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7/27/2019 Topic Summary_Ethics, Sustainability, CSR
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Contemporary OB in Action: Topic Summary: Corporate social responsibility, sustainability, and
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Topic Summary: corporate social responsibility, sustainability and ethics
Topic Summary Learning Goals
1) Define why corporate social responsibility and sustainability are relevant fororganizational behavior
2) Discuss the differences between the shareholder and stakeholder perspectives.3) Explain the business case and ethical mandate case for corporate social
responsibility and sustainability.
4) Describe the triple bottom line, corruption, and integrity and how they factorinto corporate social responsibility.
Key terms
Applied ethicsBenefit Corporation
Corporate social responsibilityCorruption
EthicsGeneral ethics
Globalization impact on ethicsHuman sustainability
IntegrityInstrumental values
MoralsNormative ethics
OmbudsmanPay to play schemes
Shareholder value approachStakeholder approach
SustainabilityTerminal values
Triple bottom lineValues
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Corporate Social Responsibility
This topic summary reviews social responsibility, which has become an important
consideration for all types of organizations. For-profit enterprises, not for profit, as well
as governmental organizations show increased awareness of the impact of their activities
on society and the environment. Two major considerations go into an organizations
actions around corporate social responsibility (CSR) and sustainability:
1) The business case approach which emphasizes strategy, stability and survival2) The ethical mandate approach which emphasizes values, ethics and integrity
Corporate social responsibility
Corporate social responsibility (CSR) refers to the expectations society holds of
an organization and how the society chooses to uphold the organization to those
expectations. Although it is popular to say that a companys primary responsibility is to
make a profit, there are other expectations for companies in addition to making profits.
Organizations have responsibilities to society, the environment, the community in which
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they operate, and to their employees.1 This diverse set of goals are called the triple bottom
line which includes 1) on economic viability including profits; 2) environmental concern
which focus on minimal impact on the natural environment; and 3) concern for the health
of its community which includes fair treatment of employees.2 Essentially, calls for
greater corporate social responsibility suggest that all organizations, and corporations in
particular, have a responsibility to consider their impact on society that goes beyond
simply following the rule of law. Sustainability is referred to as the set of voluntary
actions that an organization takes to demonstrate its environmental and social
responsibilities.
3
When an organization takes action in order to minimize its impact on
the natural environment and takes care to insure the long-term maintenance of the
environment, we call this environmental sustainability.
Environmental sustainability
In 1968, an ecologist by the name of Garret Hardin published an essay in
Science magazine4 that described a situation that has come to symbolize the
current state of the environment and the way it was managed. He a time when
all the cattle owners who lived in a small villager shared a common grazing area called
the commons. In these conditions, each owner had an incentive to maximize his number
of cattle because he had no restriction on the amount of grass his cattle could eat. But
there was a problem. If all the cattle owners took advantage of this incentive, then soon
the entire pasture would be overrun with cattle and the common land would no longer be
sufficient to sustain the cattle. This scenario, where common resources are shared, but the
incentive to exploit these common resources for individual gain, has become known as
the tragedy of the commons.Organizations have become more aware of their impact on
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the environment and have begun to realize how their own actions look similar to the
cattle ranchers who try to take advantage of the shared resources. Due to this growing
concern about the impact that on the environment, organization have begun to
demonstrate their concern for preservation of the natural environment. Examples of
organizational actions that show responsible use of resources include recycling, use of
renewable resources, minimizing use of hazardous chemicals, and water and energy
conservation efforts.
Human sustainability
Another approach to sustainability focuses on broader concern for human factors
such as the need for medical insurance, working conditions, work life balance, stress, and
inequality.Human sustainability or social sustainability is the voluntary actions that an
organization takes to focus on the well being of people within the organization and those
who belong to the greater community in which it operates. Organizations can choose to
focus on both environmental sustainability and human sustainability or choose to focus
on one area over another. For example, Wal-Mart, the largest employer in the United
States has developed a focus on environmental sustainability, while at the same time, it
paid its employees 15% lower than other retailers. In addition, 46 % of children whose
parents worked at Wal-Mart remained uninsured.5
Advocates of human sustainability are often concerned with unfairness and the
concern that many organizations take advantage of workers, suppliers and customers for
the benefit of the company. For example, where organizations charge high fees for
certain transactions or engage in lending that overburdens the borrower or failing to pay
health insurance to workers. Other proponents of human sustainability offer that
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organizations have the knowledge and resources to effect social change in their
communities and should do so. In this instance, and organization operating in a
developing country might offer education programs to develop the basic skill set of their
workers.
