The Idea in Brief
Companies have poured time and money into ethics training and compliance programs, but unethical behavior in business is nevertheless widespread. That’s because cognitive biases and organizational systems blind managers to unethical behavior, whether their own or that of others.
All these serve to derail even the best-intentioned managers:
- Goals that reward unethical behavior
- Conflicts of interest that motivate people to ignore bad behavior when they have something to lose by recognizing it
- A tendency to overlook dirty work that’s been outsourced to others
- An inability to notice when behavior deteriorates gradually
- A tendency to overlook unethical decisions when the outcome is good
Surveillance and sanctioning systems won’t work by themselves to improve the ethics of your organization. You must be aware of these biases and incentives and carefully consider the ethical implications of every decision.
The vast majority of managers mean to run ethical organizations, yet corporate corruption is widespread. Part of the problem, of course, is that some leaders are out-and-out crooks, and they direct the malfeasance from the top. But that is rare. Much more often, we believe, employees bend or break ethics rules because those in charge are blind to unethical behavior and may even unknowingly encourage it.