(Un)Ethical Behavior in Organizations

Linda Klebe Treviño, Niki A. den Nieuwenboer, and Jennifer J. Kish-Gephart
Annual Review of Psychology
Vol. 65: 635-660 (Volume publication date January 2014)
First published online as a Review in Advance on July 3, 2013
DOI: 10.1146/annurev-psych-113011-143745

Abstract

This review spotlights research related to ethical and unethical behavior in organizations. It builds on previous reviews and meta-analyses of the literature on (un)ethical behavior in organizations and discusses recent advances in the field. The review emphasizes how this research speaks to the influence of the organizational context on (un)ethical behavior, proceeding from a more macro to a more micro view on (un)ethical behavior and covering ethical infrastructures, interpersonal influences, individual differences, and cognitive and affective processes. The conclusion highlights opportunities for future research.

Introduction

Starting in the 1980s, the systematic study of (un)ethical behavior in organizations—often referred to as behavioral ethics in organizations or as organizational ethics (Treviño et al. 2006)—began to take shape. Over the years, a series of ethical debacles has only increased the salience of this area of study for practitioners and researchers alike. Indeed, as a testament to the growing interest among researchers, a number of literature reviews have appeared in recent years—including several qualitative reviews (O'Fallon & Butterfield 2005, Tenbrunsel & Smith-Crowe 2008, Treviño et al. 2006), a meta-analysis of research on the sources of unethical choice in organizations (Kish-Gephart et al. 2010), a meta-analysis of the ethical climate literature (Martin & Cullen 2006), and a meta-analysis of the whistleblowing literature (Mesmer-Magnus & Viswesvaran 2005). The meta-analytic reviews, in particular, represent a major advance, showing that enough research has been conducted for investigators to undertake such statistical reviews.

The entire article is here, behind the paywall.

EthicalSystems.org Launches

EthicalSystems.org culls years of academic research to educate executives on how to create and maintain an honest, moral company culture.

By Will Yakowicz
Inc.
Originally published on January 22, 2013

What makes good people make unethical decisions? How can you ensure your employees don't accept bribes, cut corners, or cheat when you're counting on them?

These are the questions EthicalSystems, a new nonprofit formed by business school professors, social scientists, and behavior specialists, aims to answer. The group's website, launched in early January, was spearheaded by Jonathan Haidt, a professor of ethical leadership at New York University's Stern School of Business.

The entire article is here.

Strengthening the Ethical Culture of Your Organization Should Be a Priority

By Barbara Richman
SPHR

According to the 2011 National Business Ethics Survey, a report published by the Ethics Resource Center, the ethical culture of the American workplace is in transition. The survey, the seventh since 1994, was conducted for the purpose of understanding how employees at all levels view ethics and compliance at work.

Its overall results send mixed signals to employers. While positive indicators are included in the findings, they are clouded by “ominous warning signs of a potentially significant ethics decline ahead.”

On the positive side, the data revealed historically low levels of misconduct in the American workplace and near record high levels of employees reporting misconduct that they observed. On the negative side, however, there was a sharp rise in retaliation against employee whistleblowers, an increase in the percentage of employees who perceived pressure to compromise standards in order to do their jobs, and near record levels of companies with weak ethical cultures.

The entire story is here.

Using Social Media to Boost Ethics and Compliance

By Pamela Babcock
Society for Human Resource Management
Originally published August 27, 2013

Organization leaders should take a cue from their employees and spend some time on social media, experts said.

Even though employees may misuse social media—and need to be trained on what is and is not acceptable—it is a powerful tool that companies can use to promote ethical practices and culture, a recent study found.

To more effectively engage employees, enhance ethics and compliance programs, and positively affect workplace culture, businesses should tap their employees’ expertise and encourage workers to use social media, according to a July 17, 2103, report from the Ethics Resource Center (ERC) in Arlington, Va. The key is seizing the opportunity of having tech-savvy employees who are invested in the company while mitigating the risk of inappropriate postings.

