MGMT 5073

Leaders

maintain or change organizational culture

Friendship

long standing relationship that's well known in the community.

Locus of control can be thought of as a

stable individual characteristic that differentiates people from each other.

System 1 generates suggestions for System 2

such as impressions, intuitions, intentions and feelings.

Rights can be thought o as negative rights

such as the limits on government interference with citizens right to privacy or the pursuit of happiness.

Corporate Core Values ex:

sustainability, environmentally friendly, innovation and excellence.

Utilitarian ethical dilemma approach

systematically identifying the stakeholders in a particular situation as well as the alternative actions and their consequences (harms and/or benefits)

Positive Illusions

tendencies to perceive ourselves more favorably than others do

Fundamental attribution error (aka corrspondence bias or over attribution effect) is the

tendency for people to over emphasize idspositional, or personality based explanations for behavior observed in others while under emphasizing situational explanations.

self serving bias is the

tendency to attribute our successes to dispositional causes and blame our failures on situational causes. personal credit for positive events or outcomes, but blaiming outside factors for negative events.

Memories - Repitition

tendency to not recall "negatives"

Virtue ethics perspective assumes

that your identify as a moral actor is important to you and that you are devoted to continuously developing that aspect of yourself

ethical judgement

the ability to determine the morally right or best course of action

Priming

the activation, often unconsciously, of certain associations, thus predisposing one's perception, memory, or response

Sexual harassment

unwelcome sexually oriented behavior which makes someone feel uncomfortable at work.

"Natural Rights"

"Natural Law"

In Kohlberg's adherence to any principle qualifies as "principled" thinking

False

Nature vs Nurture

Genes vs Environment

System 1 + System 2 =

Integration

Bias blind spot

cognitive bias of failing to compensate for one's own cognitive biases.

Weak Culture

subgroup norms more influential.

Euphemistic/neutral language make decisions and actions seem less problematic

"Bad patient outcome" instead of " the patient died" Pre-texting instead of spying

Deontological

"duty"

difusion of responsibility

"golden rationalization". Everyone does it. It's always been done this way. based on the assumption that the ethical act is acceptable due to the number of others doing it as well.

Heuristics

"judgemental shortcuts"

Richard Feyman

'The first principle is that you must not fool yourself- and you are the easiest person to fool."

Deontology

(GOLDEN RULE) - leads you to the best decision ONLY if both parties are highly ethical.

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

Blowing the Whistle

-How strongly do you feel about this issue? -What are your intentions? -Think about power and influence -Weigh the risks and benefits -Consider the timing -Develop alternatives

Ethical conflict is almost exclusively influenced by individual differences

False

Veil of Ignorance (Rawls)

-temporary deprive self of knowledge about themselves that is likely to influence judgements -justice emerges when social differentiations are eliminated

How to Blow the Whistle

1) Approach Your Immediate Manager First If You Can (your manager isn't involved in the problem) 2) Discuss the issue with your family 3) Take it to the next level 4) Contact your company's ethics officer ombudsman 5) Consider going outside your chain of command 6) Go outside of the company 7) Leave the company

Barriers to Fact Gathering

1) overconfidence (we tend to be overconfident about ourself-esepecially w/ knowing all the facts of a situation) 2)"confirmation trap" aka "google trap"(we use the web to make diagnosis of your health/everyone is basically dying according to google. (confirm our suppression)

Federal and State laws define what is ethical. Therefore, if it is not illegal, it is not unethical

False

Calculated Risk Taking

1. Ask yourself how strongly you feel about the particular issue. 2. Ask yourself about your intentions. 3. Consider power and influence. 4. Weigh the risks and benefits of action. 5. Think about timing 6. Develop alternatives

Individual differences which affect ethical judgement

1. Cognitive Moral Development 2. Locus of Control 3. Machiavellianism 4. Moral Disengagement

Rationalization techniques

1. Denial of Responsibility: whenever someone is guilty of doing something immoral (or illegal) in a business, its often unclear who exactly (if anyone in particular) is responsible. "pass the buck". No one accepts responsibility. 2. Denial of Injury: It's not always clear who gets harmed by our decisions or to what extent they get harmed, and the consequences of our decision are often difficult to know about without scientific research. People are more permissive attitudes toward crime when the victim is unknown. 3. Denial of the Victim: Those who harm others often argue that the others "started it" or deserve punishment. 4. Condemnation of the Condemners - Sometimes people say that the law is unjust. 5. Appeal to higher loyalties: People excuse their immoral acts because they are done to help people they are loyal to, such as family, company or friends. 6. Everyone else is doing it: Corruption as a business practice. 7. Claim to entitlement: rationalizations are to the effect that we can realize that an action is illegal, but we might decide that the law should be broken out of some duty or that the law itself is illegitimate for violating certain rights we are entitled to.

The 6 most common categories of rationalizations:

1. Denial of responsibility ("I know I shouldn't do this, but my boss is making me, so it's not really my fault.") 2. Denial of injury ("I know that I shouldn't do this, but who's really being hurt?") 3. Denial of victim ("I know that I shouldn't do this, but this guy is so stupid that he deserves to get ripped off." 4. Social weighing ("I know that I shouldn't do this, but my competitors are doing even worse stuff.") 5. Appeal to higher loyalty ("I know that I shouldn't do this, but I have a family to feed.") 6. Metaphor of the ledger ("I know that I shouldn't do this, but I give a lot of money to charity.")2.

Organizational Justice types

1. Distributive- fairness of the outcomes that individuals receive in an organization. can be tangible (pay) or intangible (evaluations) (Adams, 1965) 2. Procedural- fairness of the process by which the outcomes are allocated in an organization. (consistency, accuracy) (Leventhal, 1980) 3. Interactional- fairness of the interpersonal treatment given in the course of explaining procedures and outcomes (includes both the information and treatment) 2 components: Inperpersonal (degree people are treated with dignity and respect). and infomrational justice (communication/explanations/justification). (Bies&Moag, 1986)

8 Steps to Sound Ethical Decision Making Process (a Linear Perspective)

1. Gather the Facts - do your homework. 2. Define the Ethical Issues - what are the points of values conflict in the dilemma. 3. Identify the Affect Parties (the stakeholders) 4. Identify the Consequences. Long term vs. short term consequences; symbolic consequences; consequences of secrecy 5. Identify the Obligations and the reasons for each. 6. Consider your character and integrity. Remember the disclosure rule. 7. think Creatively about Potential Actions. Don't force yourself into a corner. 8. Check your gut. remember Empathy and fairness. use rational decision making.

Steps in ethical decision making

1. How much time do you have? 2. Gather the Facts 3. Define the ethical issues - what values are in affect? 4. Identify the affected parties. 5. Identify the consequences (4&5 - which action will do the most good and the least harm?) 6. Identify the obligations - Which decision best serves other's rights? 7. Consider your character and integrity. What is consistent with my values? 8. Think creatively about potential actions.. 9. Check your gut.

Ethical Decision Making Process

1. Identify the ethical dilemma 2. Discover alternative actions 3. Decide who might be affected 4. List the probable effects of the alternatives 5. Select the best alternative

People are more likely to be ehically aware, to recognize the ethical nature of an issue or decision, if three (3) things happen:

1. if they believe that their peers will consider it to be ethically problematic 2. if ethical language is used to present the situation to the decision maker 3. if the decision is seen as having the potential to produce serious harm to others.

People are more likely to be ethically aware, to recognize the ethical nature of an issue or decision, if three (3) things happen

1. if they believe that their peers will consider it to be ethically problematic; 2. if ethical language is used to present the situation to the decision maker; 3. if the decision is seen as having the potential to produce serious harm to others.

Ethically Aware Factors

1. most people look to others in their social environment for guidance in ethical dilemma situations. 2. Situations can be "FRAMED" - using ethical language or more neutral language. Using ethical language (positive words such as integrity, honesty, fairness, and propriety, or negative words such as lying, cheating and stealing) will trigger ethical thinking because these terms are attached to existing cognitive categories that have ethical content. 3. an issue or sitaution that has the poetential to produce serious harm to others is more likely to be seen as an ethical issue.

