Cameras flashed as reporters jostled for position. This was the biggest story of the year: Kenneth Lay was surrendering to the FBI. Slapped with a slew of charges alleging he falsified statements to hide billions in losses, Lay’s arrest marked the end of Enron’s empire.
But that’s not the whole story.
“We always imagine people doing unethical things for self-interested reasons,” says John Bingham, a Marriott School organizational leadership and strategy professor. “But at Enron, mid-level managers were willing to jeopardize their standing in the organization by shredding documents to preserve someone else’s name.”
Why did good people—moms, dads, and Sunday school teachers—lie for others when they had nothing to gain? How did they get to that point? And was it a long road from honest employee to shady accomplice? Intrigued by these questions, Bingham and Elizabeth Umphress, a management professor at the University of Washington, decided to study the motivations behind such actions. The results were striking.
Employees in a variety of industries were willing to do dishonest things for their organization, especially when they felt they had a positive relationship, attachment, or loyalty to their workplace. And those who claimed a strong moral code in their personal lives didn’t fare much better. But it’s not all doom and gloom for office loyalty, Bingham says. By building a good corporate culture, rewarding the right behaviors, and tightening company guidelines, organizations can offer their employees a guilt-free guarantee.
When Good People Go Bad
Corruption can happen anywhere: at church, in the office, and even at 30,000 feet. A 2003 study found that airline employees often resorted to what Bingham and Umphress have termed unethical pro-organizational behavior.
If passengers complained about the food, flight attendants would say the services had been contracted out—anything to protect the image of the company—even if it wasn’t true.
“An employee who feels a strong connection to her organization thinks complaints reflect negatively on her,” Bingham says. “They say, ‘I’m not that type of person—I care about high-quality food and service.’”
And this behavioral phenomenon isn’t restricted to the skies. A study of more than 2,000 executive assistants in the United States and Canada found that 10 percent had destroyed damaging information, 6 percent had written documents with false or misleading information, and 5 percent had falsified expense accounts on the job.
Though it’s harder to track how often top-ranking executives break the rules, the lack of data doesn’t mean ethical breaches can’t also originate in corner offices.
“At Enron it trickled down from the top, and no one ever questioned it,” Bingham adds. “Eventually the company was altogether criminal in its intentions and outcomes.”
Although no workplace sets out to define itself as unethical, organizations may set themselves up for failure if they don’t identify and encourage the right behaviors. Enron’s culture of high expectations led to a slippery slope, where nearly any action could be justified by the desired end result. Unchecked white lies eventually transformed into more egregious behaviors, culminating in the loss of thousands of jobs.
Strong Morals Aren’t a Shield
Criminal. That’s not the first word you’d think of when describing a churchgoing businessman, but it could be accurate. Even people who are extremely conscientious about moral values at home can rationalize dodgy behavior in the office.
Data gathered by Bingham and Umphress found that morally grounded individuals often identify strongly with their organization and therefore have an increased likelihood of committing unscrupulous acts. The simple explanation: committed employees don’t want to let anyone down.
But there could be more at play.
Consider the recent fungal meningitis outbreak. More than 600 people in nineteen states contracted the disease after receiving epidural injections produced by a small pharmaceutical company. Employees reportedly knew safety practices were being violated but still rationalized the sale of tainted drugs—a decision that would lead to nearly forty deaths.
This self-justification is called neutralization—the process where moral imperatives associated with an act are masked, overlooked, or dismissed. And research suggests it’s the gateway to corrupt behavior.
According to Bingham, workplace neutralization occurs in two scenarios:
- When employees are more focused on their role than the ethicality of a deed. “The company needs this sale, and it’s my job to make it happen.”
- When employees feel obligated to reciprocate good treatment. “My boss helped me last quarter—I owe him.”
This allows normally upright people to couch bad behavior in a positive light—“I did it to help the company”—rather than suffer the guilt that comes from admitting their actions deviated from personal or societal standards.
But the most dangerous part of neutralization isn’t that it enables one bad choice. It’s that it makes successive offenses that much easier.
