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A New Model for Ethical Leadership

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Business ethics

A New Model for Ethical Leadership

Create more value for society.

Max H. Bazerman

From the Magazine (September–October 2020)

· Long read

Ted + Chelsea Cavanaugh

Summary.

Rather than try to follow a set of simple rules (“Don’t lie.” “Don’t cheat.”), leaders and managers seeking to be more ethical should focus on creating the most value for society. This utilitarian view, Bazerman argues, blends philosophical thought with business school pragmatism and can inform a wide variety of managerial decisions in areas including hiring, negotiations, and even time management. Creating value requires that managers confront and overcome the cognitive barriers that prevent them from being as ethical as they would like to be. Just as we rely on System 1 (intuitive) and System 2 (deliberative) thinking, he says, we have parallel systems for ethical decision-making. He proposes strategies for engaging the deliberative one in order to make more-ethical choices. Managers who care about the value they create can influence others throughout the organization by means of the norms and decision-making environment they create.

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Idea in Brief

The Challenge

Systematic cognitive barriers can blind us to our own unethical behaviors and decisions, hampering our ability to maximize the value we create in the world.

The Solution

We have both an intuitive system for ethical decision-making and a more deliberative one; relying on the former leads to less-ethical choices. We need to consciously engage the latter.

In Practice

To make more-ethical decisions, compare options rather than evaluate them singly; disregard how decisions would affect you personally; make trade-offs that create more value for all parties in negotiations; and allocate time wisely.

Autonomous vehicles will soon take over the road. This new technology will save lives by reducing driver error, yet accidents will still happen. The cars’ computers will have to make difficult decisions: When a crash is unavoidable, should the car save its single occupant or five pedestrians? Should the car prioritize saving older people or younger people? What about a pregnant woman—should she count as two people? Automobile manufacturers need to reckon with such difficult questions in advance and program their cars to respond accordingly.

A version of this article appeared in the September–October 2020 issue of Harvard Business Review.

7 Ways to Improve Your Ethical Decision-Making | HBS Online

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7 Ways to Improve Your Ethical Decision-Making

03 Aug 2023

Esther Han

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Business in Society

Leadership

Leadership, Ethics, and Corporate Accountability

Management

Effective decision-making is the cornerstone of any thriving business. According to a survey of 760 companies cited in the Harvard Business Review, decision effectiveness and financial results correlated at a 95 percent confidence level across countries, industries, and organization sizes.

Yet, making ethical decisions can be difficult in the workplace and often requires dealing with ambiguous situations.

If you want to become a more effective leader, here’s an overview of why ethical decision-making is important in business and how to be better at it.

Free E-Book: How to Become a More Effective Leader

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The Importance of Ethical Decision-Making

Any management position involves decision-making.

“Even with formal systems in place, managers have a great deal of discretion in making decisions that affect employees,” says Harvard Business School Professor Nien-hê Hsieh in the online course Leadership, Ethics, and Corporate Accountability. “This is because many of the activities companies need to carry out are too complex to specify in advance.”

This is where ethical decision-making comes in. As a leader, your decisions influence your company’s culture, employees’ motivation and productivity, and business processes’ effectiveness.

It also impacts your organization’s reputation—in terms of how customers, partners, investors, and prospective employees perceive it—and long-term success.

With such a large portion of your company’s performance relying on your guidance, here are seven ways to improve your ethical decision-making.

7 Ways to Improve Your Ethical Decision-Making

1. Gain Clarity Around Personal Commitments

You may be familiar with the saying, “Know thyself.” The first step to including ethics in your decision-making process is defining your personal commitments.

To gain clarity around those, Hsieh recommends asking:

What’s core to my identity? How do I perceive myself?

What lines or boundaries will I not cross?

What kind of life do I want to live?

What type of leader do I want to be?

Once you better understand your core beliefs, values, and ideals, it’s easier to commit to ethical guidelines in the workplace. If you get stuck when making challenging decisions, revisit those questions for guidance.

2. Overcome Biases

A bias is a systematic, often unconscious inclination toward a belief, opinion, perspective, or decision. It influences how you perceive and interpret information, make judgments, and behave.

Bias is often based on:

Personal experience

Cultural background

Social conditioning

Individual preference

It exists in the workplace as well.

“Most of the time, people try to act fairly, but personal beliefs or attitudes—both conscious and subconscious—affect our ability to do so,” Hsieh says in Leadership, Ethics, and Corporate Accountability.

There are two types of bias:

Explicit: A bias you’re aware of, such as ageism.

Implicit: A bias that operates outside your awareness, such as cultural conditioning.

Whether explicit or implicit, you must overcome bias to make ethical, fair decisions.

Related: How to Overcome Stereotypes in Your Organization

3. Reflect on Past Decisions

The next step is reflecting on previous decisions.

“By understanding different kinds of bias and how they can show themselves in the workplace, we can reflect on past decisions, experiences, and emotions to help identify problem areas,” Hsieh says in the course.

Reflect on your decisions’ processes and the outcomes. Were they favorable? What would you do differently? Did bias affect them?

Through analyzing prior experiences, you can learn lessons that help guide your ethical decision-making.

4. Be Compassionate

Decisions requiring an ethical lens are often difficult, such as terminating an employee.

