Managers are often accused of deliberately acting unethically, accepting environmental damage or exploitative practices solely to maximize profits. However, in many cases, they may be unaware of the ethical consequences of their actions in daily business operations—they act with “ethical blindness.” This tendency is particularly strong when organizational routines come into play.
Companies are directly or indirectly involved in many major societal issues, from labor exploitation to environmental destruction. These companies are led by managers who make decisions with massive social and ecological consequences every day. The common assumption is that decision-makers knowingly accept “collateral damage” to meet shareholder expectations. For example, managers in large textile corporations are often thought to weigh the costs and benefits of polluting a river or exploiting cheap labor and then consciously choose the more profitable—yet unethical—option.
While some managers may indeed make deliberately unethical decisions, there is an alternative explanation for many such cases: “Ethical Blindness” (Bazerman & Tenbrunsel, 2011; Palazzo et al., 2012).
Ethical Blindness
Ethical blindness means that individuals, in situations with potentially negative consequences for people or the environment, unintentionally act unethically—they are temporarily “ethically blind.” In such cases, the ethical dimension of the situation is completely ignored.
A well-known example of ethical blindness is the Ford Pinto scandal in the 1970s (Gioia, 1992). The Pinto, a small car manufactured by Ford, was prone to bursting into flames in minor rear-end collisions due to design flaws. Although Ford was aware of the issue, over 20 people died before the company initiated a recall. Why? The cost of compensation for deaths and injuries was lower than the profit generated by continued sales.
At the time, Ford executives—including Dennis Gioia, a recall manager who later became a respected management professor—failed to recognize the ethical implications of their inaction. Instead, Gioia saw his decision purely as a cost-benefit calculation (Gioia, 1992, p. 382). In hindsight, he acknowledged that he had been “ethically blind”. The Ford Pinto case shows that ethical blindness can have severe—sometimes deadly—consequences. But how does it arise?
Ethical Blindness Through Rigid “Cognitive Frames”
Research suggests that rigid cognitive frames are a primary cause of ethical blindness (Palazzo et al., 2012). Cognitive frames are mental lenses through which people evaluate situations—technical, economic, or ethical.
For example, a company might view vehicle explosions purely through an economic or technical frame rather than an ethical one. The frame used determines whether a problem is even recognized as a problem.
Frames improve efficiency by helping people process information quickly, but they can also filter out critical ethical aspects. When rigid frames dominate, individuals may only perceive one aspect of a situation (e.g., financial impact) and become incapable of considering ethical perspectives.
If a company fosters an internal culture shaped by rigid frames, unethical decisions can become normalized—what seems rational inside the company may appear deeply unethical to outsiders.
Ethical Blindness Through Routines
Beyond cognitive frames, organizational routines can also contribute to ethical blindness (Kump & Scholz, 2022). Routines are repeated behaviors within a company, often involving multiple people. They can be formalized processes (e.g., procurement, contract approvals) or informal habits.
How Routines Foster Ethical Blindness
- Automation of Actions
- In routine situations (e.g., launching a new product, disposing of waste), employees act automatically without reconsidering whether their actions are ethical.
- If these routines involve exploitative labor practices or environmental harm, they may continue unquestioned simply because “this is how things are done.”
- Lack of Oversight
- Routines often involve multiple people, with no single individual seeing the full picture.
- As a result, employees unknowingly contribute to unethical outcomes that may violate their own ethical standards.
An example of harmful routines is racial profiling in police work. A single police check is not inherently unethical, but repeating the practice uncritically leads to systematic discrimination.
Another example is the “forced distribution” method used in some large corporations, where the bottom 5% of employees are automatically fired (e.g., Amazon). While managers see this as a performance-boosting strategy, they may overlook the severe psychological stress and long-term unemployment it causes.
Like cognitive frames, routines enhance efficiency, allowing employees to perform tasks smoothly. However, because routines are rarely questioned, unethical aspects can remain unnoticed for years—especially when the negative consequences emerge slowly.
Overcoming Ethical Blindness
While not all unethical business practices stem from ethical blindness, this underlying issue is often overlooked in discussions about corporate responsibility. As a result, even companies committed to social and environmental responsibility may fail to recognize unethical routine decisions.
How Can Companies Prevent Ethical Blindness?
- Recognize the Role of Cognitive Frames
- Acknowledge that all decisions are shaped by cognitive frames.
- Avoid rigid, one-dimensional frames by encouraging diverse perspectives in decision-making.
- Critically Examine Organizational Routines
- Regularly review routines from an ethical perspective.
- Use focused reflection to identify and redesign unethical processes.
- Modify automated procedures, evaluation criteria, and policies to align with the company’s ethical commitments.
A Key Insight
Ethical blindness does not arise from greed or intentional wrongdoing. Often, it affects employees deeply committed to their company’s success. The key to overcoming ethical blindness is making ethical aspects of decisions visible again—before harm is done.
For a German Version of the article, see https://wissensdialoge.de/ethische-blindheit/
Further Reading:
Palazzo, G., Krings, F., & Hoffrage, U. (2012). Ethical Blindness. Journal of Business Ethics, 109 (3), 323–338.
Bazerman, M. H., & Tenbrunsel, A. E. (2011). Blind Spots: Why We Fail to Do What’s Right and What to Do About It. Princeton University Press.
Gioia, D. A. (1992). Pinto Fires and Personal Ethics: A Script Analysis of Missed Opportunities. Journal of Business Ethics, 11, 379–389.
Kump, B., & Scholz, M. (2022). Organizational Routines as a Source of Ethical Blindness. Organization Theory, 3, 1–24.
Dr. Barbara Kump 