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Requirement
Describe three models used by managers to make business decisions.Critically evaluate whether ethics should be a decision making criteria.
Solution
Introduction
The lives of humans are directed by the course of actions and decisions. Whetherit is personal life or professional life, humans are destined to follow the proper code of ethics and morals.In the workplace, the organizations need to bind with certain codes and practices which will be followed by employees and organizations in order to perform the working of the organization in a smooth way. At the workplace, different types of situations will arise and different situations are guided by different models of decision making so that the most feasible solution will be proposed for the problem. The organization needs to focus on strong relationships among the group members. The present essay discussed the case of unethical decision making. The organization of Michael Patrick Pulis will be taken in the study taken from the news review of Fair Work Ombudsman in which the exploitation of young employee has been done for underpaying him for several months and afterward on claiming the payment he was fired from the organization. The analysis of the case has been done in this essay by taking the models of decision making and the importance of ethics in business which is followed by the recommendations on the case.
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Decision making and ethics
Ethical decision making refers to the process of evaluating and choosing the best alternative inconsistent with the ethical principles. Ethical decisions play an important role in the business world. But the decisions will be made morally so that it will become effective decisions.An ethical decision making is defined as the decision that is acceptable legally and morally in the larger community, whereas unethical decision will be regarded as the decision that is morally unacceptable to the larger community.Ethicsplay an important role in decision making and is seen as the important aspect of management. The issue of ethics will arise when managers make decisions by benefitting one stakeholder at the cost of other.
Identification of problem
The case study has discussed the problem of unethical behavior and decision making in an organization named Pulis Plumbing. The case discussed the problem of a young man who is just 20 years old and is underpaid by $26,882 over three months. The company fired the employee on the basis that he was hired as the second year apprentice but his skills and attitudes are not according to the standards of second-year apprentice.The company is already getting the notice from Fair work Ombudsman stating that labor rates should be paid accordingly as the apprenticeship arrangement is not there in the company, but in spite of that company do not make any arrangement for apprenticeship training and in addition to that company also breached record keeping and pay in slips at the time of producing records issued by Fair Work Inspector.
Fair work Ombudsman statement on the case
Judge Riethmuller is looking towards the case and noted that in organizations apprenticeship training must be provided, and the employee must be paid according to the working hour’s ass the enterprise agreement states that employee will be paid at the rate of $37.08 for ordinary hours and up to $74.16 for overtime workings. But in this case, the employee is only getting $12.18 an hour which is very much on the lesser side. This is an unethical behavior on the part of Pulis plumbing. According to FWO, the conduct will be defined as deliberate. the judge Riethmuller stated that Fair work act needs to be amended, a s the employer is not keeping timesheets and pay slips of the employees . for that the Fair Work Ombudsman “record my hours “smartphone app “will be used by the organizations that will be easily downloaded from Google play which will provide workers with the record of time they spend at their workplace and the workers and apprentices stand for their rights in the recently released resource that has a partnership with Fair work Ombudsman and the foundation of Young Australians to protect their rights and the penalty of $121,000 was imposed on the Pulis Plumbing Pty, Ltd for exploiting young person.
Theoretical models of decision making
According to (Ferrell,2015) good decision-making practices cost very little in organization. In this context, the models of ethical decision making will be used for decision making. Rational decision making is consideredasthe sequence of steps which involve identification of the problem by analyzing the situation and select the best alternative from the outcomes(Rational Decision Making Model,2018). This model provides the structure for the decision making the process as it considers various factors in a logical and comprehensive manner.in the words of (Carlton,2015) ethical decision making involves the participation of stakeholders in decision-making process by using time in generating possible solutions.The principle assumption of rational decision-making process is that decision has to be made as per the situations in the context of intuitive knowledge. On the other hand, the intuition model of decision making focuses on the conscious awareness of the reasoning process. According to (Hodkinson,2012 ) intuition is the result of instinct and experiences without any emotional conflict or confusion. on the other hand ( Rosanoff,2014) describe that intuition is incorporated in the decision making process, as it enhances analytic decision making and is seen as the important one in decision making(Intuitive decision making management,2018).High level of intuitive behaviors is seen in top organizations which show that leadership is the talent of making decisions. Whereas the boundary model as defined by (Battilana,2015 ) states that the rationality of individuals will be limited to the cognitive limitations and the time constraints. This model proposed that when a person is facing a choice with different options, he need not look at various alternatives, so for selecting the feasible solution sacrifice needs to be done in bounded rationality(Demirtas,2015).