“Termination decisions are some of the hardest that managers will ever have to make,” Hsieh says in Leadership, Ethics, and Corporate Accountability. “These decisions affect real people with whom we often work every day and who are likely to depend on their job for their livelihood.”

Such decisions require a compassionate approach. Try imagining yourself in the other person’s shoes, and think about what you would want to hear. Doing so allows you to approach decision-making with more empathy.

5. Focus on Fairness

Being “fair” in the workplace is often ambiguous, but it’s vital to ethical decision-making.

“Fairness is not only an ethical response to power asymmetries in the work environment,” Hsieh says in Leadership, Ethics, and Corporate Accountability. “Fairness–and having a successful organizational culture–can benefit the organization economically and legally as well.”

It’s particularly important to consider fairness in the context of your employees. According to Leadership, Ethics, and Corporate Accountability, operationalizing fairness in employment relationships requires:

Legitimate expectations: Expectations stemming from a promise or regular practice that employees can anticipate and rely on.

Procedural fairness: Concern with whether decisions are made and carried out impartially, consistently, and transparently.

Distributive fairness: The fair allocation of opportunities, benefits, and burdens based on employees’ efforts or contributions.

Keeping these aspects of fairness in mind can be the difference between a harmonious team and an employment lawsuit. When in doubt, ask yourself: “If I or someone I loved was at the receiving end of this decision, what would I consider ‘fair’?”

6. Take an Individualized Approach

Not every employee is the same. Your relationships with team members, managers, and organizational leaders differ based on factors like context and personality types.

“Given the personal nature of employment relationships, your judgment and actions in these areas will often require adjustment according to each specific situation,” Hsieh explains in Leadership, Ethics, and Corporate Accountability.

One way to achieve this is by tailoring your decision-making based on employees’ values and beliefs. For example, if a colleague expresses concerns about a project’s environmental impact, explore eco-friendly approaches that align with their values.

Another way you can customize your ethical decision-making is by accommodating employees’ cultural differences. Doing so can foster a more inclusive work environment and boost your team’s performance.

7. Accept Feedback

Ethical decision-making is susceptible to gray areas and often met with dissent, so it’s critical to be approachable and open to feedback.

The benefits of receiving feedback include:

Learning from mistakes.

Having more opportunities to exhibit compassion, fairness, and transparency.

Identifying blind spots you weren’t aware of.

Bringing your team into the decision-making process.

While such conversations can be uncomfortable, don’t avoid them. Accepting feedback will not only make you a more effective leader but also help your employees gain a voice in the workplace.

Ethical Decision-Making Is a Continuous Learning Process

Ethical decision-making doesn’t come with right or wrong answers—it’s a continuous learning process.

“There often is no right answer, only imperfect solutions to difficult problems,” Hsieh says. “But even without a single ‘right’ answer, making thoughtful, ethical decisions can make a major difference in the lives of your employees and colleagues.”

By taking an online course, such as Leadership, Ethics, and Corporate Accountability, you can develop the frameworks and tools to make effective decisions that benefit all aspects of your business.

Ready to improve your ethical decision-making? Enroll in Leadership, Ethics, and Corporate Accountability—one of our online leadership and management courses—and download our free e-book on how to become a more effective leader.

About the AuthorEsther Han is a marketing professional and contributing writer for Harvard Business School Online. She has a passion for design, photography, and the written word. One of her bucket list items is to travel to every country in the world; she's been to 40 so far.

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Personal ethics

Building an Ethical Company

Create an organization that helps employees behave more honorably.

Isaac H. Smith

and

Maryam Kouchaki

Isaac H. Smith

and

Maryam Kouchaki

From the Magazine (November–December 2021)

· Long read

Jon Cowan/Courtesy Naked Good Galley

Summary.

Just as people can develop skills and abilities over time, they can learn to be more or less ethical. Yet many organizations limit ethics training to the onboarding process. If they do address it thereafter, it may be only by establishing codes of conduct or whistleblower hotlines. Such steps may curb specific infractions, but they don’t necessarily help employees develop as ethical people.

Drawing on evidence from hundreds of research studies, the authors offer a framework for helping workers build moral character. Managers can provide experiential training in ethical dilemmas. They can foster psychological safety when minor lapses occur, conduct pre- and postmortems for initiatives with ethical components, and create a culture of service by encouraging volunteer work and mentoring in ethics.

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Idea in Brief

The Opportunity

Just as people entering the workforce can develop job-related skills and abilities over time, they can learn to be more ethical as well.

Why It’s Often Missed

Many organizations relegate ethics training to the onboarding process, perhaps also issuing codes of conduct and establishing whistleblower hotlines. Such steps may curb specific unethical acts but don’t necessarily help workers grow as moral people.

How to Capitalize on It

Managers can provide experiential training in ethical dilemmas, foster psychological safety when (minor) lapses occur, conduct pre- and postmortems for initiatives with ethical components, and create a culture of service by encouraging volunteer work and mentoring in ethics.

People don’t enter the workforce with a fixed moral character. Just as employees can nurture (or neglect) their skills and abilities over time, they can learn to be more or less ethical. Yet rather than take a long-term view of employees’ moral development, many organizations treat ethics training as a onetime event, often limiting it to the onboarding process. If they do address ethics thereafter, it may be only by espousing codes of conduct or establishing whistleblower hotlines. Such steps may curb specific unethical actions, but they don’t necessarily help employees develop as moral people.

