Cullings in BE for Ethical Infra

1. Ethically Adrift- Celia Moore and Francisca Gino, Harvard

a. Social categorization processes have a number of effects on our moral awareness: we consider
behavior manifest by members of our in-groups as morally acceptable, even when it may not be
and we define unethical behavior as less problematic as long as it is committed against a member
of an out-group.
b. However, witnessing unethical behavior committed by an out-group member makes us less
likely to follow suit; similarly, witnessing positive behavior by an in-group member may inspire
us to imitate it. These findings suggest that choosing the right exemplars of moral behavior—
either positive in-group members to emulate or negative out-group members from which to
differentiate oneself—may strengthen the magnet inside one’s moral compass.
c. Brown, Treviño, and Harrison (2005) define ethical leadership as “the demonstration of
normatively appropriate conduct through personal actions and interpersonal relationships, and
the promotion of such conduct to followers through two-way communication, reinforcement, and
decision-making”. Thus, leaders can be encouraged to use transactional efforts (e.g.,
communicating, rewarding, punishing, emphasizing ethical standards) as well as modeling to
influence their followers to behave ethically.
d. Individuals’ sense of anonymity—which, as we have discussed, facilitates unethical
behavior—is undermined when they believe they are being monitored. Studies have shown that
even when people are told their actions are anonymous, they respond to subtle cues of being
watched, such as the presence of eye-like spots on the background of the computer they are
using.
e. It seems that monitoring may work when it subtly reminds people to be their own best selves
but is less effective when it provides an external, amoral reason to comply with an external
request (such as a regulation or policy.)
f. But future research is needed to disentangle when and under what conditions monitoring
systems lead to more ethical behavior and when they backfire. Tenbrunsel and Messick‟s work
(1999) shows that external monitoring changes the way that people frame choices, moving them
from an ethical frame, in which they make choices because of a sense of intrinsic value, to a
business frame, in which they make choices to maximize profit.
g. Careful and cognizant goal-:: Setting overly narrow or ambitious goals can blind individuals
to other important objectives and over-commitment to goals can motivate individuals to do
whatever it takes to reach them.
However, carefully designed goals may have the power to appropriately direct behavior toward
ends that meet both business and moral obligation:
• Are goals are too specific or too challenging,
• Whether they include an appropriate time frame
• How they will affect risk taking, intrinsic motivation, and organizational culture
h. Intrapersonal processes
Increasing self-awareness: Individuals differ in the extent to which they are aware of their own
attitudes, feelings, needs, desires, and concerns, a trait called private self-consciousness.
Private self-consciousness or mindfullness promotes introspection and, as a result, is
associated with correspondence between attitudes and behavior. It is also
associated with a tendency to resist persuasion and efforts to change one’s attitudes.
E.g: Signing at the top of a form rather than a reminder to be truthful in filling he form at the
bottom of the form has resulted in being more truthful.

Increasing one’s sensitivity to moral emotions

The emotions that have been most frequently studied in the context of moral choice are negative
ones such as shame, guilt, and envy.
Guilt causes us to want to make amends and expiate negative feeling.
Though guilt is not a universal consequence of unethical behavior, it can be an instructive
emotion that later leads to reparative or altruistic behaviors.
In contrast, shame can lead to less adaptive behaviors such as rumination and aggression.
 Behavioural Ethics-XUB
Structural Impediments to Ethical Behaviour
 Structural Impediments to Ethical Behaviour in
Organisations
• Division of Labour--- leads to seeing the trees and missing the forest. Also easy to
hide small unethical practices at the ground level, if management is looking only
at the outcome and not the process.

• Separation of Power from Execution—the process is at lower levels, while the

responsibility is at higher levels. The concept of lean manufacturing and the
Toyota Way!

• Principle of Command and Obedience (Displacement of Responsibility). A case

for decentralisation of responsibility.
 Cultural Impediments to Ethical Behaviour in
Organisations
• Leadership Role at all levels—Unethical Socialisation

• Company Loyalty and Fear Psychosis- Hide Ethical Violations to

protect company image.

• A Transactional Orientation—Growth and Rewards based on target-

achievement!
 The Ethical Prisoner’s Dilemma
Payment B behaves morally B behaves immorally

A behaves morally 5,5 0,6

A behaves immorally 6,0 1,1=Nash Equilibrium

 The Ethical Prisoner’s Dilemma
• The ethical prisoner dilemma for a fair competition is as follows: The
worst case for a company manager A is if he behaves morally, but the
company manager of another company B does not and the best case
for A is if A behaves immorally, but B does not. B is in the same
decision-making situation.
• The result is the combination in which both companies operate
unfairly, thus the worst case for all (Nash equilibrium= No one can
unilaterally improve their profits thru another strategy).
• Without ethical rules, such as law enforcement when the ethical
prisoner dilemma arises, a company finds itself in the worst-case
situation if it behaves ethically
 Public Goods Ethical Dilemma
Payment A/B/Third Parties B behaves morally B behaves immorally

A behaves morally 1,1,(0) 0,5,-5

A behaves immorally 5,0,-5 {3,3,(-10)}

 Public Goods Ethical Dilemma
• In the case of the environment, the cost of pollution is borne by the
public, whose health and quality of life are adversely affected
(negative external effects).
• In the case of work safety, the company can save costs at the expense
of employees.
• Even if they all wanted to behave ethically, they could not, because
there was then the risk of coming into the worst case situation.
• What is the solution? Moral Economics—Monetary incentives and
Sanctions!
 Moral Economics: Morality Must Be Worthwhile

• It asserts that if morality is to be achieved, the incentives must be designed to

make moral behaviour worthwhile

• Karl Homann rejects the moral self-control of the individual by means of

internalized values because it would be exploited in market competition.

• A moral framework should be designed in such a way that self-interest

becomes socially productive-incentivizing whistleblowing!
 Factors That Encourage Unethicality in Business
• Dishonesty and Deception as Desired Traits in Some Professions and Sectors--
professions such as investment bankers, politicians, lobbyists, spies, actors, and
salesmen, or fields such as public relations (PR) or marketing. Lawyers are
another example of a profession in which the art of deception can be
systematically rewarded.

• Dishonesty and Deception as Moral Traits in Ethical Dilemmas—Learning to

swim well in a grimy ocean; loyalty to your organisation and lie; lying to protect
others from harm or to even benefit them; lying is regarded negatively only
when it is self-serving; not when it helps others.

• Weak and ineffective Ethical Infrastructures

 The Role of Bias in Unethical Behaviour
• Motivated Blindness
• This bias is rooted in the self-interest of people and arises when individuals face a
conflict of interest, or creates one in others, which impairs their ability to judge
rationally the ethics of their actions--- Auditing Firm and Management Consultant
• Although intentional corruption is probable, evidence on unconscious bias suggest
that professionals are often unaware of how morally compromised they are by
conflicts of interest—The Salmonella Outbreak and The Peanut Corporation of
America
• Outcome Bias
• Because outcomes are often the result of a confluence of individual decisions made
by many people, the outcome bias is manifested when people judge the ethics of a
particular action based on the outcome rather than the individual acts producing it
• In other words, OB arises when a positive outcome mitigates a known unethical
process or action creating it—e.g food poisoning!
 The Role of Bias in Unethical Behaviour
• Omission Bias
• According to the omission bias, not doing something is seen as less problematic than
doing something, even if the outcomes are the same---adulterated food!
• Indirect Bias
• This bias arises when harm caused by delegating is seen as less problematic than
harm caused by oneself
• The growing use of Third Party Certifications—the courts are more lenient to parent
company.
• Identifiable Victim Bias
• When people see non-identifiable or statistical victims as less problematic
than identifiable or known victims, even when identification provides no
meaningful information, they are affected by this bias—e.g asbestos
victims!
Behavioural Ethics
Why good people break bad
The Theory of Bounded Ethicality
Chugh, Bazerman and Banaji
 Bounded Ethicality--Continued

• Bounded Ethicality refers to the systematic and predictable ways in

which humans act unethically beyond their own awareness

• Bounded Ethicality- the idea that our ability to make ethical

choices is often limited or restricted because of internal and

external pressures.
 Bounded Ethicality- Continued

• Self-View vs Self-Threat

• Self-Protection Mode vs Self-Enhancement Mode

• Predictive Value of the Theory of Bounded Ethicality-Self Enhancement

Mode Leads to Unethical Fall

 Bounded Ethicality-Continued

• These cognitive biases operate outside our own awareness and therefore in a

way make us blind to the ethical failures we commit

• Includes a blindness component, which can be seen as activating an ethical

fading process, which removes the difficult moral issues from a given problem or

situation, hence increasing unethical behaviour

 Socialisation--Social Categorisation and Moral
Distance
• The psychological process by which individuals differentiate between those who
are like them (in-group members) and those who are unlike them (out-group
members).

• Categorizing individuals as members of an out-group allows us to dehumanize

them, to exclude them from moral considerations, or to place them outside our
“circle of moral regard”, and thus mistreat them without feeling (as much)
distress.

