Final exam

roles

-Assigned roles can reduce our sense of individulatity by focusing our attention to roles rather than ourselves. -Roles can reduce our sense of responsibility -roles influence behavior- zambardo experiement at work- conflicting roles can lead to unethical behavior, competeing for time or resources. roles can support unethical behavior -example- zambardo, jail case-

moral disengagement (all 8)

1) Euphemistic language 2) Moral justification 3) Advantageous comparison 4) Displacement of responsibility 5) Diffusion of responsibility 6) Distorting consequences 7) Dehumanization 8) Attribution of blame

moral disengagement

1) Euphemistic language-big short- subprime morgages 2) Moral justification- contributes to another socity valued outcome, like fraud to help stockholders and employees- enron 3) Advantageous comparison- pento fires, comparing thier cars to other similar european cars that had the same issue 4) Displacement of responsibility- big short- banks blaming it on poor people and immagrants 5) Diffusion of responsibility- 6) Distorting consequences-Weston, when he preformed his action never would have thought of jail time 7) Dehumanization - zambardo, guards 8) Attribution of blame- its thier own fault, blames victim-

Relationship between ethics and the law

1) define- The relationship between ethics and the law can be tricky, something that the public could be represented as ethical while it is considered unlawful. Many times if something is unlawful many would consider it also unethical, however history as shown this to not always be true (civil rights). Many times, ethics and law can agree, but its important to be able to differentiate them when needed. 2) show an example in the work place-? example- big short- when christian bale decided to pause all investors from withdrawing their stock from the company. He has the legal right to do so under contract allowing him to be in full control under market stability. however, this may have not been to ethically correct thing to do since it is not his money, and what they saw was considered insane.

Bad apples/bad barrels argument

1a) Bad apples vs bad barrells is a simile that can be realted to ethical or unethical individuals in a culture. in a literal sense when a bad apple is infected, it can spread throughout the other apples and infect them. 1b) realating this to humans can make serval points, like maybe an unethical manager infecting the ethical cuture in the buisness causing other to follow inethical practices. This could also infer that when something unethical or illagal happens, the blame is typically placed on one person. Rather than only putting the blame on one of the bad apples, the blame should be put on the barrell as well which infected this bad apple. 2) an example of this is can be found in the big short and can reprent any banker in the morgage sector. at the end of the big short, only one man was put in jail from backs for the 2008 finicaial crisis. The blame was put on one bad apple rather than the the entire barrel (the culture and every other banker) who created these CDO's and sold them as morgage back securities.

Locus of control

1a) describe the concept- is a view point where someone directs the outcome of an event on either external or internal sources. biased on where they direct this determines their traits, if they are internal or eternal. Someone who has an external locus of control will typically place the blame of an outcome on an outside source like fate or a higher being. someone who has an internal locus of control will place the blame on themselves 1b) how it applies to the workplace and ethics- typically employees who have a trait of internal control and will accept responsibility for their actions. While a draw back may be that they are hard on themselves, they will attribute success to themselves as well. When it comes to ethics, they will make their decisions on what they think is ethical or unethical which has an advantage on external employees who might make excuses or attribute an unethical decision to others at work. 2) Mark Baum in the big short shows the characteristics of an internal locus of control. After his brother's tragic death, he sadly explains to his wife that his brother told him about dark thoughts and instead of helping him, he offered money. Mark seemed very regretful for this, which could imply that mark thought he could have helped his brother and prevent him from committing suicide. His character seemed that the purpose of his job was to personally fix the greedy banks and he could fix it.

philosophical approaches

1a) these are percriptive approaches that help make ethical decisons. Three philosophical approaches are deontological, consequential, and virtue ethics. Deontological focuses on duties and how soceity would see this problem as ethical or unethical. to help determine if something is ethical deontologically, then one could ask how would the world be if everyone made this type of desison, or what would you decide if you knew nothing about the individual, or lastly how would you want to be treated? consequenital iis based on consiquenses such as what group of stakeholders is most likely to be affected? in a consquential approach, someone would base thier desision by determining if its the greatest good for the largest amount of people. and lastly virtue ethics is based off of character or integry, a good tool to use is to create your moral community or ask if this was posted on time square would i be ashamed? 1b) this applies in the workplace when any deision is made, typically, buisnesses go with a consequintialist approach. Many ethics issues arrise when maybe the consequinitalist approch interfers with deontological. for instance fraud to protect your stock because it will cause pain on investors and jobs will be lost. 2) example- enron creating fraud to protect the company and it's shareholders was a consequentialist approach.

Moral disengagements

Are 8 forms of disengagement where people tend to detach, make excuses, and not take the blame for their unethical actions. example- The Weston Case showed many moral disengagments which led the Chris to believeing that there was nothing unethical about his actions.

