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From Baseball to Accounting: Why We Encourage Unethical Behavior

January 28th, 2008 @ 7:21 am

9 Comments

Categories: Management, Managing Others

Tags: Accounting, Behavior, Real Estate, Leadership, Operational Accounting, Financial Services, Business Operations, Management, Finance, Sean Silverthorne

It may not be right, but we often overlook unethical behavior in others. In a recent working paper, Harvard Business School professor Max Bazerman and colleagues explain the psychological reasons why this is so, and what companies can do about it.

The paper, See No Evil: When We Overlook Other People’s Unethical Behavior, says we tend to ignore bad behavior when:

  1. Recognizing such behavior would harm us.
  2. Others have an agent do their dirty work for them.
  3. We grow comfortable over time with objectionable behavior.
  4. We value outcomes over processes.

Take the first point, which the researchers term motivated blindness, or “the tendency for people to overlook the unethical behavior of others when recognizing the unethical behavior would harm them.”

Baseball powers-that-be overlooked the rapid physical development in aging superstar Barry Bonds because of the record-breaking results he was producing, the researchers say. The same forces are at work when auditors bend the rules to please their clients.

The paper concludes that most people value ethical behavior, but are sometimes swept up in the dark side by biases that influence their decisions. Organizational leaders should be responsible and accountable for understanding these processes and for making structural changes to reduce them.

Do you work in an ethical organization? Do you find it difficult to do the right thing even when doing so would harm your own interests?

 
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  •  
    1

    hbizdr

    01/29/08 | Report as spam

    answer to: why we aencourage unehtical behavior

    As a speaker, executive coach and trainer for Ethical, CSR and Sustainability conferences & workshops I have presented, The Ethical Enterprise, A Global Study, 2005-2015, work that I had researched and authored for the American Management Association.

    To best identify and answer the question posed by the article, I submit the following:

    According to The Ethical Enterprise, A Global Study, 2005-2015, the most popular responses to what drives unethical business behaviors are the following:

    1 69.7% Pressure to meet unrealistic business objectives/deadlines
    2 38.5% Desire to further one?s career
    3 33.8% Desire to protect one?s livelihood
    4 31.1% Working in environment with cynicism or diminished morale
    5 27.7% Improper training/Ignorance that the act was unethical
    6 24.3% Lack of consequence if caught
    7 23.5% Need to follow boss?s orders
    8 14.9% Peer pressure/Desire to be a team player
    9 9.5% Desire to steal from or harm the organization
    10 8.7% Wanting to help the organization survive
    11 7.9% Desire to save jobs
    12 6.9% A sense of loyalty

  •  
    2

    hbizdr

    01/29/08 | Report as spam

    answer to: why we encourage unethical behavior

    As a speaker, executive coach and trainer for Ethical, CSR and Sustainability conferences & workshops I have presented, The Ethical Enterprise, A Global Study, 2005-2015, work that I had researched and authored for the American Management Association.

    To best identify and answer the question posed by the article, I submit the following:

    According to The Ethical Enterprise, A Global Study, 2005-2015, the most popular responses to what drives unethical business behaviors are the following:

    1 69.7% Pressure to meet unrealistic business objectives/deadlines
    2 38.5% Desire to further one?s career
    3 33.8% Desire to protect one?s livelihood
    4 31.1% Working in environment with cynicism or diminished morale
    5 27.7% Improper training/Ignorance that the act was unethical
    6 24.3% Lack of consequence if caught
    7 23.5% Need to follow boss?s orders
    8 14.9% Peer pressure/Desire to be a team player
    9 9.5% Desire to steal from or harm the organization
    10 8.7% Wanting to help the organization survive
    11 7.9% Desire to save jobs
    12 6.9% A sense of loyalty

  •  
    3

    dextrus

    01/30/08 | Report as spam

    RE: From Baseball to Accounting: Why We Encourage Unethical Behavior

    Now the question is, if almost 70% of unethical behavior is due to the pressure to meet unrealistic business objectives deadlines, hmmm, what is the root cause to this and how do businesses deal with it? Or should we just shove it under the rug? I guess it is done, otherwise such figure wouldn't be there. Point finger at company culture? CEO? Board of directors? Who is Really accountable and who should clear the air?

