Ethics Notes PDF

[ **Chapter 1 -- General** ] Why do we choose to not be good? 1. Greed (for yourself) 2. Omnipotence (the feeling of having unlimited power) 3. Cultural numbness (having the bearing of your moral compass shift towards your culture) 4. Justified neglect ("its just a small thing", "gettin...

[ **Chapter 1 -- General** ] Why do we choose to not be good? 1. Greed (for yourself) 2. Omnipotence (the feeling of having unlimited power) 3. Cultural numbness (having the bearing of your moral compass shift towards your culture) 4. Justified neglect ("its just a small thing", "getting the reward or doing the right thing") **Rationalisation techniques \[getting yourself involve in the scheme\]** a. Denial of responsibility - "What can I do? My arm is being twisted" - Where individuals convince themselves that they are participating in corrupt acts because of circumstances -- they have no real choice - "Everyone does it" mindset - Individuals do not regard themselves as perpetrators of unethical acts; rather they view themselves as morally responsible individuals being forced into unethical acts. - Rather easily adopted when experiencing intense pressure from top management to meet numeric targets. b. Denial of injury - "No one was really harmed" - Employees convince themselves that no one is really harmed by their actions and therefore, not corrupt. - Commonly employed in situations such as theft from an organization where the organization is assumed to be well insured or can easily recover the costs - A variant of the denial-injury tactic occurs when a given act is rendered less offensive by comparing it to more extreme factors. c. Denial of victim - "They deserved it" - Employees define the victim of their unethical behaviour as someone deserving to be victimised. - A very common tactic is to convince oneself that targets deserved their fate due, for example, to past unfairness or corruption on their part - Thus seen as a form of revenge - A variant of the denial-of-the-victim tactic occurs when the victim is depersonalised, that is, converted into a faceless statistic, or subhuman status. - By doing so, employees can place significant "psychological distance" between themselves and their victims making it easier to drag the impact of their unethical actions on the victims. d. Social weighing - "You have no right to criticize us" - Can occur in 2 ways (a. Condemning the condemners. b. selective social comparisons) - a\. If the legitimacy of actors/entities is questionable, then so too is their argument. Eg. if the law itself is wrong, it is not unethical to contravene it. - b\. Similar to denial of injury. Individuals are motivated to find examples of others who are even more corrupt and thereby demonstrate that "we are not so bad" e. Appeal to higher loyalties - "I would not report it because of my loyalty to my boss" - Employees argue that some ethical norms need to be breached to fulfil more important goals - Different from other rationalisation, this form may go beyond neutralising the negativity of corruption to actually valuing it. - When a group becomes highly cohesive, employees often believe that the goals of the group are more impt that other groups/society. \[group-based loyalties\] f. Balancing the ledger - "We have earned the right" - When individuals believes that good works (whether actual or anticipated) have earned a credit that can be used to offset corrupt acts. - Employees bask in the past glory of an organization to justify current unethical behaviour \*In many cases, rationalisation is essential for organizations and employees to operate. **Socialisation processes \[Getting other people involve in your scheme\]** - Corruption can only continue if newcomers also start exhibiting the behaviours. a. Cooptation - "I will focus on selling what gives me more commissions" - Rewards are used to indue attitude change towards unethical behaviour - Often subtle because the individuals themselves may not realise how the rewards have induced them to resolve the ambiguity that often pervades business issues in a manner that suits their self-interest. b. Incrementalism - "It is such a small thing, no big deal" - Newcomers are gradually introduced to corrupt acts. As they come to accept the act as normal, they are introduced to another, more corrupt act. - In this way, the individual climbs the ladder of corruption and is eventually engaging in acts that they would previously reject outright. c. Compromise - "Let me compromise my morals to keep business coming" - Individuals essentially "back into" corruption through attempts (often in good faith) to resolve pressing dilemmas, role conflicts and other intractable problems. \*The 3 types of socialisation are not mutually exclusive, they may exist simultaneously and frequently reinforce each other. [The internal pillars of our moral foundation: ] - Care/harm - Fairness/cheating -- equality, proportionality - Loyalty/betrayal - Authority/subversion - Sanctity/degradation **Care/harm** -- - Evolved in response to the adaptive challenge of caring for vulnerable children. It makes us sensitive to signs of suffering and need; it makes us despise cruelty and want to care for those who are suffering. - Adaptive challenge -- protect and care for children - Original triggers -- distress or neediness expressed by child - Key emotions -- compassion - Relevant virtues -- caring, kindness **Fairness/cheating** -- - Evolved in response to the adaptive challenge for reaping the rewards of cooperation without getting exploited. It makes us sensitive to indications that another person is likely to be good (or bad) partner for collaboration and reciprocal altruism. - Makes us want to shun or punish cheaters - Intuitions about equal treatment and equal outcome \[equality\] - Adaptive challenge -- reap benefits of 2 way partnerships - Original triggers -- cheating, co-operation and deception - Key emotions -- anger, gratitude, guilt - Intuitions about individual getting rewards in proportion to their merit or contribution \[proportionately\] **Loyalty/Betrayal** -- "I expect someone to be loyal to me" - Evolved in response to the adaptive challenge of forming and maintaining coalitions. It makes us sensitive to signs that another person is (or is not) a team player. It makes us trust and rewards such people, and it makes us want to hurt, ostracise, or even kill those who betray us or our group. - It's makes Intuitions about cooperating with ingroups and competing with outgroups. - Adaptive challenge -- form cohesive coalitions - Original triggers -- threat of challenge to group - Key emotions -- grp pride, rage against traitors - Relevant virtues -- loyalty, patriotism, self-sacrifice **Authority/subversion** -- "if boss okay, I will just do it" - Evolved in response to the adaptive challenge of forging relationships that will benefit us within social hierarchies. It makes us sensitive to signs of rank or status, and to signs that other people are (or are not) behaving properly, given their position. - Intuitions about deference towards legitimate authorities and the defence of traditions, all of which are seen as providing stability and fending off chaos - It is more complex than the other foundations as its modules must look up in 2 directions (up towards superiors and down towards subordinates) - Adaptive challenge -- forge beneficial rs with hierarchies - Original triggers -- signs of dominance and submissions - Key emotions -- respect, fear - Relevant virtues -- obedience, deference Sanctity/degradation (purity) -- "how do I feel when I see someone getting killed?" - Evolved initially in response to the adaptive challenge of the omnivore's dilemma, and then to the broader challenge of living in a world of pathogens and parasites. - It includes the behavioural immune system, which can make us wary of a diverse array of symbolic objects and threats. - Intuitions about avoiding bodily and spiritual contamination and degradation - Adaptive challenge -- avoid contaminants - Original triggers -- waste products, diseased people - Key emotions -- disgust - Relevant virtues -- temperance, chastity, piety, cleanliness Reading notes: Article 1: - Ethical traditions reflect common ways to think and reason about how we should live, what we should -- Ethics of consequences, ethics of principles and ethics of personal character - 1\. Utilitarianism (ethics on consequences) -- the policy of "maximising the overall good" or of producing "the greatest good for the greatest number" -- we should decide what to do by considering the overall consequences of our actions - We should act in ways that produce better consequences than the alternatives we are considering - In a business context, a temptation is to answer in terms of financial consequences: the right decision is one that produces the best financial returns. But this answer would reduce ethics to economics by identifying ethically best as economically best. **So a better answer would be an action that promote human well-being: the happiness, health, dignity, integrity, freedom and respect of all the people affected**. - This makes utilitarianism a social philosophy that opposes policies that aim to benefit only a small social, economic or political minority. - Eg. **Child Labour**. Utilitarian thinking would advise us to consider all the likely consequences of a practice of employing young children in factories. Obviously, there are some harmful consequences: they suffer physical and psychological harms, denied opportunities for education, their low pay is not enough to escape a life of poverty, etc. - But these consequences must be compared to the consequences of alternative decisions. If the children don't have this job, they would still be denied opportunities for education, they would be in worse poverty and they would have less money for food and family support. - We should also consider not only the consequences to the children themselves, but to the entire society. - Child labour can have beneficial results for bringing foreign investment and money into a poor country - Thus, one might argue that on utilitarian grounds that such labour practices are ethically permissible because they produce better overall consequences than the alternatives. - Because utilitarians decide strictly on the basis of consequences, and because the consequences of our actions will depend on the specific facts of each situation, **utilitarianism tend to be very pragmatic thinkers**. - No type of act is ever absolutely right or wrong in all cases in every situation; it will always depend on the consequences. - In business context, competitive markets are seen as the most efficient means to the utilitarian end of maximising happiness. (by pursuing profits, business ensures that scare resources are going to those who most value them and thereby ensures that resources will provide optimal satisfaction) - Challenges to this: - If utilitarianism advises that we make decisions by comparing the consequences of alternative actions, then we must have a method for making such comparisons. However, some comparisons and measurements are very difficult -- there simply is no consensus among utilitarians on how to measure and determine the overall good. - The second challenge goes directly to the core of utilitarianism. For utilitarians the end justifies the means. But this seems to deny one of the earliest ethical principles that many have learned: **the end does not always justify the means**. - When we say that "the ends do not justify the means", what we are saying that there are certain things we