[MUSIC] Welcome to this third video of Week 5 of our course on unethical decision making. In this video, we will discuss the role of fear as a driving force of unethical decision making. In this session, you will understand how fear provokes irrational behavior. You will learn how fear emerges in organizations and how it can even become a dominating emotion. And you will understand how a culture of fear increases the risk of unethical decision making in organizations. In our analysis of The Emperor's New Clothes, we have argued that fear can lead to irrational behavior. And fear can be found as a dominating emotion in many corporations. And it is certainly present in all the corporate scandals we have discussed in this course so far. The fear at Enron to be perceived and punished as a low performer. The fear of the engineer to resist group pressure in the Challenger case. The fear of an aggressive CEO at fort. And fear does play a role in the current discussion on the corporate culture of Amazon as well. We have seen how fear influenced the behavior of participants in the experiments on authority, group, role or time pressure that we presented in the first video of this week. Of course, fear is not just an irrational emotion, it can be very important. It can save our life. When we perceive a risk, we may be more concentrated. Our attention may be more focused and we may be more cautious in how we move and what we say. However, fear also has a negative aspect and we want to focus on one, in particular. Fear increases the risk of provoking unethical behavior. And it may ultimately even lead to ethical blindness. There's a particular type of fear we want to critically examine in the context of our course, the fear that is created by other people. Fear that emerges from social interaction switches off reason and promotes irrational behavior. In our fairy tale, the Emperor created a context of fear in which the others were more concerned to hide their presumed stupidity than to critically challenge the perspective imposed on them by the two crooks. Paradoxically, as we have seen, these also includes the Emperor himself. He creates the fear and becomes a victim of it. So let's look at those two aspects first, the irrational behavior that follows fear and the social context that creates fear. One example of the irrational behavior fear can trigger has been discussed by the German psychologist Gerd Gigerenzer. After two planes crashed into the Twin Towers in New York on September 11, 2001, people were not only shocked and terrified, they immediately developed a very concrete fear of using airplanes. Of course, nobody wants to sit in a hijacked airplane. For a while, even for long distances, many Americans who before September 11 would have taken an airplane, used their car instead. Driving a car however, is much riskier than taking an airplane and, as a result, the probability of being killed in a car accident is much higher than dying in an airplane accident. As you can easily imagine, dying in an accident of a hijacked airplane is even less probable. These facts about the risks linked to traffic accidents are very well known and there are numerous statistics demonstrating the relative safety of airplanes and the relative risk of cars. But, despite statistical evidence, we often have the illusion of being safer in a car, in particular, if we drive ourselves. It is this feeling of being in control of the situation that we do not have when we take an airplane. When examining the consequences of September 11, Gerd Gigerenzer compared the number of people dying in a car accident five years prior to September 11, and five years after. For one year after the terrorist attack, people changed their traveling habits, then they went back to their normal travel routines. Gigerenzer was wondering how many people additionally died in car accidents as a direct result of this change of habits, this panic that followed September 11th. The model used by Gigerenzer suggests that an estimated number of 1,595 people died in a car accident because they were concerned to die in an airplane crash. In the case of September 11, the overall fear of airplane accidents was less a fear of dysfunctional technology and more a fear of the uncivilized behavior of others, terrorists who could hijack the airplane. The philosopher Thomas Hobbes has examined this kind of fear centuries ago and we shortly mentioned this already in our video on ethical dilemmas. In his book Leviathan, he proposes a thought experiment. What will happen if we remove all rules and regulations from society? How will the world look like in which we are free to do what we want? Well, according to Thomas Hops, this radical freedom will not create the best of all possible worlds. Given that resources are limited and our desires to own them is unlimited, in a world without rules, it will be the strong and violent people who will be successful. They take away the property of the weaker people. Power will be abused and such an abuse creates fear, first among the weaker members of the community. However, also the stronger people can never be safe because sooner or later, someone might arrive who is stronger or more intelligent or able to create coalition of actors. The result of the situation is obvious. In the absence of rules, life, according to Hobbes, is brutish and nasty. It is dominated by fear. This is the amazing effect Hobbs assumes for such a world without rules. It is not so much the people who become victims of violence who have fear, everybody has fear. And fear does not result from bad experience, it already results from the risk of violence we imagine, the violence that we perceive as lurking behind the next corner. Fear thus is strongly connected to the expectation that the thin soil of civilization might erode quickly. Fear results from our imagination of what might happen. What is fear? Fear is a negative and potentially uncontrolled emotion linked to the perception that a situation is risky, threatening or dangerous. Many fears are hardwired into our brain. And this has been important for the survival of our species. From a neuroscience perspective, fear is a reaction to a stimulus that is processed in a part in the temporal lobe of our brain called amygdala. Fear is an emotion that works at high speed, without involving reason. It is a quick and conditioned reaction to a pattern that we perceive in our context, and that rings our alarm bells immediately. It is based on previous experience. We can consciously or unconsciously use the power of fear to get control over others, to win and keep power and to impose a particular thinking, a behavior on others which they would not show without fear. There many sources and forms of fear. For instance, it seems that people across many cultures share a fear of snakes, even if they have never seen a snake before. They intuitively are racked by fear. As I already emphasized in