3 qualities that differentiate great leaders from average ones

1. self awareness: knowing your own strengths and limits and strengthening your inner ethical radar. 2. self management: being able to manage your emotions in ways that allow you to effectively lead yourself 3. empathy: understanding the emotional reactions of others in order to lead them effectively.

Hippocratic Oath for Managers

1. service to Public/society - Recognize the manager's responsibility to serve the public interest by creating sustainable value for society in the long term. 2. balance multiple stakeholders' interests- Recognize that mangers must balance the often conflicting needs of many stakeholders to enhance enterprise value in a way that is consistent with societal well being. 3. act with integrity in enterprise's interest-Put the interests of the enterprise ahead of personal interests while behaving as a person of integrity, consistent with personal values, and leading other to do the same. Avoiding behavior which advances personal ambitions that harm either the business or society. Reporting ethical or legal violations of others. 4. adherence to law-Make a commitment to adhere to the spirit and the letter of the law and contracts in personal and enterprise action. 5. accurate and transparent reporting- Report enterprise performance accurately and transparently to all relevant stakeholders so that they can make informed decisions. 6. respectful and unbiased decision making-Make decisions in an unbiased and respectful manner without considering race, gender, sexual orientation, religion, nationality, politics, or social status. 7. professional development -Commit to continuous professional development for the self and others with the goal of always using the best and most current available knowledge to make informed decisions. 8. responsibility to protect the profession-Recognize that being considered a professional has privileges that come with responsibilities to uphold and protect the standards, and continue to develop them in a way that contributes to the trust, respect, and honor associated with them and with the profession.

Consequentialist theory problem

1. you may not have all the facts to list harms vs benefits. 2. the rights of a minority group can easily be sacrificed for the benefit of the majority.

liar loan

A fraudulent loan transaction in which the applicant inflates, enhances, or otherwise misrepresents qualifying information.

Fairness

A perception. Being impartial and honest. Free from bias, dishonesty, or injustice; a concept commonly related to everyday activities

off the record

A reporter cannot directly use information provided in an interview.

F. Neil Brady Two (2) Reasoning Styles

A rule based style (formalism): a backward looking or reflective perspective to determine whether the current issue is related to a similar case and/or the rules governing it. With this approach individuals subscribe to a set of rules or principles for guiding behavior. Actions are viewed as ethical to the extent that they conform to these rules. A cost/benefit based style (utilitarianism): a forward-looking perspective, comparing the alternatives and their consequences. Evaluates whether the outcomes and consequences of actions are ethical rather than just the actions themselves.

Categorical Imperative

Act as if the maxim of thy action were to become by thy will a universal law of nature. Is your action suitable to become universal law or principle for everyone to follow.

Kant's Categorical Imperative

Act only in accord with a maxim (principle) which you would at the the same time will that it should be universal law. Acting the way most would. We should act in accordance with our duty and obligations, not our feelings or emotions. Man is not a means to an end, man is an end unto himself. Ask: What kind of world would it be if everyone behaved this way?

Chapter 4

Addressing Individuals' Common Ethical Problems

unconscious bias

Also called implicit bias. An inclination to prefer one type of person, object, or idea over others without being consciously aware of that preference.

Locus of Control

An individual's perception of how much control he or she exerts over events in life. External------------Internal

Good character is the main factor determining whether an individual act ethically whtin an organization.

False

In Kohlberg's theory, adherence to any principle qualifies as "principled" thinking.

False

MBA Oath

As a business leader I recognize my role in society. * My purpose is to lead people and manage resources to create value that no single individual can create alone. * My decisions affect the well being of individuals inside and outside my enterprise, today and tomorrow. There I promise: * I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society. * I will understand and uphold, in letter and spirit, the laws and contracts governing my conduct and that of my enterprise. * I will refrain from corruption, unfair competition, or business practices harmful to society. * I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation. * I will protect the right of future generations to advance their standard of living and enjoy a healthy planet. * I will report the performance and risks of my enterprise accurately and honestly. * I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity.. In exercising my professional duties according to these principles, I recognize that my behavior must set an example of integrity, eliciting trust and esteem from those I serve. I will remain accountable to my peers and to society for my actions and for upholding these standards. This oath I make freely, and upon my honor.

Core Values vs. Aspirational Values

Aspirational values don't guide actions. They are what we want to be.

System 1 thinking

Automatic, fast, little or no effort, no sense of voluntary control

Facilitators of and Barriers to Good Ethical Judgment

Cognitive Bias: Overconfident Confirmation trap - which facts to gather rather than all facts. Must think of how you would go wrong to overcome this trap.

Cognitive Bias

Can lead to poor decisions.

Interpersonal Behaviors

Care, concern and compassion supports and takes responsibility for others Values and maintains relationships hardworking and helpful accentuate the positive accepts others' failure - not unconditionally.

Carol Gilligan's critique of Kohlberg's theory

Carol Gilligan argued that Kohlberg's classification of moral judgment is centered on principles of justice and rights which are valued more by males than by females, rather than on values of caring and responsibility for others, which are more central to females. Contrary to Gilligan's theory, however, there is little evidence that males and females score differently on Kohlberg's stages of moral reasoning. Adolescent and adult females do focus somewhat more on issues of caring about other people in their moral judgments Lawrence kohlberg conducted many studies on moral reasoning. his research had a distinct male bias as not many of his subjects that he surveyed and interviewed were female. he seems to suggest that males often reason through moral issues at higher levels than females. gilligan pointed out the male bias in kohlberg's research and argued that females have different ways of reasoning through moral issues and this does not make them inferior to male reasoning but only points out that the females value different things when trying to reason through moral issues.

Moral Disengagement Categories (3)

Cat I: behavior which makes bad behavior seem more acceptable. JUSTIFICATION: unethical behavior is thought to be okay because it contributes to some socially valued outcome. ADVANTAGEOUS COMPARISON: people compare their own behavior to more reprehensible behavior and thus make their own behavior seem more okay. Cat II: Distorting consequences or reducing personal repsonsibility for bad outcomes. DISPLACEMENT OF RESPONSIBILITY: reduce personal accountability by thinking of their actions as resulting from an authority figure's dictates. "Boss made me do it" DIFFUSION OF RESPONSIBILITY: reduce personal accountability by looking to others or the group. "It's not my job". DISTORTING CONSEQUENCES: individuals will think of negative consequences as less serious than they are. "Its no big deal to fudge numbers on expenses". Cat III: reduces the person's identification with the victims of unethical behavior. DEHUMANIZATION: individuals make those who would be harmed less worthy of ethical consideration because they're thought to be different, stupid or not even human. ATTRIBUTION OF BLAME: lays blame on the victims of harm for a variety of reasons "it's their own fault".

Influences on individual decision making: ETHICAL DECISION-MAKING PROCESS

Characteristics of Individuals (individual differences and cognitive biases) Ethical Awareness Ethical Judgment Ethical Behavior (process of individual ethical decision making) Characteristics of Organizations (Group and organizational pressures and Organizational culture

Relativism

Circumstances should be weighed because there are no universal standards to dictate all situations (high relativism)

Ethical Aptitudes

Classifying how individuals address or interpret ethical situations has occupied ethical scholars for some time.

Common Sense is not

Common Only common if in fact it comes from the same group with the same experiences.

Tendency of attend to the information that endorses the decision we prefer

Confirmation Bias

Provide 3 primary approaches to ethical decision making/ethical decisions

Consequentialist - Utilitarian (maximizes the benefit to society while minimizing harms "the greatest good" - a cost benefit analysis. Reason vs. Emotion (mom on the train track vs 5 other people) "Veil of Ignorance" Deontological - Focus is on the decision or act itself not the consequences. Decisions based upon abstract universal principles: e.g., honesty, promise-keeping, fairness, rights, justice, respect, etc. Virtue Ethics Approach (Aristotle) - focus on integrity of moral actor rather than the act, or consequence of the action. Considers character, motivations, intentions, etc.

