P&O 6

Employee misconduct costs U.S. companies approximately $50 billion per year.
- Examples of misconduct include:
  - Stealing office supplies
  - Fraudulent expense claims
  - Overbilling
Small violations can accumulate into larger ethical issues.
- Progressively straying further from personal values over time.
- Contribution towards an unethical organizational culture, thereby encouraging wrongdoing by others.
Ethical implications:
- Ethical issues are wrong on principle.
- Small violations are significant as well!

The mechanics of unethical actions can be viewed through a Cost-Benefit analysis.

Most individuals maintain a genuine concern for ethics but often encounter "ethical blind spots".
- Individuals do not recognize the ethical implications of their behaviors.
- Rationalization often occurs to dismiss the ethical faults associated with behavior.

Select the right people:
- Inadequate as everyone has ethical blind spots.
Ensure unethical practices are caught and punished:
- Insufficient; monitoring does not guarantee 100% compliance.
Anticipate ethical blind spots:
- Encouraging awareness can help individuals and organizations navigate these issues effectively.

Definition: Moral identity refers to how central the concept of being a "moral person" is to one’s sense of self.
- Approximately 75% of individuals exhibit situational moral identity, which indicates that their moral identity is variable based on environmental cues.
Generally, individuals are concerned about maintaining virtues; however, they may deviate from this when faced with temptations.

Most individuals care about virtue, but rationalization can occur when faced with situational temptations, enabling unethical behavior.
Key reasons people engage in wrongdoing:
1. Excelling at rationalizing bad behavior (referred to as moral disengagement).
2. Lack of recognition of ethical implications (due to blind spots).

Definition: Cognitive processes that allow individuals to engage in unethical behavior without acknowledging wrongdoing or harm.
- Provides a means to maintain moral identity, bridging the reality gap of good actions versus bad behaviors.
- Involves mental gymnastics to alleviate internal moral distress.

Moral justification:
- Reframing unethical acts as serving a greater good, thereby justifying harmful actions.
- Examples include Volkswagen's pollution test cheating justified as protecting jobs and Truman's atomic bomb rationale for world peace.
Euphemistic labeling:
- Replacing the language surrounding harmful actions to downplay negative implications.
- Examples include using terms like "creative accounting" instead of fraud and "enhanced interrogation techniques" instead of torture.
Advantageous comparison:
- Comparing unethical behaviors to something worse, thereby making those actions seem more justifiable.
- Engaging in counterfactual thinking can also minimize perceived wrongdoing.
Shifting blame:
- Assigning responsibility for actions to authorities or external circumstances.
- Example scenario from Wells Fargo scandal illustrating shifting blame through organizational hierarchy.
Distortion of consequences:
- Minimizing harm caused by actions, often leading to a lack of recognition of the ethical implications of what was done.
- Example: BP CEO Tony Hayward’s dismissal of the oil spill’s impact by arguing the vastness of the Gulf of Mexico.

The Trolley Dilemma: Most individuals would sacrifice one life to save five, while the Footbridge Dilemma provokes resistance to sacrificing a single life to save multiple.

Consequences of unethical actions feel less wrong when perceived as distant:
- Spatial Distance: Military actions versus personal involvement.
- Social Distance: Corporate restructuring vs. direct layoffs.
- Temporal Distance: Impact of underfunded pensions to enhance earnings.

Strategies to prevent moral disengagement:
- Consciously acknowledging ethical implications and the mechanics of moral disengagement.
- Evaluate objectives separately from methods to dismantle the rationalization of wrongdoing.
- Form distinct ethical aspirations and foster accountability for actions.

Defined as the process in which moral implications or ethical considerations fade from view, typically occurring in subconscious processes.

Incrementalism, also known as the "boiling frog effect":
- Our cognitive wiring makes us prone to notice contrast, not gradual changes, resulting in a small ethical violation becoming the new norm.

Individuals often overestimate their ability to recognize ethical concerns, leading to a lack of awareness regarding recurring ethical dilemmas.

Factors that foster fading of ethical principles include:
- Time pressure, stress, focus on winning, authority pressure, and conformity.

Familiar unethical behaviors become increasingly normalized, leading to less intense emotional responses towards the wrong actions, ultimately diluting moral judgement over time.