• The notion of moral distance holds the idea that people will have only ethical
concerns about others that are near to them. If the distance increases, it
becomes easier to behave in unethical ways.
 Albert Bandura
The Theory of Moral Disengagement
 The Theory of Moral Disengagement
Eight Cognitive Distortion Mechanisms

Moral Justification--justify one’s actions as serving

the ‘‘greater good’’

The Theory of Moral Disengagement--Continued

• Euphemistic Labelling--using sanitized or convoluted language to make an

unacceptable action sound acceptable

• Advantageous comparison--making a behaviour seem less harmful or of no

import by comparing it to even worse behaviour

Advantageous Comparison
The Theory of Moral Disengagement--Continued

Displacement of responsibility--deflect responsibility for

their own behaviour by attributing it to social pressures or

the dictates of others, usually a person of higher power or

authority
Displacement of Responsibility
 Diffusion Of Responsibility

Diffusion of responsibility--avoid personal feelings of culpability for their actions by

hiding behind a collective that is engaged in the same behaviour– also called the

By-stander Effect
Diffusion of Responsibility
The Theory of Moral Disengagement--Continued

• Distortion of Consequences--misrepresenting the results

of one’s actions by minimizing them or focusing only on
the positive.
Distortion Of Consequences
 The Theory of Moral Disengagement--Continued

