Study: Execs blinded by bottom line

January 9, 2006

A researcher says corporations like Enron that overemphasize profits might make their leaders blind to ethical or moral issues.

Scott Reynolds, an assistant professor of business ethics in the University of Washington Business School, found that it is not always obvious when an issue has moral overtones, the business school reported.

In two separate studies, Reynolds asked senior-level managers to rate scenarios involving varying degrees of ethical violations.

Previous research has shown that when facing ethical dilemmas, individuals either focus on the ends or the means as they search for a solution.

The study, published in the current issue of the Journal of Applied Psychology, found that end-focused people recognize ethical issues when harm is done but are much less sensitive to ethical issues that seem to only involve a violation of the means.

Means-focused people, however, recognize both harmful situations and those situations in which the means used were an ethical issue, the study said.

Reynolds speculates former Enron Corp. chief executive officer Kenneth Lay and others at the company saw no harm in what they did -- it was just doing business as usual.

Copyright 2006 by United Press International

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