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  • October–December 2015
  • Article
  • Organizational Dynamics

Reducing Bounded Ethicality: How to Help Individuals Notice and Avoid Unethical Behavior

By: Ting Zhang, Pinar O. Fletcher, Francesca Gino and Max H. Bazerman
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Abstract

Research on ethics has focused on the factors that help individuals act ethically when they are tempted to cheat. However, we know little about how best to help individuals notice unethical behaviors in others and in themselves. This paper identifies a solution: instilling a mindset of vigilance. In an experiment, individuals playing the role of financial advisers recommended one of four possible investments to their clients. Unbeknown to these advisers, one of the funds under consideration was actually a fraudulent feeder fund of Madoff Investment Securities. Results from this empirical study demonstrate that instilling vigilance by asking individuals to indicate their suspicions prior to making a decision was critical to helping them notice fraudulent behavior and act on that information. In contrast, committing to a decision prior to contemplating suspicions precluded individuals from subsequently integrating critical information about the fund’s fraudulent activity. We extend these findings to other interventions aimed at helping managers notice unethical behavior.

Keywords

Ethics; Management Skills; Behavior; Perception

Citation

Zhang, Ting, Pinar O. Fletcher, Francesca Gino, and Max H. Bazerman. "Reducing Bounded Ethicality: How to Help Individuals Notice and Avoid Unethical Behavior." Special Issue on Bad Behavior. Organizational Dynamics 44, no. 4 (October–December 2015): 310–317.
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About The Authors

Ting Zhang

Organizational Behavior
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Francesca Gino

Negotiation, Organizations & Markets
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Max H. Bazerman

Negotiation, Organizations & Markets
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More from the Authors
  • Mellody Hobson at Ariel Investments By: Lakshmi Ramarajan and Francesca Gino
  • Ed Catmull: Lessons from Leading Pixar Animation Studios By: Francesca Gino, Linda Hill, Gary Pisano and Ruth Page
  • Leadership & Overconfidence By: Don A Moore and Max H. Bazerman
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