must do, certain rules we should follow, no matter what the consequences. - The ends (or goals) of our actions are not all that matters; it also matters how we achieve those ends. -- we have certain [duties or responsibilities] that we ought to obey even when doing so does not produce a net increase in overall happiness. (eg. truth telling, justice, loyalty, respect and responsibilities that flow from our roles as a parent, friend, citizen or professional) - Violating such commitments and duties in order to maximised utility for some larger group would require individuals to sacrifice their own integrity for the common good. - Such commitments and duties play a large role in business life. Contracts and promises are commitments that one ought to honour, even if the consequences turn out to be unfavourable. For eg. Lawyers have a duty not to help their clients find ways to violate the law, even if they are offered a high salary to do so. - Because utilitarianism focuses on the overall consequences, utilitarianism seems willing to sacrifice the good of some individuals for the greater overall good. - Eg. utilitarians would object to child labour, not as a matter of principle, but only if and to the degree that it detracts overall happiness. If it turns out that slavery and child labour increase the net overall happiness, utilitarianism would have to support these practices. In the judgement of many people, such a decision would violate fundamental ethical principles of justice, equality and respect. - Despite these challenges, utilitarian reasoning does contribute to an ethically responsible decision in important ways. First and most obviously, we are reminded that **responsible decision making requires that we consider the consequences that our actions have on a wide range of people**. But it is equally important to remember that utilitarian reasoning does not exhaust the range of ethical concerns. - 2\. Principle-based framework -- typically assert that individual rights and duties are fundamental and thus can also be referred to as a rights-based or duty-based approach to ethics. - This argues that individuals possess certain **basic rights that should not be violated even if doing so would increase the overall social happiness**. - Human rights protect individuals from being sacrificed for the greater overall happiness and protect them from being treated in ways that would violate their dignity and that would treat them as mere objects or means. - For eg. it is often argued that child labour is ethically wrong in principle even if it contributes to the overall social good because it violates the rights of young children. - The utilitarian approach must be enriched with the recognition that some decisions should be a matter of principle, not consequences. (a utilitarian framework should be supplemented by a framework that also accounts for fundamental ethical principles) - Ethical principles can be thought of **as a type of rule**, and this approach to ethics tells us that there are some rules that we ought to follow even if doing so prevents good overall consequences from happening or even it results in some bad consequences. - Principles (eg. obey the law, keep your promises, uphold contracts) create ethical duties that bind us to act or decide in certain ways. Eg. there is an ethical rule prohibiting slave labour, even if this practice would have beneficial economic consequences for society. - Legal rules, are one major set of rules that we obviously have to follow. (eg. we have the duty to pay our taxes, even if we think the money might be more efficiently spent on our children's college education) - Other rules are derived from various institutions in which we participate, or from various social roles that we fill. (eg. as a teacher, I ought to read each student's assignment carefully and diligently, even if they will never know the difference and their final grade will not affected) - There will be many occasions in which such role-based duties arise in business. Every business will have a set of rules that employees are expected to follow. Sometimes these rules are explicitly stated in a code of conduct, other times in employee handbooks, and some are simply stated by managers. - Example: Object to child labour because such practices violate our duty to treat children with respect. We violate the rights of children when we treat them as mere means to the ends of production and economic growth. Thus, even if child labour produced beneficial consequences, it would be ethically wrong because it violates a fundamental human right. - Our fundamental moral duty is to **respect the fundamental human rights of others**. Our rights establish limits on the decisions and authority of others. - Overall, human rights are meant to offer protection of certain central human interests, prohibiting the sacrifice of these interests merely to provide the net increase in the overall happiness. - The **Kantian tradition** claims that our fundamental human rights, and the duties that follow from them, are derived from our nature as free and rational beings. - Employees have both human rights (as persons) and legal rights (as employees) - Challenges to this: - Acknowledging this diversity of rights makes it easy to understand the two biggest challenges to this ethical tradition. - There appears to be much disagreement about what rights truly are basic human rights and, given the multiplicity of views about this, it is unclear **how to apply this approach to practical situations**, especially in cases where rights appear to conflict. - Unless there is a specific person or institution that has a duty to provide the goods identified as "rights", talk of rights amounts to little more than a wish list of things that people want. What are identified as "rights" often are nothing more than good things that most people desire. - There is no agreement about the scope and range of such rights. Which good things quality as rights, and which are merely thing that people want? The list of rights will only grow to unreasonable lengths and the corresponding duties will unreasonably burden everyone. - 3\. Virtue -- studies the character traits or habits that constitute a good human life, a life worth living - Utilitarian and principle-based frameworks focus on rules that we might follow in deciding what we should do, both as individuals and as citizens. These approaches conceive of a practical reason in terms of deciding how to act and what to do. However, that ethics also involves questions about the type of person one should become. - One can see virtue ethics at play in everyday situations: we all know people we look up to because we respect them for their character, and we all know people whom we describe as being people of integrity. - To understand how virtue ethics differs from utilitarian and principle-based frameworks, consider the problem of egoism (egoism is a view that holds that people act only out of self-interest) - An ethics of virtue shifts the focus from questions about what a person should **do**, to a focus on who that person **is**. - The degree to which we are capable of acting for the well-being of others therefore seems to depend on a variety of factors such as our desires, our beliefs, our dispositions, and our values (in short, it depends on our character or the type of person we are) - Virtue ethics recognises that our motivations -- interests, wants, desires are not the sorts of things that each of us chooses anew each morning. Instead human beings act according to who they are, according to their character. - Virtue ethics also reminds us to examine how character traits are formed and conditioned. - By the time we are adults, much of our character is formed already but powerful social institutions such as business and especially our own places of employment and our particular roles within them have a profound influence on shaping our character. - Virtue ethics reminds us to look to the actual practices we find in the business world and to ask what types of people are being created by these practices. Many individual moral dilemmas that arise within business ethics can best be understood as arising from a tension between the type of person we seek to be and the type of person business expects us to be. Decision-making process: 1. **Determine the facts**: gather all of the relevant facts. It is critical at this stage that we do not unintentionally bias our later decision by gathering only those facts in support of one particular outcome. 2. **Identify the ethical issues involved**: what is the ethical dimension? What is the ethical issue? 3. **Identify stakeholders**: who will be affected by this decision? What are their rs, to me, and what is their power over my decision or results? Do not limit your inquiry only to those stakeholders to whom you believe you owe a duty. For instance, you might not necessarily first consider your competitors as stakeholders; however, once you understand the impact of your decision on those competitors, an ethical duty may arise. 4. **Consider the available alternatives**: explore not only the obvious choices, but also those that are less obvious and that require some creative thinking or thinking "outside the box" 5. **Compare and weigh the alternatives**: take the point of view of other people involved. How is each stakeholder affected by my decision? Compare and weigh the alternatives. Can consider the 3 ethical frameworks here. 6. **Make a decision**: is this a point-in-time decision, or something that will be carried out over time? What is your plan, and how are you going to implement it? 7. **Monitor and learn**: make sure that you learn from each decision and move forward with that increased knowledge. Article 2: - Taken together, rationalizations and socializations practices allow perpetrators of unethical activities to believe that they are moral and ethical individuals, thereby allowing them to continue engaging in these practices without feeling pangs of conscience. - **Rationalizing corruption** -- people who have engaged in corrupt acts excuse their actions to themselves, by viewing their crimes as non-criminal, justified, or part of a situation which they do not control. They avoid the tag of being corrupt by using a number of rationalizing tactics that allow them to look at their corrupt acts in a way that makes them appear to be normal and acceptable business activities. If the rationalizations become a shared resource in the organization or industry's culture, they may pave the way toward defining the practice as "business as usual -- the way things work" - Denial of responsibility - The circumstances may involve a coercive system, dire financial straits, peer pressure, "everyone does it" reasoning and so on. - When using this rationale, individuals do not regard themselves as perpetrators of unethical acts; rather they view themselves as morally responsible individuals being forced into these unethical acts. - This is rather easily adopted when experiencing intense pressure from top management to meet numeric targets. - Denial of injury - This rationalization is commonly employed in situations such as theft from an organization is assumed to be well insured or can easily recover the costs, or where the actual damage is slight. - Denial of victim - Exploitation of the victim is thus seen as a form of revenge and the perpetrator as a modern day Robin Hood. - One study found that the most common explanation offered by employees for theft of company property was unfair treatment by the employer. - Once individuals