Do Your Ethical Decisions Depend on Your Situation or on Character?

This module is on the ethics pillar of decision making and the specific focus will be on first of all, the process for ethical decision making. And then second, ethical leadership. And the ethics pillar is especially important in a business setting, as we’ve discussed in other modules. The business framework for decision making involves an overlap among the three pillars between Ethics, Law, which has a focus on Risk Management and Strategy, which has the focus on Value Creation. And when you can achieve this overlap in business, it creates in the center the so called sweet spot, which is the zone of competitive advantage. This is going to be our agenda for looking at the ethics pillar.

We’re going to start by taking a look at ethical decisions in general and ask the question is this something we can be taught? Is this something that can be learned or are ethics something that are embedded in our character and developed from early childhood? After looking at that question, we will focus then on Ethical Decision Making and on Ethical Leadership. So here’s one perspective on teaching ethics and whether ethics can be learned. This is from a letter to the editor of the Harvard Business Review. Teachings ethics in business school is a waste of time. Ethics and trust are about character, and that is developed before anyone ever sets foot in business school.

This person went on to say, Maybe the selection process should consider character before credentials. Maybe candidates should have to play a round of golf to see if they count every stroke, play every lie, and maintain composure as they hit a poor shot. So this is one view of ethics that, ethics are embedded in our character from an early age. In fact, in the olden days at the University of Michigan, character was actually an important part of the admissions process. Applicants had to prove satisfactory evidence of good moral character. On the other hand, we have this perspective. The person who, with inner conviction, loathes stealing.

In other words, who has a strong character trait of hating stealing, and other unethical behavior, may find himself performing these acts with relative ease when commanded by authority. This is a quote from a famous researcher named Stanley Milgram from a book called Obedience to Authority. And so the fundamental question is, is your ethical behavior the result of your built in character or is it more situational, and especially subject to pressure from authority? Let’s go back to Milgram’s experiment. I don’t know if you can read this ad. But the ad basically says, the headline is, we’ll pay you $4.00 for one hour of your time. Persons needed for a study of memory.

We’re going to pay 500 New Haven men to help us complete a scientific study of memory and learning. Now there’s an ethical question about this ad, by the way, because it wasn’t really a study about memory and learning. The study’s being done at Yale University. Each person who participates will receive the handsome some of $4 plus 50% car fare for approximately one hour’s time. We need you for one hour, no further obligations. All persons must be between the ages of 20 and 50, etc etc. etc. If you meet these qualifications, fill out the coupon below and mail it to Professor Stanley Milgram, Department of Psychology Yale University.

So Milgram recruited these people under false pretenses and then he conducted the famous Milgram experiments. So what I want you to do now is to watch a small documentary based on these experiments. And as you watch this, ask your self what you would do if you were the one in the teacher role and somebody told you to continue to administer the electrical shocks, despite the pain caused to the other person? What would you do.? So please watch the video and then we’ll continue.

So this comes back to the question, would you succumb to pressure from authority like most people? The study has been replicated in many different scenarios with basically the same results. Or does your Strong character trump situational pressure? In a business setting, the pressures are especially great. This is from a classic best seller called In Search of Excellence. One of the needs filled by the strong excellent company cultures is the need most of us have for security. Unfortunately, in seeking security, most people seem all too willing to yield to authority. The Milgram experiments warn us of the danger that lurks in the darker side of our nature.

So we’re going to assume, as we proceed, that even if you do have a strong character, depending on the situation, you might be subject to pressure. And what I’d like to do next is to discuss a framework for ethical decision making, that might help you when you’re in these difficult scenarios.