In all organizations, senior management is responsible for making strategic and operational decisions to ensure that the internal control of the business is running effectively, smoothly and efficiently. Good strategic decision making enhances profitability and long-term growth. It is important that decision making take into consideration the business' ethical values along with the objective of achieving its long-term stability.
Ethical Values in Decision Making
An organization, through its management, needs to ensure that all of its employees maintain the business' ethical values when making decisions and performing their duties, and these should be embedded as part of the culture in the organization. Respecting everybody’s rights and privacy, treating employees fairly and being professional and objective are ethical principles that all managers and employees should demonstrate.
Purchase and Safeguard of Assets
Members of senior management have a key role in making decisions on assets acquisition. They have to ensure that the process is done through legitimate means, such as an open competitive market, and is based on the quality of the goods and whether they provide value for the money. It is crucial to ensure that unethical behavior is not being practiced, such as taking money or large gifts in return for accepting goods from suppliers. Some companies have an ethical code for their employees in terms of the size and quantity of gifts that can be accepted from suppliers. Management also ensures that the assets are utilized and maintained for the purpose of the business only and will result in a profit for the company.
A meeting often has to take place before any decision is reached on a particular issue. This provides opportunities to all members to raise their concerns and disagreement and then to come to a decision. Having more ideas presented in the meeting will not only strengthen the intellectual discussion but also will enhance ethical practices. For example, the process of the meeting and reaching a decision through majority vote itself is an ethical process, rather than one person making the decision without having discussion in the meeting.
Employee and Management Relationship
Employees are part of an organization’s assets and are one of the determining factors for the company’s survival. A good relationship between employees and management stimulates the company’s growth. Management, through the human resources department, plays an important role to ensure that employees practice proper ethical conduct. Unethical behaviors such as coming late to work and poor performance in their jobs, among other negative activities, should be monitored consistently by management. However, it is also their obligation to ensure that any disciplinary decision is made fairly to all employees concerned.