Ethical Blindness and Business Legitimacy

Ethical blindness describes the temporary inability of a person to make moral judgments and acting morally in the context of working in an organization. Such a failure of moral judgment can be harmful and may damage the entire organization, its reputation, and public legitimacy. This chapter provides both an introductory overview and definition of the theory of “ethical blindness.” The chapter proceeds by first introducing to the general social phenomenon of ethical blindness. Then it presents the specific theory of ethical blindness proposed by Palazzo et al. (J Bus Ethics 109:323–338, 2012). The structure is as follows: First, the chapter shows how the theory relies on an epistemology of individuals’ cognitive propensity to be fallible in combination with a theory of individual “sensemaking” and “framing.” The sensemaking process is under external pressure from social contexts within the organization and its surrounding society. The possible outcome of inflexible and too “rigid framing” is ethical blindness – an incapacity to be sensitive to moral demands elicited by the situation. Second, the normative aspect of the theory is outlined to argue for a pluralistic democratizing of the business organization as a means to prevent ethical blindness in the organization. The theory of political CSR is suggested as a means to secure business legitimacy and counteract ethical blindness in organizations. Finally, the chapter concludes with a brief discussion of the practical usages of the theory of ethical blindness as a possible template for a tool to educate employees to withstand pressures that might lead to harmful ethical blindness in the working place.