Literature review assignment (approx. 1000 words)
Name: David Card
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The Role of Ethics and Empathy in managerial decision-making
1. Introduction
Managerial decision-making is the process managers use to identify issues, gather helpful information,
weigh possibilities, and make decisions that produce successful results. Hence, choosing the best course
of action to accomplish a particular goal or purpose involves using analytical and critical thinking skills.
Nowadays, people are becoming more aware of how their decisions affect others and the environment.
That leads to ethics and empathy in business becoming increasingly more significant today, affecting
every working individual. This literature review explores the role ethics and empathy play in management
and how they affect managerial decision-making.
2. Literature review
Managers have to do many decisions each day. Making decisions when only considering personal
benefits is difficult, while managers face decisions that impact employees, departments, and sometimes
even the whole company. That is why managerial decision-making is probably the most complex process
they must face.
According to Arnold et al. (2004), ethical theory brings clarity, depth, and accuracy to discussions about
morality by focusing on justifying morally right actions. In other words, ethical theory helps better
understand what makes specific actions right or wrong and provides a framework for reasoning about
ethical issues. While some individuals rely on their values to guide their behavior, others look to the norms
and expectations of their community or faith. This idea is supported by Bazerman and Moore (2008), who
examine the study of “implicit attitudes” and how they affect the subconscious mind in the form of
stereotypes. They explore the study case of prejudices based on race conducted by the Implicit
Association Test. The test concluded that both white and black people show favoritism towards the white
race as it is stereotypically and discriminatingly displayed as superior.
Thus, ethical beliefs are often deeply rooted in upbringing, culture, religion, and own experiences, which
may not correlate with the ethical standards of others. Put it differently, people have different opinions
about what constitutes morally acceptable and what does not. Bazerman and Moore (2008, Chapter 7)
imply that even if managers try to make ethical decisions, their subconsciousness might limit them. This
can lead to favoritism and discrimination in the workplace without managers even realizing what they are
doing wrong.
Dietz and Kleinlogel (2014) conducted a study on 112 university students of social psychology. The aim
was to assess the effect of empathy on employee pay reduction instructed on managers by higher
authorities in the company. The findings indicate that managers with more empathetic feelings would be
less likely to comply with demands to reduce employees' pay when asked by a superior. This is because
compassionate managers can identify with and feel the worry their staff would feel if their salaries were
reduced. However, compassion might be one of many reasons for the non-compliance. Batson et al.
(2009) analyze the correlation between empathy and altruism, which is the act of selfless help without
expecting any benefit in return. In comparison, empathy is a feeling that does not have to result in action
like altruism. They imply that people still get a subconscious benefit in return when deciding with altruistic
intent. In my understanding, in the example of a manager helping employees in need, even if the manager
does not expect anything in return, they still feel content with themselves, not feeling the guilt of inaction,
and they get the employee's admiration and loyalty. Batson et al. (2009) also state that “empathy is not
felt for everyone in need, at least not in the same degree.” (p. 422), which would imply that not only ethics
but also empathy can lead to favoritism.
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The fast fashion industry is a good example of an extreme lack of ethics and empathy in higher
management. The industry’s success is based on fast adaptiveness to new trends in fashion and cheap
selling prices. However, behind the success are worldwide brands that use cheap labor force, mainly in
Asian factories that violate basic human rights or needs and where employees have no certainty of safety
(Morgan & Ross, 2015). In 2013, the collapse of the Rana Plaza building in Dhaka, Bangladesh, resulted
in the most fatal disaster in the history of garment manufacturing. The tragedy claimed the lives of over
1,100 people, making it the deadliest industrial accident ever recorded. Despite receiving orders from the
authorities to close the building, the management disregarded the safety concerns and continued
operations, putting profit above the welfare of their workers (Hobson, 2013; Morgan & Ross, 2015).
3. Conclusion
In conclusion, considering ethics and empathy, not only profit, in decision-making leads to a more
comfortable working environment and shows managers in a better light, creating admiration. Therefore,
employees are more likely to stay loyal to the company and create bonds with their colleagues. However,
deciding what is morally correct and whom to feel empathy for is mainly done by subconsciousness. As
a result, ethics and empathy can lead to discrimination and favoritism in the workplace. On the other
hand, the lack of ethics and empathy can cause hardships for employees and, in extreme cases, can
even lead to their passing, like in the fast fashion industry. In the end, the responsibility to decide what
values to follow and what is essential and crucial for the business is up to the manager. They must choose
whether to prioritize the loyalty of their employees or profit. In my opinion, the ideal is to have a perfect
balance between both.
4. Resources:
Batson, C. D., Ahmad, N., & Lishner, D. A. (2009). Empathy and Altruism. In The Oxford Handbook of
Positive Psychology (pp. 416–426). Oxford University Press.
https://doi.org/10.1093/oxfordhb/9780195187243.013.0039
Bazerman, M. H., & Moore, D. A. (2008). Judgment in managerial decision making. John Wiley & Sons.
Arnold, D. G., Beauchamp, T. L., & Bowie, N. E. (2019). Ethical Theory and business.
https://doi.org/10.1017/9781108386128
Dietz, J., & Kleinlogel, E. P. (2014). Wage cuts and managers’ empathy: How a positive emotion can
contribute to positive organizational ethics in difficult times. Journal of business ethics, 119, 461-472.
https://doi.org/10.1007/s10551-013-1836-6
Hobson, J. (2013). To die for? The health and safety of fast fashion. Occupational Medicine, 63(5),
317–319. https://doi.org/10.1093/occmed/kqt079
Morgan, A. (Director), Ross, M. (Producer & Editor). (2015). The True Cost [Film]. Life is My Movie
Entertainment & Untold Creative.