the context of our course, we are more interested in fear as the result of social dynamics, and in particular, those that emerge in organizations and drive ethical blindness. Just imagine, you are sitting in a team meeting. You disagree with the analysis of your boss and you try to speak up. Your boss interrupts you aggressively bullying you, making fun of your argument and even questioning you competence in front of the others. Nobody in the room supports you, they look down on the table and remain silent. You feel isolated, humiliated, threatened. As the minister in the fairytale of The Emperor's New Clothes, you might start to question yourself. Maybe you are stupid. Maybe your critique is inappropriate. Your blood pressure increases, your heart is beating fast, you feel out of control, both of the situation and your emotions. You feel that you must protect yourself somehow. You have the impulse to flee, to run away form the situation, but you can't. So instead of running away, you freeze. When you think about the situation afterwards, you're not even surprised about what happened because you have seen your boss shouting at others in previous meetings already. You do not want to be exposed to such a situation again. From that day on, you already have stomach problems before you get into the next meeting. Fear becomes a physical pain. You want to minimize the risk of being exposed to the same situation again, so you will remain silent in the meeting, or at least you will avoid any critique of your boss, and so do all our colleagues. Fear in organizations may have many sources. It can result from a threatening and humiliating leadership style. It can result from group pressure, from the overall aggressiveness of a corporate culture in which the weaker people are bullied, ridiculed and pushed aside. It can result from a lack of openness for critique and it will be reinforced by reward and punishment structures as in the Enron case. Fear can be magnified by situations of uncertainty such as in a merger of two companies where your future is unclear. As we have learned from Thomas Hobbes, fear does not necessarily need the experience of a threatening situation. It can already be activated by storytelling in an organization. What do I learn about others who dared to take a risk? You do not need the unpleasant confrontation with the CEO yourself, you only need the unpleasant stories about other colleagues' experience to feel the fear. If you're one of the people sitting in the room while your boss shouts at someone else, you might even feel the physical pain yourself. You'll fear to become a victim of a similar exposure to verbal violence later on. You do not want to be stigmatized as the troublemaker. Fear is often reinforced by threat appeals, which are messages designed to scare you and that recommend you to abstain from certain activities. Don't challenge me, I will fire you. Sadly enough, it is a widespread phenomenon that people in organizations have the perception that is not safe to speak up at work and in front of the superiors. The dynamics we have seen in the Emperor's story, in the Enron case or at Lehman Brothers, is only possible because fear keeps critical thinking in check. The consequences of a culture of fear can be devastating for organizations. Research has shown numerous side effects of fear. Fear makes it difficult to learn. Who can learn while having panic attacks? It isolates people. Fear inhibits risk taking. It blocks innovation and it kills your imagination. Fear damages your self-esteem. We wonder whether we are a bad or an incompetent person. Fear encourages avoidance behavior and pessimistic interpretations about the future, we disconnect. Fear promotes a narrow perception, and a focus of our cognition on a perceived threat. We develop a tunnel vision of our context, as soon as our heart starts beating faster. Fear promotes counterproductive silence in situations where people in organizations should speak up. Repeated situation of fear creates a routine, a habit of doing or not doing certain things. For instance, criticizing your boss, talking about problems, disagreeing with your team. You will internalize an understanding of particular situations as being threatening and this will activate a culture of silence. We will construct the kind of protective structure around us that includes among others the justifications for why we do what we do and two effects come together at this point. First, an effect called Confirmation bias. Once we have started to experience the world in a particular way, we start to hear and see only those pieces of information that confirm what we believe already. This effect can be complimented by a second effect, which is called Group polarisation. The more we get our beliefs confirmed by the group to which we belong, the stronger the beliefs become, and the less we are willing and able to see the evidence that might contradict our beliefs. If we collectively make all the same experience with our CEO, a particular behavior, for instance, not challenging him or her, might be routinized intersubjectively. We all avoid it. Social fear is contagious. We are all afraid of the temper and the often uncontrolled rage of our CEO. In a worse case, when fear gets habitualized, we might apply the same reaction to other superiors, or even within the teams, just because we have learned that speaking up in general, in this organization, will harm us. In the worst of all cases, we perceive this interaction style, shouting boss, silent subordinates as normal and get used to it. And we will shout ourselves once we've climbed up the ladder in the hierarchy and become bosses ourselves. We will discuss this temple dynamics of ethical and unethical decision-making next week. In our course, we've argued that unethical decision-making does not require consciousness. It often results from automized reactions to particular contextual signals. Fear is a very powerful emotion that can promote such unconscious behaviors and beliefs that switch off conscious decision making. Fear is also a considerable obstacle for those who might have the feeling that particular decisions or routines are inappropriate from a moral point of view. They might not have the courage to speak up and disrupt the unconscious routines of their colleagues or superiors and over time, they become ethically blind as well. As one of the Enron traders stated, you do it once, and it smells. You do it again, and it smells less. Let me conclude this session. In most of the corporate scandals where good people were involved in bad practices, fear was a dominating emotion. Fear is contagious, it gets mutually reinforced in an aggressive corporate culture and it switches off reason when people make decisions. A key driver of a culture of fear is the behavior of leaders. Leaders create cultures of fear, but this culture will then affect them as well. Thank you for watching. [MUSIC]
