Sneak Preview to Business Ethics and Negotiations

In my course about Business Ethics and Negotiations, I like to use film clips. Today we have so many great sources for this kind of learning input. I am, of course, a big fan of TED talks. Also RSA Animated has excellent material.

In order to give you a sneak preview to my course, I would like to present a selection of the most interesting and fun ethics flicks that are used:

Rational Moral Theory…

At the beginning of this class we will learn some basic principles of ethical decision-making. We will learn about the German philosopher Kant and about the Utilitarian approach to ethical decision making. These theories are fascinating, interesting, and can be very helpful in real life. And they mainly see ethical decision making as a rational process. This is good because with these theories we can train ourselves in some advanced critical thinking.

At the same time we might wonder why business ever again blunders so badly when it comes to ethical decision making. If we look at the big corporate scandals of recent years it is often more than obvious that the unethical decisions managers took were not only unethical but often also not very rational.

…and Irrational Behavior

What we have learned from recent scandals is that even persons with a high level of integrity who are put into a pathological context will probably misbehave: bad contexts can push good people towards illegal and immoral decisions. Therefore, this class takes an intensive look at why it is so difficult for people to act ethically. We will get familiar with the social and psychological pressures that can turn the average person morally blind. We will in particular look at peer pressure, role expectation, and obedience to authority.

These phenomena had been widely examined through psychological experiments that scholars have conducted in the 1950s to 1970s in order to understand the mechanisms behind. In the following video you can see a great summary of two of the most important experiments done in this field: The Stanford Prison Experiment and the Milgram Experiment.

In the Stanford Prison Experiment a group of normal and friendly students are divided into two groups: prisoners and prison guards. The guards wear mirrored sunglasses and a fake uniform, the prisoners get a number and a night gown. They all are put into a mock prison in the psychology department. The guards had the task to keep the prisoners under control. This set-up was enough to make the guards start to treat prisoners sadistically and turn the prisoners into depressed and disturbed victims. This experiment nicely illustrated the effects of role expectations and the impact of contexts on people.

The Milgram experiment focused on the effects of obedience to authority. It showed that normal, nice people were willing to kill other people with electric shocks if there was an authority figure that simply said that they needed to do it and that they were not responsible.

The Psychology of Cheating

People do not only behave unethically because of social pressures. We also look at the recent work of behavioral economist Dan Ariely to find out that most people cheat just a little bit. They do this because they want to profit from the cheating and at the same time feel good about themselves and preserve their self-image as a moral person. Ariely calls this the “nudge factor” and he brilliantly explains all of this in this TED talk:

Leadership Styles and Ethics

In the context of business it is obvious that leadership plays an important role in ethics. And how do you lead ethically? What kind of leadership style is better for ethics? Should an ethical leader be more transactional, i.e. give clear directions, set the right incentives, control results and give as little room to autonomy as possible? Or should the ethical leader be more transformational, i.e. give lots of room for independent decisions, create trust, inspire people and encourage the questioning of old ways?

To kick off a discussion about these tough questions I show the TED talk of Itay Talgam who demonstrates the leadership styles of great conductors. Definitely one of my favorite talks that gives you a very profound and unusual perspective on leadership:

Using the Power of Persuasion for Ethics

The powerful idea about this class it the connection between ethics and negotiations. First of all, there are a couple of tough ethical issues you will encounter when you negotiate: Should you always say the truth? Is bluffing ok? Is not mentioning something the same as lying? How do I create trust in negotiations?

And then we can examine how we can use the techniques of persuasion and communication that we learn in a negotiation class for the advancement of ethics in business.

Imagine you are a young manager and your boss wants you to do something that you feel is unethical. What do you do? The standard options are:

  • Just do it (and betray your ethical principles).
  • Tell your boss that it is unethical (and bear the risk that this might be a career terminating move)
  • Quit your job.

All of these options are not very appealing. And you can do it differently by using negotiating techniques like preparing the crucial conversation with your boss well: think systematically about your own objectives and, even more importantly, about those of your boss. If you learn how to ask the right questions to detect the real motivations of our boss, you might even find out that he had no unethical intentions in the first place. Maybe he just did not want to lose a client and overlooked the ethical implications of the case.

And finally you can use some of these 6 principles of persuasion for your argumentation:

Enjoy your films!

Dr. Bettina Palazzo, Professor at BSL

1 thought on “Sneak Preview to Business Ethics and Negotiations

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