How could a team of decent, hardworking, normally law-abiding managers find themselves facing fines, jail time, the loss of their jobs, and ultimately the loss of the company they managed? In making executive decisions, these managers were not deliberately trying to evade the intent of the law, defraud anyone, harm the environment, or act in an antisocial manner. Indeed, in the situations that led to the most serious legal problems, they didn’t really do much of anything. Therein lies the tale.
The top managers of a company that we will call the California Ordnance and Technology Corporation (COTC)1 found themselves at the center of a costly regulatory and legal storm because of decisions that were not that different from many of those made in executive offices every day. In some cases, these were not decisions to act, so much as decisions to postpone action due to undesirable alternatives. The consequences, however, were disastrous for the firm and for several of the people involved.
As Messick and Bazerman stated, “Executives today work in a moral minefield. At any moment, a seemingly innocuous decision can explode and harm not only the decision maker but also everyone in the neighborhood.”2 In noting the challenges facing executives, they review psychological research about how people make decisions... To read the complete article, login or sign-up using the form below.
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