Virtue Ethics

Considers a person's character, motivations, intentions and what it is to be a good person. it's important that the person "intends" to be a good person and exerts effort to develop themselves a s amoral agent.

Procedural Justice

Consistency - treating people the same. Employees may be treated differently due to context. Change policies when they aren't working. Voice - Give employees a voice in decision making and ability to respond. Allow them to vent. Bias Suppression - decisions and processes need to be neutral and unbiased. Avoid appearance of favoritism. Correctiblity - mechanisms to correct unfair situations. formal/informal. Representativeness - consider needs of all employees. Accuracy - decisions based on accurate information.

Internal locus of control

Controlling boss - employee is uncomfortable with boss's request to do something inappropriate. Employee more likely to resist boss's influence and more likely to look for an opportunity to leave.

Most adults are at the _______ level of cognitive moral development and their action is _______ .

Conventional; based on what others think, say, and do.

The 6 most common categories of rationalizations:

Denial of Responsiblity Denial of Injury Denial of Victim Appeal to Higher Loyalties Metaphor of the Ledger Social Weighting

Prescriptive Approach

Derived from ethical theories in philosophy and offers decision making tools that help you decide what decision you should make as a conscientious moral agent.

Locus of Control

Develops over a long period of time through interactions with other people and the social environment.

Challenges to Consequentilist Approach

Difficult to have all the facts to evaluate all consequences. rights of minorities can be sacrificed. Weighing of harms/benefits can be subjective. Maximizes benefits to society - must step outside what you want.

US Congress legislation to rein in the most egregious practices in the financial industry

Dodd-Frank Financial Regulation Legislation

Equality vs fairness

Equality is the quality of being the same in status, quantity, and value while fairness is the quality of being unbiased and impartial. ... Equality is giving individuals who have the same task the same compensation while fairness is giving individuals the same choices or chances no matter their status in life.

4 Step process of ethical decisions

Ethical Awareness Ethical Judgement Ethical Intent Ethical Action

Ethical Decision Making Process

Ethical Awareness -> Ethical Judgement -> Ethical Action

4 categories of leaders

Ethical Leadership - Strong moral person & strong moral manager. Unethical Leadership - weak mora persons & weak moral managers. Hypocritical Leadership - talks about ethical values, but behaves unethically or encourages others to do so. Ethically Neutral or "Silent" Leadership - do not provide ethical leadership (are silent) so employees not sure what they think on the issues.

Individual indifference

Ethical decision making style Cognitive moral development Locus of Control Machiavellian Moral disengagement

Trickle Down Effect

Ethical leaders can influence employees througout the organization, not just those they come in contact with. Positive direct relationship between ethical leaders and ethical behavior of upper/middle management. Positive indirect affect on other employees through formal and informal systems/processes.

Chapter 2

Ethics and the Individual

Leadership

Executive Leaders create culture

If you are asked to make hastily a decision that you believe raises potential ethical issues you should be a good team player and proceed with the decision.

False

Organizational Culture

Expresses shared assumptions, values and beliefs and is the social glue that holds the organziation together. Can have Strong and Weak Culture.

Ethical Climates

Fairness - employees believe treated fairly in outcomes, processes and interactions. Benevolence - organization cares about multiple stakeholders. Self Interest - people protect their own interest above all. Rule Based - employees follow both laws and organizational rules when making a decision.

According to Kohlberg, as individuals move forward through the sequence of stages they are cognitively capable of comprehending all reasoning stages below and above their own

False

According to Lawrence Kohlberg, developer of a key theory of moral reasoning, role taking is useless as nothing is gained by putting yourself in the shoes of others.

False

According to cognitive moral development theory, the actual moral decision is more important than the reasoning process used to arrive at it.

False

An employer cannot be held liable for an employee's sexual harassment activities.

False

Despite the disclosure rule, making decisions in private to avoid negative reaction is generally best for a business as it safeguards your firm's reputation and keeps competitive information away from your competitors.

False

Discarding the few "bad apples" will usually solve all the ethical problems wkthin an organization

False

Employee satisfaction and commitment are not related to the leader's moral development

False

In business, concerning yourself with how your decision-making affects stakeholders is useless given the number of stakeholders and their different interests.

False

It is good advice to always just go with your gut when faced with an ethical dilemma

False

It is good advice to always just go with your gut when faced with an ethical dilemma.

False

It is unethical for managers to "control" employees ethicla behavior through direct management and the organziation's formal and informal cultural systems.

False

The type of language used when describing a situation does not affects moral awareness.

False

There are major differences in levels of moral reasoning between men and women.

False

Training, whether in groups, peer to peer, or using DVD to deliver the content, has been shown to be ineffective in helping employees become ethically aware.

False

With the advent of technology, fewer people look to others in their social environment for guidance in ethical dilemma situations

False

According to the textbook, most people are guided by a strict internal moral compass and will not be swayed by organziation factors.

False.

Illusion of Validity

Fast thinking is not prone to doubt Confidence is a feeling, not something based upon reason or reasoning. bias toward coherence favor overconfidence. An individual who expresses high confidence probably has a good story, which may or may not be true.

why don't people whistleblow

Fear - reprisal/retaliation nobody will do anthing anyways org won't protect me being treated different by co workers people said not to report.

Legal approach to ethics

Focus on Compliance Follow the law

Risk Management Approach

Focus on Conduct (what not to do)

Deontological Ethics

Focus on Duties, Obligations, Principles. Advantages: Stay true to our values Consistent results Rights approach found in public policy debates. Challenges: Deciding which value takes precedence. Does not take into account context.

Philosophical/Psychological Approach (normative ethics)

Focus on the "why" or "how"

Cognitive Moral Development Level III: Conventional Stage 6: Universal Ethical Principles

Following ethical principles of justice and rights. Acting in accord with principles when laws violate principles.

Cognitive Moral Development Level I: Pre-conventional Stage 2: Instrumental Purpose and Exchange

Following rules only when it is in one's immediate interest. Right is an equal exchange, getting a good deal.

Ethical multisystem approach

Formal and Informal Systems

Cognitive Moral Development Level II: Conventional Stage 4: Social Accord and System Maintenance

Fulfilling duties and obligations of the social system. Upholding laws and rules except in extreme cases where they conflict with social duties.

The first step in the sound ethical decision making business:

Gather the facts

Kent Druyvesteyn

General Dynamics, 1985 first "ethics Officer"

Locus Control relationship to Ethical Judgment.

High internal locus of control see a relationship between behavior and outcomes more clearly. More in control of things. Take responsibility. being in charge of their fates.

Creating an ethical culture

Highering Process values and mission statements policies and codes orientation and training programs performance management systems - focus on the mechanics - marry the what with the how employees must take responsibility for their behavior. Held accountable employees must feel free to question orders to behave unethically. employees need to report misconduct or problems. employees need to report misconduct or problems. - loyalty vs unquestioning obedience. - formal structures and systems for reporting misconduct (whistle blowing) - monitor reporting & survey employees to see if problems exist. reward systems for reporting problems. consider discipline for failure to report. Employees have a voice in decision making. Make ethics a regular part of meetings. - stories/myths/legends - include core values on agenda. Beyond a quantitative cost benefit analysis. - the bottom line is important, but not to the exclusion of ethical considerations.

Ethical Action & Expectation for Self

Honesty Trustworthy Integrity Humility consistently ethical - in public and private Accepts responsibility for own failings. High ethical standards (self and others)

The Moral Dimension, Amitai Etzioni

Human action has two distinct sources: 1. the pursuit of self interest and 2. Moral commitments.

Amitai Etzioni - The Moral Dimension

Human action has two distinct sources: the pursuit of self interest and moral commitments.

