WEEK 5: Decision Making - Ethical behavior in international business

The decisions can be programmed or no programmed, the fist one it’s the simplest one, already established. The second one, is more complex. There are three decision models:

·         Rational Model: How should be the actions regarding on a desired outcome.

·         Bounded rationality model: Recognized limitations.

·         Garbage Can Model: Decisions are mixed in random way.

When individuals are in the process of decision making, there is an important concept that stands out: Risk, some of these persons are risk aversive and some of them are risk takers. Managing consist of deciding under risk and uncertainty.

In this video, we can see people without adversion to physical risks.

This process can get affected by personal pride, prejudice and other attitudes coming from the actors involved in the situation. From the other side, positive attitudes like creativeness and optimism can make the process easier and more enjoyable. The Decision making process in joint or among other can be more comfortable, but not all the times. It’s important to have in mind different alternatives and resources to avoid complications such as groupthink and misinterpretations.

Ethical Behavior refers to the willing to act in certain way according to the individual values and the organizational codes of conduct. Very important to keep in mind and rule by the established codes, all that in order to have a better relationship and control over faults.

How can organizations effectively manage both risk taking and escalation of commitment in the decision-making behavior of employees?

To start, employees have to be aware to what kind of decision they are getting involved with, also knowing which risk are likely to happen in what portion. Improving communication between managers and employees, improving control and management over employees, being more consistent with the times, etc: can be positive aspects towards these decisions of employees

Image retreived from: http://www.bioteams.com/images/complex_decisio.jpg

Video retrived from: http://www.youtube.com/watch?v=U6Iu7Qi0mSQ

Information retreived from: http://interactiva.eafit.edu.co/ei/

Information retreived from: Xiao-Ping Chen, Shu Li (2005), Cross-National Differences in Cooperative Decision-Making in Mixed motive Business Contexts.