Rationalization and Escalation…a possible explanation for the VW fiasco

Volkswagen recently admitted that  millions of clean diesel cars sold worldwide contain software to fool regulators. In contrast to the GM safety scandal, however, where unclear standards and communications issues contributed to the production of unsafe vehicles, it will be pretty hard for VW to find a rationale for its use of technology that blatantly violated regulations. This is particularly difficult given VW’s high profile efforts to assert its “greenness” – and many laudable efforts to support these assertions.  When this type of event happens, the question always comes up:  How do people that, in all likelihood, are reasonable, ethical people, end up making such unethical decisions.

One possible answer can be that they are able to develop rationalizations for why these decisions are not unethical.  In a paper published in Journal of Business Ethics, we argue that these clearly faulty rationalizations don’t occur over night.  We propose that corruption in organizations often spreads through a process of overcompensation, where rationalization and action interact in a dynamic way. To give people a margin of error in defending unethical behavior, rationalizations are developed that that ‘over-shoot’ the actual corrupt deed.  This overshoot then provides an impetus for more serious forms of illegality. In other words, the over rationalizations push out the boundaries of what might be considered ethical, so when the next decision is made, the reference point for ethical decision making has moved.  This occurs in a cycle, eventually leading to decisions that to the common person would seem blatantly unethical.

To avoid this escalation, you need an organization that questions these types of rationalizations early on.  This requires a strong culture, and organizational mechanisms to double check ethically questionable decisions.

See the entire paper at: http://scholarworks.rit.edu/cgi/viewcontent.cgi?article=1600&context=article

 

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