Bounded Ethicality

Bounded ethicality explains how predictable organizational pressures and psychological processes cause us to engage in ethically questionable behavior that is inconsistent with our own values and preferences.

Discussion Questions

1. Do you think that acting ethically is just a matter of wanting to badly enough? Why or why not?

2. What kinds of situational factors can you think of that might make it difficult for a well-intentioned person to always do the right thing?

3. Can you think of a time when you did not live up to your own ethical standards? What caused you to depart from your own standards?

4. Can you think of an example of a friend who acted unethically? Or someone in the news lately? Without making excuses for them, can you explain why they might have made bad ethical decisions even though they are generally good people?

5. Do you think it’s possible to be completely rational when making ethical decisions? Why or why not?

6. Do you think we can improve moral behavior by helping people understand that ethical decision-making isn’t solely about what happens inside their heads, but also involves an appreciation for organizational pressures, psychological factors, and other environmental conditions that can cause good people to make bad decisions?

Case Studies

The CIA Leak

In 2002, the Central Intelligence Agency (CIA) asked Joseph Wilson, U.S. diplomat and husband of CIA agent Valerie Plame, to investigate allegations that Saddam Hussein purchased yellowcake uranium in Niger. Wilson traveled to Niger and found no evidence of this. Nonetheless, during the 2003 State of the Union Address, President George W. Bush stated, “The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.” On July 6, 2003, Wilson rebutted this statement in an editorial for The New York Times. One week later, journalist Robert Novak published an op-ed in The Washington Post criticizing Wilson and releasing information identifying Plame as a CIA agent. Another journalist, Matthew Cooper, wrote in Time Magazine that government officials informed him that Wilson’s wife was employed by the CIA. Plame was a classified covert agent and her actual employment was not public knowledge. Her employer, Brewster Jennings, was thus unmasked as a CIA front company and their employees worldwide were put at risk.

The CIA asked the Department of Justice to investigate the leak. Bush stated if a leak occurred from his administration “and if the person violated the law, the person will be taken care of.” He later said, “If someone committed a crime, they will no longer work in my administration.” A special counsel examined the legal violations and a grand jury summoned the journalists involved, as well as various members of the Bush administration, with a focus on presidential aide Karl Rove and Scooter Libby, Chief of Staff for Vice President Dick Cheney.

Cooper claimed Rove told him Plame’s name and employment, while Rove contended he only learned of her name from journalists. Evidence suggested Cheney might have informed Libby. Eventually, the source was revealed as Richard Armitage, Deputy Secretary of State at the time. Armitage was ultimately not charged because no evidence existed to prove he was aware Plame’s employment was covert, and thus, illegal to disclose.

The only person charged over the leak was Libby. He was indicted on two counts of perjury, two counts of making false statements, and one count of obstruction of justice. These charges all stemmed from testimony he gave during the investigation, not the initial disclosure of information. He resigned from his position, and was later fined and sentenced to thirty months in federal prison. President Bush commuted the prison time, but left the fines intact. Cheney aggressively sought a full pardon for Libby and was reportedly very upset with Bush for refusing to grant it. Bush publicly stated he respected the jury’s verdict, but Cheney felt Libby did nothing inappropriate.

Wilson and Plame eventually filed a civil lawsuit against Rove, Libby, Cheney, and Armitage for their role in disclosing her identity. The lawsuit was dismissed, and the U.S. Supreme Court refused to hear the dismissal on appeal.

In 2018, President Donald Trump pardoned Libby, stating, “I don’t know Mr. Libby, but for years I have heard that he has been treated unfairly. Hopefully, this full pardon will help rectify a very sad portion of his life.” Cheney responded to the pardon, stating, “He is innocent, and he and his family have suffered for years because of his wrongful conviction. I am grateful today that President Trump righted this wrong.”

Plame saw the pardon as a dangerous precedent that could further endanger the safety of covert operatives and the operations of the CIA. In an op-ed, Plame wrote, “The pardon power of the president cannot be challenged constitutionally; it should be wielded with enormous diligence and prudence. In granting his pardon to Scooter Libby, Donald Trump seems to have avoided the careful process of review within the Justice Department that has been established to consider pardons,” continuing, “Our national security is at serious risk when there is daylight and distrust between the president and the CIA.”

Discussion Questions

1. Which person involved in this complex case do you think was most subject to bounded ethicality? Why?

2. How do the situational factors of this case pose challenges for those involved to act ethically?

3. How were the actions of Bush, Cheney, and Libby subject to bounded ethicality? In this case, what organizational pressures or psychological factors may have influenced each of their decisions? Explain.

4. President Bush was caught between the interests of Cheney, Rove, and Libby on the one hand, and Plame, Wilson, and the CIA on the other. Do you think President Bush’s actions were ethically ideal? Why or why not?

5. If you were in President Bush’s position, how would you have handled this situation? Explain how your resolution would minimize harm to those involved.

