Managing Business Ethics

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Managing Business Ethics

• Chapter 3
• Treviño Nelson 5th Edition

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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
• Gioias Personal Reflections on the Pinto Fires
  Case

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The Relationship between EthicalAwareness,
Judgment, and Action
Ethical Judgment
Ethical Awareness
Ethical Action
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Case

• Youve 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 sons 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 favorsimply sign his name and
  forward the check to his boss.
• What might influence whether you see this as an
  ethical issue or not?

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Influences on ethical awareness

• If peers agree
• If ethical language is used
• If potential for serious harm

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Individual Differences Influence How We Make
Ethical Decisions
Individual Differences Ethical Decision-Making
Style Cognitive Moral Development Locus of
Control Machiavellianism Moral Disengagement
Ethical Awareness
Ethical Judgment
Ethical Actions
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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

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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

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Locus of Control
An individuals perception of how much control he
or she exerts over events in life.
External
Internal
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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

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Machiavellianism

• Self interested
• Opportunistic
• Deceptive
• Manipulative

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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

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Moral Disengagement
STOPANDTHINK
Its not my responsibility - my boss told me to
do it. Its not my responsibility my team
decided this. Its no big deal! Its not as
bad as (what someone else) is doing. They
deserve whatever they get. They brought this on
themselves.
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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

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More Cognitive Barriers

• Thoughts about integrity
• Illusion of superiority or illusion of morality
• Paying attention to gut
• Careful! Gut may be wrong

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Unconscious Biases

• The IAT and race bias
• The role of emotions

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How it felt to be a recall coordinator

• The recall coordinators 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

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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

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Case

• Mary, the director of nursing at a regional blood
  bank, is concerned about the declining number of
  blood donors. Its 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 Peggys defense and
  told the donor to leave the premises. To Marys
  horror, the male donor was a senior manager with
  the corporation.

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