Amitai Etzioni - The Moral Dimension

Human action has two distinct sources: Pursuit of self interest and moral commitments. Most human decisions are based on ethical and emotional considerations as well as rational economic self interest. People are motivated by both economic and moral concerns.

Tendency to underestimate risks because of the belief that we are in charge of what happens

Illusion of Control

Tendency to underestimate risks because of the belief that we are in charge of what happens.

Illusion of Control

Tendency to overestimate the likelihood of good future events

Illusion of Optimism

Consequences as risk

Illusion of Optimism - People tend to underestimate potential risks. Overestimate the good and underestimate the bad. They overestimate the likelihood of good future events and underestimate the bad. Illusion of Control - general belief that we really are in charge of what happens. "If we are in control bad things are less likely to happen" Framing - People are loss averse. when decisions are framed in terms of loss, people are more likely to behave unethically.

Unconscious distortion of information in order to maintain a positive self image

Illusion of Superiority

Tendency to overestimate the likelihood of good future events

Illusion of optimism

Barriers to Fact Gathering

Illusions, biases, and heuristics

Positive Illusions

Illusory Superiority Illusion of Control Optimism Biases

Emotions In Ethical Decision Making

Importantly, emotions are not just an interference to good ethical judgment, as many used to believe. Instead, emotions often lead to right action. Fairness, along with compassion or harm to others, have also been found to be among just a few ethical motivations that appear to be hardwired in us through evolution.

Those with higher ______ are more likely to avoid pressure to violate social norms because ______

Internal locus of control; they believe they are in charge of their own fate

Role Models - 4 Perspectives

Interpersonal Behaviors Fairness with Others Ethical Action & Expectations for Self Articulating Ethical Standards

Levels to Discuss Ethics

Individual Group Organization

Decision Making occurs at 3 levels

Individual Group Organization

An approach to change

Intitial Audit - cultural surveys Systems view - target both formal and informal. Long term view - culture change takes time. Assumptions about people - typcially behave in best interest - focus on behaviors, hold accountable. - unethical actions a signal for audit/investigation. Formal: Use surveys, interviews, observations at meetings, orientation/training, analyze documents. Auditing the content of decision making. coding content of stories/anecdotes Open ended meetings with all employees at all levels. Informal: Use HR department or outside person - outside persons trusted by employees - conducting an audit sends a message that ethics is important. follow up by action. Ask ethical related questions during interviews. Intervention: - discuss audit data with employees - formal change is more straightforward - change structure for personal responsibility and discourage unquestioning obedience. Participation in creating codes, distribute them, enforce them. Obtain employee buy in Performance management that foceses on process and outcomes. reporting systems with confidentiality assured. Orientation/training that discusses values. Selection/Promotion with integrity considered. decision making with time devoted to ethics.

Doctrine of Double Effect

It is ethically okay to do something that is morally good even if it has a morally bad side effect, provided the bad side effect wasn't intended. This is true even if you foresaw that the bad effect would probably happen.

Cognitive Moral Development Levels

Level 1: (Pre-Conventional Morality) most common in children vs adults Stage 1 - obedience and punishment orientation (Lacks empathy for the individual) Stage 2 - Instrumental purpose and exchange (What's in it for me?) Level II: (Conventional Morality) Most people are in this level. Stage 3 - Interpersonal Accord - Conformity - Mutual Expectations (Respect, Gratitude, Golden Rule) Most people stay in stage 4. Abiding by laws. Stage 4 - System Maintenance - Upholding duties, laws (What is right? What is wrong?)

Cognitive Moral Development Levels

Level III: (Post-Conventional or Principled Morality) Can disobey rules because they have their own principles. Rules are useful but not absolute. Stage 5 - Social contracts and rights. Laws are not rigid edicts. Laws should be changed for the greatest good. Stage 6 - Theoretical Stage Only. Abstract reasoning on universal thought.

Three aspects of ethics (3)

Knowledge Conduct Governance

Why are people unethical?

Lack ethical awareness Do not have a standard ethical decision making process Cognitive biases and organizational practices can blind unethical behavior.

View problems through lenses:

Lenses are the theories which can serve us when looking at problems

Rights can be thought of as Negative Rights

Limits on government interference with citizens' right to privacy or the pursuit of happiness.

Informal Change

More difficult "art" rather than science Attention to symbolic management Re-create rituals, symbols, stories Remythologize the firm - consider current values/needs of firm - infrequently because the strength of culture comes from stability across time.

Cognitive Moral Development Level II

Most adults are in this category.

Role Models & Heroes

Modeling is a well documented means of transmitting values, attitudes and behaviors. formal and informal - informal - what employees observe of people in authority or they respect. - formal - mentoring socialization systems

Two (2) pillars of ethical leadership

Moral Person Moral Manager

Kohlberg's Theory of Moral Development

Moral development takes place in 3 broad levels, each composed of two stages and awareness of other people increases at each stage

Natural Rights which emerge from

Natural Law.

Cognitive Moral Development Level I: Pre-conventional Stage 1: Obedience and Punishment Orientation

Obedience to authority for its own sake. Sticking to rules to avoid punishment.

Personal Responsibility

Obligations that each person assumes individually; accepting consequences for actions, behave in civil manner.

Idealists

One should always avoid harm (high idealist) vs. harm is sometimes okay because i produces good (non-idealist)

Chapter 5

Organizational Ethics

Influence of Culture on Individuals

Organizational ethical culture can affect all three (3) stages of the ethical process: Ethical awareness Ethical judgement Ethical Action whereas Individual culture can affect two (2) stages of the ethical process: Ethical Judgement Ethical Action

People tend to look to others in their social environment for guidance.

Peers Agree Section

People are more likely to be ethically aware if:

Peers agree Ethical Language is Used Decision has potential serious harm to others.

Illusion of Superiority

People overestimate their positive qualities and underestimate their negative qualities relative to others

Focuses on avoiding punishment

Stage 1

Advantages to Consequentialist Approach

Practical Way most of people think

Ethical decision making

Prescriptive Approach Descriptive Approach

you scratch my back and I'll scratch yours

Stage 2

Giving Voice to Values

Purpose is Self Story: Questions of Purpose Questions of Risk Questions of Personal Communication Style or Preference Questions of Loyalty Questions of Self Image

Focuses on interpersonal trust and social approval

Stage 3

System 2 thinking

Reflective thinking that is slow, deliberate, and conscious. Often less charged with emotions. analytic Slow Costly Avoided/Lazy

Fairness with Others

Resources distributed equitably open to and solicits input equal respect - never condescending, even in disagreements. offers explanations of decisions. willing to admit to and correct mistakes. willingness to listen - invites argument - a reason or set of reasons given with the aim of persuading others that an action or idea is right or wrong. ethical decision making is searching for morally appropriate action. an ethical leader must be willing to listen to other perspectives and change opinion based upon validity of arguments from others.

Focused on following the rules or laws that are designed to promote the common good

Stage 4

Considers the possibility of changing the law for socially useful purposes

Stage 5

Jack Abramhoff's downfall

Rationalization Overconfidence Bias Framing Self serving bias

3 Components to Define Fairness

Reciprocity Equity Impartiality

Consequences for decision making

Reduce the number of consequences - Likely to ignore consequences which affect a few people. Consequences for the self vs. for others - people who make decisions in a self interested manner. When consequences of multiple alternatives are ambiguous, people tend to choose the alternative they prefer rather than the one which is more just.

How people thiunk about consequences - Challenges

Reduced number of Consequences - people simplify their decisions and make them mor emanageable by reducing the number of consequences they consider. Consequences for the self versus consequences for others - making decisions in a self interested manner.