start believing that the victim is deceitful, they are likely to feel less regret about their own unethical actions - Social weighting - 1\) Condemning the condemners -- eg. individuals may characterize the law as vague, complex, inconstant, rarely enforced, punitive, or political motivated such that enforcement is inconsistent or malicious -- Since the law itself is wrong, it is not unethical to contravene it. - 2\) Selective social comparisons -- when individuals are confronted with negative impressions about themselves, comparisons with others who appear even worse serve to bolster them against the threat. - Appeal to higher loyalties - The most common higher cause appears to be group-based loyalties. When a group becomes highly cohesive, employees often believe that the goals of the group are more impt than those of other groups. - Balancing the ledger - Eg. individuals engaging in cyber-loafing felt no guilt pangs because they thought that they had accrued sufficient credit in the organization through the time and effort they had put into completing their work. - But **rationalization tactics are often useful to the organization**. Executives operating in turbulent environments need to make hard choices that often have undesirable consequences. For eg. managers laying off close associates to ensure firm survival or relocating local manufacturing sites overseas for efficiency reasons often need to use rationalization processes (like denial of responsibility) to help them cope with the undesirable and visible cons of their actions. Hence in many cases rationalization tactics are essential for organizations and employees to operate. - Socializing newcomers into corrupt practices - Cooptation - Eg. financial brokers who push offerings with high commissions - The broker may honestly conclude that the offerings he is rewarded for pushing are in fact the best investments. If the practice is exposed, he is likely to perceive himself as the victim - Incrementalism - To relieve the dissonance, the newcomer grasps at ready rationalizations offered by peers. - Compromise - For eg. politicians accrue power by forming networks, currying favors and cutting deals, often causing them to support accusations and causes they would otherwise avoid. It thus becomes very difficult for senior politicians to act exclusively according to their own ethical principles and preferences. - A common theme of all 3 paths to corruption is **perceived choice**: newcomers are far more likely to accept corrupt acts as justifiable if not desirable if the newcomers perceive that they chose their course of action. - The most insidious of socialization practices are therefore those that provide **only an illusion of choice**, subtly inducing behaviour that the newcomer would have otherwise avoided. - Socialization is also an integral and often beneficial organizational process. Newcomers learn about an organization's culture and ethical norms and obtain operational knowledge through a variety of socialization processes in the organization. - While the two processes (rationalization and socialization) can exist to some extent without any support from the organization's environment, certain factors therein can significantly enhance the likelihood of the two processes emerging. - 1\. **Group Attractiveness and a social cocoon** - In many instances, corruption is widespread among the employees in a subunit rather than being limited to one or two individuals - Researchers have pointed out that this is often facilitated by group dynamics working in tandem with rationalizing and socializing practices to create a "special cocoon" - When membership in a group is highly prized, employees are more likely to accept and adopt the norms of the group. New recruits were unlikely to raise any sticky questions that could deprive them of their chance at the brass ring - 2\. **Mutual support of rationalization and socialization** - The processes of rationalization and socialization support and reinforce each other. - A newcomer engaging in the first corrupt act is likely to experience significant dissonance that could prevent the process from continuing. However, when rationalizations are available to subdue this dissonance, the process is more likely to continue. - 3\. **Euphemistic language** - Individuals engaging in corruption describe their acts in ways that make them appear inoffensive (the use of pleasant expressions to refer to things that may be unpleasant) - A set of actions that can address the challenges posed by the rationalization and socialization of corruption. - Focus on prevention: - a\. Foster awareness among employees -- training employees to at least periodically think about a prospective action or decision from the pov of customers, shareholders, and other constituents might help to puncture the ideological balloon. -- "headline test": what would an organization's constituents think about the act or decision if it was reported in the media? Organizations need to have periodic "introspection days" where employees look at all the acts they perform and examine them for ethical implications. - b\. Use performance evaluations that go beyond numbers -- evaluations based on numeric outcomes may significantly increase the likelihood of unethical activity. It is imperative for executives to understand the ethical risks involved in outcome-based evaluations and balance them with other means that examine the ethical conduct of employees in meeting their targets. A performance evaluation approach that simultaneously explores whether the numbers were met and how the numbers were met is much more likely to prevent the onset of rationalization/socialization. - c\. Nurture an ethical environment in the organization -- firstly, when employees have misgivings or uncertainties about the propriety of an action, they should have access to mechanisms that allow them to discuss the issues with an independent company representative: helps to create an environment where individuals who have any ethical concerns are free to discuss them without fear of retribution. Secondly, the organization should have strong verification procedures in place for code-compliance during key activities. - d\. Top management serves as ethical role models -- it is not sufficient that top management be ethical: they should be seen to be ethical. Extremely important for top managers to assess the risk factors associated with their particular organization and industry that may facilitate rationalization and socialization. - Once ongoing rationalization and socialization have been uncovered, organizations need to make reversal a top priority. In this context, we believe that quick action and the involvement of credible external change agents become critical, as described below. - Avoid denial and move quickly - When unethical acts are uncovered in organizations, there is often strong resistance to accepting the facts, no matter how strong the evidence. - Such denials and unwillingness to act hurt the company's reputation, led to high court-assessed damages, and delayed the needed changes. - In some cases, such denials may lead to such a loss of stakeholder confidence that a firm may well dive into a death spiral. - Involve external charge agents - Insiders are often so embedded in the organization that they may lack the ability, will, and credibility to effect the needed changes. - In many cases, calling in an outsider to clean house is the only viable operation. External change agents are more likely to be successful at reversing corruption for a variety of reasons. - Their appointment signals a break from the past and sends an unequivocal message to employees and other stakeholders of the organization's intention to make the necessary changes. Employees and stakeholders are more likely to cooperate with the change efforts and provide needed resources. - Outsides also come to the organization with a fresh and different perspective. They are much more likely to question tenets and practices long held to be sacred in the organization. - While outsiders may know the business less intimately than insiders, they are also likely to possess social networks diverse from those held by employees within the firm, allowing them to seek advice from individuals and entities that are not linked to the organization, further accentuating their ability to question existing organizational practices. - Remaining aware and vigilant - Today's executives must pursue ambitious and at times contradictory goals and make difficult decisions in real time based on necessarily incomplete information. - Organizations need to be especially conscious in guarding against the onset of such tactics within the organization. Article 3: Moral Machine Experiment - Global Preferences - The strongest preferences are observed for sparing human over animals, sparing more lives, and sparing young lives. - Cultural clusters - Eg. the preference to spare younger characters rather than older characters is much less pronounced for countries in the Eastern cluster, and much higher for countries in the Southern cluster. The same is true for the preference for sparing higher status characters. - Similarly, countries in the Southern cluster exhibit a much weaker preference for sparing humans over pets, compared to the other two clusters. - All the patterns of similarities and differences unveiled suggest that manufacturers and policymakers should be, if not responsive, at least cognizant of moral preferences in the countries in which they design artificial intelligence systems and policies. - Whereas the ethical preferences of the public should not necessarily the primary arbiter of ethical policy, the people's willingness to buy autonomous vehicles and tolerate them on the roads will depend on the palatability of the ethical rules that are adopted. - Country-level predictors - Preferences revealed by the moral machine are highly correlated to cultural and economic variations between countries. - It was observed that systematic differences between individualistic cultures, which emphasise the distinctive value of each individual, show a stronger preference for sparing the greater number of characters. - Participants from collectivistic cultures, which emphasize the respect that is due to older members of the community, show a weaker preference for sparing younger characters. - Because the preference for sparing the many and the preference for sparing the young are arguably the most important for policymakers to consider, this split between individualistic and collectivistic cultures may prove an important obstacle for universal machine ethics. - Before we allow our cars to make ethical decisions, we need to have a global conversation to express our preferences to the companies that will design moral algorithms, and to the policymakers that will regulate them. - This data will help to identify 3 strong preferences that can serve as building blocks for discussions of universal machine ethics, even if they are not ultimately endorsed by policymakers: the preference for sparking human lives, sparing more lives and sparing young lives. - We can embrace the challenges of machine ethics as a unique opportunity to decide, as a community, what we believe to be right or wrong; and to make sure that machines, unlike humans, unerringly follow these moral preferences. Article 4: - We are about violence toward many more classes of victims today than our grandparents did in their time. - Political parties and interest groups strive to make their concerns become current triggers of your moral modules. To