Adding General Managers to the Organization Could Improve Ethical Decision-Making

I’ve mentioned before that I’m working at Ashoka for the summer. As I don’t currently live in Rossyln, I take the Metro to get to work. As I don’t yet have an iPhone or an iPad (with which to read something on), I’ve kept my subscription to The Economist. As I was reading last week’s issue, I got to an article from Schumpeter called, “No Rush: In Praise of Procrastination.”

At first, I was a bit skeptical, but as I read on, it may me think of the post I recently wrote about general managers and JP Morgan. Here’s an excerpt from the Schumpeter article [emphasis added]:

But is it wise to be so obsessed with speed? High-speed trading can lead to market meltdowns, as almost happened on May 6th 2010, unless automatic breaks are installed. And is taking one’s time so bad? Regulators are always warning people not to buy things in the heat of the moment. Procrastinators have a built-in cooling-off period. Businesses are forever saying that they need more creativity. Dithering can help. Ernest Hemingway told a fan who asked him how to write a novel that the first thing to do was to clean the fridge. Steven Johnson, a writer on innovation, argues that some of the best new products are “slow hunches”. Nestlé’s idea of selling coffee in small pods went nowhere for three decades; now it is worth billions.

These thoughts have been inspired by two (slowly savoured) works of management theory: an obscure article in the Academy of Management Journal by Brian Gunia of Johns Hopkins University; and a popular new book, “Wait: The Art and Science of Delay”, by Frank Partnoy of University of San Diego. Mr Gunia and his three co-authors demonstrated, in a series of experiments, that slowing down makes us more ethical. When confronted with a clear choice between right and wrong, people are five times more likely to do the right thing if they have time to think about it than if they are forced to make a snap decision. Organisations with a “fast pulse” (such as banks) are more likely to suffer from ethical problems than those that move more slowly. (The current LIBOR scandal engulfing Barclays in Britain supports this idea.) The authors suggest that companies should make greater use of “cooling-off periods” or introduce several levels of approval for important decisions.

I fine this rather on-point with what I was saying in the General Managers article. By having more layers of approval (by way of the general managers), there would, undoubtedly, be more time factored into the process. As a result, this *may* result in less of the instances of poor decision-making that what we’ve seen recently with companies like Barclay’s and JP Morgan.