With growing globalization, organizations increasingly have access to new pools
of labor in developing countries. Many companies are attracted to these labor pools
because they can pay these workers a fraction of the wage of a worker in a developed
country like the US, developing countries dont hold organizations to the same work
standards such as allowing for breaks, time off, and clean working conditions, and
because workers are less likely to object to poor working conditions. Critics have argued
that in fact, most workers choose to work under certain conditions and that these
conditions provide better options than the worker would otherwise have.6
The Role of Organizational Behavior: Shareholder vs. Stakeholder
Both arguments for CSR and sustainability hold merit in studies of contemporary
organizational behavior. Ethical scandals have been widely reported. While the actually
causes of these ethical lapses are varied, business schools and their students have not
been immune to criticism. Some of the blame for these scandals has been assigned to
higher education. Some critics have specifically pointed to the fact that business schools
in particular ignore the human and environmental concerns and instead focus on profits.
Because of this, students have an inadequate understanding of the need for organizations
to do more than what is legally mandated. Some observers believe that the values taught
by business schools as a primary driver of ethical lapses by organizations. One commonly
cited problem, thought to encourage unethical behavior is the predominance of the
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shareholder value perspective in education. Perhaps the most commonly cited advocate
of shareholder value perspective is economist Milton Freedman. He wrote that:
"The Social Responsibility of Business Is to Increase Its Profits. There is one and
only one social responsibility of business -- to use its resources and engage in
activities designed to increase its profits so long as it stays within the rules of the
game, which is to say, engages in open and free competition without deception or
fraud"7
Increasing shareholder value essentially means increasing the price of the stock.
The predominance of the shareholder approach, according to the critics, focuses on the
pursuit of self-interest at the expense of other values. The predominance of shareholder
value and its focus on shareholders at the expense of other groups who benefit or are
harmed, shows the influence that economic thought has had on thinking in business
schools. Courses in organizational behavior have begun to expand discussions from only
focusing on the business case for CSR to identify a more complete understanding of an
organizations responsibilities, including the ethical mandate to shareholders.
Critics of higher education often cite a study conducted by the Aspen institute. It
surveyed 2,000 masters level business students and found that those who believed that
maximizing shareholder value was the primary responsibility of a corporation increased
from the time they entered school to the time the completed their first year. This trend
may be changing, however, as more students report that companies should value
customers, another stakeholder group, above shareholders.8
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Dissatisfaction with the Shareholder model
The contemporary movement for a more complex argument for CSR grows out of
dissatisfaction with narrow definitions of business offered by Milton Fridman.9The
specific calls for CSR vary from concern for the environment associated with
sustainability, calls for corporations to consider their impact and their potential
exploitation of developing countries, or for corporations to consider following higher
ethical standards, or even the more radical notion that capitalism itself should be
transformed.
Stakeholder approach
An important challenge to Milton Friedmansshareholderapproach can be found
in the idea of a stakeholder approach.9 The arguments for CSR emerges primarily from
pressure from stakeholders such as the community, employees, regulators, customers,
suppliers, as well as shareholders.10As interest in alternative forms of corporations arise,
many corporations are reevaluating their impact on the environment, communities in
which they do business, their employees, and the larger society. One alternative approach
is the benefits corporation or a flexible purpose corporation, which is a legal entity that
holds a corporation legally accountable for a broader set of stakeholders than simply
shareholders. Although only a few states recognize Benefits Corporations, there is
growing interest in this form of business. Under a Benefits Corporations charter,
company directors must consider not only profits of the businesses, but will consider the
companys broader impact as well.11 Researchers remain skeptical and argue that
organizations efforts at corporate social responsibility are no more than public relations
stunts designed to hide corporate goals which involve unrelenting pursuit of profits and
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economic driven activities.12 Some universities have responded by encouraging their
students to sign codes of ethics or asking students to promise they will do well when they
enter the work world.