A version of this article appeared in the November–December 2021 issue of Harvard Business Review.

Read more on Personal ethics

or related topics

Business ethics,

Managing people,

Organizational culture

and Leadership

Isaac H. Smith is an associate professor of organizational behavior and human resources at BYU Marriott School of Business. His research explores the morality and ethics of organizations and the people in them.

Maryam Kouchaki is a professor of management and organizations at the Kellogg School of Management. Her research explores ethics, morality, and the complexity and challenges of managing ethnic and gender diversity for organizations.

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Behavioral science

How to Design an Ethical Organization

A behavioral approach

Nicholas Epley

and

Amit Kumar

Nicholas Epley

and

Amit Kumar

From the Magazine (May–June 2019)

· Long read

Steven Derks

Summary.

From Volkswagen’s emissions fiasco to Wells Fargo’s deceptive sales practices to Uber’s privacy intrusions, corporate scandals are a recurring reality in global business. Compliance programs increasingly take a legalistic approach to ethics that focuses on individual accountability. Yet behavioral science suggests that people are ethically malleable, so creating an ethical culture means thinking about ethics not simply as a belief problem but also as a design problem. The authors suggest four ways to make being good as easy as possible: Connect ethical principles to strategies and policies, keep ethics top of mind, reward ethical behavior through a variety of incentives, and encourage ethical norms in day-to-day practices.

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The Problem Unethical behavior ruins reputations,

The Problem

Unethical behavior ruins reputations, harms employee morale, and increases regulatory costs—not to mention damages society’s trust in business. Yet corporate scandals are a recurring reality.

What Doesn’t Work

Compliance programs take a legalistic approach to ethics that focuses on individual accountability—but a large body of behavioral science research suggests that even well-meaning and well-informed individuals are ethically malleable.

A Better Way

Leaders must design workplace contexts that encourage good behavior. Keeping prosocial values top of mind for employees as they make decisions will reduce the likelihood of transgressions while making workers happier and more productive.

From Volkswagen’s emissions fiasco to Wells Fargo’s deceptive sales practices to Uber’s privacy intrusions, corporate wrongdoing is a continuing reality in global business. Unethical behavior takes a significant toll on organizations by damaging reputations, harming employee morale, and increasing regulatory costs—not to mention the wider damage to society’s overall trust in business. Few executives set out to achieve advantage by breaking the rules, and most companies have programs in place to prevent malfeasance at all levels. Yet recurring scandals show that we could do better.

A version of this article appeared in the May–June 2019 issue (pp.144–150) of Harvard Business Review.

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7 Ways to Improve Your Ethical Decision-Making

03 Aug 2023

Esther Han

Author

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Business in Society

Leadership

Leadership, Ethics, and Corporate Accountability

Management

Yet, making ethical decisions can be difficult in the workplace and often requires dealing with ambiguous situations.

If you want to become a more effective leader, here’s an overview of why ethical decision-making is important in business and how to be better at it.

Free E-Book: How to Become a More Effective Leader

Access your free e-book today.

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The Importance of Ethical Decision-Making

Any management position involves decision-making.

This is where ethical decision-making comes in. As a leader, your decisions influence your company’s culture, employees’ motivation and productivity, and business processes’ effectiveness.

It also impacts your organization’s reputation—in terms of how customers, partners, investors, and prospective employees perceive it—and long-term success.

With such a large portion of your company’s performance relying on your guidance, here are seven ways to improve your ethical decision-making.

7 Ways to Improve Your Ethical Decision-Making

1. Gain Clarity Around Personal Commitments

You may be familiar with the saying, “Know thyself.” The first step to including ethics in your decision-making process is defining your personal commitments.

To gain clarity around those, Hsieh recommends asking:

What’s core to my identity? How do I perceive myself?

What lines or boundaries will I not cross?

What kind of life do I want to live?

What type of leader do I want to be?

2. Overcome Biases

A bias is a systematic, often unconscious inclination toward a belief, opinion, perspective, or decision. It influences how you perceive and interpret information, make judgments, and behave.

Bias is often based on:

Personal experience

Cultural background

Social conditioning

Individual preference

It exists in the workplace as well.

There are two types of bias:

Explicit: A bias you’re aware of, such as ageism.

Implicit: A bias that operates outside your awareness, such as cultural conditioning.

Whether explicit or implicit, you must overcome bias to make ethical, fair decisions.

Related: How to Overcome Stereotypes in Your Organization

3. Reflect on Past Decisions

The next step is reflecting on previous decisions.

Reflect on your decisions’ processes and the outcomes. Were they favorable? What would you do differently? Did bias affect them?

Through analyzing prior experiences, you can learn lessons that help guide your ethical decision-making.

4. Be Compassionate

Decisions requiring an ethical lens are often difficult, such as terminating an employee.

5. Focus on Fairness

Being “fair” in the workplace is often ambiguous, but it’s vital to ethical decision-making.

Legitimate expectations: Expectations stemming from a promise or regular practice that employees can anticipate and rely on.

Procedural fairness: Concern with whether decisions are made and carried out impartially, consistently, and transparently.

