Scholarly Achievement: Goal 4

Goal

Continue to collect data on ethical decision making regarding the Should Mary Buy Her Bonus? scenario.

Since Fall 2010 I have been collecting data on an ethical scenario entitled, Should Mary Buy Her Bonus? Originally published in 2009 in Business Ethics Magazine by Shel Horowitz, the scenario challenges the reader to consider the ethical ramifications of profiting from a seemingly altruistic donation. Consider the scenario for yourself:

Mary Kantarian was achingly close to making her million-dollar sales goal — only $1,000 short. If she made the goal by the end of the year, it would mean a fat $10,000 bonus check, and a happy trip to the bank to finance a dream home she’d recently found. Other sales reps also were close, and one had already made the bonus. The books would close in just a few days, but at the end of the year her clients weren’t in a buying mood.

Still, Mary had one hope: inner-city Lincoln High School. Its students, who often had to share textbooks, could really use her company’s multimedia educational aids, but Lincoln had no discretionary budget for new teaching materials. What if Mary donated the money to this needy school for the purchase, and put herself over the magic quota?

Or perhaps she could offer partial “donations” to close sales at several schools. She would then surpass her quota goal with room to spare. The Lincoln school or other needy schools would gain immensely valuable educational programs that would help them serve their students, her company would pick up sales revenue, and she would meet her sales quota. Even better, she would earn a cool $10,000 on an investment of $1,000.

At first thought, this seemed like a win-win solution. But the idea needled Mary’s conscience. The more she thought about it, the more something about it bothered her. Yet if she didn’t close this “sale” — one which would help out disadvantaged students — she wouldn’t make that bonus, and her dream house would remain out of reach. She found herself wondering, What should she do?

Horowitz, S. (2009 November 11). Should Mary buy her bonus? Business Ethics Magazine. http://business-ethics.com/2009/11/11/should-mary-buy-her-bonus/

I started using this scenario in 2010 in a Principles of Management class at Saint Mary’s University. I continued using it in MGMT 325 Organizational Dynamics at WSU. Typically, students in these classes have junior standing and are business students.

The point of the scenario is to judge whether or not students can articulate that choosing to donate money to earn a bonus–a typical win-win situation–is unethical because of its intent. What are the ramifications of the decision? Is it really a win-win where no one is hurt? When applying an ethical test, does the decision look the same?

I collected data because without fail an overwhelming number of students choose the win-win argument and cannot articulate the ethical ramifications, especially since there are no legal consequences to the decision. In short they think, if it’s not illegal and the company doesn’t say it’s wrong, then it’s ok. I wanted to see if there was a pattern to their answers over time–there is–and when presented with Jones’ (1991) ethical intensity model and various ethical tests if they changed their mind.

Research shows (Craft, 2013) that people make better ethical decisions when they have more work experience and more education (Eweje & Brunton, 2010; Awasthi, 2008; Valentine & Rittenburg, 2007; Cagle & Bacus, 2006; McCullough & Faught, 2005). In their earlier review of ethical decision making, O’Fallon and Butterfield (2005) reported 41 findings regarding education and experience and stated that research, “generally indicates that more education, employment or work experience is positively related to ethical decision-making” (p. 387). My goal in collecting longitudinal research from business school juniors is to establish a base of knowledge that is stable–their typical answer to buy the bonus because of win-win–and see if it changes when further information is presented that they are forced to consider.

As of Fall 2016, I have presented this situation to 684 junior-level business students at two universities. 86% of students said that they would indeed buy the bonus for various reasons including:

  • It’s a win-win-win for Mary, the school and the company.
  • It looks good to donate for Mary’s career and it helps the kids in school.
  • The return on investment is positive (i.e. invest $1000, profit $9000).
  • There is nothing wrong with donating and getting the bonus because it is not illegal and not against company policy.
  • She was “close enough” to her goal percentage-wise.
  • No one will be hurt by her decision.

When I continued the conversation and included ethical tests and moral intensity factors I kept track of the number of students who change their mind. A few interesting findings emerged. Although very few students changed their mind (about 5%), about half of the students were able to engage in a dialogue that was richer and deeper than when the discussion first started. For example, when I replaced Mary’s goal of buying a house with paying for my mother’s cancer treatment (moral intensity) the answers were definite rather than shaky in the yes, buy the bonus category. This showed them that there is a price at which your ethical stance may be discarded in favor of a larger moral good. On the contrary, when I presented the students with the front of the newspaper test, their reactions were mixed. Essentially, let’s say that a reporter from the Winona Daily News got hold of this story and this was the headline: “Local Book Rep Profits From Donation.” Regardless of the content of the article, your integrity would be in question. Your boss would wonder how many other deals you’d cut corners on and your morals would be suspect. Students did not seem to understand the importance of doing business fairly and how having questionable integrity would impact your ability to be employed, make sales and be successful. Finally, a third factor emerged that surprised me. An ethical test that involves comparing your decision to that of a moral leader or highly respected individual (i.e. Jesus, Mother Teresa, Gandhi, etc.) elicited a surprising revelation that has stayed true. Students were not so concerned with looking bad in front of their parents, but if Grandma or Grandpa heard about them buying the bonus, that was unacceptable. The Grandma Effect quickly became an ethical test that has proved fruitful for six years.

