Thursday, December 26, 2013

Does Closeness with Others Influence Business Ethical Choices?

Decisions are a common occurrence in everyday life. Why some make ethical and others make unethical decisions is of interest. Wood, et. al. (2013) studied the decision-making process of managers and found that psychological distance and options influenced their ultimate choice. When proper choices are available, and reflections on courses of action are possible, better decisions result.

There are pillars that help formulate how psychological distance is created in people’s minds. These pillars are mental constructs and decision filters managers use judge course of action. They are as follows:

1.) Temporal Distance: Now versus later. Future events are more abstract while current events are more concrete.

2.) Spatial Distance: Researchers have shown that faraway locations are abstract while closer locations are more concrete.

3.) Social Distance: Us versus them mentality that lowers the perception of impact on other groups while raising the perception of harm to one’s own.  Think of in-group and out-group dynamics.

4.) Hypothetical Distance: When it appears that an outcome is unlikely it is evaluated more abstractly than likely outcomes.

The researchers used surveys of managers to determine their decision-making processes. They found that when faced with a forced choice those who are more psychologically distant from them often received the brunt of impact. When the choices are open they often distribute the impact equally. When they have an option not to choose they often reflect more on the potential consequences.

The research helps show that people will make poor decisions that influence the future, are geographically distant, are outside of their social group, and when it appears that, the outcome is unlikely. Reflection helps us to consider the potential consequences of choice and how they impact others. Sometimes to not choose is the best choice someone can make.

Wood, et. al. (2013). If you can’t see the forest for the trees, you might just cut down the forest: the perils of forced choice on “seemingly” unethical decision-making. Journal of Business Ethics, 118 (3).

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