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From Yale to jail. Why good managers make unethical decisions Guido Palazzo

From Yale to jail. Why good managers make …...Why good managers make unethical decisions Guido Palazzo Do corporate criminals look like this guy? Martin Shkreli, hedge fund manager

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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

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