisions must take the prior decision into account.
In addition to simplifying and clarifying the who and how around decision-making, it's also important to
clearly articulate the what-which decisions are the highest priority. In many cases, understanding what decisions are
most critical can help organizations better figure out the who and the how.
Simplicity and clarity in decision rights can sometimes prove to be the missing ingredient in an otherwise "stuck"
transformation effort. For instance, one Fortune 500 organization in the financial services industry implemented
several agile practices, including redesigning their organization into network-based teams, in an effort to become
more agile as a business. However, leaders quickly found that the changed structure alone was not yielding the hoped-
for benefits. They moved people and roles around and called them chapters" and "guilds," and yet nothing really
changed; in fact, the new structure created further confusion and decision-making delays, as the accountabilities for
decisions had not been clearly assigned. It was not until the organization focused specifically on decision making that
performance began to improve. Leaders clarified which few decisions mattered most-the ones that had a significant
impact on resources and outcomes-and identified which person or group had the authority to make each decision.
They then communicated these decision rights to the accountable people and groups, along with clear guidelines for
when a decision would need to be escalated. By building transparency and accountability into decision-making, the
organization increased worker satisfaction and significantly improved its ability to get products and services to
market.
Establish strong, transparent accountability for decisions made: Just because an organization has done a RACI
exercise to assign decision-making accountability doesn't mean that those accountabilities have been made strong
and transparent, which is the second key attribute of organizations with effective decision rights practices. To achieve
strong, transparent accountability, leaders should consider and answer questions such as:
 Who is the primary owner of the decision's outcomes?