Self Assessment questions

Questions of Purpose: what are your goals Questions of Risk: risk profile Questions of Personal Communication Style: Deal well with conflict? Questions of Loyalty? loyalty to family? other? Questions of Self Image: Idealistic or pragmatic

Self Assessment Questions

Questions of Purpose: what are your personal and professional goals? Questions of Risk: What is your risk profile? are you a risk taker or risk averse. Questions of Personal Communication Style or Preference: Deal well with conflict? or non-confrontational? Do yo prefer communicating in person or letter? Questions of Loyalty: Do you tend to feel the greatest loyalty to family, colleagues, employer or stakeholders? Questions of Self Image: identify as shrewd or naive? idealistic or pragmatic?

Sexual Harassment (Title VII)

Quid pro quo sexual harassment -sexual favors are a requirement, or seem to be a requirement, for advancement. Hostile Work Environment - a worker feels uncomfortable because of unwelcome comments or behavior of a sexual nature.

Moral Manager (Brown 2005)

Role Modeling Takes visible ethical action Rewards/Discipline Hold people accountable for ethical conduct. Communicating Sends an "ethical and values" message

Script Processing

SCRIPTS: cognitive frameworks that guide our thoughts and actions. Contain information about the appropriate sequence of events in routine situations.

Three (3) qualities that differentiate great leaders from average ones

Self Awareness Self Management Empathy

How Culture Influences Behavior

Socialization - (Sensemaking and Sensegiving) - Sensemaking: process by which org members gain an understanding of the work environment by observing those around them. - Sensegiving: how the org influences employees interpretation of sensemaking. - Internalization: when employees adopt the or values on its own. can also occur when the employee adopts the company's values over time. Formal - Values and Mission Statements - Policies and Codes - Orientation and Training Programs - Performance Management Systems. Informal - role models and heroes - Norms: The way we do things around here - Rituals - Myths and Stories

conscientious moral agent

Someone who is concerned impartially with the interests of everyone affected by what he or she does.

Cognitive Moral Development Level II: Conventional Stage 3: Interpersonal Accord, Conformity, Mutual Expectations

Stereotypical "good" behavior. Living up to what is expected by peers and people close to you.

You should guard your reputation as it is built slowly with countless actions, but it can be destroyed in an instant by one foolish mistake

True

System 1 vs. System 2

System 1: automatic evaluation based on pre-set assumptions System 2: Slower, more effortful, deliberate processing

The brain is in two sytems, called...

System 1: fast and intuitive System 2: slow and deliberate

Anchoring Effect

Tendenc to rely too heavily ("anchor") on a past reference or on one trait or piece of infomration when making decisions (also called "insufficient adjustment")

Disclosure Rule

Test an ethical decision by asking how you would feel explaining it to a wider audience such as newspaper readers, television viewers, or your family

Conflict of Interest

a conflict between self-interest and professional obligation

Adam Smith's first book

The Theory of Moral Sentiments

Context

The circumstances, atmosphere, attitudes, and events surrounding a text.

Consumer Trust

The degree to which consumers trust organizations has a direct impact on their buying patterns.

Bounded Awareness

The systematic ways in which we fail to notice obvious and important information that is available to us. Emotion vs Reasoning

Moral Disengagement: Individuals have a higher (or lower) propensity to deactivate self control systems through eight (8) moral disengagement mechanisms.

These moral disengagement mechanisms allow individuals to engage in unethical behavior without feeling bad about it.

Discrimination can be subtle or not so subtle

Those who don't fit the "corporate profile"

Laws to Prevent Discrimination

Title VII of the Civil Rights Act of 1964 Age Discrimination Act of 1967 1973 Rehabilitation Act - Protects disabled Americans against disrimination by federal , state, and local governments, agencies, and contractors. Pregnany Discrimination Act of 1978 Americans with Disabilities Act of 1990 - exteneded protections to private sector of companys of 15 or more people

Difference between causality and correlation

To answer questions like this, we need to understand the difference between correlation and causation. Correlation means there is a relationship or pattern between the values of two variables. ... Causation means that one event causes another event to occur

Moral Person (Brown 2005)

Traits Honest, Integrity, Trust Behaviors Openness, concern for people, personal morality Decision Making Values based, Fair, Giving people a voice

Consequences of Secrecy

Transparency is important. Decisions in private in order to avoid some negative reaction.

Golden Rule

Treat others the way you want to be treated both parties must be ethical

Platinum Rule

Treat people how they want to be treated.

1. A virtue ethics approach is particularly useful for individuals who work within a professional community, such as the accounting profession, that has developed high standards of ethical conduct for community members.

True

A challenge involved in using a strictly consequentialist approach is that it is often difficult to obtain the information required to evaluate all of the consequences for all stakeholders who may be directly or indirectly affected by an action or decision.

True

A major challenge of taking a deontological approach to resolving an ethical dilemma is deciding which duty, obligation, right, or principle takes precedence because ethical dilemmas often pit these against each other.

True

A virtue ethics perspective requires a moral actor to look to the community that will hold the moral actor to the highest ethical standard and support the moral actor's intention to be a virtuous person.

True

According to cognitive moral development theory, the actual moral decision is not as important as the reasoning process used to arrive at it.

True

An effective way to avoid decision making weaknesses and biases is to become aware of them and to incorporate steps into decision making that are explicitly aimed at reducing their impact

True

An effective way to avoid decision-making weaknesses and biases is to become aware of them and to incorporate steps into decision-making that are explicitly aimed at reducing their impact.

True

An organization led by a leader high in cognitive moral development establishes a much stronger ethical climate in the organization

True

Business managers generally rely on the consequentialist approach.

True

Cognitive biases are the result of trying to reduce uncertainty and simplify the world

True

Cognitive biases are the result of trying to reduce uncertainty and simplify the world.

True

Ethical dilemmas represent conflicts in values

True

If an individual does not recognize that he or she is facing an ethical dilemma, then ethical judgement is likely not to occur

True

In organizations, individuals high on Machiavellianism are significantly more likely to have unethical intentions and to engage in unethical behavior including accepting kickbacks

True

Kohlberg argued that the higher the reasoning stage, the more ethical the decision

True

Managers must structure the work environment to support ethical conduct and this includes ensuring that reward systems are aligned with the ethics of the firm

True

Neutral language can be used to make an unethical action seem less problematic

True

One of the best things we can do to preserve our moral intent is to monitor our own rationalizations.

True

People's locuse of control is relatively stable, but can change over time

True

Stage 1 of Kohlberg's Levels of Moral Reasoning is focused on avoiding punishment.

True

The human ability to rationalize is perhaps the single most important factor that enable good people to give themselves license to do bad things.

True

The human ability to rationalize is perhaps the single most important factor that enables good people to give themselves license to do bad things.

True

The self-serving bias can cause us to selectively remember things that make us look good.

True

Ethical Culture Change

Unethical to Ethical Managers who want to change. Pressure for change comes from outside forces. - stockholders, the government, regulators. - threat of government regulation - sentencing for corporate crimes. Vulnerable to external pressures because of other corporate wrongdoings. New CEOs hired for change - clout and resources to make changes.

Cognitive Moral Development Level III: Post-conventional or Principled Stage 5: Social Contract and Individual Rights

Upholding rules because they are the social contract if they are consistent with values such as fairness and rights and the greater good (not because of the majority opinion)

Best known consequentialist theory

Utilitarianism

Consequentialist Theories (aka Teleological)

Utilitarianism - an ethical decision should maximize benefits to society and minimize harms. What matters is the net balance of good consequences over bad for society overall.

Excellence - Value

We are satisfied with notherin less than the very best in everything we do.

cognitive blindness

We make decisions based upon the facts as they appear.

Illusion of Validity

We overestimate our ability to use data to accurately predict an outcome, especially when the data analyzed tells a coherent story.

Integrity - Value

We work with customers and prospects openly, honestly and sincerely

Advantagous Comparison

We're not as bad as others. A rationalization and a distraction.

Virtue Ethics Questions

What does it mean to be a person of integrity in this situation, profession, etc.? What ethical community would hold me to the highest ethical standards? Do carefully developed community standards exist? What would the broader community think if this were disclosed? New York Times test? What would my "harshest moral critic" expect me to do? What would my "ethical role model" expect? What do I want my professional reputation to be?

