How Unethical Behavior Becomes Habit” is a paper by Francesca Gino, Lisa D. Ordóñez and David Welsh which illustrates how seeming unimportant unethical acts lead to bigger ones.

It reports how Bernie Madoff, who swindled thousands of people out of abot £40 billion by operating a ponzi scheme commented,, “Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big.”

It is probably true what the authors claim, that we all are vulnerable to the same slippery slope. We may start  with small unethical acts such as taking a few pens home from the office of fudging business expenses. It seems that people who are faced with growing opportunities to behave unethically are much more likely to rationalise this conduct than those who are presented with an abrupt change. Many of the biggest business scandals of recent years — including the News of the World phone hacking scandal, billions in rogue trading losses at UBS, and the collapse of Enron — have followed a similar pattern: The ethical behavior of those involved eroded over time.

The authors found that when given a series of problem-solving tasks, 50% of subjects cheated to earn $.25 per problem in the first round, and 60% cheated to earn $2.50 per problem in the final round. However, the people in the abrupt change group who could not cheat during the first two rounds were much less willing to cheat big for $2.50 per problem during the final round (only about 30% did).

It also seems that people are more likely to overlook the unethical behavior of others when it deteriorates gradually over time. One surprising finding was that the assumption that unethical workplace behavior is the product of a few bad apples is  blinding organisations to the fact that all employees have the potential to be unethical when faced with certain personal or corporate situations.

The message for organisatons

The authors claim that ethical nudges can help people avoid the types of indiscretions that might start them down the slippery slope of unethicalness. It was  found that customers who signed the statement “I promise that the information I am providing is true” prior to reporting their annual mileage — that is, at the top of the page — were significantly more honest in their reporting compared to those who reported first and signed at the bottom of the page.

The message for organisations seems clear. When moral standards are unclear or unenforced, it’s easy for employees to feel it is okay to engage in unethical acts that are readily rationalised. Environments that nudge employees in the right direction, and managers who immediately identify and address problems, can stop ethical breaches before they develop into major unethical acts and even crimes.

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