Why do physicians have financial conflicts of interest? They arise because society expects physicians to act in their patients’ interest, while simultaneously, financial incentives encourage physicians to practice medicine in ways that promote their own interests or those of third parties. Because physicians’ clinical choices, referrals, and prescriptions affect the fortune of third parties (providers, medical facilities, insurers, drug firms and suppliers of ancillary services), these third parties may offer physicians financial incentives to make income-driven clinical choices. In the past, (...) physicians and scholars typically conceived of conflicts of interest as an ethical issue to be resolved according to individual judgment or professional and organizational norms. However, society can mitigate or eliminate conflicts of interest by changing financial and organizational arrangements in medicine. Conflicts of interest, therefore, are as much matters of public policy and management as individual choices or social norms. (shrink)

This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems were impacted by (...) the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code. (shrink)

Much research in the last two decades has demonstrated that human responses deviate from the performance deemed normative according to various models of decision making and rational judgment (e.g., the basic axioms of utility theory). This gap between the normative and the descriptive can be interpreted as indicating systematic irrationalities in human cognition. However, four alternative interpretations preserve the assumption that human behavior and cognition is largely rational. These posit that the gap is due to (1) performance errors, (2) computational (...) limitations, (3) the wrong norm being applied by the experimenter, and (4) a different construal of the task by the subject. In the debates about the viability of these alternative explanations, attention has been focused too narrowly on the modal response. In a series of experiments involving most of the classic tasks in the heuristics and biases literature, we have examined the implications of individual differences in performance for each of the four explanations of the normative/descriptive gap. Performance errors are a minor factor in the gap; computational limitations underlie non-normative responding on several tasks, particularly those that involve some type of cognitive decontextualization. Unexpected patterns of covariance can suggest when the wrong norm is being applied to a task or when an alternative construal of the task should be considered appropriate. Key Words: biases; descriptive models; heuristics; individual differences; normative models; rationality; reasoning. (shrink)

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by (...) which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration). (shrink)

When confronted with an ethical dilemma, most of us like to think we would stand up for our principles. But we are not as ethical as we think we are. In Blind Spots, leading business ethicists Max Bazerman and Ann Tenbrunsel examine the ways we overestimate our ability to do what is right and how we act unethically without meaning to. From the collapse of Enron and corruption in the tobacco industry, to sales of the defective Ford Pinto, the downfall (...) of Bernard Madoff, and the Challenger space shuttle disaster, the authors investigate the nature of ethical failures in the business world and beyond, and illustrate how we can become more ethical, bridging the gap between who we are and who we want to be. Explaining why traditional approaches to ethics don't work, the book considers how blind spots like ethical fading--the removal of ethics from the decision--making process--have led to tragedies and scandals such as the Challenger space shuttle disaster, steroid use in Major League Baseball, the crash in the financial markets, and the energy crisis. The authors demonstrate how ethical standards shift, how we neglect to notice and act on the unethical behavior of others, and how compliance initiatives can actually promote unethical behavior. They argue that scandals will continue to emerge unless such approaches take into account the psychology of individuals faced with ethical dilemmas. Distinguishing our "should self" from our "want self", the authors point out ethical sinkholes that create questionable actions. Suggesting innovative individual and group tactics for improving human judgment, Blind Spots shows us how to secure a place for ethics in our workplaces, institutions, and daily lives. (shrink)