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  How-using what metrics-will these outcomes be evaluated?
 Where, when, and how will progress against these outcomes be evaluated?
 To what degree will the answers to these questions be shared openly and broadly within the organization?
The aim of strong, transparent accountability is not to assign blame for decisions gone wrong. Rather,
transparent and clear accountability, complete with agreed-upon outcomes and metrics, makes it easier for an
organization to review and reflect on past decisions and the process by which they were made, enabling the
organization to better learn from both failures and successes. Focusing on decisions and outcomes, and
not on individuals, reduces unhelpful anxieties and defensiveness and increases the potential for true The value of
such transparency and reflection refed up by research on organizational learning cultures: Organizations with greater
clarity about both the identity of its decision-makers and the outcomes of the decisions made are better able to harvest
invaluable wisdom from both success and failure, ultimately leading to better results.
Decision-makers should understand, too, that it is not enough just to know where one's own decision- making
authority begins and ends. It can be even more critical to understand what roles others across the the organization
play in decision-making, including specific decision-making accountabilities of key individuals and groups. This
level of understanding is useful because it can help people roadblocks. Most decision-making bottlenecks and identify
and address organizational decisions, after all, do not occur in a vacuum: Most have a critical path, with some having
to be made before others can be considered, and knowing "where" (that is, with whom) the decision-making process
is stuck is the first step in shaking it loose.
Align individuals in decision-making groups to a common mission: Sometimes, an organization may want certain
decisions to be made by groups, not by individuals. One reason group decision-making can be desirable is that it
brings multiple perspectives to the table, which can improve decision quality. The flip side, however, is that unhelpful
competition and dissent within the decision-making group can slow the process. and sabotage decision quality.
Establishing a clear common mission for the group can help counter this risk, allowing the group to reach
decisions more quickly and less contentiously. To do this, the group should have a charter that articulates its mission,
with the full endorsement of the organization's senior leadership team. The organization should also establish
individual and team incentives for the group that support the common mission.
As an example, at one global pharmaceutical company, decisions about resources and proje prioritization had
historically been made piecemeal with the leaders of the R&D, marketing, legal, and compliance functions signing
off on their "piece of the decision, followed by the CEO reviewing and approving the decision-in this case, to move
on to the next step in the drug development process as a whole. This practice of pooling individual decisions for the
CEO' ultimate signoff was not only slow-many decisions were delayed as their individual components made their
way up the chain of command-but also did not allow the functional leaders to take each other's perspectives into
account.
To speed the decision-making process, the organization identified what decisions had to be made, determined
which ones were most critical to the outcomes they cared about, and analyzed how these decisions were currently
being made. They then assigned decision-making accountability to specific people or cross-functional groups,
highlighting decisions for which they deemed it essential to bring cognitive diversity-diversity of thought-to foster
innovation and get drugs to market more quickly. The common mission, communicated by the CEO as a strategic
"must win priority and reinforced through changes in bonuses and goals, was to speed up and improve the drug
development process by making timely decisions in an integrated manner. Partly as a result of these changes, the
company was able to accelerate its products' time to market twofold.
Encourage Distributed Authority Some important enterprise-level decisions must rest with C-suite executives or
others in top management positions. But in the day-to-day course of business, these types of determinations are much
less common than more routine decisions. Pushing such day-to-day decisions closer to where they directly affect
operations-in effect, putting them in the hands of frontline workers-allows an organization to be more flexible and
respond more quickly to changing marketplace needs.
That said, while giving frontline workers more decision-making authority can increase adaptability. it can also create
confusion if accountabilities are not clearly defined and communicated. Just as with decision rights among
management, it's therefore important to explicitly articulate which frontline workers have the authority to make which
decisions under what circumstances.
Empowering line workers to make decisions can pay off in greater agility and responsiveness. For example, the
pharmaceutical company described above identified which decisions had to remain in the corporate center and pushed
all remaining strategic investment and operational decisions to its frontline teams. Among other things, team leaders
were empowered to make certain financial decisions within previously established budget guidelines, and given
authority to change individuals performance measurement metrics and incentives. This, along with the shift to cross-
functional decision- making, helped the company's newest drug beat the previous time to market by two years and
achieve a dominant position in the market.
Prioritize the Customer Voice in Decisions: Among the most important ways to better understand customer wants
and needs is for organizations to listen more closely to what their customers are saying. Indeed, our research finds
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the highest-performing adaptable organizations have learned to "put the customer and (the customer's) outcomes at
the center of every decision." Giving customer-facing workers more decision-making authority is one way to increase
the customer's influence over these decisions.
In one instance, a famous consumer products company was setting up a new, flexible distribution center
intended to tailor distribution to more effectively meet customer demand. To enable a more accurate understanding
of customer demand and the ability to quickly act on this understanding, key decisions around how to bundle, ship,
and deliver products were assigned to a cross-functional customer-facing team.
This approach allowed the company to streamline these decisions to the extent that they can now adjust their
tactics overnight to respond to immediate changes in customer requirements.
Decision Rights as Competitive Advantage: Improving an organization's decision rights practices is not always
easy. Whether this work is initiated by the C-suite or elsewhere in the organization, getting decision rights right can
mean fundamentally changing many things in the way the organization operates. Real and lasting change depends on
engaging the right leaders and stakeholders, creating transparency throughout the process, and decisions to the lowest
organizational level possible to free top executives to manage institutional decisions. The effort will likely require
people across the organization to change their behaviors and mindsets, and it will need to be supported by rewards
systems and incentives to encourage change.
In the end, improving decision rights is an achievable goal that can start with the single decision to proceed.
The benefits can far outweigh the investments. By adopting a detailed, well thought-out approach to decision rights,
organizations can inspire a new culture of transparency and accountability that will help them become more
competitive, more adaptive, and more responsive to marketplace needs.

