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Managing Business EthicsChapter 3

Treviño & Nelson – 5th Edition

++Chapter 3 Overview

Ethical Awareness and Ethical Judgment

Individual Differences, Ethical Judgment, and Ethical Behavior

Facilitators to and Barriers to Good Ethical Judgment

Toward Ethical Action

Gioia’s Personal Reflections on the Pinto Fires Case

++ The Relationship between EthicalAwareness, Judgment, and Action

Ethical Ethical JudgmentJudgment

EthicalEthical AwarenesAwarenesss

Ethical Ethical ActionAction

++Case

You’ve just started a new job in the financial services industry. One afternoon, your manager tells you that he has to leave early to attend his son’s softball game, and he asks you to be on the lookout for an important check that his boss wants signed before the end of the day. He tells you to do him a favor—simply sign his name and forward the check to his boss.

What might influence whether you see this as an ethical issue or not?

++Influences on ethical awareness

If peers agree

If ethical language is used

If potential for serious harm

++Individual Differences Influence How We Make Ethical Decisions

Individual DifferencesIndividual DifferencesEthical Decision-Making StyleEthical Decision-Making StyleCognitive Moral DevelopmentCognitive Moral Development

Locus of ControlLocus of ControlMachiavellianismMachiavellianism

Moral DisengagementMoral Disengagement

Ethical Ethical AwarenessAwareness

Ethical Ethical JudgmentJudgment

Ethical Ethical ActionsActions

++Cognitive Moral Development

Level I (Preconventional) Stage 1 – Obedience and Punishment Orientation Stage 2 – Instrumental Purpose and Exchange

Level II (Conventional) Stage 3 - Interpersonal Accord - Conformity – Mutual

Expectations Stage 4 – System Maintenance - Upholding duties, laws

Level III (Postconventional or Principled) Stage 5 – Social contract and rights Stage 6 - Theoretical stage only

++Why is Cognitive Moral Development Important?

Because most people reason at the conventional level and are looking outside themselves for guidance

That makes “leading” on ethics essential

++Locus of Control

An individual’s perception of how An individual’s perception of how much control he or she exerts over much control he or she exerts over events in life.events in life.

ExternalExternal InternalInternal

++Connection to Ethical Behaivor?

Internals are more likely to see the connection between their own behavior and outcomes and therefore take responsibility for their behavior.

Therefore, internals are more likely to do what they think is right

++Machiavellianism

Self interested

Opportunistic

Deceptive

Manipulative

++Moral Disengagement

The tendency for some individuals to deactivate their internal control system in order to feel okay about doing unethical things

Eight mechanisms used for doing this Euphemistic language Moral justification Displacement of responsibility Advantageous comparison Diffusion of responsibility Distorting consequences Dehumanization Attribution of blame

++Moral Disengagement

STOPSTOPANDANDTHINKTHINK

““It’s not my responsibility - my boss told me to do It’s not my responsibility - my boss told me to do it.”it.”

““It’s not my responsibility – my team decided It’s not my responsibility – my team decided this.”this.”

““It’s no big deal!”It’s no big deal!”““It’s not as bad as (what someone else) is doing.”It’s not as bad as (what someone else) is doing.”

““They deserve whatever they get.”They deserve whatever they get.”““They brought this on themselves.”They brought this on themselves.”

++ Cognitive Barriers to Good Ethical Judgment

Barriers to Fact Gathering Overconfidence “Confirmation Trap”

Barriers to Consideration of Consequences Reduced number Self vs. others Ignore consequences that affect few Risk underestimated: illusion of optimism, illusion of control Consequences over time – escalation of commitment

++More Cognitive Barriers

Thoughts about integrity Illusion of superiority or illusion of morality

Paying attention to gut Careful! Gut may be wrong

++Unconscious Biases

The IAT and race bias

The role of emotions

++How it felt to be a recall coordinator…

“The recall coordinator’s job was serious business. The scripts associated with it influenced me more than I influenced [it]. Before I went to Ford I would have argued strongly that Ford had an ethical obligation to recall. After I left Ford, I now argue and teach that Ford had an ethical obligation to recall. But, while I was there, I perceived no obligation to recall and I remember no strong ethical overtones to the case whatsoever. It was a very straightforward decision, driven by dominant scripts for the time, place, and context.”

Dennis Gioia, former recall coordinator at Ford

++Toward Ethical Action

Script Processing Cognitive frameworks that guide our thoughts and actions

Cost-Benefit Analysis Too simplistic a way of analyzing No moral dimension

++Case

Mary, the director of nursing at a regional blood bank, is concerned about the declining number of blood donors. It’s May, and Mary knows that the approaching summer will mean increased demands for blood and decreased supplies, especially of rare blood types. She is excited, therefore, when a large corporation offers to host a series of blood drives at all of its locations, beginning at corporate headquarters. Soon after Mary and her staff arrive at the corporate site, Mary hears a disturbance. Apparently, a nurse named Peggy was drawing blood from a male donor with a very rare blood type when the donor fondled her breast. Peggy jumped back and began to cry. Joe, a male colleague, sprang to Peggy’s defense and told the donor to leave the premises. To Mary’s horror, the male donor was a senior manager with the corporation.

- - What is the ethical dilemma in this case?What is the ethical dilemma in this case?- What values are in conflict? What values are in conflict? - How should Mary deal with Peggy, Joe, the donor, and How should Mary deal with Peggy, Joe, the donor, and representatives of the corporation? representatives of the corporation?