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Managing Business Ethics
Chapter 3
Treviño & Nelson – 5th Edition
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Chapter 3 Overview
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Ethical Awareness and Ethical Judgment
Individual Differences, Ethical Judgment, and Ethical
Behavior
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Facilitators to and Barriers to Good Ethical Judgment
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Toward Ethical Action
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Gioia’s Personal Reflections on the Pinto Fires Case
+ The Relationship between Ethical
Awareness, Judgment, and Action
Ethical
Awareness
Ethical
Judgment
Ethical
Action
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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?
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Influences on ethical awareness
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If peers agree
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If ethical language is used
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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
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Level I (Preconventional)
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Stage 1 – Obedience and Punishment Orientation
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Stage 2 – Instrumental Purpose and Exchange
Level II (Conventional)
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Stage 3 - Interpersonal Accord - Conformity – Mutual Expectations
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Stage 4 – System Maintenance - Upholding duties, laws
Level III (Postconventional or Principled)
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Stage 5 – Social contract and rights
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Stage 6 - Theoretical stage only
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Why is Cognitive Moral
Development Important?
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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 individual’s perception of how much
control he or she exerts over events in life.
External
Internal
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Connection to Ethical Behaivor?
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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
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Self interested
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Opportunistic
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Deceptive
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Manipulative
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Moral Disengagement
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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
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Euphemistic language
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Moral justification
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Displacement of responsibility
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Advantageous comparison
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Diffusion of responsibility
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Distorting consequences
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Dehumanization
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Attribution of blame
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Moral Disengagement
STOP
AND
THINK
“It’s not my responsibility - my boss told me to do it.”
“It’s not my responsibility – my team decided this.”
“It’s no big deal!”
“It’s 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
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Barriers to Fact Gathering
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Overconfidence
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“Confirmation Trap”
Barriers to Consideration of Consequences
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Reduced number
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Self vs. others
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Ignore consequences that affect few
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Risk underestimated: illusion of optimism, illusion of control
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Consequences over time – escalation of commitment
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More Cognitive Barriers
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Thoughts about integrity
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Illusion of superiority or illusion of morality
Paying attention to gut
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Careful! Gut may be wrong
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Unconscious Biases
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The IAT and race bias
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The role of emotions
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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
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Toward Ethical Action
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Script Processing
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Cognitive frameworks that guide our thoughts and actions
Cost-Benefit Analysis
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Too simplistic a way of analyzing
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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. 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 values are in conflict?
- How should Mary deal with Peggy, Joe, the donor, and representatives of the
corporation?