Ethical Blindness

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J Bus Ethics DOI 10.1007/s10551-011-1130-4

Ethical Blindness
Guido Palazzo • Franciska Krings • Ulrich Hoffrage

Received: 1 June 2010 / Accepted: 22 November 2011 Ó Springer Science+Business Media B.V. 2011

Abstract Many models of (un)ethical decision making assume that people decide rationally and are in principle able to evaluate their decisions from a moral point of view. However, people might behave unethically without being aware of it. They are ethically blind. Adopting a sensemaking approach, we argue that ethical blindness results from a complex interplay between individual sensemaking activities and context factors. Keywords Ethical decision-making Á Ethical/unethical behavior Á Ethical fading Á Moral disengagement Á Bounded awareness/ethicality Á Rigid framing

Introduction Business history is rich with examples of extreme forms of unethical behavior by and within companies. When these cases are made public by traditional muckrakers like Upton Sinclair in the nineteenth century or today’s NGOs, by internal whistle-blowers or official investigations, the public is often shocked. It seems to be difficult to understand how behaviors that seem to violate any moral common sense are possible. During the last three decades, the business ethics literature has developed sophisticated models that have considerably G. Palazzo (&) Á F. Krings Á U. Hoffrage Faculty of Business and Economics, University of Lausanne, Internef, 1015 Lausanne, Switzerland e-mail: guido.palazzo@unil.ch F. Krings e-mail: franciska.krings@unil.ch U. Hoffrage e-mail: ulrich.hoffrage@unil.ch

improved our understanding of why, how, and under what conditions individuals make ethical decisions—and when they fail to do so. These models suggest that (un)ethical decisions are the result of an interplay between personal traits of the decision maker and characteristics of the situation (Trevino 1986). However, most research on ethical decision making still builds on the assumption that decisions are made by rational actors (see critically Sonenshein 2007). The rationality assumption is displayed in several ways. Standing in the tradition of moral philosophy, business ethicists usually assume that there is a moral point of view from which the ethicality of a decision can be evaluated. They acknowledge that the moral point of view can be interpreted differently, depending on the specific background philosophy (e.g., the Kantian duty approach versus the Utilitarian calculation). But they share the assumption that there is an objective and impartial yardstick that people can (and do) use to weigh arguments and come to a decision (Hunt and Vitell 1986). For example, Sharp-Paine (1997) suggested that managers use different philosophical lenses when making a decision— reflecting on consequences (Utilitarian lens), principles (Kantian lens) and objectives (economic lens)—to include as many aspects as possible. In contrast, interactionist models (Trevino 1986) question the assumption that managers simply take a Kantian or Utilitarian position, independently of the context in which the decision is made. Indeed, context factors can have an important impact on the decision-making process. Nevertheless, even though person-situation models have dropped the assumption that managers deliberate like philosophers, they still conceive them as rational actors, holding that ‘‘cognitive moral development is the critical element in the judgment phase’’ (Jones 1991, p. 371, see also Sonenshein 2007). Often, however, (un)ethical decision making is less rational and deliberate but more intuitive and automatic

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(Gigerenzer 2008; Haidt 2001; Reynolds 2006; Sonenshein 2007). As a consequence, the ethical dimension of a decision is not necessarily visible to the decision maker. People may behave unethically without being aware of it— they may even be convinced that they are doing the right thing. It is only later that they realize the unethical...
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