Changes in today’s business environment pose vexing ethical challenges to executives. We propose that unethical business decisions may stem not from the traditionally assumed trade-off between ethics and profits or from a callous disregard of other people’s interests or welfare, but from psychological tendencies that foster poor decision making, both from an ethical and a rational perspective. Identifying and confronting these tendencies, we suggest, will increase both the ethicality and success of executive decision making.
Executives today work in a moral mine field. At any moment, a seemingly innocuous decision can explode and harm not only the decision maker but also everyone in the neighborhood. We cannot forecast the ethical landscape in coming years, nor do we think that it is our role to provide moral guidance to executives. Rather, we offer advice, based on contemporary research on the psychology of decision making, to help executives identify morally hazardous situations and improve the ethical quality of their decisions.
Psychologists have discovered systematic weaknesses in how people make decisions and process information; these new discoveries and theories are the foundation for this paper. These discoveries involve insights into errors that people make when they estimate risks and likelihoods, as well as biases in the way they seek information to improve their estimates. There are new theories about how easily our preferences can be influenced by the consequences... To read the complete article, login or sign-up using the form below.
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