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This thesis is focussed on unpacking individual factors in ethical decision-making. However, the other side of the coin, i.e. knowing what leads to unethical behaviour is also crucial. According to Gino (2015), unethical behaviour can be both intentional and unintentional. This shows that many individuals start with good intentions but ultimately engage in unethical behaviour (Gino, Schweitzer, Mead, & Ariely, 2011). Four main barriers to ethical decision-making include: (i) moral disengagement; (ii) difficulty in recognising an ethical problem; (iii) cognitive biases and psychological tendencies; and (iv) ego depletion.

Individuals are more likely to make unethical decisions when they are morally disengage. Moral disengagement refers to the deactivation of moral self-regulatory processes that usually curb unethical behaviour (Bandura, 1999). According to Bandura (1999), self- regulatory mechanisms governing moral conduct do not come into play unless they are activated, and there are many psychological manoeuvres by which moral self-sanctions

68 are selectively disengaged from inhumane conduct. Moral disengagement may centre on the cognitive restructuring of inhumane conduct into phenomena that include moral justification, disavowal of a sense of personal agency by diffusion or displacement of responsibility, and disregarding or minimising the injurious effects of one’s actions. For example, the study by Milgram (1974) has shown that when responsibility is not enforced, individuals may diffuse responsibility or unquestioned deference to authority. Diffusion of responsibility suggests that individuals will act in ways they would usually find unacceptable if an authority figure takes responsibility for the outcomes. In other words, according to Bandura (1990), good people can be talked into performing cruel deeds in deference to authority. Similarly, in Haney, Banks and Zimbardo’s (1973) simulated prison experiment, college students were randomly assigned to serve as either inmates or guards and were given unilateral power. The experiment that was originally planned to be two weeks long had to be terminated in six days after pathological changes in participants were observed. Zimbardo, Maslach, and Haney (2000) contemplate that the experiment shows that good people can be induced to do evil things within the context of socially approved roles, rules and norms, a legitimising ideology, and institutional support that transcends individual agency. The scholars contend that some situations can exert powerful influences over individuals, causing them to behave in ways they would not have predicted. Various scholars have interpreted the experiment as a classic work in the effects of authority (Knoll, Schyns, & Petersen, 2017; Teper, Zhong, & Inzlicht, 2015).

One of the impediments in the rational framework of decision-making is the assumption of decision-maker’s awareness of problems. This may not always be the case. As Jackson (1975) and McShane et al. (2013) point out, people have difficulty in recognising problems, therefore there needs to be a process of problem detection. For instance, from

69 an organisation’s (or management) point of view, there are even impediments to problem identification (McShane et al., 2013; Robbins, Judge, Millet, & Boyle, 2014). As many decision-making situations can be morally ambiguous, moral awareness enables individuals to identify that a situation should be considered from a moral point of view (Jordan, 2007; Wurthmann, 2017). Therefore, scholars stress the importance of moral awareness in making ethical decisions (Martinez & Jaeger, 2016; Schwartz, 2016). According to Schwartz (2016), an individual must realise that he or she is faced with a situation requiring a decision or action that could affect the interests, welfare, or expectations of oneself or others that may conflict with one or more moral standards. Moral awareness is associated with moral behaviour and many other positive outcomes (Reynolds & Miller, 2015). Empirical research supports this idea shown in the study by Welsh and Ordóñez (2014) that used priming to raise implicit moral awareness and discovered that doing so reduced dishonesty.

Cognitive biases and psychological tendencies are also barriers to ethical decision- making, particularly with relation to bounded ethicality and conformity bias. The rationalist approach assumes that decision-makers are able to articulate all information to choose the best solution. However, Simon (1972) and many subsequent scholars argue against this and suggest that individuals suffer from bounded rationality due to limited and imperfect information-processing capabilities. The human mind cannot formulate and solve complex problems with full rationality, so people operate within the confines of bounded rationality. As a result, individuals construct simplified models that extract the essential features from problems without capturing all their complexity (Simon, 1997). Therefore, people make the best decision with the available information.