Distributive fairness: The fair allocation of opportunities, benefits, and burdens based on employees’ efforts or contributions.

6. Take an Individualized Approach

Not every employee is the same. Your relationships with team members, managers, and organizational leaders differ based on factors like context and personality types.

7. Accept Feedback

Ethical decision-making is susceptible to gray areas and often met with dissent, so it’s critical to be approachable and open to feedback.

The benefits of receiving feedback include:

Learning from mistakes.

Having more opportunities to exhibit compassion, fairness, and transparency.

Identifying blind spots you weren’t aware of.

Bringing your team into the decision-making process.

While such conversations can be uncomfortable, don’t avoid them. Accepting feedback will not only make you a more effective leader but also help your employees gain a voice in the workplace.

Ethical Decision-Making Is a Continuous Learning Process

Ethical decision-making doesn’t come with right or wrong answers—it’s a continuous learning process.

By taking an online course, such as Leadership, Ethics, and Corporate Accountability, you can develop the frameworks and tools to make effective decisions that benefit all aspects of your business.

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Coevolution of Strategy, Innovation and Ethics | Journal of Business Ethics

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Journal of Business Ethics

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Coevolution of Strategy, Innovation and Ethics

Original Paper

Published: 28 June 2023

Volume 186, pages 711–721, (2023)

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Liang Wang1 & Justin Tan2,3

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AbstractThe way in which business ethics change over time will remain theoretically unclear unless we empirically reveal the temporal coevolution and coalignment among a changing environment, transitional institutions, strategic adaptations, and performance implications. To revitalize this coevolutionary perspective in business ethics research, in this special issue, we ask the following question: how do business ethics practices coevolve with a changing society and technology advancement as a result of the strategic choices of organizations in adapting to and shaping the environment? This special issue includes a collection of seven empirical studies of business ethics in China that differ in methodology and empirical context but collectively showcase the change in business ethics practices in an emerging economy and the processes underlying this change. Based upon the findings, we propose a conceptual model of the coevolution among business ethics practices, technological innovation, institutional transition and disruptive events; then, we pose questions for future research.

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Download referencesAcknowledgementsWe would like to express our sincere gratitude to Mary Sully de Luque, the editor of the Journal of Business Ethics, for her guidance and support throughout the publication process. We also thank Dan Li and the anonymous reviewers for their valuable feedback. The project was supported in part by research grants from Social Sciences and Humanities Research Council of Canada, and National Natural Science Foundation of China (72072124, 72272106, 72272083), and by the Center for Business Studies and Innovation in Asia-Pacific at the University of San Francisco.Author informationAuthors and AffiliationsSchool of Management, University of San Francisco, 2130 Fulton Street, San Francisco, CA, 94117, USALiang WangSchulich School of Business, York University, Toronto, ON, M3J 1P3, CanadaJustin TanCollege of Economics and Management, Tianjin University, Tianjin, ChinaJustin TanAuthorsLiang WangView author publicationsYou can also search for this author in

PubMed Google ScholarJustin TanView author publicationsYou can also search for this author in

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Justin Tan.Ethics declarations

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We as the authors hereby declare that there is no potential competing interest involved in the publication of the paper.

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Additional informationPublisher's NoteSpringer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.Rights and permissionsSpringer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.Reprints and permissionsAbout this articleCite this articleWang, L., Tan, J. Coevolution of Strategy, Innovation and Ethics.

J Bus Ethics 186, 711–721 (2023). https://doi.org/10.1007/s10551-023-05439-4Download citationReceived: 07 December 2022Accepted: 08 April 2023Published: 28 June 2023Issue Date: September 2023DOI: https://doi.org/10.1007/s10551-023-05439-4Share this articleAnyone you share the following link with will be able to read this content:Get shareable linkSorry, a shareable link is not currently available for this article.Copy to clipboard

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Journal of Business Ethics

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Coevolution of Strategy, Innovation and Ethics

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Published: 28 June 2023

Volume 186, pages 711–721, (2023)

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Liang Wang1 & Justin Tan2,3

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Coevolution of Strategy, Innovation and Ethics

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Liang Wang1 & Justin Tan2,3

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A Framework for Ethical Research and Innovation

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AbstractIn this contribution, we set out a framework for ethical research and innovation. Our framework draws upon recent scholarly work recommending the introduction of new models at the intersection of ethics, strategy, and science and technology studies to inform and explicate how the decisions of researchers can be considered ethical. Ethical research and innovation is construed in our framework as a dynamic process emerging from decisions of multiple stakeholders in innovation ecosystems prior to, during and after the execution of a research and innovation project. The framework can be used by different types of research organizations to implement governance models of ethical research and innovation.