Prescriptive Ethical Theories

What individuals decide what they SHOULD do in response to ethical dilemmas.

Cialdini 1993

When looking at tethics in organizations, one cannot merely consider core values statements and ignore social proof.

Fairness

Willingness to listen

Think with your Gut

Your gut alerts you to something which is wrong. Ethical judgements are often more intuitive, impulsive, and automatic than deliberative.

Culture

a body of learned beliefs, traditions, and guides for behavior shared among members of a society or a group.

cost-benefit analysis

a decision-making process in which you compare what you will sacrifice and gain by a specific action. Reducing the value of human life to quantitative terms can remove moral criteria from the decision making process and reduce ethical awareness.

Ethical Awareness

a person recognizes that a situation or issue is one that raises ethical concerns and must be thought about in ethical terms.

Willful Blindness

a person trying to avoid responsiblity by intentionally puttting themselves in a position so they do not know something or appear to be unaware.

Conflicts of Interest

a person's judgement or objectivity is compromised, typically because of financial or other gain for the person making a decision or for a close relative or friend.

Ethics

a set of moral principles or values

ethical dilemma

a situation in which two or more "right" values are in conflict

Cognitive Bias

a type of error in htinking that occurs when people are processing an interpreting information in the world around them

Quid Pro Quo

a type of sexual harassment wherein an individual believes that sexual favors are a requirement for advancement in the workplace.

Corporate Reputation

a widely held perception of a company by the general public

special fiduciary responsibilities

acting in the best interest of the customer or company.

Organizational Culture

affects the way groups interact, as well as their stakeholders.

B.F. Skinner

all behavior is controlled, either intentionally or unintentionally.

Eight Moral Disengagement Mechanisms

allow individual sto engage in unethical behavior without feeling bad about it.

Appearance of a Conflict of Interest

an appearance that your judgement has been compromised.

Whistleblower

an employee who exposes unethical or illegal conduct within the federal government or one of its contractors

Locus of Control

an individual's perception of how much control he or she exerts over life events.

Locus of Control

an individual's perception of how much control he or she exerts over life events. A single continuum from a high internal locus of control to a high external locus of control.

Ethical Behavior can be influenced by:

an individual's religion an organization's culture ethical training an individual's personality

Organizational justice

an overall perception of what is fair in the workplace, composed of distributive, procedural, and interactional justice

Stakeholder

any person or group with a stake in the issue at hand.

stakeholder

any person or group with a stake in the issue at hand.

Those with higher Internal locus of control

are more likely to avoid pressure to violate social norms because they believe they are in charge of their own fate.

Representative Heuristic

assessing similairty of objects and organizing them based on likeness. used because it is an easy computation. people overestimate its ability to accuratley predict the likelihood of an event. people rely on representativeness to make judgements, they are likley to judge wrongly because the fact that something is more representative does not make it more likely.

Machiavellianism

associated with unethical action. individuals who act in self interest; opportunistic, deceptive, and manipulative ways to win no matter what the cost or how it affects other people. "Ends justify the Means"

Strong Culture

assujptions, values, beliefs widely shared

Deontological "Duty" approach

base decisions about what's right on broad, abstract, universal ethical principles or values such as honesty, promise keeping, fairness, loyalty, rights (to safety, privacy, etc.), justice, responsibility, compassion, and respect for human beings and property.

Ethical judgement AND action

based on individual characteristics from moral reasoning.

Common Sense

based on upon a loosely organizaed set of facts, observations, and experiences that we accumulate over our lifetime. Not theoretical. It is practical.

Perceived Fairness

based upon individual perceptions of authority's (e.g. organization, leader, manager, etc.) decision making.

Ethical behavior in business

behavior that is consistent with the principles, norms, and standards of business practice that have been agreed upon by society.

Self management

being able to manage your emotions in ways that allow you to effectively lead youself

System 2 endorses the suggestions by System 1, the impressions and intutions turn into

beliefs and impulses turn into actions.

Alignment

both formal and informal systems are "pushing" employees in the same direction - either ethical or unethical. examples: policies and training match what employees observe of leaders and coworkers.

Patter recognition

brain sees patterns.

consequentialist theory "aka Teleological"

focus attention on the results or consequences of the decision or action.

Deontological Approach

certain moral principles are binding, regardless of the consequences.

Cognitive Moral Development represents a

cognitive "capacity" to reason about ethical dilemmas at a particular level, and that it is possible to act below one's capacity.

"Slippery Slope"

committing increasingly serious ethical infractions over time.

Decision Making

complex endeavor

What if others are Unethical?

complicit? by not reporting?

Customer Confidence

confidentiality, product safety and effectiveness, truth in advertising, and special fiduciary responsibilities.

Customer Confidence

confidentiality, product safety and effectiveness, truth in advertising, and special fiduciary responsiblities, respect for others.

Customer Confidence Issues

confidentiality, product safety, truth in advertising, special fiduciary responsibilities

Tendency to search for and focus on information that endorses the decision we prefer

confirmation bias

Prescriptive ethical decision making lens is helpful when considering

conflicts of interest. Utilize veil of ignorance

Role of Culture

culture and climate are cruicial to understanding how unethical cultures facilitate unethical and illegal activity within organizations (Trevino, 2001) Ethical cutlures within organizations can influence the process and judgment dimension of integrity (Barnett & Varcys, 2000) Incidents of unethical behavior can help to shape a cutlure that influences future incidents, thus creating a cycle of unethical behavior. (Sinclair, 1993)

Corporations can have ethical and unethical

cultures

Rawls Veil of Ignorance

deciding what's fair

Deontological approach challenges

deciding which duty, obligation, right or principle takes precedence because ethical dilemmas often pit these against each other. when they conflict with consequentialist reasoning. ex: telling the Nazis of jews hiding in your attic.

John Rawls

decision makers use a veil of ignorance exercise to arrive at fundamental principles of justice that should guide ethical decision making. Rational people who use the veil of ignorance principle will be more likely to develop ethical rules that do not unfairly advantage or disadvantage any particular group.

Consequences of Time: Escalation of Commitment

decisions are a series of choices within the context of investment in a larger decision. "good money after bad".

Organizations have core values as well

define what the organization believes. Expressed in mission and value statements.

Pattern recognition can be flawed

derived from perceptions and applied to memories. Perceptions may not be accurate. How accurate are our memories?

People Issues

describe the ethical problems that occur when people work together. The problems may concern privacy, discrimination, sexual and other types of harassment, or simply how people get along.

Altruism

disenterested and unselfish concern for the welfare of others. "working with the elderly out of altruism"

Moral Licensing -

doing good in one manner and offsetting unethical behavior because of that.

Motivated Reasoning

emotion-based confirmation bias that leads people to confirm what they already believe, whiule ignoring contrary data. Drives people to develop elaborate rationalizations to justify holding beliefs that logic and evidence have shown to be wrong. Results in defensive responses to contrary evidence. Driven by a desire to avoid cognitive dissonance. Basis for conspiracy theory beliefs.

Misalignment

employees are getting mixed messages about expectations. ex: Enron

Conversations with co-workers, trainings, policies, etc. all help

employees identify ethical issues

Human decisions are based on

ethical and emotional considerations as well as rational economic self interest.

Script Processing can be problematic

ethical decision making requires active consideration of the more dimensions of the situation and a "custom" decision, tailored to the complexities of that particular case. But in many occasions members don't even know their is an ethical dilemma. They handle situations by following scripts that are likely to exclude ethical considerations.

People Issues

ethical problems that occur when people work together. Problems with privacy, discrimination, sexual and other type of harassment, or simply how people get along. Key considerations: fairness/Equity/Impartiality/ recriprocity

Ethical Cutlure Change

ethical to unethical unethical to ethical - change for alignment between formal and informal - change at lower levels must be supported by higher levels - modeled by senior managers. New members actively accept culture, especially if alignes with their values, but change for existing members is difficult. Changing individual/group behavior is time consuming and difficult - cultural persistence/inertia.

