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05.11.

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How to protect organiza/ons


against ethical blindness
Week 7, video 3
MOOC-UNIL Sep.2014
Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

Main goals
In this session, you will

understand how leaders can evaluate the risk of
ethical blindness in their organiza9ons.
get familiarized with the key ques9ons you
might want to ask when designing an
organiza9onal context that promotes integrity.

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

05.11.14

From the individual to the


organiza/on
It can be extremely dicult for an individual to resist to those
psychological and sociological forces that we have discussed in our
previous sessions.
But we have also looked at some possible solu9ons from the perspec9ve
of an individual actor. What about organiza9ons?
What can be done within an organiza9on to protect its members against
ethical blindness?
Implemen9ng changes on the organiza9onal level is of course easier for
leaders than it is for subordinates. Therefore, the following
recommenda9ons are mainly formulated for leaders.
But this does not mean that you, if you are only a team member, should
stop this video here. Team members can also take over responsibility.
Granted, they may need to be a bit more careful when it comes to
ini9a9ng any changes, but some bosses actually appreciate if they get
support from people with integrity in the team.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

Watch out for signals of ethical


blindness
The rst and most important step to ght ethical
blindness is to increase awareness for the dynamics
of strong contexts.
Watch out for signals of ethical blindness in your
context.
As a leader you may want to analyze the situa9on in
your team, using the following check list:
But keep in mind what I just said: basically
everybody, also team members, could do that!
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Check list for the blindness analysis of


your own organiza/on

Our 9me pressure is intense.


We are completely absorbed by our work.
The pressure to perform is very strong.
In our company you be_er just accept orders and regula9ons.
Our objec9ves are not realis9c.
We do not have a lot of inuence. Decisions come top down.
The compe99on in our industry is merciless.
Expecta9ons are unclear.
There is a widespread feeling of being overwhelmed by
informa9on.
In our mee9ngs, we almost always have the same opinion.
Processes are highly standardized.
If somebody does not t in here, they usually do not last long.
Professional du9es and personal values are strictly separated.
In our mee9ngs there are always the same people who talk.
Our company is highly prot-driven.
Our top managers have a very aggressive leadership style.
The language used in our company is very aggressive.
Fear is a widespread feeling in our company.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

GeOng the big picture


Your answers to this checklist will give you an idea
about the overall dynamics in your organiza9on, or
in your team.
And it also gives you an idea what you might want to
change in order to promote a broader perspec9ve of
the people in your organiza9on.
We will now zoom into some selected types of
contextual power, star9ng with 9me pressure

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

05.11.14

Dealing with /me pressure


If you are leader in an organiza9on with huge 9me pressure,
help your people to press the pause bo_om when making
decisions.
Research clearly shows: If you take 3 minutes of reec9on,
you increase the probability of ethical decisions.
Mo9vate others in or organiza9on to take a deep breath,
to bring themselves in the present moment,
to inves9gate, what their automa9c rou9nes behaviour
would have been,
to reect alterna9ves they could consider.
Train this kind of conscious break taking before decision
making so that it becomes a habit for you and ideally across
your organiza9on
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

Dealing with obedience pressure


Here is another piece of advise to increase organiza9onal integrity: break
the power of obedience to authority.
Leaders have to be authori9es in their organiza9on, but:
they should not abuse their power,
they rather should lead as role models,
and in par9cular they should empower their teams to speak without
fear.
Fear is one of the key drivers of ethical blindness.
As a leader you should:
communicate clearly on the values of the organiza9on,
be open to the cri9cal statements of others,
encourage reason-based dissent,
be clear about the rules of the game,
not lead with vague and ambivalent messages,
not leave people confused about rules of the game.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Obedience: As a manager of an
organiza/on, you should ask yourself:

Am I communica9ng clearly and regularly on ques9ons of


ethics and compliance?
Do I act as a role-model for integrity?
Do I make it clear to my team them that integrity is
important for me?
Do I respond promptly and decisively when compliance
failures occur?

