Max H. Bazerman

Ann E. Tenbrunsel

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <p>Companies have poured time and money into ethics training and compliance programs, but unethical behavior in business is nevertheless widespread. That’s because cognitive biases and organizational systems blind managers to unethical behavior, whether their own or that of others.</p>
  <p><strong>All these serve to derail even the best-intentioned managers:</strong></p>
  <ul>
   <li>Goals that reward unethical behavior</li>
  </ul>
  <ul>
   <li>Conflicts of interest that motivate people to ignore bad behavior when they have something to lose by recognizing it</li>
  </ul>
  <ul>
   <li>A tendency to overlook dirty work that’s been outsourced to others</li>
  </ul>
  <ul>
   <li>An inability to notice when behavior deteriorates gradually</li>
  </ul>
  <ul>
   <li>A tendency to overlook unethical decisions when the outcome is good</li>
  </ul>
  <p>Surveillance and sanctioning systems won’t work by themselves to improve the ethics of your organization. You must be aware of these biases and incentives and carefully consider the ethical implications of every decision.</p>
 </div>
</article-ideainbrief><p>The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread. Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfeasance from the top. But that is rare. Much more often, we believe, employees bend or break ethics rules because those in charge are blind to unethical behavior and may even unknowingly encourage it.</p>

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<p>Companies are spending a great deal of time and money to install codes of ethics, ethics training, compliance programs, and in-house watchdogs. If these efforts worked, the money would be well spent. But unethical behavior appears to be on the rise. The authors observe that even the best-intentioned executives may be unaware of their own or their employees&#8217; unethical behavior. Drawing from extensive research on cognitive biases, they offer five reasons for this blindness and suggest what to do about them.</p>
<ul>
<li><em>Ill-conceived goals</em> may actually encourage negative behavior. Brainstorm unintended consequences when devising your targets.</li>
<li><em>Motivated blindness</em> makes us overlook unethical behavior when remaining ignorant would benefit us. Root out conflicts of interest.</li>
<li><em>Indirect blindness</em> softens our assessment of unethical behavior when it&#8217;s carried out by third parties. Take ownership of the implications when you outsource work.</li>
<li><em>The slippery slope</em> mutes our awareness when unethical behavior develops gradually. Be alert for even trivial infractions and investigate them immediately.</li>
<li><em>Overvaluing outcomes</em> may lead us to give a pass to unethical behavior. Examine good outcomes to ensure they&#8217;re not driven by unethical tactics.</li>
</ul>

Ethical Breakdowns

Companies are spending a great deal of time and money to install codes of ethics, ethics training, compliance programs, and in-house watchdogs. If these efforts worked, the money would be well spent. But unethical behavior appears to be on the rise. The authors observe that even the best-intentioned executives may be unaware of their own or their employees’ unethical behavior. Drawing from extensive research on cognitive biases, they offer five reasons for this blindness and suggest what to do about them. Ill-conceived goals may actually encourage negative behavior. Brainstorm unintended consequences when devising your targets. Motivated blindness makes us overlook unethical behavior when remaining ignorant would benefit us. Root out conflicts of interest. Indirect blindness softens our assessment of unethical behavior when it’s carried out by third parties. Take ownership of the implications when you outsource work. The slippery slope mutes our awareness when unethical behavior develops gradually. Be alert for even trivial infractions and investigate them immediately. Overvaluing outcomes may lead us to give a pass to unethical behavior. Examine good outcomes to ensure they’re not driven by unethical tactics.

Ethical Breakdowns

Summary.

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