"Entrepreneurial Thinking" was created to provide personal experiential advisory and rich information resources to entrepreneurial executives in order help open their minds, enhance their vision and extend personal perspective. Further, we will try to help navigate the evolution of the entrepreneur's businesses in the areas of equity/debt financing, M&A, strategic planning, new product or business model development, market timing and related sales/marketing efforts. Finally, we will also attempt to provide some wisdom in order to help balance the entrepreneurial workload with family.

Tuesday, August 19, 2008

Watching The Brain Make Ethical Business Decisions

Watching The Brain Make Ethical Business Decisions

Moral reasoning

August 18, 2008

F ew would argue that people’s views on morality play a major role in the way they operate in their personal and professional lives. But how does moral reasoning “kick in” when a businessperson is in the midst of a dilemma? Just the mention of the executives involved in the scandals at Enron or WorldCom causes many to wonder what made these people capable of such fraudulent behavior. Were their choices prompted by a knee-jerk intuitive reaction formed from ingrained behavior? Can we attribute their actions to thoughts formed through a rational process, prompted by the risks and rewards of the moment? Or, did they lack the moral compass that allows most people to sense when to avoid an unethical situation? According to Rick Gilkey, an associate professor of organization and management at Emory University’s Goizueta Business School and an associate professor of psychiatry at Emory University’s School of Medicine, understanding how the brain processes critical thought on moral issues may provide a useful window into ethical lapses in the workplace.


In new cutting-edge research, Gilkey, along with Diana Robertson, a professor of organization and management at Goizueta, and Clinton Kilts, a vice chair for research and a professor of psychiatry at Emory University’s School of Medicine, employed magnetic resonance imaging to isolate the parts of the brain activated when study participants were presented with a series of narratives depicting a variety of business scenarios for a fictional marketing analyst. Some of the scenarios involved normal business interactions of a strategic or tactical nature, and other situations detailed a moral dilemma for the marketing analyst.

For the initial phase of the research, Gilkey, Robertson and Kilts used sixteen right-handed men, aged from 27-42, in their study, and noted the selection of all male study participants “was motivated by a prominent, though controversial, contention that gender-related differences exist in moral orientation.” (The researchers hope to replicate their study with female participants at a later date.) Says Gilkey, “One assumption we had early on was that there was a region of the brain responsible for dealing with moral problems, or that there was some sort of subset localized area. As it turns out, this wasn’t the case. Ideas and thoughts dealing with novelty and ambiguity come largely from the right hemisphere. But it may then become more routine information and then get stored and encoded in the left hemisphere. You might liken the businessperson’s moral reasoning to that of different players in an orchestra, pulling in all the divergent parts to form a whole.”

In a soon-to-be released paper titled "The neural basis of moral sensitivity to issues of justice and care: an fMRI study," the authors describe their efforts, and they conclude that three brain areas are critical to moral sensitivity: the medial prefrontal cortex, the dorsal posterior cingulate cortex, and the posterior superior temporal sulcus (STS). Based on prior research, Gilkey notes that the medial prefrontal cortex is associated with personality and early memories. Prior research indicates that this area of the brain is also involved in the ability to understand or empathize with someone else’s situation. (Interestingly, the study participants did not receive direct instruction to consider others’ thoughts when presented with the hypothetical business scenarios, and this activation of the section of the brain responsible for empathy may suggest a more intuitive or innate empathetic response on the participants’ part.)

Prior neurological research on moral thought indicates that the dorsal posterior cingulate cortex is associated with “evaluating the appropriateness of solutions to personal moral dilemmas,” as well as emotional memories and first-person perspective taking. However, the posterior STS has been linked to a more integrated brain function, playing a role in combining the various perspectives taken. Gilkey notes that this is when the rationale behind the actions taken might be reached. The findings suggest that moral reasoning is (at least initially) an intuitive response, and somewhat outside of the individual’s immediate awareness. Gilkey adds, “The construction of why it all makes sense, the right or wrong of it, comes after—to justify the intuitive process."

According to Robertson, additional findings illustrated that the brain functions in slightly different ways for matters involving the need for impartiality or equality (justice issues) versus those involving more emotion or compassion (care issues). An example of a justice narrative used in the study involved the fictional marketing executive being pressured by his boss to bend the interpretation of data to confirm the boss’s biases. However, one of the care scenarios described a situation where the marketing executive was conflicted by having to spend large amounts of time in the office on the weekend, when he promised to devote the time to his family.