“If you can’t beat them, leverage them,” quipped ERC President Patricia J. Harned, Ph.D., adding that active social networkers “have a really strong interest in the culture of the workplace. They are more likely to be responsive if you’re making use of social networks to address company culture and employee concerns.”

The entire article is here.

Corruption in Business and the Importance of Ethics

By Vivek Wadhwa
The Wall Street Journal Blog - The Accelerators
Originally published June 28, 2013

Here is an excerpt:

How can companies do better? Corporate executives and business owners need to realize that there can be no compromise when it comes to ethics and there are no easy shortcuts to success. Ethics need to be carefully sown into the fabric of their companies.

Business executives need to start by spelling out and communicating their values. Then they need to lead by example. This means getting rid of the bad apples and declining opportunities that bring instant wealth at the cost of selling one’s soul.

Corporate culture is built from the top down. Employees embrace the ethics and values of their leaders. You simply can’t have one set of standards for management and another for staff. Every executive and employee needs to be held accountable.

Employees need to be encouraged to speak up when they see wrongdoing — to “speak truth to power.” And when a mistake is made, it is better to deal with the immediate fallout rather than allow it to build its own momentum. A corporate culture that doesn’t allow for mistakes is destined for disaster. The best strategy is to encourage employees to come clean and learn from their errors.

The worst is when employees are pressured to hide information. A company can usually survive short term snags. But covering up a problem is likely to create even bigger problems later on.  No truth remains hidden forever.

The entire article is here.

Certain Age Groups May Encounter More Ethics Risk, Says New Report from the Ethics Resource Center

Ethics Resource Center
Press Release
Originally presented on June 24, 2013

Younger workers are more susceptible to experiencing ethical dilemmas on the job, the Ethics Resource Center (ERC) said today in “Generational Differences in Workplace Ethics,” a supplemental research report to their 2011 National Business Ethics Survey®.  The new report takes an in-depth look at how employees of different generational cohorts are shaping today’s workplace.

The report delves into trends among four specific generational groups- Millenials, Generation X (Gen X’ers), Boomers, and Traditionalists. Each generation, shaped by significant world events and cultural trends, exhibits distinct differences when it comes to ethics.  According to the study, certain age groups are more “at risk” than others when it comes to the four key measures of ethical performance- pressure to compromise standards, misconduct, reporting, and retaliation.  For instance, the report reveals that the younger the worker, the more likely they are to feel pressure, observe misconduct, and experience retaliation for reporting.

Major findings from the survey include:

• Almost half of Millenials (49 percent) observed workplace misconduct
• The youngest workers (29 percent) were significantly more likely to experience retaliation than Gen X’ers (21 percent) and Baby Boomers (18 percent)
• After witnessing misconduct, over half of employees in every age group reported it to their supervisor first

“It is important for companies to realize that each generation perceives ethics and culture differently from the others,” said ERC’s President, Dr. Patricia J. Harned.  “However, business leaders should know they do not have to completely redesign their ethics and compliance programs.  Implementing an effective ethics and compliance program and building a strong ethics culture will continue to make a difference for all employees. The key is communicating their commitment to ethics differently for different generations.”

This study is the most recent in a series of surveys conducted by the ERC. The ERC has fielded a biennial National Business Ethics Survey (NBES®) since 1994, providing business leaders a snapshot of workplace ethics trends.  Throughout the years the NBES has been expanded into a series, making it possible to focus on specific areas of interest.

“Generational Differences” allows ERC to address challenges facing a workforce spanning multiple generations, and offers suggestions for business leaders on how to reach each generation.  This newest report was made possible in part by a generous contribution from Raytheon Company.

Download the entire supplemental report here.

Forget ethics training: Focus on empathy

Craig Dowden
Special to Financial Post
Originally published June 13, 2013

The sheer volume and diversity of recent scandals in the corporate world, various levels of government, and even the media, has been astounding. Even though initiatives to get tough on corporate malfeasance were introduced and promoted in the early 2000s, it seems the only lesson learned is how to shield bad deeds more effectively while keeping up the appearance of compliance.