Corporate Social Responsibility and Sustainability: A Business Case
Several perspectives offer a business case for organizations to promote corporate
social responsibility. These include organizational strategy, stability and survival.
Organizational Strategy
Some people have argued that greater social responsibility can be a good
organizational strategy because it aligns the organizations social efforts with its overall
mission. Strategy professor Michael Porter offers a remedy to address the perception that
corporate social responsibility is simply a faade. He argues that a corporations efforts at
social responsibility should be aligned with its corporate strategy.13 An example that
Porter provides is when a multinational corporation that does business in Africa, and
works to solve the AIDS problem as part of its strategy. This multinational corporation
will be able to have access to the African workforce, and it has a business case to work to
alleviate the AIDS crisis, because lowering the rate of AIDS infections expands the pool
of healthy labor for the corporation.
Organizational stability and survival
Another important perspective that makes a business case for considering social
responsibility in organizations comes is the organizational stability and survival
argument. When organizations fail to pay attention to their impact on the human and
natural environment, they can find themselves at risk. There are several examples where
ethical lapses have resulted in the total collapse of the organization. For example, Barings
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Bank in 1995, Britains oldest commercial bank, collapsed due to the risk behavior of one
of its employees. Arthur Anderson, one of the most respected and largest accounting
firms in the world, went out of business due to its perceived complicity misrepresenting
financial statements at Enron, one of the biggest bankruptcies of all times. Other issues
related to organizational survival and stability focus on product safety, health and safety,
environmental concerns.14
Corporate Social Responsibility and Sustainability: An Ethical Mandate
A business case perspective is not enough to justify corporate social responsibility
in organizations. Many see CSR as an ethical mandate where organizations should be
concerned with ethics, values and integrity.
Ethics
Ethics is the general study of behaviors and judgments. Ethics is an attempt to
describe the rational for engaging in certain behaviors and about the appropriateness of
these behaviors and rational. According to one ethicist, Discussions of ethics begin
when people find their code of prevailing rules [provide] unsatisfactory for explain
events.15 Discussions of ethics fall into three basic categories:
General ethics seeks to describe general moral standards. Of particular interest arethe origins of these standards and what they suggest about the culture that follows
them.
Normative ethics is an attempt to find universal principles about what is
appropriate and inappropriate behavior to measure right from wrong.
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Applied ethics focuses on areas of interest and how to make practical judgmentsabout moral issues where there is either great disagreement about what constitutes
right and wrong or where right and wrong are not at all clear.
Concerns about ethics are not with businesses alone. Governments too can be the
source of concern. One commonly used tactic seen in government is a so calledpay-
to-play scheme where an organization pays a government official in order to gain
access to influential officials or win a contract with the government.
Globalization
One reason that interest in corporate social responsibility from an ethical mandate
approach has increased is the result of globalization. Increased globalization offers
organizations the ability to dodge undesirable regulations in one jurisdiction and set up
operations in another jurisdiction where they can dodge oversight. As such, nations have
less ability to impose regulations that may support human rights values, environmental
values or cultural values. Companies can avoid ethical and legal implications of corrupt
or questionable business practices by moving operations to countries that have laws that
prove more favorable to business.16
Since, ethics cannot always be enforced, organizations have to define
and create standards of moral behavior, judgment and decision making as part of their
organizational culture. What people value in an organization impacts this culture as well.
Values
Values are distinct from ethics, although ethics and values may be interrelated in
some cases. Values describe an individual or organizations beliefs. Where ethics are
generally more about distinguishing right from wrong, values describe a broad set of
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priorities around what is important. Ethics follow rules and since ethics can be tied to
rules, there are formal approaches to defining ethics and ethics codes in organizations.
