Unethical decision-making in organisations & what to do about it

By Anna Koj

While recently preparing for my MBA graduation ceremony I was forced to gather thoughts and creatively squeeze hundreds of pages and hours of studies, books, articles and theses read, contemplated, studied and written in a brief speech that would outline the main ideas behind a complex problem I have been working on for quite some time, now. 

My interest in the issue of unethical decision-making in organisations has been prompted by two contrasting reflections about today's society. On the one hand, we live in a world where more and more often people are not willing to compromise on their personal values and convictions simply to earn more money or advance in their career. On the other, we also live in a world that never stops spinning and puts a lot of pressure on professionals, often requiring them to be constantly present, performing and on top of everything.

The question arising from these two thoughts, therefore, is the following: 

Can people of high moral standards and integrity engage in unethical doing without even realising it?

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We assume that people always act consciously and knowingly when choosing whether or not to do something that can be perceived as unethical. However, there are actually a number of factors that can more or less subconsciously interfere in our decision-making process, influence our actions and, ultimately, make us do things that we perceive as normal, regardless of their dubious ethical character.

We can, in fact, become ethically blind, enter into a state of a temporary inability to see the ethical dimension of the decision at stake. The concept has been introduced by three scholars from the University of Lausanne: Guido Palazzo, Franciska Krings and Ulrich Hoffrage, who note that ethical blindness is not at all dependent on the nature of the decision-maker or any innate personal characteristics. It can, on the contrary, 'touch' anyone and result from a number of factors, which are often outside of our control.

These triggers include, i.a. framing, strong contexts, routine, use of specific language, time pressure, intercultural aspects and others. 

I might dig deeper into these individual aspects and their characteristics in a different post. Here, I would like to underline one specific consideration, which came to my mind as I studied the issue. Most of the above-mentioned factors can be identified as natural processes. We can try to understand them, channel or counter them if we see the danger of unethical doing coming, but they are in itself a natural way for people to interact with the environment around them. For example, we all have our own luggage of experience, our cultural background we come from and these clearly - in a more or less conscious way - condition our decision-making process, both on a personal and a professional level. At the same time, some of them can also become a manipulative tool, voluntarily and willingly used to induce others into ethical blindness and to prompt unethical doing. Think of how media can influence the thinking of large groups of people solely by framing the worldview they present in a distorted manner, to serve a concrete purpose. Decision-makers in organisations can resort to the use of aggressive language in order to promote a 'we-them' division and build an atmosphere of unhealthy rivalry with competitors that are seen as absolute enemies, against which we, then, are ready to do anything it takes.  

All of these have a great impact on our decision-making already individually. Now, they never really occur in isolation. It is interesting to see how they can group and boost one another's effect. Clusters of mutually reinforcing elements exponentially increase the risk of vicious circles of prolonged periods of ethical blindness. 

So, what is it that sets the ethical tone in organisations? 

The role of leaders is crucial. They can drive the way employees perceive the ethical dimension of their doing and foster healthy organisational culture, which in itself constitutes a strong backbone of the ethical atmosphere in an organisation. These two elements are constantly influencing each other and build a crucial axis in putting ethical values high in the hierarchy of the organisation's priorities. 

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What concretely can leaders do, however, to increase ethical awareness amongst their teams, foster healthy leadership and organisational culture? 

Again, there are a number of initiatives that can help, starting from the more traditional ethical decision-making models, which can come in handy and helpful in certain situations, through increased levels of individual accountability, binding for each and everyone in an organisation, including the top management, up to a better understanding and greater importance being given to seemingly less concrete, yet provenly greatly effective elements, such as emotional intelligence and Factor C.

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Factor C stands for the so-called Collective IQ (for a broader overview take a look at this interesting HBR article), which comprises of three elements that researchers have identified as crucial in boosting fruitful team work, i.e. high levels of social perception, equal participation and, finally, more women involved in the decision-making process. The mysterious Factor C still requires further studies but is already a clear indicator of the direction, in which organisational decision-making is heading. Soft skills gain on importance as they allow for a better understanding of our motivations, which have been changing over time. This thought follows the initial assumption that young people in today's world are looking for something more in their career path than simply more money. 
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Originally posted by Anna Koj on LinkedIn, here.