Bounded ethicality refers to the idea that the ability of the person to make ethical decisions is limited because of the various internal and external factors. The internal factors could be the conscious or unconscious self-serving biases, and external factors could be our tendency to choose the decisions that make us more acceptable to those around us. Bounded ethicality claims that everyone is bounded ethically, and various factors like cognitive biases and social or organizational pressures limit the abilities of the person to make ethical decisions. Bounded ethicality also explains that people tend to overemphasize the ethicality of their behaviour, and they fail to recognize that their behaviour and their ethical choices are the results of various internal biases. Bounded ethicality makes people unaware of their unconscious bias which plays a major role when making any ethical decisions. Bounded ethicality tends to make people consider themselves ethical, and competent, even when their decisions are influenced by their self benefits only. Bounded ethics also seeks to answer why even the ethical person tends to behave unethically in certain circumstances. Bounded ethicality does not aim to teach people how they should behave in the given situations, instead, it focuses on making people aware of their own behaviour by raising their ethical level. In this article, we’ll understand the concept of bounded ethicality and its negative impacts on society.
Understanding Bounded Ethicality
The first model of bounded ethicality contrasts the idea that people can act ethically in every situation, it proposes that people are highly likely to fall for the various biases and act unethically in certain circumstances (Chugh, Banaji, & Bazerman, 2005). According to Chugh, various systematic and usual psychological processes are responsible for the ethical behaviour of the people. This model of bounded ethicality tends to explain the various gaps that exist between the real and the intended behaviour of the person. For example, it is often seen that in organizations some people tend to overclaim credit (Caruso, Epley, & Bazerman, 2006), and their decisions are influenced by self-interest (Moore, Cain, Lowenstein, & Bazerman, 2005).
1. Cognitive Sources of Binding Ethicality
The work in the field of Behavioural ethics describes various mechanisms that lead to bounded ethicality. Let us discuss those mechanisms.
Bounded ethicality can make people ignore their wrong or unethical behaviour because their judgement to analyse the decision becomes bounded, i.e., they assume and evaluate the decisions from their own perspective. For example, motivated reasoning can cause people to ignore some crucial facts and overemphasize certain other facts that support their perception. This thing also points out how the self-interest of the person shapes his/her perception of reality. A person tends to mould and evaluate the given situation in a way that aligned with his/her self-interest and the person fails to see his/her wrongdoings or unethical behaviour.
In this biased thinking, the person tries to justify his/her wrong actions. Even when the person consciously knows that he/she has committed something wrong, he/she will use several excuses to justify his/her wrongdoings. For example, using several arguments such that he/she did this to prevent that from happening or ‘he/she had to do this and so on. Psychologists Greenwald and Banaji suggested that people like to think of themselves as moral and ethical, and they find it difficult to admit to others and to themselves that they have committed something which is not ethical.
Some researchers claim that people overestimate that they are capable of being impartial and they fail to accurately analyse their actions. Due to this bias, they believe that they are behaving ethically even if they are not. The researchers Chugh, Bazerman, and Banaji called this an illusion of objectivity, i.e., people think of themselves as more objective than they really are. This illusion occurs due to the various psychological mechanisms that lower their ability to accurately analyse their behaviour and they wrongly evaluate their ethicality. This mechanism allows people to view themselves as morally right even if they engage in unethical behaviour, and they justify their behaviour through several excuses.
2. Experimental Evidence of Bounded Ethicality
Some researchers claim that the wrongdoings or the unethical judgements are not completely conscious, instead, these are influenced by implicit judgment. For example, if a person wants a particular conclusion, for example, if a person thinks that he/she is behaving ethically then the person remembers this and often chooses and emphasises those actions that are aligned with that belief. Let us discuss some of the experiments that illustrate this concept.
