Unethical business research practices articles - correlation research definition pdf


 

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unethical business research practices articles

unethical business research practices articlesUnethical business research practices articles -Employees engage in unnecessary and expensive projects and creative bookkeeping to reach their goals.Many law firms, increasingly aware that goals are driving some unethical billing practices, have made billing more transparent to encourage honest reporting.More than two dozen people were killed or injured in Pinto fires before the company issued a recall to correct the problem.(We’ve personally heard many executives describe this phenomenon.) The manager may either not see the behavior at all or quickly explain away any hint of a problem. In 2007 Barry Bonds, an outfielder for the San Francisco Giants, surpassed Hank Aaron to become the all-time leader in career home runs—perhaps the most coveted status in Major League Baseball.We asked a third subgroup to read both versions and judge which scenario was more unethical.Research shows that as the uncertainty involved in completing a task increases, the guesswork becomes more unconsciously self-serving.(Bonds racked up 762 versus Aaron’s 755.) Although it was well known that the use of performance-enhancing drugs was common in baseball, the Giants’ management, the players’ union, and other interested MLB groups failed to fully investigate the rapid changes in Bonds’s physical appearance, enhanced strength, and dramatically increased power at the plate.Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfeasance from the top. Much more often, we believe, employees bend or break ethics rules because those in charge are blind to unethical behavior and may even unknowingly encourage it.Engineers had discovered the potential danger of ruptured fuel tanks in preproduction crash tests, but the assembly line was ready to go, and the company’s leaders decided to proceed.Rather than work faster, however, employees met the goal by overcharging for their services and “repairing” things that weren’t broken. The pressure at accounting, consulting, and law firms to maximize billable hours creates similarly perverse incentives.Furthermore, the agencies provide consulting services to the same firms whose securities they rate.In order to recoup costs, company Y increased the price of the drug to $15/pill.” Participants who read version A, in which company X itself raised the price, judged the company more harshly than did those who read version B, even though the patients in that version ended up paying more.Companies have poured time and money into ethics training and compliance programs, but unethical behavior in business is nevertheless widespread.Nor will integrity alone prevent them from spurring unethical behavior, because honest people can suffer from motivated blindness.If steroid use did help bring the home runs that swelled ballpark attendance and profits, those with a stake in Bonds’s performance had a powerful motivation to look the other way: They all stood to benefit financially.Even without an intention to pad hours, overbilling is the outcome.Drawing from extensive research on cognitive biases, they offer five reasons for this blindness and suggest what to do about them.It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.However, few grasp how their own cognitive biases and the incentive systems they create can conspire to negatively skew behavior and obscure it from view.It’s well documented that people see what they want to see and easily miss contradictory information when it’s in their interest to remain ignorant—a psychological phenomenon known as motivated blindness.unethical business research practices articlesSupport for predictions that the impact of High Performance Work Practices on firm performance is in part contingent on their interrelationships and links with competitive strategy was limited.These agencies made their profits by staying in the good graces of rated companies, not by providing the most accurate assessments of them, and the agency that was perceived to have the laxest rating standards had the best shot at winning new clients.Soon after the deal was completed, Ovation raised Mustargen’s wholesale price by about 1,000% and Cosmegen’s even more.We believe that the patterns evident there continue to recur in organizations.The pharmaceutical was making the drug for $2.50/pill (all costs included), and was only selling it for $3/pill.” Then a subgroup of study participants was asked to assess the ethicality of “A: The major pharmaceutical firm raised the price of the drug from $3/pill to $9/pill,” and another subgroup was asked to assess the ethicality of “B: The major pharmaceutical X sold the rights to a smaller pharmaceutical.It promoted paper-thin down payments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes.Further experiments using different stories from inside and outside business revealed the same general pattern: Participants judging on the basis of just one scenario rated actors more harshly when they carried out an ethically questionable action themselves (directly) than when they used an intermediary (indirectly).(In fact, Ovation had a history of buying and raising the prices on small-market drugs from large firms that would have had public-relations problems with conspicuous price increases.) Why didn’t Merck retain ownership and raise the prices itself?In our teaching we often deal with sales executives.Let’s look at another case in which a well-intentioned goal led to unethical behavior, this time helping to drive the recent financial crisis.Many saw the decision as evidence of the callousness, greed, and mendacity of Ford’s leaders—in short, their deep unethicality.At the same time, we believe that the strategy worked because people have a cognitive bias that blinds them to the unethicality of outsourcing dirty work.Consider an experiment devised by Max Bazerman and his colleagues that shows how such indirectness colors our perception of unethical behavior.