get your vote, your money, or your time, they must activate at least one of your moral foundations. - **Care/Harm Foundation** - The suffering of your own children is the original trigger of one of the key modules in the Care foundation. - **Fairness/Cheating Foundation** - Evolution could create altruists in a species where individuals could remember their prior interactions with other individuals and then limit their current niceness to those who were likely to repay the favor. - Human life is a series of opportunities for mutually beneficial cooperation. - Those whose moral emotions compelled them to play "tit for tat" reaped more of these benefits than those who played another other strategy, such as "help anyone who needs it" (invites exploitation) or "take but don't give" (which can work just once with each person; pretty soon nobody's willing to share pie with you) - The original triggers of the Fairness modules are acts of cooperation or selfishness that people show toward us. We feel anger, contempt, and sometimes disgust when people try to cheat us or take advantage. We feel pleasure, liking and friendship when people show signs that they can be trusted to reciprocate. - The current triggers include a great many things that have gotten linked, culturally and politically, to the dynamics of reciprocity and cheating. - On the left -- **equality and social justice** (wealthy and powerful groups are accused of gaining by exploiting those at the bottom while not paying their "fair share" of the tax burden) - On the right -- **proportionality** (people should be rewarded in proportion to what they contribute, even if that guarantees unequal outcomes) - **Loyalty/betrayal Foundation** - This is just a part of our innate preparation for meeting the adaptive challenge of forming cohesive coalitions. - The original trigger is anything that tells you who is a team player and who is a traitor, particularly when your team is fighting with other teams. - The love of loyal teammates is matched by a corresponding hatred of traitors, who are usually considered to be far worse than enemies. - **Authority/subversion foundation** - Cultures vary enormously in the degree to which they demand that respect be shown to parents, teachers and others in positions of authority. - The urge to respect hierarchical rs is so deep that many languages encode it directly. - If you ever felt a flash of distaste when a salesperson called you by first name without being invited to do so, or if you felt a pang of awkwardness when an older person you have long revered asked you to call him by first name, then you have experienced the activation of some of the modules that comprise the Authority/subversion foundation. - This is more complex than the other foundations because its modules must look in two directions -- up toward superiors and down toward subordinates. These modules work together to help individuals meet the adaptive challenge of forging beneficial rs within hierarchies. - The original triggers of some of these modules include patterns of appearance and behaviour that indicate higher vs lower rank - The current triggers of this foundation include anything that is construed as an act of obedience, disobedience, respect, disrespect, submission or rebellion, with regard to authorities perceived to be legitimate. Also include acts that are seen to subvert the traditions, institutions, or values that are perceived to provide stability. - Sanctity/degradation foundation - Disgust is part of the "behavioral immune system" -- a set of cognitive modules that are triggered by signs of infection or disease in other people and that make you want to get away from those people - The original triggers of the key modules that compose this foundation include smells, sights, or other sensory patterns that predict the presence of dangerous pathogens in objects or people. - The current triggers are extraordinarily variable and expandable across cultures and eras. A common and direct expansion is to out-group members. Cultures differ in their attitudes towards immigrants, and there is some evidence that liberal and welcoming attitudes are more common in times and places where disease risks are lower. - Plagues, epidemics, and new diseases are usually brought in by foreigners -- as are many ideas, goods and technologies -- societies face an analogue of the omnivore's dilemma, balancing xenophobia and xenophilia. - Even though sanctity seems to be off to a poor start as a foundation of morality. Yes, it makes it easy for us to regard some things as "untouchable", both in a bad way (because something is so dirty or polluted that we want to stay away) and in a good way (because something is so hallowed, so sacred, that we want to protect is from desecration) - When someone in a moral community desecrates one of the sacred pillars supporting the community, the reaction is sure to be swift, emotional, collective and punitive. **[Chapter 2 -- The difficulty of being good (Answering the WHY) ]** \*Each unethical action could have a disproportionately negative reaction What is our insurance policy against such a disproportionately negative reaction? -\> A clean conscience, less "good" benefit for us, being ok with "tiring to be good all the time" Examples on why there is a need to be ethical: - Depressingly long list of ethical failures in just the 21^st^ century (Facebook, Google, Tesla, etc) - Many ethical failures cause massive cascading impacts - Who would not prefer ethical workers, bosses, companies, friends, family? [3 main ethical frameworks: ] 1. **Utilitarianism** ethics (decisions based on consequences) 2. **Ethics of principles and rights** (decisions based on principles of human rights; also sometimes referred to as *Kantian* or *Deontological ethics*; Deon = Duty) -- what the world believes 3. **Virtue** ethics (decisions based on my own virtues and character) -- what you believe and stand for 1. Utilitarianism - Decide based on the consequences of our actions (consequentialist theory) -- more concern about the outcome - Emphasis is on producing the greater good (happiness or well-being; not always money) for the greater number (and not just for me) - Most laws/politics are passed by using this consequentialist theory) - Challenges: how to measure outcomes? The end does not always justify the means (the end might be maximizing benefit but the means might be unethical). Does not benefit the minority 2. Ethics of principles and rights - Some decisions should be a matter of principles ("never lie"), rights (unalienable rights, liberty, equality) or duties ("legal duty to follow the law") AND NOT CONSEQUENCES. - Human principles, rights, duties vs legal principles, rights and duties - Some acts are always wrong, even if the act leads to an admirable outcome - People should treat themselves and others always as ends and never merely as means to an end. - Challenges: diversity and disagreement of what constitutes basic principles, rights and duties (some countries have certain principles, might not sit right with some countries). A decision based on rights may not be fair for both parties. The minority may not feel personally attacked because it is the law already, but they will still be against it. 3. Virtue ethics - Those character traits that would constitute parts of a good and meaningful human life (having integrity, being honest, forthright, truthful, etc) - Decision focus shifts from what a person should do, to a focus on who that person is. - Challenges: individualistic decision making based on an individual's character. No two individuals are alike. \*When you make a decision, you can use all 3 frameworks to help you. An ethical decision making process: a. Determine the facts b. Identify the ethical issue c. Identify the stakeholders and consider the situation from their POV d. Consider the available alternatives e. Compare and weigh the alternatives f. Make a decision g. Monitor and learn from the outcome Decision **Outcome** Fairness vs **Process** Fairness - If the outcome is not fair, but the process is fair -\> its okay because you cannot satisfy everyone - Fairer process cost a lot less and results in better outcomes - Fair process determinants: how much inputs we believe we have in the decision being made, our knowledge on how decisions are made and implemented, the behaviour of the decision makers towards those impacted by the decision - Why fair process may not be followed? - Belief that tangible resources better than treating people decently - Negative impacts of being transparent on how decisions are made - Belief that knowledge is power and therefore not sharing information - Desire to avoid uncomfortable situations Reading notes: - Studies have shown that when managers practice process fairness, their employees respond in ways that bolster the organisation's bottom line both directly and indirectly. (employees feel like they have been treated justly) - Process fairness is more likely to generate support for a new strategy, for instance and to foster a culture that promotes innovation. - 3 drivers of process fairness: How much input employees believe they have in the decision-making process? How employees believe decisions are made and implemented? How managers behave? - Process fairness doesn't ensure that employees will always get what they want; but it does mean that they will have a chance to be heard. - Its safe to say that expressing genuine concern and treating dismissed employees with dignity is a good deal more affordable than not doing so. (companies could spend a lot less money and still have more satisfied employees) - In addition to reducing legal costs, fair process cuts down on employee theft and turnover. - Things like asking employees for their opinions on a new initiative or explaining to someone why you are giving a choice assignment to her colleague doesn't cost much money. - Ofc executives should not simply emphasize process fairness over tangible support -- determining exactly how much tangible support to provide is perhaps best captures by the law of diminishing returns. - Its not enough for executives to just be fair, but they also have to be seen as fair - Process fairness can not only minimize costs but can also help to increase value (a performance booster) - Systematically practiced process fairness/Strategic Fitness Process (SFP) ---\> a model for process fairness. - Has helped numerous organizations capture value by getting employers to buy in to strategies. A critical element of SFP is the appointment of a task force consisting of 8 well-respected from one or two levels below senior management. -- Task force members distil the information they gain from these interviews into major themes and feed them back to senior management. -- They then discuss how the strategy could be rolled out most effectively. - Operational autonomy (as the extreme version of process fairness) -- employees have control over how they get their work done - Work evnt which employees have a high degree of operational autonomy lead to the highest degree of creativity and innovation. Why isn't everyone practicing process fairness? - Some managers wrongly believe that tangible resources are always more meaningful to employees than being treated decently. - Instead of wrestling with uncomfortable emotions, many managers find it easier to sidestep the issue -- and the people affected by it altogether. (Desire to avoid uncomfortable situations) - May be overlooked also because some of its benefits isn't obvious to executives. - Sometimes, corporate policies hinder fair process. The legal dept may discourage managers from explaining their decisions. - Managers who unwaveringly believe that knowledge is power may fear that engaging in process fairness will weaken their power. Might lose power when they involves others in decision making. -- But usually the practice of process fairness increases power and influence. Several steps to make fair process the norm: 1. Address the knowledge gaps - Managers need to be warned about the negative emotions they might experience when practicing fair process. Let them expect it first, so they can tolerate it better. Managers are also more likely to endure a difficult process when they know that the effort will have a tangible payoff. 