Personal beliefs + corporate culture produce unethical behavior

August 5, 2010

Organizations have more power to direct employee ethical behavior of than we previously knew. 

That’s the bottom line of new research from the University of Washington Foster School of Business that demonstrates, for the first time, the relationship between moral intuition—a reflexive perception of what is right and wrong—and moral behavior.

“Philosophers have been talking about this for ages,” says co-author Scott Reynolds, an associate professor of business ethics at the Foster School. “But now we have empirical evidence of moral intuition and how it works.”

The link between intuition and action is not always obvious. Context is critical. Reynold’s study demonstrates this in the workplace, where a firm’s cultural cues can “activate” immoral behavior in an employee who is predisposed to believe that “business” is an inherently moral activity.

Identifying assumptions

This new line of social science is rooted in decades of research in moral decision making and, more recently, automatic social cognition—the way our brains are hard-wired to associate terms like “salt” and “pepper” without conscious deliberation. These associations can affect behavior, as in the inextricable links between black (bad) and white (good).

In their study, Reynolds and co-authors Keith Leavitt of the United States Military Academy at West Point and Katherine DeCelles of the University of Toronto explored the implicit association of morality in the context of business.

They first developed a measure of an individual’s implicit assumption about the moral nature of business. In other words, do you believe in your gut—without any inner debate the matter—that the traditional notion of “business” is something to endorse or decry?

This was accomplished by adapting the UW Psychology Department’s world-renowned Implicit Association Test. After posing a series of questions, the clever computer assessment spits out a numerical association score in a range between 1.0 (business is moral) and -1.0 (business is immoral).

“What’s really interesting,” Reynolds says, “is that these associations predict behavior.”

From association to action

A second study asked the association-assessed individuals to complete a series of workplace tasks for a fictional company. Among them was a test: the opportunity to overstate an insurance claim. And a veiled cue: a welcome memo from the CEO written either in aggressive language (“we’re a competitive firm that does whatever it takes”) or ethical language (“we are a responsible firm that does things the right way”).

Few of the people who implicitly believe business is immoral overinflated their insurance claim. But the people who believe business is moral were affected by their respective cues. Those who read the “ethical” CEO memo did not cheat on their insurance claim. But those who read the “aggressive” CEO memo were much more inclined to cheat on their claim.

“This research shows that belief alone—in this case a notion in the back of the mind that whatever you do to advance the interests of your business is right and good—is not sufficient to push someone over the limits of ethical behavior,” Reynolds says. “It takes personal belief plus a culture or context that supports and encourages it.”

He adds that a follow-up study is proving that even incredibly subtle cues—an aggressive versus collaborative company logo, for instance—can activate unethical behavior in those who are predisposed to believe that business is a moral endeavor.

Wake up and smell the ethics

This latest finding furthers Reynolds’ career hypothesis that the critical lapse in corporate ethics typically occurs not in the decision to do right or wrong, but rather in the inability to even recognize that an ethical decision is required.

“Every year that goes by, I’m more convinced that most people are operating on automatic pilot,” he says. “And when these gnarly ethical issues come across their desk, they don’t see them as ethical issues at all. They see them as the way the job is done.”

He adds that the study sheds light on the thousands of individual ethical breaches that led to the recent meltdown in the financial sector.  “This was not just the work of a few rogue finance experts,” Reynolds says. “It was finance experts in organizations that supported this kind of risky, unethical behavior. That’s what drove the economy over the edge.”

His advice to individuals is to increase self-awareness of the unspoken beliefs that can really affect behavior. To organizations: “You really have to assess the culture and cues in your organization. Do they send a message that supports unethical behavior?”

“Automatic Ethics: The Effects of Implicit Assumptions and Contextual Cues on Moral Behavior” is published in the July issue of the Journal of Applied Psychology.




Ethics & Economic Meltdown
"This was not just the work of a few rogue finance experts. It was finance experts in organizations that supported this kind of risky, unethical behavior. That’s what drove the economy over the edge."

Scott Reynolds
Business ethics professor