Behavioral Ethics in Accounting. Julie Mercado, M.S., CPA

Transcription

1 Behavioral Ethics in Accounting Julie Mercado, M.S., CPA

2 Objectives Why do we need to learn about ethics? What is your ethical style? What is behavioral ethics? Theories of behavior Common pitfalls Affecting change Conclusion

3 Why do we study ethics?

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5 1. Which is worse? hurting someone's feelings by telling the truth telling a lie and protecting their feelings Ethical "Style" (pg. 1) 2. Which mistake is worse? to make exceptions too freely to apply rules too rigidly 3. Which is it worse to be? unmerciful unfair 4. Which is worse? stealing something valuable from someone for no reason breaking a promise to a friend for no good reason 5. Which is it better to be? just and fair sympathetic and feeling

6 6. Which is worse? not helping someone in trouble being unfair to someone by playing favorites Ethical "Style" (pg. 2) 7. In making a decision you rely more on hard facts personal feelings and intuition 8. Your boss orders you to do something that will hurt someone. If you carry out the order, have you actually done anything wrong? yes no 9. Which is more important in determining whether an action is right or wrong? whether anyone actually gets hurt whether a rule, law, commandment, or moral principle is broken

7 Answer key 1) HURTING FEELINGS (C)/ TELLING LIE (J) 2) MAKE EXCEPTIONS (J)/ APPLY RULES (C) 3) UNMERCIFUL (C)/ UNFAIR (J) 4) STEALING (J)/ BREAKING PROMISE (C) 5) JUST (J)/ SYMPATHETIC (C) 6) NOT HELPING (C)/ PLAYING FAVORITES (J) 7) FACTS (J)/ FEELINGS (C) 8) YES (C)/ NO (J) 9) HURT (C)/ RULE (J)

8 What is behavioral ethics? Definition: the study of systematic and predictable ways in which individuals make ethical decisions and judge the ethical decisions of others that are at odds with intuition and the benefits of the broader society - Bazerman & Gino, Harvard B-school Theories: Kohlberg Gilligan Rest Ajzen Kahneman

9 Heinz experiment Heinz's wife has a rare disease A special drug can make her better Pharmacist charges 10 times the cost ($200 cost; $2,000 charge for needed dose) Heinz can only gather $1,000 Seller will not make an exception on price What should Heinz do?

10 Kohlberg's Stages of Moral Development

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12 Gilligan's Stages of Ethical Care

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14 Rest's components of ethical behavior Moral Sensitivity Moral Judgment Moral motivation Moral character

15 Icek Ajzen's Theory of Planned Behavior The best predictor of one's behavior is his/her intentions.

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17 System 1 "Fast" System 2 "Slow" Kahneman's Systems of Thinking Intuitive system of processing information; fast, automatic, unconscious, effortless, emotional decision process Continually assesses the situation, delivers updates Includes instinctual behavior Jumps to conclusions Slower, conscious, deliberate, effortful, explicit, and a more reasoned decision process Logical, skeptical, seeks new or missing information, makes decisions Powerful but lazy

18 "Five percent of the people think; ten percent of the people think they think; and the other eighty-five percent would rather die than think." - Thomas A. Edison

19 Denise is standing next to a switching lever near some trolley tracks when she sees an out-of-control trolley. The conductor has fainted and the trolley is headed toward five people walking on the track; the banks are so deep that they will not be able to get off the track in time. The track has a side track leading off to the left, and Denise can flip the switch and turn the trolley on to it. There is, however, one person on the left-hand track. Denise can turn the trolley, killing the one; or she can refrain from flipping the switch, letting the five die. Is it morally permissible for Denise to flip the switch, turning the trolley onto the side track?

20 Frank is on a bridge over the trolley tracks. He knows trolleys and can see that the one approaching the bridge is out of control, with its conductor passed out. On the track under the bridge, there are five people; the banks are so steep that they will not be able to get off the track in time. Frank knows that the only way to stop an out-of-control trolley is to drop a very heavy weight into its path. But the only available, sufficiently heavy weight is a large person also watching the trolley from the bridge. Frank can shove the large person onto the track in the path of the trolley, resulting in his death; or he can refrain from doing this, letting the five die. Is it morally permissible for Frank to push the large person onto the tracks?

21 Common Pitfalls Values Beliefs & behaviors Blocks Norms

22 Values in tension Autonomy vs Equality Sensibility vs Rationality

23 Cognitive Dissonance Ways to reduce dissonance: 1. Change in one or more beliefs/attitudes 2. Acquire new information 3. Reduce importance of the beliefs/attitudes

24 "Blocks" to making ethical decisions Conflict of interest Peer pressure Obedience to authority Moral muteness Incrementalism Rationalization Bystander effect Renaming Groupthink Loss aversion Framing Moral equilibrium

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28 Something (such as a behavior or process) that is usual or expected Norms Cultural/Social Religious Workplace Family Individual

29 Affecting Change Narratives Relationships Identity

30 A 7-yr old child asks to sit on your lap while you mow. The child is a relative (son/daughter, niece/nephew). How will you respond?

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35 A 7-yr old child asks to sit on your lap while you mow. The child is a relative (son/daughter, niece/nephew). How will you respond?

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38 A 7-yr old child asks to sit on your lap while you mow. The child is a relative (son/daughter, niece/nephew). How will you respond?

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40 Relationships (no, not that kind)

41 Identity

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43 Conclusion

44 "The Wrestle"

45 VIA Survey of Character Strengths Dr. Martin Seligman - Positive Psychology