Managers have a different role to play in their work place as compared to his or her personal life decisions. The manager has is targets set for the year, month and each day. There are regular reviews, check and rewards and punishment for his progress in this field. These are tangible and all stakeholders keep a close watch.
The other aspects that guide a manager in decision making are:
i. Company vision.
ii. Company ethical codes and how these are practiced.
iii. Company conduct rules and policy followed regarding wrong actions. How ethical behaviour and decisions are perceived and encouraged in the organisation.
In the long-term, markets encourage ethical companies and ethical behaviour of the officers of the organisation. The risks and potential cost of unethical behaviour are higher than those of honesty. Truth should not be weakened. If slightly weakened it is no more truth or honesty.
The modern business entities are requiring large significance due to their size and influence exerted by them. The business corporations have become a method of property’ tenure and a means of organizing economic life. The growth of business houses has evolved a corporate system. The corporate system has gained prominence and has with it the attributes of power and can deal with itself as a major social institution.
While making decisions a manager has many questions that come to his mind. The first and foremost obvious question will be: what is right, for whom the decision will help, for whom it will harm, what will be the gains and losses and what is optimal decision that makes overall good for most of the people.
The most important people that are connected with the company are the stakeholders. First let us stakes. A stake is an interest, share or claim that a group or individual has in the outcome of a policy of a company, procedures or action towards others. Stake and claims may be based on legal, economic, social, moral, technological, ecological, political or power interest.
The stakes can be present, past or future oriented. A stakeholder may seek compensation for the past actions of a company or try to hold certain future actions which may be harmful to the society. Stakeholders include all individuals or groups who can affect or is affected by the actions, decisions, policies, practices, or goals of the organisation.
The stakeholders include all those who are connected with the business organisation: Owners, Financial Community, Activist Groups, Customers, Customer Advocate Groups, Unions, Employees, Trade Associations, Competitors, Suppliers, Government and Political Groups.
The following Fig. 9.2 shows the stakeholders and company relations:
The stakeholders are further divided into three categories:
(1) Focal Stakeholders:
The focal stakeholders include the business house or the group of the top managers of the company. The CEO and the Board of Directors are considered as the representatives of the firms in the stakeholder analysis.
(2) Primary Stakeholders:
The primary stakeholders consist of owners, customers, suppliers and employees. The primary stakeholders are important for the survival of the organisation.
(3) Secondary Stakeholders:
The secondary stakeholders are large in number and include all the interested groups other than (1) and (2) above. They are the consumers, the governments, courts, competitors, general public, society, media and the like.
The relation of primary and secondary stakeholders in a company is shown by Fig. 9.3 below:
The ethical dilemmas are two types:
(1) Open:
Open type where the problem is open to public and can be seen.
For example: theft, bribery, sabotage or espionage
(2) Concealed:
Concealed that is secret or not seen.
For examples: capital investment or insider trading, bad HRM policies or corporate acquisitions and mergers.
The ethical dilemmas are shown in Fig. 9.4 below. In ethical dilemmas also similar issues come up.
To satisfy the maximum number of stakeholders it is important to review the stakeholders by the following questions:
(1) Who are stakeholders of the company and what are the relationships?
(2) Finding the stakeholder interest in the company.
(3) Assessing the nature of the power that a stakeholder has.
(4) What are the moral responsibilities of the stakeholders?
(5) Developing strategies in the business organisation to take care of the interest of the stakeholders.
(6) Monitoring the decisions if the stakeholders are taken care.
(7) How the stakeholders measure the performance of the company or what really the stakeholders want?
The normal practices of decision making involve in knowing the opportunities taking proper decisions, actions, visualizing trends and impending crisis.
The actions generally taken are:
i. Identifying the problem by study of details and environment scanning.
ii. Analysis of the issues involved.
iii. Prioritising and ranking the problems on hand.
iv. Identifying proper strategy.
v. Taking decision and implementation of decision.
vi. Evaluation of actions and monitoring the progress.
While approaching ethical dilemmas a manager has to ask one most important question is what is the motivation of manager in choosing a particular course of action? While the decision give maximum good to maximum number of people.
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