BUS-201-202: TUTORIAL 6
CASE INCIDENT 1
As you saw in the opening vignette, computerized decision-making has really taken
off in recent years. Some have blamed the financial crisis that began in 2007-2008 on
excessive reliance on these computerized decision-making models. Lending officers
who used to make individualized decisions about credit worthiness through personal
judgment were replaced by computerized and statistical models, which resulted in
mechanistic decision making. As a result, large numbers of decisions were tied to a
common set of assumptions, and when those assumptions proved to be wrong, the
entire credit system fell apart and the economy faltered.
Besides the use of computerized decision models, the use of computerized systems
like Twitter for information sharing and the burgeoning number of computer “apps”
may be leading to information overload, so facts and figures replace analysis and
thought in making human decisions. Eric Kessler from Pace University's Lubin
School of Business notes, “What starts driving decisions is the urgent rather than the
important.” Researchers have begun to find that people using too much information
actually make worse decisions than people with less information, or they get so
swamped in information that they are unable to reach a decision at all.
Computer decision models do present certain advantages. Computers are capable of
amassing and compiling enormous amounts of data and using them to spot trends and
patterns a human observer would simply never see. Computers also are not prone to
emotional decision making or falling into the heuristics and biases we discussed in
this chapter. Finally, computerized decision making systems are generally faster than
human beings.
However, computer decision-making systems have certain faults that might
severely constrain their usefulness. Although computers can grind through masses of
data, they are not capable of intuition or creative thought. As scholar Amar Bhidé
notes, “An innovator cannot simply rely on historical patterns in placing bets on
future opportunities.” People are much more likely to spot opportunities that lie just
beyond what the data can tell us directly. Also, groups of people working in
collaboration can discuss and question assumptions and conclusions. Computers
cannot actively consider whether their programming makes sense or adapt
automatically when values change.
Questions
1. What are the specific advantages of using computerized decision-making? How
can computers be better decision makers than humans?
2. What are the weaknesses of using computers as decision tools? Are computers
likely to have any specific problems in making decisions that people wouldn’t
have?
3. Do you think computer decision-making systems can effectively take ethical
issues into account? What is the role of human decision makers in creating ethical
choices?
4. Are there advantages to completely disconnecting from the wired world when
possible? What can you do to try to retain your ability to focus and process
information deeply?
Source: Based on S. Begley, “I Can’t Think!” Newsweek 157, (March 7, 2011),
www.newsweek.com; A. Bhidé, “The Judgment Deficit” Harvard Business Review, (September,
2010), pp. 44-53; and T. H. Davenport and J. H. Snabe, “How Fast and Flexible Do You Want Your
Information, Really?” Sloan Management Review 52, (Spring 2011), pp. 57-62.
CASE INCIDENT 2
Why would former New York Attorney General and then Governor Eliot
Spitzer decide to use a prostitution service? Why would highly respected attorney
Marc Dreier, with degrees from Harvard and Yale and a successful Park Avenue law
firm, decide to impersonate people in order to swindle others? From Tiger Woods to
Bernie Madoff, it’s not hard to find examples of unethical behavior. But what causes
people to make unfortunate choices?
Behavioral genetics research has taught us that virtually every human
characteristic has genetic origins, and that genetic differences are a central reason
people differ in their behavior. Thus, some personality traits probably predispose
people toward unethical behavior. One study of white-collar criminals, for example,
showed they were significantly lower on conscientiousness than the general
population.
On the other hand, recent research shows that all of us perform unethical
behavior to some degree while subconsciously fooling ourselves about it. We may
bend a rule to help a colleague, overlook information that might damage a case we
want to make, or lie to avoid a negative consequence, blithely unaware that others
might view this behavior as unethical.
Why do we do this? Evidence suggests that when we fail to notice a decision
has an ethical component, it enables us to behave in a self-interested manner without
having to feel badly about it. No wonder, then, that people tend to believe they are
more ethical than they are.
Many think that transparency and accountability increase ethical behavior.
Behavioral ethics research, however, shows us that often these actions increase
unethical behavior, because they cause individuals to think disclosure absolves them
of ethical responsibilities to be objective, or to deny to an even greater degree the
ethical components of their decisions.
The first step toward behaving more ethically is, ironically, admitting to
ourselves that we adhere to ethical standards less well than we admit.
Questions
1. Do you think people see themselves as more ethical than they really are? And
you?
2. The authors of one study noted that “disclosures can exacerbate [unethical
behavior] by causing people to feel absolved of their duty to be objective.” Do
you agree? Why or why not?
3. Do you think if we admitted it to ourselves times when we behaved
unethically we would be less likely to behave unethically in the future?
Sources: M. H. Bazerman & A. E. Tenbrunsel, Blind Spots: Why We Fail to Do What’s Right and
What to Do about It (Princeton, NJ: Princeton University Press, 2011; M. H. Bazerman and A. E.
Tenbrunsel, “Stumbling into Bad Behavior,” New York Times (April 21, 2011), p. A23); S. Jayson,
“What Propels Us To Do Bad Things?” USA Today (May 3, 2011), p. 6D.