Framing describes how our responses to situations, including our ethical judgments, are impacted just by how those situations are posed or viewed.
1. Studies show that people primed to think about business profits will make different choices than people facing the same decision who have been primed to think about acting ethically. Can you explain how that might affect you in your work life?
2. Can you think of a situation where you made a decision that you regret and probably would have chosen differently had you looked at the choice in a different way?
3. How do politicians and advertisers use framing to channel people’s decision?
4. How might framing adversely affect your ethical decision making in your projected workplace?
5. How can you work to ensure that ethical considerations stay in your frame of reference when you make decisions in your career and your life?
6. How can firms help their employees to keep ethical considerations in mind when they make decisions?
Offshore oil and gas reserves, primarily along coastlines in Alaska, California, Louisiana, and Texas, account for a large proportion of the oil and gas supply in the United States. In August 2015, President Obama authorized Royal Dutch Shell to expand drilling off Alaska’s northwest coast. His decision brought into sharp relief the different, oftentimes competing views on the expansion of offshore drilling.
Many proponents of offshore drilling argue that tapping into the vast amount of oil and gas reserves in the Arctic will help shore up national security interests for the United States, bolster its economy and workforce, and offer Americans a reliable, safe supply of oil. According to Robert Bryce, senior fellow at the Manhattan Institute for Policy Research, there are “enormous amounts of recoverable energy resources in the Arctic. The Department of Energy estimates them at something on the order of 400 billion barrels of oil equivalent in natural gas and oil. That’s four times the crude oil reserves of Kuwait.” Framed this way, drilling in the Arctic presents a way for Americans to mitigate risks from dependence on foreign oil and build the local and national economies by creating jobs and supplying cheap oil.
A competing point of view charges that offshore oil drilling poses immense risk to the environment while reinforcing a reliance on dirty, environmentally unfriendly sources of energy. Critics claim that industrial activity associated with offshore drilling in the Arctic could harm native animals, including polar bears, walruses, seals, and whales already jeopardized by climate warming and declining levels of sea ice. Environmentalists argue that oil companies have not demonstrated the capability to clean up an oil spill in water obstructed by ice. Furthermore, they contend, extracting oil only perpetuates a fossil-fuel economy and will contribute dangerously to rising global temperature thereby exacerbating climate change.
“Granting Shell the permit to drill in the Arctic was the wrong decision, and this fight is far from over,” said Michael Brune, executive director of the Sierra Club. “The people will continue to call on President Obama to protect the Arctic and our environment.”
1. Do you find one framing of the situation more compelling than the other? Why? In what ways do your own beliefs or opinions affect your perspective on this issue?
2. If you were in President Obama’s position, how might the different ways of framing this issue affect your decision-making process? Is it possible to make an objective decision in the case of Arctic drilling? How might you come to a decision that is both reasonable and ethically defensible?
3. Can you think of other ethical dilemmas that are unexplored or absent in these dominant, competing frames of offshore drilling? How might these additional issues affect the decision to drill in the Arctic?
4. Do you think there are unintended or undesirable consequences of framing Arctic drilling as an “either-or” issue, i.e. as one that pits environmentalists against business leaders? Why or why not?
5. Can you think of an example of another contentious issue that has been framed in an “either-or” way? What would be an ethically ideal way to resolve this issue and why?
Obama’s Alaska controversies: Denali, oil drilling, climate change
Does allowing Arctic offshore drilling undermine Obama’s climate efforts?
U.S. lets Shell drill for oil off Alaska
Feds allow Shell to drill for oil in Arctic Ocean off Alaska
In the late 1990s, the state of California deregulated many of its electricity markets, opening them up to private sector energy companies. Enron Corporation had long lobbied for deregulation of such markets and would likely have profited greatly had California’s experiment succeeded and become a model for other states.
Enron CEO Ken Lay wrote a public statement saying that Enron “believes in conducting business affairs in accordance with the highest ethical standards… your recognition of our ethical standards allows Enron employees to work with you via arm’s length transactions and avoids potentially embarrassing and unethical situations.” At the same time, Tim Belden, a key Enron employee in its energy trading group, noticed that California’s “complex set of rules…are prone to gaming.”
According to Bethany McLean and Peter Elkind, authors of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, “In one scheme, Enron submitted a schedule reflecting demand that wasn’t there… Another was a variation of the Silverpeak experiment: Enron filed imaginary transmission schedules in order to get paid to alleviate congestion that didn’t really exist… Get Shorty was a strategy that involved selling power and other services that Enron did not have for use as reserves…”
Some Enron employees admitted that their schemes were “kind of squirrelly,” but used them because they were profitable. The impact on customers was clear: electricity prices rose and rolling blackouts occurred. Enron’s profits, however, quadrupled. An Enron lawyer later wrote that the Enron traders did not think “they did anything wrong.” Another employee admitted, “The attitude was, ‘play by your own rules.’ …The energy markets were new, immature, unsupervised. We took pride in getting around the rules.”
In October 2001, Enron’s unethical and illegal business practices became public knowledge. Enron’s stock prices plummeted, and the company filed for bankruptcy in December 2001.
1. How did Enron’s CEO and employees frame their business model? How did differences in their framing affect their actions?
2. How might framing affect people’s approaches to business conduct? Explain your reasoning.
3. Can you think of other framing tactics used by different businesses? How does framing affect the products they sell and the actions of their consumers?
4. How do you react to the following recorded conversation between two Enron employees? What does it tell us about framing, if anything?