2. Invest In training - Subordinates of the trained managers for instance are not only significantly less likely to steal or to resign -- but they are more likely to go the extra mile - Participants will respond better to active guidance than to a lecture - Training is most effective when its delivered in several instalments rather than all at once. - Its important for trainees to maintain expectations that are both optimistic and realistic 3. Make process fairness a top priority - Must begin at the top - By modelling process fairness, senior management does more than communicate organizational values; it also sends a message about "the art of the possible" - Act as role models - Senior managers may communicate the value they place on process fairness by making its practice a legitimate topic of conversation throughout the organization. Process fairness is the responsibility of all executives, at all levels, and in all functions; it cannot be delegated to HR. Must minimize the costs of decisions that might threaten employees and maximise the benefits of decisions that may be sources of opportunity for them. h **[Chapter 3 -- the role of individual biases ]** The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread. Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfeasance from the top. BUT THAT IS RARE. Much more often, we believe, employees bend or break ethics rules because those in charge are blind to unethical behaviour or may even unknowingly encourage it. Our brain is split into: 1. Emotional/Intuitive response (you don't have to think much, it just happens) 2. Analytical response Or 1. "Want" self (more emotion) 2. "Should" self (more analytical) Or 1. Known knowns ("I know that I know this") 2. Known unknowns ("I know that I don't know this") 3. Unknown unknowns ("I don't know about things that I don't know) System 1 -- fast, intuitive, emotional; "we don't choose to do it, it just happens to us", automatic and cannot be turned off (eg. seeing a snake and running away immediately) -- know knowns - Involves associating new info with existing patterns or thoughts, rather than creating new patterns for each new experience - More prone to substituting a simpler question for a more difficult one System 2 -- slower, logical; "we choose to take specific actions" deliberate and lazy (eg. planning a trip, class participation) -- known unknowns, unknown unknowns \*System 2 is activated when an event is detected that violates the model of the world that System 1 maintains. - Most of us believe that we are ethical and unbiased. We imagine we are good decision makers. But more than 2 decades of research confirms that, in reality, most of us fall woefully short of our inflated self-perception - We tend to be optimistic and suffer from the illusion of objectivity -- that we are free of the very biases we are quick to recognise in others. (we are really quick to judge others but cannot see it from ourself) - Our implicit or unconscious biases are contrary to our consciously held or explicit beliefs. [Why don't we recognise our own ethical failings? ] - Our actions are hidden between predictions that we will behave ethically (system 1) and recollections that we behaved more ethically than we really did (system 2). - When we are predicting how we will behave: - We believe that we will behave ethically in line with our "Should" self - At the time of decision, our "Want" self wins out and we behave unethically - When we recall the behavior, we see it through our "Should" self and recall that we behave more ethically than we actually did. - We look for rationalization tactics to gain alignment between what we do and our perceived self 2 concepts: 1. **Ethical blind spot** \> Good people do bad things without knowing that they are doing anything wrong. (Eg. you did something at work, but you don't know its wrong, and the consequences end up becoming huge) 2. **Ethical fading** \> when people focus on some other aspect of a decision so that the ethical dimensions of the choice gradually fade from their view. [Bounded ethicality] (you also want to be 100% ethical, but you are bounded) - Most approaches to ethics assume that people recognise an ethical dilemma for what it is and respond to it intentionally - But this can be unethical behaviour that arises **without intentionality** - Even good people engage in ethically questionable behaviour **based on intuition and biases** that actually **contradicts their own preferred ethics** - Bounded ethicality comes into play when individuals make decisions that harm others and when that harm is **inconsistent** with the decision makers conscious beliefs and preferences. - Ethical blind spots, ethical fading, and biases **bound** our ethicality and make many of us take unethical decisions Our intuition is powered by system 1 processes - Intuition is nothing more than recognition based on our understanding of the world comprising a small and necessarily un-representative set of observations (we are relying only on the know-knowns) - All of us have intuitive expertise (eg. friend's mood, recognising dangerous driver) - need reinforced practice, rules, feedback - Intuition does not develop in a chaotic universe or in chaotic circumstances (because you will know exactly what will happen if you do smtg) - Expert/professionals have very high intuitive expertise in their field of study but even their decisions can sometimes be questioned and be seen as unethical - Due to system 1 processes that depend on heuristics (approximations) rather than algorithmic certainties, we quite frequently have intuitions that are **false** but system 1 does not know them to be false; thoughts come to our mind and they are subjectively indistinguishable from an expert's intuition. - When we see something, our **associative memories** gets activated -- associative memories is a gigantic network of ideas (examples of many different links -- at any one time a stimulus occurs, it activates a subset of nodes, activation spreads through associated memory, we become sensitized to other related ideas activated in that fashion \> a story gets created once a stimulus is presented -- associated memory looks for causes of that stimulus \*Intuition driven by system 1 manifests individual biases in each one of us and these individual biases can distort decision making, possibly leading to ethical breakdowns. Thus, system 2's analytical and more thoughtful processes could counter System 1's intuitive and more automatic processes (and create better decisions) \- But what if system 2 is under overload (stress, over-worked, needing money, needing money, etc)? and system 2 thinking will also have bias. 1. **Cognitive biases**: general patterns of thinking and judgement errors that can affect various aspects of decision-making and reasoning. These biases are generally no specific to any particular group or identity and can apply to a wide range of situations. These preconceptions are mental shortcuts the human brain produces to expedite information processing -- to quickly help it make sense of what it is seeing. 2. **Implicit biases**: specifically refers to unconscious biases that relate to social groups and identities. These biases are outside our awareness and control (eg. you tell everyone that everyone works hard, but you subconsciously think that Chinese people work harder) 3. **Explicit biases**: conscious attitudes, beliefs, or stereotypes that individuals are aware of, often related to social groups and identifies. \*How do you control implicit bias? -- you will need to first know that there is even a bias (to counter) **[Blind spots due to biases: ]** a. Implicit prejudice - Most fair-minded people often judge or make decisions based on unconscious stereotypes (age, race, etc) or "implicit prejudice" - Our "system 1" associative memory makes us unconsciously believe that these associations are accurate all the time. - Early on, we learn to associate things that commonly go together and expect them to inevitably coexist: thunder and rain or gray hair and old age. - This skill -- to perceive and learn from associations -- often serves us well - Because we automatically make such associations to help us organize our world, we grow to trust them and they can blind us to those instances in which the associations are not accurate - Because implicit prejudice arises from the ordinary and unconscious tendency to make associations, it is different from explicit or conscious prejudice -- racism, sexism, age, etc - Examples: US home selling price based on home owner race b. In-group favoritism - We tend to do more favors for those we know and those who tend to be more "like us" (Race, religion, family, employer, sports, etc) - We aren't setting out to discriminate, instead, see these as acts of kindness that our system 1 mind justifies as ethically correct - In doing so, we could have taken away opportunities from the "out group" / effectively discriminate against those who are different from us. - Examples: recommending a friend for a job in your company c. Over-claiming credit (self-assessment bias) - We tend to over-estimate ourselves (and under-estimate others) - Majority of people consider themselves above average on a host of measures (from intelligence to driving ability) - Overblown sense of self entitlement - Potential to destabilize alliances, reduce longevity of teams, increase resentment \> ppl don't like ppl who always think that they are the best - We become the unabashed, repeated beneficiaries of this unconscious bias, and the more we think only of our own contributions, the less fairly we judge others with whom we work. - Examples: sense of needing the biggest raise, the biggest title, the biggest job d. Motivated blindness (you are aware of it) - People see what they want to see and easily miss contradictory information when it is in their best interest to remain ignorant. - Conflicts of interest that motivates people to ignore bad behaviour when they have something to lose by recognising it - Believe stories reinforcing our perceived ethical self-image rather that believe we are performing unethical acts - Executives should be mindful that conflicts of interest are often not readily visible and should work to remove them from the organization entirely, looking particularly at existing incentive systems. - Examples: Arthur Anderson collapse with blind eye to illegal financial off-book accounting (because they are being paid so much money) e. Indirect blindness (you get someone else to do it, so you don't feel bad) - We hold others less accountable for unethical practices when it is carried out through third parties -- particularly when we have incomplete information about the effects of oursourcing. - Outsourcing dirty work - Conflicts of interest that motivates people to ignore third-party bad behaviour when they have something to lose by recognising