This document discusses rational decision making and ethical behavior. It presents a parable about a man named Buzz McCoy who faces an ethical dilemma when trying to achieve his goal. It then provides a framework for analyzing decisions that considers both self-interest and ethics. The framework involves 4 steps: 1) an economic analysis of consequences, 2) an ethical analysis, 3) identifying any ethical dilemmas, and 4) a dynamic analysis of how priorities could shift over time. It argues that rational choices can prioritize either self-interest or ethics, and that a proactive strategy prioritizing ethics may be most credible and sustainable in the long run.

1. Goals, Processes and Rationality:
A Parable and a Framework
Marc Le Menestrel
marc.lemenestrel@upf.edu

2. Session’s Menu
The parable of the Sadhu (discussion)
A Methodological Framework (lecture)

3. 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

4. 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?

5. 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

6. 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?

7. 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?

8. A Word from Common Sense
The end does not justify the means

9. 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.

10. ?
Ethical
analysis of
actions
Dual Analysis
Self-interest
analysis of
consequence
s
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

11. A Framework of Open Rationality
1. Economic Analysis
2. Ethical Analysis
3. Ethical Dilemma
4. Dynamic Analysis

12. 1. Economic Analysis
Step 1: What is the action that leads to the best consequence for you?
Interest of the consequence
?
The rational actor (you, the team, the firm)
1. Anticipates the consequences of the available actions
2. Evaluates these consequences according to their interest for the actor
3. Identify the action that leads to the best consequence

13. 2. Ethical Analysis
Step 2: What is the ethics of the action that leads to the best consequence for you?
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?
?
Here you raise an ethical
dilemma!
Here you justify your interest!

14. 3. Ethical Dilemma
Step 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?
?
?

15. The Dilemma of Buzz Mc Coy
Leave the
Sadhu
Bring the
Sadhu to his
monastery
?
?
Attain his goal
Feel guilt
all his life
Fail his goal
Discover
Buddhism
Prudence: Could Buzz have anticipated the reaction of Steven and the
guilt he will feel?
Vision: Could Buzz have envisioned bringing the Sadhu back?
Imagination: Could Buzz have realized that this was an opportunity?

16. Open Rationality
Less ethical More Ethical
Worse Better
Ethical Values
Interest
Ideal
Priority
to
interest
Irrational
Priority
to
ethics
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 ethics
We can rationally give priority to ethics, and sacrifice interest

17. 4. Dynamics Analysis
Increasing demands (legal, social)
Credibility ambiguous
Contentment, lack of vigilance
Unawareness, rationalization
Ideal
If you are in the
ideal position,
you may not be
lucky for very
long
Priority
to
interest
Irrational
Priority
to
ethics
Lack of transparency
Legal pressure
Liabilities
Bad Reputation
PR costs
Negative motivation
Managerial inertia
Transparency
Social involvement & support
New scope of activities
New business processes
Long term thinking
Strategic investment
Positive motivation
Learning process
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

18. A Difficult Strategy…
Ideal
Priority
to
interest
Irrational
Priority
to
ethics
Few ones are going to believe it,
Outside or inside the company…

19. A Reactive Strategy…
Ideal
Priority
to
interest
Irrational
Priority
to
ethics
We wait for change to become necessary
But it can be very dangerous…

20. A Proactive Strategy…
Ideal
Priority
to
interest
Irrational
Priority
to
ethics
We are likely to be more credible,
And more motivated for change…
Visionary Leaders Welcome!

21. 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

23. 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 “