  •  
    4

    dkjohns

    02/01/08 | Report as spam

    RE: From Baseball to Accounting: Why We Encourage Unethical Behavior

    "The paper concludes that most people value ethical behavior..." As for moral business behavior, the biases that influence decisions, what which goes beyond integrity as organizational leaders lower standards by choosing to make processes and structural change to accomplish tasks and pacify end results. As this cycle repeates itself over, over and over again, processes and structural change are reduced to nothingness. Consider integrity first! Ingetrity is not compromise.

    dkjohns

  •  
    5

    arlinwall

    02/05/08 | Report as spam

    "Free" Markets Produce Unethical Behavior

    In a free market economy where cash is king. Anything that gets in the way of that is frowned upon. Clean production, working wages, legal immigrant workforces, environmental awareness, unions ect. As long as money is the supreme goal we will have an abundance of unethical behavior, from drug-dealers to white-collar embezzlement. We can make all the ethics rules and laws we want, nothing will change until America ceases to put profit first, over the "COMMON GOOD".

  •  
    6

    asellers4@...

    02/20/08 | Report as spam

    Free Market Ethics

    I'd reply by saying that countries without free markets have far worse "ethical" problems. Corruption runs rampant in socialist, monarchist, oligopolist, and kleptocratic states, while Western Democracies with consistent rules of law and respect for property have far better growth rates and living standards because of ethical standards.
    Most people will consistently act in their own self interests. Isn't it self-defeating for a firm to commit ethical lapses such as accounting fraud, regulatory violations, or deceptive advertising?
    Lawyers, regulators, lenders, and investors regularly punish these companies in one manner or the other - out of self interest - and firms that face these sorts of sanctions act against their own self-interests, ultimately.
    To fudge the numbers runs the risk of a sharp-eyed short-seller driving your market cap into the ground. Don't we all avoid people we know to be unethical? Are they not penalized for being unethical?
    It is almost always harder to lie than to tell the truth - we weave a tangled web. Greed, avarice, and self-interest thus act, in a (perhaps) counterintuitive way, to keep us ethical.
    Greed is good, then, when it keeps everyone honest, and is another reason for the legitimacy of democratic capitalism.
    Countries where ethical lapses are unpunished do far worse - and much of the populace in these nations are NOT free to pursue their self-interests.
    Isn't capitalism truly wonderful?

  •  
    7

    jenyj89

    02/04/08 | Report as spam

    Why we really don't fight unethical behavior

    The problem with integrity in large organizations is it's not the popular or "team" side to be on; I've found this out through 23 years of civil service work. The more powerful are the unethical and they are hard to fight...the ethical people usually lose. It's an uphill battle and one that you don't get alot of support for...people worry about damaging their careers, getting "labeled" or we have just given up! It's a tough fight and one that you rarely win which is one reason that people rarely fight unethical behavior...not because they agree with it but because they know they can't win or do anything about it.

  •  
    8

    valroymiranda

    02/23/08 | Report as spam

    Whistle Blower- Blown Away

    Jenny, I feel that this article was written for me. In my country - they?ve tweaked the term- if you can?t beat em Join em- its now- if you can't beat em-force em-beat em-mentaly -emotionaly-finaly buy em.
    I see it everyday - rampant as ever- I've even contemplated suicide- only to be stopped by the lord- who I am sure is only testing my resolve.

    Pray for me that as they sow so shall they reap

    In India whistle blowing does not pay- you pay with either your career or your life

    Those who know me will know that I would have had to have seen something so evil to have written in this tone

    Pray for me

  •  
    9

    fumcsecty

    02/06/08 | Report as spam

    RE: From Baseball to Accounting: Why We Encourage Unethical Behavior

    I do work in an ethical business - a church! Sometimes I do find it hard to "fess up" when I've screwed up. But I have a boss who creates a caring environment that recognizes that all of us, including himself, drop the ball so let's do what we can to correct it and move on. I can't imagine working in any other environment.

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