27 Lies Your Business Ethics Training Needs to Address: Analyzing the First Seven

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This is part one in a four part blog series on the psychology behind bad behavior. In this blog I will cover the first 7 reasons good people do bad things and how we can use this information to modify business ethics training. Stay tuned for posts two, three and four for the remaining 20 lies people tell themselves to justify bad behavior.

When I was still in elementary school my mother had a bumper sticker made for her car that said “Pobody’s Nerfect.” She told my sister and I that she knew she wasn’t a perfect driver – ie. she might “accidentally speed” or cut someone off, but if she had this bumper sticker on her car others might be more forgiving of her driving mistakes. Sometimes I think employees have this same, “bumper sticker” mentality. It’s not a one-to-one comparison, I’m not suggesting for example that your employees think they can make trades off of insider stock tips and expect to go unpunished, because they are human and hey, humans make mistakes. But, I do think that people tend to justify behavior they know to be illegal, for one reason… or 27.

The Professor of Business Ethics and Integrity Management at the Rotterdam School of Management, Dr. Muel Kaptein, postulates 27 psychological reasons why good people knowingly do bad things. By delving into Kaptein’s reasearch, perhaps we can better understand how and why your employees justify bad behavior, and in turn, modify company communications and compliance training to address those lies.

Let’s take a look at the first 7 psychological reasons why good people do bad things, as featured in Business Insider:

1. Tunnel Vision

Tunnel vision is when employees have a single-minded focus. The best example I can think of is sales. Every sales staff member has goals, and balancing compliance with obtaining goals can be difficult, especially for sales professionals who work on international accounts where facilitation payments are seen as an everyday part of doing business. In order to meet his or her sales goals, you might have an employee who chooses to make facilitation payments to close a deal.

Takeaways:

First, it’s important to understand that facilitation payments do happen. Lori Tansey Martens, President of International Business Ethics Institute likens facilitation payments to tipping in the U.S. Here tipping is customary, but in countries like Japan it is frowned upon. Likewise for Chinese New Year, it is the custom in China to give gifts of cash in red envelopes. However, if a U.S. company gave away cash as part of Chinese New Year it would be recognized as a bribe. The tough part? Not participating would be viewed as rude or cheap to the Chinese. So what the heck are we supposed to do?

As part of a broad initiative to address tunnel vision, top-level and mid level management need to communicate the value of compliance to employees within the company – this will emphasize that doing the right thing is highly valued. Achieving sales goals should never be done at the expense of compliance, because, as we know, government probes, fees and reputation damage are not worth it. If you have more questions about how to navigate cross cultural challenges, like those mentioned above, check out this on-demand webinar.

2. The Power of Names

Have you ever told a lie, but referred to it instead as “improving the truth?” Suddenly it doesn’t seem so bad, right? After all, improvements are good things. Changing the way we refer to bad behavior has the effect of downplaying the severity of that behavior. Instead of “cooking the books,” maybe your genius has allowed you to come up with some “creative accounting” that will allow you to hide company losses for another day. Hey, it gives you a chance to recoup those losses, right?

Takeaways:

Be forthright with your employees, let them know via training and other awareness materials that both “insider trading” and “information sharing” come with the same prison term. You can even turn it into an interactive activity for different departments. Task accounting with coming up with positive names for fraud, money laundering, etc. and then link those terms to the widely recognized illegal activities they are associated with. If you can identify and apply the appropriate negative connotation to these seemingly benign versions of very malignant words and phrases, you have the opportunity to take away an employee’s ability to downplay illegal behavior.

3. Social Bond Theory

When you are one of 2 million employees, how will anyone notice what you do? It’s kind of like being the valedictorian in high school and going off to college only to realize that everyone in your macroeconomics class was the valedictorian of their high school (#wakeupcall). Suddenly you feel less like an individual and more like a tiny, tiny unimportant ant. So why not cheat a little to get ahead? There are so many people, no one will notice. Except they do notice.

Takeaways:

The idea of social bond theory does not have to come to fruition in large organizations. Instead, ensure each of your employees feels that they have something unique to contribute to the organization. A simple way to achieve this is by having job roles and responsibilities written for each position in the company. You can also create smaller, more specialized teams within the organization and clearly communicate to each team their team and individual goals. This can be reinforced by department or team specific compliance training.

4. The Galatea Effect

We are who we perceive ourselves to be. I may not be a parent, but I cringe when I hear people talk ill of their kids, whether it be in front of them or not. This past weekend, I was hanging out with friends of a friend and they said of their daughter, “she’s a great kid, but she’s as dumb as a rock.” Now my thought here is “sure, not everyone is a rocket scientist”, but to call your kid dumb? That just seems like you are letting them off the hook to me- you’re giving them an excuse not to try their best. Behavior works the same way. If your employees perceive themselves as unethical, if they think you don’t expect much of them – well, then don’t expect much of them!

Takeaways:

I think often businesses forget to slow down and encourage or develop employees. If business is good, you probably have your hands full making sure product releases launch on time, deals are closing, etc. But forgetting about your number one customer – your internal customer – is a big mistake. Aside from the fact that employees are needed to perform specific job functions to keep the organization running (HR, accounting, sales, etc), your employees are also what help differentiate between a good company and a great company. If your employees perceive themselves to be ethical and make the hard, albeit right decisions, they won’t disappoint. So help them get there! Some of your employees undoubtedly already have a strong sense of self and demand the best of themselves, but some of them might not be there yet.