- Let us first discuss the three-stage experiment conducted by Lisa Shu, Max Bazerman, and Francesca Gino. The findings of this experiment discuss moral forgetting. During the first stage, the participants were told to memorize the honour code of a university in which the rules for appearing for the university exams and other codes of conduct were included. In this second stage, the participants were provided with various problem-solving tasks. The participants had to report the solutions to the tasks to the examiner, and they will get a monetary payment depending on the number of tasks they reported that they had been solved. The participants were assigned to any one of the two groups at the time they reported their results. The participants belonging to the first group had to show their task sheet at the time they asked for payments, for the confirmation that they had really solved the problems. This means that the participant belonging to the first group did not have the cheating opportunity because the examiner can cross-check the tasks they have solved from their task sheets. On the other hand, the participants belonging to the second group were not asked to show their task sheets for getting the payment, instead, they were told to put their task sheets through a shredder machine. This means that the participants of the second group had the chance for cheating. They could have easily claimed the wrong number of problems solved to gain the monetary benefits. In the third stage of the experiment, the participants were told to recall the honour code that they memorized in the first stage. It was found that the participants of the second group, i.e., the ones who had the chance to cheat, found it more difficult to recall the honour code than the participants of the first group, who did not have the chance to cheat. This suggests that people are more likely to forget the facts or rules that make them feel negative about themselves. Their brain subconsciously reduces its ability to recall the rules that prohibit the actions they had committed to reduce the feeling of guilt of performing those actions.
- Now, let us discuss ‘motivation seeing’ another concept similar to moral forgetting. This explains how visual perception gets influenced by the self-interest of the person. The report of an experiment conducted by Balcetis and Dunning suggests that the preferences and desires of the person impacts his/her impact his/her visual stimuli processes. In an experiment, some ambiguous figures were shown to the participants. Ambiguous figures refer to the shape that two or more people may view as the same or the different shapes depending upon their viewpoints or interpretation of that shape. For example, some may interpret the shown figure as the letter B or others may interpret it as the number 13. In this experiment, it was found that the participants interpreted the figures in a way that result in their favour. This experiment shows that our brain restricts the interpretation of things that is against our interests, i.e., the self-interest of the person not only influences the planned and calculated decisions but also the processing of the visual stimulus. Hence, the desires and the wishes of the person influence the brain to display the content in a way that makes the person interpret the situation in a way that makes it easier for him/her to behave unethically.
- Here’s another experiment conducted by Shalvi, Elder & Bereby-Meyer. In this study, participants had to roll a die. The number that comes after the roll is only visible to the one who rolls the die, i.e., the results of the roll were not shown to the others. Then, the participants had to report the results to the experimenter and they were awarded the money according to the number that comes. The higher the number comes after roll, the higher will be the monetary benefits. The members of the first group were told to roll the die once and then they have to report the results of the roll to get the payment while the members of the second group were told to roll the die two times but they were asked to report the results of only the first roll to get the payment. It may seem that there is not any difference in the payments received by the participants as in both the cases participants are receiving the payments for only one roll. However, the findings of the experiment showed that the members of the second group, who were told to roll the die two times, reported higher rolls (falsely) to get the higher payments than the members of group one, who rolled the die for only once. Hence, the results show that the decision of the person to cheat is not always rational or calculated, instead, the environmental conditions also impact the decisions of the person. In this experiment, the members of both groups had an equal opportunity to report the false number to get the maximum payment. However, the results of the experiment show that the members of the second group found it easier to lie than the members of the first group. This is because the members of the second group rolled the die twice and they found it easy to lie about the results of the first roll because they could justify their false claim based on the outcome of the second roll. For example, It might seem difficult to claim that you have received a five on the die when you have received two in real but suppose you receive two in the first roll, and five in the second roll, it becomes easier for you to report that you received five in the first roll. In that manner, people find it easier to justify their wrongdoings.
