Summary Note by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
Behavioral Issues and Culture Main Page |
Ethics Main Page
This is the first of two short articles related to how biases can cause unethical behavior. Accounting professions make ethics violations or missteps that are frequently attributable to ethical blind spots or biases. To make less-biased decisions we need to identify the judgment traps that represent both conscious and unconscious biases.
According to Daniel Butcher, cognitive biases that negatively influence our decisions occur for three reasons: groupthink, a rush to judgment, and trigger events.
Groupthink occurs when leaders have strong expectations that overwhelm the beliefs and thought processes of their subordinates.
In other cases, the ethical issues involved in a decision are not well understood and a rush to solve the problem leads to an improper choice.
Judgment triggers occur when the decision makers fail to perform certain necessary steps in the decision process. For example, by accepting easily accessible evidence or data rather than engaging in an independent analysis.
Self-Examination Through Rose-Colored Classes
People have illusions about how ethical they really are. We are all subject to ethical fading and compartmentalization. Ethical fading is not being aware of the ethical implications of a decision we're about to make. Compartmentalization involves assuming ethics is the responsibility of someone else in the organization. In addition, people tend to be unaware of the ethical behavior of others allowing more unethical behavior to occur. Incentive systems with difficult goals can also motivate unethical behavior.
Spidey Sense vs. Rationalization
Although most professionals have an internal ethical compass or sixth-sense to provide guidance for right and wrong decisions, many people can rationalize an unethical decision thinking they had no other choice, everyone is doing it, or no one is going to get hurt by this decision.
Avoiding Ethics Traps
There are six ethical traps mentioned at the end of the article including the following.
1. Conformity Bias - Everyone else is doing it.
2. Framing - Describing the issue to promote a specific decision.
3. Selective Perception - The decision is influenced by what we want to see or expect based on our vested interest.
4. Confirmation Bias - When we look for, or pay attention to information that supports our beliefs, and disregard information that contradicts our beliefs.
5. Overconfidence - This makes us prone to justifying and rationalizing self-interested behavior.
6. Greed - When our motivation for money causes us to ignore considerations of justice, fairness, and honesty.
Every professional needs an honest self-assessment to identify their own biases to avoid common judgment traps and unethical behavior.
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Related summaries:
Butcher, D. 2019. Techniques to overcome biases. Strategic Finance (November): 13-14. (Summary).
Coutu, D. L. 2002. The anxiety of learning. Harvard Business Review (March): 100-107. (Summary).
Dawkins, R. 2008. The God Delusion. A Mariner Book, Houghton Mifflin Company. (Summary).
Gino, F. and K. Coffman. 2021. Unconscious bias training that works: Increasing awareness isn't enough. Teach people to manage their biases, change their behavior, and track their progress. Harvard Business Review (September/October): 114-123. (Summary).
Gladwell, M. 2002. The Tipping Point: How Little Things Can Make a Big Difference. Back Bay Books. (Summary).
Hornsey, M. J. and K. S. Fielding. 2017. Attitude roots and Jiu Jitsu persuasion: Understanding and overcoming the motivated rejection of science. American Psychologist 72(5): 459-473. (Summary).
Kahneman, D., D. Lovallo and O. Sibony. 2011. Before you make that big decision: Dangerous biases can creep into every strategic choice. Here's how to find them - before they lead you astray. Harvard Business Review (June): 50-60. (Summary).
Kenrick, D. T., A. B. Cohen, S. L. Neuberg and R. B. Cialdini. 2018. The science of antiscience thinking. Scientific American (July): 36-41. (Summary).
Thaler, R. H. 2008. Mental accounting and consumer choice. Marketing Science 27(1): 15-25. (Summary).