Mains Practice Questions

A. Ethical fading

• Ethical fading occurs when the ethical aspects of a decision disappear from view.
• This happens when people focus heavily on one aspect of a decision, such as profitability or winning. People tend to see what they are looking for, and if they are not looking for an ethical issue, they may miss it altogether.
• Ethical fading is similar to moral disengagement. It is when people restructure reality in order to make their own actions seem less harmful than they actually are.
  
  • Both ethical fading and moral disengagement help people minimize the guilt they feel from violating ethical standards.

Examples:

• A manager asking a new recruit to appreciate his behaviour with their client for the sake of promotion.
• Many national leaders not accepting the phenomenon of climate change.

B. Fiduciary Duty:

• A fiduciary duty is the legal responsibility to act solely in the best interest of another party. ‘Fiduciary’ means trust, and a person with a fiduciary duty has a legal obligation to maintain that trust.
• It includes duties of undivided loyalty, due diligence and reasonable care, full disclosure of any conflicts of interest, and confidentiality.

Examples

• Civil servants have a fiduciary duty with the people of India to adhere to the constitutional values.
• The trustees of a mutual fund have a fiduciary duty to protect and further the interests of investors.

C. Bounded Ethicality

• Bounded ethicality is the idea that our ability to make ethical choices is often limited or restricted because of internal and external pressures.
• Outside pressures, such as the tendency to conform to the actions of those around us, can make it hard to do the right thing.
• Hence, people are susceptible to cognitive biases and organizational or social pressures that limit their abilities to make ethical decisions.

Examples

• People in India could not eliminate the practice of Sati even till 18^th century. It was due to the efforts of great social reformers like Raja Ram Mohan Roy that common Indians could come out of their bounded ethicality.
• A Member of Parliament has to adhere to party’s whip in the house on important issues restricting his/her personal preferences on the issue.