it. - Believe stories reinforcing our perceived ethical self-image rather than believe we are performing unethical acts through third parties. - If we are presented with complete information and reflect on it, we can overcome such "indirect blindness" and see the unethical actions - Managers routinely delegate unethical behaviours to others, and not always consciously. They may say "do whatever it takes" and this invites questionable tactics. - When an executive hands off work to anyone else, it is that executive's responsibility to take ownership of the assignment's ethical implications and alert to the indirect blindness that can obscure unethical behaviour. - Examples: Merck decision on how to deal with dramatically raising price on drugs f. Slippery slope (similar to incrementation) - We are less able to see others unethical behavior when it develops gradually - Conflicts of interest that motivates people to ignore larger unethical acts by an actor when they previously overlooked smaller unethical acts by the same actor - We are likely to accept increasingly major infractions as long as each violation is only incrementally more serious than the preceding one - Over time, could cause cognitive dissonance and the desire to "come clean" - To avoid the slow emergence of unethical behaviour, managers should be on heightened alert for even trivial-seeming infractions and address them immediately. If something seems amiss, they should consider inviting a colleague to take a look at all the relevant data and evidence together. -- in effect creating an "abrupt" experience - Examples: Ponzi schemes g. Overvaluing outcomes (utilitarianism) - We give a pass to unethical behaviour if the outcomes are good -- recipe for disaster over the long term - Rewarding outcomes instead of processes followed to get to outcomes - Bias for "bad process, great outcome" over "great process, bad outcome" - Many managers are guilty of rewarding rewards rather than high-quality decisions. They overlook unethical behaviours when outcomes are good and unconsciously helping to undermine the ethicality of their organisation. - They should beware this bias, examine the behaviour that drives good outcomes, and regards quality decisions, not just results - The law often punishes bad outcomes more aggressively than bad intentions - Example: Clinical studies **[There are other common biases like: ]** - Anchoring \> relying heavily on the first piece of information we receive - Availability \> making judgements on probability of events on basis of how easily we can think of examples - Confirmation \> looking for data that backs our decisions/assumption - Recency \> overly relying on the most recent data we can recall - Bandwagon \> supporting decisions that are more popular - Sunk cost \> preference to continue even though it is rational to stop - Zero risk \> preference to have absolute certainty - Loss aversion \> preferring decisions that minimise "loss" **[Blind spots due to organizational systems]**: - (intentional) Annual ethics flu shot rather than a sustained focus on ethics - (intentional) Blind eye to ethical breakdowns - (intentional) no culture of speaking out to report ethical violations - (intentional) no consequences on ethical breakdowns - (unintentional) ill-conceived goals (Possibly also incentivization bias, choice-support bias) \> eg, a driver gets paid by the distance they clocked so the driver will tend to speed - Examples: selling with focus on revenue rather than profits, truck driver compensated on hourly basis How to counter blind spots? - Be more humble (realise that you are not as ethical as you think) - Collect data (know yourself better) - Change your environment (engage external cues that are blind spots) - Boarden decision making (invite diverse voices) - Foster strong culture of ethics within the organization - Educate on biases/blind spots (surveillance/sanctioning not enough) - Ask questions ("what ethical implications might arise from this decision?") - Try a blind approach (taking decisions by obscuring data that biases) - Foster a psychologically safe environment (ok to speak up, make mistakes, take risks) Reading notes: [How (un)ethical are you? ] - Doubtful that a well-intentioned, just-try-harder approach will fundamentally improve the quality of executives' decision making. To do that, ethics training must be broadened to include what is now known about how our minds work and must expose managers directly to the unconscious mechanisms that underlie biased decision making. - And it must provide managers exercises and interventions that can root out the biases that lead to bad decisions. - Managers can make wiser, more ethical decisions if they become mindful of their own unconscious biases. - The first step to reducing unconscious biases is to **collect data** to reveal its presence. - Most of us trust the "statistics" our intuition provides - One way to get those data is to examine our decisions in a systematic way - Unpacking is a simple strategy that managers should routinely use to evaluate the fairness of their own claims within the organisation. They can also apply it in any situation where team members may be overclaiming. - Taking the IAT is another valuable strategy for collecting data. Recommended that you and others in your organisation use the test to expose your own implicit biases. - Simply knowing the magnitude and pervasiveness of your own biases can help direct your attention to areas of decision making that are in need of careful examination and reconsideration. - The second step is to **shape your environment.** - Research shows that implicit attitudes can be shaped by external cues in the environment - One remedy for implicit bias is to expose oneself to images and social environments that challenge stereotypes - If the envt may be promoting unconscious biased or unethical behaviour, consider creating countervailing experience - The third step is to **broaden your decision making** - Think about hypothetical, counterstereotypes scenarios -- such as what it would be like to trust a complex presentation to a female colleague or to receive a promotion from an African-american boss -- can prompt less-biased and more ethical decision making. [Ethical breakdowns] - Example: Ford Pinto became notorious for its tendency in rear-end collisions to leak fuel and explode into flames. More than 2 dozen people were killed or injured in Pinto fires before the company issues a recall to correct the problem. Scrutiny of the decision process behind the model's launch revealed that under intense competition from Volkswagen and other small-car manufactures, Ford had rushed the Pinto into production. Engineers had discovered the potential danger but assembly line war ready to go, and the company's leaders decided to proceed. Many saw the decision as evidence of the callousness, greed, and mendacity of Ford's leader. - But actually, cognitive biases distort ethical decision making -- so the leaders might have thought of it as purely a business decision rather than an ethical one - When employees behave in undesirable ways, it's a good idea to look at what you are encouraging them to do. When you give employees the pressure to reach a goal, they might start engaging in unnecessary and expensive projects and creative bookkeeping to reach their goals -- unethical behaviour - Research shows that as the uncertainty involved in completely a task increases, the guesswork becomes more unconsciously self-serving - Leaders setting goals should take the perspective of those who behaviour they are trying to influence and think through their potential responses. - When leaders fail to meet this responsibility, they can be viewed as not only promoting unethical behaviour but blinding engaging in it themselves. - Avoid "forcing" ethics through surveillance and sanctioning systems. Instead ensure that managers and employees are aware of the biases that can lead to unethical behaviour A white and yellow chart with black text Description automatically generated with medium confidence **[Chapter 4 -- the role of the context]** As employees of a firm the overall context matters comprising: our individual factors, culture comprising situational factors & ethical culture. 4 cognitive processes in individuals for ethical decision making: 1. Awareness: Recognise moral issue, if you have ethical blind spot? Generally affected by your environment. (eg. lying to increase sales) 2. Judgement: Make moral judgment (eg. Lying is bad) 3. Intent: Establish moral intent (eg. decide to be honest) 4. Behavior: engage in moral behavior (eg. tell the truth) \*We may be weak or strong in any or all of these processes Individual factors impacting cognitive processes - Age - Gender - Nationality - Cultural characteristics - Education - Psychological factors - Personal integrity - Wealth - Experience acquired Situational factors - Family - Friends - Rewards - Authority - Organizational norms and culture - Bureaucracy - Colleagues - Work roles - Country of work - Leaders An organisation's culture and ethical culture -- - Culture is a body of learned beliefs, traditions, and guides for behavior shared amongst members of a group - Organisational ethics/ethical culture can be conceptualized as representing a slice of an organization's overall culture that focuses on what ethical (or unethical) practices are acceptable in the organisation - An organization can have a weak or strong culture - Ethical culture sets a strong context for our ethical performance within an organisation (the environment we are in will really impact our ethical decisions) - [Socialisation] (co-opt, incrementalism, compromise) and [internalisation] (org ethical culture is internalised as our own as we see congruence our and organizations value sets) are how new employees assimilate within an organization's ethical culture Factors that shape ethical culture: Formal systems -- 1. **Executive Leadership** - Likely the most important determinant for culture - Leaders are perceived to have immense authority and therefore influence - New in-coming leaders can change or maintain organizational culture (GE) - Culture affected in both formal and informal ways - Ethical leaders support ethical culture by being both a moral person and a moral manager  2. **Selection system** - How new employees are selected and hired - Background checks and references - Avoid ethical problems by hiring the right people - Ethic a key part of interview questions - Check alignment (both way) with company core values 3. **Orientation/training** - Formal orientation programs for new employees (how to make it exciting?) - Ongoing reinforcement - Most companies mandate ethics training - Executives, leaders, managers have to role model and continuously test alignment - Strong alignment needed between training programs and actual practice within the company 4. **Performance management** - [Goals for employees]; annual merit increases, bonuses, commissions tied to these goals - Performance management philosophy should support ethical conduct -- marry the "what" with the "how" - Measure to leadership competencies (act with integrity, treats people with respect, etc) and company core culture - Rewards and consequences to align holistically - Tough decisions to take -- let go of unethical employees - Should not just be performance driven - Might cause a lot of problems (eg. if company only values high number, might have unethical issues) 5. **Authority structure** - Individuals have to take responsibility for their own actions (Positive and negative consequences) - Org