Example case study
In the above-mentioned case of Pulis plumbing, it is found that the company has to bear the penalty of $121,000 due to the unethical decision making, by not paying appropriate wages to the employee, who is on the post of second-year apprentice. In addition to that organization also do not provide any training to the employee during the apprenticeship and the organization does not maintain any record of working hours.Theleave, terminations and the meal and travel allowances are also unpaid for the employee. The result of this decision making is that the organization is facing severe consequences in termsof spoiling reputation and levied of undue penalties which will affect the organization. Incontrast to that similar case of an underpayment is found in the organization Acute Health Pty Ltd by FWO, Australia in which the penalty is imposed of $300,000 to the organization for not paying wages to the first aid workers(Welcome to the Fair Work Ombudsman website,2018). Both these cases show that in organization unethical decisions affect a lot of the working and reputation of the organization. And the losses will be bear in both tangible and intangible way, which will affect the goodwill and financial aspects of the organization.
So from both these cases, we find that businesses have to adopt ethical decision making by following all the laws and regulation so that the losses will be avoided.
Recommendations
In both the cases, the investigators revealed the problem of unethical decision making, as underpayment of employees has occurred in both the cases. The unethical decisions not only affect the employees but also damage the reputation and goodwill of the organization(Forbes Welcome,2018). These cases are just like the tip of the iceberg a there are many other organizations who are involved in such malpractices. There is a strong need for modifying the malpractices and for that the companies have to implement:
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Develop the code of conduct for each and every organization as per the standards and all the organizations have to follow that code.
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Timely feedback from employees will be taken by the authorities like Fair Work Ombudsman in context of working days, timings and wages.
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Government authorities have to implement tight control on corporates, for following all the prescribed guidelines and the failure of which leads to delicensing of organizations.
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Employees have to read the employee manual and company guidelines and make sure that what is acceptable or what is not acceptable. In case of any query, the discussion needs to be done with HR professional or legal professional.
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Employees need to be curious to justify their own ethical conduct when they see their leaders act unethically.
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Poor decision making proved to be a costly decision which had an impact on employees, stakeholders, and companies. These negative effects lead to the resignation of employees and the demise of the organization. The organization needs to understand the importance of ethical decision making in the organization and serve as a role model for their employees and other organizations.
References
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Welcome to the Fair Work Ombudsman website. (2018). Fair Work Ombudsman. Retrieved 14 April 2018, from https://www.fairwork.gov.au/about-us/news-and-media-releases/2018-media-releases/april-2018/20180412-acute-health-penalty-mr
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Rational Decision Making Model, Bringing Structure to Decision Making. (2018). The Happy Manager. Retrieved 14 April 2018, from http://the-happy-manager.com/articles/rational-decision-making-model/
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Intuitive decision making inmanagement.. (2018). Freepatentsonline.com. Retrieved 14 April 2018, from http://www.freepatentsonline.com/article/Indian-Journal-Industrial-Relations/235631668.html
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Forbes Welcome. (2018). Forbes.com. Retrieved 14 April 2018, from https://www.forbes.com/sites/lisaquast/2011/12/19/how-to-prevent-poor-ethical-decision-making/#3d4401023798
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Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
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Carlton, D. W., & Perloff, J. M. (2015). Modern industrial organization. Pearson Higher Ed.
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Battilana, J., Sengul, M., Pache, A. C., & Model, J. (2015). Harnessing productive tensions in hybrid organizations: The case of work integration social enterprises. Academy of Management Journal, 58(6), 1658-1685.
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Demirtas, O., & Akdogan, A. A. (2015). The effect of ethical leadership behavior on ethical climate, turnover intention, and affective commitment. Journal of Business Ethics, 130(1), 59-67.
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