Goals, Processes and Rationality: A Parable and a Framework

Marc Le Menestrel

marc.lemenestrel@upf.edu

Session’s Menu

The parable of the Sadhu (discussion)

A Methodological Framework (lecture)

The Parable of the Sadhu

Attainment of goal is threatened by unexpected event

Adverse decision-making conditions Ethical dilemma between attainment of a

major goal and respect of a moral obligation Human conflict in intensity of moral values Difficulty in the (re)assessment of the goal Breach of leadership responsibility

Goals and Success

Sometimes, goals are attained but reward is not there…

Sometimes, goals are not attained but experience is gained and happiness is felt…

What is in success but beyond goals?

What is the rational path towards genuine success?

What is Behavior?

It comes from an actor: an individual or a group of individuals (e.g. a company);

It is a transformation of the world: an action or a process;

It has an outcome: a consequence.

A Behavior is an Action with its Consequences

What is Rational Behavior?

It is a behavior that is chosen intentionally and purposefully by the actor;

Among the available behaviors, the rational behavior is the preferred one.

How does an actor choose the rational behavior?

The Consequence of choice

For each available action, the actor evaluates the consequences for him/her;

The best consequence is identified, from the point of view of the self-interest of the actor.

Is the action with the best consequence for the actor the one to be rationally chosen?

A Word from Common Sense

The end does not justify the means

The Process of choice

The actor may also prefer an action relatively to another, because: of some intrinsic pleasure in the action itself (virtue) of some ethical principle that the action respects (deontology) of the consequences of the action for others or for the

environment (altruistic consequences) Ethical values help to identify and make explicit intrinsic

preferences over actions, as ends in themselves, beyond the self-interest of their consequences.

?

Ethical analysis of

actions

Dual Analysis

Self-interest analysis of

consequences

The distinction between self-interest (of consequences) and ethics (of actions) is somehow conventional

But it acknowledges the importance of self-interest as a motivation

And connects with the model of economic rationality

A Framework of Open Rationality

1. Economic Analysis

2. Ethical Analysis

3. Ethical Dilemma

4. Dynamic Analysis

1. Economic Analysis

The rational actor (you, the team, the firm)1. Anticipates the consequences of the available actions2. Evaluates these consequences according to their interest for

the actor3. Identify the action that leads to the best consequence

Interest of the consequence

?

Step 1: What is the action that leads to the best consequence for you?

2. Ethical Analysis

To which extent is it ethical?

Emotions/Virtue:Do I feel good?Is this a natural way to act?

Deontology/Idealism:What sort of principle, rule or norm do I

respect?What happens if everybody does the same?What happens if I always act like this?

Utilitarianism/Consequentialism:What are the good consequences for others?Would I like these consequences for myself?What are the good consequences for the

environment?Would the children of my children like these

consequences?

To which extent is it unethical?

Emotions/Virtue:Do I feel bad?Is this an unnatural way to act?

Deontology/Idealism:What sort of principle, rule or norm do I violate?What happens if everybody does the same?What happens if I always act like this?

Utilitarianism/Consequentialism:What are the bad consequences for others?Would I suffer these consequences for myself?What are the bad consequences for the

environment?Would the children of my children dislike these

consequences?

Step 2: What is the ethics of the action that leads to the best consequence for you?

?

Here you raise an ethical dilemma!

Here you justify your interest!

3. Ethical DilemmaStep 3: Facing the extent to which there is a dilemma

Prudence: Could the unethical aspects lead to unexpected negative consequences?

?

Unethical aspects of behavior

More ethical alternative

Vision: Can you find a more ethical alternative?

Imagination: If the consequences of the alternative affect your interest, cannot they be improved?

?

?

The Dilemma of Buzz Mc Coy

Prudence: Could Buzz have anticipated the reaction of Steven and the guilt he will feel?

Leave the Sadhu

Bring the Sadhu to his monastery

Vision: Could Buzz have envisioned bringing the Sadhu back?

Imagination: Could Buzz have realized that this was an opportunity?

?

?

Attain his goal

Feel guilt

all his life

Fail his goal

Discover

Buddhism

Open Rationality

Less ethical More Ethical

Bet

ter

Wor

se

Ethical Values

Inte

rest

Ideal

Rational choices between interest and ethics are often kept hidden, but they are the most difficult:

We can rationally give priority to interest, and sacrifice ethicsWe can rationally give priority to ethics, and sacrifice interest

Irrational

Priorityto

interest

Priorityto

ethics

4. Dynamics Analysis

Ideal

If you are in the ideal position,

you may not be lucky for very

long

Irrational

Priorityto

interest

Priorityto

ethics

Lack of transparencyLegal pressureLiabilitiesBad ReputationPR costsNegative motivationManagerial inertia

TransparencySocial involvement & supportNew scope of activitiesNew business processesLong term thinkingStrategic investmentPositive motivationLearning process

Increasing demands (legal, social)Credibility ambiguous Contentment, lack of vigilanceUnawareness, rationalization

If you give priority to interest, you will

need reactive strategies to survive

If you give priority to ethics, you may find

help for your proactive strategies

A Difficult Strategy…

Few ones are going to believe it, Outside or inside the company…

Ideal

Irrational

Priorityto

interest

Priorityto

ethics

A Reactive Strategy…

We wait for change to become necessary

But it can be very dangerous…

Ideal

Irrational

Priorityto

interest

Priorityto

ethics

A Proactive Strategy…

We are likely to be more credible,And more motivated for change…

Visionary Leaders Welcome!

Ideal

Irrational

Priorityto

interest

Priorityto

ethics

Conclusions

It is easy not to see ethical dilemmas: you just have to

find a good justification for the action leading to the best

consequence!

It is not easy to see ethical dilemmas: it questions

ourselves and it does not look fun…

It can be rational to be ethical sacrificing your interest, or

to sacrifice ethics for your interest: the choice remains

yours

It is difficult, but helpful, to search for ethical dilemmas

beforehand if you want to have a chance not to be

trapped by them and anticipate their dynamics

Next session

Accounting Practices: the Enron Collapse

Preparation:

What do you think of S. Watkins attitude and behaviour? How would you blow the whistle?

Reading: • Watkins, S.S. “Ethical Conflicts at Enron: Moral

Responsibility in Corporate Capitalism”• Currall, S.C. & Epstein, M.J. , “Lessons from the

Rise and Fall of Enron “