IMPACT OF DECISIONS?
What Are the Ethical Decisions That Impact Any Organization? (Kevin Johnston)
Ethics are often taught separately from business skills. In fact, they affect every business. They are not an
afterthought. As you build your company, you must deal with ethical considerations that affect how successful you
will be. Though you might be tempted to focus on the nuts-and-bolts aspects for running a business and making a
profit, you can't avoid ethical concerns that are common to all businesses."
Treatment of Employees: Deciding how you will treat employees requires you to consider many ethical issues from
fair pay to providing a safe and healthy work environment. Your decisions demonstrate your ethical responsibility
toward your employees. If you consistently make decisions that devalue your employees, you may find that their
work offers less and less value to your company. Conversely, if you make ethical decisions that show your concern
for the well-being of the people that work for you, this can have a positive effect on your company.
Fair Competition: Your pursuit of profits requires you to forgo ethical short cuts and compete fairly, Decisions
about whether to spread rumors about the competition put out misleading marketing messages or misrepresent the
quality of your products affect not only your reputation but also your ability to make sound business decisions. If you
must consistently cut ethical corners to make a profit, you show that you lack the business acumen to compete fairly.
On the other hand, if you maintain an ethical stance in all your competitive strategies, you can gain a reputation for
shrewdness and honesty at the same time.
Financial Reporting: Accounting ethics require you to be accurate and to fully disclose all of your financial dealings.
Your decision to live up to those standards impacts your company's ability to borrow money, attract investors and get
favorable rates from vendors. Even the hint that you have misrepresented your finances can ruin your company's
reputation and destroy your customers' confidence in you. However, if you maintain scrupulous honesty in your
accounting, you can gain a reputation for honesty that will open doors with banks, joint venture partners and new
markets.
Social Impact: Your decisions about the impact of your company on society can determine your success. If you
consistently make decisions that benefit the community, your industry or society, people will come to see your brand
in a positive way. If you disregard the social implications of your decisions or consistently make decisions that harm
people, the resulting bad reputation can hamper your ability to grow. In cases where any decision you make will harm
somebody, expressing your genuine concern about the situation will at least demonstrate that you are aware of the
social impact of your decisions. For example, if you sell a product meant for adults, such as alcohol, and you
acknowledge that some teens may consume your product illegally, your recognition of the dilemma can place you in
a favorable light. If you spend some of your profits on public service announcements about the dangers of teen
drinking, you will show that you put your money where your ethics are.

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ETHICAL DIMENSIONS OF LEADERSHIP AND DECISION MAKING
The field of organizational ethics deals with the issues that inevitably arise when a desire for financial success
conflicts with moral duty. While the academic study of ethics is complex, there are some basic steps you can take to
foster an ethical, socially responsible company.
Considerations: You're in business to make money, but you also have moral duties toward your employees,
customers and community. Ethical guidelines, no matter how detailed, address every potential ethical dilemma. That's
why it's important to periodically analyze your goals and practices, as well as those of your employees, to determine
if your organization is drifting into unethical behavior. In general, the most effective approach is to strive to be honest
and forthright and to consider the needs of others as much as or more than your own.
Employees: As a business owner, you are responsible for creating a workplace in which your employees can thrive.
For example, you must monitor hiring and firing practices and promotions and bonuses to ensure fair and equal
treatment of all workers. While complying with legal guidelines is an important first step, your moral obligation goes
further. For example, hiding vital information about the financial health of your company is unethical, as is ignoring
worker safety. You also must monitor your employees to ensure they behave ethically.
Customers: Your customers depend on you to maintain an ethical organization. A bakery's clients trust that the
posted food descriptions are accurate and consistent. If you fail to honor their trust- for instance, if you cut costs by
secretly switching to cheaper ingredients while still claiming to use higher-quality versions you disregard their right
to make informed decisions. Such behavior is unethical and possibly illegal.
Community: Your organization can have detrimental effects on your community. As the leader of your company,
you have an ethical obligation to do what you can to minimize those negative effects, even if that hurts your
profitability. For example, dumping hazardous chemicals near your business might save money, but you have a legal
and ethical duty to find socially and environmentally responsible ways to operate. Further, many companies believe
it's important to do more than just minimize harm. For instance, your company could find ways to partner in social
causes, perhaps raising money to assist disadvantaged locals.
Customer Transparency: Many of the ethical issues in profit maximization center on customers, given that they
directly provide the revenue you need to earn a profit. Profit maximization dictates that you attract customers and
create sales at all costs. However, ethical demands suggest you need to operate with honesty, transparency in
marketing and a more customer-centric attitude. In the short-term, you may miss sales by being honest. However,
building a reputation for integrity and customer-friendliness can benefit you with increased customer loyalty and
higher long-term profit as a result.
Community Relationships: Profit maximization also suggests that your best move in a community is to figure out
how to get the best location, tap into all possible subsidies and give little consideration to how your money-making
endeavors affect the local area in which you operate Ethically, this isn't a good way to build a favorable reputation
with community leaders and citirens. Instead, communities typically expe companies to get involved in local activities
and events and to give back in some way for the financial benefits they receive, even if that may take some revenue
away from the bottom line.
Fair Employment: Labor is one of the most significant costs to a business and costs impede profit. Thus, profit
maximizes pay the lowest possible wages, cut corners on benefits and may even hire illegal workers or fail to pay for
overtime. Aside from the legal implications, creating a work environment that is unfair for employees fails the ethics
test. Along with basic compensation factors, companies also must promote a non-discriminatory culture. Paying for
safety training and equipment can also eat into profit, but ethics require you need to provide the safest operation
possible for your workers.
Partner Integrity: Business associates and partners that support your profit-generation also have some ethical
expectations. First, they expect that you operate with integrity to avoid indirectly damaging their reputations.
Additionally, your suppliers expect that you communicate honestly, don't use their products for unethical and pay
your bills on time. Treating suppliers fairly may cost more initially, but strong supplier partnerships can provide
benefits to your operation and brand in the long-term