Attribution of Blame-- justifying one’s behaviours in

reaction to someone else’s provocation or behaviour

Attribution of Blame
The Theory of Moral Disengagement--
Continued

• Dehumanization-- minimizing or distorting the

humanity of others so as to lessen identification with

or concern for those who might be harmed by one’s

actions
 Behavioural Ethics-Cullings
• 1.“Toward a Better Understanding of Behavioral Ethics in the
Workplace”, David De Cremer and Celia Moore, Annual Review
of Organizational Psychology and Organizational
Behavior,2020, 7:19.1–19.25
• When organizations fail to conduct their business in an
honorable way, they damage their reputations, the
interests of the industries they represent, and eventually
the welfare of society as a whole. As a result, trust in
business is hit hard, and profits and performance suffer.
This makes identifying how organizations can improve the
ways in which they manage unethical behaviors more
important, and is perhaps why ethics in organizations has
never received more research attention than it does
today.
• 2. Behavioral Field Evidence on Psychological and Social
Factors in Dishonesty and Misconduct , Lamar Pierce Olin
Business School Washington University in St. Louis Parasuram
Balasubramanian Olin Business School Washington University
in St. Louis
• Social processes: One of the most promising and
important topics on dishonesty is how social processes
influence behavior, with a growing body of work using
behavioral field evidence to explore it. Bucciol et al. [4]
used direct observation and interviews to identify how
bus passengers travelling with family members were
more likely to have a valid ticket, but not those travelling
with friends…. This is consistent with a field experiment
by Wenzel [11] that found information on others’
behavior improved tax compliance, as well as results
showing employees become more dishonest when joining
dishonest firms.
 • Fairness, equity, and social comparison: Social
comparison and related fairness and equity concerns are
also a focus of recent work. Early work by Greenberg [13]
was one of the first to address this topic using behavioral
field data, showing increased theft following a pay
decrease at two out of three factories.
• Moral reminders and preferences: Related to this, Shu et
al. [23] used a field experiment to show that insurance
customers who signed at the top of forms reported higher
annual mileage than those who signed at the bottom,
presumably because signing provided a moral reminder.
• Culture: Other papers focused on how interactions within
and across ethnic and national groups can change levels
of dishonesty, including favoritism in Olympic judging
[25], ethnic diversity and corruption in Indonesia [26], and
stock market fraud in Kenya [27]. One approach by
Bianchi and Mohliver [28] links economic conditions
during executives’ formative periods to stock option
backdating.
• Professionalism: Similarly, teachers who are expected to
instill ethical values in children have been shown to cheat
when pressured with strong financial and career
incentives [31].
• Incentives and control: Monitoring, for example, has been
shown to reduce theft [33, 34], unexcused absenteeism
[35], and dishonest reporting [36] in organizational
settings such as call centers, restaurants, schools, and
banks
3. Blind forces: Ethical infrastructures and moral disengagement in
organizations, Sean R. Martin, Jennifer J. Kish-Gephart, James R.
Detert. Organizational Psychology Review 1–31, Reprints and
permission: sagepub.co.uk/journalsPermissions.nav DOI:
10.1177/2041386613518576
• To address unethical behavior in organizations, scholars have
discussed the importance of creating an ethical organizational
context or ethical infrastructure that encourages ethical, and
sanctions unethical, behavior both formally and informally.
• Specifically, in recent decades, research in social psychology,
behavioral economics, and behavioral ethics has increasingly
uncovered the multitude of ways in which otherwise good
people can be morally blind and engage in unsavory acts
without being aware of the unethical nature of their actions.
• bounded ethicality, self-deception and ethical fading, intuitive
morality, plus a host of other cognitive biases, indirect agency
biases, attribution biases. Moral disengagement, a theory that
explains the process and mechanisms by which an individual’s
moral self-regulatory system is decoupled from his or her
thoughts and actions, represents a particularly powerful
manner by which individuals can rationalize or neutralize
reprehensible conduct.
• While organizational infrastructures may be effective in
reducing the unethical behavior that organizational members
are aware of, this aforementioned research suggests that even
in organizations with formal and informal systems prioritizing
ethics, many unethical decisions and behaviors may go
unrecognized, or be rationalized in ways that make them seem
ethical to insiders.. Extreme examples of this phenomenon,
referred to in O’Reilly and Chatman’s (1996) review of
organizational culture, include the thoughts and actions of cult
members who see their organization as morally beyond
reproach.
• Trevino and Brown (2004, p. 75) described Arthur Anderson
employees believing in the ethicality of their organization
 saying, ‘‘we’re ethical people; we recruit people who are
screened for good judgment and values.’’ Yet at the same time,
their auditors and consultants were engaged in numerous
unethical activities. These examples suggest it is possible for
members to perceive their organization as being one in which
ethics are prioritized, routinely enacted, and as having formal
and informal systems supporting those priorities— that is, as
having a strong ethical infrastructure— and yet still be working
in an environment where various unethical behaviors go
unnoticed or are easily rationalized.
• Importantly, we do not argue that strong ethical infrastructures
necessarily foster more unethical behavior in an absolute
sense. Indeed, they likely do root out severe and blatantly
unethical types of behavior (Jones, 1991). Rather, we argue
that there are numerous outcomes associated with perceptions
of a strong ethical infrastructure that can trigger members’
tendencies to morally disengage about common, less intense
behaviors. Further, we argue that moral disengagement likely
plays a role in reinforcing members’ perceptions that the
ethical infrastructure of their organization is strong.
• We follow Tenbrunsel and colleagues’ (2003) lead in
considering culture and climate as key components of a more
expansive term—ethical infrastructure—that incorporates
these constructs and others to describe the general ethical
context of an organization.
• When organizational members perceive consistent
expectations being communicated by the formal and informal
systems, the organization’s ethical culture is said to be strong
and employees are likely to abide by the clear and consistent
messages about behavioral expectations. When these
messages are seen as conflicting, the ethical culture is deemed
weaker (Trevin ˜o, 1990). Whether based on Trevino’s
theorizing or other models of ethical culture that have been
 proposed (e.g., Hunt & Vitell’s [1986] research on corporate
ethical values, and Kaptein’s [2008, 2011] corporate ethical
values model), empirical work generally supports the expected
negative relationship between perceptions of the
organization’s ethical culture and unethical behaviour.
• Corresponding to the introduction of ethical culture, Victor and
Cullen (1987) introduced the ethical climate construct, or ‘‘a
group of perspective climates reflecting the organizational
procedures, policies, and practices with moral consequences’’
(Martin & Cullen, 2006, p. 177). The authors identified two
dimensions that, when crossed, theoretically derive nine ethical
climate types. The first dimension, ethical criteria, includes
three broad categorizations of moral philosophies: egoism,
benevolence, and principled. These dimensions parallel
Kohlberg’s theory of cognitive moral development wherein an
individual’s level of moral reasoning is classified as self-
centered (Level 1), other-centered (Level 2), or focused on
broad principles of fairness and justice (Level 3). The second
dimension, locus of analysis, draws on sociology literature (e.g.,
Merton, 1957) to identify the referent group as individual (i.e.,
within the individual), local (i.e., internal to the organization
such as a work group), or cosmopolitan (i.e., external to the
organization such as a professional organization).
• Later theorizing offered a more simplified model of the
relationship between ethical climate types and unethical
behavior, arguing that employees are more likely to behave
ethically in organizations that stress ‘‘the consideration of
others’’ (such as benevolent and principled climates) versus in
organizations that stress self-interest (egoistic climate).
Empirical results, which rest on employees’ perceptions of their
work environment, generally support a positive relationship
between egoistic climate and unethical behavior, and negative
 relationships between benevolent and principled climates and
unethical behaviour.
• Researchers have recognized that ethical climate and ethical
culture are highly related descriptors of an organization’s
overall ethical context. In a comprehensive model, Tenbrunsel
et al. (2003) subsumed elements of ethical culture and ethical
climate under the term ‘‘ethical infrastructure,’’ which they
defined as the organizational climates, informal systems, and
formal systems relevant to ethics in an organization. The
authors modeled ethical infrastructure as three concentric
circles—starting with the innermost circle of formal systems,
followed by informal systems, and then encompassed by the
outermost circle, organizational climates—that simultaneously
support and influence each other. The formal systems refer to
the documented and standardized procedures upholding
(un)ethical standards. The informal systems are those signals
that are not documented—they are felt and expressed through
interpersonal relationships. Both the formal and informal
elements are undergirded by individuals’ shared perceptions of
those systems.
• Over the past decades, approaches to studying the ethical
decision making of individuals have proliferated and evolved.
Some emphasize ethical decision making from a more
deliberative frame—emphasizing, for example, individuals’
moral awareness and reasoning, their level of moral
development, their dispositional tendency to attend to and
reflect upon moral information, or their prioritization of a
moral identity (their desire to be and be seen as a moral
person). From this perspective, individuals are treated as
decision makers who perceive moral information, establish
moral judgment, form an intention for action, and act
accordingly. And indeed, moral awareness and level of moral
 development have been found to be positively (negatively)
related to (un)ethical intentions.
• Recently, however, other research has shown that individuals,
and not just those with obvious moral development limitations,
often engage in unethical behavior with little pre-active
cognition about the moral considerations involved. This work
has shown how various factors can lead individuals to make
decisions that result in unethical behavior that is either unseen
or cognitively re-construed. One particularly valuable approach
to explaining the overlooking or re-construing of unethical
behavior is the study of moral disengagement (Bandura,
1986)—a process by which the connection between individuals’
moral self-regulation systems and thoughts and actions is
interrupted. Moral disengagement can operate as an automatic
and anticipatory factor preventing individuals from perceiving
moral cues, or as a post hoc rationalization to justify unethical
decisions. In other words, not only can it facilitate unethical
action by dampening moral awareness and preventing
individuals from perceiving moral information, but it can also
bias judgment when individuals are somewhat morally aware.
• The notion that individuals have the cognitive capability to
rationalize inconsistencies in their espoused moral beliefs and
their behavior in practice, and thus make themselves (and
others) blind to ethical gaffs, has a long history. For example,
drawing on interviews of white-collar criminals accused of
embezzling money from their employers, Cressey noted that
‘‘normal’’ people refused to accept their actions as criminal.
Rather, they minimized their indiscretions by using neutral
language (e.g., ‘‘borrowing’’ rather than ‘‘stealing’’) or citing
injustices at the hand of the victim (i.e., their organizations).
Similarly, criminal theorists Sykes and Matza (1957) argued
against the prevailing theory that juvenile delinquency was the
result of learning a different set of values in low socioeconomic
 environments. Instead, the authors suggested that juvenile
delinquents share society’s conventional values but, in certain
situations, use cognitive neutralization techniques to weaken
the apparent necessity of applying those values. The authors
identified several neutralization techniques such as denying
responsibility for one’s actions or denying that a victim had
been unjustly harmed (or harmed at all). Drawing on this
foundational work, organizational researchers have suggested
additional types of cognitive distortion techniques, that are
commonly found in organizations where systemic corruption is
uncovered.
• Moral disengagement theory posits that people generally
behave in ways that are consistent with their internal standards
of morality because they experience anticipatory negative
emotions such as guilt, shame, or remorse when they consider
deviating from those from standards. However, individuals are
at times motivated (consciously or non-consciously) to
disengage this moral self-regulatory process in ways that fit
their needs, effectively bypassing the negative emotions that
would normally come from violating internal standards.
• Bandura (1986) articulated eight cognitive distortion
mechanisms by which individuals morally disengage. Moral
justification occurs when individuals justify their actions as
serving the ‘‘greater good’’ (as in the case of substandard jobs
being characterized positively as ‘‘economic development’’).
Euphemistic labeling involves using sanitized or convoluted
language to make an unacceptable action sound acceptable—
such as ‘‘borrowing’’ software purchased by someone else, or
engaging in ‘‘creative accounting.’’ Advantageous comparison
involves making a behavior seem less harmful or of no import
by comparing it to even worse behavior. For example, a person
who takes a ream of paper home from the office for personal
use might say, ‘‘It’s not like I’m taking a printer home with me.’’
 With displacement of responsibility, people deflect
responsibility for their own behavior by attributing it to social
pressures or the dictates of others, usually a person of higher
power or authority (e.g., ‘‘I was just following orders’’).
Diffusion of responsibility allows individuals to avoid personal
feelings of culpability for their actions by hiding behind a
collective that is engaged in the same behavior, or by using the
rationale that ‘‘everyone else is doing it, too.’’ Distortion of
consequences involves misrepresenting the results of one’s
actions by minimizing them or focusing only on the positive.
Claiming that one’s (unethical) actions are ‘‘no big deal,’’or that
they ‘‘don’t hurt anyone’’ are common ways of trying to
convince oneself and/or others that one’s behaviour is
acceptable because little or no harm is done. Attribution of
blame (also known as ‘‘blaming the victim’’) is the process of
justifying one’s behaviors in reaction to someone else’s
provocation or behavior (e.g., ‘‘It’s their own fault for trusting
others with this responsibility’’).The notion of ‘‘buyer beware’’
may be considered a broader example of the way business
behavior has been construed so as to make harming a victim
easily justifiable as being the victim’s own fault. Last,
dehumanization involves minimizing or distorting the humanity
of others so as to lessen identification with or concern for those
who might be harmed by one’s actions (e.g., ‘‘those clowns’’).
Additional examples of each moral disengagement mechanism
are provided in Table 1.
• Dispositional moral disengagement can be defined as ‘‘an
individual difference in the way that people cognitively process
decisions and behaviour with ethical import that allows those
inclined to morally disengage to behave unethically without
