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Business Ethics

Why Your Workplace Ethics Program Is Failing

By Josh Young Feb 28, 2017

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In a recent experiment, behavioral economist Dan Ariely demonstrated the disturbing tendency of people to engage in increasingly dishonest behavior when exposed to existing corruption.

For the experiment, participants were given the chance to win real money based off of die rolls, having them choose either to take the number of dollars displayed on the top of the die or the bottom. And while the participant was instructed to make their choice of top or bottom number before the roll, they weren't required to tell the technician until after the die had been rolled.

Not surprisingly, the participants proved "very lucky" in their rolls, claiming that they had picked the higher number more often than was statistically likely.

Is your management setting the right ethical tone for your business? Watch: What is Tone at the Top? to learn why their actions are so important.

As a second phase of the experiment, the technician running the test attempted to solicit a meager $3 bribe from participants, offering them the chance to switch their experiment group and raise their winnings cap from $4 to $40.

A harrowing 90 percent of participants chose to pay the bribe. And those that paid the bribe cheated even more on their die rolls.

Not only did these participants feel more comfortable lying after paying the bribe, but they were also more comfortable stealing. As an additional phase to the experiment, the technician gave participants the ability to pay themselves from envelopes containing $50, instructing them to remove their winnings and leave the rest in a pile of envelopes from other participants. Most of the bribe payers took more money than they had actually won.

What Went Wrong?

As troubling as the results of these experiments are in the context of general morality, they are downright frightening when the topic shifts to anti-corruption and business ethics. But by exploring the underlying factors that led these otherwise honest participants to engage in such dishonest behavior, we can gain insight into how to limit similar ethical lapses from entering our businesses.

Authority problems

Ariely argues that within his experiment, the dishonest technician undermined the participants' existing social norms. In other words, the technician's tolerance for corruption coupled with his position of power led subjects to lose confidence in their own convictions of right and wrong.

To create an ethical culture within your business, your need to drive anti-corruption and ethical standards from the top down.

If your employees see C-level executives and senior management taking anti-corruption seriously -- drafting clear guidelines, participating in training, enforcing zero-tolerance for ethics violations -- they will more likely embrace their individual responsibility in complying with corporate conduct guidelines.

Conversely, as Ariely describes it: "If the person running the system is telling us that corruption or dishonesty or something is allowed, our understanding of what is acceptable changes instantly."

Creeping corruption

As participants were exposed to the initial bribe, their moral compasses tended to drift, freeing them up to make more dishonest decisions.

These results are reflected in the findings of multiple, separate research projects that found that people are more likely to rationalize unethical behavior if the opportunities for misconduct are presented gradually rather than as an abrupt change. In fact, even those charged specifically with oversight and monitoring responsibilities will be more likely to overlook creeping misconduct.

Similarly, in a follow-on experiment when Ariely's team increased the bribe to $12, 81 percent of participants refused to pay it. However, these presumably "honest" subjects were still more likely to cheat on their die rolls than those subjects that were never approached with the opportunity to bribe - meaning that merely the exposure to bribery is likely to make people behave more dishonestly.

To combat this phenomena, have senior managers draft conduct guidelines that clearly outline what is and is not acceptable behavior. At the same time, establish mechanisms throughout the business, such as auditing committees and analytics tools, to keep watch for potential policy violations.

By being proactive, your business can better stamp out these minor violations before they have the chance to snowball into more rampant corruption.

The Next Step

By making it clear that ethical behavior is a priority for everyone in the company -- even the most powerful -- your organization can create a culture that limits the opportunity and incentive for employees to misbehave. Even better, research indicates that with a small "nudge" in the right direction, your business can subconcsiously encourage employees to behave more honestly.

To learn more about our ethics and code of conduct training courses, you can fill out the form on the right to request a demo.

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