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Managing Business Ethics

Chapter 3 Trevio & 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

Gioias Personal Reflections on the Pinto Fires Case

+ The Relationship between Ethical

Awareness, Judgment, and Action

Ethical Awareness

Ethical Judgment

Ethical Action

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?

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 Differences
Ethical Decision-Making Style Cognitive Moral Development Locus of Control Machiavellianism Moral Disengagement

Ethical Awareness

Ethical Judgment

Ethical Actions

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 individuals perception of how much control he or she exerts over events in life.

External

Internal

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

STOP AND THINK

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.

+ 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 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

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. 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 conict? - How should Mary deal with Peggy, Joe, the donor, and representatives of the corporation?