Values focus on the choices that are made. Typically, values are considered within a
system of beliefs know as a values system.
Values Clarification
Values clarification is the process of clarifying or become more aware of ones
own individual values. Values clarification involves understanding and evaluating ones
own values where the goal is to increase self-awareness and confront inconsistencies or
uneasiness with ones own values.
The values clarification process is useful to understand
person and organizational fit and person and job fit. If an individuals values are in
conflict with the values in the organization or even the requirements of a job, it may not
be an optimal work situation.
The Rokeach values survey offers a list of two sets of values terminal, or values
that serve as goals to be achieved, and instrumentalvalues, values that serve in the
process of achieving those values.17 Terminal values are the destination we hope to
achieve and Instrumental values describe our internal motives and how we attempt to
achieve certain outcomes in life.
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Table: Terminal and Instrumental Values
Terminal Values Instrumental Values
A comfortable and prosperous life Ambitious
An exciting life (Stimulating) Broad-minded
A sense of accomplishment (last contribution) Capable
A world at peace (free from war and conflict) Cheerful
A world of beauty (beauty of nature and the arts) Clean
Equality (Brotherhood, equal opportunity) Courageous
Salvation (eternal life, saved) Forgiving
True friendship (close companionship) Helpful
Honest
Imaginative
Values Orientation
Another values orientation framework describes the values systems in Western
Culture. This framework falls into three distinct categories: pragmatic, intellectual, and
human values.18
This framework suggests that peoples values from a Western Culture
can be sorted into three categories. Values orientation clarification helps people integrate
their values with others. An example of this conflict might occur if an employee (who
held to a human value of loyalty) was asked by her boss (who held to a pragmatic value
of cost saving) to fire an employee. This conflict could be resolved as both the employee
and boss express their values and work together toward a common goal.
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Table: The values categories of Western culture
Pragmatic Intellectual Human
usefulness and utility of an
idea.
rationalism and strengths of
ideas in the abstract
specific close personal
relationships such as family,
friends and acquaintances and how
things impact these relationships.
Values in this category
emphasize effort, the desire to
maximize output, with a focus
on measurement of output and
ways to determine relative
value across different
perspectives.
Values in this category
emphasize the intellectual
value and emphasize
perception of reality and a
set of concepts that explain
it. The intellectual values
orientation relies on logical
coherence, contextual
relevance, and meaning and
a well thought out
argument.
Values in this category emphasize
loyalty and consistency as they
relate to personal relationship.
Morals
Morals, like values, are individual or collective sets of preferences, but are more likely
to be judged as right or wrong. Morals are often thought of as the inner direction of
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ethics19 Morals describe an individuals rule around what is acceptable (right) versus
unacceptable (wrong).
Organizational Integrity
Organizational corruption occurs when an entire system engages in unethical
behavior. Whereas ethical lapse and moral decisions are often isolated events that can be
attributed to the actions of individuals, corruption implies the system itself is bad and that
unethical behavior cannot be attributed solely to an individual or individuals. Like ethics,
what is considered corrupt practices differs across countries and cultures. Corruption
often is associated with the illegitimate use of power in organizations. One way to think
about corruption is through a metaphor. This metaphor is that corruption is a disease that
must be cured and absence of corruption is a healthy, functioning organization. Another
challenge with defining corruption is that practices that constitute corruption differ across
cultures and countries have not only different practices but also different laws that define
and govern corruption.20
The idea of integrity has been offered as an alternative to the negative focus on
corruption.21 Organizations that demonstrate integrity track their risk relative to ethical
lapses by employees, have oversight, a culture of compliance and have a system in place
to report ethical breaches as they occur. Carter, a researcher at Yale, gives three criteria
for an organizational culture of integrity:
1. People in the organization clearly understand what is right and what is wrong;
2. People in the organization act on what they discerned to be right, even at personalcost; and
3. People openly link actions to understanding of right and wrong.22
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One system that organizations put into place to increase integrity is an
organizational ombudsman. An ombudsman is a person or group or people where
employees can go if they believe they have seen an unethical practice or a practice that is
not consistent with the organizations values. The ombudsman is then responsible for
following up on the concern and investigating to see if there is a problem. The
ombudsman may be an employee of the organization, or work outside the organization.
