Notes for Behavioural Ethics

Prof John Chiramel

XUB & XLRI
01\07\2020

1. The Theory of Bounded Ethicality

Herbert Simon-Bounded Rationality= In Economics, we are taught that people make
rational choices after assessing information available to them. But Simon said that
that is not true—people are rational but within boundaries—people seldom gather
all available info, and even more, people seldom accurately process all the available
info they have, nor do they always know what it is that will make them happy--the
brain has limited capacity to absorb information and process information, it has its
boundaries, beyond which it refuses to process any more info and simply takes a less
than optimal decision..like buying a car after going to several showrooms and just
having had enough buying a car that was not the best..”

Bounded Ethicality refers to the systematic and predictable ways in which humans
act unethically beyond their own awareness”….Example: Northerners vs
Southerners vs North eastern Chinese,; The TVS Group-in-group vs out group…or to
impress the coach, you play rough in a football match, where there was no need to
be rough; or to impress the boss, you fudge the stats a little.. the situational often
dominates the dispositional, ie our disposition is that we are good people, but
psychological organisational pressures can often overwhelm your desire to be
ethical, sometimes even when you are not aware of the pressures and still
acquiesce. To please your mother, you might go to the temple or the church or the
mosque, although you have lost the connection with God. We want to be a part of a
team or peer-pressure can make you want to be part of an in-group, which may be
indulging in some not so ethical practices..like the junior BPO employees and self-
dissipating activities.
2. The predictive value of the theory of Bounded Ethicality: Bounded Ethicality is
similar to bounded rationality..how psychological processes that limit our ethicality..
there are no unicorns in life! There is no perfect ethicality.. we can never be
perfectly ethical. Our self-view is more important to us than anything we really enjoy
—be it food, friends, music or sex. When our self-view is destroyed, we can even
destroy our self. So most of us develop a very good self -view. Self-view vs self-
threat= when we receive a negative critique or when we have moments of self-
doubt about our unicorn self-view, then we normally go into self-protection mode; if
there are no self-threats, then we go into a process of self-enhancement. As we go
more into the mode of self-enhancement, the less we are on guard and the more
likely that we can fall into doing an unethical act..this is the predictive value of the
 theory of bounded ethicality. The case of my Sri Lankan colleague, who was
spotlessly ethical, clean as mountain water in his financial dealings and reporting,
and sharp as a razor in his analytical abilities and great leader, who has mentored
many a junior..then he falls for a junior female colleague and what a fall from
grace!!When we are in self-protective mode, we question our own sense of being
beyond wrong-doing, come down from our high moral ground and recognize that we
can be wrong and then the correction takes place and we begin to become more
careful and more ethical. This is a cyclical, dynamic process that can go on and on
throughout your careers, unless you can become ethical learners, grounded not in
unicorn unreality but in bounded ethicality and continue learning from it.
3. Bounded Awareness—I can never find anything that I want in my fridge, however
hard I search. Then my wife comes along and points out the stuff sitting right there!!
When we fail to see or seek out relevant information, that is an example of bounded
awareness. It’s like believing the first fake news that comes to you as a forward,
when you could have googled and checked if that was fake or not! It’s a failure to
see and a failure to seek. All of us are “System 1 “ thinkers—fast, reflexive, automatic
thinking and “System 2” thinking, which is our slower, deliberative thinking mode.
And we do both, according to David Kahneman, Nobel Prize winner in Economics
(Thinking Fast and Thinking Slow) Bounded Awareness is part of System 1 thinking.
We need to learn to pull back from System1 thinking to get out of Bounded
Awareness mode.
4. A conflict of interest is a situation that could potentially undermine a board
member's objectivity. For example, a conflict of interest would exist if the board
voted to hire a janitorial service that was owned by a board member.
5. Visible conflicts of interest—those conflicts that are proven beyond doubt and are