feeling distress’’ (Moore et al., 2012, p. 2). According to this
approach, people who have a tendency to morally disengage
 will be more likely to engage in unethical or deviant behaviour
across situations.
• According to Beu and Buckley (2004), for instance, politically
astute leaders can influence followers toward unethical
behaviour by reframing actions and situations in ways that
draw attention away from ethical issues and by encouraging
the use of morally disengaged reasoning. An important part of
using their political skill effectively is the ability to inspire trust,
defined as one’s willingness to be vulnerable to another, which
in turn reduces others’ felt need to closely monitor their words
and deeds. In effect, the leader, whose rationale is trusted with
little thought or questioning, helps the follower to reinterpret
the situation using a morally disengaged lens.
• The very nature of moral disengagement is alarming because it
demonstrates the power of the human mind to distort
perceptions and rationales such that unethical thinking and
behavior is not recognized as such. If individuals’ perceptions of
unethical behavior are readily distorted in this way, it seems
plausible that employees could perceive (and report) that an
organization’s infrastructure is ethical when indeed unethical
rationales and practices exist and persist but are simply
unnoticed. In the following section, we thus caution against the
assumption that organizational infrastructures are ethical
because members—even many members—view them as such.
Instead, we argue that an ethical infrastructure may not only
harbor unethical thinking and behavior, but also, in some ways,
may make it more difficult for members to see certain types of
problems— particularly those of the day-to-day, less morally
intense variety (Jones, 1991). Further, we posit that moral
disengagement is, to some degree, an important factor in
preserving employees’ perceptions that their organization
enjoys an ethical infrastructure. Our argument rests on the
recognition that several fundamental human tendencies found
 in prior work to motivate morally disengaged thinking may
actually be present more often in situations in which
employees perceive themselves to be part of an ‘‘ethical’’
infrastructure.
• Defined as ‘‘a motive or behavior that seeks to benefit the self’’
(Cropanzano, Stein, & Goldman, 2007, p. 6), self-interest is a
powerful human motive. A potential problem arises in that
both broad organizational objectives and specific performance
goals can at times be extremely challenging or even impossible
to achieve, and thus potentially motivate employees to take
shortcuts or engage in unethical behavior to avoid losing out on
maximum personal gain. Schein (2004) has noted that
rationalizations for unethical behavior that is easily identifiable
to outsiders—including those in different functions within the
same organization—is often unrecognized by embedded
members for whom it has become part of the taken-for-
granted fabric of their environment. This is because
‘‘normatively appropriate’’ is largely a perceptual process that
can vary among individuals and groups who have chosen, over
time, to prioritize different bases for judging social action.
• The bad news, however, is that although strong ethical
infrastructures are likely to suppress blatantly self-interested
motivations and unethical behavior, they are not necessarily
equally effective at suppressing morally disengaged reasoning
and unethical behavior related to other motivations—such as
the desire to maintain a positive self-image or the desire to
reduce cognitive load—commonly linked to strong ethical
infrastructures. Indeed, in their original theorizing, Victor and
Cullen (1987) recognized that even the venerable benevolent
(or caring) ethical climate is imperfect: Corporations with caring
or rules climates may be more prone to violations of trade laws
than corporations with a professional climate ... when faced
with the dilemma of offering a bribe or losing a contract, an
 employee from a caring climate may judge that s/he is
expected to give the bribe because the contract would help
people who work for the firm, even though it is illegal. (Victor &
Cullen, 1987, pp. 67–68). This suggests that even organizations
with noble ethical intentions prioritize some values over others,
and some groups or people over others (e.g., in-groups such as
employees over out-groups such as customers or competitors),
which creates a series of opportunities for distorted cognition
about what is appropriate (Giessner & van Quaquebeke, 2010).
• In one example from Margolis and Molinsky’s (2008, p. 856)
study of ‘‘necessary evils,’’ a police officer must evict a
delinquent tenant from her home. Although this action will
cause emotional and financial pain to the tenant, the officer
needs to carry out the act to comply with the law and protect
the rights of the landlord. The officer’s reasoning—‘‘Well, they
put themselves in this situation’’ (attribution of blame)—is
likely an institutionalized rationalization that helps to minimize
the discomfort of a challenging situation while maintaining the
positive self-image of officers who must undertake such
behavior.
• Ethical infrastructure, limited cognition, and moral
disengagement: Classic psychological research has shown
various risks resulting from humans’ desire to reduce cognitive
effort (Fiske & Taylor, 1984) and their susceptibility to social
influences. For example, followers in a hierarchy will often
automatically experience an ‘‘agentic shift’’ in which they
become an instrument of a perceived authority figure and do
not think carefully for themselves about the ethical
ramifications of their own (leader instructed) behavior
(Milgram, 1969). In the classic Milgram experiments and more
recent replications, participants used morally disengaged
language to explain why they continued to shock another
person when directed to do so by an experimenter: ‘‘I was just
 doing what he told me’’ (displacement of responsibility; ‘‘Basic
instincts,’’ 2007). Similarly, work in social learning theory and
social information processing indicates that individuals learn
about norms and expected behaviors from those around them
(Bandura, 1986; Salancik & Pfeffer, 1978), thus sparing
themselves the cognitive effort of having to think through or
experience everything for themselves. And when it comes to
moral reasoning and behavior more generally, the finding that
most individuals operate at a ‘‘conventional level’’ of moral
development (Kohlberg, 1969; Trevin ˜o, 1992)— wherein they
take their cue from what they see others around them doing—
suggests that individuals do not routinely ‘‘think through’’ the
ethical implications of every stimulus they face in their work
life.
• ‘‘the function of the cultural pattern [is] to eliminate
troublesome inquiries by offering ready-made directions for
use, to replace truth hard to attain by comfortable truisms, and
to substitute the self-explanatory for the questionable.’’
• As shown in Figure1, the influence of a strong perceived ethical
infrastructure on decreased cognition and hence potentially
increased moral disengagement is proposed to operate in part
through increased trust, commitment, and identification. For
instance, ethical infrastructures have been linked empirically
and theoretically to trust (seeFigure1,Step1).And, people are
less suspicious of and less concerned about monitoring the
behaviors of those they trust and more open to absorbing new
knowledge from them without careful analysis. In short, trust
allows individuals to reduce their cognitive effort (see Figure 1,
Step 2). Thus, if trust minimizes the extent to which people are
likely to closely examine others’ rationales for action, it follows
that moral disengagement in co-workers may be less likely to
be noticed or questioned and more likely to be mimicked in
 ethical infrastructures because of the trust that exists in such
environments (see Figure 1, Step 3).
• Recent scandals involving some of the most well respected
corporations in the world, including Johnson & Johnson, Merck,
and Toyota, provide some anecdotal evidence for this
possibility. In 2008, for instance, Johnson & Johnson initiated a
‘‘phantom recall,’’ instructing employees to surreptitiously buy
back problematic Motrin IB caplets from convenience stores
(Besser & Adhikari, 2010). Given Johnson & Johnson’s
reputation for recalling Tylenol in the early 1980s and its
corporate reputation for a climate of care, organizational
decision makers may have unconsciously engaged in moral
licensing when initiating and overseeing this discreet recall.
Furthermore, because the legal implications of the action were
unclear and the ultimate outcome was intended to be positive
(i.e., prevent sickness from tainted medication), there were
certainly multiple bases for rationalizing that the action was
‘‘morally justified’’ and in line with the company’s strong
ethical culture.
• Solutions: training can be used to help employees identify
morally disengaged reasoning in their own and others’ thinking;
devil’s advocates; ‘‘stop and think’’ moments; ethics officers,
Those individuals would also need to be endowed with
sufficient power to avoid being blindly overruled or shouted
down by the majority.
• For example, extant research suggests that reaffirming one’s
core values helps to counter the negative effects of ego
depletion i.e., weakened self-control, because it refocuses
one’s perspective on the bigger picture,
4. Building Houses on Rocks: The Role of the Ethical Infrastructure
in Organizations, Ann E. Tenbrunsel, Kristin Smith-Crowe and
Elizabeth E. Umphress3
• We argue that designing ethical organizations requires an
understanding of how and why such systems work; that is, one
must be able to distinguish between ethical foundations of rock
and those of sand. First and foremost, such an understanding
requires an informed, theoretical identification of the
organizational elements that contribute to an organization’s
ethical effectiveness. We introduce the term ethical
infrastructure to describe these elements, which we identify as
incorporating the formal systems, the informal systems, and
the organizational climates that support the infrastructure. We
suggest that the first two elements can be categorized both by
the formality of these systems as well as the mechanisms used
to convey the ethical principles, including communication,
surveillance, and sanctioning systems. We further argue that
these formal and informal elements are part of another
element of the ethical infrastructure—the organizational
climates that support the infrastructure—that permeates the
organization.
• The third, and equally crucial step is to understand how these
elements interact to influence ethical behavior. We propose a
theory of ethical embeddedness to describe these
interrelations. We argue that formal systems are embedded
within their informal counterparts, which in turn are embedded
within the organizational climates that support the
infrastructure. The strength and ultimate success of each layer,
we assert, depends on the strength of the layer in which it is
embedded. We use this theory to develop predictions about
the relationships between the ethical infrastructure and ethical
behaviors. We conclude by linking these predictions to their
 associated practical implications, including offering
recommendations for organizations that desire to enhance
their ethical effectiveness. (Draw three layers to explain this
concept of ethical infrastructure).
• Formal systems are those that are documented, that could be
verified by an independent observer. We focus on three types
of formal systems that we believe to be the most prevalent and
the most directly observable: communication, surveillance, and
sanctioning systems. Formal communication systems are those
systems that officially communicate ethical values and
principles. Formal representations of such systems include
ethical codes of conduct, mission statements, written
performance standards, and training programs. Formal
surveillance systems entail officially condoned policies,
procedures, and routines aimed at monitoring and detecting
ethical and unethical behavior. Examples include the
performance appraisal itself as well as procedures for reporting
ethical and unethical actions, including reporting hot lines and
ethical ombudsmen. Formal sanctioning systems are those
official systems within the organization that directly associate
ethical and unethical behavior with formal rewards and
punishments, respectively. Perhaps the most obvious example
of such a system is one in which unethical behavior is clearly
and negatively related to performance outcomes, such as
evaluations, promotions, salary, and bonuses.
• Each of these processes is independent. It is possible, for
example, that a performance standard is set, but never
monitored, or that behavior is monitored, but not sanctioned.
Thus, it is important to recognize the contributions that each of
these mechanisms makes to the ethical infrastructure.
• Formal communication systems include ethical codes of
conduct, mission statements, written performance standards,
 and training programs. These systems are used quite frequently
by organizations.
• Informal communication systems are defined as those
unofficial messages that convey the ethical norms within the
organization. Informal, “hallway” conversations about ethics,
informal training sessions in which organization members are
“shown the ropes,” and verbal and nonverbal behaviors that
communicate ethical principles all represent different
mechanisms by which ethical principles are informally
communicated. Informal Surveillance and Sanctioning Systems.
In order for informal communication systems to be effective,
there must be an accompanying informal surveillance system,
consisting of someone or some mechanism that can informally
monitor ethical and unethical behaviors. Informal surveillance
systems are those systems that monitor and detect ethical and
unethical behavior, but not through the official channels of the
formal surveillance systems. Rather, informal surveillance
systems are carried out through, among other channels,
personal relationships (e.g., peers) and extra-organizational
sources (e.g., the police). The informal representation of the
surveillance system may best resemble a spy network, an
“internal CIA.” Informal sanctioning systems are those systems
within organizations that directly associate ethical and
unethical behavior with rewards and punishments; however,
unlike its formal counterpart, informal sanctioning systems do
not follow official organizational channels. Informal sanctioning
systems may take the form of group pressure to behave in a
certain manner or the perceived consequences that are
experienced if one engages in certain ethical or unethical
activities. Organizational members may threaten to punish
someone for engaging in an ethical behavior, such as whistle
blowing, with such punishment including isolation from group
 activities, ostracism (Bales, 1958; Feldman, 1984), and even
physical harm.
• In general, we define organizational climate as organizational
members’ shared perceptions regarding a particular aspect of
an organization; in other words, organizational climates are in
reference to something (e.g. , ethics). Because climate is born
out of the context of an organization, climates vary across
different contexts. Also, because the experiences that
organizational members have of any given context are so
complex, multiple organizational climates for different aspects
of an organization exist simultaneously. We should note that
some theorists have made a fundamental distinction between
organizational climate and a related concept, organizational
culture, with the latter construct being essentially broader than
the former. However, for our purposes, we do not assume that
these are two distinct constructs, but rather that they are two
different perspectives (i.e., using different language and coming
from different disciplines) of the same phenomenon.
• Organizational climate consists of the perceptions of
organizational members (e.g., Schneider, 1990) regarding
ethics, respect, or procedural justice within organizations,
whereas formal ethical systems consists of tangible objects and
events pertaining to ethics, such as codes of ethics. Likewise,
the informal ethical system consists of tangible objects and
events relevant to ethics (e.g., conversations among workers),
while, again, climate is made of perceptions.
• At the root of the proposed curvilinear relationships between
elements of the ethical infrastructure and ethical behavior is a