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Innovation Ethics

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Methods for Practising Ethics in Research and Innovation: A Literature Review, Critical Analysis and Recommendations

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12 September 2017

Wessel Reijers, David Wright, … Bert Gordijn

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NotesMoral overload results from the excessive overheads associated with rules and norms for the responsible conduct of research and innovation.The institutional void is defined as the lack of institutions guiding the governance of research and innovation.These are methods aiming to implement applied ethics prior to, during, and after the execution of a research and innovation project.Human and common goods are defined as knowledge and innovation spillovers introduced to society such as the generation of new knowledge that becomes publicly available and the generation of innovations that become part of the public domain. We also include under this term intellectual properties (IPs) that may not be in the public domain but can help introduce innovation spillovers that contribute to the economy, the social advancement of humanity and the preservation of the environment.The reader is referred to the essay of Isaiah Berlin on these two forms of freedom (Berlin 1969) and to https://plato.stanford.edu for further discussions on this subject.See https://www.eea.europa.eu/publications/late-lessons-2.Which corresponds to the overheads associated with reflecting upon and anticipating the impact of research and innovation and responding to any of their potential threats.These are projects that pose serious ethical issues in terms of the ANERIA they entail.Though in some cases they may engage political communication for corporate reputational effects above and beyond what is required by existing regulatory frameworks.Such as ethical review boards and codes of responsible conduct of research.This is reflected in the reduced number of stakeholders shown in Fig. 2.Dating back to Polanyi’s Republic of Science (Polanyi 1962), this assumption is often at odds with the mission of universities as institutions that should produce knowledge, foster social inclusiveness, and have broader impacts on society (Crow and Dabars 2015).Such as the project mentioned in “Appendix A”.In “Appendix A”, we show how these weights can be generated.This scale of relative importance is defined as follows: 1 (equal), 2 (moderately equal), 3 (weakly stronger), 4 (moderately stronger), 5 (stronger), 6 (stronger to much stronger), 7 (much stronger), 8 (much stronger to extremely stronger), 9 (extremely stronger). The reciprocal values correspond to the multiplicative inverse of these values.The consistency ratios of the judgments expressed in Tables 5, 6and 7 are 0.026, 0.048 and 0.012, respectively. As these ratios are below the threshold of 0.1, the judgments of strategists are found to be consistent (Saaty 1980).The values in the evaluation matrix of alternatives corresponded to the value delivered by each alternative for each criterion using the following Likert scale: very unsatisfactory (1), unsatisfactory (2), neutral (3), satisfactory (4), and very satisfactory (5).According to the plurality rule, the alternative most often ranked in the first place is the chosen alternative for the group of strategists.ReferencesAdam, B., & Groves, G. (2011). Futures tended: Care and future-oriented responsibility. Bulletin of Science, Technology and Society, 31, 17–27.Article

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Download referencesAcknowledgementsThe work reported in this article was partially conducted during the participation of the first and third author in the GREAT project. Funded by the Seventh Framework Programme of the European Commission, the GREAT project aimed at developing new governance frameworks for responsible research and innovation in the European Union. The first and third author thank fellow researchers in the GREAT consortium who contributed with valuable discussions regarding responsible research and innovation. The first and second author also thank the School of Economics and Business at Diego Portales University for funding the international seminar on business ethics in 2017. Many of the ideas that led to the integrative framework of ethical research and innovation reported in this article originated during conversations and discussions conducted during this seminar. We would also like to thank all the anonymous reviewers who participated in the review process. Their comments and suggestions greatly contributed to improving our article.FundingThe work reported in this article was partly funded by the European Union's Seventh Framework Programme for research, technological development and demonstration under grant agreement N° 321480.Author informationAuthors and AffiliationsFaculty of Economics and Business, Diego Portales University, Avenida Santa Clara 797, 8580000, Huechuraba, Santiago, ChileHarold Paredes-FrigolettWalker College of Business, Appalachian State University, 416 Howard Street, Boone, NC, 28608-2037, USAAlan E. SingerEconomics Institute, University of Hohenheim, Wollgrasweg 23, 70593, Stuttgart, GermanyAndreas PykaAuthorsHarold Paredes-FrigolettView author publicationsYou can also search for this author in