Symbolic consequences

every decision and action sends a message.

Overconfidence Bias

excessive confidence in one's own ansers (e.g., for certain types of questions, answers that people rate as "99% ceratin" turn out to be wrong 40% of the time.

Overconfidence Bias

excessive confidence in one's own answers.

Change blindness

failing to notice changes in the environment change is made during an eye movement or an eye blink Change blindness can also occur if the change is made while the changing item is occluded by another object

Humans are hardwired for

fairness and altruism

According to research, one's ethics are fully formed and unchangeable by the time one is old enough to enter college or a job.

false

The tendency to overemphasize personality based explanations for behaviors observed in others while under emphasizing the role and power of situational influences on the same benavior.

fundamental attribution error

Confirmation Bias

give more weight to facts that support our already held opinion. can makes us rationalize vs reason.

Smith

good life derives from the expression of "beneficence", not from material wealth.

availability heuristic

greater weight to events/facts that we can recall. Biased worard vivid, unusual or emtionally charged examples.

Behavioral Economists

have found that people are not only less rational than classical economists assumed, but more moral.

High Idealists

high ethical intentions because of strong concern with doing no harm.

High Relativism

high unethical intentions because they do not follow clear ethical principles and find it easier to rationalize unethical behavior

Concept of Fairness: Organizational Justice

how employees judge the behavior of the org.

Kohlberg's moral reasoning theory is a cognitive developmental theory that focuses primarily on

how people think about and decide what course of action is ethically right.

Disclosure Rule

how would you feel if your behavior appeared on ____? The assumption behind the disclosure rule is that community standards do exist for most situations, and at a gut level, most of us know what those are.

Utilitarianism

idea that the goal of society should be to bring about the greatest happiness for the greatest number of people

Ethical Decision-Making Style

idealism and relativism

Utilitarian approach

identify stakeholders alternative actions and their consequences (harms vs benefit)

Unsconscious distortion of information in order to maintain a positive self image:

illusion of superiority

Illusions of Thoughts

illusions which affect our thought.

Level III: Postconventional Morality aka: Principle Reasoning

individual has developed beyond identification with others' expectations, rules and laws to make decisions more autonomously. Looks to ethical principles of justice and rights. Stage 5 - Social Contract and Individual Rights. social contract Emphasis on rules and laws as they represent the social contract. Willing to question the law and to consider changing the law for socially useful purposes. Stage 6 - universal ethics right and wrong. Theoretical Stage. following ethical principles of justice and rights. Acting in accord with principles when law violate principles.

Level II: Conventional Morality

individual is still externally focused on others but is less self centered and has internalized the shred moral norms of society or some segment like a family or work group. What's right is what pleases or helps others or is approved by those close to you. Stage 3: Interpersonal Accord, Conformity, Mutual Expectations. Interpersonal trust and social approval are important. Stage 4: Social Accord and System Maintenance: Fullfilling duties and obligations of the social system. Upholding laws and rules except in extreme cases where they conflict with social duties. Individual is concerned about fulfilling agreed upon duties and following rules or laws which are designed to promote the common good. Perspective broadens to consider society.

rational choice theory

individuals always make prudent and logical decisions that provide them with the greatest benefit or satisfaction and that are in their highest self interest. EV = Probability * Payoff

Thinking about Integrity

individuals think positively about their own ethics. Unconsciously filter and distort information to maintain positive self image. ILLUSION OF SUPERIORITY: Thinking one is more ethical, fair and honest than most. ILLUSION OF MORALITY: belief that the group's decisions are morally correct Virtue Ethics: rely on ethics of profession. Integrity: a person may like to think that he/she is a person of integrity, but engages in small indiscretions.

Illusion of Validity

is a cognitive bias in which a person overestimates his or her ability to interpret and predict accurately the outcome when analyzing a set of data, in particular when the data analyzed show a very consistent pattern—that is, when the data "tell" a coherent story.

Hostile Work Environment

is a type of sexual harassment wherein a worker is made to feel uncomfortable because of unwelome actions relating to sexuality.

Discrimination

is an ethical issue. it's at the core of fairness in the workplace.

Equality

is the quality of being the same in status, quantity, and value

Conflict of Interest

is your judgement or objectivity compromised. bribes, undue influence, access to priviledged information.

Long term vs short term consequences

it is important to think about both in business.

Heuristics

judgement shortcuts in decision making. used at the cost of occasionally sending us on the wrong path. Useful as they use effort reduction and simplication in decision making.

Adam Smith's "Wealth of Nations"

justify breed of capitalism that abhors regulation and focuses on short term profits over long term stewardship.

Self awareness

knowing your own strengths and limits and strengthening your inner ethical radar.

Cost of Descrimination

legal fees, punitive damages, media coverage, morale of existing work force. Important Note: Valuing Diversity * Discrimination means treating people unequally beacuase they are, or appear to be different. * Valuing diversity is a positive action - treating people equally while incorporating their diverse ideas.

optimism bias

less at risk at experiencing negative affects than everyone else. Rules don't apply to them.

high external locus of control

life events are determined primarily by fate, luck or powerful others.

Ethical Judgement Process

making a decision about what is the right thing to do in a situation with ethical overtones. A truly unique form of decision making.

False memories

memories for events that never happened, but were suggested by someone or something

Virtue Ethics Approach

moral behavior stems from personal virtues the integrity of the moral actor (person) than on the moral act itself (the decision or behavior)

Virtue Ethics Approach

moral behavior stems from personal virtues. focuses on the integrity of the moral actor than on the moral act itself (decision or behavior)

Deontological approach

moral principles are binding, regardless of the consequences. Some actions are wrong even if the consequences of the actions were good. focuses on "doing what is right"

Business school students ranked lower in

moral reasoning than other students.

Loyalty to a particular group can lead to

more ethical behavior, but it can also be problematic.

Principled based approach

most cherished values

Integration

most of the time System 2 adopts the suggestions of system 1 with little or no modification. You generally believe your impressions, which is usually fine.

Ethical conduct may be either/or

nature vs nurture

Virtue ethics -

one's character may be defined by a relevant ethical community - a community that holds you to the highest ethical standards.

Virtue ethics

one's character may be defined by a relevant ethical community.

F. Neil Brady

observed that when faced with an ethical dilemma, managers reasoned from dual perspectives. His model proposes that individuals, when faced with an ethical dilemma use two separate and practical reasoning styles.

Illusion of Causality or Correlation

occur when people develop the belief that there is a causal connection between two events that are actually unrelated. "pick pocket vs loss of wallet"

Locus of control does not shift from

one situation to another

Values

one's core beliefs about what is important, what is valued, and how one should behave across a wide variety of situations.

The authors focus on

organziation factors because these facotrs can be diredlty controlled by managers.

Ethical conduct is influenced by

our environment

High internal locus of control

outcomes of his or actions are primarily the result of his or her own efforts.

Conflicts of Interest examples

overt bribes or kickbacks Subtle Bribes Influence Privileged Information

Common Sense is a

paradox It can undermine our ability to correclty understand the world.

Intuitition

pattern recognition

Heirchacle Mum affect

people are hesitant to convey bad news to the chain of command

Prospect Theory

people choose to take on risk when evaluating potential losses and avoid risks when evaluating potential gains

illusion of superiority or illusion of morality

people tend to think of themselves as more ethical, fair, and honest than most other people

Illusion of Control

people's belief that they overestimate their ability to influence events, even when they have no control over what will happen

Self Story "narrative"

personal characteristics that will help you find ways of behaving that align with your image

what do we do when values conflict?

possible lie for good reason or excusable?

Realism

pragmatic - what "is" rational safer choices Ethical principles dependent on situation. More goal oriented

2 ways of ethical decision making

prescriptive approach descriptive approach

Confidentiality

privacy is a basic right.

