Modelling complex ethical decision problems with operations research

This paper discusses the practical contribution of operations research (OR) techniques to modelling decision-making problems with ethical dimensions. Such problems are frequent in the global world: they frequently appear today in sustainability issues, e.g., in conflicts in the triangle of society, economy and environment. We show that the prerequisites for ethical problem-modelling are: the definition of moral principles, the evaluation of the decision context, the participation of stakeholders, the multidisciplinary collection of data, and the understanding of systemic interconnections. Classical OR instruments, mainly used in logistics and optimisation problems, are not entirely satisfactory for coping with the new ethical dimensions of sustainability. It is recommended to use and to develop more advanced, or combined instruments from the multi-criteria/multi-stakeholder and systemic streams of OR. It is argued that an important added value of using OR techniques for modelling today ethical issues lies at least as much in the discovery of open questions as in finding closed-form solutions.     

The effect of authentic transformational leadership on follower and group ethics

We propose a theoretical model to examine how authentic transformational leadership influences follower individual and group ethical decision making. We investigate how follower moral identity and moral emotions mediate the effect of authentic transformational leadership on follower authentic moral action. Furthermore, we explore how authentic transformational leadership develops group ethical climate, which in turn contributes to enhancing group ethics and to developing follower moral identity and moral emotions. Future research and practical implications are discussed.     

Shaping emotional reactions to ethical behaviors: Proactive personality as a substitute for ethical leadership

Due to ethical lapses of leaders, interest in ethical leadership has grown, raising important questions about the responsibility of leaders in ensuring moral and ethical conduct. However, research on ethical leadership has failed to examine the active role that followers' attributes play in enhancing or minimizing the influence of ethical leadership in organizational outcomes. We applied the substitutes for leadership approach (Kerr & Jermier, 1978) to ethical leadership and predicted that proactive personality acts as substitute in the relationship between ethical leadership, workplace emotions and organizational citizenship behaviors (OCBs). Data from two distinct samples offered strong support for the hypotheses. Specifically, we found that ethical leadership was significantly and negatively related to negative workplace emotions when subordinate proactive personality was low, but not when it was high, with consequences for OCBs. These findings suggest that proactive personality constitutes an important moderator on the impact of low ethical leadership on workplace emotions, with consequences for OCBs.     

MANAGING THE DECISION SCIENCE TECHNOLOGY: A CASE FOR ETHICAL ANALYSIS?*

After ten years of rapid, if sometimes chaotic growth, it is time to reflect upon where Decision Sciences is headed. At stake are the essential questions of (1) should the growth of the discipline be managed, and if so (2) how should it be managed and who should do the managing? I argue that the growth of the discipline should be managed rather than be dictated by the technological imperative that states that any envisioned application of quantitative methods should be implemented. Moreover, I argue that, since to a large degree the implementation decision is an ethical question, the individual decision scientist must ultimately be held accountable. Finally, I suggest that Glenn Stassen's social ethic paradigm may be a useful vehicle for resolving intradiscipline conflicts. These abstract ideas are concretized by examining the growth of the area of artificial intelligence.     

Ethical leadership: Mapping the terrain for concept cleanup and a future research agenda

Ethical leadership has attracted massive attention in the twenty-first century. Yet despite this vast literature, knowledge of ethical leadership suffers from two critical limitations: First, existing conceptualizations conflate ethical leader behaviors with followers' evaluations of leaders' characteristics, values, traits, and followers' cognitions. Second, we know little to nothing regarding the causes and consequences of ethical leadership behaviors as most of the evidence not only confounds concepts, but also precludes causal inferences due to design problems. Thus, we first present a review of the definitions of ethical leadership that alarmingly reveals a hodgepodge of follower evaluations of leader behaviors, traits, and values. We then address this concept confusion by drawing upon signaling theory in presenting a new conceptualization of ethical leadership behavior (ELB) defined as signaling behavior by the leader (individual) targeted at stakeholders (e.g., an individual follower, group of followers, or clients) comprising the enactment of prosocial values combined with expressions of moral emotions. As such, enacting prosocial values and expressing moral emotions are each necessary for ethical leadership. Next, we review the nomological network of ELB at the individual, dyad, and group levels. We conclude with a discussion of future research directions in testing new theoretical models, including a set of theoretical and methodological recommendations.     

The Conflict between U.S. Patent Protection and Technological Innovation: Analysis and Problem Solving by Means of the Integrated Causal Model for Innovated Ethic

Criticisms of patent laws for technological innovations in the United States reveal a multifaceted milieu of problems centered around the protection of short‐term economic gain and individual property rights. In this article, we consider this a conflict between current patent laws and the innovation capabilities of organizations. We propose a solution that enables the company to assure its long‐term survival in the face of these restrictions. This presumes that the firm will at least maintain its innovation capacities while preserving the company's ethical values and those of its social environment. We offer a theoretical model that is designed to help managers and policymakers reorient their governance strategies for managing the innovation process, using the “ethics of responsibility,” which establishes the link to individual moral values at the beginning of a governance process as well as the consequences of a decision. Our integrated causal model of ethical innovation for patents is presented and implications for global organizations and possible solutions for patent law process failure are offered.     

