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.”