Mendoza School of Business

Warren Watch: Ethical ‘blind spots’

Published: June 5, 2011 / Author: Steve Jordon

Conflicts of interest cause ethical “blind spots” that let people
overlook misdeeds, a pair of professors wrote for the Harvard Business
Review, citing the stock-trading episode involving former Berkshire
Hathaway executive David Sokol and his boss, Warren Buffett.

Max Bazerman of the Harvard Business School and Ann Tenbrunsel of the
University of Notre Dame wrote that Berkshire chairman and CEO Buffett
“failed to understand the unethicality of Sokol’s actions when he
learned of them and intervene.”

“Mounting research shows that we
often fail to notice others’ unethical behavior if it’s in our interest
not to notice,” they said. “This failure of oversight — called
‘motivated blindness’ — is unconscious and common. When Sokol told
Buffett that he owned stock in Lubrizol, Buffett probably didn’t
consciously ignore the warning signs; he didn’t see them at all.”

To read the entire article visit: Warren Watch: Ethical ‘blind spots’


Topics: Mendoza