proposed cognitive shift that occurs when an ethical
infrastructure is in place as compared to when such an
infrastructure is nonexistent. When an ethical infrastructure is
nonexistent, an individual must decide what is ethical. In
contrast, when an ethical infrastructure is in place, the
 individual interpretation of what is ethical is supplanted by the
interpretation that is advanced by the organization. Individuals
in this type of organization no longer rely on their own values;
rather, they look to the organization to decide what is ethical.
• We argue that a weak ethical infrastructure, because it does
not promote individual reflection, results in more unethical
behavior than when the ethical infrastructure is nonexistent or
is strong. When an organization has a weak ethical
infrastructure, individuals exhibit more unethical behavior than
when such an infrastructure is nonexistent because they
engage in less sophisticated moral reasoning; instead, they look
to the organization for guidance but don’t find much help. A
weak ethical infrastructure also produces more unethical
behavior than a strong ethical infrastructure. In both cases, the
individual looks to the organization for guidance. However, by
definition, in a strong ethical infrastructure, unlike in a weak
structure, the organization is clearly conveying the importance
of ethical principles. Consequently, when an organization has a
strong ethical infrastructure, they engage in more ethical
behavior than when an organization has a weak ethical
infrastructure because the organization has sent a signal that
ethical behavior is important. While the reason for this ethical
behavior is fundamentally different for a strong ethical
infrastructure (“I am doing this because the organization has
told me it is important”) than for a nonexistent ethical
infrastructure (“I am doing this because it is the right thing to
do”), the end result is the same. Ethical behavior is therefore
higher when a surveillance and sanctioning system is either
nonexistent or strong than when such a system is weak, thus
producing the curvilinear relationship.
• Tenbrunsel and Messick (1999) provide an illustration of this
phenomenon in the domain of formal surveillance and
sanctioning systems. They argued and found support for the
 proposition that cooperative behavior would be lower when a
weak versus a nonexistent sanctioning system was in place.
Using a prisoner’s dilemma as the context, subjects had the
option to either cooperate by adhering to an industry
agreement to reduce emissions or defect by not adhering to
such an agreement. Half of the subjects were told that there
would be no fines associated with defection (non-existent
surveillance and sanctioning system),whereas the other half
were told that there would be a weak surveillance and
sanctioning system (characterized by a small probability of
being caught and small fines if defection was noted). Results
provided support for the notion that the weak system would
increase undesirable behaviors, with defection rates higher in
the weak sanctioning condition than in the condition in which
no sanctions were present. An additional study extended these
findings, illustrating that a weak sanctioning system produced
less cooperative behavior than both a nonexistent sanctioning
system and a strong sanctioning system.
• Ethical systems vary in the degree to which they reflect an
organization’s commitment to ethical principles, which in turn
influences the degree to which they influence an individual
employee’s ethical behavior. The lower the perceived
commitment to ethical principles, the less salient they are in
the organizational member’s experience and hence the less
influential they are in influencing an individual’s behavior. We
argue that elements that reflect a greater degree of
commitment to ethical values are those that are more inherent
to the organization. True belief in ethical principles is reflected
not so much in what is said but in what is done. In this sense,
we predict that formal elements of the ethical infrastructure
reflect a weaker degree of commitment than informal
elements, which in turn reflect a weaker degree of
commitment than the relevant organizational climates.
• At the base of our proposition is the notion of consistency
between the various elements of the ethical infrastructure. In
order for codes of conduct and ethical training to have an
impact, they must be consistent with more systemic ethical
elements, such as the organization’s informal reinforcements
and the relevant organizational climates. If such congruence is
missing, then employees receive a mixed message,
substantially reducing the impact that these formal systems
might have. For example, imagine a situation in which an
organization engages in extensive ethical training, but has an
informal reward system that promotes individuals based on the
bottom-line, independent of the means used to get there. The
effectiveness of this training would be substantially diminished
in comparison to a situation in which the organization’s
informal system of promotions rewarded individuals who were
ethical.
• Following the strategically-focused climate argument (Smith-
Crowe et al., in press), an organization’s ethical infrastructure
will only be effective to the extent that the elements within it
act in concert. If they are to be effective, formal ethical systems
must reside in informal reinforcements and organizational
climates that are solid. If not, the formal systems act more like
a Band-Aid than an antibiotic, addressing the symptoms, but
not the underlying causes. Similarly, if the informal system is
incongruent with the pertinent climates, the effectiveness of
that informal system is compromised. We therefore argue that
stronger elements, or those which reflect a deeper
commitment to ethical principles and ideals, moderate the
effectiveness of weaker elements
• Practically, our discussion has several implications for
organizations that wish to increase their ethical effectiveness.
First, it suggests that a focus on formal systems—which are the
most visible and the most highly touted—isn’t enough. Rather,
 it is important to delve below the ethical exterior to uncover,
other, perhaps more important, elements, such as informal
systems and organizational climates. Second, the relationship
between these elements is complicated, with half-hearted
attempts producing potentially disastrous results. Third, one
must look at the elements of the ethical infrastructure in
conjunction with one another, for it is really the interplay
among them that is critical.
5. “Does Power Corrupt or Enable? When and Why Power
Facilitates Self-Interested Behavior” ,Katherine A. DeCelles, D. Scott
DeRue, Joshua D. Margolis ,Tara L. Ceranic
• The questions of when and why people will advance their
own interests at the expense of the common good are
evident across a wide range of organizational behavior
research. Therefore, we define self-interested behavior as
actions that benefit the self and come at a cost to the
common good. Power presents organizations with a paradox
related to self-interested behavior. On the one hand, there is
a widespread belief and evidence that power corrupts, and
people in positions of power can have a substantial negative
impact on the common good by acting solely in their own self-
interest. Yet, power can increase perspective taking and
interpersonal sensitivity, suggesting that power might
increase the emphasis placed on others’ needs as opposed to
one’s own interests. In parallel to this research on power, it
has been argued that self-interested behaviour is a function
of individuals’ moral identity. Moral identity is the extent to
which an individual holds morality as part of his or her self-
concept and it has been shown to influence the degree to
which people emphasize their own versus others’ needs.
• We expect self-interested behavior to be a function of both
power and moral identity. We expect this interaction between
 power and moral identity to manifest itself because
individuals’ traits can increase the accessibility of cognitive
concepts and then influence how people interpret
information, especially in situations where an individual
perceives him- or herself to be autonomous or powerful.
Based on this research, it follows that people with high moral
identities will have more readily available moral concepts in
their accessible mental structures and that when experiencing
feelings of power, they will be more aware of the moral
implications of a situation relative to those with a lower moral
identity. Reynolds (2006) referred to this recognition by an
individual of a situation’s moral content as “moral
awareness.” Individuals with higher moral identities are likely
to have greater moral awareness (Reynolds, 2006), which we
argue should lead them to engage in even less self-interested
behavior when feeling powerful because they are likely to be
especially aware of the moral implications of their actions.
Conversely, feeling powerful, yet having a lower moral
awareness (associated with a lower moral identity), likely
results in individuals not seeing any problem with benefiting
themselves at the expense of others.
• Across two studies, we found that power predicts self-
interested behavior differently depending on moral identity.
In our first study of working adults, there was a negative
association between trait power and self-interested work
behavior when individuals had a high moral identity, yet a
positive relationship between trait power and self-interest
when individuals had a low moral identity.
• Our research has important practical implications. As
organizations look to promote people to more powerful
positions or empower people with greater discretion, our
research suggests, understanding how central morality is to
the person’s self-concept will be a critical consideration for
 predicting whether that person will engage in self-serving
behavior. For employees who are already in positions of
power or who exhibit strong trait power, it is important that
organizations work to develop their moral identity.
6. “Managing Unethical Behavior in Organizations: The Need for a
Behavioral Business Ethics Approach”, David De Cremer ,Judge
Business School, University of Cambridge ,Wim Vandekerckhove
University of Greenwich Business School
• A prescriptive approach thus implies that people are rational
human beings, who make conscious decisions about how to
act. As a result, prescriptive approaches to business ethics
assume that bad people do generally bad things and good
people do good things, because they are rational decision
makers. Explaining situations whilst sticking to this rational way
of reasoning is attractive for a variety of reasons (De Cremer,
2009, De Cremer & Tenbrunsel, 2012): (a) it is a simple
assumption that promotes an economic way of thinking about
moral violations, (b) allows to blame a few bad apples for the
emerging violations, and (c) provides a justified ground to
punish those regarded as rationally responsible. However,
many situations exist where good people do bad things - an
observation that has received considerable empirical support.
These observations challenge the accuracy of the prescriptive
approach in predicting the extent to which so-called rational
human beings will display ethical behavior. It seems to be the
case that because of rather irrational, psychological tendencies
humans do not always recognize the moral dilemma at hand
and engage in unethical behaviors without being aware of it.
Indeed, Tenbrunsel and Messick even note that people do not
see the moral components of an ethical decision, not so much
because they are morally uneducated, but because
 psychological processes fade the ethics from an ethical
dilemma.
• To make sense of the fact that good people can do bad things
an alternative view point is needed that accounts for people’s
morally irrational behavior. We propose that this alternative
view point is a descriptive approach that examines more closely
how people actually take decisions and why they sometimes do
not act in line with the moral principles that are universally
endorsed. Indeed, it is intriguing to observe that the actors in
many business scandals do not see themselves as having a bad
and ethically flawed personality. They consider themselves as
good people who have slipped into doing something bad. How
can we explain this? An interesting idea put forward by the
behavioral business ethics approach is that many organizational
ethical failures are not only caused by the so-called bad apples.
In fact, closer inspection may reveal that many ethical failures
are in fact committed by people generally considered to be
good apples, but depending on the barrel they are in they may
be derailed from the ethical path.
• Taken together, the assumption that when people are
confronted with moral dilemmas they are automatically aware
of what they should be doing and therefore are in control to do
the good thing is limited in its predictive value because of the
fact that humans seem to deviate from what rational
approaches predict.
• Or, as Tenbrunsel and Smith-Crowe (2008, p. 548) note:
“Behavioral ethics is primarily concerned with explaining
individual behavior that occurs in the context of larger social
prescriptions. The role of behavioral ethics in addressing ethical
failures is to introduce a psychological-driven approach that
examines the role of cognitive, affective and motivational
processes to explain the how, when, and why of individual’s
engagement in unethical behaviour”.
• These two topics illustrate how psychological processes play a
role in shaping people’s moral judgments and actions that are
relevant to business and organizations: (a) the processes and
biases taking place during ethical decision making and (b) the
impact of the social situation on how ethical judgments and
actions are framed and evaluated. Research on these two
topics advocates the view that when it comes down to ethics,
many people are followers, both in implicit and explicit ways.
More precisely, the field of behavioral ethics makes clear that
people are in essence followers of their own cognitive biases
and the situational norms that guide their actions.
• Bounded ethicality includes the workings of our human
psychological biases that facilitate the emergence of unethical
behaviors that do not correspond to our normative beliefs.
Specifically, people develop or adhere to cognitions (biases,
beliefs) that allow them to legitimize doubtful, untrustworthy
and unethical actions. Importantly, these cognitive biases
operate outside our own awareness and therefore in a way
make us blind to the ethical failures we commit. In addition,
this blindness is further rooted in the self-favoring belief
that in comparison to the average person one can be looked
upon as fairer and more honest. These self-favoring
interpretations of who they are in terms of morality, are used
by humans in implicit ways to infer that they will not act
unethically, which as a result lowers their threshold of
monitoring and noticing actual violations of our ethical
standards.
• This concept of bounded ethicality thus literally includes a
blindness component, which can be seen as activating an
ethical fading process, which as Tenbrunsel notes is a fading
process that removes the difficult moral issues from
a given problem or situation, hence increasing unethical
behaviour. Below, we briefly discuss a number of psychological
 processes that influence people to show unethical behavior
even if it contradicts their own personal beliefs about ethics.
These processes are: moral disengagement, framing, anchoring
effects, escalation effects, level construal,
and should-want self.
• Moral disengagement: Moral disengagement can be defined as
an individual’s propensity to evoke cognitions which
restructure one’s actions to appear less harmful, minimize
one’s understanding of responsibility for one’s actions, or
attenuate the perception of the distress one causes others
(Moore, 2008, p. 129).
• Framing. Depending on how a situation is cognitively
represented has an effect on how we approach moral
dilemmas and take decisions. Insights building upon the
concept of loss aversion (the notion that people perceive losses
as more negative than they regard gains of an equal magnitude
as positive, suggest that self-interest looms larger when people
are faced with loss. Indeed, losses are considered more
unpleasant than gains are considered pleasurable and hence
invite more risk-taking to avoid the unpleasant situation. Thus,
risk-taking often leads to behavior violating ethical standards.
