Ethics in Accounting and Finance

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Social Cognitive Theory

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Ethics in Accounting and Finance

Definition

Social Cognitive Theory is a psychological framework that emphasizes the importance of observational learning, imitation, and modeling in the development of behaviors and attitudes. It connects individual behavior with environmental influences and cognitive processes, suggesting that people learn not only through direct experience but also by watching others and reflecting on those observations.

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5 Must Know Facts For Your Next Test

  1. Social Cognitive Theory highlights that individuals can learn behaviors without having to perform them directly, which can lead to ethical fading when observing unethical practices.
  2. The theory posits that reinforcement and punishment can influence the likelihood of a behavior being repeated, making it relevant in understanding moral disengagement.
  3. Cognitive processes such as attention, retention, reproduction, and motivation are crucial for learning new behaviors through observation.
  4. People are more likely to model the behavior of others whom they view as similar or relatable, which can create ethical dilemmas when those role models act unethically.
  5. Social Cognitive Theory stresses that individuals' beliefs about their capabilities can affect their engagement in ethical versus unethical behaviors.

Review Questions

  • How does Social Cognitive Theory explain the process of ethical fading in individuals observing unethical behavior?
    • Social Cognitive Theory explains ethical fading through the lens of observational learning, where individuals witness unethical behavior modeled by others and may not fully recognize its moral implications. This diminished awareness can lead to a disconnect between their values and actions as they unconsciously imitate those around them. By observing unethical practices without experiencing direct consequences, individuals may begin to rationalize similar behaviors themselves, thus reducing their moral engagement.
  • In what ways does self-efficacy play a role in moral disengagement according to Social Cognitive Theory?
    • Self-efficacy is significant in moral disengagement because if individuals believe they are capable of acting ethically but choose not to due to external pressures or influences, it highlights a conflict within their self-perception. When self-efficacy is low, individuals may feel helpless against unethical practices around them and justify their participation in such actions. This creates a cycle where decreased self-efficacy fosters moral disengagement, as individuals may no longer see themselves as responsible agents of ethical action.
  • Evaluate how reciprocal determinism within Social Cognitive Theory can impact ethical decision-making in a business environment.
    • Reciprocal determinism illustrates how personal beliefs, environmental factors, and behaviors influence one another. In a business setting, if employees observe unethical practices endorsed or tolerated by management (environmental factor), their perception of what is acceptable behavior changes (personal belief), leading to an increase in unethical actions (behavior). This cycle perpetuates itself as more employees adopt these behaviors, demonstrating how the environment shapes ethical decision-making and potentially leads to widespread moral disengagement across the organization.
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