Ethics, Decision Analysis, and Public Risk

In any analysis of a decision problem involving public risks, ethical implications are introduced. In some cases, these ethical implications may be introduced simply because an analysis is being done. Additional ethical implications may be inherently part of the methodology being utilized or introduced into the specific analysis of the decision problem. In this paper, we investigate where and how ethical implications enter when using the methodology of decision analysis to examine problems involving public risks. We conclude that the methodology of decision analysis is sufficiently robust to allow for numerous different ethical viewpoints to be accounted for in any specific analysis. Stated alternatively, decision analyses of public risks can be conducted in a manner consistent with utilitarianism, deontological theories, libertarianism, egalitarianism, and so forth. However, any specific analysis has embedded within it numerous ethical implications. This suggests that the careful ethical scrutiny of analyses involving the methodology of decision analysis should be placed on the specific application and not on the methodology per se or on the fact that an analysis is undertaken.     

Applying Decision Analysis to Determine the Effect of Smoke Detector Laws on Fire Loss in the United States

Decision analysis is used to examine whether residential smoke detectors should be required by law. Statistics pertaining to fire incidence, fire death, smoke detector efficacy, and the consequences of fire are examined for accuracy and availability and combined in a decision model. A sensitivity analysis is performed on the model inputs. Included in the analysis is the idea that homes with detectors may have lower death rates due to the characteristics of those who purchase detectors rather than the detectors themselves. Results from the base case estimate show an expected cost of $65,000 per life saved when a law is enacted. This value lies well below the value implied by spending on other public safety programs.     

Are real options more valuable in the presence of agency conflicts?

The theory on real options has extended the traditional net present value rule in order to capture the value of flexibility in investment decisions. Typically, the theory of real options does not take into account agency conflicts (between central and divisional management). In this paper, we investigate the influence of agency conflicts on real options within a LEN-type model. We extend a standard LEN model with investment activities by explicitly considering the possibility to abandon an investment project after all parties involved have received further information about the project’s development. Especially, we analyze how the option’s flexibility value is influenced by the agency conflict. Our analysis shows that the real option alters the trade-off between risk sharing and incentives that underlies the agency conflict. Thereby, situations can occur in which central (and divisional) management evaluates the abandonment option ex ante differently than ex post. Using this framework, we discuss the role of commitment and the advantages of centralization and delegation of the abandonment decision.

Patterns of Conflict About Risky Technologies

This paper examines taxonomies for classifying risks and conflicts about risky technologies. First, we describe six levels of conflict that represent various " shades of gray" between purely factual and purely value laden conflicts in technology disputes. Subsequently, we survey several recent taxonomies of risks and hazards that were at least partly intended to clarify the nature of the public conflicts about technologies and their risks. After pointing out that non-risk features frequently shape technology debates, we develop a taxonomy of the disputes themselves, based on a collection of 162 cases. Our taxonomy of technological controversies is related to the recent risk taxonomies and to the different levels of conflict. It turns out that the different technological disputes create quite different levels of conflict ranging from mainly factual (consumer products, drugs) to extremely value laden (nuclear power, genetic engineering). Depending on the type of controversy and level of conflict we suggest alternative conflict management strategies.     

Does the best practice of rational-style model-based policy analysis already include ethical considerations?,

This paper deals with ethics in the context of the real-world practice of operations research (OR), once an analyst has taken on the responsibility of carrying out a rational-style model-based policy study for a client. OR models are often used by policy analysts to assist decisionmakers in choosing a good course of action based on multiple (and competing) criteria from among a variety of alternatives under uncertain conditions as part of the policy analysis process. The paper suggests that if applied operations researchers (acting as rational-style model-based policy analysts, and not as policy analysts playing a different role or as policy advocates) use the scientific method and apply the generally accepted best practices of their profession, they will be acting in an ethical manner. It, therefore, describes the steps of a typical rational-style model-based policy analysis study, and specifies the tenets of good practice in each step. It also provides a list of questions and statements that the analyst and those evaluating an analyst's work (both internally and externally) can use to help make sure that the study adheres to the tenets of good practice for rational-style model-based policy analysis and remains within ethical bounds.     

Managing Integrity: The Regulation of Post Public Employment in Britain and Hong Kong

In this article, we examine the regulatory mechanisms governing post public employment in Britain and Hong Kong in the context of changing views on how integrity should be managed in their civil services. In both places, new public management practices have increased the possibility of ‘soft’ conflicts of interest which in turn has resulted in debates over the necessary degree of regulation, the organizational form that this should take, and the extent to which ethical concerns should be more focused on the communication and inculcation of core values in civil servants. We argue that the difficulty of regulating ‘soft’ conflicts of interests is driving moves toward the greater centralisation of ethical regulation in both Britain and Hong Kong and that there appears to be a return to more traditional ways of managing integrity.