When confronted with an ethical dilemma, most of us like to think we would stand up for our principles. But we are not as ethical as we think we are. In Blind Spots, leading business ethicists Max Bazerman and Ann Tenbrunsel examine the ways we overestimate our ability to do what is right and how we act unethically without meaning to. From the collapse of Enron and corruption in the tobacco industry, to sales of the defective Ford Pinto, the downfall (...) of Bernard Madoff, and the Challenger space shuttle disaster, the authors investigate the nature of ethical failures in the business world and beyond, and illustrate how we can become more ethical, bridging the gap between who we are and who we want to be. Explaining why traditional approaches to ethics don't work, the book considers how blind spots like ethical fading--the removal of ethics from the decision--making process--have led to tragedies and scandals such as the Challenger space shuttle disaster, steroid use in Major League Baseball, the crash in the financial markets, and the energy crisis. The authors demonstrate how ethical standards shift, how we neglect to notice and act on the unethical behavior of others, and how compliance initiatives can actually promote unethical behavior. They argue that scandals will continue to emerge unless such approaches take into account the psychology of individuals faced with ethical dilemmas. Distinguishing our "should self" from our "want self", the authors point out ethical sinkholes that create questionable actions. Suggesting innovative individual and group tactics for improving human judgment, Blind Spots shows us how to secure a place for ethics in our workplaces, institutions, and daily lives. (shrink)

Prior research on ethics codes has suggested, but rarely tested, the effects of code design alternatives on the impact of codes. This study considers whether the presence of explanatory rationales and descriptions of sanctions in ethics codes affects recipients'' responses to a code. Theories of organizational justice and persuasive communication support an expectation that rationales and sanctions will be positively related to code recipients'' recall of code content and perceptions of organizational justice. Content recall is an obvious precondition of code (...) compliance; justice perceptions have multiple implications for the attitudes and actions of organizational members. Results show that explanatory rationales are associated with a statistically significant increase in perceptions of organizational procedural justice, but that rationales and sanctions generally show no relationship to distributive justice perceptions and accurate content recall. These results suggest that common prescriptions regarding ethics code design are of uncertain value apart from further research which unearths the relationships among the intended and perceived purposes of codes, the organizational settings in which they are applied, and a wide variety of code designs. (shrink)

The dramatic increase in the number of corporate ethical codes over the past 20 years has been attributed to the Watergate scandal and the Foreign Corrupt Practices Act. Ethical codes differ somewhat from profesional codes and mission statements; yet the terms are frequently interchanged and often confused in the literature. Ethical code studies are reviewed in terms of how codes are communicated to employees and whether implications for violating codes are discussed. Most studies use content analysis to determine subjects in (...) codes. Little information is available about how codes are communicated, whether they are accepted and used by employees, and whether they affect employee/corporate behavior. More research on ethical codes is needed to answer some of these questions. (shrink)

Codes of ethics are being increasingly adopted in organizations worldwide, yet their effects on employee perceptions and behavior have not been thoroughly addressed. This study used a sample of 613 management accountants drawn from the United States to study the relationship between corporate and professional codes of ethics and employee attitudes and behaviors. The presence of corporate codes of ethics was associated with less perceived wrongdoing in organizations, but not with an increased propensity to report observed unethical behavior. Further, organizations (...) that adopted formal codes of ethics exhibited value orientations that went beyond financial performance to include responsibility to the commonweal. In contrast to corporate codes of ethics, professional codes of ethical conduct had no influence on perceived wrongdoing in organization nor these codes affect the propensity to report observed unethical activities. (shrink)

This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems were impacted by (...) the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code. (shrink)

In Study 1, 49 college students' preferences for different brands of strawberry jams were compared with experts' ratings of the jams. Students who analyzed why they felt the way they did agreed less with the experts than students who did not. In Study 2, 243 college students' preferences for college courses were compared with expert opinion. Some students were asked to analyze reasons; others were asked to evaluate all attributes of all courses. Both kinds of introspection caused people to make (...) choices that, compared with control Ss', corresponded less with expert opinion. Analyzing reasons can focus people's attention on nonoptimal criteria, causing them to base their subsequent choices on these criteria. Evaluating multiple attributes can moderate people's judgments, causing them to discriminate less between the different alternatives. (shrink)

Conflicts of interest can lead experts to give biased and corrupt advice. Although disclosure is often proposed as a potential solution to these problems, we show that it can have perverse effects. First, people generally do not discount advice from biased advisors as much as they should, even when advisors’ conflicts of interest are disclosed. Second, disclosure can increase the bias in advice because it leads advisors to feel morally licensed and strategically encouraged to exaggerate their advice even further. As (...) a result, disclosure may fail to solve the problems created by conflicts of interest and may sometimes even make matters worse. (shrink)