ETHICAL & MORAL ORGANIZATION VALUES IN INDUSTRIAL

The benefits of adopting ethics in business are more important than ever before in maintaining a sustainable
and profitable business. It is no longer acceptable for a business to operate in an entirely self-interested manner,
having no regard to the impact it has on the local community. In the modern commercial environment there is a strong
emphasis on businesses meeting their legal guidelines and ethical obligations. Trading in an ethical and socially-
conscious manner will benefit businesses off all sizes on a number of levels.
Goodwill and Publicity: One of the major advantages of business ethics is the opportunity to foster a sense of
goodwill among the general public toward your business. Customers are increasingly concerned with using products
produced in an environmentally sustainable manner and where the producers are paid a fair wage for their work for

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example, fair trade coffee. Being seen as meeting your social and societal obligations will ingratiate your business to
the public and attract socially responsible consumers.
Shareholders and Investors Benefit: In most cases, it will be important to shareholders that your business is
managed in an ethical fashion. Transparent accounting practices and an engaging, consultative relationship with your
shareholders will encourage confidence in your business, Investors will be more willing to put capital into a business
that they can see is ethically managed, because there is less chance that the business will be founded on unsafe
practices. Ethically-minded investors may also be unwilling to invest in a business that they see as socially or
environmentally irresponsible.
Gives the Business a Competitive Edge: Advantages of business ethics can extend beyond moral obligation; they
can also benefit a company's bottom line. Ethical behavior can serve to differentiate your brand from those of your
competitors if you operate in an oversubscribed market, offering you a competitive edge. Identifying your product
and business practices as being founded on strong ethical principles makes your product or service more attractive to
consumers - a good example of this model would be the Body Shop, a cosmetics company whose products are not
tested on animals.
Moral Obligations to the Community: A powerful argument in favor of running your business in an ethical manner,
aside from the financial benefits that can be gained, are the moral obligations your business has toward the
community. A successful business takes from the community in the form of profits, which are distributed among its
employees, directors and shareholders in wages and dividends. As an integral part of society, the business has a moral
obligation to behave in an ethical manner toward employees and third parties, and to be conscious of its environmental
impact.
Positive Knock-On Effects: The knock-on effects of adopting a strong ethical ethos will benefit a business Honest,
open accounting practices will help build a stronger financial base for the company and may help avoid lawsuits or
sanctions for malfeasance. The knock on effect of fairly compensating employees and meeting your tax liabilities
will be a prosperous, more robust local economy, which will benefit everyone in the long run.

THE IMPORTANCE OF CONFIDENTIALITY IN MENTORING

Creating an ethical culture for your small business means more than complying with regulations. Your
business operates as part of society and you can lose customers and status by engaging in behavior that is perceived
as unethical even if it is legal. While you can set rules for employees to follow, rules won't replace the influence of
culture on behavior. You can create a positive culture by addressing ethics as part of each employee's job.
Communicating Values: Ethics start with values, and company values start with the owner's values. You necessarily
have to focus on some bottom line issues, such as productivity and sales, but you can also take time to convey your
ethical values and the values you expect from employees. Your willingness to make values part of your professional
outlook will send the message that ethics are not an afterthought. This helps create a culture that is ethical.
Internal Systems: Quality control doesn't just mean checking products or services to see that they live up to
standards. It also means assessing the ethics of decision- making. If you create a system to review decisions and listen
to concerns about company initiatives and directions, you can encourage input on your company ethics. This creates
a culture where ethics are part of the quality you offer. The result in pride can help retain employees and produce
high-quality work in ways bonuses and other incentives never could. In short, employees who feel good about where
they work are more likely to stay and do good work.
Enforcement of Policies: Ethics isn't something you just talk about. You must put policies in place that explicitly
state punishments for unethical behavior and rewards for ethical behavior. After you've established those policies, if
you enforce them consistently you re- enforce your expectations that employees will behave ethically at all times.
This means you must also make sure that you follow your own policies so you will serve as an example.
Conversations About Ethics: Ethics are not part of your culture if they're not part of your conversation. Company-
wide meetings and communications can refer to ethical dilemmas regularly so that employees understand that
discussions of ethics are a normal part of their work days. San Francisco State University points out in its newsletter,
"SF State News," that some employees may be reluctant to discuss ethics because having a difference of opinion may
seem like they're favoring dishonesty. However, if you create an atmosphere where dissenting points of view are
allowed, the open discussion about ethics will contribute more to an ethical culture than any disagreements would
detract from it.

