Request PDF on ResearchGate | Ethical breakdowns. Bazerman & Tenbrunsel (a) It’s well documented that people see what they want to see and easily. Harv Bus Rev. Apr;89(4), Ethical breakdowns. Bazerman MH(1), Tenbrunsel AE. Author information: (1)Harvard Business School, USA. Failure Understand It Good people often let bad things happen. Why? by Max H. Bazerman and Ann E. Tenbrunsel Ethical Breakdowns ILLUSTRATION.

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Ethical breakdowns.

Skip to main content. Log In Sign Up. Failure Understand It Good people often let bad things happen. Bazerman and Ann E. Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfea- sance from the top.

But that is rare. Much brakdowns often, we believe, em- ployees bend or break ethics rules because those in charge are blind to unethical behavior and may even unknowingly encourage it. Consider an infamous case that, when it broke, had all the earmarks of conscious top-down corruption. The Eghical Pinto, a compact car pro- duced during the s, became notorious for its tendency in rear-end collisions to leak fuel and explode into lames. More than two dozen people were killed or injured in Pinto ires before the company issued a recall to correct the problem.

But looking at their decision through a modern lens—one that takes into account a growing understanding of how cognitive biases distort ethical decision making—we come to a diferent conclusion. We sus- pect that few if any of the executives involved in the Pinto decision believed that they were bazer,an an unethical choice.

Apparently because they thought of it as purely a business decision rather than an ethical one. Taking an approach heralded as rational in most business school curricula, they conducted a formal cost-beneit analysis—putting dol- lar amounts on a redesign, potential lawsuits, and even lives—and de- termined that it would be cheaper to pay of lawsuits than to make the repair.

That methodical process colored how they viewed and made their choice. The moral dimension was not part of the equation. When the potentially dangerous design law was irst discovered, did anyone tell him? With Lee it was taboo. The lesson is clear: The pressure at accounting, consulting, and law irms to maximize billable hours creates similarly perverse incentives.

Employees engage in unnecessary and expensive Whenever a problem ehtical raised that meant a delay projects and creative bookkeeping to reach their on the Pinto, Lee would chomp on his cigar, look out goals. Of course, this requires a detailed al- ecutives in charge of the Pinto were consciously lotment of time spent, so some irms have assigned unethical or that they intentionally sanctioned un- codes to hundreds of speciic activities.

What is the ethical behavior by people further down the chain efect? Deciding where in a multitude of categories of command. Research We believe that the patterns evident there continue shows that as the uncertainty involved in complet- to recur in organizations.

A host of psychological ing a task increases, the guesswork becomes more and organizational factors diverted the Ford execu- unconsciously self-serving.

Ethical breakdowns by Alyona Zhukova on Prezi

A sys- problem, and executives today are bgeakdowns by similar tem designed to promote ethical behavior backires. At the heart from view. In the BusinessWeek pire to run. Add President Clinton to the long list of people Ill-Conceived Goals who deserve a share of the blame for the housing In our teaching we often deal with sales executives. A recently re-exposed document By far the most common problem they report is that shows that his administration went to ridiculous their sales forces maximize sales rather than proits.

ORG Idea in Brief Companies have poured time and All these serve to derail even the Surveillance and sanctioning money into ethics training and best-intentioned managers: You must be aware of these widespread.


This bias applies dramatically with respect standards pushed prices up by increasing demand, to unethical behavior. Pinto into production not only seemed unable to The Sears executives seeking to boost repair rates, clearly see the ethical dimensions of their own deci- the partners devising billing policies at law firms, sion but failed to recognize the unethical behavior of and the Clinton administration officials intending the subordinates who implemented it.

Five Key Ethical Breakdowns | Change for the Better!!

But by failing to consider the ef- which motivated blindness contributed to some bad fects of the goals and reward systems they created, decision making. This the companies they rate. These agencies made their will help head off unintended consequences and profits by staying in the good graces of rated com- prevent employees from overlooking alternative panies, not by providing the most accurate assess- goals, such as honest reporting, that are just as im- ments of them, and the agency that was perceived portant to reward if not more so.

When leaders fail to have the laxest rating standards had the best shot to meet this responsibility, they can be viewed as at winning new clients.

Furthermore, the agencies not only promoting unethical behavior but blindly provide consulting services to the same irms whose engaging in it themselves. Research reveals that motivated blindness can Motivated Blindness be just as pernicious in other domains. The manager the efort, why did Merck keep producing them? In fact, Ovation had an outielder for the San Francisco Giants, surpassed a history of buying and raising the prices on small- Hank Aaron to become the all-time leader in career market drugs from large irms that would have had home runs—perhaps the most coveted status in public-relations problems with conspicuous price Major League Baseball.

