1. Managing Business Ethics
Chapter 3
Treviño & Nelson – 5th Edition

2. Chapter 3 Overview Ethical Awareness and Ethical Judgment
Individual Differences, Ethical Judgment, and Ethical Behavior
Facilitators to and Barriers to Good Ethical Judgment
Toward Ethical Action
Gioia’s Personal Reflections on the Pinto Fires Case

3. The Relationship between Ethical Awareness, Judgment, and Action
Ethical Judgment
Ethical Action

4. Case
You’ve just started a new job in the financial services industry. One afternoon, your manager tells you that he has to leave early to attend his son’s softball game, and he asks you to be on the lookout for an important check that his boss wants signed before the end of the day. He tells you to do him a favor— simply sign his name and forward the check to his boss.
What might influence whether you see this as an ethical issue or not?

5. Influences on ethical awareness
If peers agree
If ethical language is used
If potential for serious harm

6. Individual Differences Influence How We Make Ethical Decisions
Ethical Decision-Making Style
Cognitive Moral Development
Locus of Control
Machiavellianism
Moral Disengagement
Ethical Awareness
Ethical Judgment
Ethical Actions

7. Cognitive Moral Development
Level I (Preconventional)
Stage 1 – Obedience and Punishment Orientation
Stage 2 – Instrumental Purpose and Exchange
Level II (Conventional)
Stage 3 - Interpersonal Accord - Conformity – Mutual Expectations
Stage 4 – System Maintenance - Upholding duties, laws
Level III (Postconventional or Principled)
Stage 5 – Social contract and rights
Stage 6 - Theoretical stage only

8. 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

9. Locus of Control
An individual’s perception of how much control he or she exerts over events in life.
External
Internal

10. Connection to Ethical Behaivor?
Internals are more likely to see the connection between their own behavior and outcomes and therefore take responsibility for their behavior.
Therefore, internals are more likely to do what they think is right

11. Machiavellianism
Self interested
Opportunistic
Deceptive
Manipulative

12. Moral Disengagement
The tendency for some individuals to deactivate their internal control system in order to feel okay about doing unethical things
Eight mechanisms used for doing this
Euphemistic language
Moral justification
Displacement of responsibility
Advantageous comparison
Diffusion of responsibility
Distorting consequences
Dehumanization
Attribution of blame

13. Moral Disengagement STOP AND THINK
“It’s not my responsibility - my boss told me to do it.”
“It’s not my responsibility – my team decided this.”
“It’s no big deal!”
“It’s not as bad as (what someone else) is doing.”
“They deserve whatever they get.”
“They brought this on themselves.”

14. Cognitive Barriers to Good Ethical Judgment
Barriers to Fact Gathering
Overconfidence
“Confirmation Trap”
Barriers to Consideration of Consequences
Reduced number
Self vs. others
Ignore consequences that affect few
Risk underestimated: illusion of optimism, illusion of control
Consequences over time – escalation of commitment

15. More Cognitive Barriers
Thoughts about integrity
Illusion of superiority or illusion of morality
Paying attention to gut
Careful! Gut may be wrong

16. Unconscious Biases
The IAT and race bias
The role of emotions

17. How it felt to be a recall coordinator…
“The recall coordinator’s job was serious business. The scripts associated with it influenced me more than I influenced [it]. Before I went to Ford I would have argued strongly that Ford had an ethical obligation to recall. After I left Ford, I now argue and teach that Ford had an ethical obligation to recall. But, while I was there, I perceived no obligation to recall and I remember no strong ethical overtones to the case whatsoever. It was a very straightforward decision, driven by dominant scripts for the time, place, and context.” Dennis Gioia, former recall coordinator at Ford

18. Toward Ethical Action Script Processing Cost-Benefit Analysis
Cognitive frameworks that guide our thoughts and actions
Cost-Benefit Analysis
Too simplistic a way of analyzing
No moral dimension

19. Case
Mary, the director of nursing at a regional blood bank, is concerned about the declining number of blood donors. It’s May, and Mary knows that the approaching summer will mean increased demands for blood and decreased supplies, especially of rare blood types. She is excited, therefore, when a large corporation offers to host a series of blood drives at all of its locations, beginning at corporate headquarters. Soon after Mary and her staff arrive at the corporate site, Mary hears a disturbance. Apparently, a nurse named Peggy was drawing blood from a male donor with a very rare blood type when the donor fondled her breast. Peggy jumped back and began to cry. Joe, a male colleague, sprang to Peggy’s defense and told the donor to leave the premises. To Mary’s horror, the male donor was a senior manager with the corporation.
- What is the ethical dilemma in this case?
What values are in conflict?
How should Mary deal with Peggy, Joe, the donor, and representatives of the corporation?