WHAT IS THE DIFFERENCE BETWEEN UNETHICAL AND ETHICAL ADVERTISING?

Just a few decades ago, business ethics received far less attention and scrutiny than they do today. Some
questionable practices were regarded as simply the price of doing business and remaining competitive in a crowded
marketplace. As the public demands greater transparency today, both small and large businesses must understand and
honor ethical boundaries.
Defrauding Customers: Many companies conduct business with a constant eye on the bottom line, a practice that's
not inherently illegal or unethical However, if organizations inflate fees and charges, fl to give customers everything

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they paid for, bill clients for time they don't work or price gauge in the event of natural disasters or other catastrophes,
they breach the trust of clients and the general public. Also, if companies knowingly sell inferior products or services,
they violate ethical boundaries by fraudulently taking customers money and potentially placing them at risk,
especially if the products are dangerous or don't function as promised.
Conflicts of Interest: The public expects that the primary responsibility of employees and company management is
to their customers, yet professionals sometimes place their personal benefit first or use their positions to gain favors
or other perks. For example, if a company is evaluating bids from several suppliers and accepts gifts from one
candidate in exchange for the contract, this constitutes a bribe and unfairly eliminates other applicants from the
bidding process. Similarly, if a professional uses insider knowledge to dump stock he knows is about to take a
significant hit, this violates ethical standards and could be considered criminal activity.
Employment Policies and Practices: How a company treats current and potential employees reflects on its ethical
principles and can damage employee morale or drive away top talent. Employers who favor candidates in their 20s
regardless of their qualifications unfairly discriminate against older workers. Ethics also come into play regarding the
day-to-day treatment of employees, such as allowing a culture of bullying, requiring employees to work exceedingly
long hours or in inhospitable conditions, and paying workers below minimum wage or less than the standard industry
wages.
Social and Environmental Impact: Some ethical violations aren't immediately obvious but gradually cause dameg
to the community. For example, companies dam" unethical business practices to squeeze out their competitors could
shut down businesses in the that community and threaten the economy and people's livelihoods. If companies don't
assess the environmental footprint they leave behind, they could cause irreparable ecological damage that also may
threaten the health and safety of residents in the community.

THE VALUE OF STRONG ETHICAL BUSINESS PRACTICES AND SOCIAL RESPONSIBILITY

Stakeholders are the people and groups that have an interest in your business. Traditionally, shareholders or
owners have been the primary stakeholder of a business. In the early 21st century, though, other groups have become
more vocally involved in holding companies to a higher social and environmental standard.
Stakeholder Groups: To understand the impact of stakeholders, you need to know who they are and how they relate
to your business. Along with owners, customers, communities, employees, business partners and suppliers are key
groups. Customers expect you to operate a business honestly and fairly while also offering a value-oriented solution.
Communities expect companies to get involved and to give back. Employees expect a fair working environment.
Business partners and suppliers expect you to manage your business relationships with high integrity and
responsibility.
Financial Impact: Companies are still in business to make money. However, the financial interests of your owners,
partners or shareholders have been tempered a bit to create a greater balance with social responsibilities. Still, part of
your role as company leader is to make wise decisions that improve revenue, minimize costs and produce a positive
bottom line. The greater involvement of other stakeholders, though, has had uncertain effects on the bottom line of
companies. Showing a financial return on investment from socially and environmentally responsible behaviors is
difficult. It costs money to manage waste and recycling programs that are good for the environment. However,
companies that do take other stakeholder interests into account understand the negative publicity that comes from
unethical decision-making in the information age,
Social Impact: The internet and mobile technology have given greater power to social and consumer watch groups
and the public at large. If you operate without integrity in customer marketing, sales and service, you will get called
on it. Non customer friendly actions simply g term sense in the early 21st century dont make long- Communities, a
separate entity from customers, also expect you to participate in community activities and to share a bit of the wealth
with the people that provide your income. One of the advantages a local business has over large chains is the
connection with the community. Leave this aside and you lose that personal touch."
Operations Impact: Employees have become a much more involved stakeholder group. In general, employees
expect to be valued as a key asset and expect to be able to work in a non-discriminatory work environment. Failure
to provide an equal opportunity workplace can lead to lawsuits and low employee morale, Suppliers. expect to be
paid on time and expect that you will keep them in the loop on important business activity that relates to their
relationship with your company. As a simple example, using a supplies or resale products in a way that is bad for the
environment or socially irresponsible impacts the suppliers or your partners as well.

