Sustainable Management Metropolia Business Ethics IP week 11 Social Context

Social context n “almost everyone is capable of torture and other evil acts if placed in the wrong social context” Susan Fiske, Princeton University n Stanley Milgram experiment showed that 2/3 of participants did cross borders

Stanford prison experiment Situational context was created where students performed roles of guards and prisoners. Within 6 days the experiment had to stop because of excessive abuse of the prisoners. Situation: role-playing, coercive rules, power differentials, anonymity, group dynamics, and dehumanization. Participants: 24 were selected based upon mental stability. At day 5 prisoners were extremely stressed

Social context n Diffuse responsibility (other people involved, it comes with the job) n Dehumanizing (victims are not seen as full, or as animals) n Brotherhood mentality (group commitment) n Social cascade effect (large group of people do or think because others have done it before) n Financial markets n Protest movement n Opinion polls, voting New scientist article,”they made me do it” Bond,2007)

Social context n Social learning ( assuming that others know something you don’t know) and social coordination (doing it together, going up in the mass) are driving factors n Peer pressure (it is hard to go against peers) n Reinforcement (in large groups with same opinion, “see I was right”) n Polarization (we – they thinking, especially in crisis, iraq after 9/11, police and football crowd) New scientist article,”they made me do it” Bond,2007)

Motivation and Values n Bruntland definition of sustainable development “Meet the needs of people…without compromising the needs of future generations…” n What are the ‘needs’, or better the ‘wants’ n Values are the basis of motivation in decision making

Hierarchy of Needs Honour Good Name Please Group Primary needs Maslows Pyramid Western Biased Pinto’s Pyramid Eastern Biased

ERG Theory Alderfer Existence needs Relatedness needs Growth needs Satisfaction / Strengthening Frustration / Regression Satisfaction / Progressing

Motivation n Humans are motivated by 3 impulses: n Greed (we want to gain) n Fear (we don’t want to lose, loss aversion) n Morality ( do what is right, even if it means loss and harm)

Value of Live n How much consumption during lifetime n Avoiding death n How much income generated n Check your worth out: n

Value of Live n Needed in calculating life saving measures n Preventing legal actions Moral issue: n Sell kidney on Ebay n Win a kidney in a show

Ford Pinto Case n In production n Design flaw: fuel tank was easily punctured in rear end collisions, and could set fire to the car n Doors could jam in accidents to, deathtrap

Ford Pinto Case n Ford knew about the design flaw, but decided after a cost-benefit analysis that it was cheaper to pay off lawsuits n A memo about this leaked n Pintos were called back in a costly operation n Pinto gained a bad reputation (only 2 mln sold out of the projected 11)

Ford Pinto Case n Expected Costs of producing the Pinto with fuel tank modifications: n Expected unit sales: 11 million vehicles (includes utility vehicles built on same chassis) n Modification costs per unit: $11.00 n Total Cost: $121 million [= 11,000,000 vehicles x $11.00 per unit] n n Expected Costs of producing the Pinto without fuel tank modifications: n Expected accident results (assuming 2100 accidents): 180 burn deaths 180 serious burn injuries 2100 burned out vehicles n Unit costs of accident results (assuming out of court settlements): $200,000 per burn death* $67,000 per serious injury $700 per burned out vehicle n Total Costs: $49.53 million [= (180 deaths x $200k) + (180 injuries x $67k) + (2100 vehicles x $700 per vehicle)]