PMGM7002 Chap.6 Decision Making and Ethics Away From Home
Decision Making and Ethics Away From Home
From the rational model to how people really decide
The rational model defines a problem, generates options, analyses them against criteria and chooses the best. The course then introduces bounded rationality: decision makers cannot process all the information, so they satisfice, rely on heuristics such as availability, and sometimes procrastinate or panic.
Each of these tendencies shows up in cross-cultural decisions, where unfamiliar information makes shortcuts more tempting.
Culture at every step
The chapter follows culture into each step of a decision.
Values set which problems are noticed, shortcuts decide which options are considered, and the selection criteria differ, with ability in staffing meaning what you can do in individualistic settings and who you are in collectivistic ones. Individual or group decisions and centralised or delegated authority also vary.
Further findings concern foreground against whole-scene attention, escalation of commitment in long-term oriented cultures and the effect of positive mood on stereotyping.
Ethics away from home
The course poses dilemmas a global manager meets, about gifts, promoting women, waste disposal and investing where rights are weakly protected.
Relativism says no culture's ethics are better and is labelled morally blind; absolutism imposes one list of truths everywhere. Between them sit three principles: respect for core human values as an absolute threshold, respect for local traditions, and attention to context.
Making it operational
A code of conduct has to be spelled out clearly and still leave room for judgement.
The course gives four guidelines for ethical leadership and advice for operating in corrupt environments, including understanding gradations of corruption, prioritising stakeholders who support ethical conduct and borrowing reputation from high-status partners. It closes with creative corporate responses to ethical dilemmas and asks what makes them hard to copy.
What this chapter covers
- 01
The rational decision model
- 02
Bounded rationality, satisficing and heuristics
- 03
Cultural influence on each decision step
- 04
Selective attention, escalation and mood
- 05
Ethical dilemmas for global managers
- 06
Relativism and absolutism
- 07
Three principles for balancing them
- 08
Codes of conduct and ethical leadership
- 09
Operating in a corrupt environment
Worked example · free
Respond to a facilitation demand at customs
- 2Explain why both relativism and absolutism give poor answers here.
- 3Apply the three principles in order.
- 3Recommend actions using the course's guidance for corrupt environments.
Key terms
- Rational Model
- A decision process that defines the problem, generates alternatives, analyses them systematically and chooses the best one.
- Bounded Rationality
- The limit on how much information and how many options a decision maker can actually weigh, which rules out a truly optimal choice.
- Satisficing
- Choosing the first acceptable option instead of searching for the best one.
- Availability Heuristic
- Judging how likely something is by how easily examples come to mind.
- Escalation of Commitment
- Continuing to invest in a failing course of action, often described as throwing good money after bad.
- Ethical Relativism
- The position that no culture's ethics are better than another's and that there are no international rights and wrongs.
- Ethical Absolutism
- The position that a single list of truths applies everywhere and calls for the same behaviour around the world.
- Reputation Borrowing
- Building relationships with high-status individuals and organisations to strengthen a firm's standing in a corrupt environment.
Decision Making and Ethics Away From Home FAQ
Is it wrong to follow a local business custom?
Not in itself. Respect for local traditions is one of the course's three principles, with gift exchange in Japan as its example. The limit is the threshold of core human values, meaning human dignity, basic rights and good citizenship. A custom that stays above that threshold can be adopted; one that falls below it cannot be justified by being local.
How does culture change who gets hired?
The course's example is what ability means in a staffing decision. In individualistic cultures it tends to mean what a candidate can do, while in collectivistic cultures it can mean who the candidate is, including background and relationships. Two panels applying these criteria to the same shortlist can each believe they are choosing on merit.
What should a company do when bribery is common in a market?
The course suggests treating its own values and standards as absolutes, framing ethical behaviour so that as many stakeholders as possible support it, recognising that corruption comes in degrees, and prioritising pragmatic, absentee and ethical stakeholders over indifferent ones. It also recommends building relationships with reputable, high-status partners and supporting efforts to reduce institutional corruption.
Assessment move
Write the three principles on a card in the order you apply them, then take each of the course's four dilemmas and decide it in three sentences, one per principle. Doing all four in one sitting shows you how often the first principle settles the question before the others are reached.
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