6. Do you think it was ethically permissible to pardon Libby? Why or why not?

7. Does Libby’s pardoning, as Plame suggested, cause further harm? If so, to whom or what? Explain.


Fair game: my life as a spy, my betrayal by the White House

The politics of truth: inside the lies that led to war and betrayed my wife’s CIA identity: a diplomat’s memoir

Key Players in the Valerie Plame Affair

2003 State of the Union Address

What I Didn’t Find in Africa

Mission to Niger

A War on Wilson?,8599,465270,00.html

Bush Raises Threshold for Firing Aides In Leak Probe

Reporter Says He First Learned of C.I.A. Operative From Rove

Trump issues pardon to ‘Scooter’ Libby, former chief of staff to Vice President Cheney

I was outed as a CIA officer. But pardoning Scooter Libby hurts all of us.

Healthcare Obligations: Personal vs. Institutional

In a typical year in the United States, the public is urged to get flu shots as a means of protection against influenza. A report published by an influenza expert at the British Columbia Centre for Disease Control found that the 2014-2015 rate of effectiveness for flu shots was 23% in the U.S., and that the shots offered no significant protection in Canada. A related finding published by researchers at the National Institutes of Health documented that, although the percentage of seniors who received flu shots in recent decades rose from 15% to 65%, the deaths caused by influenza among the elderly continued to climb during this period. These researchers concluded “either the vaccine failed to protect the elderly against mortality… and/or the vaccination efforts did not adequately target the frailest elderly.”

More recent research has tried to develop a method to assess in advance whether a given flu vaccine would have any protection benefit. A report published in 2016 in the journal Nature Immunology used a blood assay and identified a correlation between persons with a certain pattern of gene expression and the likelihood that such persons would experience adverse events after receiving a flu vaccine. If this assay could be made economical, and included in blood tests typically done in annual physicals, it could reduce the number of suits filed with the federal Vaccine Injury Compensation Program. With these reports in mind, consider the following case:

Dr. Jones works in a hospital and she recently became aware of all the above reports. She belongs to the American Medical Association (AMA), which strongly recommends that everyone receive flu shots each year. Moreover, her hospital recently informed her that she herself must take annual flu shots or risk termination of her hospital privileges or employment. Dr. Jones, however, is aware of the AMA Code of Ethics, which states that patients have a right of self-decision regarding their health care, and that this right can only be effectively exercised “if the patient possesses enough information to enable an informed choice.” She feels a moral obligation to inform her senior patients that she has reservations about the efficacy of flu shots for their age group and why.

Since the AMA and the Centers for Disease Control and Prevention are strong proponents of annual flu shots, if Dr. Jones gives contrary advice to her patients, this could jeopardize her standing with the AMA, in addition to her employment at her hospital. Furthermore, her hospital administrator and other health officials are concerned that if doctors advise patients about the relative ineffectiveness of, and potential injury from, flu vaccines, this could feed public doubts about the efficacy or safety of other vaccines. Such doubts could increase public opposition to new state laws that aim to promote “herd immunity” by mandating certain vaccinations.

While the case of Dr. Jones is based on the actual experiences of a medical doctor, her name and identifying details have been changed. This case study reflects the key ethical dilemmas the doctor faced.

Discussion Questions

1. Do you think Dr. Jones should discuss her reservations about flu vaccines with her senior patients? Why or why not?

2. Do you think Dr. Jones has a greater moral obligation to her family to protect her job security or to the recommendations of the AMA Code of Ethics, which encourage physicians to help patients exercise their “right of self-decision” by providing them with enough information to enable an informed choice? Explain your reasoning.

3. Even if flu shots provide protection less than one fourth of the time, is it ethically permissible for Dr. Jones to decide that protection for some patients is better than none? And, on that basis, decide not to discuss the potential benefits and harms of flu shots with her patients? Explain.

4. Do you think the AMA should promote open discussions about the efficacy of flu vaccines and support the development of blood tests that could predict that efficacy? Why or why not? What are the potential outcomes?

5. Both the AMA Code of Ethics and the World Health Organization endorse the primary “right of self-decision” of all patients regarding their health care. However, to foster “herd immunity,” the bill SB 277 was recently passed in the state of California, mandating multiple doses of vaccinations for all students entering kindergarten. Do you think there is a way to reconcile these two opposing ethical goals? Explain.


Mandated Influenza Vaccines and Health Care Workers’ Autonomy

Impact of Influenza Vaccination on Seasonal Mortality in the US Elderly Population

Adjuvanted influenza-H1N1 vaccination reveals lymphoid signatures of age-dependent early responses and of clinical adverse events

H1N1 viral proteome peptide microarray predicts individuals at risk for H1N1 infection and segregates infection versus Pandemrix vaccination

Vaccines for preventing influenza in healthy children

Vaccines to prevent influenza in healthy adults

AMA Code of Medical Ethics

National Vaccine Injury Compensation Program

California Vaccination Bill SB 277 Signed By Governor, Becomes Law

How cognitive biases contribute to people refusing the flu vaccine

Teaching Notes

This video introduces the behavioral ethics bias known as bounded ethicality. Bounded ethicality explains how predictable social and organizational pressures and our own psychological processes cause us to engage in ethically questionable behavior that is inconsistent with our own values and preferences.