obvious, like a Board member voting on an investment in cement purchase, where
his own son’s cement company is one of the bidders.
6. Potential conflict of interest is like when a judge is about to get a case in which one
of his distant relatives is an accused..he should then recuse himself
7. Invisible conflict of interest is one in which the conflict is not visible to others and
sometimes even to the perpetrator..the case of Prof Dan Ariely and tattoing one side
of his face and also the case of the drunk guy being included in the high performer
people group.
8. Perceived Conflict of Interest—where there was no actual conflict of interest but
people think that there is one. GST revenue sharing is an example.
9. Socialisation- In our communitarian society called India, caste is a fundamental tenet
of our culture; marriage is a sacred, God-ordained sacrament; patriarchy is a given;
and abject obedience to your parents and your village elders is expected. The act of
adapting behavior to the norms of a culture or society is called socialization.
10. Social Categorisation: The process of classifying people into groups on the basis of
common attributes like caste, gender, race, religion, age, income, location.. Social
Categorization is normal , but potentially destructive. SC leads us to overestimate the
differences between groups and underestimate the differences within groups,
leading to stereotyping, prejudice and discrimination and the formation of in-groups
 and out-groups. In-group favouritism and out-group denigration, even though one
has not really had any close relationship with in-group members or any problems
with out-group members. Out-groups ae seen as less capable of complex emotions
11. Theory of Moral Disengagement-Albert Bandura- Cognitive Biases and Distortions.
How people who otherwise in their life have exhibited socially ordained and sanctioned
moral behaviour, suddenly do things just the opposite and in the process, harm others
and even themselves. The paradox is that they still retain their sense of self-worth
through a mechanism of adaptation that disengages their morality from their
detrimental conduct and they disavow their responsibility for their behaviour.
A. Moral Justification: “Propaganda is to democracy, what violence is to dictatorship”-
Developing the Big Lie---WMD by Bush-Blair..Vietnam, Sale of Private Data,..ISIS
beheading people and enslaving women for sexual pleasure, all in the name of Islam,
ideological, political and national imperatives. It operates not only at the individual
level but also at the collective level. It is easier to morally disengage collectively than
individually. ”You need a village to kill a half a million people in the US alone”-
Bandura on the tobacco industry—they denied the connection between tobacco and
cancer for years, bribe the bureaucracy, Lobbyist persuading the govt officials;
advertisers, lawyers, actors.. all are morally disengaging..
B. Euphemistic Labelling—“collateral damage”.. a self-deceiving mechanism to make
reprehensible behaviour look respectable to the perpetrator; making harmful
behaviour look innocuous and judgemental actions remove all sense of guilt;
“servicing the target” meaning killing the enemies; surgical strikes for pinpoint
devastation; “downsizing “for laying off employees; “terrorists” as jihadists..
“euphemisms are unpleasant truths wearing diplomatic cologne”. “You are fired” is
the opposite of euphemism! Killing animals as “depopulated” or “harvested” or
“creative accounting” for fraud. “When a huge tree falls, the Earth around will
shake”—Rajiv Gandhi
C. Advantageous Comparisons—“I am a crusader for a good cause” and kill and steal on
the way to the place of battle. “LTTE-and the origin of “suicide bombing”
D. Displacement of Responsibility—most Nazi criminals displaced their responsibility by
saying “I was following orders”.. the Milligram Experiment- behaviour of volunteers
with and without a uniformed supervisor
E. Diffusion of Responsibility— Walking off an accident site without helping.my own
experience with my Head of Quality
F. Distortion of Consequences—Sterlite, NANO, Narmada Bachao
G. Attribution of Blame—drunk driver hits a pedestrian and makes him a paraplegic for
life..we feel bad for the victim.. then we learn that the victim is a convicted
paedophile… then all sympathy goes out of the window. he deserved what he
got..karma has caught up with him. My mugging experience and the police’s
comment!! George Floyd--he is a convicted felon and a porn actor!
H. Dehumanisation---Dalit scavengers, LGBT Community, girl infanticide