The most recent National Business Ethics survey reinforces this notion. Using data from the 2011 report, 42% of respondents state their organizations have weak ethical cultures — a result comparable the highest level in the history of the survey.

Given the importance of ethics in underpinning effective organizational leadership, the question remains: how do we demonstrate and promote ethical behaviour?

Empathy and the moral compass

The Management Research Group (MRG) has been administering the “360 review” process to executives for almost 30 years, allowing it to build a database of 100,000 leaders’ assessments.

One of the great value-added features of the MRG 360 process is that it includes various outcome measures of leadership effectiveness. One of the performance indicators asks respondents to rate a leader on whether he or she “demonstrates ethical leadership.”

When MRG examined what was the strongest predictor of ethical leadership behaviour out of the 22 competencies in their model, the resounding answer was empathy. In other words, leaders who scored highest on empathy also exhibited the highest levels of ethical leadership.

The entire article is here.

Chief of Army message regarding unacceptable behaviour

Published on Jun 12, 2013

Message from the Chief of Army, Lieutenant General David Morrison, AO, to the Australian Army following the announcement on Thursday, 13 June 2013 of civilian police and Defence investigations into allegations of unacceptable behaviour by Army members.





This video was made in response to news reports to the following:

Australian news outlets reported last week that at least 17 soldiers circulated video of themselves having sex with women. The videos were shared without the women's knowledge. Some of the material was distributed over military computer networks, and those under investigation include a lieutenant colonel and a major, Morrison told reporters on Thursday.

The following quote is from a CNN story found here.

Editorial notes: This video is an interesting and thought-provoking way to share unequivocal moral and ethical standards to the military community under his leadership.  Also interesting is the number of comments and the wide variety of responses to this video.

Additionally, compare and contrast this response to the United States military's response to the increased reports of sexual assault in our military community.  The responses are not the same.

Ethics Without Borders

By Cynthia Schoeman
The Ethics Monitor

For organisations that strive to be ethical, there are two important criteria for earning and maintaining an ethical status: the continual, consistent application of their values to all their stakeholders and their on-going adherence to all applicable laws and regulations. If a company’s commitment to their values or their compliance with regulations is intermittent or applied selectively, it erodes their ethical standing. The constancy of ethical behaviour reflects the practice of “ethics without borders”.

Borderless ethics necessitates that the organisation has a very inclusive ethical boundary, whereby ethics is exercised beyond self-interest and includes all stakeholders affected by the company’s operations. By contrast, an exclusive ethical boundary, which implies that ethics is exercised only for the organisation’s own benefit and relative to a select few stakeholders (typically shareholders), totally contradicts an approach of ethics without borders. While the exclusion of other stakeholders does not necessarily mean that the company is behaving unethically, it does highlight the fact that the company prioritises their own goals and needs above others’ or that they don’t give equal priority to their various stakeholders – such as communities who are impacted by the company’s operations. Added to that, organisations are rarely obliged - for example, by law - to include all stakeholder groups formally within their ethical boundary. So, although such companies may not be technically behaving unethically or illegally, their limited application of ethics means that they would rarely be regarded as an ethical organisation.

There is a further challenge to following an approach of ethics without borders. This emanates from the recurring discourse in workplace ethics that ethics differs for different people, cultures, countries and situations. This view needs to be addressed not only because it appears to invalidate the possibility for ethics without borders, but also because it undermines the pursuit of common and shared organisational ethics. The globalised nature of the world of work particularly makes for a multitude of differences in the workplace. Yet, ironically, globalisation makes the practice of ethics without borders all the more valuable, not least for the clarity it offers all affected parties and the fairness it embodies by operating in terms of the same ethics globally.

The entire story is here.

Editor's Note: This article has direct connections to individual psychologists in private practice, businesses in general, state psychological associations, and the American Psychological Association.