How to Stop Corrupt Conduct
Luckily, preventing tragedies caused by unethical behavior is possible. While Bingham’s research points to intense loyalty as a potential trigger, healthy ties to the workplace can be the first defense against improper conduct.
“Employee loyalty has powerful implications for a company’s survival,” Bingham clarifies. “If you have a strong culture, employees are willing to sacrifice, share more ideas, and go above and beyond prescriptive job duties.”
Especially in this economy, when companies need employees to do more with less, loyalty benefits the organization. Dedicated employees often work long hours and do whatever it takes to pitch in.
“Most organizations attempt to create these connections with their employees,” explains Brad Agle, a public management professor at the Marriott School. “However, almost every virtue can become a vice if taken to excess.” Agle recommends finding the golden mean—where employers can cash in on the benefits of employee loyalty without incurring unethical pro-organizational behavior.
Establishing guidelines is the first step. “If organizations don’t set clear expectations about the way to meet objectives, employees will come up with their own creative solutions and not necessarily ethical ones,” Bingham says.
Publicly traded companies with high expectations for earning projections and sales companies with monthly quotas should proceed with extra caution. The pressure to meet goals or cater to shareholders makes those organizations particularly susceptible to dirty dealing. According to Bingham, it’s up to managers to ensure this doesn’t happen.
“If managers aren’t aware of what’s going on, employees learn they can take shortcuts,” he warns. “The signals managers send matter.”
Rewarding the Right Behavior
Another powerful tool against unethical practices is to offer incentives to employees who meet goals without stooping to less-than-savory methods. But fair warning: this isn’t a silver bullet.
Without fully thinking through the reward system, managers can unintentionally draw the wrong behavior from employees.
In another BYU-led study, Jeffery Thompson, a Marriott School public management professor, found that zookeepers are paid significantly less than they deserve because employers take advantage of their passion for the animals
In order to avoid the wage hit, some employees tried to hide their love of the job from management, even though passion was what landed them the position in the first place. And most managers weren’t even aware of these actions since they seemed to happen on a subconscious level.
In the end, zookeepers with a higher sense of calling took home smaller paychecks than employees who were less engaged—the exact opposite of how a reward system should operate.
“Most people can relate to the zookeepers,” Thompson says. “They have that sense of dedication to the job and resonate with the idea that passion shouldn’t come cheap.”
In order to avoid this law-of-the-jungle scenario, managers should evaluate on a regular basis how they reward individuals. By consistently rethinking the system, it will be easier to quickly identify solutions that motivate employees.
Tying Down Amoral Practices
Managers should also lead by example, demonstrating the behavior they expect from employees. Agle, who has a strong background in business ethics, explains that managers are more likely to gain employees’ respect by modeling appropriate conduct—and by encouraging frank dialogue—than by demanding it.
“Managers should talk about the importance of doing things the right way and make that concrete by identifying specific issues in their office,” he says. “It’s also imperative to create an environment in which employees feel encouraged to bring up such issues.”
For companies looking for more ways to prevent unethical pro-organizational behavior, Agle points to guidelines developed by the U.S. Sentencing Commission. They suggest managers set up codes of conduct, host regular training meetings, and appoint a leader to be in charge of ethics. To guarantee these ideals are being executed, the company should enforce standards consistently, modify programs as necessary, perform ethics risk analyses, train high-level leaders in appropriate laws, and give compliance officers authority and budget to do their jobs.
These measures might seem steep, but the time and cost accrued are small when compared to the damage one unethical act—even if it is well intentioned—can cause. By keeping a watchful eye for unethical pro-organizational behavior, managers can sidestep the dangers of risky business.
Article written by Celia Shazman
Illustrations by Jonathan Bartlett
About the Author
Celia Shatzman lives and writes in Brooklyn, New York. A graduate of the Medill School of Journalism at Northwestern University, her work has appeared in Time Out New York, Teen Vogue, New York, USA Today, and Family Circle, among others. When she’s not writing, Celia enjoys traveling, learning to play tennis, and playing with her rescue dog, Olive.