Common Causes of Ethical Breakdowns

Common Causes of Ethical Breakdowns

1. Bias

   • Implicit
     • Unconscious stereotypes, associations or attitudes about other individuals  Ex: Ann Hopkins V. Waterhouse
   • In Group Favoritism
     • Favor to those who are similar  like ourselves in terms of race, religion, employer, etc Ex: Cheating among Carnegie Mellon Students (hoodies with different schools)
   • Conflict of Interest
     • Lawyers telling client make a settlement. You have your own self-interest and has a professional or public interest.   EX: Doctor and pharmaceutical company 
   • Over claiming Credit Tendency
     • to over rate our individual contribution groups leading to under judgement. EX: overestimating one's contribution tin tema presentation or project

2. Blind Spots

   • Ill Conceived Goals
     • Setting goals and incentives to promote a desired behavior but they encourage a negative one 
   • Motivated Blindness
     • Overlooking unethical behavior of others when it is in our best interest to remain ignorant  EX: Giants use of steroids, Penn State Football team, and Boston Globe (Catholic Church)
   • Indirect Blindness
     • Holding others less accountable for ethical behavior when it is carried out through third parties 
   • The Slippery Slope
     • inability to detect unethical behavior of others because it developed gradually EX: Enron, Toby Groves and his air mortgages
   • Over Valuing Outcomes
     • Giving a pass to ethical behavior if the outcome is good  EX: Elizabeth Holmes (finger tip blood test) got sued by everyone 
   • Ethical Fading
     • an erosion of ethics to the point that ethical consideration is removed from the decisions we face

3. Personal Ethics vs Business Ethics

   • Types of Ethical Dilemmas
     • Saying things You know aren't true
     • Hiding information or disclosing
     • Engaging in conflict of interest without transparency
     • Overlooking unethical conduct in others.
     • Violating organizational rules
     • Giving or allowing false impressions
   • Why do people do bad things
     • Everyone Else Does It.
     • Renaming the Dilemma. (According to Waksal, “linguistics”)
     • It Doesn’t Really Hurt Anyone
     • The System is Unfair
     • It’s a Gray Area
     • We All Don’t Share the Same Ethics
   • Peter Drucker
     • Drucker advocates for the ethics of prudence and self-development inspired by Aristotle    
     • Believes in one ethics, one set of rules of morality pertaining to individual behavior in which the same rules apply to everyone.
     • Drucker equates “Business Ethics” with Casuistry practiced over 300 years ago
       • Casuistry is when a ruler (manager) feels that she must subordinate her own individual conscience and behavior to the demands of social responsibility
         • Called this politics not ethics
     • “above all, do no harm.”
     • Confucianism
     • Albert Carr
       • Business and Personal Ethics are two separate things
         • Ethics is based on honesty and truth, but business is based on game strategy, not actual lying, but a strategy to bluff.     
       • Business is like a game of poker
       • no one in business actually expects the truth
       • Pressure to Decieve
         • First, he says that most executives and employees are practically compelled to deceive in order to keep their job, make a profit, negotiate the best price or contract. In fact, according to Carr, if you tell the truth all of the time, you are actually doing your employer a disservice by putting them at a disadvantage. In order to operate under this regime, you must make peace with the bluff: convince yourself that bluffing is justified, and it can be according to Carr because business follows the rules of an impersonal game with special ethics.     
       • Legality and Profit
         • The only way to know whether you have made the right choice is if the decision makes a profit for your business and is legal, that is all you need to know. We don’t make the laws we just follow them: Carr uses the example of a master key manufacturer who takes phone orders: he knows that probably some of these people are really car thieves and will use his product for illegal purposes, but that’s not his problem, he made his decision properly: he makes a profit and it is legal to sell the keys based on phone orders, so he doesn’t need to worry about what happens after. Carr thinks its not really ethics, it a self-serving calculation to act a certain way in order to earn business. Very much a utilitarian line of thinking isn’t it? Carr thinks its not really ethics, it a self-serving calculation to act a certain way in order to earn business. Very much a utilitarian line of thinking isn’t it? self-serving calculation to act a certain way in order torn business. Very much a utilitarian line of thinking isn’t it?     
       • Kantian Evasion
         • a true but misleading statement (remember Kant says you can’t lie, but technically he is not lying, so Kant would be cool with it): “I don’t own any stock in that company”  we have seen this  before:Use pic of poker player wearing sunglasses    
       • Pride and Money

4. Ethical Frameworks

   • How do you recognize an ethical dilemma?
     • The Smell Test
       • •Can you tell your Mother (or Father or respected authority figure) about it? •“…Contemplating any business act, an employee should ask himself whether he would be willing to see it immediately described by an informed and critical reporter on the front page of his local paper, there to be read to his spouse, children, and friends.”  …“We simply want no part of any activities that pass legal tests but that we, as citizens, would find offensive.”  Warren Buffett     
   • Utilitarianism
     • Jeremy Bentham and John Stuart Mill
     • bring the greatest good to the greatest number of people.
     • cost-benefit analysis
     • Many critics say it fails to respect individual rights, places the same value on everyone’s happiness, focuses on outcomes and not motives
   • Deontology
     • Immanuel Kant
     • the best decisions are those motivated by a sense of duty, not by the result of the decision.
     • categorical imperatives: rules that you are willing to universalize so that everyone should follow them.
     • Critiques are: not concerned with consequences, most struggle to follow rules strictly
   • Libertarianism
     • Milton Friedman
     • freedom of individual choice, and respecting this freedom in others, is key to determining the right decision.
     • Critiques include: There is too much focus on the interests of the individual and not of society, This framework is inconsistent with corporate social responsibility or stakeholder theory, Libertarians do not believe in many laws that limit individual rights for the sake of social welfare
   • Virtue Ethics
     • Aristotle
     • Ethics focuses on living a good (virtuous) life through habit
   • Social Justice
     • John Rawls
     • fairness, equity and justice
     • making the right decision involves being ignorant of our status in life (Veil of Ignorance).
     • believe that luck, although arbitrary, plays a strong role in our lives and that it is an obligation for those who are lucky to help the unlucky in life.
   • Confucianism
     • Treating others with respect and sincerity: respect for family, community and nation
     • The same ethical rules apply to each individual. Confucians believe that in business, there is a connection between people created by mutual (equal) obligation. According to thinker Peter Drucker, Confucianism is the ethics of interdependence.
   • Religion/Faith
     • Many of us are guided by our particular religion or faith when it comes to making decisions. The Golden Rule of “do unto others as you would have done unto yourself.”