Over the past six years, the 86% rate of “yes, buy the bonus” and the reasons to do so has remained constant. I needed to see if my results would hold true to the research that stated increased education and experience positively impacted ethical decision-making. In this case, would business professionals (increased experience) and business ethics students (increased ethics education) answer differently?I was invited to speak at the Women in Business luncheon and Winona Rotary where I presented this scenario in a presentation entitled, The hidden cost of win-win: Why it’s important to learn the ethics pause, and asked for written feedback on their decision. I also presented this scenario to employees of a local veterinary clinic as part of a paid consulting job and to my teaching colleagues in the business department at Saint Mary’s University. In sum, 88 people were polled and their overall responses matched that of other researchers. 53% of respondents chose to buy the bonus, which is significantly lower than business student responses. Reasons they would not buy the bonus were many:

  • No, it just seems wrong.
  • My gut is saying, “no.”
  • This seems to be “gaming the system” (bankers)
  • Her intent is flawed
  • Being close enough isn’t enough. If you can’t sell another $1000 and this represents a small percentage of your sales goal you shouldn’t get the sale (from a jewelry business owner)
  • It is dishonest.
  • Mary isn’t donating, the company is indirectly contributing.

Few professionals changed their mind and many had the same reasons for buying the bonus as students with one exception: ethics are different from morals in that they are set by an outside agency. As you can see, the rationale is more mature and thought-provoking. Experience is clearly seen in the response by business professionals in the intuition and sales answers. Essentially, the business professionals who mentioned intuition and gut were illustrating my concept of the ethics pause. That hesitation when you are faced with a decisions that seems right but you can’t exactly explain why it may be wrong. You can’t quite put your finger on what is wrong about the situation and your intuition is telling you to stop without being able to articulate why. When presented with ethical tests and moral intensity, the professionals said the benefit did not outweigh the risk, no matter the situation, but it may be acceptable to buy the bonus if the bonus is donated.

I’d heard the donation theory before when I had asked 29 seminary students at Immaculate Heart Seminary at Saint Mary’s University to weight in on the scenario. Seminarians–all male–are required to be philosophy majors. As such, they are skilled in diving deep into a scenario and seeing it from secular, religious and moral aspects. 93% of seminarians said they would not buy the bonus because it was basically morally wrong. However, a large majority of seminarians included in their written statements how the scenario could be accepted as morally right if Mary donated the money to charity she received. In essence, her altruistic donation of $1000 would gain her $9000 and if she donated it instead of used it for personal gain, that would right the wrong.

I collected data in three Applied Business Ethics classes in a pre and post-test scenario. I presented the Mary scenario to business ethics students at the start of the semester and at the end. At the end of the semester, out of 114 students surveyed, only 37% of students would buy the bonus, a stunning reversal when compared to their peers in the principles of management and organizational dynamics classes. Their reasons for not donating included:

  • Transparency is important.
  • Your colleagues will not look at you as a worthwhile peer
  • Your reputation may suffer
  • Parents matter, grandparents matter, everyone matters
  • This is a big risk with a relatively small reward.
  • It feels wrong. The intent is not right.

Essentially, one can see where a semester of business ethics education impacts ethical decision-making just as much as experience gained in the field.

mary-chart

I continue to collect data from students, but am focusing on collecting more data from business professionals. I plan to publish this data soon.

References

Awasthi, V.N. (2008). Managerial decision-making on moral issues and the effects of teaching ethics. Journal of Business Ethics, 78, 207-223.

Cagle, J.A. & Bacus, M.S. (2006). Case studies of ethics scandals: Effects on ethical perceptions of finance students. Journal of Business Ethics, 64, 213-229.

Craft, J. (2013). A review of the empirical ethical decision-making literature: 2004-2011. Journal of Business Ethics, 117(2), 221-259.

Eweje, G. & Brunton, M. (2010). Ethical perceptions of business students in a New Zealand university: Do gender, age and work experience matter? Business Ethics: A European Review, 19(1), 95-111.

Jones, T.M. (1991). Ethical decision-making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16(2), 366-395.

McCullough, P.M. & Faught, S. (2005). Rational moralists and moral rationalists value-based management: Model, criterion and validation. Journal of Business Ethics, 60, 195-205.

O’Fallon, M.J. & Butterfield, K.D. (2005). A review of the empirical ethical decision-making literature: 1996-2003. Journal of Business Ethics, 59, 375-413.

Valentine, S.R. & Rittenburg, T.L. (2007). The ethical decision-making of men and women executives in international business situations. Journal of Business Ethics, 71, 125-134.

result

Continue to collect data on ethical decision making regarding the Should Mary Buy Her Bonus? scenario.

ongoing

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