Bonds racked up ver- increases. Although it was well known that raise the prices itself? Rather, we want to know why managers stands accused of illegally using steroids and lying and consumers tend not to hold people and organiza- to a grand jury about it; his perjury trial is set for this tions accountable for unethical behavior carried out spring.

If steroid use did help bring the home runs through third parties, even when the intent is clear. They all stood to believe most people would agree that using an inter- beneit inancially.

At the same time, we believe that the strategy worked be- Managers routinely delegate cause people have a cognitive bias that blinds them to the unethicality of outsourcing dirty work.

The study participants read a story, inspired by the Merck case, that began this way: A decade of re- minimally proitable.

But the patients who used essarily reduce their untoward impact on decision the drug really needed it. The pharmaceutical was making. The major pharmaceutical X sold the rights baxerman a smaller pharmaceutical.

But after selling the rights to paying ehtical. Here are some of the reasons—and what to do about them. Consider necessarily reduce might invite unethical them immediately. Further mental, and breakdoens standards. But if you put have incomplete information about the effects of it in a pot of warm water and raise the temperature the outsourcing.

If we for what they are. They may as long as each violation is only incrementally more bteakdowns subordinates, or agents such as lawyers and serious than the preceding one. Over the course of 16 been a change in behavior over time.

And if some- rounds, the estimates rose to suspiciously high erhical thing seems amiss, they should consider inviting a els either incrementally or abruptly; all of them in- colleague erhical take a look at all the relevant data and ished at the same high level. Overvaluing Outcomes Now imagine an accountant who is in charge of Many managers are guilty of rewarding results rather auditing a large company. An employee may make inancial statements are clean. In the irst of two sce- a poor ethial that turns out well and be rewarded narios, the company then commits some clear trans- for it, or a good decision that turns out poorly and be gressions bazermn its inancial statements, even breaking punished.


Rewarding unethical decisions because the law in certain areas. In the second scenario, the they have good outcomes is a recipe for disaster over auditor notices that the company stretched brekdowns did the long term.

By brothers, Jon and Mark, neither of whom has a crimi- the third year the violation has become more severe. A man insults their family. Jon wants to In the fourth year the client commits the same clear kill the guy: He pulls out and ires a gun but misses, transgressions as in the irst scenario. Matt wants only to scare The auditors-and-estimators experiment, along the man but accidentally shoots and kills him.

In the with numerous similar ones by other researchers, United States and many other countries, Matt can suggest that the accountant above would be more expect a far more serious penalty than Jon.

It is clear likely to reject the inancial statements in the irst that laws often punish bad outcomes more aggres- scenario. Bazerman and colleagues explored this sively than bad intentions. We presented the following stories success? He believes that the data in fact are appropriate to use, and when he adds those data points, the results move from not quite statistically signiicant to signiicant. A recent survey of large companies adds these data points, and soon the drug goes to indicated that brexkdowns every billion dollars of revenue, a market.

If these eforts worked, one might of others. De- is safe and efective.

As the deadline approaches, he spite all the time and money that have gone toward notices that if he had four more data points for how these eforts, and all the laws and regulations that subjects are likely to behave, the analysis would be have been enacted, observed unethical behavior is signiicant.

He makes up these data points, and soon on the rise. This drug is a proitable and This is disappointing but unsurprising.

Even the efective drug, and years later shows no signiicant best-intentioned ethics programs will fail if they side efects. What can you do to head of rather than exacer- searcher to be?

Ethical Breakdowns: Good People often Let Bad Things Happen. Why?

Instead ensure that managers and employ- more harshly. This simple step might have headed of And that is how other study participants saw it when the disastrous decisions Ford managers made—and we removed the last sentence—the outcome—from employees obeyed—in the Pinto case. And encour- each story. They spots, which may permit, or even encourage, the un- should beware this bias, examine the behaviors that ethical behaviors you are trying to extinguish.

The Managerial Challenge Ann E. Tenbrunsel is the Rex and Alice A. Martin Professor Companies are putting a great deal of energy into of Business Ethics and the Research Director of the Institute eforts to improve their ethicality—installing codes for Ethical Business Worldwide at the University of Notre Dame. They are the authors of Blind Spots: It is not intended for use as assigned course material in academic institutions nor as corporate learning or training materials in businesses.

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