FromYaletojail.Whygoodmanagersmakeunethicaldecisions

GuidoPalazzo

Docorporatecriminalslooklikethisguy?

MartinShkreli,hedgefundmanagerandpharma CEO

«Idon’t mean tobe presumptuous,butIlikenmyself totherobber barons«

Kweku Adoboli,former trader at the UBSbank

Ormorelike this guy?

Thebanalityofevil

AdolfEichmann

Doesyourt-shirtinfluenceyourcolleagues’morality?

Gino, F., Ayal, S. & Ariely, D. 2009. Contagion and Differentiation in Unethical Behavior. The Effect of One Bad Apple on the Barrel. Psychological Science, 20 (3): 393-398

Doyou remember your visit inDisneyland?

Loftus, E. (2003) Our changeable memories: Legal and practical implications. Nature Review Neuroscience 4(3): 231–234.

Understandingthepowerofthedarkside

Notseeingthedilemma–becomingethicallyblind

Weperceivetheworldthroughafilter

slipperyslopeofincrementalchangetime

Proximalcontext:Organizationalpressure

Proximalcontext:Situationalpressure

EthicalBlindness

Becomingethicallyblind– step1

1.Weperceivetheworldthroughafilter

slippery slope of incremental changetime

Proximal context: Organizational pressure

Proximal context: Situational pressure

EthicalBlindness

Howoftendotheplayerspasstheballtoeachother?

Tunnelvisionandunintentionalblindness

50%ofparticipantsintheexperimentdidNOTseetheGorilla

Becomingethicallyblind– step2

1. We perceive the world through a filter

slippery slope of incremental changetime

2.Proximalcontext:Organizationalpressure

Proximal context: Situational pressure

EthicalBlindness

WellsFargo:Thecorporateculturenightmare

SometestimonialsofWellsFargoemployees

“Everyhourwewerethere,itwas:Howareyournumbers?Howareyournumbers?Whereareyouat?”RuthLandaverde

“Ihadmanagersyellingatme,thesalespressurewasunbearable.”SabrinaBertrand

“Managersdiscusseddailysalestargetsfourtimesaday,at11am,1pm,3pmand5pm."anonymousemployee

"Theyruinedmylife"BillBado

“Istartedtohaveextremephysicalstress-relatedsymptomsaswellasrandompanicattacks.”AngiePayden

“TherewerenumerousdayswhereIwouldhideinthemen’sbathroomcrying.”ScottT.

“Thelastthreemonthswerehell.EventhoughIwasreachingmysalesgoals,itwasnotenoughforthem.”Dennise C.

“IstartedlosingsleepandgotnauseouseverySundaynightoverthestartofthenextworkweek.”Ashlie Storms

Creating thecorporate tunnelvision– some ingredients

unrealistictargets

+

one-dimensionalhighlyindividualizedincentives

+

aggressivelanguageandcompetition

+

ambivalentmessages

+

humiliatingperformanceevaluation

FEAR

AlectureofFrancescoStarace,CEOofENELtostudentsofLUISSBusinessSchool

Forasuccessfulchangeprocess,youhaveto...

• ...“physicallydestroythepowercenterswhichyouwanttochange.”

• ...“creatediscomfortinsidethosecenters.”

• ...“hitthosepeoplewhoopposethechangeinthemostvulgarwaysothatyoupromotefear.”

InthecourtroominJerusalem,AdolfEichmannwasasked:

"Wasithardforyoutosendthesetensofthousandsofpeopletotheirdeath?"Eichmann'sanswer:

"Totellyouthetruth,itwaseasy.Ourlanguagemadeiteasy."

Becomingethicallyblind– step3

1. We perceive the world through a filter

slippery slope of incremental changetime

2. Proximal context: Organizational pressure

3.Proximalcontext:Situationalpressure

EthicalBlindness

Some experiments onthepowerofsituations

Milgram’s experiment onauthority pressure

Asch’s experiment ongrouppressure

Darley &Batson’s experimentontimepressure

Zimbardo’s experimentonrole pressure

Becoming ethically blind – step 4

1. We perceive the world through a filter

4.slippery slope ofincremental changetime

2. Proximal context: Organizational pressure

3. Proximal context: Situational pressure

EthicalBlindness

BrokenWindowTheory:Theimportanceofzerotolerancepolicy

Volkswagenreloaded

guido.palazzo@unil.ch