Neutral language can be used to make an unethical action seem less

problematic.

Decision making is a

process

Virtuous persons balance

prudence (mature self love), strict justice and benevolence, and ideal societies.

Resemblence Heuristic

psychological heuristic pertaining to how people make judgments based on similarity

Descriptive Approach

psychological research to describe HOW people actually make ethical decisions. Focuses in particular on individual characteristics that influence how individuals think and on cognitive limitations that often keep people from making the best possible ethical decisions.

2 types of sexual harassment

quid pro quo: sexual favors are a requirement, or appear to be a requirement, for advancement. and hostile work environment: employee has been made to feel uncomfortable because of unwelcome actions or comments relating to sexuality.

Moral Disengagement

rationalizing immoral behavior as legitimate, as a way of justifying one's own bad acts.

Intuition

reason by analyogy to situtations that seem quite similar to ones we are currently facing. rather than exploring a wide range of options, if we find an analogy that seems to fit, we often go with it. Works most of the time. works best when we face problems with which we have had experience.

the decision about whether the behavior constitutes harassment is determined from the viewpoint of a

reasonable person

Ethical Awareness is the

recognition that a situation or issue raises ethical concerns.

Memories are

reconstructed at each recall

Law

reflecting society's minimum norms and standards of business conduct.

Evaluate

regular surveys and interviews analyze documents Law suits and other reports most org's are unwilling to invest in evaluation and thus can't evaluate effectiveness.

Pre-scripting

rehearse voicing your values to increase the odds and comfort of doing so in the moment. certain actions, or deciding to take the actions in advance, tends to make an actor more likely to do a certain action.

Cognitive Bias

result of our attempt to simpligy information processing. Rules of thumb that help us make sense of the world and reach decisions with relative speed.

Some Deontological Theories focus on

rights rather than duties, values, or principles

Deontological theories can also focus on

rights rather than duties, values, or principles.

Rights can be thought of as positive rights

rights to health and safety.

Being able to see the situation though others' eyes is a key skill called

role taking

Relationship between ethics and law

see diagram

Pareidolia

see patterns which do not exist.

Level I: Pre-conventional Morality

self centered views ethical rules as imposed form outside the self. Stage 1: Obedience to authority for its own sake. sticking to rule to avoid punishment Stage 2: Instrumental Purpose and Exchange: Following rules only when it is in one's immediate interest. Right is an equal exchange, gettiung a good deal. Personal reward What's in it for me? Can I get away with it? Will I get punished?

Trust is essential in a

service economy

Fairness

signals organization/person can be trusted. Demonstrates that org/person values you. Neurological response when things seem unfair.

Locus of Control can be thought of as a

single continuum from a high internal locus of control to a high external locus of control.

Ethical Dilemma

situation in which two or more "right" values are in conflict.

Virtue ethics perspective considers

the actor's character, motivations and intentions. important that the individual INTENDS to be a good person.

According to Kohlberg

the actual decision an individual makes isn't as important as the reasoning process used to arrive at it.

Bias Blind Spot

the cognitive bias of failing to compensate for one's own cognitive biases.

Machiavellian-ism

the degree to which an individual is pragmatic, maintains emotional distance, and believes that ends can justify means. Self Interested Opportunistic Deceptive Manipulative ends Justify the means Associated with sociopath/psychopath

moral intensity

the degree to which an issue demands the application of ethical principles

Organizational Climate

the employee's shared perceptions of the organization in terms of policies, pracxtices, expectations, and outcomes. Climate is a more surface level phenomenon reflecting individual or group experiences. Climate is easier for us to change than culture.

Endowment Effect

the fact that people often demand much more to give up an object than they would be willing to pay to acquire it.

Endowmnet Effect

the fact that people often demand much more to give up an object than they would be willing to pay to acquire it.

Core Values

the important principles that will guide decisions, behavior and actions

morally intense

the moral intensity of an issue is higher when consequences for others are potentially large, the consequences are relatively immediate and likely to occur, and the potential victims are psychologically or physically close to the decision maker.

Doctrine of Double Effect

the moral principle that performing a bad action to bring about a good effect is never morally acceptable but that performing a good action may sometimes be acceptable even if it produces a bad effect

Discrimination

unequal treatment based on one's race, gender, ethnicity, national origin, religion, age, disability, etc. Standard for hiring, promotions, etc. should be the ability to do the job. People are passed over because they don't fit the "corporate profile" (may be discriminatory)

External Locus of Control

the perception that chance or outside forces beyond your personal control determine your fate.

Internal Locus of Control

the perception that you control your own fate

Memory

the persistence of learning over time through the storage and retrieval of information

Idealism

the person's concern for the welfare of others ( a focus on consequences)

Idealism

the person's concern for the welfare of others ( a focus on consequences) What "should be" More risky decisions

Relativism

the person's emphasis on ethical principles being dependent on the situation rather than being applicable to all situations (similar to deontological theories)

Relativism

the person's emphasis on ethical principles being dependent on the situation rather than being applicable to all situations. (similar to deontological theories)

Core Values

the primary or dominant values that are accepted throughout the organization Organizations guiding principles Corporations Value or Mission Statements

Ethics

the principles, norms, and standards of conduct governing an individual or group - focuses on conduct.

Cognitive Moral Development

the process of moving through stages of maturity with regard to making ethical decisions

Fundamental Attribution Error (Bias)

the tendency for people to overemphasize personality based explanations for behaviors observed in others while under emphasizing the role and power of situational influences on the same behavior.

Conformity Bias

the tendency people have to take their cues for ethical behavior from their peers rather than exercising their own independent ethical judgment.

Confirmation Bias

the tendency to attend to information that will help confirm the decision we would prefer to make.

Hindsight Bias

the tendency to see past events as being predictable at the time those events happend.

Hindsight Bias

the tendency to see past events as being predictable at the time those events happened.

Anchoring

the tendency, in making judgments, to rely on the first piece of information encountered or information that comes most quickly to mind

Organizational Culture

the underlying shared values and beliefs which lead to the experiences that influence the development of those perceptions.

Framing

the way an issue is posed; how an issue is framed can significantly affect decisions and judgments.

Leaders create culture by

their actions and behaviors what they pay attention to what gets rewarded and what gets punished the allocation and attention to resources

Prospect Theory

theory that suggests that a decision, or argument, can be framed in different ways and that the framing affects risk assessments consumers make

Ethical language, both positive (integrity, honesty, etc.) and negative (lying, cheating)

trigger ethical thinking / awareness

two "right" values that can create significant conflict are

truthfulness loyalty

Empathy

understanding the emotional reactions of others in order to lead them effectively.

Discrimination

unjustifiable negative behavior toward a group and its members

leaders hav ethe single biggest impact on the ethicality or org culture

values ar ethe glue that holds an org and its employees together. values must be conveyed from the top of the organization (Dickson 2001)

John Rawls

veil of ignorance

Memory

we can add/subtract facts

Intuition as a Problem Solver

we can intuitively resolve many problems quickly and effortlessly "Danger". "Sense to survive"

Communication - Value

we have an obligation to communicate

Respect - Value

we treat others as we would like to be treated

Conflict of Interest

when a person's judgement or objectivity is compromised, typically because of financial or other gain for the person making a decision or for a close relative or friend.

Socialization

when employees lear appropriate behaviors.

Negativity bias

where people pay mor eattention to and give more weight to negative rather than positive experiences.

Negativity Bias

where people pay more attention to and give more weight to negative rather than positive experiences.

Challenges of deontological approach

which duty, obligation, right, or principle takes precedence? When this approach conflicts with the consequentialist approach.

Hostile Enviornment

would a reasonable person define it as hostile. Reasonable person standard. was it physically intimitading? did it affect the employees performance?

Culture vs Value statements

you must look at the org itself, not just its statements. They may be a presentation only.

Virtue ethics perspective assumes that

your identify as a moral actor is important to you and that you are devoted to continuously developing that aspect of yourself.