To learn about related behavioral ethics concepts, watch Conformity Bias, Moral Equilibrium and Obedience to Authority.

The case studies on this page explore two examples of how bounded ethicality can conflict with one’s own work or values. “The CIA Leak” examines the disclosure of classified information that led to the identification of a CIA agent. “Healthcare Obligations: Personal vs. Institutional” explores the difficult decision a medical doctor must make when informing patients of the effectiveness of flu shots while upholding institutional recommendations.

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.

Terms defined in our ethics glossary that are related to the video and case studies include: behavioral ethics, bounded ethicality, conformity bias, moral emotions, moral equilibrium, moral reasoning, and obedience to authority.

Additional Resources

Bazerman, Max H., and Ann E. Tenbrunsel. 2011. Blind Spots: Why We Fail to Do What’s Right and What to Do about It. Princeton, NJ: Princeton University Press.

De Cremer, David, Rolf van Dick, Ann Tenbrunsel, Madan Pillutla, and J. Keith Murnighan. 2011. “Understanding Ethical Behavior and Decision Making in Management: A Behavioural Business Ethics Approach.” British Journal of Management 22 (s1): s1-s4.

Hoyk, Robert, and Paul Hersey. 2008. The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior: 45 Psychological Traps That Everyone of Us Falls Prey To. Stanford, CA: Stanford University Press.

Simon, Herbet A., Massimo Egidi, Riccardo Viale, and Robin Marris. 1992. Economics, Bounded Rationality and the Cognitive Revolution. Aldershot, UK: Edward Elgar Publishing.

The latest teaching resource from Ethics Unwrapped is an article, written by Cara Biasucci and Robert Prentice, that describes the basics of behavioral ethics, introduces the videos and supporting materials along with teaching examples, and includes data on the efficacy of Ethics Unwrapped for improving ethics pedagogy across disciplines. It was published in Journal of Business Law and Ethics Pedagogy (Vol. 1, August 2018), and can be downloaded here: “Teaching Behavioral Ethics (Using “Ethics Unwrapped” Videos and Educational Materials).”

For more 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.

Messick, David M., and Ann E. Tenbrunsel (Editors). 1996. Codes of Conduct: Behavioral Research into Business Ethics. New York: Russell Sage Foundation.

Rhode, Deborah L. (Editor). 2006. Moral Leadership: The Theory and Practice of Power, Judgment, and Policy. San Francisco, CA: Jossey-Bass.

Werhane, Patricia H., Laura Pincus Hartman, Crina Archer, Elaine E. Englehardt, and Michael S. Pritchard. 2013. Obstacles to Ethical Decision-Making: Mental Modes, Milgram and the Problem of Obedience. Cambridge, UK: Cambridge University Press.

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

“Economists have often modeled human decision makers as completely rational. According to this model, rational people know their own preferences, gather and accurately process all relevant information, and then make rational choices that advance their own interests. However, Herbert Simon won a Nobel Prize in economics by pointing out that people are rational, but only boundedly so in that they seldom gather all available information, they often do not accurately process the information that they do gather, nor do they necessarily know what it is that will make them happy. People are rational, but boundedly so.

If the last fifty years of psychological research has proven anything, it is that the situational often dominates the dispositional. That is to say, our disposition or desire to be good people can be overwhelmed by psychological or organizational factors that we may not even be aware of. These factors adversely affect ethical decision-making as well as economic decision-making, meaning that people are boundedly ethical as well as boundedly rational.

The basic notion, as spelled out by Professor Ann Tenbrunsel and her colleagues, is that systematic and predictable organizational pressures and psychological processes cause people to engage in ethically questionable behaviors that are inconsistent with their own preferences. Various factors cause us to make unethical decisions that we later regret.

For example, although most of us want to act ethically, we also wish to please authority figures. Therefore, if our boss asks us to do something unethical, we may do it without even realizing our mistake because we are focusing on pleasing the boss rather than on the ethical dimensions of the issue facing us.

To take another example, we also have a natural desire to be “part of the team” at work. Therefore, if a questionable action advances the team’s interests, as we perceive them, we may act unethically because, again, we are focusing upon achieving the team’s goals rather than on adhering to out own ethical standards.

Most of us want to act ethically, and are certain that we will because we just know we are good people. But most of us are also overconfident regarding our own ethicality. This can lead to complacency that causes us to make decisions containing ethical dimensions without reflecting deeply.

So, we are ethical, it is true, but boundedly so. I recommend a little humility. Only if we truly commit ourselves to being ethical people and diligently guard against the organizational pressures and psychological factors that put bounds upon our ability to be so, can we possibly realize our ethical potential.”