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Chet Ozgen

Great article! There is a book called “How We Decide” by Jonah Lehler that also addresses this issue. Here, I will summarize some of my experiences.
Having started a company with two other partners with drastically different backgrounds and business experiences, I found that during the first 8 years of our company all of the decisions had to be made rationally. Conversely, the past 8 years during which I had the luxury of not having any partners, I find myself relying on emotions as much as rationale for decision making.
After reading Jonah Lehler’s book, I concluded that in a corporate (or partnership) environment rational decisions cannot be avoided since other peoples’ money is involved in the outcome. When the outcome only affects your own finances, it is much simpler to be ethical, virtuous and altruistic.
By the way, as a company we had mediocre performance during the first 8 years. What about the latest 8 years? We’ve grown over four-fold (organically) without any outside financing. We have an excellent employee benefit package (which did not exist during the first 8 years) and high employee retention rate. Yes, the profit goes up-and-down each year, but it is more than enough for me (and for the employee bonuses). Could we have done even better? Yes, but at what cost?

Tina Dussault

A TRULY rational person would not lie. So I am not sure that "rational" is the right word here. If you really think through a situation and fully process its cascading benefits and losses, the rational decision will be the honorable one. I do not know many rational liars, but I do know of many irrational ones.

This is why I understand why people "instinctively" feel safety with rational people over feeling people: they suspect that there is a reality-based foundation to the thinking person's actions. I put 'instinctively' in quotes because I am not sure that it is necessarily instinct. I am thinking that that instinct is likely to have been developed over a period of time of observing a series of feeling versus thinking people, and seeing how their two types of worlds play out. That is actually a period of fact-collecting. So the decision to side with a rational person is probably rational in some way! :-)

Suzanne

Kelley, I completely agree. I understand life is competative, but it does not have to be a winner take all game. A few months ago I read a book that was published in the 70's (Dyer's Pulling Your Own Strings-an oldie) but the author had strong words of caution against unbridled competition and the destruction it brings. It is interesting to see that now coming true in business, politics, and often, even in religion.

Kevin Rutkowski

I think that KNisa's comment from a couple posts earlier sums up the concept well: "People should be groomed not to go for short cuts as it matters of course to reach the destination but it also matters how you get there.....or maybe for some it doesn't ;)"

I'm several chapters into the book "Enchantment" by Guy Kawasaki, and the concepts so far jibe well with the idea of behaving ethically and considering feelings when conducting business. Based on Mr. Kawasaki's success (as well as many other examples), it seems likely that many companies and people do well by doing good.

davidburkus

I've got to disagree with SteveB. Classes on moral ethics aren't really changing the ethical landscape of business. A course on ethics may in fact teach one the ethical framework to rationally justify an unethical decision.

Perhaps instead of a course on ethics, business leaders ought be instructed on how to "go with their gut" again.

Casey Bisard

This study is a fascinating one. I am not surprised that people are more moral when they think and act with their gut rather than when they think rationally. Your gut contains your feelings on the situation, which includes feelings on whether to screw the person or not; whereas, it is in your rational favor to screw everyone (discounting future business opportunities). The part I find interesting is that most people would rather do business with a rational one rather than one who acts with their feelings. It is comforting to know that a person will act rationally and be businesslike, but as this study shows, businesslike might mean that they’ll screwed you over.

steveB

Business leaders should be required to take a course in virtue ethics. Some sound moral reasoning would go a long way towards remedying this issue.

Jenny

I completely agree and had read about this study at U of T, the results of which I found really interesting but not incredibly surprising (given some of the bad boss situations I've come across and the boss' instructions to always remove the emotional from decision making - "it's nothing personal, just business"). Doesn't this go into the area of whether the business of making making can have a "soul" or "nobility?"

I think a good addition to your mantra is, "Make an effort to walk in the other's shoes before you take action." By this I mean we should try to have more empathy in our dealings and relationships with others. This doesn't mean you won't ever take the action(s) you are considering but if you take the time to think and feel things from the other's perspective, you may realize that you are about to treat someone unethically (or otherwise poorly). This might make you stop since you wouldn't want someone to do that to you.

Sounds like you both had a great discussion - how fortuitous your plane was delayed!

Kelley Eskridge

Ah, Bob, this is a very interesting post. Apologies for this long comment, hope you don't mind.

I think our cultural ambivalence about ethical behavior and gut instinct is directly related to our definitions of individual power and what it means to "win."

We're taught in business and in life that we need to win, by which (in my perception) we really mean "I need to always feel good about myself." The tricky part is what the culture teaches us to assume should make us feel good.

Winners in general are given approval not because they've helped others, but because they have triumphed over others in some way. And being a "loser" isn't just about not getting first prize -- it carries all kinds of semantic connotations about being easily trampled, being stepped on, being powerless, being not smart enough to win.

I remember the first time I got taken by a street scammer (the old "I need money for gas" story). I was in my early 20's and had no idea I was being duped. When I found out I'd been lied to, I felt like a loser. It made me (briefly) want to never help anyone on the street again, just in case I was being taken again.

Wow, how messed up is that? When we are so vulnerable to our cultural notions of "winning" that any threat to our feeling like we're always "on top" of a situation can make us unwilling to risk losing face... It's tricky, because in fact I don't want to give money to scammers for the rest of my life, but I also fear that all too often, my "rational analysis" of other people's needs is way too based on my own concern about whether I'll look like an idiot for losing money. Or giving up power. Or allowing someone to "get away with" something.

And now after much wandering I arrive at my point (grin). I think the experiment being described nails the dynamics perfectly. Lots of folks are happy to help someone change a flat tire -- that's a clear "win" for everyone. But leaving money on the table...oh ho, now we get into the gray space where cultural expectations of ethical behavior clash with cultural notions of what makes us feel good about ourselves. Because in this culture, leaving money on the table is stupid. It makes us "the loser."

And so when you ask someone in this context how they will feel, perhaps what you would get is two conflicting answers. I feel good that we both got something. I feel like a loser because I didn't get everything I "should."

I think that one lesson from this study is that in this context, "rational analysis" is cultural code for "how I can make sure I don't come out of this feeling like a loser? If someone has to feel like a loser, it should be the other guy, not me."

And that's a trap for all of us. Ethical behavior very often does not result in a clear "win" for everyone, because our values about winning don't permit it. The ironic thing is that I honestly think that we'd end up screwing each other less in general if we all stopped trying so hard to keep it from happening. Our own definitions of winning make it easier for us to rationalize our way into making sure someone else loses.

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