Greg: “It’s all how well you can weave these lies together, Shari.
Shari: I feel like I’m being corrupted now.
Greg: No, this is marketing.
5. The Enron scandal affected the lives of many employees who had no responsibility in Enron’s framing tactics. If you were a new employee starting your career at Enron and you learned of the framing tactics in this case study, what would you do? Why?
Conspiracy of Fools: A True Story
Enron: The Rise and Fall
Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan
The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior: 45 Psychological Traps that Every One of Us Falls Prey To
Experimental Ethics: Toward an Empirical Moral Philosophy
The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron
I Survived Enron
This video introduces the behavioral ethics bias known as framing. Framing describes how our responses to situations, including our ethical judgments, are impacted just by how those situations may be posed or viewed. For example, we may frame an ethical issue to benefit our own perspective or beliefs. Or, the framing of an issue in the news may affect how we respond to it depending on how tangible or abstract the problem may seem to us.
To learn about related behavioral ethics concepts, watch Self-serving Bias and Tangible & Abstract. For a closer look at how framing affected the behavior of former lobbyist Jack Abramoff, watch In It to Win: Jack & Framing.
The case studies on this page offer examples of how framing can cause significant environmental and economic effects. “Arctic Offshore Drilling” describes how groups with competing interests have framed the debate over expanded oil drilling off the coast of Alaska. “Selling Enron” illustrates how the energy company profited greatly from deceitful framing practices, but at a dire cost. For a related case study that explores the consequences of false framing, read “A Million Little Pieces.”
Behavioral ethics draws upon behavioral psychology, cognitive science, evolutionary biology, and related disciplines to determine how and why people make the ethical and unethical decisions that they do. Much behavioral ethics research addresses the question of why good people do bad things. Many behavioral ethics concepts are explored in detail in Concepts Unwrapped, as well as in the video case study In It to Win: The Jack Abramoff Story. Anyone who watches all (or even a good part) of these videos will have a solid introduction to behavioral ethics.
Cruver, Brian. 2002. Anatomy of Greed: The Unshredded Truth from an Enron Insider. New York: Carroll & Graf Publishers.
Herbert, Wray. 2010. On Second Thought: Outsmarting Your Mind’s Hard-Wired Habits. New York: Broadway Paperbacks.
McDonald, Allan J., and James R. Hansen. 2009. Truth, Lies, and O-Rings: Inside the Space Shuttle Challenger Disaster. Gainesville, FL: University Press of Florida.
For resources on teaching behavioral ethics, an article written by Ethics Unwrapped authors Minette Drumwright, Robert Prentice, and Cara Biasucci introduces key concepts in behavioral ethics and approaches to effective ethics instruction—including sample classroom assignments. The article, published in the Decision Sciences Journal of Innovative Education, may be downloaded here: “Behavioral Ethics and Teaching Ethical Decision Making.”
A detailed article by Robert Prentice with extensive resources for teaching behavioral ethics, published in Journal of Legal Studies Education, may be downloaded here: “Teaching Behavioral Ethics.”
An article by Robert Prentice discussing how behavioral ethics can improve the ethicality of human decision-making, published in the Notre Dame Journal of Law, Ethics & Public Policy, may be downloaded here: “Behavioral Ethics: Can It Help Lawyers (And Others) Be their Best Selves?”
A dated but still serviceable introductory article about teaching behavioral ethics can be accessed through Google Scholar by searching: Prentice, Robert A. 2004. “Teaching Ethics, Heuristics, and Biases.” Journal of Business Ethics Education 1 (1): 57-74.
Transcript of Narration
Written and Narrated by
Robert Prentice, J.D.
Business, Government & Society Department
McCombs School of Business
The University of Texas at Austin
“In any kind of decision-making, context counts. The simple reframing of a situation or question can produce a totally different answer from the same person. For example, people would rather buy a hamburger made of meat labeled 75% fat free than meat labeled 25% fat. In fact, when questioned, these people will tell you that the 75% fat-free burger tastes better than the 25% fat burger, even though the burgers are identical.
When NASA was deciding whether to launch the ill-fated space shuttle Challenger, Morton Thiokol’s engineers at first opposed the launch on safety grounds. But when their general manager instructed the engineers to “put on their management hats,” he reframed the decision from one focusing on safety to one focusing on dollars and cents. The engineers then unfortunately changed their decision.
We need to look beyond the obvious frame of reference in business – “will this be a profitable decision?” – and consider our actions from a broader perspective like “how will this look when it’s reported on the front page of the newspaper?”
Decisions made by business people often occur in a context where subjective factors predominate, and the framing of an issue is particularly influential. In Enron’s declining days, the company attempted to save money by encouraging employees to minimize travel expenses. An Enron employee later wrote that he intentionally flouted the new policy. While this seems like a clear ethical lapse, in the employee’s mind, he deserved to stay in the most expensive hotels and to eat at the best restaurants because of how very hard he was working. He framed the issue in terms of his narrow self-serving interests, not in the broader ethical context of adhering to company policy.
CFOs and accounting personnel at Enron, HealthSouth, and other scandal-ridden companies didn’t need a philosophy course to help them figure out that their manipulation of financial statements was unethical. Their problem was that at the time of their actions, their frame of reference was loyalty to the company and to the company’s goal of maximizing stock price. Had those employees been able to think in terms of the bigger ethical picture – for example, the impact of their actions on other people’s pension funds – they might have acted differently.”