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Unethical Decision Making - Basics

  • Teacher(s):   G.Palazzo   U.Hoffrage  
  • Course given in: English
  • ECTS Credits: 3 credits
  • Schedule: Autumn Semester 2020-2021, 2.0h. course (weekly average)
  •  sessions
  • site web du cours course website
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Why do people behave unethically? While this has been a key question for philosophers over the last 2000 years, a rising tide of corporate scandals – from Enron to Siemens – has put this question high on the agenda of corporate decision makers. Corporations are exposed to the increasing risk of unethical/illegal behaviour with tremendous financial consequences. Such deviant behaviour can even destroy a company as in the case of Arthur Andersen or Lehman Brothers.

The overarching objective is to prepare students for the unavoidable ethical risks they will face in their future organizational life. Students will understand the driving forces of unethical decision making within organizations. They will be familiar with various literatures (Management, Sociology, Psychology, Philosophy) that can be used to understand those forces. The seminar will enable them to analyze risks of unethical behavior in various contexts and to develop interventions to reduce such risks in organizations.


Whenever we hear about corporate scandals, we have the tendency to believe that unethical or illegal behavior in organizations is driven by the character deficiencies of individual actors. Put differently, we simply assume that bad things are done by bad people (often referred to as “bad apples”). Examining recent research in psychology, philosophy and sociology, Guido Palazzo and Ulrich Hoffrage (together with Franciska Krings) have developed a new concept to understand unethical behaviour in organizations – the concept of ethical blindness which builds the thread of this course.

Ethical blindness builds on the assumption that contexts can be stronger than reason. If put in a bad context, even good people may do bad things. Regardless of their good intentions and strong values, individual actors might adapt to the deviant practices in their respective organizational context and, over time, lose the ability to see that what they do is wrong. They become ethically blind. If we want to better protect individuals as well as their respective organizations against the deviant power of the context, we have to understand, why and under what conditions, good people make bad ethical decisions.

This year, our 3-credit-course on “Unethical Decision Making in Organization” (UDM) will be taught 100% online due to the covid crisis. The University of Lausanne has become a partner of Coursera, one of the world leading online learning platforms, and our course is the pilot course in this partnership. On Coursera, our course takes the form of a MOOC (Massive Open Online Course). In this online course, participants will study with students from around the world.

In order to participate, you will have to inscribe to the online course entitled “Unethical Decision Making in Organizations” on the Coursera platform ( and study online, which means that you will have to watch videos and participate in online discussions (instructions are to be found in the course description on the Coursera website).

Starting in week 8 participants of the online course can continue with a the UDM advanced course, which builds on the Basics course. This will also be a 3-credit course so that students participating on both can earn 6 credits with UDM overall (for information on the advanced course see the syllabus on this course on the moodle). Students who have not attended the course “Unethical Decision Making – Basics” cannot take the follow-up continuation “Unethical Decision Making – Advanced”.


The following articles build the backbone of the course and are important to understand unethical decision making. We highly recommend you to read them, ideally during the online phase of the course so that we can build on them in our discussions. Some of those texts will be relevant for your reflection papers (these appear in bold).

Ashforth, B. E. & Anand, V. 2003. The normalization of corruption in organizations. Research in Organizational Behavior, 25: 1-52.

Bezos, J. 2015: Jeff Bezos responds to New York Times report on Amazon’s workplace.

Blass, T. 1991. Understanding Behavior in the Milgram Obedience Experiment. Journal of Personality and Social Psychology, 60: 398-413.

DiMaggio, P. & Powell, W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields, American Sociological Review, 48(2): 147-160.

Feldman, S. P. 2004. The culture of objectivity: Quantification, uncertainty, and the evaluation of risk at NASA. Human Relations, 57, 691-718.

Friedman, M. 1970. The social responsibility of business is to increase its profit. New York Times Magazine, September 13. Reprinted in Donaldson, T., & Werhane, P. H. (Eds.). 1970. Ethical issues in business: 217–223. Englewood Cliffs, NJ: Prentice-Hall.

Gioia, A. G. 1992. Pinto fires and personal ethics: A script analysis of missed opportunities. Journal of Business Ethics, 11: 379-389.

Havel, V. 1984. Living in truth. Extract from: Politics and conscience. Reprint in: Living in truth: 22 Essays published on the occasion of the award of the Erasmus price to Vaclav Havel. Faber & Faber Pub.

Hoffrage, U. 2011. How people can behave irresponsibly and unethically without even noticing it. In: G. Palazzo & M. Wentland (Eds.), Responsible management practices for the 21st century. Paris: Pearson. (French and German version are also available)

Lee, M. & Ermann, M. D. 1999. Pinto „madness“ as a flawed landmark narrative: An organisational and network analysis. Social Problems, 46: 30-47.

Kantor, J. & Streitfeld, D. 2014. Inside Amazon: Wresting big ideas in a bruising workplace. New York Times, August 15.

Oreske, N. & Conway, E. M. 2013. The collapse of Western civilization. Daedalus, 142: 40-58

Orwell, G. 1983. “1984”. Penguin Books, extracts

Palazzo, G.; Krings, F. & Hoffrage, U. 2012: Ethical blindness. Journal of Business Ethics, 109: 323–338

Sims, R. R., & Brinkmann, J. 2003. Enron Ethics (Or: culture matters more than codes). Journal of Business Ethics, 45: 243-256.

Vaccaro, A. & Palazzo, G. 2015: Values against violence. Institutional change in societies dominated by organized crime. Academy of Management Journal, 58:1075-1101.




First attempt

Without exam (cf. terms)  

Element of evaluation

Component 1 (during class)

You will have to write 2 individual essays during the course (450 words each). You will find the details in the syllabus on the moodle. Please upload your assignment before the deadlines specified there.

30% of the overall grade

Component 2

(during class)

During the semester you will have to take two quizzes in a multiple-choice-question format on the moodle.

20% of overall grade

Component 3

(after class)

You will write five essays in which you will reflect on what you have learned. Select 5 out of the 7 categories, in which we grouped the videos:

1. Framing and sensemaking (videos 1.1, 1.2, 2.1, 2.2, 3.1, 3.4)

2. Ethical blindness (videos 2.3, 2.4, 2.5, 6.1)

3. Heuristics (videos 4.1, 4.1bis, 4.4)

4. Organizing for ethical blindness (videos 3.2, 3.3; 4.2; 4.3)

5. The power of situations (videos 5.1, 5.2, 5.3)

6. The power of institutions (videos 6.2, 6.3, 6.4, 6.5)

7. Solutions (videos 7, 7.1, 7.2, 7.3).

Reflect upon your learnings for the five topics you selected. You can use short cases to illustrate your learnings, make references to movies or books or insert thoughts on any additional material that you find useful to enrich the learnings from the videos. You can criticize some aspects of our videos or make suggestions how we could have done them better. You should NOT copy-paste the key learning points that we included at the end of the videos. Overall, you will write five short essays of 300 words (plus or minus 30). Please list all your references and additional sources (not included in the word count).

50% of overall grade

The deadline for components 1, 2, and 3 will be communicated on the moodle. If such a component is missing by the deadline, it will be graded with “1.0”. The deadline for final essays is December 1, 2019, 23:59. Later submissions will still be considered, but penalized by reducing the grade for this component. It will be useful to start with this final assignment early on.

While there are assignments on Coursera as well, our grading will exclusively be based on the assignments that you share with us via moodle, the tests in the class room, and the final essay. You do not have to do the Coursera assignments!


Without exam (cf. terms)  

if the overall score results in a non-passing grade, then each component that received a non-passing grade needs to be redone

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