To avoid making losses, firms can resort to unethical practices.
The 2008 Financial Crisis is one example. Put differently: when
looking at a situation in terms of losses, corruption is never far
away.
• Anchoring effects: This effect holds that our judgments and
decisions are strongly influenced by the information that is
available and accessible. Importantly, this information can be
very arbitrary or even irrelevant to the decision and judgments
one is making. Rumours of sexual harassment by superiors can
bias one’s own sexual harassment of subordinates. Experiment
of African nations in the UN by roulette spin.
• Escalation effects: One important observation concerns the
fact that those showing bad behavior never arrive immediately
at the stage of doing bad. Rather, it seems like bad behavior
emerges slowly and gradually as can be inferred from remarks
like “I never thought I would show this kind of behavior.” In the
literature this effect is referred to as the escalation effect or the
slippery slope effect. The famous social psychology experiment
by Milgram (1974) illustrates this principle. Not 450 watts, but
lower initial watts.. Thus, many unethical decisions and actions
grow slowly into existence and this escalation process itself is
not noticed consciously. For example, research by Cain,
Loewenstein, and Moore (2005) described how auditors are
often blind to client’s internal changes in accounting practices,
but only if the changes appear gradually.
• Level construal: According to this theory, acts that are in the
distant future cannot be experienced directly and therefore are
hypothetical. Hypothetical situations bring their own mental
constructions with it and a consequence of this process is that
more distant events (e.g. events on the long-term) are
represented with it less concrete details. Under such
circumstances, people adhere more easily to moral standards
as guide lines for their decisions and judgments. In contrast,
events that are closer in time are represented in less abstract
and more concrete ways. Under those circumstances people
will rely more on concrete details and relevant contextual
information to make decisions and judgments. Then, egocentric
tendencies will more easily influence the actions one will take.
• Forecasting errors: Participants consistently overestimated
their future emotional reactions to both positive and negative
events (Gilbert et al., 1998;
Wilson, Wheatley, Meyers, Gilbert, & Axsom, 2000). With
respect to what people expect they will do, literature on
behavioral forecasting shows that people overestimate their
 tendency to engage in socially desirable behaviors like being
generous or cooperative (Epley & Dunning, 2000), and
underestimate their tendencies toward deviant and cruel
behavior like providing electric shocks (Milgram, 1974).
Moreover, people also overestimate their willingness to forgive
moral transgressions by overvaluing restorative
tactics such as offering apologies (De Cremer, Pillutla, &
Reinders Folmer, 2011). In a similar vein, it also follows that
people are biased in their predictions in such a way that they
will predict to behave more ethically than they actually will do
in the end.
• Should-want Selves: This distinction was introduced by
Bazerman et al. (1998) and is used to describe intrapersonal
conflicts that exist within the human mind; notably conflicts
between what we morally should be doing and what in reality
we want to do. Specifically, people predict that they will act
more morally in situations than they actually do when being
confronted with these situations. These faulty perceptions and
estimates can be explained by the distinction between should
and want selves. The “want” self is a reflection of people’s
emotions and affective impulses. Basically, the want self is
characterized more as “hot-headed”. The “should” self, in
contrast, is characterized as rational and cognitive, and can
thus be looked upon as “cool headed”. Applying this distinction
to our forecasting problem, it follows that the “should” self is
more active when making decisions on the long-term, whereas
the “want” self is doing more of the talking when it concerns
short-term decisions. Morality and ethics as standards to live by
are thus more accessible and guiding when making predictions
towards the future. Moreover, because people are generally
optimistic and have great confidence in their own judgments
they will consider their predictions towards the future as valid
and reliable.
• Social conditions: Finally, in 1971 Zimbardo (2007) conducted
an impressive experiment at the Stanford University campus in
which participants assumed the roles of “prisoner” or “guard”
within an experimentally devised mock prison setting.
Specifically, many of the participants classified as “prisoners”
were in serious distress and many of the participants
classified as “guards” were behaving in ways which brutalized
and degraded their fellow participants. Participants were so
merged into the prisoner’s setting that they took up their roles
too seriously, leading to behavior that was considered
inappropriate and unethical at times. This study shows the
powerful influence of organizational roles and how it can
implicitly influence people’s beliefs and consequently their
actions.
• Moral Distance: This idea of context being a powerful
determinant for people to act in bad and unethical ways
towards others has been central in the work of Bauman on
“Moral Distance” (Bauman, 1991). The notion of moral distance
holds the idea that people will have only ethical concerns about
others that are near to them. If the distance increases, it
becomes easier to behave in unethical ways.
• Organisational Features: A first organizational feature is the
kind of industry people may work in. For example, the LIBOR
scandal where traders manipulated the interest rate known as
Libor illustrates that a context defined in terms of finance
actually encouraged dishonest behavior. Second org feature
can be the structure of the organization that creates more
versus less distance towards others, which can influence the
degree of unethical behaviors. Based on the idea of Bauman
(1991, p. 26) that bureaucracy functions as a “moral sleeping
pill”. it stands to reason that mechanistic organization
structures introduce more distance and hence allow for more
unethical behaviors to emerge.
 • In the 1990s Miceli, Near and Dworkin conducted extensive
descriptive research on whistleblowers (for an overview see
Miceli, Near & Dworkin, 2008). This work has caused a huge
shift in how prescriptive business ethics discusses
whistleblowing. ( To be read for whistleblowing)
7. MORAL DISENGAGEMENT IN THE CORPORATE WORLD, Moral
Disengagement J. White et al. JENNY WHITE, ALBERT BANDURA and
LISA A. BERO, Accountability in Research, 16:41–74, 2009 Copyright
© Taylor & Francis Group, LLC ISSN: 0898-9621 print / 1545-5815
online.
• In the course of socialization, individuals adopt standards of
right and wrong that serve as guides for conduct. They monitor
their conduct, judge it in relation to their moral standards and
the conditions under which it occurs, and regulate their actions
accordingly. They do things that give them satisfaction and a
sense of self-worth, and they refrain from behaving in ways
that violate their moral standards because such conduct will
bring self-condemnation. However, moral standards do not
function as unceasing internal regulators of conduct. Self-
regulatory mechanisms do not operate unless they are
activated. Many psychosocial manoeuvres can be used to
selectively disengage moral self-sanctions. Indeed, large-scale
inhumanities are typically perpetrated by people who can be
considerate and compassionate in other areas of their lives.
8. Ethically Adrift: How Others Pull Our Moral Compass from True
North, and How We Can Fix It, Moore, C., and F. Gino,
http://nrs.harvard.edu/urn-3:HUL.InstRepos:10996801
• The fact that human survival depends on finding ways to live
together in peaceful, mutually supportive relations created an
evolutionary imperative for fundamental moral behaviors such
 as altruism, trust, and reciprocity. In other words, we are moral
because we are social.
• However, much of our immorality can also be attributed to the
fact that we are social animals. In other words, this chapter is
about why we are immoral because we are social. When he
was sentenced to six years in prison for fraud and other
offenses, former Enron CFO Andy Fastow claimed, “I lost my
moral compass and I did many things I regret” (Pasha, 2006).
Fastow’s statement implies that if his moral compass had been
in his possession, he would have made better choices. In
contrast, we argue that unethical behavior stems more often
from a misdirected moral compass than a missing one. Given
the importance of morality to our identities, we would notice if
our moral compass went missing. However, a present but
misdirected moral compass could seduce us with the belief that
we are behaving ethically when we are not, while allowing us to
maintain a positive moral self-image. The idea that one’s moral
compass can veer away from “true North” has a parallel with
navigational compasses.
Conditions within a local environment, such as the presence of
large amounts of iron or steel, can cause the needle of a
navigational compass to stray from magnetic North, a
phenomenon called magnetic deviation. Explorers who are
aware of this phenomenon can make adjustments that will
protect them from going astray, but laymen can veer wildly off
course without being aware they are doing so.
• What forces are both powerful and subtle enough to cause
people to believe their actions are morally sound when in fact
they are ethically adrift? Existing research has offered two main
explanations for this phenomenon. The first considers
individuals who are ethically adrift to be “bad apples” whose
moral compasses are internally damaged. This explanation for
ethical drift harkens back to Aristotelian notions of human
 virtue and persists in contemporary discussions of character as
the foundation of morality (cf., Doris, 2002).
• Consistent with this explanation, scholars have identified some
(relatively) stable individual differences that demagnetize
moral compasses, leading to unethical behavior. According to
this view, a deviated moral compass is evidence of an
individual’s faulty human nature. Indeed, the idea that
psychometric tests can identify “bad apples” before they are
hired underlies the common practice of integrity testing among
employers.
• In this chapter we focus instead on an increasingly dominant
alternative view, grounded in moral psychology and behavioral
ethics, that suggests that individuals‟ morality is malleable
rather than stable. This alternative perspective proposes two
main reasons why we can become ethically adrift: intrapersonal
reasons (caused by human cognitive limitations) and
interpersonal reasons (caused by the influence of others). We
describe both of these reasons briefly below, before turning
the rest of our attention to the latter of these two.
• Social processes that facilitate neglect:
The research overviewed in this section suggests that social
norms and social categorization processes can lead us to
neglect the true moral stakes of our decisions, dampening
our moral awareness and increasing immoral behavior. Rather
than driving our own destiny, we look for external cues that
allow us to relinquish control of the wheel. Put another way,
“one means we use to determine what is correct is to find out
what other people think is correct”, a concept known as social
proof.
• We are more likely to engage in altruistic behavior if we see
others doing so and more likely to ignore others‟ suffering if
others near us are similarly indifferent. We are even more likely
to laugh at jokes if others are also laughing at them. In general,
 the more people engage in a behavior, the more compelling it
becomes, but the actions of one person can still influence our
behavior. Some of Bandura‟s classic studies showed how
children exposed to an aggressive adult were considerably
more aggressive toward a doll than were children who were
not exposed to the aggressive model.
Together, this research suggests that others—either in groups
or alone—help to establish a standard for ethical behavior
through their actions or inaction. These “local” social norms
provide individuals with the proof they need to categorize
behavior as appropriate or inappropriate. Repeated exposure
to behavioral norms that are inconsistent with those of society
at large (as is the case, for example, with the subcultures of
juvenile delinquents) may socialize people to alter their
understanding of what is ethical, causing broader moral norms
to become irrelevant. Thus, when a local social norm neglects
morally relevant consequences, it dampens moral awareness,
and through this dampening, will increase unethical behavior.
• Social categorization: Social categorization is the psychological
process by which individuals differentiate between those who
are like them (in-group members) and those who are unlike
them (out-group members). Social categorization amplifies the
effect of social norms, as norms have a stronger effect on our
behavior when we perceive those enacting them to be similar
to ourselves. Unfortunately, this means that if we socially
identify with individuals who engage in unethical behavior, our
own ethical behavior will likely degrade as well. In one study,
college students were asked to solve simple math problems in
the presence of others and had the opportunity to cheat by
misreporting their performance and leave with undeserved
money. Some participants were exposed to a confederate who
cheated ostentatiously (by finishing the math problems
impossibly quickly), leaving the room with the maximum
 reward. Unethical behavior in the room increased when the
ostentatious cheater was clearly an in-group member (a
member of the same university as the participants) and
decreased when he was an out-group member (a student at a
rival university).
• These findings suggest an intersection between social norm
theory and social identity theory. Essentially, people copy the
behavior of in-group members and distance themselves from
the behavior of out-group members, and then use this behavior
to maintain or enhance their self-esteem, but in two different
ways. In-group members‟ transgressions are perceived to be
representative of descriptive norms (those that specify how
most people behave in a given situation) and thus as less
objectionable than the same behavior by an out-group
member. In contrast, when assessing the immoral behavior of
an out-group confederate, people highlight injunctive norms
(those that refer to behaviors that most people approve or
disapprove of) and distance themselves from this “bad apple.”
Highlighting the different types of norms, depending on
whether an in-group or out-group member is modeling the
behavior helps individuals maintain a distinctive and positive
social identity for their in-group.
• Another consequence of social categorization is out-group
mistreatment. Categorizing individuals as members of an out-
group allows us to dehumanize them, to exclude them from
moral considerations, or to place them outside our “circle of
moral regard”, and thus mistreat them without feeling (as
much) distress. At a fundamental level, we conceive of out-
group members as less human and more object-like than in-
group members. Recent neurophysiological research has even
found that individuals process images of extreme out-group
members, such as the homeless or drug addicts, without many
of the markers that appear when they look at images of other
 people (Harris & Fiske, 2006). Brain-imaging data even show
that individuals manifest fewer signs of cognitive or emotional
distress when they are asked to think about sacrificing the lives
of these extreme out-group members than when they
contemplate sacrificing the lives of in group members.
• Finally, social categorization also leads us to feel psychologically
closer to those whom we have categorized as members of our
in-group than to those we have categorized as out-group
members. When people feel connected to others, they notice
and experience others‟ emotions, including joy,
embarrassment and pain”. As individuals grow close, they take
on properties of each other and psychologically afford each
other “self” status. Indeed, copycat crimes are often
perpetrated by individuals who feel a psychological connection
to the models they are emulating. In other words, having a
psychological connection with an individual who engages in
selfish or unethical behavior can influence how one‟s own
moral compass is oriented.

