Dealing With Ethical Blind Spots and Bounded Awareness Key to Corporate Social Responsibility

I’ve come to the conclusion that relying solely on teaching students’ ethical principles using philosophical reasoning methods won’t cut it with respect to enhancing ethical decision-making. We need to go beyond that and recognize there are other factors that determine whether ethical decision-making will occur. These include behavioral ethics concepts such as bounded ethicality, bounded awareness, ethical blind spots, ethical fading, and organizational systems that inhibit ethical decision making.

The concept of “bounded ethicality” has been discussed in the literature as psychological processes that lead people to engage in ethically questionable behaviors that are inconsistent with their own preferred ethics. Even well-intentioned people may engage in a variety of unethical actions without recognizing that they act unethically. Why might this occur? The reason is bounded awareness. Specifically, individuals do not always recognize the ethical dimension of their decisions because they are subject to systematic and predictable” ethical blind spots.”

"Bounded awareness" has been argued as a limitation on the ability of decision-makers to focus on easily observable and relevant data. It’s the idea that people do not see important, accessible, and perceivable information during the decision-making process. It has been characterized as a “focusing failure” that occurs when the information needed and available to make a good decision does not align with the information a decision maker considers.

"Ethical blind spots" are those factors the decision-maker fails to see because of certain biases in the decision-making process. It may be due to a self-serving bias. In other words, many people have a tendency to not notice the unethical actions of others when it is against our best interests to do so. We may want to make the ethical choice but it may be against our own self-interest to do so. Moreover, an “ethical fading” may be in play where the moral dimension of a decision is cloudy perhaps because of self-deception. We convince ourselves the decision we are about to make is ethically acceptable because the consequences of that decision may bring real harm to ourselves and others.

Now that I have finished the psychological and behavioral aspects of ethical decision-making, it’s time to discuss why these problems occur and what can be done about it. There are two causes: our personal ethics may skew the ethical path. We might value being a team player over making the right choice. After all, most people don’t want to be demoted or worse for telling the truth so they mask the ethical issues and rationalize unethical behavior.

Organizational systems also can inhibit ethical behavior depending on the culture. An ethical culture enforces ethics policies and the provisions of the code of ethics. Beyond that, organizations should promote whistleblowing because letting things fester only make the consequences worse later on.

The ethical decision-making process can be strengthened by following three basic rules:

1. Develop a process to support ethical decision-making through ethical awareness. The first step in making an ethical decision is to be aware that one’s actions and decisions affect others. The way this occurs in an organization speaks volumes about whether top management sets an ethical tone at the top.
2. Establish the systems to support ethical decision making. The control environment of the organization should ensure that procedures are in place (i.e., ethics hot line) to support individuals who bring ethical matters of concern to top management.
3. Reward ethical behavior. Employees who have stepped forward to do something about questionable/improper behavior should be rewarded. It should be part of the annual performance review. On the other hand, those who have inhibited ethical behavior should suffer the consequences.

Ethical decision-making in organizations is easier said than done because of the pressures that typically exist to maximize performance (i.e., profits and market share). Decision-makers tend to take a short term view of decision-making and become blinded to the ethical dimension.

For ethical behavior to occur, a long-term view must be taken. In the long run, unethical decisions and actions may very well come back and bite the organization as we have recently seen in the cases of Wells Fargo (unauthorized customer accounts), Volkswagen (emissions defeat device), and the makers of oxycontin and other opioids.

Being good by doing good is not only a personal mantra to live by but and organizational one as well. Employees should dedicate themselves to ethical behavior and build responsible organizations that put the public interest right up there with self-interest. Anything less is would be a failure in corporate social responsibility.

Posted by Steven Mintz, aka Ethics Sage, on October 3, 2019. Dr. Mintz recently published a book titled Beyond Happiness and Meaning that explains the ethics of personal relationships,  workplace interactions and on social media activities. His book is available on Amazon. Visit his website, sign up for his newsletter, and follow him on Facebook.