“Hell no,” said one high company official who worked on the Pinto, according to a 1977 article in . Safety wasn’t a popular subject around Ford in those days. Whenever a problem was raised that meant a delay on the Pinto, Lee would chomp on his cigar, look out the window and say ‘Read the product objectives and get back to work.’” We don’t believe that either Iacocca or the executives in charge of the Pinto were consciously unethical or that they intentionally sanctioned unethical behavior by people further down the chain of command.But by failing to consider the effects of the goals and reward systems they created, they did.The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread.That’s because cognitive biases and organizational systems blind managers to unethical behavior, whether their own or that of others.Taking an approach heralded as rational in most business school curricula, they conducted a formal cost-benefit analysis—putting dollar amounts on a redesign, potential lawsuits, and even lives—and determined that it would be cheaper to pay off lawsuits than to make the repair.Rather, we want to know why managers and consumers tend not to hold people and organizations accountable for unethical behavior carried out through third parties, even when the intent is clear.But the results also reveal that when we’re presented with complete information and reflect on it, we can overcome such “indirect blindness” and see unethical actions—and actors—for what they are. unethical business research practices articles When the potentially dangerous design flaw was first discovered, did anyone tell him?Consider an infamous case that, when it broke, had all the earmarks of conscious top-down corruption.Why did the agencies vouch for those risky securities?This bias applies dramatically with respect to unethical behavior.When leaders fail to meet this responsibility, they can be viewed as not only promoting unethical behavior but blindly engaging in it themselves.The fixed costs were high and the market was limited.A decade of research shows that awareness of them doesn’t necessarily reduce their untoward impact on decision making.A system designed to promote ethical behavior backfires.In August 2005 Merck sold off two cancer drugs, Mustargen and Cosmegen, to Ovation, a smaller pharmaceutical firm.Leaders setting goals should take the perspective of those whose behavior they are trying to influence and think through their potential responses.Of course, this requires a detailed allotment of time spent, so some firms have assigned codes to hundreds of specific activities. Deciding where in a multitude of categories an activity falls and assigning a precise number of minutes to it involves some guesswork—which becomes a component of the billable hour.It does little good to simply note that conflicts of interest exist in an organization.Managers routinely delegate unethical behaviors to others, and not always consciously.But the patients who used the drug really needed it.If small-market drugs weren’t worth the effort, why did Merck keep producing them?By far the most common problem they report is that their sales forces maximize sales rather than profits.That methodical process colored how they viewed and made their choice. Such “ethical fading,” a phenomenon first described by Ann Tenbrunsel and her colleague David Messick, takes ethics out of consideration and even increases unconscious unethical behavior.Scrutiny of the decision process behind the model’s launch revealed that under intense competition from Volkswagen and other small-car manufacturers, Ford had rushed the Pinto into production.Only by understanding these influences can leaders create the ethical organizations they aspire to run.The largest agencies, Standard & Poor’s, Moody’s, and Fitch, were—and still are—paid by the companies they rate. unethical business research practices articles At the heart of the problem was President Bill Clinton’s desire to increase homeownership.This will help head off unintended consequences and prevent employees from overlooking alternative goals, such as honest reporting, that are just as important to reward if not more so.In 2008 the Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust.A host of psychological and organizational factors diverted the Ford executives’ attention from the ethical dimensions of the problem, and executives today are swayed by similar forces.Today Bonds stands accused of illegally using steroids and lying to a grand jury about it; his perjury trial is set for this spring.Those people saw company X’s behavior as less ethical in version B than in version A.The study participants read a story, inspired by the Merck case, that began this way: “A major pharmaceutical company, X, had a cancer drug that was minimally profitable.Assuming that Merck knew a tenfold price increase on a cancer drug would attract negative publicity, we believe most people would agree that using an intermediary to hide the increase was unethical.We don’t know for sure, but we assume that the company preferred a headline like “Merck Sells Two Products to Ovation” to one like “Merck Increases Cancer Drug Prices by 1,000%.” We are not concerned here with whether pharmaceutical companies are entitled to gigantic profit margins.Research reveals that motivated blindness can be just as pernicious in other domains.A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate.These experiments suggest that we are instinctively more lenient in our judgment of a person or an organization when an unethical action has been delegated to a third party—particularly when we have incomplete information about the effects of the outsourcing.But participants who compared a direct and an indirect action based their assessment on the outcome.But looking at their decision through a modern lens—one that takes into account a growing understanding of how cognitive biases distort ethical decision making—we come to a different conclusion.This study comprehensively evaluated the links between systems of High Performance Work Practices and firm performance.Executives should be mindful that conflicts of interest are often not readily visible and should work to remove them from the organization entirely, looking particularly at existing incentive systems.But after selling the rights to manufacture and market the drugs to Ovation, Merck continued to make Mustargen and Cosmegen on a contract basis.Consider what happened at Sears, Roebuck in the 1990s, when management gave automotive mechanics a sales goal of $147 an hour—presumably to increase the speed of repairs.You must be aware of these biases and incentives and carefully consider the ethical implications of every decision.Part of the answer lies in powerful conflicts of interest that helped blind them to their own unethical behavior and that of the companies they rated. unethical business research practices articles More than two dozen people were killed or injured in Pinto fires before the company issued a recall to correct the problem. unethical business research practices articles




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