She notes, “Despite the fact that both are ethical issues, we found distinct differences in the neural activity associated with the processing of justice versus care issues.” Greater activation occurred in the ventral posterior cingulate cortex, ventromedial and dorsolateral prefrontal cortex, and thalamus for the narratives associated with care issues—all areas of the brain linked to the ability to take another’s perspective and also with emotional memories. However, there was greater activation in the left posterior STS for justice issues—a section of the brain implicitly linked to the “non-emotional” processing of situations and social convention.

Robertson adds, “The results also indicate that social perspective taking (the ability to put yourself in another’s shoes) and autobiographical memory are important components of sensitivity to ethical issues. This corroborates methods used at Goizueta Business School to teach business ethics. Case method teaching requires students to take the perspective of another and to make decisions from that person’s point of view. Discussion-based classes and debates require students to respect and appreciate the perspectives of their classmates. Class exercises and assignments ask that students reflect upon and understand the basis of their own values and ethics, a process that is necessarily autobiographical.”

Gilkey believes that the findings not only corroborate Goizueta’s teaching model, but that they provide a framework for those looking to teach a new generation of ethically aware business students and employees. Says Gilkey, “It’s important to understand how the role of early memory and personal identity affects ethical decision making. The big question will be to find out if we can work to reformulate this identity once it is imprinted. Our findings also have implications for the development of moral sensitivity, suggesting that efforts to sensitize individuals to moral issues [should] focus on methods that tap into introspection based on personal experiences, as well as the use of perspective taking techniques such as role playing.”

While Sigmund Freud might have believed that individual behavior is pretty much set from an early age, Gilkey says that many now believe there may be some truth and some fiction in the notion. He adds, “It’s also possible that we may evolve, or that ethical decision-making skills can be matured or enhanced. As far as the future, we may soon discover that some business people may never be attuned to a more principled leadership model. Our research does indicate that, for the most part, ethical decision-making is an innate capacity that the majority [of people] possess. We’re trying to ensure that the capacity is elicited. The ultimate objective is to determine the most effective management training techniques to develop this capacity.”

Currently, Robertson notes that her research team is seeking funding for future related projects, including an investigation of contextual variables that influence decision-making about ethical issues. “Empirical research in business ethics has explored the impact of variables, such as the potential high risk/high reward for behaving unethically. Such variables appear to have played a prominent role in recent scandals at companies such as Enron and the like. We hope to discover the neural activity associated with these variables and their impact on decision making, [employing] hypothetical business situations presented to research participants as their brains are scanned.

Future research could focus on determining if immoral actions suggest some sort of “dysfunctional concept of self,” a lack of appropriate teaching models from early childhood, the inability to effectively judge a possible outcome of an action, or a combination of these scenarios. Certainly, prior neurological studies do indicate that prefrontal cortex damage has a negative impact on social and moral thought. Following that thought, Kilts adds that there needs to be an understanding of “the access to knowledge of self. It’s critical that as we develop an interpretative awareness of moral consequences, [we determine if] the lack of a concept of an unhealthy self might be indicative of the problems in business today. Could those involved in some of the recent business scandals think they did nothing wrong? Maybe we need to determine who can pick out and be aware of moral conflicts. With that in mind, we need to look to the other part in this—the outer world and not just the inner world (self). A component of this is the ability to evaluate how various outcomes affect others involved. To be interpretatively aware also means to have an awareness of the social ramifications.”

Read more articles like this at Knowledge @ Emory.


No comments:

StomperNet Internet Marketing University - Going Natural 2.0

The first product announcement and launch from our internet marketing gurus at StomperNet for 2008 was - SMARTS (Social Media Marketing Training). From beginner tutorials to the most advanced internet marketing information, StomperNet is renown for the following disciplines: (1) Search Engine Marketing (SEM). StomperNet's expert faculty represents the very best Search Engine Optimization talent in the country. (2) Customer Usability, Testing and Analytics. How to deploy tracking mechanisms and analyze data in order to increase visitor value and ultimately, conversions and sales. (3) E-Store (E-Commerce) Creation.

Registration for StomperNet Going Natural 2.0 opened on January 11th and SOLD OUT IN ONE WEEK! StomperNet may be opening up later this year... So Stay Tuned! More...

If you missed out this time you can get overview information at the following links:

1) Social Media Marketing - StomperNet White Paper

2) SMARTS (Social Media Marketing - Free Video)

3) If you missed the"SMARTS" Coaching Program