COMM101 Lecture Notes - Lecture 2: Slippery Slope, List Of Corporate Collapses And Scandals, Sunk Costs
Week 2
Comm101 - Principles of Responsible Business
Aim of Lecture
-understand the evolution of a corporate scandal
-lay context and prepare to better understand the ethical theories
-to understand why ‘good’ companies and ‘good’ people engage in unethical action
-Enron —> how can such a big company collapse in such a short time? —> what could they
have done?
Factors Contributing to Unethical Business
-why do people behave unethically?
•arrogant belief that they will never fail
-Similar to consensus/peer pressure…
•the inside/outside struggle
-Self serving bias —> people tend to look for information that will confirm their pre-exisiting
views
-Slippery slope —> people are willing to do unethical things because they have already done
smaller, less extreme acts that make the bigger choice appear less unethical
-Sunk costs and loss aversion —> continue towards an unethical course of action simply
because we are reluctant to accept that our prior choices or investments were wrong or
wasted
-
Enron Video
-Enron ruined by a few bad men or the dark shadow of the American dream?
-“what unites them all is their willingness to believe in the magic of the marketplace”
Requisites for Ethical Action
-The four steps to ethical action
1. Awareness of an ethical problem
2. Ability to reason about ethical issues
3. Having the motivation to act ethically
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