structures create layers/specialization and often absolute power to hire/promote/fire - Need to avoid demand for "absolute loyalty", "do as you are told", "don't ask any questions" - Should be perfectly [ok to question] authority figures, unethical orders or unethical bosses - Some bosses cover their asses by delegating unethical practices to lower levels - Foster multi-modal (anonymous emails, confidential tip line, skip level complaint, etc) ability for employees to speak up - Safe zone -- no retaliation 6. **Vision, mission, values** - Need to make sure that it is emphasise to employees so that they will always remember it - Every organization has these - Should be very carefully worded, reflecting executive leadership and employee inputs - Does not change frequently - Words matter less than how these are brought to life - Should be part of daily life within the organization - Employees to be held accountable to these 7. **Policies and codes** - More detailed than vision - Provides guidance in specific business areas (code of conduct, anti-corruption/anti bribery, conflict of interest, insider trading, expense policy, sustainability, diversity, non-discrimination, etc) - Regularly updated to reflect changes in environment - Applies to employees, suppliers, contractors, other stakeholders 8. **Ethical decision making process** - Make ethical concerns a formal and expected part of decision making - Expand to cover multiple areas -- business practices, hiring, diversity, sustainability, etc - Incorporate into daily/weekly/quarterly/annual conversations - Avoid exclusive reliance on just financial goals without ethical considerations - Be watchful of changes to traditional and proven decision making criteria when company is under a crisis or financial stress Informal systems -- 1. **Role models/heroes** - Senior managers, immediate supervisor, senior co-workers can serve as role models - For newer employees, mentors, either formal or informal, strengthen/reinforce ethical practices in 1-1 settings - Heroes personify organisational values and set the standard for performance by modelling certain behaviours; can be CEO, ex CEO or simply senior colleagues who are either obviously reflecting the status or awarded as such - Role models and heroes set the tone for what is considered normal 2. **Norms** - Standards of daily behaviour that are accepted as appropriate by members of a group (what is normal) - They exert a powerful influence in an organisation and can serve to support an ethical or unethical culture - Informal ethical or unethical norms can simply become "the way we do things around here" and can conflict with formal rules - Socialisation create the norms already 3. **Rituals** - Symbolically tells people what the organisation wants them to do and how it expects them to do it - Can be a way to affirm and communicate culture in a very tangible way - Can bring company values to live - Eg. rituals that ties back the value of fun (cross functional team outings, lunches, dinners, happy hours, celebrate values day, bring children to work day, unique imagery to support winning culture) 4. **Myths/stories** - Insiders can tell you stories that characterize the organization's culture (how people act in the organization) - Anecdotes about the founders or the companies founding or the reason why values were chosen - Equally impt -- stories about how unethical behavior/unethical employees was handled - Stories can reinforce the company's values and can serve to align the formal/informal systems - Best stories are simple ones and based on real people 5. **Language** - In a strong ethical culture, ethics is a natural part of the daily conversation - Organisational values are invoked in decision making - Managers routinely talk about ethics with their direct reports - Ethical managers aren't "morally mute", don't use euphemistic language to hide the tough ethical issues, and are willing to take the extra time to make ethical decisions. Evolution of the ethical culture - Unethical to ethical - Ethical to unethical - Ethical to more ethical Factors: - New ceo, massive attrition, several leadership changes, mergers/acquisitions driven growth, changes in business models, prioritizing financials over ethics, crisis/stress situations - Regular and systematic audits of formal and informal systems can serve as guardrails - This isn't an overnight journey -- usually takes years and constant vigilance to get right Reading notes: - Most employees are at the conventional level of cognitive moral development, meaning that they are looking outside themselves for guidance about how to think and act. - Ethical culture is a source of a good bit of that guidance and can influence employees to be aware of ethical issues (or not), to make good or bad judgements, and to do either the right thing or the wrong thing. - The organizational culture expresses shared assumptions, values, and beliefs and is manifested in many ways, including formal rules and policies, norms of daily behavior, physical settings, modes of dress, special language, myths, rituals, heroes, and stories. - Eg. Apple Computer, on the other hand, was known for its informality. Particularly in its early days, T‐shirts, jeans, and tennis shoes were the expected Apple "costume." - In a strong culture, standards and guidelines are widely shared within the organization, providing a shared sense of who we are and "how we do things around here" and a common direction for day‐to‐day behavior. - In a weak organizational culture, there is no single strong set of standards or behaviors. Instead, strong subcultures exist and guide behavior that differs from one subculture to another. - It's important to note that weak doesn't necessarily mean bad. In some situations, weak cultures are desirable. They allow for strong subcultures featuring diversity of thought and action. However, in a weak culture, behavioral consistency across the organization is tough to achieve. - How cultures influence behaviour: socialization and internalization - [Socialization: ] - Employees are brought into the organization's culture through a process called socialization - Socialization can occur through formal training or mentoring, or through more informal transmission of norms of daily behavior by peers and superiors. - With socialization, people behave in ways that are consistent with the culture because they feel they are expected to do so - Their behavior may have little to do with their personal beliefs, but they behave as they are expected to behave in order to fit into the context and to be approved by peers and superiors - But individuals may behave according to the culture for another reason---because they have internalized cultural expectations. - [Internalization: ] - Individuals have adopted the external cultural standards as their own. - Their behavior, though consistent with the culture, also accords with their own beliefs. Ideally, they come into the organization sharing its values and expectations, thus making for a very smooth transition. - To create a consistent ethical culture message, the formal and informal systems must be aligned (work together) to support ethical behavior. - Executive leaders affect culture in both formal and informal ways. - Senior leaders can create, maintain, or change formal and informal cultural systems by what they say, do, or support. Formally, their communications send a powerful message about what's important in the organization. - On the formal side of the organization, current executive leaders can also influence culture in a number of ways. - Clearly, employees take their cues from the messages sent by those in formal leadership roles. But most employees don't know the senior executives of their organization personally. They only know what they can make sense of from afar. - Therefore, senior executives who care about ethics must develop a "reputation" for ethical leadership by being visible on ethics issues and communicating a strong ethics message. - Being a moral person is not in itself enough to be perceived as an ethical leader. Being a moral person tells employees how the leader is likely to behave, but it doesn't tell them how the leader expects them to behave. So to complete the ethical leadership picture, executives must also act as "moral managers"--- they must focus on the "leadership" part of the term ethical leadership by making ethics and values an important part of their leadership message and by shaping the firm's ethical culture. - Moral managers do this by being visible role models of ethical conduct, by communicating openly and regularly with employees about ethics and values, and by using the reward system to hold everyone accountable to the standards. - In the context of all the other bottom‐line‐oriented messages being sent in a highly competitive business environment, employees are likely to interpret ethical silence to mean that the top executive really doesn't care how business goals are met (only that they are met), and they'll likely act on that message - **Selection systems**: Selection systems are vital to hiring people who fit the culture of the firm. When considering the ethical culture, organizations can avoid ethical problems by recruiting the right people and by building a reputation that precedes the organization's representatives wherever they go. - **Values, mission statements**: It's important that the values and mission statement be closely aligned with other dimensions of the culture. If the policies and codes are followed in daily behavior and people are held accountable to them, this is another example of a strong ethical culture in alignment. - **Polices and codes**: Formal ethics policies (often called codes of ethics or codes of conduct) are longer and more detailed than broad values and mission statements. They provide guidance about behavior in multiple specific areas. Policy manuals are even lengthier than codes and include more detailed lists of rules covering a multitude of job situations that are specific to the industry, organization, and type of job. Most people are looking outside themselves for guidance and stated organizational policy can be an important source of that guidance. - **Orientation and training programs**: The organization's cultural values and guiding principles can be communicated in orientation programs. - **Performance management systems**: Performance management systems involve the formal process of articulating employee goals, identifying performance metrics, and then providing a compensation structure that rewards individual---and frequently team---effort in relation to those goals. Informal: - Role models and heroes: Much socialization about ethics is informally conducted by role models and mentors. Role models may be senior managers, immediate superiors, or just more experienced coworkers. - Norms: They exert a powerful influence on individual behavior in organizations, and they can serve to support an ethical or unethical culture. - Rituals: They tell people symbolically what the organization wants them to do and how it expects them to do it. Rituals are a way of affirming and communicating culture in a very tangible way. - Stories: If you want to learn about an organization's culture, ask insiders to tell you stories that characterize the organization. In other ethical organizations, stories that convey the importance of the ethical culture may refer to rule violators being disciplined harshly or fired for unethical or illegal behavior. - Language: But in a strong ethical culture, ethics becomes a natural part of the daily