Does a firm’s exposure to ethical failures matter to financial markets? A governance perspective

This paper investigates if a firm’s ethical reputation, in conjunction with its governance, affects its standing within financial markets. A firm`s ethical reputation, as measured by ethical failures, arises from its involvement in ethical violations and incidents while a comprehensive index proxies for governance. We assess a firm’s standing within financial markets through two complementary perspectives, i.e., the level of information asymmetry between managers and investors, as inferred from analyst forecast dispersion and analyst forecast error, and the relation between a firm’s earnings and its stock market valuation or return (value relevance). Our results suggest that a firm`s ethical reputation affects financial analysts’ forecasts as well as the stock market value assigned to its reported earnings. Moreover, it appears that corporate governance moderates such relations, with strong (weak) governance compensating for a weak (strong) ethical reputation. Overall, our evidence shows that ethical failures do not seem to pay.     

Domestic Violence Spillover into the Workplace: An Examination of the Difference between Legal and Ethical Requirements

Domestic violence is a growing societal concern that often spills over into the workplace. However, employers are not recognizing the spillover of domestic violence as a workplace issue. This is problematic considering the serious financial, legal, and ethical consequences for organizations. We analyzed six cases involving domestic violence that were litigated under specific legal bases: Violence Against Women Act, discrimination laws including Title VII, Family and Medical Leave Act, Americans with Disabilities Act, Social Security Disability, Occupational Safety and Health Act, and associated state and municipal ordinances. We chose cases that illustrate the problems of companies meeting the legal standards but not necessarily reaching ethical expectations. Our approach is congruent with the perspective that both legal and ethical analyses should be used in organizational decision making. We suggest for future research the analysis of additional litigated cases, other ethical perspectives, and additional sources of data. In addition, we suggest that companies who are striving for corporate social responsibility should integrate the ethical treatment of domestic violence victims.     

Not in My Town: Conflicting Views on the Siting of a Hazardous Waste Incinerator

In recent years a large number of conflicts associated with environmental risks have arisen in Hungary. The case study described here is related to the siting of a hazardous waste incinerator in Dorog. First, the history of the siting procedure is outlined in terms of the multiparty, multiattribute decision framework. Subsequently, the case reveals how stakeholder groups can be identified in the structure of decision-making, how they think about the object causing the conflict, about the conflict itself, and the possibilities of resolving it. In investigating the conflict, a combination of analytical tools were applied. The multiple-perspective model of Linstone and the argumentation analysis of Toulmin provided the frame for analyzing the information collected by interviews in the affected town, Dorog, and two other towns affected to different degrees in environmental problems.     

Ambiguous Allure: The Value–Pragmatics Model of Ethical Decision Making

Research in organizational ethics emphasizes those dispositional factors that are expected to foster positive ethical behavior. We seek to contribute to this literature by including personal values that are in contention with moral outcomes. Specifically, we combine the values of hedonism and power with benevolence and universalism. Our underlying premise of this value–pragmatics model is that nonmoral, as well as moral, dispositional characteristics simultaneously influence ethical decision making. We further contribute to the existing research by investigating how these contending values interact with situational factors, such as performance rewards and punishments for unethical conduct. We administer an experiment to subjects (N = 177) and analyze their decisions regarding the likelihood they would act unethically. Results indicate that both morally relevant and nonmoral variables have direct effects on these decisions, and that nonmoral as well as moral values interact with situational factors to significantly influence decisions. Implications for practice and research are discussed.     

一种新的基于粗糙集理论的冲突分析模型

在PAWLAK提出的冲突系统中,局中人对争端的态度只有3种:肯定、否定或中立。这样的冲突系统提供的信息过于抽象,很难从该模型中了解局中人产生冲突的原因,更无法找到大多数局中人一致同意的方案。经深入研究,认为现实生活中的某些冲突系统,其局中人应具有自己的方案,而整个冲突系统应有领域专家提供的方案。同时,各争端之间可能存在相互制约关系。根据这些特点,在PAWLAK冲突系统模型的基础上,引入每个局中人的信息系统和可行方案、领域专家为冲突系统提供的信息系统和可行方案,以及冲突系统中各争端的约束条件和冲突系统的可行方案,从而得到一个新的基于粗糙集的冲突模型。同时,给出了一个求冲突系统可行方案的算法,并以实例说明新模型能较好地刻画现实在生活的某些冲突系统。     

Dispute systems design: A preventive approach to ethical conflict in organizations

Questions of ethical behavior have arisen in every culture throughout history. It is important for organizations to anticipate ethical dilemmas before they become crises or disasters. This paper considers an open systems approach to designing practical mechanisms for conflict resolution. It uses the BART whistle-blowing incident of 1972 as an example of how a dispute system design as developed by Ury, Brett, and Goldberg could have been applied to ethical conflicts and potentially could have resulted in a win-win resolution for both person and organization.