The ombudsman allows the organization to:
Build awareness of what constitutes ethical and unethical behavior, andunderstand the ethical implications of decisions
Clarify values of the employee and the organization Develop structural supports such as an ethical ombudsman who listens to
whistleblowers, institute clear rules to follow when ethical issues arise,
Foster a culture of openness and trust Include strict oversight and compliance by third parties
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OB Feature: Why is making ethical decisions difficult?
Ethical decisions are often difficult to make. Ethical decision making often
requires unsatisfactory choices, rational-economic models are not sufficient to solve a
problem, the ethical rules are often confusing and ambiguous, and we live in a society,
world with multiple competing values systems. When a decision has ethical implications
and some or all of these exist, a person is said to be in n ethical dilemma, described as a
situation where taking an action requires taking into account multiple ethical
considerations.
Leadership often requires taking decisive actions in ambiguous situations. While
leaders must weigh options and make choices, many times those choices are between
competing but equally important demands. This requires not only taking action, but also
being able to provide compelling reasons for those actions.
Competing values Difficult to ascertain correct answer What may be viewed as right by one group is wrong by another (moral
incommensurability)
require making difficult and often unsatisfactory decision often rational-economic models are not sufficient to solve a problem confusing and ambiguous outcomes live in a society, world with multiple competing values system
Some have argued that ethical decisions are difficult because most decisions often
involve an ethical dilemma, a complex situation where two or more competing choices.
When a person faces an ethical dilemma, no choice is completely desirable.Applied
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ethics helps people in organizations make decisions when they are faced with an ethical
dilemma. Applied ethics guides leaders and managers as they integrate ethics into their
day-to-day behavior as they try to determine what is appropriate and inappropriate
behavior. Applied ethics offers five distinct tests to a behavior. Each test is a question
that a person should ask themselves before or during the ethical decision making process.
New York Times test. Ask your self: How would I feel if my actions were printedin the front page of the New York Time for everyone to read? This questions
helps you determine how your actions would appear to the average person. If you
answer the question, No, I would not like this on the front page of a major news
paper because I would be embarrassed or ashamed, then you should not do the
action.
The compliance test. This compliance test asks you. Would my actions break anyregulations or written policies? If you actions break regulations or policies, then
you should not participate in the activity.
The legal test. The legal test asks a similar question to the compliance test but itasks whether or not you are breaking any laws. You should ask, does my action
break any laws?
The culture test. The culture test asks are my actions consistent with the culture inwhich I work or among my coworkers. What would my peers say? In many cases
your actions may not break a law, a regulation, or a specific company policy, but
it may threaten the culture of the organization nonetheless.
The values test. The values test asks: How does this relate to my values? Will I beable to live with myself if I engage in these actions?
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Applied ethics also looks at the governance structure of organizations to see if
certain types of governance structure make more or less ethical decisions. The role of
corporate governance has been of increasing interest in light of several high profile
ethical challenges by members of boards of directors at major companies.
What to do to improve your values ethical decision making
Recognize and describe personal values and their influence on decisionmaking
Account for multiple competing demands inherent in decision making Develop a Personal Ethic of Leadership
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OB at work: Mike McLaughlin shows how corporate social responsibility is the
business of every employee
Mike McLaughlin spends time each day considering the health and well being of
his customers, his employees, and his community. In the morning, he analyzes the impact
a new product may have on the environment. In the afternoon he speaks with a supplier
that might adopt a new farming practice to boost yield. How does this effect his
companys aspiration for organic products? Before he heads home, he sits down with one
of his employees to discuss staffing. It turns out that the company is sponsoring the
employee to perform volunteer work for the community, while still on the companys
payroll and a short-term replacement may be needed.
With all the time he spends thinking about human, organization, and
environmental sustainability, you might think he is the head of Human Resources or
perhaps even the Chief Corporate Responsibility Officer in his company, but he isnt. He
is the Vice President of Operations for a company that manufactures and sells energy bars
and other food products.