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Harold Paredes-Frigolett.Additional informationPublisher's NoteSpringer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.Appendix A: An IllustrationAppendix A: An IllustrationThe illustration presented in this appendix is modeled on the SPICE project, a project aimed at informing decisions for the development of climate geoengineering technologies (Stilgoe et al. 2013).First PhaseIn the first phase of inclusion, the strategists need to be defined. To this end, the delineation of the ecosystem of the project is assumed to consist of two research organizations and a research-funding agency as strategists.Second PhaseDuring the second phase, the alternatives need to be elicited. We assume that the project is currently transitioning from “lab tests to a field trial,” as was the case with the SPICE project (Stilgoe et al. 2013, p. 1575). As their legitimacy, urgency and power have increased, the strategists now face not only the fierce opposition from nongovernmental organizations but also the need to respond to them (Mitchell et al. 1997). The alternatives are: (1) to continue with the field trial ($a_1$), (2) to go back to previous phases to conduct additional broader impact assessments and reengage with external stakeholders ($a_2$), (3) to put the project on hold until conditions for the field trial are propitious ($a_3$), or (4) to abort the project ($a_4$).Once the alternatives have been elicited, the next step in this second phase is to define the criteria to be used to analyze the alternatives. The reflexivity criteria to be used are compliance ($c_1$), internal communications ($c_2$), external communications ($c_3$) and reviews ($c_4$). The anticipation criteria are environmental risks ($c_5$), social risks ($c_6$), economical impact ($c_7$), and political impact ($c_8$). It should be noted that the list of potential risks listed above as criteria under the dimension of anticipation is included here for illustration purposes and is not meant to be comprehensive. In general, this list will depend on the project at hand. In the case of the SPICE project, political, social and environmental risks were very salient, though technological risks in the area of geoengineering were also present. This is to be compared with other project types, such as those in the emerging Industry 4.0, where technological risks (e.g. in the area of cybersecurity) take center stage and would probably be included in the list of relevant criteria by stakeholders (Radanliev et al. 2020).With the set of strategists, alternatives and criteria in place, the next step in this second phase is to elicit the weights of criteria for each strategist. To this end, we follow the procedure proposed by Thomas Saaty as part of the analytical hierarchy process (AHP), a widely used multicriteria decision analysis method (Saaty 1980). This method deploys the Saaty scale in order to measure the relative importance of one criterion over another.Footnote 15 To elicit the weights of criteria, we first multiply every value in each row and then raise the result to the power of 1/m, where m is the number of criteria. The resulting value for each row is then divided by sum of the values of all rows and gives the normalized weight for each criterion.Applying this method, the profile of strategist $s_1$ gives higher importance to compliance with existing norms, internal communications and the economic impact of the project, as shown in Table 5.Table 5 The weights of criteria for the first strategistFull size tableThe profile of strategist $s_2$ is shown in Table 6. As we can see, complying with existing norms, communicating with internal stakeholders more than with external stakeholders, and assessing the project economic impact are more important to the second strategist than anticipating environmental and social risks.Table 6 The weights of criteria for the second strategistFull size tableThe profile of strategist $s_3$ is shown in Table 7. Strategist $s_3$ corresponds to a research-funding agency from the public sector. The third strategist is more concerned with the incorporation of external stakeholders and with the political risks of the project.Footnote 16Table 7 The weights of criteria for the third strategistFull size tableOnce the set of alternatives, the set of criteria, and the m-dimensional vectors of weights (one per strategist) have been elicited, the evaluation matrix of alternatives containing the values $v_{ji}$ that each alternative $a_j$ delivers under each criterion $c_i$ is generated. This matrix $E_{mn} = v_{ji}$ is shown in Table 8.Footnote 17Table 8 The evaluation matrix of alternativesFull size tableThird PhaseThe third phase is implemented using a multicriteria decision analysis method. We illustrate this process using the TODIM method proposed by Gomes and Lima (1991).Using the evaluation matrix of alternatives $E_{nm} = [v_{ji}]$, which is one of the outputs of the second phase of our methodology, the value function $\phi ^{k.i}$ of TODIM computes a pairwise comparison of the values $v_{hi}$ and $v_{ji}$ that the pair of alternatives $(a_h, a_j)$ deliver under criterion $c_i$ in the evaluation matrix of alternatives $E_{nm} = [v_{ji}]$. The value function $\phi ^{k,i}$ yields $m \times l$ matrices $\varPhi ^{k, i}$, the partial dominance matrices of alternatives containing the values $\phi ^{k,i}_{hj}$ representing the partial dominance of alternative $a_h$ over alternative $a_j$ under criterion $c_i$ for strategist $s_k$, with $1 \le i \le m$, $1 \le h, j \le n$, and $1 \le k\le l$.The value function $\phi ^{k,i}$ is given by the following expression:$$\begin{aligned} \phi ^{k,i}(a_h, a_j) = \left\{ \begin{array}{lclrlrl} \sqrt{{w^k_{i}}\ {(v_{hi}-v_{ji})}} & {if } \left( v_{hi}-v_{ji}>0\right) &&\\ 0 & if \left( v_{hi}-v_{ji}=0\right) &\\ - \sqrt{\frac{v_{ji}-v_{hi}}{w^k_{i}}} & if \left( v_{hi}-v_{ji}<0\right) & \end{array} \right. \end{aligned}$$

(1)

The profile of each strategist is brought to bear in (1) by the weight $w^k_i$ that each strategist $s_k$ attaches to each criterion $c_i$. Using the partial dominance matrices $\varPhi ^{k, i}$ for each criterion and strategist, the final dominance matrix of alternatives is computed using the function $\delta ^k$, with $1 \le i \le m$, $1 \le h, j \le n$, and $1 \le k\le l$. Each of the l final dominance matrices is computed using the following expression:$$\begin{aligned} \delta ^k\left( a_h,a_j\right) = \sum _{i=1}^{m}\ \phi ^{k, i}_{hj} \end{aligned}$$

(2)

Equation 2 generates l matrices of dominance of alternatives $\varDelta ^{k}$, one for each strategist, containing the values $\delta ^k_{hj}$ representing the dominance of alternative $a_h$ over alternative $a_j$ for strategist $s_k$. Each one of these dominance matrices corresponds to the evaluation matrices of strategists (EMS$_k$), with $1 \le k\le l$, which is the output of the first step of the third phase of the methodology proposed in the “Operationalizing the Framework” section of our article. Finally, the global value that each alternative $a_h$ yields for strategist $s^k$, with $1 \le h, j \le n$, and $1 \le k\le l$ is given by expression (3):$$\begin{aligned} \xi ^k_{h} = \sum _{j=1}^n \delta ^k_{h,j} \end{aligned}$$

(3)