Negative Impacts of Bounded Ethicality
- The bounded ethicality of people can lead to various social harms. Because of the bounded ethicality, people find it easy to justify their unethical behaviour. Let’s understand this with an example of small thefts. We all are aware that stealing is bad, yet some people find it easy to steal the small things (less costly) from their workplace or institutions, even if they find it difficult to steal the cash equal to the cost of that small thing. They justify stealing these small things by considering it is ok to steal small things and that it is harmless. The false evaluation of their actions leads them to do unethical acts. The results of a study revealed the average number of employees who steal from their workplace is nearly 50 per cent. This theft may seem small to the employer but it may result in huge losses for the employer. In the case of the goods production factories, these small thefts of the employees may also result in a rise in the price of goods, which eventually result in a burden on the consumers. These small thefts can also result in large scale bankruptcies. The most devastating thing about these small crimes is that they are easy to justify but their impacts are large, which makes them a point of concern. For example, it may not be a big deal for the one who commits the act of wardrobing (an act of buying an item and returning it to the store after using it), but it cost the retailers billions of dollars per year. According to some statistical reports, these small thefts lead to the loss of 40 billion dollars per year in the accounting sector, 24 billion dollars per year loss in the insurance sector, and loss of more than 300 dollars per year in case of tax deception. We can say that these ordinary employee thefts can be even more financially harmful than illegal crimes, for example, burglary. There are very few excuses to justify the act of burglary, but one can make a number of excuses to justify stealing a small item from the workplace.
- The finding of a lab experiment shows that unethical conduct can even become nearly universal due to the bounded ethicality. This study was conducted on the thirty thousand participants. The result of this experiment showed that in almost all the observations of the experiments nearly 50 per cent of people chose to cheat and lie. What makes us more concerned about this experiment is that the ethical rules and moral values were clearly mentioned to the participants, and the potential incentives that they were receiving for the act of cheating or lying were relatively small. When we talk about real life, the ethical standards are usually ambiguous and the monetary benefits that one receives from lying or cheating are significantly higher than one receives compared to what they were getting in the lab experiment, i.e., the frequency of following the unethical conduct become even higher.
- The increase of bounded ethicality among people could lead to a negative impact on interpersonal trust, which ensures the smooth functioning of society. Due to various ethical biases and the inability of the people to aptly judge moral situations their tendency to show unethical behaviour becomes common, which can even result in making this unethical behaviour a norm. This shows that bounded ethicality can result in undermining the mechanisms that depend upon the mutual belief of people in the positive intentions, cooperation and integrity for others. For example, if you see that to get success in business everyone lies or fools others, it will become very difficult for you to trust others.
- If we view it from the perspective of law and enforcement the normalisation of bounded ethicality has a troubling impact. For example, it would be difficult to curb unethical acts if the people who commit those acts believe that they are not doing anything wrong. Due to bounded ethicality, people face difficulty in following various legal policies, rules and regulations and they use various excuses to justify their unethical behaviour.
Ways to Overcome Bounded Ethicality
1. Think Objectively
Whenever you are about to make any ethical decision, try to avoid subjective thinking. We often fell victim to the various biases and subconscious desires while making decisions. While making any judgement we sometimes think of the situation from our perspective only, instead of thinking objectively. Try to imagine yourself in the position of the other person and think of how that person will make the decisions, this strategy will prevent you from making subjective and unethical decisions.
2. Build Humility
As we have read above, sometimes even the person who thinks of himself/herself as an ethical people tend to make unethical decisions because of the various cognitive biases. To avoid this, always challenge your decisions even when you think you have made an ethical decision because the decisions that seem ethical to you may be unethical from the other’s perspective. Try to understand other people’s perspectives and then evaluate your decision.
3. Spot the Biases
Some people tend to commit unethical actions without even being aware of that because their decisions are often based on various unconscious biases. One should try to spot these biases before making ethical decisions.
4. Pay Attention
One should pay attention to his/her surroundings. Try to focus that under what circumstances or environmental conditions you become more vulnerable to bounded ethicality. Analyse whether your decisions are actually ethical or you are just following the group norms and trying to please the higher authorities for self-serving benefits. When you pay close attention to your decisions it may reduce your chances to make unethical decisions.