Linking the process of rational decision making to emotions, an award-winning scientist who has done extensive research with brain-damaged patients notes the dependence of thought processes on feelings and the body's survival-oriented regulators. 50,000 first printing.

Applying evidence from recently available public information on Enron, I defined Enron’s culture as one rooted in agency theory by asserting that Enron’s members were predominantly agency-reasoning individuals. I then identified conditions present at Enron’s collapse: a strong agency culture with collectively non-compliant norms, a munificent rare-failure environment, and new hires with little business ethics training. Turning to four possible antidotes (selection, objectivist integrity, integrity capacity, and stewardship reasoning) to an agency culture under these conditions, I argued that the currently (...) available ethics literature would have made little difference toward averting Enron’s collapse if any of the recommendations from the relevant ethics literature had been implemented. I conclude by identifying new directions for business ethics literature in order to make it more implementable under the conditions identified at Enron. Essentially, we need a way to clearly determine (1) the difference between connivance and commitment, (2) what is meant by balance with regard to the multiple dimensions of ethics and legal theories, and (3) the proper balance between agency and stewardship reasoning. (shrink)

Research on moral judgment has been dominated by rationalist models, in which moral judgment is thought to be caused by moral reasoning. The author gives 4 reasons for considering the hypothesis that moral reasoning does not cause moral judgment; rather, moral reasoning is usually a post hoc construction, generated after a judgment has been reached. The social intuitionist model is presented as an alternative to rationalist models. The model is a social model in that it deemphasizes the private reasoning done (...) by individuals and emphasizes instead the importance of social and cultural influences. The model is an intuitionist model in that it states that moral judgment is generally the result of quick, automatic evaluations (intuitions). The model is more consistent than rationalist models with recent findings in social, cultural, evolutionary, and biological psychology, as well as in anthropology and primatology. (shrink)

This paper examines whether appealing to learners’ moral identity makes a significant contribution to improving their ethical decision making beyond traditional, rule-based teaching. In response to criticisms leveled at rule-based ethics teaching by alternative approaches, we identify moral identity theory and experiments in moral psychology as useful sources to draw on for the creation of a new, identity-based ethics teaching approach. We develop and apply a set of regular self-reflection focused writing tasks added to the traditional teaching program over a (...) one-semester period, and assess the outcomes of an overall sample of 149 postgraduate business school students, who were randomly assigned to one of three conditions: exposure to both identity-based tasks and rule-based teaching, exposure to rule-based teaching only, and the control condition. Our findings show that, while the three groups reported the same level of ethical decision making at the beginning of the semester, at the end of the semester the students who were exposed to both identity-based and rule-based teaching reported higher level of ethical decision making compared to those who were only exposed to rule-based education. In addition, the students who received rule-based teaching reported higher ethical decision making compared to those in the control condition. These results suggest that a teaching approach which appeals to the learner’s moral identity can act as an effective leverage point when complementing rule-based teaching. This simple approach should be widely adopted as common practice in graduate business schools. (shrink)

From a traditional moral point of view, business practitioners often seem overly concerned about the behavior of their peers in deciding how they ought to act. We propose to account for this concern by introducing a mutual trust perspective, where moral obligations are grounded in a sense of trust that others will abide by the same rules. when grounds for trust are absent, the obligation is weakened. We illustrate this perspective by examining the widespread ambivalence with regard to deception about (...) one's settlement preferences in negotiation. On an abstract level, such deception generally seems undesirable, though in many individual cases it is condoned, even admired as shrewd bargaining. Because of the difficulty in verifying someone's settlement preferences, it is hard to establish a basis for trusting the revelations of the other party, especially in competitive negotiations with relative strangers. (shrink)

From a traditional moral point of view, business practitioners often seem overly concerned about the behavior of their peers in deciding how they ought to act. We propose to account for this concern by introducing a mutual trust perspective, where moral obligations are grounded in a sense of trust that others will abide by the same rules. when grounds for trust are absent, the obligation is weakened. We illustrate this perspective by examining the widespread ambivalence with regard to deception about (...) one's settlement preferences in negotiation. On an abstract level, such deception generally seems undesirable, though in many individual cases it is condoned, even admired as shrewd bargaining. Because of the difficulty in verifying someone's settlement preferences, it is hard to establish a basis for trusting the revelations of the other party, especially in competitive negotiations with relative strangers. (shrink)

This paper gives prescriptions for introducing ethical concerns into the economic theory of the firm. Topics include social responsibility, corporate governance, profit maximization, competition barriers, collusion, the market system, and welfare economics. The need for such prescriptions is based on a content analysis of 21 managerial economics texts for their coverage of ethics. My analysis finds that substantive discussions of ethics are conspicuous by their absence. As ethical breaches can involve significant monetary damages to a firm - particularly through adverse (...) market reactions - moral-reasoning abilities can complement analytical skills. Consequently, my analysis demonstrates how ethics figure into the opportunity costs of managerial decision making, which is central to the economic definition of profit. (shrink)

This study examines the deliberations of professional MBA students when presented with a dilemma that weighs the difference between commitments to profit-maximization against concerns for fired workers who would need to seek a new job during a recession. Using content analysis, accounting, economic, and ethically based rationales that differ from the profit-maximizing recommendation are categorized. Results also show that those who make non-profit-maximizing recommendations consider, but ultimately reject the profit-maximizing approach to layoffs.

A survey was carried out among two groups of undergraduate economics students and four groups of students in mathematics, law, philosophy and business administration. The main survey question involved a conflict between profit maximisation and the welfare of the workers who would be fired to achieve it. Significant differences were found between the choices of the groups. The results were reinforced by a survey conducted among readers of an Israeli business newspaper and PhD students of Harvard. It is argued that (...) the overly mathematical methods used to teach economics encourage students to lean towards profit maximisation. (shrink)