The World's Most Ethical Companies

By Jacquelyn Smith
Forbes
Originally published March 1, 2013

The Ethisphere Institute, an international think tank, has just announced its seventh annual list of the World’s Most Ethical Companies. The selection, open to every company in every industry around the globe, gives its winners an opportunity to trumpet their do-gooding ways. It is not a ranking, so they are all equally winners.

(cut)

Why is there so much interest? Brigham says that recognition on the WME list has proven to be beneficial in various ways for the winners. “Many companies promote the recognition in their recruitment materials, as studies show that employees increasingly want to work for an organization that aligns with their own personal values. They are more loyal to such organizations,” he says. “In addition to providing a competitive advantage in workforce recruitment, many companies also display the designation in their marketing materials to attract customers, particularly in new markets,  where the company may not be well-known.”

The World’s Most Ethical Companies are leaders of their respective industries when it comes to key ethical criteria such as tone from the top, employee well-being, CSR, compliance programs and other important areas, Brigham adds. “Every year we are impressed to learn some of the new ethics initiatives that these companies have developed and we are pleased to see the bar raised higher year after year. These companies also understand that a strong culture of ethics is also key to helping drive financial performance,” he concludes.

The entire article, including the winners, is here.

A Chance to Walk the Talk at the Ethics Educators Conference

By Jeff Sternlieb, PhD
The Pennsylvania Psychologist
June 2012

During the 2011 annual PPA Ethics Educators Conference, an exchange occurred that could, met with the right attitude, guide our organization in creating safe learning spaces. Here’s what happened:

The exchange

The chair of the Ethics Committee began by identifying the content of the program for the day and then introduced the “luminaries” present: past presidents of PPA and significant contributors to ethics education. He ended with a specific request to be respectful of each other in our exchange of ideas and then introduced the morning’s presenters.

When the first pair of presenters described their roles, the second made a comment about being a longtime sidekick – Robin to the first one’s Batman. Immediately, someone in the audience remarked, “Oh, I guess that means you’re gay,” chuckling as though it were a joke. A ripple of laughter from the audience quickly subsided as the presenters moved on without any comment about the “joke,” even though it occurred minutes after the Ethics chair requested sensitivity.

My thoughts

Immediately I struggled. I wondered whether anyone would respond to the remark. I believed we were all, through our silence, colluding with the “joke” and placing in an unfair position anyone who was gay or simply cognizant of the impact of such comments on any minority member.

I shared my concern with a colleague next to me, who did not seem to consider it nearly as significant. I was considering what I should do, but doing or saying nothing was not an option. Two choices occurred to me: say something to the entire group, potentially embarrassing the person who made the remark, or say something to him at the break. The former had the potential to interfere with the ethics program; the latter might determine the speaker’s awareness of the remark’s impact and intent to address it in the larger group. I chose the latter.

The conversation

When I asked the quipster whether he was aware of the possible impact of his comment, he indicated that not only was he aware, but that he had already addressed it during a small-group discussion. He said he regretted it the minute it came out of his mouth, and that he worked with a number of gay clients in a setting in which his comment would have been heard differently. It struck me as a justification rather than an understanding of its potentially negative impact in the current context. He said he appreciated that I brought the concern to him but made no offer to discuss it with the larger group. He had not heard the term “microaggression” when I used it. Included in his small discussion group had been the Ethics chair, who approached while we were talking and asked whether I would be willing to share my experience with the larger group. I agreed.

The organic process

After the morning break, one psychologist, new to the Ethics Educators Conference, questioned how the earlier comment had impacted the learning, sharing environment. This opened the opportunity to share these issues in a natural way, and the Ethics chair publicly invited me to share what we discussed during break. This person’s independent concern supported my belief that such comments have an impact. Save for those who speak out, we cannot know how many others have been affected.

I shared my reaction, thought process, and conversation. I then invited the quipster to share his perspective, and he did, explaining that he worked with a largely gay clientele, apologizing to anyone he might have offended, and repeating that he had regretted his remark immediately after making it.

