Ethical Decision Making Essay Example

commitment and continuously monitor their performance and the surrounding environment. This allows them to learn and make necessary improvements. The same applies to teams and work groups within any organization.

The kernel is purpose, capability, commitment, monitoring, and learning.

General Categories of Objectives for Effectiveness and Efficiency:
- Organizational ends, such as client service.
- Efficient usage of resources.
- Profitability and meeting societal responsibilities.

These objectives encompass safeguarding the organization's resources from inappropriate usage or loss, as well as identifying and managing liabilities.

The text emphasizes the significance of reliability in both internal and external reporting, as well as the importance of maintaining accurate accounting records. It highlights the need for dependable information within the organization and for information published for third parties. The text also underscores the protection of records against fraud, particularly theft and manipulation of results. Furthermore, it acknowledges the importance of compliance with relevant laws, regulations, and internal policies to ensure proper conduct by the organization.

Effective control is achieved when it inspires confidence in the organization's capacity to accomplish its objectives, which involves recognizing and reducing risks. There are two significant risks that can jeopardize the organization's sustainability and prosperity: a) Failure to sustain the organization's ability to recognize and capitalize on opportunities, and b) Failure to sustain the organization's adaptability. Adaptability refers to the organization's capability to react and adjust to unforeseen risks and opportunities while making decisions based on suggestive indicators in the absence of clear information.

Important Concepts in Understanding of Control (a) Control is influenced by individuals throughout the organization, including the board of managers, direction, and all other staff. (b) People are responsible for achieving objectives as well as ensuring effective control to

support objective attainment.

Organizations continuously respond and adapt to changes in both the external and internal environments to be successful. Effective control requires alignment with the organization's objectives, changes, and ability to adapt.

When making changes to any aspect of the organization, the resulting effects on control should be taken into account. Control can provide reasonable assurance, but not absolute certainty.

There are two reasons why absolute control is not possible, despite exercising due diligence. The first reason is the limitations of human capabilities, including faulty judgment and human error. The second reason is cost/benefit considerations. Effective control requires maintaining a balance.

Between liberty and integration lies the delicate equilibrium between centralization and decentralization. It is about striking a balance between imposing limitations for achieving consistency and facilitating the freedom to maneuver.

There is a delicate balance between maintaining the status quo and adapting to change. This balance involves demanding consistency for efficiency while allowing flexibility to respond to change. The CoCo model is based on four pillars:

• The purpose pillar focuses on establishing and communicating objectives, as well as identifying and evaluating significant risks.
• The policies pillar requires the establishment of policies that support objective achievement and risk management. These policies need to be communicated and practiced so people understand expectations and limits.
• The plans pillar involves communicating and establishing the organization's plans for achieving objectives. These plans should include measurable performance metrics and indicators.
• The commitment pillar emphasizes establishing and communicating shared ethical values.

Organization-wide training and implementation is essential; Human resource policies must align with the organization's ethical values and goals; Specific roles and responsibilities must be clearly defined and aligned with organizational goals; A culture of trust should be

cultivated to promote effective communication and performance towards achieving the organization's objectives. Capable people must possess the required knowledge.

The organization should have accomplishments and tools in place to support its aims. Communication procedures should align with the organization's values and help achieve these aims. It is important to timely communicate relevant information that enables individuals to perform their assigned duties. Coordination should be maintained among different parts of the organization, focusing on its aims and risks. Control activities should be an integral part of the organization, designed to support its objectives. Monitoring of both external and internal environments is necessary to gather information that may indicate the need to reassess the organization's aims or control measures. Performance should be evaluated against the targets and indicators set in the organization's objectives and plans. The assumptions underlying the organization's aims should be periodically challenged. Information needs and systems should be reevaluated when aims change or reporting deficiencies are identified. Follow-up procedures should be established to ensure appropriate changes or actions are implemented. Management should periodically assess the effectiveness of control in the organization and share the results with those to whom they are accountable. The Ouchi Framework defines control as the sum of interpersonal influence relationships within an organization.

It is equivalent to power. Ouchi on control: The role of an organization is to acquire cooperation among a group of individuals or units who share only partially aligned goals. Market control in a market, prices provide all the information needed for effective decision-making.

