Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Profit-driven corporations can make management blind to ethics

10.01.2006


Corporations like Enron that overemphasize outcomes such as profits might make their leaders blind to ethics and limit their abilities to recognize ethical or moral issues when they surface, according to a University of Washington study.



Scott Reynolds, an assistant professor of business ethics in the UW Business School, examined why some managers recognize a situation as involving moral issues whiles others do not. His research demonstrates it is not always obvious when an issue has moral overtones – people can and do disagree about whether an issue involves ethics.

In two separate studies, Reynolds asked 96 senior-level managers to rate five scenarios involving varying degrees of ethical violations designed to measure their moral awareness. Previous research has shown that when facing ethical dilemmas, individuals either focus on the ends (consequences such as happiness, harm and profits) or the means (such as don’t lie, don’t cheat and don’t steal) as they search for a solution. The study, published in the current issue of the Journal of Applied Psychology, found that this preference also influences an individual’s capacity to simply identify a problem as an ethical issue.


Reynolds found that people who focus primarily on the ends recognize ethical issues when harm is done but are much less sensitive to ethical issues that seem to only involve a violation of the means (someone lied, broke a promise, violated a policy, etc.). When it appears that no harm is done, ends-based decision-makers are much less inclined to see the issue as an ethical one. Means-focused people, however, recognize both harmful situations and those situations in which the means used were an ethical issue.

The results are surprising, he said, because they suggest that means-based decision makers are affected by a much broader range of what they consider to be ethical issues.

"For that reason, ends-based decision-makers might be very surprised to know what others call or treat as ethical issues," Reynolds said. "You could say that ends-based decision-makers are ’blind’ to those kinds of ethical issues."

Reynolds believes former Enron Corp. chief executive officer Kenneth Lay and others at the bankrupt trading and energy company might have been victims of this phenomenon. He speculates that Lay and other Enron executives probably saw no harm in what they did and therefore believed there were no ethical aspects to their business – it was just doing business as usual. Thus, there was an initial sense of surprise or disbelief within the culture once they saw outsiders’ reactions to their business practices.

"If you saw his testimony before Congress, he just looked dumbfounded the whole time," said Reynolds. "He just didn’t get it – that his business decisions had powerful ethical components to them and that his decisions could be framed as either moral or immoral and right or wrong. He never really became morally aware and for that reason the rest of us have had to suffer. It’s not necessarily that he didn’t have a conscience, it’s that nothing about the situation activated or turned on his conscience."

Enron employed more than 20,000 and had revenues of $101 billion in 2000 but questionable accounting practices and widespread corporate fraud led to its collapse. Lay is expected to go on trial soon for securities and wire fraud and making false statements, charges that carry a maximum sentence of 175 years.

"The findings of this study suggest that when attempting to improve moral awareness in organizations, leaders should take the initiative to better educate managers about the moral value of rules, principles and guidelines more generally," Reynolds said.

"Improving managers’ appreciation for such guides increases their ability to access moral frameworks in the face of not just harmful situations, but also seemingly inconsequential violations of rules."

For more information, contact Reynolds at (206) 543-4452 or heyscott@u.washington.edu

Nancy Gardner | EurekAlert!
Further information:
http://www.washington.edu

More articles from Studies and Analyses:

nachricht WAKE-UP provides new treatment option for stroke patients | International study led by UKE
17.05.2018 | Universitätsklinikum Hamburg-Eppendorf

nachricht First form of therapy for childhood dementia CLN2 developed
25.04.2018 | Universitätsklinikum Hamburg-Eppendorf

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: LZH showcases laser material processing of tomorrow at the LASYS 2018

At the LASYS 2018, from June 5th to 7th, the Laser Zentrum Hannover e.V. (LZH) will be showcasing processes for the laser material processing of tomorrow in hall 4 at stand 4E75. With blown bomb shells the LZH will present first results of a research project on civil security.

At this year's LASYS, the LZH will exhibit light-based processes such as cutting, welding, ablation and structuring as well as additive manufacturing for...

Im Focus: Self-illuminating pixels for a new display generation

There are videos on the internet that can make one marvel at technology. For example, a smartphone is casually bent around the arm or a thin-film display is rolled in all directions and with almost every diameter. From the user's point of view, this looks fantastic. From a professional point of view, however, the question arises: Is that already possible?

At Display Week 2018, scientists from the Fraunhofer Institute for Applied Polymer Research IAP will be demonstrating today’s technological possibilities and...

Im Focus: Explanation for puzzling quantum oscillations has been found

So-called quantum many-body scars allow quantum systems to stay out of equilibrium much longer, explaining experiment | Study published in Nature Physics

Recently, researchers from Harvard and MIT succeeded in trapping a record 53 atoms and individually controlling their quantum state, realizing what is called a...

Im Focus: Dozens of binaries from Milky Way's globular clusters could be detectable by LISA

Next-generation gravitational wave detector in space will complement LIGO on Earth

The historic first detection of gravitational waves from colliding black holes far outside our galaxy opened a new window to understanding the universe. A...

Im Focus: Entangled atoms shine in unison

A team led by Austrian experimental physicist Rainer Blatt has succeeded in characterizing the quantum entanglement of two spatially separated atoms by observing their light emission. This fundamental demonstration could lead to the development of highly sensitive optical gradiometers for the precise measurement of the gravitational field or the earth's magnetic field.

The age of quantum technology has long been heralded. Decades of research into the quantum world have led to the development of methods that make it possible...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

Save the date: Forum European Neuroscience – 07-11 July 2018 in Berlin, Germany

02.05.2018 | Event News

Invitation to the upcoming "Current Topics in Bioinformatics: Big Data in Genomics and Medicine"

13.04.2018 | Event News

Unique scope of UV LED technologies and applications presented in Berlin: ICULTA-2018

12.04.2018 | Event News

 
Latest News

Designer cells: artificial enzyme can activate a gene switch

22.05.2018 | Life Sciences

PR of MCC: Carbon removal from atmosphere unavoidable for 1.5 degree target

22.05.2018 | Earth Sciences

Achema 2018: New camera system monitors distillation and helps save energy

22.05.2018 | Trade Fair News

VideoLinks
Science & Research
Overview of more VideoLinks >>>