In order to generate the rankings as part of the second step of the third phase of our methodology, $\xi ^k_{h}$, the global value that each alternative $a_h$ yields for strategist $s^k$, with $1 \le h \le n$, and $1 \le k\le l$, needs to be normalized as per expression (4):$$\begin{aligned} \hat{\xi }^k_{h} = \frac{\xi ^k_{h} - min_{h=1}^n \xi ^k_{h}}{max_{h=1}^n \xi ^k_{h} - min_{h=1}^n \xi ^k_{h}} \end{aligned}$$

(4)

The normalized global value of each alternative given by Eq. 4 leads to the ranking of alternatives for each strategist $s^k$, which is the output of the second step of the third phase of the methodology set out in the “Operationalizing the Framework” section of our article.Applying Eqs. (1) through (4), we obtain three evaluation matrices of strategists (EMS$_k$), with $1 \le k\le 3$, and three rankings of all four alternatives, as shown in Tables 9, 10 and 11.Table 9 Evaluation matrix and raking of alternatives for first strategistFull size tableTable 10 Matrix of gains, global value and ranking for second strategistFull size tableTable 11 Matrix of gains, global value and ranking for third strategistFull size tableDifferent profiles of strategists lead to different evaluation matrices of strategists, which may lead to different rankings of alternatives for strategists. In the case of our illustration, the first and third strategist would prefer to continue with the execution of the project by postponing the field trial and investing more resources in the phases of reflexivity and anticipation. The second strategist, on the other hand, would prefer to put the project on hold. For all three strategists, even aborting the project is a better strategy than continuing on with the field trial, as originally planned.The last step during the third phase of our methodology would be to generate a consensus strategy. If the plurality principle were to be applied,Footnote 18 then the second strategy would be the consensus strategy to be pursued. The strategists may agree to apply other rules to arrive at a consensus strategy (Fishburn 1973; Munda 2004), such as the Borda count (Borda 1784; Condorcet 1785; McLean and Urken 1995), which would lead to a different consensus strategy.It is important to note that the methodology shown in Fig. 6 is iterative and dynamic in that at any given point in time, the flow of control can go back to previous phases to revisit decisions that have been already made, such as the inclusion of new stakeholders, which would require the flow of control to go back to the first phase, or the addition of new criteria or the modification of the profiles of strategists, which would require the flow of control to go back to the second phase. In the same way, other types of alternatives can emerge and be considered by the strategists by backtracking to the second phase of the lifecycle.Our methodology does not endorse a particular multicriteria group decision analysis method. Different multicriteria group decision analysis methods can be used interchangeably to implement the third phase of our methodology. The choice will always depend on the type of multicriteria decision analysis problem at hand. While the TODIM method implemented in this case may be of interest to model the biases of human decision-making, especially those that arise in the domain of losses under deep uncertainty, in many cases the deployment of more computationally tractable methods, such as the TOPSIS method (Hwang and Yoon 1981), may be preferred, especially when considering large sets of criteria, alternatives, and strategists.Rights and permissionsReprints and permissionsAbout this articleCite this articleParedes-Frigolett, H., Singer, A.E. & Pyka, A. A Framework for Ethical Research and Innovation.

Sci Eng Ethics 27, 11 (2021). https://doi.org/10.1007/s11948-021-00287-9Download citationReceived: 14 November 2018Accepted: 02 January 2021Published: 10 February 2021DOI: https://doi.org/10.1007/s11948-021-00287-9Share this articleAnyone you share the following link with will be able to read this content:Get shareable linkSorry, a shareable link is not currently available for this article.Copy to clipboard

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5 Research-Backed Strategies for Building an Ethical Culture at Work

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5 Research-Backed Strategies for Building an Ethical Culture at Work

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Organizations Jan 5, 20225 Research-Backed Strategies for Building an Ethical Culture at WorkAn annual training session isn’t going to cut it.

Based on the research ofMaryam KouchakiIsaac SmithTranslationsEnglishPortuguêsEspañol中文