Why do physicians have financial conflicts of interest? They arise because society expects physicians to act in their patients’ interest, while simultaneously, financial incentives encourage physicians to practice medicine in ways that promote their own interests or those of third parties. Because physicians’ clinical choices, referrals, and prescriptions affect the fortune of third parties, these third parties may offer physicians financial incentives to make income-driven clinical choices. In the past, physicians and scholars typically conceived of conflicts of interest as an (...) ethical issue to be resolved according to individual judgment or professional and organizational norms. However, society can mitigate or eliminate conflicts of interest by changing financial and organizational arrangements in medicine. Conflicts of interest, therefore, are as much matters of public policy and management as individual choices or social norms. (shrink)

Humans and animals make inferences about the world under limited time and knowledge. In contrast, many models of rational inference treat the mind as a Laplacean Demon, equipped with unlimited time, knowledge, and computational might. Following H. Simon's notion of satisficing, the authors have proposed a family of algorithms based on a simple psychological mechanism: one-reason decision making. These fast and frugal algorithms violate fundamental tenets of classical rationality: They neither look up nor integrate all information. By computer simulation, the (...) authors held a competition between the satisficing "Take The Best" algorithm and various "rational" inference procedures. The Take The Best algorithm matched or outperformed all competitors in inferential speed and accuracy. This result is an existence proof that cognitive mechanisms capable of successful performance in the real world do not need to satisfy the classical norms of rational inference. (shrink)

Two insights of psychology on which we would like to draw are that people react to law in more complex ways than rational-choice models assume and that good people sometimes do bad things. With that starting point, this article provides a behavioral perspective on some of the factors that policymakers seeking to reduce the level of misconduct in the pharmaceutical industry should consider. Effective regulation and enforcement need to address the following questions: Who are the regulation's targeted actors — researchers (...) or executives? Are the regulations directed toward research or marketing activities? Is the misconduct a product of explicit rational choice or implicit processes of which the actor is unaware? Is it reasonable to address all types of misconduct using the same approach? Certain misconduct — particularly by researchers — is due to automatic, intuitive, and unconscious decisions and needs to be addressed through different means than those used to address misconduct due to controlled, deliberate decisions. This article therefore recommends using different sorts of regulation depending on the context. It suggests more tailored enforcement mechanisms that will be sensitive to the pharmaceutical researchers’ unique work motivations and to their awareness or lack of awareness of their own misconduct. (shrink)

To sell a new drug, pharmaceutical companies must discover a compound, run clinical trials to test its efficacy and safety, get it approved by regulatory bodies, produce the drug, and market it. As this process brings the drug through so many hands, there are risks of many kinds of corruption. The pharmaceutical industry has recently gone from being one of the most admired industries to being described by the majority of Americans as “dishonest, unethical, and more concerned with profits than (...) with individual and public health.” Legal scholar Marc Rodwin suggested that the pharmaceutical industry can be viewed through the lens of institutional corruption as defined by legal scholar Lawrence Lessig, whereby widespread or systemic practices undermine the main purposes of drug therapy — healing illness, preventing medical problems, and alleviating suffering. Many drugs do serve these goals, yet a significant number of drugs churned out by pharmaceutical companies are ineffective or have dangerous side effects that could have been predicted had the companies conducted the appropriate research. (shrink)

Conflicts of interest can lead experts to give biased and corrupt advice. Although disclosure is often proposed as a potential solution to these problems, we show that it can have perverse effects. First, people generally do not discount advice from biased advisors as much as they should, even when advisors’ conflicts of interest are disclosed. Second, disclosure can increase the bias in advice because it leads advisors to feel morally licensed and strategically encouraged to exaggerate their advice even further. As (...) a result, disclosure may fail to solve the problems created by conflicts of interest and may sometimes even make matters worse. (shrink)