1. A Psychological Approach to Ethics Geoffrey G. Bell, PhD, CA University of Minnesota Duluth October, 2003

2. Sources for the lecture The text. Web site TBA. Frank, R.H. (1988). Passions within Reason: The strategic role of the emotions, W.W. Norton & Company, New York.

3. Moral awareness & moral judgment You need to become aware of the ethical elements of a decision before you can make ethical decisions. People consider the ethical nature of decisions if:  their peers consider the decisions to have an ethical component.  moral language rather than neutral language is used to describe the decision (“forge” instead of “sign”).

4. Cognitive moral development Kohlberg proposed that people move sequentially through three broad levels of moral development, each of which is sub-classified into 2 stages. This is a normative perspective, arguing that people “ought” to operate at as high a level as possible. Read through & understand the model! Note that most people operate at level 3 or 4, and that level 6 is rarely experienced. Prep for next slide!

5. What do you see? Script processing

6. Cognitive barriers to good ethical judgment Script processing Behaviors become “scripted” (routinized), so they’re executed without thinking. “A way of seeing is a way of not seeing.” (Gareth Morgan, Images of Organization) This is part of what happened at Waco (the FBI scripted the siege as a hostage-taking, and acted accordingly). Simplifying consequences Reduce the number of considered outcomes, eliminating potentially disastrous ones accidentally. May over-discount unlikely outcomes (anchoring problems). Escalation of commitment We refuse to think of sunk costs as truly sunk, but want to recover our investment. “Just another $10 M will make this work!” We don’t want to be seen as quitters or losers.

7. Passions within Reason: the strategic role of the emotions The basic premise of Frank’s book is that there are circumstances within which it is rational to act emotionally. People act in a manner that appears irrational, and they know it.  The GM example on page 128 is one. Argument: “specific emotions act as commitment devices that help resolve (economic and social interaction) dilemmas.” (Frank, pages 4-5)

8. Frank’s logic (page 5) “Consider a person who threatens to retaliate against anyone who harms him. For his threat to deter, others must believe that he will carry it out. But if others know that the costs of retaliation are prohibitive, they will realize the threat is empty. Unless, of course, they believe they are dealing with someone who simply likes to retaliate. Such a person may strike back even when it is not in his material interests to do so. But if he is known in advantage to have that preference, he is not likely to be tested by aggression in the first place… “Being known to experience certain emotions enables us to make commitments that would otherwise not be credible. The clear irony here is that this ability, which springs from a failure to pursue self- interest, confers genuine advantage.”

9. A reinterpretation of the GM example Trevino & Nelson adopt the perspective that the emotions of GM’s executives ran amok, resulting in an irrational decision made under the guise of “ethics.” An alternative explanation is that the lawsuit etc form a commitment by GM to not being exploited. With Fortune claiming the action was a waste of effort, GM has shown it’s willing to be “irrational” when it’s wronged. The consequence: in future, it’s less likely to be wronged.

10. Conclusions The first step to ethical decisions is recognizing the ethical dimensions of those decisions. Individuals differ in their level of moral development (Kohlberg), and we should strive to attain higher levels of moral reasoning. It’s easy to argue ethical reasons for emotional decisions, but note that emotional decisions may also be rational!