• Organizational aggravators of moral neglect:

Organizational socialization sets up role expectations for
individuals, communicates which organizational goals are
important, and establishes appropriate ways to achieve them.
Socialization processes per se are agnostic about questions of
morality. However, when individuals are new to an
organization, or when a pre-existing organizational culture re-
socializes individuals to new institutional demands, they look
for cues from others to identify appropriate behavior, and may
acclimate to norms that are morally corrupting. Thus, through
socialization processes, organizations can exacerbate social
facilitators of moral neglect.
• The human need to belong makes it easier to successfully
socialize individuals in unethical behavior. An example of this is
 described in journalist Michael Lewis‟ (1989) account of being
socialized into the sales culture at investment bank Salomon
Brothers. When he joined the firm, Lewis was informed that he
could either fit in by becoming a “jammer,” someone willing to
unload whatever stocks would most benefit Salomon Brothers,
regardless of their worth or benefit to the client, or to be
labelled a “geek” or “fool”—that is, someone who behaves
more ethically (1989). Given these options, it becomes clear
why many chose to become jammers. ( My own PhD thesis is
relevant here).
• Roles : A spectacularly un-roadworthy car, the Pinto was
susceptible to “lighting up” (bursting into flames) during low-
speed, rear-impact collisions. Gioia explains how the scripts of
his role, which included what to attend to and what to ignore
when making recall decisions, prevented him from recognizing
that leaving this model on the road could have fatal
consequences. Specifically, his scripted cues for initiating a
recall were restricted to whether negative outcomes occurred
frequently and had directly traceable causes (1992). After
determining that accidents involving “light ups” were relatively
rare and did not have a clear cause, his investigations went no
further, nor did he see this decision as morally problematic.
• Goals: In a notorious example, the sales goals set in Sears,
Roebuck & Co.‟s auto repair centers in the early 1990s
prompted mechanics to regularly overcharge customers and
undertake unnecessary work on vehicles (Yin, 1992). Goals also
played a role in the dangerous design of the Ford Pinto. The
company gave engineers a goal called the “Limits of 2,000,”
which required them to produce a car that was less than 2,000
pounds (to maximize fuel efficiency) and cost less than $2,000
(to ensure a low price). This goal influenced the placement of
the Pinto‟s rubber gas tank behind an insubstantial rear
bumper, a major factor in the Pinto‟s tendency to “light up” in
 low-speed collisions (Gioia, 1992). Goals and incentives can
both telescope our attention toward an outcome and blind us
to the reasons the goals or incentives were set up in the first
place. As an example, when police officers are given a target
number of crimes to solve, they typically become motivated to
pursue the crimes whose perpetrators are easiest to catch
(such as prostitution) rather than the crimes whose
perpetrators are more elusive but at least equally as important
to catch (such as burglars) (Stone, 1988.)

