Copyright © London Business School 2006 (original) (raw)
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We combine prior research on ethical decision-making in organizations with a rational choice theory of corporate crime from criminology to develop a model of corporate offending that is tested with a sample of U.S. managers. Despite demands for increased sentencing of corporate offenders, we find that the threat of formal sanctions does not directly affect the likelihood of misconduct. Managers’ evaluations of the ethics of the act have a significant effect, as do outcome expectancies that result from being associated with the misconduct but not facing formal sanctions. The threat of formal sanctions appears to operate indirectly, influencing ethical evaluations and outcome expectancies. There is also support for the influence of obedience to authority, with managers more likely to engage in misconduct if ordered to do so by a supervisor.
Encouraging Ethical Behavior in Organizations: Punishment as Magnitude of Consequences
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Adhering to recent arguments that unethical decision making is driven by the underlying psychological processes, the purpose of this study is to investigate the role of individual psychographics (i.e., cognitive style, decision confidence, emotional intelligence, and attitude toward risk) in ethical decision making within a business context. Using a novel approach, the researchers capture ethical decision making using a computer-simulated market context and couple the results with survey data. The results of the regression analysis reveal that an individual's cognitive style, decision confidence, emotional intelligence, and attitude toward risk play a significant role in ethical decision making. Participants with an analytical cognitive style were less likely to engage in unethical means to accomplish business objectives compared to those with intuitive or adaptive cognitive styles. Similarly, greater confidence in decision making, higher emotional intelligence, and a greater preference for risk were also found to increase the chances that an individual avoids engaging in unethical decision making. Finally, the effect of cognitive style was found to be stronger than the other factors examined in this research. Theoretical and practical implications are discussed.
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Journal of Pacific Rim Psychology, 2022
This article reports two studies evaluating the impact of moral intensity, work experience, and gender on the propensity (attitude, behavioral intention, and subjective norm) for unethical behavior of Venezuelan students and employees responding to different organizational scenarios, and controlling the effects of moral disengagement and empathy. One study singled out moral disengagement as a covariate, and the other did the same with empathy. In both studies, moral intensity, work experience, and gender acted as independent variables. Each study consisted of around 400 participants (totaling 801 participants in both studies): one-half were students without work experience and the other half were employees. For manipulating moral intensity, we used six scenarios describing ethically questionable situations. After reading each of the scenarios, participants answered the Multidimensional Ethics Scale to measure propensity for unethical behavior. After completing this phase, participants responded to the moral disengagement scale in Study 1 and the empathy scale in Study 2. This research did not find concluding, significant effects of moral intensity on the measures of the propensity for unethical behavior. Employees expressed higher intentions of acting unethically than students, though the effect was small (ϵ 2 Study 1 = .016. ϵ 2 Study 2 = .026). Gender had no significant effect on attitude and subjective norm; but, in behavioral intention, men's scores were significantly higher than women's in Study 1, but not in Study 2. Moral disengagement had a stronger effect than empathy on the propensity for unethical behavior (ϵ 2 moral disengagement: attitude = .225, behavioral intention = .179, subjective norm = .159. ϵ 2 empathy: attitude = .016, behavioral intention = .011, subjective norm = .010). The authors highlight the relevance of contrasting findings from less-developed countries with those from developed countries, commonly found in the literature, and suggest avenues for further research.
European Journal of Law and Economics, 2016
Legislation addressing corporate criminal liability has been the subject of worldwide debate ever since the financial scandals of the early 2000s. Under current regimes, firms must observe such compliance requirements as internal monitoring mechanisms, the purpose of which is inducing firms to detect the wrongful conduct of their agents. We develop an analytical framework for identifying when, and to what extent, firms may find it beneficial to adopt these regulatory devices. We conclude that more productive firms, those operating in sectors with more market power, and firms whose managers have more opportunities for criminal activity are more likely to prevent wrongful conduct-either through monitoring or the payment of efficiency wages. When the potential returns to illegal activities are high or the firm is large, internal monitoring is probably the optimal strategy of crime prevention; in contrast, smaller firms typically proceed by paying efficiency wages (or ignoring crime). This paper also analyzes the role of the State's legal capacity as well as the effects of interactions between the structure of reputational losses and the firm's market power.
Why employees do bad things: Moral disengagement and unethical organizational behavior
Personnel Psychology, 2012
We examine the influence of individuals' propensity to morally disengage on a broad range of unethical organizational behaviors. First, we develop a parsimonious, adult-oriented, valid, and reliable measure of an individual's propensity to morally disengage, and demonstrate the relationship between it and a number of theoretically relevant constructs in its nomological network. Then, in 4 additional studies spanning laboratory and field settings, we demonstrate the power of the propensity to moral disengage to predict multiple types of unethical organizational behavior. In these studies we demonstrate that the propensity to morally disengage predicts several outcomes (self-reported unethical behavior, a decision to commit fraud, a self-serving decision in the workplace, and supervisor-and coworker-reported unethical work behaviors) beyond other established individual difference antecedents of unethical organizational behavior, as well as the most closely related extant measure of the construct. We conclude that scholars and practitioners seeking to understand a broad range of undesirable workplace behaviors can benefit from taking an individual's propensity to morally disengage into account. Implications for theory, research, and practice are discussed.