The Business Ethics Blog

Here’s a new study about the causes of unethical corporate behaviour.

Pressure to Meet Unrealistic Business Objectives and Deadlines Is Leading Factor for Unethical Corporate Behavior

NEW YORK–(BUSINESS WIRE)–Jan. 17, 2006–Pressure from management or the Board to meet unrealistic business objectives and deadlines is the leading factor most likely to cause unethical corporate behavior, according to a new survey on business ethics. The desire to further one’s career and to protect one’s livelihood are ranked second and third respectively as leading factors. That’s according to a global survey commissioned by American Management Association (AMA) and conducted by the Human Resource Institute (HRI).

The AMA/HRI survey on “The Ethical Enterprise” included responses from 1,121 managers and HR experts from around the world. The survey was conducted in conjunction with AMA’s affiliates and global partners, including Canadian Management Centre in Toronto, Management Center de Mexico in Mexico City, Management Centre Europe in Belgium and AMA Asia in Japan.

According to the AMA/HRI survey, working in an environment with cynicism or diminished morale, improper training about or ignorance that acts are unethical, and the lack of consequences when caught are the next leading factors likely to cause unethical behavior. These factors are followed by the need to follow the boss’s orders, peer pressure/desire to be a team player, desire to steal from or harm the organization and, paradoxically, wanting to help the organization survive.

And what solutions does the study suggest?

“Laws and regulations are, and will remain, the most influential external drivers of corporate ethics, but legislation is no substitute for the presence of leaders who support and model ethical behavior,” said Edward T. Reilly, president and CEO of American Management Association. “Corporate leaders need to communicate ethical values throughout the organization, but they must do more than talk the talk in order to establish and sustain an ethical culture,” Reilly added.

A couple of notes:
First, note that the headline of the press release is somewhat misleading: technically, the survey isn’t about unethical corporate behaviour. If you look at the full report, you’ll see that the researchers “asked participants about the top three reasons that were most likely to cause people to compromise an organization’s ethical standards.” So, it’s about individual behaviour. Sometimes, of course, an action by an employee affects outsiders in a way that might make observers want to call it a “corporate action.” (Example: Exxon rightly gets blamed, as a corporate entity, for the Exxon Valdez spill, despite the fact that running the oil tanker aground wasn’t really a corporate decision.) But that’s not really what the study seems to be about. It seems to be about unethical behaviour by employees, regardless of whether that behaviour amounts to a corporate action. (The work of ethics scholar Peter French is a good starting point for thinking about when it is that an action is a corporate action. See his “The Corporation as a Moral Person,” originally printed in the July 1979 American Philosophical Quarterly, but anthologized in various textbooks.)

Second, notice that the various factors listed are not mutually exclusive. It’s quite likely that unethical behaviour often results from a combination of, say, pressure to perform, the need to follow the boss’s orders, and a desire to help the organization survive. In fact, it seems quite unlikely that the need to follow the boss’s orders operates independently of the desire to further (or protect) one’s career. And a lack of (or improbability of) negative consequences must almost always be a factor.

Third, note (if you haven’t already) that little of this is very surprising. These are pretty much the factors most people would expect to see at play. But I guess it’s good to have actual evidence.

Fourth, this study only shows what factors people believe to cause unethical behaviour. It’s not about what actually does cause unethical behaviour.

Finally, note that there’s no mention of whether any of these causal factors amount to an excuse. (An electronic search of the full study finds zero occurrences of any of these words: blame, culpable, culpability, exculpate, justify, justified. There is one occurrence of the word “excuse.”) It would be interesting to know if the people surveyed thought any of the reasons given actually work to mitigate blame; it would be even more interesting for someone to work out a good argument about that.