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

Processes and management systems


Next: inves9gate the organiza9ons processes and
management systems.
It is important to promote such management systems that
clearly align target sejng, evalua9on and incen9ves with
integrity.
Dont push other decision makers to the percep9on that they
have to choose between success and integrity.
Pressure is of course an important leverage for mo9va9on,
however, too much pressure is a main source of ethical
blindness.
It is important to wisely manage the balance between the too
much and not enough pressure.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Provide clear role expecta/ons

Another issue is the promo9on of clear role expecta9ons.


As you have see in in the discussion on the prison experiment unclear role
expecta9ons can promote ethical blindness.
A challenge in organiza9ons is that they are oken dominated by the feeling or the
experience that it is inappropriate to raise ethical issues.
We do not want to be perceived as the moralizers and thus oken avoid talking
about ethics.
It contradicts our percep9on of how we believe others see the role of a manager.
Genera9ons of managers have gone through a similar socializa9ons at business
schools: managers have to be tough and they have to be focused on prots
This narrow understanding of management responsibility is clearly outdated
today.
Good managers need a broad understanding of roles and responsibili9es in order
to avoid unethical decisions.
This is not only important from an ethical perspec9ve: Unethical decisions can be
very expensive for organiza9ons.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Role expecta/ons:
As a manager of an organiza/on, you should ask
yourself

What are the quali9es and characteris9cs of a
successful leader in our organiza9on?
Who gets promoted in our organiza9on? The
aggressive but successful person or the reec9ve
person who looks at decisions from a broader
perspec9ve?

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Locus of control eect


Another key driver of ethical blindness is the locus of control eect.
If we feel that we are not in control of the situa9on we might disconnect
from consequences.
In such a case, we can do horrible things, without feeling responsible.
It is thus important to help people to develop this feeling of being in
control of a situa9on.
If you empower your team members by giving them the feeling that their
contribu9ons are relevant and by showing to them that they can make a
dierence they will have the percep9on of being in control.
This can be achieve, for instance by implemen9ng a democra9c leadership
style. This will increase the feeling of being in control of the decisions and
its consequences.

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Locus of control:
As a manager of an organiza/on, you should ask yourself

Do people in or organiza9on have the feeling that they can
inuence things or do they feel driven?
Do our people tend to say things like: There is nothing I
could do about thisthat is not my responsibility.?

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Avoid the slippery slope


One aspect of organiza9onal dynamics you have to understand be_er in
order to avoid ethical blindness is the so called slippery slope eect: Evil
will enter your organiza9on in small steps that might look pre_y harmless.
Therefore, you must insist on the rules of the game even if transgressions
seem harmless.
As Cat Stevens once sang: The rst cut is the deepest.
You might remember from our session on temporal dynamics that the
commitment to a par9cular belief or behaviour can escalate over 9me.
We move forward on a slippery slope. We lose the ability to stop a
dynamic which might have started with something very small.
Therefore, small compromises on values and rules already dangerous. Be
a_en9ve to your own compromises on rules and those that you observe in
your organiza9on. It should ring the alarm bell when you see slippery
slope dynamic.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Slippery slope:
As a manager of an organiza/on, you should ask yourself

Are we maintaining the same level of integrity standards? Or
are we relaxing standards?
Is ethical misconduct made transparent, corrected or do we
rather not talk about it?
Do we apply the Code of Conduct without any excep9ons?
Do we deal with compliance issues early and thoroughly?

MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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Conclusion
1. As a leader in an organiza9on, you can inuence the context in
which others make decisions.
2. As a leader in an organiza9on, you can reduce the risk of ethical
blindness by carefully analyzing your organiza9on for the driving
forces, by asking yourself cri9cal ques9ons with regards to those
forces and by managing them in a way that the pressure gets
reduced.
3. As a leader in an organiza9on, you can inuence the context in
which others make decisions.
4. We recommend that you analyze your organiza9on for factors that
may increase the risk of ethical blindness, such as 9me pressure,
obedience, management systems, role expecta9ons, and locus of
control.
5. Manage these factors in a way that the pressures on the team and
the organiza9on get reduced.
MOOC-UNIL Sep.2014 Unethical Decision Making in Organiza9ons by Guido Palazzo and Ulrich Horage

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