• Facilitators of moral justification: If moral neglect represents

the absence of conscious consideration of the moral domain,
then moral justification refers to the process through which
individuals distort their understanding of their actions. Moral
justification allows us to reframe immoral actions as defensible,
reducing the dissonance or anticipation of guilt that may
function as an obstacle to unethical behavior, paving the way
for it.
• Self-verification: First, it motivates us to interact with people
who see us as we see ourselves, since they can confirm our self-
concept. This tendency can lead individuals to create and
maintain cultures that may perpetuate morally questionable
behaviors, as individuals will seek to remain in the company of
those who confirm their positive self-regard, regardless of their
actions. Enron CEO Jeff Skilling, for example, reportedly
surrounded himself with “yes men” who built up his ego
without questioning his decisions. These “yes men” may have
helped Skilling confirm his positive self-views as a competent
executive without drawing attention to his morally
questionable behaviors.
• Second, people also solicit self-verifying feedback from others
and look for, see, and remember information that is consistent
with their existing self-concepts. As a result, people often
 misinterpret feedback in ways that are consistent with their
self-concepts and dismiss information that is accurate but
inconsistent with those self-concepts.
• Organizational aggravators of moral justification:
o Organizational identification: If moral justification
involves sanctifying corrupt practices by appealing to
worthy ends, then the organization represents a powerful
“higher cause” to which individuals can appeal to make
suspect practices appear morally worthy. Unethical
behavior in support of organizational ends has been
termed unethical prosocial behavior because it is
undertaken for ostensibly good reasons—to benefit the
company. Fortunately, there is also evidence that
identification with more virtuous institutions can mitigate
unethical behaviour. Organizational identification, then,
can work both ways: exacerbating unethical outcomes
when institutions are corrupt and mitigating unethical
outcomes when they are more virtuous. Clearly, in both
instances, the organization represents a powerful force
that can be marshalled to justify specific practices,
whether virtuous or vicious.
• Group loyalty: Just as organizations can be a
compelling source of moral justification, so too
can groups of organizational members. Group
loyalty is a fundamental facilitator of moral
justification. People may abandon global or
universal moral norms in order to give preference
to those close to them. This is perhaps most
evident in cases of nepotism, when close others
are given undue preference in employment or
resource allocation. A study of the self-regulation
of misconduct within the U.S. Military Academy
also supports the idea that explicit notions of
 loyalty toward one‟s fellow officers provide a
justification to normalize and refrain from
reporting officially prohibited behaviour.
• Business framing and euphemistic language:
Sanitizing terms are used for a wide range of
harmful or otherwise prohibited business
practices. Many forms of fraud have colorful
names that evoke images far removed from their
actual, more nefarious content: “channel
stuffing” refers to the practice of booking sales to
distributors as final sales to customers, “candy
deals” involve temporarily selling products to
distributors and promising to buy them back later
with a kickback added on, “tango sheets” are
false books used to calculate earnings inflation
and hide expenses in order to hit quarterly
targets, and “cookie reserves” refer to using
surpluses from profitable years to improve the
balance sheet during leaner years (The
Economist, 2010). These terms support moral
justification by obfuscating the true purpose of
unethical activities and making consideration of
their true nature less likely.
• Intrapersonal consequences of moral
justification: If the main intrapersonal
consequence of moral neglect is a failure to
acknowledge or integrate moral considerations
into decision making and behavior, moral
justification prompts us to re-construe immoral
choices as morally innocuous or even morally
righteous. Intra-personally, moral justification can
manifest as moral disengagement, moral
hypocrisy, and moral licensing—consequences
 that pervert how we evaluate moral decisions,
allowing us to make immoral choices more easily.
• Moral disengagement: Moral disengagement
refers to a set of eight cognitive mechanisms that
deactivate the self-sanctions that typically compel
us to behave morally. Thus, during his trial for
war crimes, Adolf Eichmann consistently
maintained that he would only “have had a bad
conscience if he had not done what he had been
ordered to do—to ship millions of men, women
and children to their death”. Eichmann, who here
has employed the moral disengagement
mechanism of displacing one’s moral agency to
organizational superiors, can legitimately claim
he was not guilty because his evaluation of his
own actions has been so thoroughly distorted.
Moral disengagement thus operates as a moral
compass disruptor, moving the needle towards
an activity that can be morally justified through
its mechanisms.
• Moral hypocrisy: A second intrapersonal
consequence of moral justification is moral
hypocrisy, or “morality extolled... not with an eye
to producing a good and right outcome but in
order to appear moral yet still benefit oneself” ( a
good example needed)
• Moral licensing: A third intrapersonal
consequence of the social availability of moral
justifications is moral licensing. In the last decade,
researchers have studied “compensatory ethics”,
the phenomenon of using prior moral actions as a
credential or license to commit later unethical
 actions and prior unethical actions as a
motivation to engage in later ethical ones
Facilitators of moral inaction or immoral action:
Individuals may be aware of the moral content of their actions, make
accurate judgments about what is right and wrong, and still be
unable to follow through with desirable action. In this section, we
overview how social processes create obstacles to doing the right
thing or motivation to do the wrong thing.
Social processes that facilitate moral inaction or immoral action:
A number of social influences can create obstacles between good
intentions and ethical behavior. In this section, we explore social
conformity, obedience to authority, and diffusion of responsibility as
three types of social influence that make moral action less likely.
Social conformity:
Asch’s foundational experiments in the 1950s demonstrated how
individuals tend to conform to the social agreement they perceive
rather than to their own intuition about what is correct. In his most
classic experimental paradigm, participants in a room filled with
confederates were asked to assess which of a series of lines is the
same length as a “standard line.” Though the correct answer was
always unambiguous, in 12 of 18 trials, the confederates first
unanimously agree to a wrong answer. In the face of this social
consensus, 75% of respondents provided a patently wrong answer at
least some of the time. When the conforming individuals were asked
why they provided wrong answers, they responded that they feared
looking foolish and, in the face of social consensus, began to doubt
their own intuitions. A partial explanation for the low rates of
whistleblowing in corporate wrongdoing must be the compulsion to
behave in concert with majority views; accordingly, best estimates
are that less than half of those who witness organizational
wrongdoing report it. Social conformity also helps us understand why
individuals mimic the egregious behavior of others, such as American
soldiers‟ torture of prisoners at Abu Ghraib in Iraq.
Diffusion of responsibility:
The general finding that the presence of others inhibits the impulse
to help individuals in distress, known as the bystander effect, is
driven in large part by social conformity. People are less likely to
respond to an emergency when others are present, particularly when
those present are passive. Even the perception that others are
witnessing the same emergency decreases one’s likelihood of acting.
In another classic study, individuals heard a confederate having what
seemed to be a severe epileptic fit in another room. Eighty-five
percent of participants who believed they were the only other
person within earshot reported the seizure in under one minute. In
contrast, only 31% of those who were led to believe there were four
others within earshot reported the emergency before the end of the
six-minute experiment, and those who did took more than twice as
long to respond as those who believed they were alone.
The explanation of this moral inaction is often described in terms of
diffusion of responsibility: when the cost of inaction can be shared
among multiple parties, individuals are less likely to take
responsibility for action themselves.
Obedience to authority
Moral inaction may also be facilitated by individuals‟ tendencies to
obey legitimate authority figures. As Miligram‟s famous obedience
experiments showed 50 years ago, individuals relinquish personal
agency for their own actions easily in the face of requests from an
authority figure. Obedience to authority appears to be a deep-seated
psychological response that only a minority of individuals naturally
resist.
Organizational aggravators of immoral (in)action
Organizations can exacerbate social influences that lead to moral
inaction or immoral action because they are commonly structured in
ways that allow us to minimize moral agency for our actions. First,
bureaucracy and the anonymity it provides exacerbate the diffusion
of responsibility—the minimization of moral agency that occurs
when one is a member of a group.
Second, hierarchy exacerbates obedience to authority and the
displacement of moral agency onto organizational superiors.
As the Lord Chancellor of England stated 300 years ago, the
corporation “has no soul to be damned, and no body to be kicked”
(cited in Coffee, 1981), a fact that facilitates corporate misconduct
and creates a conundrum for its prosecutors. The effects of
anonymity are amplified in large bureaucracies, as both size and
division of labor make responsibility more challenging to assess and
penalties for misconduct more challenging to inflict. Two interesting
studies found that the de-individuating effect of Halloween costumes
increased morally questionable behaviour. In a different experiment
ostensibly about creativity and stress, individuals were given the
opportunity to give electric shocks to other participants. Half the
participants were de-individuated by wearing baggy lab coats,
nametags with only numbers on them, and hoods or masks to cover
their faces; the other half wore “individuating” nametags and no
costumes. Psychologically shielded from the consequences of their
actions through their costumes, de-individuated (more anonymous)
participants delivered twice the level of shock to “victims”,
compared to individuated participants (Zimbardo, 1970).
In their analysis of the My Lai massacre in Vietman, Kelman and
Hamilton cite hierarchy as a cause of this “crime of obedience”: the
massacre was initiated by an order that became perverted as it
filtered through a chain of subordinates (1989). Bandura calls the
psychological passing of moral responsibility up through the chain of
command “displacement of responsibility” (Bandura, 1990, 1999).
Milgram refers to it as the “agentic shift”, a transition from an
autonomous state where one feels a personal sense of responsibility
for one‟s actions to feeling like one is simply an agent acting on
someone else‟s behalf. Similarly, when former U.S. National Security
Advisor and Secretary of State Condoleezza Rice was asked about her
involvement in authorizing practices during the Iraq War that could
be considered torture, she said, “I didn‟t authorize anything. I
conveyed the authorization of the administration to the agency”.
Together, these results suggest that the intrapersonal consequence
of immoral actions is self-deception that allows one to maintain a
positive self-image, rather than negative emotions such as guilt or
shame, particularly when the ethicality of those actions is open to
interpretation.
An agenda for future research: Regaining control of our moral
compass
• Interpersonal processes: Promoting moral exemplars or
referents: These findings suggest that choosing the right
exemplars of moral behavior—either positive in-group
members to emulate or negative out-group members from
which to differentiate oneself—may strengthen the magnet
inside one‟s moral compass. Indeed, in their study of rescuers
of Jews during the Holocaust, Oliner and Oliner found that,
compared to non-rescuers, rescuers had more models in their
close social circles who demonstrated similar altruistic
behaviors, such as participation in the Resistance.
• Brown, Treviño, and Harrison (2005) define ethical leadership
as “the demonstration of normatively appropriate conduct
through personal actions and interpersonal relationships, and
the promotion of such conduct to followers through two-way
communication, reinforcement, and decision-making. Thus,
 leaders can be encouraged to use transactional efforts (e.g.,
communicating, rewarding, punishing, emphasizing ethical
standards) as well as modeling to influence their followers to
behave ethically. (First step in building an ethical
infrastructure). Communication in particular will be central in
the work of ethical leaders. As research on positive workplace
behavior suggests, people behave better toward each other
and the organization when high levels of procedural justice
exist (fair procedures, clearly communicated) and when leaders
are oriented toward acting in their followers‟ best interests.
• Monitoring as a reminder of one’s best self: Individuals‟ sense
of anonymity—which, as we have discussed, facilitate unethical
behavior—is undermined when they believe they are being
monitored. China’s face-recognition technology and
surveillance culture and reduction of crime. Monitoring is
certainly a key lever available to organizations and
governments as they try to influence individuals toward
exemplary behavior, but future research is needed to
disentangle when and under what conditions monitoring
systems lead to more ethical behavior and when they backfire.
• Careful and cognizant goal-setting: As we have seen, goals are
a primary means of motivating and directing behavior in
organizations, but they can backfire when it comes to ethical
behavior. Setting overly narrow or ambitious goals can blind
individuals to other important objectives and over-commitment
to goals can motivate individuals to do whatever it takes to
reach them.
9. Morality rebooted: Exploring simple fixes to our moral bugs, Ting
Zhang*, Francesca Gino, Max H. Bazerman
Values-based ( encourage ethical behaviour) and structure =based
(discourage unethical behaviour)infrastructure for ethical behaviour
in orgs. Both methods should be used.
10. On Understanding Ethical Behavior and Decision Making: A
Behavioral Ethics Approach, David De Cremer, David M. Mayer, and
Marshall Schminke, ?2010 Business Ethics Quarterly 20:1 (January
2010); ISSN 1052-150X pp. 1-6
• Despite this awareness, irresponsible and unethical
behaviors and decisions still emerge. How can we explain
this? Early explanations focusing on the underlying causes
of these ethical failures promoted the idea that most
business scandals were the responsibility of a few bad
apples (De Cremer 2009). This assumption is intuitively
compelling and attractive in its simplicity. Further, at a
practical level it facilitates identification and punishment
of those deemed to be responsible. However, recent
research has focused instead on how ethical failures
witnessed in society and organizations are not the result
of so-called bad apples but rather involve a complex mix
of individual and contextual factors (Bazerman and Banaji,
2004). This research suggests most all of us may commit
unethical behaviors, given the right circumstances. This
idea is one of the major assumptions used in the
emerging field of behavioural ethics.
11. When Ethical Leader Behavior Breaks Bad: How Ethical
Leader Behavior Can Turn Abusive via Ego Depletion and
Moral Licensing, Szu-Han (Joanna) Lin, Jingjing Ma, and
Russell E. Johnson Michigan State University, Journal of
Applied Psychology © 2016 American Psychological
Association 2016, Vol. 101, No. 6, 815–830
• In this study we adopt an actor-centric perspective to
examine possible costs of exhibiting ethical leader
behaviors for leaders. To do so, we draw from theories of
ego depletion and moral licensing. One such cost may be
 feeling mentally fatigued from the added effort needed to
display ethical leader behaviors over and above formal
leader role requirements, leaving actors depleted and
with insufficient willpower to control subsequent deviant
acts. While there is empirical evidence verifying that
depletion leads to abusive behavior, there are alternative
explanations as well. For example, employees who
emphasize and model morally laudable behavior may
subsequently feel it is permissible to “get away with”
questionable behaviors because they have already
demonstrated that they are ethical.
• First, we suggest that it is possible for managers to
engage in both ethical and abusive leader behaviors.
Although ethical leader behaviors and abusive leader
behaviors have been each widely examined, it is unclear
whether and how these behaviors might co-occur within
the same person. Past research has assumed that
managers are consistent in their displays of leader
behavior, but this assumption does not appear to be
accurate.
• According to ego depletion theory (Baumeister et al.,
1998), people have a limited pool of regulatory resources
to exert self-control. Over time, people may feel depleted
as these resources become diminished owing to the
performance of activities requiring self-control. According
to Baumeister, Gailliot, DeWall, and Oaten (2006),
activities such as controlling or suppressing thoughts,
making complicated decisions, and concentrating one’s
attention are especially depleting. In the workplace, for
example, it has been found that acting consistent with
rules and norms pertaining to procedural fairness and
vigilantly monitoring for potential problems are especially
depleting.
• Ethical norms are not always aligned with people’s natural
(and often self-interested) tendencies, thus self-control
on the part of leaders is required to override these
tendencies in favor of more egalitarian ones. For example,
being consistent in one’s treatment of others by
refraining from showing favoritism to a particular
individual is a key tenet of ethical conduct in
organizations. However, doing so can be quite depleting
because leaders often have a mix of high and low quality
relationships with followers, thus they must suppress
both their preferential biases toward liked followers and
their prejudicial biases toward disliked followers.
Suppressing such biases with the end goal of being
consistent and fair to everyone is depleting.
• Abiding by ethical norms is also depleting when it runs
counter to self-interest, and there are situations where
doing so may result in lower performance. For example, a
CEO of a power company who invests in proper filtration
equipment and disposal procedures for the toxins the
company produces will result in higher expenses than if
the company bypassed safety and environmental
standards by releasing toxins directly into the air or water.
These higher expenses translate into smaller returns for
shareholders and a smaller performance bonus for the
CEO. Leaders may therefore find themselves caught
between doing “what’s right” versus “what’s profitable.”
• Acting ethical can be quite complex for leaders because
the list of stakeholders may also include people outside
the company (e.g., customers and clients, the local
community and government; McWilliams & Siegel, 2001).
The ramifications of ethical violations are also broader
than incidents of poor performance or minor counter-
productivity, as the former may include litigation,
 government sanctions, and irreparable reputation loss.
These broader and more damaging consequences
complicate matters further by eliciting intense emotional
reactions that must be managed and by requiring damage
control to prevent the situation from escalating.
Managing these demands and complexities require
resource-intensive information processing. Taken
together, exhibiting ethical leader behavior requires
nontrivial amounts of self-control on the part of leader.
• There are two explanations as to why such licensing
effects occur. First, displaying morally laudable behavior is
a way for people to accumulate moral credits. When
there is a surplus of these credits in their moral ledger,
this excess can be used to “purchase” the right to deviate
from social and ethical norms. Second, displaying morally
laudable behavior can also bestow on actors the
credentials of having a commendable moral selfregard.
Moral self-regard, which is a part of people’s working self-
concept, is an assessment of how moral people believe
themselves to currently be, which can fluctuate from one
moment to the next. In other words, the moral credential
perspective posits that actors’ current moral self-regard
can alter whether they view their behavior as ethical or
not. Regardless of whether ethical acts bolster moral
credits or credentials, in both instances they provide
moral license to subsequently engage in deviant acts.
• First, our findings hint at the possibility that the indirect
effect via depletion may be larger than that of moral
credits.