Markets are able to regulate employment and salaries by precisely measuring and valuing individual contributions. In this system, the compensation for each employee is directly

proportional to their contribution. However, pursuing personal goals outside of the organization may result in a decrease in wages. The market mechanism is only effective under strict conditions, one of which is that contributions must be quantifiable.

Reciprocality ensures that if one party in a transaction tries to deceive the other and is exposed, it becomes the norm.

Individuals who violate societal norms will face punishment from all members of the system, not just the victim. This punishment will be significantly more severe than the offense committed, effectively deterring potential future misconduct. If a member of an organization is found to be dishonest about providing higher wages, consequences will follow.

The lasting consequences will be faced by the organization itself. Bureaucratic control entails supervisors closely monitoring and directing the behavior of subsidiaries. There are stringent rules and established work procedures in place, and employees are assessed based on their adherence to these regulations. Bureaucracies utilize a combination of close evaluation and a shared understanding of common objectives. Supervisors also have the authority to assign tasks to subsidiaries as needed.

The ad hoc formation, arrangement, or completion is solely for a specific purpose. The rule has less information than a price. It is a random standard to be used for comparison.

Conformity requires employees in certain countries to sacrifice their personal freedom to their superiors within an organization. This allows the superiors to control the employees' work activities and monitor their performance. However, the bureaucratic mechanism is not as efficient as the market mechanism in terms of administrative overhead consumption. Additionally, heavy reliance on monitoring can cause individuals to feel a loss of liberty.

The negative consequence of not achieving cooperation with

cultural/clan control is that it hinders their motive. Cultural/clan control is achieved by selecting and socializing individuals who have goals that align closely with the organization's goals. This approach is most effective in an environment where determining success is inherently uncertain and where working together as a team is common.

It is difficult to accurately rate individual parts. The kin mechanism involves internalizing goals through activities like ceremonies, narratives, and rituals. It also relies on a socialization process that requires a shared understanding of values and alleviations. This mechanism depends on a thorough socialization process that effectively resolves conflicts between people.

The kin lacks a monetary value mechanism and explicit regulations like bureaucratism. It relies on common understanding and committedness to socially prescribed behaviours for control. However, diversity and high employee turnover make it impracticable as a control mechanism in modern organizations. Nonetheless, if the societal demands can be met, the kin mechanism can be efficient.

The CoSo Framework Internal Control encompasses the social and informational prerequisites necessary for effective control. It is a procedure implemented by the board of managers, direction, and other forces within an entity. The main objective of this framework is to provide reasonable assurance in achieving operational effectiveness and efficiency.

Organizational processes encompassing financial coverage, compliance with laws and regulations, and internal control are crucial for ensuring dependability. These processes involve individuals at different organizational levels and strive to achieve specific objectives in multiple intersecting areas.

There are three classes of aims: Operations, which relate to the efficient and effective use of resources like EPS or cash-flow marks, and process efficiency. Financial reporting, which relates to the preparation of reliable published financial statements. Compliance, which

relates to the entity's adherence to applicable laws and regulations. The components of the control environment include the atmosphere in which people carry out their activities and perform their control duties.

Concerning the individuals associated with the organization—their collective nature, moral principles, dedication to expertise, and the context in which they function. This context encompasses elements like board of directors and audit committee.

The management's doctrine and operating manner, organisational construction, assignment of authorization and duty, and human resources policies and patterns all play a role in creating an effective control environment where competent individuals understand their roles and responsibilities.

They are authorized, knowledgeable, mindful, and committed to doing what is right in the proper manner. They are dedicated to following an organization's policies, procedures, and ethical and behavioral standards.

The control environment includes proficient competency and ethical commitment. This includes evaluating integrity and ethical values through codes of conduct and other policies regarding acceptable business practices, conflicts of interest, and expected standards of ethical or moral behavior. It also includes relations with employees.

providers, clients, investors, and creditors.

rivals and hearers face pressure to meet unrealistic goals and expectations, which can lead to a lack of commitment to competency in both formal and informal job descriptions.

cognition and accomplishments needed to perform occupations adequately, independence of the board of managers or audit committee from direction, the frequency and timeliness of meetings with direction, sufficient and timely communication between management regarding important organizational activities and financial performance/position, management's philosophy and operating style in terms of risk aversion or neutrality.