conversation in the organization. Employees feel comfortable talking ethics with each other and with their managers. Organizational values are invoked in decision making. In one study, individuals who discussed their decision‐making using ethical language were more likely to have actually made an ethical decision. For example, when employees think about ethical culture, they tend to think about the climate for fairness in the organization. This refers to whether they believe employees are treated fairly every day, in terms of outcomes (pay, promotions, termination), processes (Are processes for making these important decisions about employees fair, nonarbitrary, and unbiased?) and interactions (Are employees treated every day with dignity and respect?) - Changing organizational culture is more difficult than developing it. In a new organization, workers are quite open to learning and accepting the culture of their new organizational home, especially if it fits with their own values. - Most often, pressure for culture change comes from outside---from stockholders, the government, regulators, the media, and other outside stakeholders. The public's general mistrust of business executives and the threat of increased government regulation may encourage leaders to look more closely at their ethical cultures. In addition, organizations whose members have been "caught" engaging in unethical behavior, or those faced with costly lawsuits, are prime candidates for such ethical culture change attempts. - The pressure to change organizational ethics can also come from within, but it is not likely to occur unless the CEO decides that change is required. **[Chapter 5: Being ethical in the workplace: (a) understanding the role of trust; (b) how to manage resource depletion in the workplace ]** The prisoner's dilemma - Regardless of what the other decides, each prisoner gets a higher reward by betraying the other ("defecting") - Defection always results in a better payoff than cooperation, so it is a strictly dominant strategy for both players - Applies to any situation in which two entities could gain important benefits from cooperating or suffer from failing to do so, but find it difficult or expensive to coordinate their activities Takeaways on trust from industry research: - Trusting actions that were quick (and therefore seen as spontaneous) were most likely to be reciprocated than those that are not - Reciprocity increased when participants did not use an opportunity to punish untrustworthy behaviour - Trust was highest when cooperation was not the result of a contract What we should not conclude: - That trust is the only reason for cooperation and that one should not consider substitutes for trust (eg. legal agreements, alignment of incentives, etc) - Where the risks are high, the relevant knowledge about trustworthiness is unavailable or power is unequal, it makes sense to rely on substitutes for trust A presence of trust is foundational for high performing teamwork - Optimizing for the group vs optimizing for self - Create healthy team dynamics - Helps avoid cascading set of issues that impacts almost all deliverables of a team, including very high attrition rates - Helps avoid resource depletion (speed of losing friends/colleagues/etc is higher than speed of adding) - A lack of effort or action to creating a trusting environment may be seen by others as being irresponsible or unethical Working in teams is difficult to avoid teams can be beneficial because they bring informational diversity however, we often to fully utilize informational diversity because: 1) issues with team foundation, 2) issues with information exchange these issues may also be seen by others as irresponsible or even unethical Issues with team formation: 1. **We bias towards ourselves and proximity** - Instead of harnessing the benefits of diverse teams by including individuals with different expertise, opinions and viewpoints -- we tend to select team members based on: similarity and proximity - Our natural inclinations when choosing teammates hinder our ability to harness the benefits of diversity. As leaders we need to select teammates more thoughtfully 2. **Benefits and downsides of diversity** - In more homogenous team, there can be: higher group cohesion, lower turnover, higher performance for simply, routine tasks. People prefer to work with similar others; it's faster and easier to set up a homogeneous team - In more diverse teams, there can be: high performance and innovation, conflict and coordination innovation, psychological barriers (performs significantly better). Sense that diversity is normatively appropriate and potentially useful for team performance even if problematic 3. **Our biases can hinder diversity** - Social categorization: allows us to process social information quickly and also to understand who in-group members are - Stereotype content model of perceived competence (look at how competent the person is, in terms of what the bring to the table) and warmth (look at how warm a person is in terms of socially) predicts emotional and behavioral reactions  - Social categorization can sow the seeds for interpersonal conflict (stereotypes, stereotype threat and implicit vs explicit prejudice) 4. **Stereotypes** - Stereotypes are commonly held beliefs about social groups - Tend to be over-generalized and resistant to new info - Can affect our judgements and behaviors - Create self-fulfilling prophecies - If this commonly held belief impacts your decision making to favor/disfavor a particular group, it gives rise to an explicit bias (or prejudice) 5. **Stereotype threat** - A situational predicament in which people are or feel themselves to be at risk of conforming to stereotypes about their social group - If negative stereotypes are present regarding a specific group, group members are likely to become anxious/conscious about their performance which may hinder their ability to perform to their full potential 6. **Strategies to mitigate these issues** - Leaders must set up the right process, structure, norms and goals: - Foster a high-trust environment -- being vulnerable, allowing team mates to make mistakes and learn from them, providing a safe space to speak up - Have to be very intentional when looking for diversity and opportunities to counter implicit/explicit biases, stereotypes, stereotypes threats Issues with information exchange 1. **Common knowledge effect** - Groups spend the majority of time discussing information they all have in common; unique info is rarely shared and if shared, it is not widely discussed - Main causes: unshared info is judge as less compelling, conformity pressures and fear of social exclusion, group members are "anchored by" initial preferences, group members seek confirmatory evidence 2. **Group polarization** - Tendency to make more extreme decisions when in a group than when alone - Main causes: confirmation bias, common knowledge effect, dependence on one expert, desire to fit in 3. **Strategies to mitigate these issues** - Leaders must set up the right process, structure, norms and goals: - Determine the team members' knowledge and expertise - Suspend initial judgement; wait for evidence - Don't rely solely on the majority rule principle - Include someone who explicitly signals differences - Create psychological safety (eg. familiarity) and norms for disagreement (eg. devil's advocate) Interventions to be considered at both individual and organisational level: - Take the perspective of diverse others to decrease stereotyping and prejudice - Realise that contexts may be creating stereotypes threat (eg. asking someone to fill in their race or gender can create stereotype threat) - Encourage openness, personal development, and high expectations - Ensure that processes, structures, training and groups are available to mentor minority members - Create a culture and incentive system that values diversity Ethical dimensions of AI decision making: - Foundation issues - Bias -- bias of people who are giving the data to AI - Privacy - Transparency and explainability -- can we clearly state how a decision was made? - Safety - Risk of harm -- can AI cause physical or emotional harm - Data protection - Cybersecurity - Environmenal and social impacts - Carbon emissions - Job displacement - Social manipulation **[Chapter 6: can you speak up? ]** - The repercussions of speaking up (or not) can be extreme, both professionally and personally Why do employees choose to not speak up?: 1. **"Psychological safety" for employees** - Lack of confidence/skills to speak up - Think they will be retaliated against - Confidentiality/legal restrictions - Don't think organisation or leaders will want their feedback or ideas - No one asks - Employees think nothing will happen 2. **Personality perspective** - Employees inherently lack the disposition to stand up and speak out about critical issues, they might be too introverted or shy to effectively articulate their views to the team - Company can "bias" to hiring employees who have proactive dispositions or can speak truth to power 3. **Situational perspective** - Employees fail to speak up because they feel their work environment is not conducive for it - Managers can create the right social norms that encourage employees to voice concerns without fear of sanctions How does company culture support speaking up? - Explicit polices - By encouraging and incenting speaking up - By providing multiple avenues to speak up - By making speaking up come alive on a daily basis - Consistent and visibly track record - Norms could indirectly shape what employees speak out about How to develop courage and a gameplan to speak up if you do decide to do it? 1. **Be a credible voice (might depend how long you have been with the company)** - Distinguish between - Complaining/troublemaker vs conviction/principles - Hearsay vs knowledge - Activist vs change agent - Organization newbie vs experienced hand - Dodgy performer vs good/high performer - Lack of or stock of goodwill - Lone ranger vs network of carefully cultivated colleagues - Challenging norms or those in power requires "idiosyncrasy credits" -- a stock of goodwill derived from history of competence and conformity 2. **Choose battles to fight to win the war (be smart)** - Not every opportunity is worth advocating - Is this really impt? - Is this the right time? 3. **Have a strategy to persuade and communicate** - Framing how you communicate the issue - Connecting why resolving this particular issue is impt from the lens of organisational/leaders priorities, values, interests or concerns - Effectively communicating data supporting the need for action - Managing emotions: art of including decision makers vs attacking them - Unless you have concluded that acting right away is impt for your sense of integrity, worthwhile to consider support from those around you - Prepare well -- role play with family, friends, and supportive colleagues (most impt) - Critical to decide who you speak to first - Boss vs persons who have the boss's confidence (might be more effective than asking the boss directly sometimes) - May be a series of conversations to build support and buy-in - Offline, one-on-one (vs group) conversations (less embarrassing for individuals to change their minds in private, adjust script and style based on the audience, group is best when you believe it will be easy to garner support) - Coming across as open, change oriented, rather than a "know it all" - Open discussion with questions rather than answers - At best, other person reconsiders some viewpoints. At worst, uncover