THE ADVANTAGES OF BEING ETHICAL

Your ethical business practices affect more than just your small business. Violations of the public trust create
a poor climate for all businesses and can bring down local, regional and even national economies. Your primary
defense against unethical practices among your employees, managers and even yourself is ethical awareness in the
workplace. All of your business activities, from the stockroom to the boardroom, have ethical implications. Promoting
ethical awareness requires company-wide initiatives.

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Community Responsibilities: Your business has place in the community, whether that is a literal community around
your premises or a virtual a community of customers and other businesses like yours. Create awareness among your
workforce of the importance of having a positive reputation in your community. At company-wide meetings, you can
discuss your company's standing in the community and the importance of each employee's contributions to that
standing. For example, if you operate a tire store, emphasize the importance of removing old tires from the back of
the store and recycling them properly.
Conflicts of Interest: Make your employees aware of the pitfalls of conflicts of interest, whether those conflicts
involve an exchange of money or an exchange of favors. Business is about selling products or services to customers
who value them. If vendors, supervisors or owners favor a product, course of action or employee because of an outside
interest, your business no longer values honesty. Make your workforce aware of your distrust of conflicts of interest,
and encourage the reporting of such conflicts.
Employment Practices: You should have written guidelines that state the ethics of your employment practices. Not
only does the law prohibit prejudicial hiring and promotions, but such practices also destroy the trust of your
employees. Review your guidelines periodically and reiterate them in meetings, emails and bulletin board postings
so that you foster awareness of fair employment practices.
Honesty: You should promote honesty between your employees and your customers. This includes your sales staff,
which should never make false promises or inflated claims. In addition, demand honesty from employees on
everything from reporting hours to handling stock and financial transactions. Your own honesty and transparency
will foster awareness of the importance of honesty.
Property Rights: You can promote ethical awareness by writing detailed policies regarding property rights. These
policies should not only cover your expectations for the treatment of company property such as the premises and
inventory, but also the respect you show toward personal property of employees.
The Law: Some ethical awareness comes from knowledge of the law. Publish guidelines on bribery, discrimination
and fraud, along with the legal consequences for such behavior. These guidelines are vital in the event that en
employee engages in illegal activity, because you need to be able to document the fact that you neither endorse nor
encourage such activity.

VALUES AND CULTURE IN ETHICAL DECISION MAKING: (Christine Chmielewski 2004)