It is important to consider the attitudes of employees towards risk, whether they are risk averse or risk seeking. Another factor to consider is

the frequency and interaction between senior management and operational management. The attitudes towards financial reporting are also important to take into account. Additionally, the appropriateness of the organizational structure and its ability to provide the necessary information flow to manage its objectives should be considered.

The definition of the duties of a cardinal manager and their understanding of these duties are assessed. The delegation of authority and responsibility involves assigning tasks and authorizing individuals to handle organizational goals, operational functions, regulatory requirements, and responsibility for information systems, as well as providing the authorization to implement any necessary changes.

Human resource policies and practices encompass policies and processes related to the engagement, training, promotion, and compensation of employees.

The direction of employee retention and turnovers is important for achieving organizational objectives. Risk Assessment involves evaluating potential risks that may hinder the achievement of these objectives. There are three categories of objectives, specifically operations objectives, which pertain to the fulfillment of an organization's core mission.

The essential basis for its existence is financial. Describing objectives in terms of finance involve preparing trustworthy financial statements. Conformity objectives entail conducting activities in accordance with relevant laws and regulations. The objectives of fiscal reporting relate to the existence or occurrence of assets and liabilities.

On a specific day of the month, both assets and equity are present and recorded accurately. Completeness is ensured as all transactions, events, and circumstances within a specific period have been properly recorded. Additionally, both assets (rights) and liabilities (obligations) are included in the recordings.

Evaluation and Allocation - All assets, liabilities, gross, and expense constituents are recorded at the correct amounts in accordance with applicable accounting rules. Transactions are accurately calculated

and appropriately summarized.

Entries are properly recorded and reflected in the entity's books and records. The items presented in the financial statements are accurately described and correctly classified. There may be instances where an objective in one category supports or overlaps with an objective in another category. For example, the objective of closing quarterly within 10 working days primarily pertains to operational matters, but it also has implications for financial reporting and compliance.

According to SEC regulations, the house must timely register fiscal statements. Evaluation of Goals: At the entity level, the goals statement should provide broad guidance on what the entity aims to achieve, while also being specific to this entity. These goals should be communicated to employees and the board of managers. Business plans and budgets should align with the entity-wide goals and current conditions.

Strong linkage between activity-level aims, entity-wide aims, and strategic programs is crucial. It is important to identify the critical success factors as the key aims. After determining the ends and aims, it is essential to address the risks that may jeopardize achieving those ends.

The text discusses the stated and implied hazards related to external and internal factors at the entity degree. Risks at the entity degree are similar to economic factors that impact the demand for a product, such as technological development and changing client demands or outlooks. These factors can affect various aspects like product development, production process, and customer service.

The text discusses pricing, guarantees, competition, new Torahs and ordinances, natural catastrophes, economic alterations, and other extraordinary events. It also mentions internal factors which include conditions within the entity such as break in information systems, quality/competency of hired forces,

change in direction duties, nature of the entity's activities, ineffective board or scrutinize commission. Activity degree involves the possible hazards hidden in the normal class of concern. An example of this is aiming to maintain equal natural stuff stock list.

The hazards of not achieving the objective of the activity may include products not meeting specifications, or not being delivered in required quantities, on time, or at acceptable prices. Analyzing risks – risk function, likelihood (frequency), and magnitude.

Pull offing Change involves dealing with changes in the operating environment, whether they be regulatory or economic in nature. These changes can be driven by various key forces, such as rapid growth, which can strain existing systems to the point where controls may break down. Additionally, new technology and the introduction of new product lines can also necessitate effective change management.

Merchandises and activities must be evaluated for risks. The house should have mechanisms in place to identify hazards from both external and internal factors. These hazards should be thoroughly assessed, taking into consideration their estimated significance and the likelihood of occurrence, as well as the magnitude of their impact on achieving goals. Once assessed, necessary actions must be identified.

It is essential to identify significant hazards for each important activity-level aim.