Why do people in good organizations do bad things?


Organizational ethics are experiencing a moment. It is now accepted that business leaders say they care about ethics as much as profit, and sometimes even more than profit– although such claims are certainly not always reflected in reality.

But the centering of ethics in business highlights an interesting issue: as organizations become more ethical, the strength of the forces pushing those organizations in other unethical directions also potentially increases.

Muel Kaptein, professor of business ethics and integrity management at Erasmus RSM University in Rotterdam, the Netherlands, offers this theory in a recent article. Kaptein says this helps explain why organizations sometimes struggle to improve, despite their intentions, or why places with high ethical standards sometimes fail to maintain those standards, and even collapse.

What is an ethical organization?

Over the past 20 years, Kaptein suggested, we have seen banks, insurance companies and pharmaceutical companies go through scandals, then make improvements, only to be hit, a few years later, by another scandal. Some people might attribute this to poor practices that were not addressed but simply glossed over. But Kaptein has a different interpretation: Organizations do indeed improve ethically, he suggests, but that very improvement presents them with new problems to solve.

Cyclical failures in corporate ethics don’t happen “because they’re bad or have bad attitudes,” Kaptein said. “No, it’s because it’s harder to stay ethical than to become ethical.”

Several different models exist for assessing an organization’s degree of ethics, and Kaptein points out that previous research by himself and others has shown that individuals in ethical organizations can be motivated to act. After ethically. The factors that oppose this trend are therefore not an inevitable slippery slope. But for anyone who has ever experienced some of the problems of working in a “good” place, they are fascinating.

Why might people start acting unethically?

Kaptein suggests that there are four “forces” that can destabilize an ethical organization and gives examples of the changes in behavior each could bring about.

The first is “upward” strength, or a potential tendency for an ethical organization to keep trying to improve. What’s wrong with that? An undesirable side effect, the research suggests, is that employees are encouraged to keep looking for problems even where there are none. This could result, for example, in a manager putting undue pressure on their team, or in employees becoming more deeply stressed than necessary, or even creating problems to solve that don’t exist.

The need to always improve can also prove detrimental by suggesting that nothing is ever good enough.. If, every time a high level is reached, the bar is raised, it will eventually be raised to an incredibly high level, the document suggests.

Forbidden fruit and other temptations

Just as there is a “bottom-up” force that pushes organizations to become ever better, there is also a “top-down” force: the more an organization becomes ethical, according to the article, “the more seductive unethical behavior becomes.” .

An example he gives is the “forbidden fruit” effect. In other areas, “banning smoking, marijuana, cybersex, and graffiti has been shown to make them more appealing,” the paper notes. In a commercial context, he cites an article from 2013 which reviewed vehicle emissions testers, showing that as testing standards increased, it became more attractive to handle them, as it would appeal to anyone whose vehicle passed the test. A second article quoted showed that ratings agencies developed high standards for providing credible information to investors, “but once these standards were established, inflated ratings began to increase in frequency as they became more profitable since their advice was reliable”.

The paper presents two other forces (backwards and forwards), each with potential associated effects that could thwart an organization’s attempts to improve.

The work is theoretical, but it could prove useful to business leaders who find themselves caught in one or a combination of the pitfalls Kaptein identifies. And it helps shed light on the complex reasons why it seems so difficult even for purpose-driven companies to keep improving and meeting their own standards, and those of the world, increasingly. higher.


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