Sustainable ManagementMetropolia Business Ethics IP week

11 Social Context

Social context

n “almost everyone is capable of torture and other evil acts if placed in the wrong social context”

Susan Fiske, Princeton University

n Stanley Milgram experiment showed that 2/3 of participants did cross borders

Stanford prison experiment

Situational context was created where students performed roles of guards and prisoners. Within 6 days the experiment had to stop because of excessive abuse of the prisoners.

Situation: role-playing, coercive rules, power differentials, anonymity, group dynamics, and dehumanization.

Participants: 24 were selected based

upon mental stability. At day 5

prisoners were extremely stressed

Social context

n Diffuse responsibility (other people involved, it comes with the job)

n Dehumanizing (victims are not seen as full, or as animals)

n Brotherhood mentality (group commitment)

n Social cascade effect (large group of people do or think because others have done it before)

n Financial marketsn Protest movementn Opinion polls, voting

New scientist article,”they made me do it” Bond ,2007)

Social context

n Social learning (assuming that others know something you

don’t know) and social coordination (doing it together,

going up in the mass) are driving factorsn Peer pressure (it is hard to go against peers)

n Reinforcement (in large groups with same opinion, “see I was right”)

n Polarization (we – they thinking, especially in crisis, iraq after 9/11, police and football crowd)

New scientist article,”they made me do it” Bond ,2007)

Motivation and Values

n Bruntland definition of sustainable development “Meet the needs of people…without compromising the needs of future generations…”

n What are the ‘needs’, or better the ‘wants’n Values are the basis of motivation in decision

making

Hierarchy of Needs

Maslows PyramidWestern Biased

Pinto’s PyramidEastern Biased

ERG Theory Alderfer

Existence needs

Relatedness needs

Growth needs

Satisfaction / Strengthening

Frustration / Regression

Satisfaction / Progressing

Motivation

n Humans are motivated by 3 impulses:n Greed (we want to gain)n Fear (we don’t want to lose, loss aversion)n Morality ( do what is right, even if it means loss

and harm)

Value of Live

n How much consumption during lifetimen Avoiding deathn How much income generated

n Check your worth out:n www.dinkytown.net/java/HumanLifeValue.html

Value of Live

n Needed in calculating life saving measuresn Preventing legal actions

Moral issue:n Sell kidney on Ebayn Win a kidney in a show

Ford Pinto Case

n In production 1971-1980n Design flaw: fuel tank was easily punctured in rear

end collisions, and could set fire to the carn Doors could jam in accidents to, deathtrap

Ford Pinto Case

n Ford knew about the design flaw, but decided after a cost-benefit analysis that it was cheaper to pay off lawsuits

n A memo about this leakedn Pintos were called back in a costly operationn Pinto gained a bad reputation (only 2 mln sold

out of the projected 11)

Ford Pinto Case

n Expected Costs of producing the Pinto with fuel tank modifications: n Expected unit sales: 11 million vehicles (includes utility vehicles built on same

chassis)

n Modification costs per unit: $11.00

n Total Cost: $121 million[= 11,000,000 vehicles x $11.00 per unit]

n  n Expected Costs of producing the Pinto without fuel tank

modifications: n Expected accident results (assuming 2100 accidents):

180 burn deaths180 serious burn injuries2100 burned out vehicles

n Unit costs of accident results (assuming out of court settlements):$200,000 per burn death*$67,000 per serious injury$700 per burned out vehicle

n Total Costs: $49.53 million[= (180 deaths x $200k) + (180 injuries x $67k) + (2100 vehicles x $700 per vehicle)]