Cognitive moral development (list)

By kohlberg Level I (Preconventional) -Stage 1 - Obedience and Punishment Orientation- - Stage 2 - Instrumental Purpose and Exchange- follows the rules only when its in one's immediate interest. Level II (Conventional) -Stage 3 - Interpersonal Accord-Conformity-Mutual Expectations-stereotypical good behavior, -Stage 4 - System Maintenance - Upholding duties-laws, in extreme circumstances going against laws if they don't agree with society's belief. Level III (Postconventional or Principled) -Stage 5 - Social contract and rights- upholding rules because they are inherently good, not because others agree. -Stage 6 - Theoretical stage only- goes with phyc concepts.

Weston

Chris and Allison Weston never thought their actions would result in criminal sentencing. Chris had a high Corprate HR position and was being flooded with work.

Cognitive moral development

Cognative moral development are the typical steps in the mind that determines what is morally right or wrong and why they think that way. For example, a child may not know why something is right or wrong, they may only know that they will be punished or rewarded. as their mind develops, they start to realized what is right and wrong for themselves rather than their parents telling them. they may start to think for themselves, and decide what is right and wrong because of what society thinks. work- how does the orginizations in whole think? at a preconvential level where they are only performing actions because they will be punished if not? or do they think about society? example- merek case- had a higher level of cognative moral development since they produced the drug for riverblindness eventhough it was not profitable. they held up to society's views because they were inherenly right (stage 5)

Script processing

Definition- cognitive framework that guides our thoughts and actions in routine situations. actions and thoughts become scripted and done without thinking. This can be done by oversimplifying routine situations. humans can act scripted in certian situations- like going out to eat and mind manors. in buisness- A cost benifit analysis in buinesses is a common way to oversimplify ethics in the form of quatifications. this can overly reduce issues to a consequitialist utilitarianistic thinking. Example- oversimplifiying to a routine form was the reason for the finacial crisis in 2008. explained in the big short, big banks were making a fortune off morgage backed securies, which had investors purchase bundles originally made of A, AA, AAA bond and were relativly safe. These ran out quickly, and banks began to take from B's. From "script processing" and routinely taking large bundles of lower and lower quality CDO's. It led to the routine process of consistently accepting bundles of subprime morgages.

ethical culture-formal systems

Executive leadership-ethical managers lead to ethical cultures Selection System-the process of hiring, interviewing, ect Policies/Codes-written rules in place by the company that all employees must follow Orientation/Training- Performance Management Authority Structure Decision Processes formal systems- are tangible systems put in place

Cognitive biases

Is taking mental shortcuts which can possibly lead to the wrong assumption. This could be mental barriers that would cause errors in the collection of data. it could be overconfidence, or listening to your gut (which could be wrong) example- the financial crisis hard to have this in a major scale, everyone just assumed the housing market was stable since it always has been and has always been strong. Bankers said they check, double check, and recheck to make sure everything is stable.

Stanford Prison experiment

Jail experiment- details- It was held at standford and was a physcologal prison experiments. it was an attempt to see how good people act in a prison experiment. started by being arrested by the city police, blindfolded and brought to prison. suggests about human behavior- that people dont act how youd expect when there is no authority, or a sense of entitalment, and create thier own power. Connection to ethics- without things like codes and policies, even good people (for example kids from standford) can follow a culture that others create. lasted 6 days instead of 2 weeks guards- had sunglasses- the gurads tried to subue prisoners with fire extinguishers, assigned prisoners numbers and no name rules, forced prisoners to use a bucket as a bathroom, removed matresses, forced to sleep naked, prisoners- one went crazy, screaming, yelling,

machiavellianism

Machiavellian used to describe individuals who act in self-interested, opportunistic, deceptive, and manipulative ways to win no matter what the cost or how it affects other people seems like the big banks in the big short seemed machiavellianistic, who committed fraud and did inherently evil acts and didn't care about anything except making money.

moral awareness and factors that mute moral awareness

Part 1a. define- Moral awareness- Is similar to the first step in the ethical decision making process, ethical awareness. Moral awareness is realizing that an ethical/unethical issue exists. It is the crucial step that begins the ethical decision making process, without it, the person or group would not realize that an ethical issue has developed. Factors that might mute moral awareness are: 1) insiders- being an individual who is engulfed in a culture that accepts the behavior 2)moral language- use of language that tends to muffle the seriousness of the situation. Part 1b, how is it implemented in work setting? In a truly ethical work environment, the factors that mute moral awareness should be eradicated. It is important that employees should be able to identify ethical/unethical situations to be able to address them. Part 2, relevant example- In the big short, Jamie and charlie celebrated when they realized that banks had no clue of the instability of mortgage backed securities. Ben (Brad Pitt) became infuriated that they were celebrating, and caused them to realize the consequences of the bank's carelessness will lead to unemployment, homeless citizens, and death. Jamie and charlie had no moral awareness of this issue, due to their focus on money.