70 Simon (1997) uses the term ‘satisficing’, which refers to people seeking solutions that are satisfactory and sufficient as well as adequate for the current time and place, rather than aiming for the ideal decision (Robbins et al., 2014; Witzel, 2012). Bounded ethicality shares similarities with the conceptualisation of bounded rationality. It describes the systematic and predictable psychological processes that lead people to engage in unethical behaviours which they would condemn upon further reflection or awareness (Banaji, Bazerman, & Chugh, 2003; Banaji & Bhaskar, 2000; Tenbrunsel et al., 2010). Examples of bounded ethicality include over-claiming credit for group work (Caruso, Epley, & Bazerman, 2006), and racist and sexist behaviour (Chugh, Bazerman, & Banaji, 2005). Conflict of interest is also an example, whereby individuals tend to evaluate or judge the behaviours of others from a moral standpoint, while they fail to recognise conflicts of interest that they possess (Gino, 2015). Tenbrunsel et al. (2010) explain that when in high intensity situations, there is a strong visceral force at the time of action that makes individuals’ behaviours more automatic and geared towards immediate, instinctive self-preservation.

Conformity bias is the tendency to imitate others, especially in-group members, in unethical actions, for example, personal internet surfing on company’s time (Schwartz, 2017). This is because people perceive questionable behaviours exhibited by an in-group member or individual similar to them to be acceptable (Gino, 2015). This relates to moral rationalisation discussed by Schwartz (2017). Rationalisations permit people to maintain their moral identity, while they avoid experiencing emotions of guilt, or anticipatory shame or embarrassment. Rationalisation occurs when the majority of people are engaged in similar unethical activity (for example padding expense accounts), therefore there is no harm in following suit (Schwartz, 2017). This relate to incrementalism means that

71 what starts out as a minor ethical infraction eventually slides into more significant misconduct (Schwartz, 2017). Experiments conducted by Gino and Bazerman (2009) demonstrate that people are more likely to accept others’ unethical behaviour when ethical degradation occurs slowly rather than in one abrupt shift. This effect can be partly attributed to biases that result in a failure to notice ethical erosion when it occurs slowly.

Ego depletion has an association with self-control. Self-control is paramount in order to resolve internal conflict between short- and long-term benefits of dishonest acts. For example, violations of ethical norms or standards, cheating, stealing and other forms of dishonesty arise from impaired self-control. Gino et al. (2011) discuss at length that self- control is also needed in controlling emotional expression, suppressing forbidden thoughts, and resisting tempting foods. Self-control is impaired, however, when an individual continuously exerts self-control without rest or replenishment. One of the experiments conducted by the researchers involved giving participants in depleted condition instructions on how to direct their attention to a video-clip on a computer, while participants in a no-depletion condition were not given any instructions. Next, participants engaged in problem-solving tasks which presented them with the opportunity to falsely report higher performance levels in order to earn more money. The results show that participants with depleted self-control were more likely to behave unethically by lying about their performance on a problem-solving task compared to participants whose self-control were not depleted. This shows that when self-control resources are depleted, people do not have enough cognitive resources to recognise the moral component of the decision they are facing, and thus give into the temptation to cheat.

72 Additionally, decision frames could be a potential barrier to ethical decision-making. A decision frame refers to the type of decision that individuals believe that they are making, specifically how the decisions are coded or categorised (Tenbrunsel & Messick, 2004). Schwartz (2017) suggests three frames in making decisions: economic frame (for oneself or in the interests of the company); legal frame (abiding by the law – this is prominent in bribery, anti-competition, fraud, intellectual property, privacy, sexual harassment, or discrimination); and ethical frame (principles of right and wrong). According to Tenbrunsel and Messick (2004), when a decision is coded as an ethical one, ethical considerations will be part of the decision process; conversely if the decision is coded as a business or a legal decision, other considerations such as profit or compliance might be more central to the decision process. Therefore, decision frames indicate the processing unique to the specific frame, in which the decision is being viewed, and entails different behaviours in different situations that occur (Messick, 1999; Tenbrunsel & Messick, 1999). Moreover, different frames induce different processing effects and, in doing so, have different effects on behaviour. For example a study by Tenbrunsel and Messick (1999) found that, within an ethical frame, cooperation among businesses with the authorities is high, whereas in a business frame, cooperation is determined by cost-benefit analysis. The scholars concluded that individuals with a business decision frame cooperate because it makes business sense to do so, as opposed to being an ethical thing to do.