Unethical Decision Making in Organizations

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Course Date: 22 September 2014 to 10 November 2014 (7 weeks)

Price: free

Course Summary

This course 'Unethical decision making in organizations : A seminar on the dark side of the force' will teach you how strong organizational contexts push good people towards unethical decisions. You will also learn how to protect yourself and your organization against such forces lurking in the dark.

Estimated Workload: 5-7 hours/week

Course Instructors

Guido Palazzo

Guido Palazzo is a professor of Business Ethics at the University of Lausanne. He studied business administration and has a PhD in philosophy from the University of Marburg in Germany. In his research, he is passionate about the dark side of the force and examines unethical decision making from various angles. He is mainly known for his studies in globalization, in particular on human rights violations in global value chains, but he also studies the reasons for unethical behaviour in organization and the impact of organized crime on business and society.

  • Basu, K. & Palazzo, G. (2008). Corporate Social Responsibility: A process model of sensemaking. Academy of Management Review, 33 (1):122-136.
  • Scherer, A.G. & Palazzo, G. (2011). A new political role of business in a globalized world - a review and research agenda. Journal of Management Studies, 48 (4): 899-931.
  • Palazzo, G., Krings, F. & Hoffrage, U. (2012). Ethical blindness. Journal of Business Ethics, 109: 323–338

Ulrich Hoffrage

Ulrich Hoffrage is a professor of Decision Theory at the University of Lausanne. He studied psychology in Konstanz (Germany), and obtained his PhD from the University of Salzburg (Austria). His research focuses, among other things, on simple heuristics as models of bounded rationality, in particular in the social world. Moreover, he conducted research on cognitive illusions, risk communication, and consumer decision making. He is fascinated by the complex interplay between the co-evolution of individuals and their environments.

  • Hertwig, R., Hoffrage, U., & the ABC Research Group (2013). Simple Heuristics in a Social World. Oxford University Press.
  • Hoffrage, U., Lindsey, S., Hertwig, R., & Gigerenzer, G. (2000). Communicating statistical information. Science, 290, 2261–2262. doi: 10.1126/science.290.5500.2261.
  • Hoffrage, U., Hertwig, R., & Gigerenzer, G. (2000). Hindsight bias: A by-product of knowledge updating? Journal of Experimental Psychology: Learning, Memory, and Cognition, 26, 566–581.

Course Description

Whenever we hear about ethical scandals, we tend to believe that unethical or illegal behavior in organizations is driven by character deficiencies of individual actors. Put differently, we simply assume that bad things are done by bad people (so-called bad apples). However, numerous corporate scandals, such as Enron, Ford, or Siemens, have demonstrated that even people with a high level of integrity can break the rules if they are put into a corrupt context. Good apples may become rotten in bad barrels. Regardless of their good intentions and strong values, individual actors might adapt to the unethical practices in their respective organizational context and, over time, lose the ability to see their wrongdoings. They become ethically blind. Such changes in people’s way of seeing the world and their value systems can occur in—and through—various organizational contexts in business, civil society, and public administration. This course is not about apples but about barrels and barrel makers. A better understanding of why and under what conditions good people make bad ethical decisions will enable us to better protect individuals as well as their respective organizations against the overwhelming power of the context. It will also enable us to cure societies from problems like corruption.

The goal of this course is to empower students to analyze the risks of unethical or illegal behavior that might be triggered by powerful contexts. It will draw from various disciplines such as management, psychology, sociology, philosophy, and literature, in order to learn what these disciplines contribute to a better understanding of unethical behavior. The course will also analyze some of the most eminent organizational scandals of the recent decades through the lenses of these disciplines.


  • Will I get a certificate after completing this class?
Students who successfully complete the class will receive a certificate signed by the instructors.

  • Why is this course important for me?
Currently, the understanding of why good people make unethical decisions is rather limited, related research is rather fragmented, and the management of such problems in organizations is overly simplistic, legalistic, and inadequate. Understanding contexts, including the dangers of routines, the mindlessness of our daily decisions, and the healing power of mindful decision-making routines is of increasing importance. In this course, you will learn the latest knowledge and the appropriate tool box for dealing with ethical challenges that you will face throughout your life!

  • What do I need to follow this course?
We build bridges between various scientific disciplines and will familiarize you with those disciplines smoothly. You need no expertise, just come and share your own real-world experiences about unethical decisions. After all, we are all experts in making decisions—some more ethically, some less ethically—aren’t we?


Broad outline of the topics covered in the seminar:

  1. Introduction: Evil in ancient and modern thought
  2. Ethical decisions in organizations: Dealing with dilemma situations
  3. Making sense of unethical decisions in organizations – The Pinto case
  4. The power of frames: How people (mis)construct their world(s) – The Enron case
  5. The power of routines
  6. The power of strong situations
  7. The power of temporal dynamics
  8. The power of institutions
  9. The concept of ethical blindness
  10. The wind of change: How to fight ethical blindness


The course will consist of video lectures (with and without interactive quiz questions), live discussions combining live webcast and Twitter, and discussion forums in which students will discuss questions related to the course. Students are encouraged to provide their own stories and experiences with regards to unethical organizational decisions. A selection of those stories and experiences will be discussed by the two teachers in weekly reflections on course progress.

The final grade will be based on the students’ performance on weekly homework assignments, which will include essays in which the students reflect upon the ideas presented in the course, for instance, by relating these ideas to their own context.

Suggested Reading

All the material will be provided electronically (and free of charge) at the beginning of the course.

Course Workload

5-7 hours/week

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