Decision Making Essay

Excerpt from Essay :



The concept of bounded ethicality raises the possibility that Madoff in fact did not understand that what he was doing was unethical. As an experience hedge fund manager, a rational-thinking Madoff had all the tools to understand the ethics of what he was doing, but bounded ethicality suggests that he may have not fully been able to process the situation. One bound could be a myopic vision of his own wealth, that this was the most important thing and nothing else really needed to be taken into consideration. Another issue could well have been that he felt he was making money for the clients. A client ripped off today would be in a better position tomorrow, to earn some of those returns. Madoff therefore was unable to see the risky situation in which he was putting his clients.

Indeed, cognitive framing can put a person in a position where they do not feel that they are in an ethical dilemma at all (Simcoe, 2012). The problem with this logic is that even if Madoff was unaware that he was making ethical decisions, he knew for a fact that what he was doing is illegal. This in turn is critical to evaluating Madoff's thought processes. An ethical dilemma, in the classical sense, involves some ambiguity. The law is unambiguous about Ponzi schemes. If one knows that they are acting illegally, then they also know that what they are doing is at the very least in an ethical grey area. The cognitive framing that might lead one to fail to realize that he/she is an ethical dilemma could not withstand the obvious realization that he/she is committing an illegal act. At that point, you know yourself that there are ethical issues. You can choose to ignore those ethical issues (something people do all the time, like when they are speeding) but that is not the same thing as bounded ethicality, where you do not understand the larger ethical picture -- Madoff did, he just sped along anyway.

References

Lenzner, R. (2008). Bernie Madoff's $50 billion Ponzi scheme. Forbes. Retrieved May 8, 2014 from http://www.forbes.com/2008/12/12/madoff-ponzi-hedge-pf-ii-in_rl_1212croesus_inl.html

Simcoe, T. (2012). Bounded ethicality. Think Ethically. Retrieved May 8, 2014 from http://thinkethically.wordpress.com/2012/05/02/bounded-ethicality/

Sources Used in Document:

References

Lenzner, R. (2008). Bernie Madoff's $50 billion Ponzi scheme. Forbes. Retrieved May 8, 2014 from http://www.forbes.com/2008/12/12/madoff-ponzi-hedge-pf-ii-in_rl_1212croesus_inl.html

Simcoe, T. (2012). Bounded ethicality. Think Ethically. Retrieved May 8, 2014 from http://thinkethically.wordpress.com/2012/05/02/bounded-ethicality/

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