I’ve added a blog post I drafted for a work audience below on the psychology of ethical decision making. I wanted to post it here because it covers lots of things I’ve been thinking and hearing about recently. In posting it on my personal blog I’d add 3 things:
- Like many people, I don’t think that you can or it is helpful to test for ethics or integrity but do think that we learn how to make ethical decisions based on our environment and the consequences of our previous decisions
- Shame does the opposite of what is intended. If you have read any of my blogs about Jon Ronson you know he is bringing out a book about humiliation and you’ll also know that shaming people into ‘doing the right thing’ does the exact opposite of what you intend. it stops people working through why they did the wrong thing in the first place and erodes their self esteem to a point where they give up hope and start behaving in an even worse way
- Not trusting people costs organisations money. Low-trust environments are riddled with hidden agendas, political games, team rivalries and people bad-mouthing each other in private. With low trust, you also get a lot of rules and regulations that take the place of human judgment and creativity resulting in profound disempowerment.
The psychology of ethical decision making
Recent research by the London School of Economics (LSE 2014) suggests that between them, 10 of the world’s largest banks, including Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland, have paid out about £157bn in “conduct costs” since 2009, equivalent to five years of dividend payments to share-holders.
The industries response to these sanctions has been to implement controls and manage each specific conduct issue, but what about the people who made the decisions? Would more controls have prevented them from making what were ultimately deemed to be bad decisions? And do we know what they personally considered before making their ill-fated decisions?
Likewise, would having a control that specified that lying on a CV was the wrong thing to do have stopped ex Yahoo CEO Scott Anderson from padding his own and subsequently losing his job as a result? Surely there just some things that we don’t need a control to tell us are the wrong thing to do?
So, the question is does having more regulation, policies, processes and controls, mean that we will make more ethical decisions? Or do more controls actually reduce our ability and motivation to work out what is and isn’t ethical for ourselves? And what does it even mean to act ethically? Surely it is a relative concept, one that can’t be taught?
Psychological theory gives a number of different perspectives to understand ethical behaviour. If we take a personality approach we could identify those people who were ‘less ethical’ relative to what we have deemed to be ‘ethical’ and select them out in the recruitment process. If we take a social psychological approach we could identify the everyday norms that create ‘ethical’ behaviour for individuals to replicate and if we take a behaviourist approach we would put in place regulation, process and controls to reinforce the right ‘ethical’ behaviour, again in comparison to what the processes, regulation and controls has set as ‘ethical’. All of these approaches have strengths but they are also limited in the sense that they are relative and subjective.
In this paper we look at some classic thinking from developmental psychology and some more recent theory on the psychology of ethical decision making. Together they provide a lens to understand and build ethical behaviour in the workplace.
Starting with a definition, ethics are ‘universal’ principles of right or wrong that guide how people make decisions and live their lives. A term derived from the Greek word ethos which can mean, custom, habit, character or disposition Ethics are concerned with not just what is good for the individual, but also what is good for society. Ethics tend to cover the following dilemmas:
- How to live a good life
- Our rights and responsibilities
- The language of right and wrong
- Moral decisions – what is right and wrong or good and bad
None of the dilemmas are clear cut - otherwise they wouldn’t be dilemmas – and these universal principles that determine what we as a society consider to be ‘ethical’ have also change over time.
Lawrence Kholberg, an American Psychologist and Professor at Harvard building on the work of Piaget, Mead and Baldwin is widely held as responsible for the creation of a field of psychology called Moral Development. Kholberg (1984) suggests that what he terms moral reasoning, provides the basis for ethical behaviour divided into six identifiable developmental steps. The stages are cumulative and cannot be skipped, the result being, as we progress through, we become more equipped to respond to moral dilemmas.
- Obedience and punishment orientation (How can I avoid punishment?)
- Self-interest orientation (What’s in it for me?)
- Interpersonal accord and conformity (Acceptance that our actions have an impact on others that drives adherence with accepted social norms)
- Authority and social-order maintaining orientation (Respect for authority and the established social order)
- Social contract orientation (Laws are regarded as two way social contracts rather than rigid edicts)
- Universal ethical principles (Laws are valid only insofar as they are grounded in justice, and a commitment to justice carries with it an obligation to disobey unjust laws)
Kholberg suggested that not everyone, or every situation would require level 3 reasoning, but it is interesting to consider, given the work each of us does, how far through the stages we journey in our work and everyday lives.
The funny thing is though, when it comes to the topic of ethics and our own personal integrity, we don’t actually much like being told by others what is ‘right’ and there is evidence to suggest that the more ‘things’ that tell us what we should do to be right the less personal responsibility we take for determining for ourselves and acting upon what we personally consider to be right.
To this point, in his research on ethics in business, Roger Steare (2013) suggests that at this time there are three dominant manifestations of ethics within modern organisations:
- Ethic of Obedience: our legal rights and duties. Obedience doesn’t invite us to think about what is right or wrong, it simply tells us. For example it is wrong to steal someone else’s property because there are clear laws against it.
- Ethic of Care: what is considered to be right and acceptable in a society based on empathetic moral principles such as love and humility. The ethic of care helps us decide what is right by considering the consequences of our actions, good and bad, on others.
- Ethic of Reason: the rational principles that come from our experience that help us to make a thoughtful decision about what is right. This ethic is based on our own perception of what makes ‘a good life’ influenced heavily by our own values and personal integrity. It grows as we get more experience in making good (and bad) decisions.
The rise in reliance on the ethic of obedience that we have seen in the wake of the variety of ethical scandals has its downside. In his research Steare found that as society leans more heavily on obedience, we rely less on our care and reason. Meaning that, over time, we become so used to referring to the rules, we forget to use our experience and empathy to guide us in making an ethical decision when the rules don’t exactly cover the situation we are facing.
This creates a practical problem in that there will never be rules, controls or regulations that will cover every situation where we need to rely on our ethics, but in seeking to deal with the current ethical issues within our organisations, we often rely very heavily on implementing more rules, while forgetting about care and reason. Relying on obedience alone also doesn’t work for leaders, who tend to not to be that obedient of rules to start with.
So how do you balance the three? Steare suggests that whilst the rules are a good starting point they should never be the only factor we consider in making an ethical decision.
His RIGHT ethical decision making framework has 5 key questions: What are the rules? Are we acting with integrity? Who is this good for? Who could we harm? What is the truth?
So it appears that if ethics are based on principles we set as a society or an organisation then they are a relative concept that can’t be taught in a classroom, rather, as Kholberg suggests, they are learnt over a lifetime of making good and bad decisions.
Within the firm we have an ethical decision making framework and a set of ethical questions for us to consider as we practice making good decisions:
- Is it against the firms standards or professional standards?
- Does it feel right?
- Is it legal?
- Will it reflect negatively on you or the Firm?
- Who else could be affected by this (others in the Firm, clients, you, etc.)?
- Would you be embarrassed if others knew you took this course of action?
- Is there an alternative action that does not pose an ethical conflict?
- How would it look in the newspapers?
- What would a reasonable person think?
- Can you sleep at night?
When it comes down to it ethics is not just what I think is ethical, it’s what you think is ethical and what we think is ethical. Context is key and there is simply no clear right or wrong answer. But what is clear is that the more people you consult with, the more likely you can get closer to a ‘righter’ answer.
Kholberg, L.(1984). Psychology of Moral Development: 2 Essays on Moral Development. New York, Joanna Cotter Books.
McCormick, R (2014) Conduct Costs Project LSE
Steare, R. (2013) Ethicability; how to decide what’s right and find the courage to do it. UK; Roger Steare Consulting Limited.