Unethical Behavior and Poor Decision-Making, Research Paper Example

Unethical behavior and poor decision-making has been a major key to collapse of many businesses around the global. Many employees have performed unethically while others have failed to make a good decision in their companies. Their impacts affect financial sectors and the whole company in general. After all, the company ends up finding itself into hot water. For example, the General Motor’s Company (GM’s) have recent been affected by above factors and it’s now facing a serious problems. The GM’s professionals were unable to make a long term decision of maintaining their customer’s and its result was bankruptcy. If not president Barrack Obama efforts, the GM’s would have resulted to dissolution. (Gaumnitz, 2004).

There is no superior impact on stakeholders when a financial officers to auditors to accountants and so on, perform unethically. Unfortunately, when an employee prepares financial information, there are a number of reasons which might be considered as acting unethically. One of it is self-interest-greed. For example, an accountant might decide to embezzle funds from another employee for his/her personal financial gain (VanZante, 2005). Or maybe the CFO of a publicly traded conglomerate might decide to prepare financial statements which will shows that the company is performing excellent but in real sense, it’s ironic, the main reason of doing this is that she/he wants their stock portfolio to amplify.

Another example of unethical behavior which current survives is from corporate pressure. An accountant might feel much pressured from her/his consumer maybe to report a false statement. Or perhaps a CFO is going through demand for upgrading from the company’s president, the board pf directors, stockholders, or the owners; or she he might be in terror of losing their job. Moreover, in a case where the company has a conflict of interest and it exists, an accountant might come to a conclusion of continuing working with the company. However, if the accountant is been owed any funds or may have a significant wager in a firm, she or he might not be the person who will set up a certain companies’ financial reports.

Lastly, and maybe the mainly form of unethical behavior, is the accountant failing to conduct an in-depth scrutiny when she/he is revising the financial report and also, when preparing it. One of the major problems in many offices is taking short-cuts in their work and this isn’t the way to go when undertaking your duty in a professional manor. For example, in Kenya, the pre budget that was announced by finance minister known as Uhuru Kenyatta, it has a lot of errors both typing errors and accounting errors. It was shameless after the Kenya parliament went through the budget and realized later that there was a mistake. This is a form of unethical behavior, since both accountant and the typist didn’t revise their work after completing it. Both can be said as escapists, they are escaping from what they are been paid for and they want to pass short-cuts in their life.

However, in order to prevent unethical accounting practices in the workplace, there have been laws enacted by both national and state levels. In addition to these bylaws, there are a lot of implementations of implementing changes which are pulled towards the perfection of professional ethics.

When comes to decision making, these is one of the most vital component in a business success. Decisions are usually been based on underpinning of knowledge and sound reckoning which will definitely leads the company into long-term opulence. Conversely, those decisions that are been based on the basis of flawed logic, incomplete information, or emotionalism might speedily put a business out of commission (whereas, bad decision might cripple even large, capital-rich corporation over moment in time). When making a decision, you are been required to take your time well and make a quality decision and implement it wisely. A good decision is a sign of success but poor decision is a sign of a failure to a business.

According to William, B. (1999), one of the roles of the mangers is decision making. If a managers might makes a decision any how without looking positive and negative side effects of his/her decision will leads the company to a failure or might even result to dissolution. For example, the Toyota Company based in Japan have been doing well and have been able to sustain their initial customers and gain others who runs away from the General Motor’s Company that is been located in United State of America due to its poor decision making. A decision maker may employ decision analysis, which will assist him/her in the decision to be made, the possibility and anonymous events which can impinge on the outcome. Also in order to avoid poor decision making, a decision maker should not be overconfidence. He/she must make consultant from others in order to ensure his/her decision is right or not.

However, whatever one’s views may be about the merits or drawbacks of business enterprise as we know it; it is apparent that the management of large firms is a complex matter. In recent years, the talents of economist, accountants, psychologists, sociologists, mathematicians and statisticians have been brought together in such areas as operational research, organization theory, managerial economics, management science, management accounting and so on, with ‘General Systems Theory’ as the ultimate in terms of the multidisciplinary approach. These subjects serve two aims: to improve our understanding of management and to teach managers methods of analysis which will make them more effective in their work.

Before we develop this further we must be more explicit about what a manager’s work consists of. J. Massie (2002) describes the functions of management as: decision making and policy formulation, planning and controlling, organizing and staffing, communicating and directing. Decision making is singled out for special attention since it pervades most managerial activity. Indeed all the other functions that Massie describes involve decision at some stage or another. Decision is the act of consciously choosing from among alternative courses of action and while one must always relate any decision to the action that ensues, conceptually the two can be separated for purposes of analysis. It is our view that any analysis of managerial decision making, in particular the kind of analysis designed to improve decisions, can benefit enormously from the subject matter of economics.

The general system theory is any entity which consists of inter-related, interacting or interdependent parts. The most important contribution, in our view, that general systems theory has to offer the subject of decision making is the emphasis on the total system. The reason for stressing this is that in a large organization, managers often become obsessed with the subsystems for which they are responsible. The production manager makes decisions about the manufacturing part of a business’s operations, the sales managers is concerned with sales, the personnel manager with acquiring and developing human resources and so on. There is a great danger in this kind of organization of losing sight of the business as a total entity, how the decisions made in one part of the system interact with those made elsewhere and how these influence the direction in which the whole firm will move. This is why is very important to consult other’s in whatever decision you might wish to make, so that other departments of organization may not be influenced by one department managerial decision making. (William, 1999)

Difference between Unethical Behavior and Poor Decision Making

Unethical behaviors are illegal activities carried out by employees in a business, such as making long distance calls on company lines, falsifying the number of worked hours, duplicating software of the company for personal use maybe at home or anywhere else outside the company, embezzling funds from the company, or even falsifying records of the business; whereas poor decision making is a process whereby a decision maker makes a wrong final choice of the business. The output might be an action or an opinion of option

Conclusion

One of the major drawbacks for many businesses is unethical behavior and poor decision making which is been made by the decision maker. However, in order to eliminate these drawbacks, we adhere to proper communication in our workplace. Also, we need to hire qualified personnel who are in a position of making long term decision and hence sustaining the business. In my opinion, this kind of behavior should be done away with and therefore, the world will be in a better position of fighting against global economics which have fallen down.

Reference

Gaumnitz, B. (2004). “Codes of ethics with impact”, CPA Journal, vol. 74, issue 5, 64-66

Massie, J. (2002). “Managerial Decision Making”, New York: Macmillan Publishers.

VanZante, N. (2005) “Improving professional ethics”. CPA Journal, vol. 75, issue 5, 9-11.

William, B. (1999). “Business Management”, London: Longhorn Publishers.