A key part of Mikes job is to ensure that the raw materials that go into those
products come from reliable sources. To ensure that the farmers and other suppliers meet
the companys high standards, his company has instituted a rigorous review process. The
standards vary by product and may include the use of organic materials, no use of
hormone supplements in animals to boost output, and trying to achieve maintaining
minimal impact on the environment. Of course, the products must also taste good and
meet customer needs. Perhaps the most important job he has is to ensure product safety.
In the food business, he argues for a dedicated focus to food safety and a focus on the
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long-term health of the business, not simply short-term profits and production. An
ethical business factors day to day decisions into the long term goals of the business, he
says.
Mike feels lucky to work for a company that considers social responsibility part
of its mission. Ive always been attracted to companies that have a strong culture
directed towards more than simply short term profits, Mike says. He likes to say that the
energy bar company is hard on results but soft on people. This kind of organizational
culture provides a great ethic for running an organization, especially a high growth
business. The company is engaged in an intense effort to do good, do well, and is
passionate about its brand, he notes.
Many organizations focus on one bottom line: profits. A few inspired companies
may focus on the triple bottom line consisting of profits, community, and environment.
The energy bar company focuses on five bottom lines, what the company calls The Five
Aspirations. These include an aspiration for business, for the brand, for its people, for
the planet, and for the community. In fact, each of these five aspirations are measured and
factored in when bonus time comes around. The important thing from a management or
leadership perspective, says Mike, is to confront all five aspirations in every decision I
make, but to realize that not all aspirations will be achieved in every decision.
This may seem like a surprising set of goals for a company whose intention is to
make money. The company represents a small, but growing trend among businesses that
see themselves as playing a larger role in society and the environment. The mission
moves beyond the simply goal of making profits. Mikes employer has joined with other
companies in the region that hold similar values. The collaboration focuses the efforts of
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up to 20 companies on something of importance and might include cleaning up the
oceans or building affordable housing. These companies and the mindset of their
employees are representative of a new mindset among businesses that adopt practices of
corporate social responsibility.
Whether identifying new suppliers of protein, ensuring the safety of his products,
supporting the community through volunteer activities performed on company time, or
further considering the impact on the planet, Mike McLaughlin represents a new kind of
company leader whos concern goes beyond profits, to building a better world.
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Spotlight on Research: Does goal setting lead to unethical behavior?
Can people in organizations be so motivated to achieve a goal that the goal
encourages them to engage in unethical behavior? Recent research reveals that, under
certain circumstances, goals can motivate unethical behavior. A group of researcher had
noticed a trend in organizations. Some organizations were so focused on achieving short-
term goals, that they set policies that motivated unethical behavior. For example, one case
found that Searss auto repair shops routinely overcharged their customers, conducted
unnecessary work, and often delivered less than acceptable work. The motivating force: a
$147 per hour sales goal. It seemed that sales goals overshadowed other factors like
customer service, quality, and honesty. But were goals really to blame for this nationwide
problem? To find out, the researchers created an experiment controlled environment to
find the effects of goals and incentives as motivators of unethical behavior.
The researchers relied on an anagram task to first determine what was an
appropriate performance goal. In an anagram task, participants in the study are asked to
take 7 letters and create as many words as they possibly can using these letters. For
example, if given the letters a, t, c, m, e, r, o, the participants in the study might create
words such as to, at, come, . . .
For the study, the participants were divided into three groups. Researchers
provided each of the three groups with different instructions. Group one was told simply
to do your best. For the second group, researchers set the goal for each participant to
make nine words from the list of 7 letters. A third group was given the same goal as
group 2, make nine words, but this group was given $2 each time they achieved the goal.
Each group went through several rounds of anagram tasks. Prior to the experiment, each
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group was paid to participate in the experiment. Group one and two were each paid $10.
Group three was provided an envelop of $1 bills and told to take out $2 for each word
that was done correctly.
