Written by Debra Shapiro

Corporate malfeasance wreaks devastating losses (e.g., job-loss, loss of health care, loss of career-long savings, and more) for countless victims, which include consumers and investors in addition to corporations’ employees. This was vividly demonstrated by the collapse of Enron, Worldcom, Arthur Andersen, and Theranos, among others, after fraudulent practices by these corporations’ employees got exposed. Understanding how to prevent employees from behaving unethically is thus a matter of, both, practical and theoretical importance.

Fortunately, management scientists have conceptually and empirically identified several key actions likely to encourage employees to behave ethically and avoid behaving unethically. One of these actions is to increase the salience of the following message in organizations: ethical-behaving, unlike “bad actors” (unethical-behaving) employees are strongly valued, hence also strongly rewarded. A second action, which is in practice an extension of the first, is to name the specific behaviors deemed “ethical” and deemed “unethical” (hence the behaviors likely to be rewarded and punished, respectively).

With regard to what the ethical behaviors might be in general (for all people), these typically pertain to demonstrations of moral traits, among which includes being honest, compassionate, and fair (Aquino & Reed, 2002). With regard to what the unethical behaviors might be, these can be “self-serving” or “pro-organizational” in nature—that is, deceptive acts performed to benefit the interests of one’s self versus one’s organization, respectively. Examples of self-serving unethical behaviors include, among others, employees claiming credit for work that others did, hiding work-related errors they have made, calling in sick when they really aren’t, recording hours they did not actually work, requesting reimbursements for “client-related expenses” they did not incur, and stealing organizational property (e.g., office supplies or equipment). Examples of “pro-organizational” unethical behaviors include, among others, employees describing and/or documenting for organizational stakeholders whose organizational support they need to maintain a favorably exaggerated picture of their organization’s product-attributes, services, financial records, and/or other organizational performance-indicators (cf., Umphress & Bingham, 2010). Less unethical behaviors are likely to occur by employees who understand that “unethical” describes all of these behaviors— pro-organizational as well as self-serving ones.

A third action that enhances employees’ ethicality is giving them ethical-behaving leaders and coworkers. This is because employees generally mimic behaviors they see in organizations, (Robinson & O’Leary-Kelly, 1998), especially those of leaders who are likely to be employees’ most visible role-models from which they learn how to behave (cf., Bandura, 1991). These dynamics, supported by empirical observations across several studies, led Mayer et al. (2013) to conclude “it takes a village” (i.e., ethical-behaving employees at all ranks) to encourage ethical behavior in organizations. Ways to demonstrate ethicality in the workplace include, among other things, exemplifying the moral traits noted above, reporting unethical acts one sees or becomes aware of, and/or personally displaying moral symbols in their work space (Mesdaghinia et al., in press). Additionally, ethicality is demonstrated when employees decline requests they may receive, even from leaders, for unethical pro-organizational behaviors (Mesdaghinia et al., 2021).

In summary, encouraging ethical behavior and discouraging unethical behavior in organizations requires ethical-behaving employees at all levels of the organization— especially at the top. This is why management scholars have long noted that “ethical leadership,” which entails being a moral person as well as a moral manager (Brown, Treviño, & Harrison, 2005), is key to building and maintaining ethical culture in organizations.

Undergraduates at the University of Maryland who demonstrate they are ethical leaders are likely to be sought by employers seeking to strengthen their organizations’ ethical culture. To help YOU become an ethical leader, join the Student Center for the Public Trust (StudentCPT). The UMD StudentCPT is an interdisciplinary organization (open to students of any major) comprised of the highest caliber students at UMD interested in questions of ethical leadership, corporate citizenship, as well as the development and implementation of best practices. During the fall semester 2021, C-BERC will be accepting applications for membership.

 

REFERENCES

Aquino, K. & Reed, A. 2002. The self-importance of moral identity. Journal of Personality and Social Psychology, 83: 1423-1440.

Bandura, A. 1991. Social cognitive theory of moral thought and action. In W. M. Kurtines & J. L. Gewirtz (Eds.), Handbook of moral behavior and development, vol. 1: 45-103. Hillsdale, NJ: Erlbaum.

Brown, M. E., Treviño, L. K., & Harrison, D. A. 2005. Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97: 117-134.

Mayer, D.M., Nurmohamed, S., Treviño, L.K., Shapiro, D.L., & Schminke, M. 2013. Encouraging employees to report unethical conduct internally: It takes a village. Organizational Behavior and Human Decision Processes, 121: 89-103.

Mesdaghinia, S., Eisenberger, R., & Shapiro, D.L. in press. Prohibitive voice as a moral act: The role of moral identity, leaders, and workgroups. Journal of Business Ethics.

Mesdaghinia, S., Eisenberger, R., Lewis, B., Liu, Z., Wen, Xueqi, Qiu, F., & Shapiro, D.L. 2021. How leaders drive unethical behavior. Working paper.

Robinson, S.L. & O’Leary-Kelly, A.M. 1998. The influence of work groups on the antisocial behavior of employees. The Academy of Management Journal, 41 (6): 658-672.

Umphress, E. E., Bingham, J. B., & Mitchell, M. S. 2010. Unethical behavior in the name of the company: The moderating effect of organizational identification and positive reciprocity beliefs on unethical pro-organizational behavior. Journal of Applied Psychology, 95: 769-780.