Corporate social responsibility and the CSR pyramid

Responsibility beyond economic and legal obligations - to act ethically and to contribute in a positive way to society 3 reasons- 1) Pragmatic- To maintain legitimacy, protect reputation, viability We must use power responsibly or risk losing it 2) Ethical-As a part of society, the greater good 3) Strategic-socially responsible creates shared value and can differentiate one from competitors Types of CSR (pyramid- top to bottom)- -philanthropic responsibilities -ethical responsibilities -legal responsibilities -economic responsibilities. Example- merek case

ethical culture-informal systems

Role Models/Heroes Norms Rituals Myths/Stories Language

Merck

background- Merck & Co- one of largest pharmaceutical companies in the world. 1978- about to loose patent on 2 largest selling drugs, poured millions into new drugs, 1 billion in research came up with 4 drugs. drug-treated riverblindness, a parasitic worm, enter and grow 2 feet. Issue was that 300,000 people were blinded from in and many more affected, however it was relatively a small number for the amount of money that it took to research. they stumbled upon a possible drug. so should they loose profit? Decision to pursue research led to...decision to provide drug for free forever...to decision to develop logistics plans...to expertise in providing drugs in developing world (currently used in AIDS drugs) Organizational values can and should guide social responsibility decisions Employees' values should be taken into account. Organizations can be ethical leaders and other firms will often follow

Enron

enron- electricity and gas company Ken lay and executives basically put all money elsewhere in ensure that the stocks remained positive. exectutives were tried for fraud and in November 2001 that Enron's earnings had been overstated by several hundred million dollars. Top Enron executives sold their company stock prior to the company's downfall. Lower-level employees were prevented from selling their stock due to 401k restrictions and many subsequently lost their life savings. Enron paid the top 140 executives $680 million in 2001. Kenneth Lay received $67.4 million and Jeffrey Skilling received $41.8 million.

Ethical Decision making process

ethical awareness -> ethical judgement -> ethical behavior 1) describe this concept- The book states that an individual goes through 3 steps: ethical awareness, ethical judgement, and ethical behavior. These three steps are the break down of most decision in regards to ethics. In a business setting, an issue will arise and an important first step of ethical awareness will come up, it will be more easily recognized if it is brought up without distorting ethical language, if the decision is widely distributed, ect... Then, the individual will decide if it is ethically right or wrong basied on thier judgement, the culture or environment could lead to the person deciding if it is ethical or unethical. lastly they will come to a decision, if everything is ethically aligned it should be an ethical decision. However this shows the steps of ethical decisions are broken up and many factors for each step can influence the ending decision. 2) in the pinto fires case, they realized the ethical delima that their cars were exploding began when they failed tests for 20mph damages, then finding out it was an $11 fix for every car, and 200,000 per life. Ethical judgmentent led them to decide to not make the fixes since the 200,000 per life would cost way less. -the big short example- small banks- should they take these subprime moragaes and give loans to individuals with terible credit or even to the unemployeed? then the judjement led to excuses like every other bank is doing it, or the big banks wont buy from us if we dont give them more loans, and the bank down the street will give them a loan if they dont.

Consequentialist theories

focus on consequences -important to identify all steakholders- who is harmed/benefited. -utilitarianism advantages- practical, and its how businesses think Challenges- difficult to evaluate all consequences, rights of minorities can be sacrificed Tools- identify stake holders, see who wins and looses

Deontological theories

focus on duties, obligations, principles. acts are inherently good or bad, regardless of consequences. advantages- rights approach challenges- deteriming the rule to follow, deciding what takes precedent, Tools- Golden rule, kant's rule, rawl's viel of ignorance

Virtue ethics

focus on integrity and moral character. advantages- can rely on community standards for guidance challenges - Limited agreement about community standards Many communities haven't done this kind of thinking Community may be wrong tools- relevant moral community, disclosure rule

obedience to authority/Milgram experiments

obedience to authority- when someone is given a command to do something unethical, they are more likely to complete the command rather than it be on their own accord. With an authority figure to put the blame on, a person will have a sense of displacement of responsibility. Milgram's shocking experiment was a good represenation of this. created interesting studies, each separate from the last. example 1- authority- collected 40 males, and created a situation where one individual thought he was electricuting another individual based on comands given by a scientist. 65% went to the maximum voltage.

Pinto Fires

timeline- 1968- production of the ford pinto- weigh no more than 2000 lbs and cost no more than $2000 1970- test crash, and failed safety standards, where gas leaked at 20 mph crash in a rear end collision. only passed if modified, could have fixed it with an $5-$8 fix. but decided not to for cost benefit reasoning. 1971- first model year released After faitalites, they could have fixed it with an $11 fix per vehicile, however they compaired this to the NHTSA's price for a human life- around $200,000 at the time. After estimating deaths, they decided that the cost of a life was less than spending $11 on a repair for each vehicle. 1971-1978- critics predicted 500 deaths 1976- NHTSA required a 30mph limit, and made ford obliged to fix the cars. results- ford convited of homocide- found not guilty, resulted in suits where a single suit for one case resulted in over $120 million