At the end of the experiment each participant recorded his or her own success rate
on the task, essentially tallying the number of correct words they produced for each
anagram. This is where the researchers identified the unethical behavior. Because in some
cases, there was a great discrepancy between what the participants reported as their score
and what they actually scored. The results appear to be influenced by the type of goal and
the rewards.
The first group, do your best took their 10 dollars, with no goal; they were
simply paid to do the work. The second group, which was directed to meet the goal of
nine words per task were given no money. The third group, which was offered a
monetary award for meeting goals, was instructed to take out $2 for each word that met
the goal, returning the remaining money in an envelope.
As confirmed by prior research, the participants instructed to do your best
scored the lowest, the goal setting group with no incentive scored second, and the goal
setting with incentive scored the highest on actually production. However, the researchers
found no statistical difference between the actual performance between these three
groups. For statistical purposes, each group produced about the same number words. In
terms of what members from each group reported however, there were significant
differences from actual production. The table below summarizes the three groups. As can
be seen, the group instructed to do your best overstated actual production by about 10 %,
the group with a goal, but no incentive overstated by about 22 %, and the group with a
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goal and a monetary incentive overstated actual production by 30 %. The research
supported the notion that goals and incentives increase unethical behavior as
demonstrated by over-reporting of production. Interestingly, it wasnt only the group that
had a financial incentive to misrepresent their production (eg. Group 3), even the group
with no financial incentive, but who had been instructed to meet a high goal (e.g., Group
2), that misrepresented their production.
Group Instructions Reward cheating
index
How much the
group on
averageoverstated
actual
productivity
Average # ofwords perround
1 do your best $10 simply fordoing the task
10. 5 % 5.46
2 set goal ofcreating 9words perround
no paymentreceived
22.7 % 5.83
3 set goal ofcreating 9words perround
$2 per word 30.2% 6.17
The study revealed something else. Those people most likely to misrepresent their
production were those who missed the mark by just a little. In other words, the closer the
person was to accomplishing the goal, but had not reached it, the more likely they were to
misrepresent their production. The study suggests that falling just short of your goal
actually increases unethical behavior.
The study has several implications for managers. It suggests that some managerial
practices, like goal setting, can actually be harmful to the organization and to fostering an
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environment of ethical behavior. Also, managers need to consider not just about
motivating employees, but what exactly are they motivating employees to accomplish.
This research reveals that managers need to consider, more fully, the unintended
consequences of goal setting and other managerial motivation techniques.
*Based on the articles: Ordez, L.D., Schweitzer, M.E., Galinsky, A.D., & Bazerman,
M.H. (2009). Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal
Setting,Academy of Management Perspectives, 23(1), 6-16 and Schweitzer, M.,
Ordez, L. D., & Douma, B. (2004). The Dark Side of Goal Setting: The Role of Goals
in Motivating Unethical Behavior. The Academy of Management Journal, 47, 422-432.
References
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(2/3):95 - 105. Mark Starik, Gordon Rands, Alfred Marcus, & Timothy Clark,
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Freeman, Jeffrey S. Harrison, Andrew C. Wicks.Managing for stakeholders. New
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11 The story of Patagonia and its quest for a new corporate status can bee seen at
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13
Michael E. Porter & Mark R. Kramer. 2006. Strategy and society: The link between
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17M. Rokeach 1973. The nature of human values. New York: Free Press.
18Richard Boyatzis and Anne McKee, 2005. Resonate leadership. Cambridge, MA:
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19Frankena, 1973.
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20For more on difference in definitions of corruption across cultures see. Donaldson,
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62. J. H. Davis & J. A. Ruhe, 2003. Perceptions of country corruption:
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21D. Christopher Kayes, T. M. Nielsen, and D. Stirling 2007. Building organizational
integrity.Business Horizons, 50, 61-70. 25Michael E. Palanski, Francis J.
Yammarino, 2007. Integrity and Leadership: Clearing the Conceptual Confusion,
European Management Journal, 25, 3, 171-184.
22
Stephen L. Carter 1996.Integrity. New York: Harper Perennial.