Ethical standards are the standards of our environment that are acceptable to most people. In the western
world these standards are, in large part, based on Judeo-Christian principles. Generally referred to as mores, ethical
standards are what the majority accepts as good, and the way they behave without imposed rules and regulations.
Within our societal structure, sanctions are often imposed on those who fail to follow ethical standards, and laws
dictate consequences for those found guilty of unethical behaviors.
Ethical thinking involves the intricate process used to consider the impact of our actions on the individuals
or institution we serve. While most decisions are routine, we can unexpectedly face an ethical dilemma when unusual
situations occur suddenly for which an immediate response is needed.
The foundation of ethical decision-making involves choice and balance; it is a guide to discard bad choices
in favor of good ones. Therefore, in making ethical decisions, one of the first questions to consider is 'what a
reasonable man would do in this situation? For tougher decisions, advisors may find three rules of management
helpful (Hojnacki, 2004).
The Rule of Private Gain. If you are the only one personally gaining from the situation, is it is at the expense of
another? If so, you may benefit from questioning your ethics in advance of the decision.
If Everyone Does It. Who would be hurt? What would the world be like? These questions can help identify unethical
behavior.
Benefits vs. Burden. If benefits do result, do they outweigh the burden?
When people work closely together on a project, individuals tend to take on the core values of the group.
Individuals within a group often compromise their own values in favor of those held by the group. Because of this,
groups should use the three rules of management to assess whether their organizational decisions are ethical. Since
group dynamics are an increasingly vital measure of organizational success, and standards of behavior are viewed
within the context of profit and integrity, it is imperative that the group conceptualize the impact of their decisions.
To be truly comprehensive, advisor development programs must address ethics and the role culture and
values play in ethical decision-making. Our institutions have become more diverse. This is true in regard to easily
recognizable differences, such as race and age, but also in terms of hidden differences, such as culture and disability.
Care must be given to the reexamination of values and perspective, and how these influence so many ethical
dilemmas.
We must understand that values are acquired in childhood and manifest themselves on our campuses as
permanent perceptions that shape and influence the nature of our behaviors. Values involve emotion, knowledge,
thought, and ultimately choice of response. Values vary between individuals and, because values govern behavior,

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they color the way individuals view and respond to their world. It is important to understand the impact values have
on choice. While values can, and do, change over time, they represent a significant component of personality. It is
through individual values that culture is defined, and provides broad social guidelines for desirable standards.
Generally described as normal societal standards, or norms, values influence how people make choices.
When working with people, it is imperative that we appreciate that each person's intrinsic values are different.
Because values are so ingrained, we are not often aware that our responses in life are, in large part, due to the values
we hold and are unique to our own culture and perspective. Furthermore, we seldom reflect on the fact that the people
with whom we associate hold their own unique set of values that may be different from our own. Advisors need to
be aware that, like their students, they bring their own set of values to the advising session. Thus advisors must be
aware of and open to, these differences in values as they work within their institution's regulations and standards.
Sometimes these are, or seem to be, conflicting.
Students are often developing their decision- making processes and may question the values held by their
families and society. In our multi-cultural environment, ethical standards need to be addressed in advising situations
and in our classrooms so that conduct can be understood and ethical challenges avoided. For example, plagiarism is
an issue frequently addressed on North American campuses. We assume that our students have a common
understanding of the issues involved, and have learned the requirements for appropriately citing sources. However,
students from cultures where vast memorization is expected or knowledge is considered common ownership often do
not recognize that papers presented in our institutions must include proper citation of thoughts borrowed from others.
In "What is Ethical Behavior for an Academic Adviser?" (Buck, et al., 2001), the authors explain three
continua of moral behavior. Advisors should locate their comfort zone along each of the following ethical continua
and steer clear of either extreme:
Neutral vs. Prescriptive. Those who operate in a neutral mode are reluctant to tell students what to, do, preferring
instead to let students discover the appropriate action with minimal guidance. On the other end of this continuum, a
prescriptive advisor uses the authority of the position to express opinions and make recommendations.
Encouraging vs. Discouraging. On one extreme, advisors look for ways to give positive messages to students while
withholding any criticisms. Advisors in the other extreme look for opportunities to chastise or dwell on negative
consequences of student behaviors.
Judgmental vs. Nonjudgmental. This continuum only exists within the advisor, not in the advisor's interactions with
students. Judgmental advisors scrutinize everything, accepting nothing at face value. Nonjudgmental advisors accept
what students or colleagues tell them without criticism (Buck, et al., 2001).
To be ethically successful, it is paramount that we understand and respect how values impact our social
environment. How we perceive ourselves and operate within our environment is of such importance that institutions
establish rules of ethical behavior that relate to practice. Institutions that examine power and responsibility, and audit
their ethical decisions regularly, develop employees that function with honesty and integrity and serve their institution
and community.
Without the emphasis on ethics, organizations can miss the opportunity to reinforce responsibility for their
internal and external environment. This failure can lead to an outcry of negative public opinion, or even worse, legal
issues. The measure of ethical success. within institutions of higher learning has always been important, but no more
so than in today's environment of regulatory and public scrutiny. Advisors, as a part of their institution, are
accountable to it in a legal and moral sense. It is important that advisors operate within the constraints of ethical
standards. We do a disservice to ourselves, our students, our institutions, and our profession if we do not address
these issues regularly.

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