Audience reactions

Some participants thanked the new attendee for her courage in raising this issue, while others commended the quipster for his apology. One asked what the fuss was about, saying she did not recall hearing any offensive remarks. One person rejected the idea that he was collusive, having heard the remark less negatively. Another asked how this had become Jeff Sternlieb’s issue. Others expressed discomfort at censoring comments that might be seen as offensive to any one person, resisting “political correctness.” One participant noted a significant bias toward calling on male participants to the exclusion of women.

Analysis

All comments struck me as introductory and reactive. No one sought clarification. We did not converse. While no time was scheduled to explore these issues, I was surprised at the lack of informal discussion during lunch or break. These issues seemed too hot to handle and we seemed too uncomfortable to talk about them. Though the exchange introduced the opportunity to learn, our inability to talk effectively stopped us from naming our experience and the concepts involved, including:

·         Privilege. Those of us with privilege – especially we who are white, male, heterosexual, and relatively financially secure ­– tend to minimize the perspectives of those who are marginalized. While none of us want an environment in which we cannot talk about race, sexual orientation, or gender because we are afraid of offending others, we seem to do the opposite: fail to take others seriously when insensitivity is identified. Just because clients or friends are gay does not give us the freedom to make jokes about being gay, particularly among those we may not know well. When any group is singled out, it impacts all groups who have been marginalized.

·         Collusion can be active or passive. Active collusion involves direct participation in the offense, and might involve adding to an initial insult or joke, thus amplifying the impact. This “joining in” sanctions the remark, making it easier for others to “pile on” with similar comments and more difficult for anyone to object. Passive collusion consists of saying or doing nothing, thereby lending tacit support to an unacceptable statement. To object may be seen as a personal affront, discomfiting, or unnecessarily confrontational.

·         Microaggressions are comments that may seem innocent, harmless, or even complimentary but contain demeaning implications or hidden messages. They “...are the brief and everyday slights, insults, indignities and denigrating messages” sent to minorities in subtle, unintended discrimination (Sue, 2010). Sue describes three types: micro-assaults, micro-insults, and micro-invalidations. A useful website, http://microaggressions.com, lists many examples of such comments.

·         Political correctness. The primary reason we should not joke about people’s race, gender, or sexual orientation is that these characteristics are personal. In the context of a professional exploration of issues, a reference might not be microaggressive, but a joke about a minority made as an aside is a personal affront, and to not recognize it as such IS to collude.

·         Misapplication of Golden Rule. The Golden Rule, “Do unto others as you would have others do unto you,” does not address individual and group preferences; we cannot assume that because a remark might not offend us that it won’t offend others. An alternate rule, the “Platinum Rule,” can be helpful: “Treat others as they want to be treated,” which would require asking rather than assuming.

The fact that one seemingly simple comment raises so many questions, issues, and reactions suggests we in PPA have a lot more to learn. Having a Committee on Multiculturalism and a host of resources (including a CE program) is not a guarantee of progress. Having this experience in vivo can teach more than any didactic exercise.

The comment one person made could have been made by any of us. The real challenge, in my view, is how we respond.

Reference

Sue, D. W. (2010). Microaggressions in everyday life:  Race, gender and sexual orientation. New York, NY: John Wiley and Sons.

Ethical Issues Related to APA’s 2005 Task Force Report on Psychological Ethics and National Security

On February 29, 2012, I posted an announcement pertaining to a new, APA member-initiated task force related to psychologists’ involvement in national security settings.

There is another group of psychologists involved in trying to shape APA policy on the ethics of psychlogists pertaining to national security: The Coalition for an Ethical Psychology.  They have called for an annulment of APA’s 2005 Task Force Report on Psychological Ethics and National Security (PENS Report).

To be as helpful, transparent, and comprehensive as possible, I posted the APA's PENS report and the Background Statement on Annulment of the APA's PENS Report from The Coalition for an Ethical Psychology in the Articles and Papers section of this site.

Readers are referred to these documents in order to have a deeper and more thorough understanding of the ethical issues related to this ongoing controversy.

John Gavazzi, PsyD ABPP

Psychologist

Board Certified in Clinical Psychology
Editor, Ethics Education and Psychology Site