It’s called “ethical amnesia.”
Just recently, Mitsubishi Motors, Japan’s sixth-largest automaker, admitted that for 25 years it had used methods to test the fuel economy of its vehicles that did not comply with Japanese government regulations. The company confessed that it repeatedly had manipulated test data for four of its domestic mini-vehicle models and conducted tests that did not comply with Japanese standards on many other models. This is not an isolated case of ongoing corporate cheating. Last September, the U.S. Environmental Protection Agency revealed that Volkswagen had been cheating on emissions tests for years. Similar examples of unethical behavior abound in many other industries, from banking to insurance to health care.
Fouad Bendris’s insight:
When people fail to live up to their own moral standards, this knowledge is unpleasant and threatens their self-image as honest and good. Consequently, they engage in various strategies to reduce their distress, including forgetting these memories. Such memory biases and distortions are not accidental; rather, they are motivated to support our self-concept and identity.
Source:: Strategy & Governance