How can you help your employees shape their perception of themselves? Communicate! Tell them you know they are ethical and give examples of their actions that prove your point.

5. Time Pressure

My sophomore year of undergrad I participated in a psychology study. As with most psychology studies you go in and have no idea what they are researching. They sat me down in a small room and gave me some menial task to perform. I was then instructed not to get up or leave the room until I was done with the task. About half way through the task, I heard yelling coming from the room next door. From what I could tell it was girlfriend and a boyfriend having a fight- it was rather quick. I heard a door slam and then sobbing. My first thought was, ok, well this is obviously part of my simulation – they want to see if I will get up or not. My second thought, does it really matter if this is part of the simulation?! I should get up!

In Kaptein’s research one of the factors that influenced good people do to bad things was a time constraint. In my case I was supposed to finish my task before leaving the room. In other research when given a time constraint, 90% of people will choose to ignore a situation that demands their help when they are already under a time constraint. The implication for compliance? Think back to the first reason good people do bad things – tunnel vision. While tunnel vision does not have to have a timing element it often does – think about sales goals. What are the chances that you will participate in illegal sales activity, bribes, etc. if you are up against a time constraint? What if you need to close an international deal to get your quarterly bonus?

Takeaways:

When I first started at The Network our VP of Marketing Operations said if there is one piece of advice I can give you it’s this: Over communicate. She was right. Making sure you have an open line of communication between employees and management can go a long way to improving compliance. If your employees feel comfortable coming to you with project time constraints, you can work with them to come up with legal, alternative solutions to problems, instead of leaving them with a feeling of, “I just have to get this done, no matter what it takes.”

6. Acceptance of Small Theft

Do you remember the movie Office Space? I think everyone who works in corporate America has probably watched the movie – it’s like a rite of passage to enter the working world! Anyway, if you haven’t seen it, the main premise of the movie centers around Peter, a mid-level employee who has an awful boss and hates his job. In attempt to get back at the company (for being awful), Peter and his friends devise a way to divert fractions of pennies from Initech’s accounting system into a personal bank account they have set up. Fractions of pennies! Not tens of thousands of dollars–fractions of pennies, because they thought no one would notice. Of course the scheme goes sideways when they accidentally misplace a decimal point in the virus’ code and steal over a quarter million dollars in a couple of days.

Takeaways:

Small theft happens! Employees take pens, toilet paper, coffee – it’s probably even widely known they are doing it. Don’t let them do it! Allowing employees to participate in small theft makes them feel more comfortable with taking things, they might even begin to feel entitled to these things and before you know it you could have a full blown fraud scheme on your hands. Ok, maybe that is a little extreme, but the message is clear. If you turn a blind eye to employees stealing small ticket items, it’s telling them you don’t care and they might become emboldened to try and take more. Think about including a similar scenario in one of your business ethics training courses to communicate to employees that any theft, no matter how small, is not acceptable.

7. Self-Serving Bias

By 2020 nearly half of your workforce will be comprised of millennials. These are the 80 million young adults born between 1976 and 2001. And, do you know what the parents of these young adults told them? I do, I’m one of them. Our parents told us we are special, that we can do anything we want. So how is that a bad thing and how does that affect your compliance program? Self-serving bias is human nature, most humans automatically think they are better than their peers, so add to that multiple generations that were explicitly told they are better and you’ve skewed that bias even more.

Here’s where ethics and compliance comes in. If one of your employees perceives that their abilities have been unrecognized or that they have been wrongly passed up for a promotion over someone else, they could start to feel that your organization is unjust. Inevitably in most situations, this is not the case and they merely haven’t been presented with the whole picture, but nevertheless the feelings are still there. If your employees begin to see the organization as unjust, they too will start to hold the organization in lower regard and may partake in unethical behavior.

Takeaways:

Communicate! Do I sound like a broken record? Let your employees know early on that they can talk to you – present examples of situations that might arise (like the one I described above) and tell them if something like this does arise and they have questions, that they should come talk to you. Sometimes if we are left to our own devices and imaginations, we will come to the worst possible conclusions, which in most cases is not the reality. So in an effort to mitigate the risk of employees coming to their own conclusions, explicitly tell them why you have made a certain decision and talk through any concerns or misunderstandings they may have. Talking is relatively easy and pain free, but dealing with the unethical actions of a disgruntled employee is not.

I hope Dr. Kaptein’s first seven psychological reasons good people do bad things has given you insights and possibly sparked some ideas for how you can shape your corporate communications and business ethics training. Check back in for analysis of the remaining 20 psychological phenomena that affect human behavior.

For more information on business ethics training check out these resources:

Blog: The “Coffee and Naps” School of Business Ethics Training: Part One
Blog: 3 Reasons Millennials Need Interactive Compliance Training Courses
Blog: How to Reduce Brand Disasters, While Building Brand Ambassadors: Social Media Compliance Training


 

Topics:  Best Management Practices, Employment Policies, Ethics, Training

Published In: General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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