Riley Mann

Based on the research ofMaryam KouchakiIsaac SmithTranslationsEnglishPortuguêsEspañol中文For most of us, work has a central but circumscribed role in our lives: it’s how we earn a living and where we learn new skills. We don’t usually think of the office as a place where we can grow ethically.That’s a mistake, according to Maryam Kouchaki, a professor of management and organizations at the Kellogg School who studies moral decision-making. After all, “a lot of our time is spent at work,” Kouchaki says. “Especially in the U.S., we have created a culture where work is a significant part of our identity. It’s naïve to assume that who you are at work and who you are at home can be separate.”In fact, work is one of the areas where we are most likely to encounter moral dilemmas and temptations to behave unethically: Should you overstate your role in a successful project when performance-review time rolls around? Stretch the truth to make an important sale? Fudge an expense report?While there’s been lots of research—some of it by Kouchaki herself—on how individuals can navigate moral issues on the job, she believes ethical conduct is not just an individual responsibility. Organizations also have an important role to play.In a new paper, she and Isaac H. Smith of Brigham Young University argue that workplaces can and should be the site of ongoing and structured ethical learning. They propose that companies take a broad and holistic view of ethics training that goes far beyond a single annual session. “It’s important to think about how to do things more systematically, such that it really helps organizations and societies,” Kouchaki says.They write that companies should seek to become “moral laboratories”—a phrase they chose very deliberately, Kouchaki explains. “With laboratories and experiments, you have to be patient and persistent and test different things,” she says. “It comes with an assumption that it’s acceptable to fail and learn from that.”So how can organizations successfully transform into the engines of moral growth Kouchaki and Smith envision? After reviewing studies in psychology and organizational behavior, they developed several recommendations.1. Integrate ethics into your corporate culture.Rather than treating ethics as a discrete topic, companies should strive to integrate it into every aspect of their culture, both formal and informal. Drawing on the work of business ethics scholars, Kouchaki and Smith suggest including ethics-related questions in job interviews, outlining the company’s values during onboarding, offering job-specific ethics training, and making ethical conduct a regular part of performance reviews.Building an ethical culture doesn’t just mean telling employees what not to do. Companies can offer awards for employees who demonstrate integrity, or create gratitude boards where employees can anonymously praise and thank one another. These measures can foster an environment where positive, prosocial behavior, rather than cutthroat competition, predominates.All of this requires the full-throated endorsement of the C-suite, Kouchaki and Smith point out. Research shows that leaders are essential in creating and maintaining an ethical culture. Ethical leadership—that is, leaders who behave ethically and promote ethical behavior on their teams—has been shown to decrease deviance and increase helping behavior among employees.2. Cultivate an environment where learning from failure is allowed.In order for employees to grow morally, they must feel they can admit mistakes. That requires a psychologically safe environment where risk-taking and asking for help aren’t taboo. Leaders, Kouchaki and Smith write, can cultivate psychological safety by admitting their own missteps, regularly soliciting feedback from across the organization, and proactively reminding employees that ethics is a learning process.“There’s evidence that more-ethical companies have happier employees and do better in the market.”— Maryam KouchakiCompanies must also respond to small ethical lapses in ways that promote learning rather than embarrassment. Research shows that transgressors are more likely to avoid unethical behavior in the future if they feel guilt (a sense of having caused harm to others) rather than shame (a sense that one will be negatively viewed by others). This means encouraging employees who have made mistakes to focus on who was harmed and how they might have behaved differently—but not criticizing who they are as people.These measures allow the entire organization to grow together. “When you create a psychologically safe environment, people are going to be willing to ask questions and reflect and learn as a group—so you learn not just from your own judgment but from other people’s,” Kouchaki says.3. Promote humility.Most of us assume we would do the right thing in an ethically challenging situation. But that belief is often the problem: moral overconfidence is associated with an inability to admit one’s own mistakes.Simply raising employees’ awareness of the natural human tendency toward hubris can help. “It is important to help workers understand that unethical workplace behavior is not simply the result of a few bad apples, but that all of us are susceptible to moral failures,” Kouchaki and Smith write.Ethics training, often narrowly focused on the dos and don’ts, can be broadened to include information on the types of situations where people are most likely to go astray and the types of justifications that are commonly used when committing infractions.Trainings can also provide employees with clear, practical heuristics to guide them through tempting situations, such as the publicity test (“Would I feel comfortable if my reason for this decision appeared on the front page of the newspaper?”), the generalizability test (“What would happen if everyone behaved this way?”), and the mirror test (“When I look in the mirror, will I be proud of myself after making this decision?”).4. Encourage reflection, early and often.Reflection—the process of thinking back on a project or experience—has been shown to improve learning, especially when combined with regular feedback. Kouchaki and Smith suggest that organizations create as many opportunities as possible for ethical reflection. “This gives an opportunity to learn from successes as well as failures,” Kouchaki says.For example, many companies already have regular “postmortem” meetings when important projects end. Organizations can add a standard set of ethics questions to these meetings: Was this project and process consistent with our values? Did we cross any lines? Was anyone harmed? Some companies also have project “premortems”—an ideal opportunity to discuss ethical challenges in advance.5. Give back.Organizations should give employees opportunities to engage in concrete opportunities for moral growth, such as volunteer work. Researchshows that giving workers the chance to serve others, whether inside or outside of the organization, has many positive effects, such as overcoming selfishness, developing greater social responsibility, and promoting an outward focus.Kouchaki and Smith cite the example of Salesforce, where employees are given seven paid days each year to engage in volunteer work and are encouraged to donate their expertise to nonprofits on their own time. Such experiences and opportunities don’t just help with ethical learning—they can even promote psychological flourishing.Doing Right and Doing GoodWhy should companies bother to expend so much time and energy on ethics? There’s a pragmatic case—“there’s evidence that more-ethical companies have happier employees and do better in the market,” Kouchaki points out—but she also believes it’s just the right thing to do. “Companies have ethical responsibilities toward their stakeholders, which includes employees and society,” she says.Fortunately, organizations don’t have to figure it out alone. “This paper is our attempt to think through what we know from the research literature and apply it to organizations,” Kouchaki says. And theirs is far from the only paper. “There’s lots of work that can guide companies in their attempts to become more ethical.”Featured Faculty

Maryam KouchakiProfessor of Management & OrganizationsAbout the WriterSusie Allen is a freelance writer in Chicago.About the ResearchSmith, Isaac, and Maryam Kouchaki. 2021. “Ethical Learning: The Workplace as a Moral Laboratory for Character Development.” Social Issues and Policy Review. 15(1): 277-322.Read the original

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