Dutch post-impressionist painter Vincent van Gogh (1873-1890) said once: “I put my heart and my soul into my work, and have lost my mind in the process.” More than hundred years later, this sounds like the perfect description for a phenomenon, what we call “ethical blindness”.
“Formally, ethical blindness can be defined as the temporary inability of a decision maker to see the ethical dimension of a decision at stake.”
Due to the combination of different psychological pressures, the employee develops a tunnel vision, or as a German proverb says, because of all the trees it is impossible to see the forest. Some of the pressures include, but are not limited to, peer pressure, role behavior or time pressure.
Another risk factor, which can lead to Ethical Blindness, is the “illusion of control”-effect.
Depending on a person’s character, employees overestimate their possibility to control a situation. This is especially true for “success seekers”, they tend to overestimate their own abilities and underestimate the risks of the situation. For the “failure avoiders” it is the other way around. Thanks to self-selection the first group of people will try to get more risky tasks with the goal that they can prove their selves and advance faster in their career.
In the early 1980’s the hard-and-software company Atari was the favorite of the US stock market and the Silicone Valley. It was the first company who presented their programmers as games designers and celebrated them similar to rock stars. A concept what got copied by other competitors like Activision, who printed the name of their programmers directly under the game title, similar to movie posters. Howard Scott Warshaw was one of Atari’s most talented game designers. He created the Indiana Jones game “Raiders of the Lost Ark” and “Yars’ Revenge”. Both had been very successful products, especially the second, as it became Atari’s best-selling game, which not had been based on a license (as Pac Man).
“E.T. – the Extra Terrestrial” became a movie sensation in ’82 and Atari’s mother concern Warner Brothers had been keen to participate in the global merchandising. Finally director Steven Spielberg agreed on the license for a video-game. The problem: It was already summer and it was necessary to develop a game in just 5 weeks, if the company wanted to aim for the attractive Christmas business. Thanks to his successful earlier games, Warshaw had enough self-affirmation to take on this task. Never before a game was finished in such a short time and he did the impossible with delivering on time. Unfortunately the quality of the game-play was not as expected and the game became known in history as the “worst game of all times”.
To be honest, it was a disappointing game, but definitively not the worst of all time, not even Atari’s. (I remember that I received the game for Christmas and liked it at that time. Even if it was difficult, it was not impossible, as I completed once to build the telephone, so that the big space ship came to pickup E.T.) Nevertheless it was perceived as this, also as there was such a huge gap between the quality of the movie and the relating game. The end of ’82 became a turning point for Atari and the whole videogame industry. Finally in ’84 Warner sold Atari to Jack Tramel, who restructured the company to develop “the next big thing”, the home computer.
Warshaw took on an impossible task to create a high quality game in such a short period and with this destroyed a must-win project. This was not the only factor for the company’s downfall, but nevertheless an important one, as it seriously damaged the Atari image and reputation. Another important factor for this was the underestimated success of the home computer, and here first of all, the C64.
As a lesson learnt, it is mandatory to have an efficient risk control process implemented in the company. A project is always an opportunity, but if the adequate execution is not ensured; integrity should tell the company not to participate. Consequences can be a negative impact on the company, including fines and loss of reputation. Honesty is a sign of respect, not just between individuals, but also companies.
A positive corporate culture presumed, “success seekers” must be included into an internal group. With this, decisions are not taken alone, but jointly, “failure avoiders” included. Smartphones, tools and apps can reduce the “perceived isolation” of sales employees and project managers. Even if not office, you are always connect with your decision group. Compliance workshops can work as an “ethical vaccination”, as the fostering of knowledge, values and attitudes can lower the risk of Ethical Blindness.
 Palazzo, Guido / Krings, Franciska / Hoffrage, Ulrich (2012): “Ethical Blindness”, published in the Journal of Business Ethics, 109