On Understanding the Human Nature of Good and Bad Behavior in Business: A Behavioral Ethics Approach

The numerous scandals in business, such as those at AIG, Tyco, WorldCom, Enron and Ahold, have made all of us concerned about the emergence of unethical and irresponsible behavior in organizations. Such widespread corruption in business and politics has, as result, prompted a growth of interest in the field of business ethics. At the same time, however, within the academic world it is also recognized that to tackle those unethical actions in an efficient way, the field of business ethics needs to integrate insights from behavioral science. In this inaugural address I focus more closely on the benefits that a behavioral approach can bring to the field of business ethics. In presenting these benefits, I draw a distinction between prescriptive and descriptive approaches and outline how the field of psychology can help in integrating these two perspectives so that we can move towards a more comprehensive understanding of behavioral business ethics. This integration is illustrated by my own research addressing how sanctioning and regulation systems affect behavior, the benefits of procedural fairness and the workings of trust repair strategies. Finally, I formulate some implications for academia, the government and economics.business ethics;behavioral ethics;descriptive;trust repair;sanctions;procedural fairness

Give and you shall receive. Give more and you shall be honored. Experimental evidence for altruism as costly signaling.

In two studies, we measured the degree and manner of reciprocation of a public good in subsequent two-by-two interactions. Both studies consisted of two phases: a public good phase and a subsequent give some game (i.e. a gradual Prisoner's dilemma game). In the first study, the public good was a financial game in the lab. In the second study, the public good games were real life student projects. The observed behavior in the subsequent interactions was consistent with the reciprocity rule, but only up to the fairness norm of equality. Students who had invested more than their fair share, did not receive more financial returns than those who had invested a fair share. However, despite the lack of financial benefits, these high investors were preferred more as future team mates (Study 1), or received more social rewards (Study 2). We interpret these findings in terms of altruism as costly signaling.Altruism; Cooperation; Costly signaling; Prisoner's dilemma game; Reputations; Studies;

Why companies should value passionate leaders

In times of corporate scandals, companies have a strong motive to create ethical awareness among their employees and increase the effectiveness of fairness policies. Many companies agree with the idea that when establishing an ethical climate, the right type of leadership is needed

On Understanding the Human Nature of Good and Bad Behavior in Business: A Behavioral Ethics Approach

The numerous scandals in business, such as those at AIG, Tyco, WorldCom, Enron and Ahold, have made all of us concerned about the emergence of unethical and irresponsible behavior in organizations. Such widespread corruption in business and politics has, as result, prompted a growth of interest in the field of business ethics. At the same time, however, within the academic world it is also recognized that to tackle those unethical actions in an efficient way, the field of business ethics needs to integrate insights from behavioral science. In this inaugural address I focus more closely on the benefits that a behavioral approach can bring to the field of business ethics. In presenting these benefits, I draw a distinction between prescriptive and descriptive approaches and outline how the field of psychology can help in integrating these two perspectives so that we can move towards a more comprehensive understanding of behavioral business ethics. This integration is illustrated by my own research addressing how sanctioning and regulation syst

Are prosocials unique in their egalitarianism? The pursuit of equality in outcomes among individualists.

The present research aims to elucidate to what extent the motive to ensure equality in outcomes is general and to what extent it interacts with other important motives such as maximizing own or collective gains. Because individuals may have different considerations and motivations in decision-making situations, it is likely that people with a different social value orientation will respond differently to an unequal distribution of outcomes. Contrary to our expectations, not only prosocials care about equality in outcomes. In study 1, we found that individualists choose to forego personal gains, despite obvious selfish reasons to cooperate, when outcomes were distributed unequally. In a second experiment we replicate this finding and show that individualists, just as do prosocials, demand equality in outcomes in interdependent situations. Our studies suggest that typifying individualists as solely being concerned about enhancing personal outcomes is too limited.Cooperation; Decision making; Demand; Distribution; Equality; Personal; Research; Social Value Orientation; Social values; Studies; Tit-For-Tat; Value;

Leadership and Fairness: The State of the Art

Research in leadership effectiveness has paid less to the role of leader fairness than probably it should have. More recently, this has started to change. To capture this development, we review the empirical literature in leadership and fairness to define the field of leadership and fairness, to assess the state of the art, and to identify a research agenda for future efforts in the field. The review shows that leader distributive, procedural, and especially interactional fairness are positively associated with criteria of leadership effectiveness. More scarce and scattered evidence also suggests that fairness considerations help explain the effectiveness of other aspects of leadership, and that leader fairness and other aspects of leadership, or the leadership context, may interact in predicting leadership effectiveness. We conclude that future research should especially focus on interaction effects of leader fairness and other aspects of leadership, and on the processes mediating these effects.Leadership effectiveness;Fairness

Feel good, do-good!? On consistency and compensation in moral self-regulation

Studies in the behavioral ethics and moral psychology traditions have begun to reveal the important roles of self-related processes that underlie moral behavior. Unfortunately, this research has resulted in two distinct and opposing streams of findings that are usually referred to as moral consistency and moral compensation. Moral consistency research shows that a salient self-concept as a moral person promotes moral behavior. Conversely, moral compensation research reveals that a salient self-concept as an immoral person promotes moral behavior. The present study’s aim was to integrate these two literatures. We argued that compensation forms a reactive, “damage control” response in social situations, whereas consistency derives from a more proactive approach to reputation building and maintenance. Two experiments supported this prediction in showing that cognitive depletion (i.e., resulting in a reactive approach) results in moral compensation whereas consistency results when cognitive resources are available (i.e., resulting in a proactive approach). Experiment 2 revealed that these processes originate from reputational (rather than moral) considerations by showing that they emerge only under conditions of accountability. It can thus be concluded that reputational concerns are important for both moral compensation and moral consistency processes, and that which of these two prevails depends on the perspective that people take: a reactive or a proactive approach

Being “in Control” May Make You Lose Control: The Role of Self-Regulation in Unethical Leadership Behavior

In the present article, we argue that the constant pressure that leaders face may limit the willpower required to behave according to ethical norms and standards and may therefore lead to unethical behavior. Drawing upon the ego depletion and moral self-regulation literatures, we examined whether self-regulatory depletion that is contingent upon the moral identity of leaders may promote unethical leadership behavior. A laboratory experiment and a multisource field study revealed that regulatory resource depletion promotes unethical leader behaviors among leaders who are low in moral identity. No such effect was found among leaders with a high moral identity. This study extends our knowledge on why organizational leaders do not always conform to organizational goals. Specifically, we argue that the hectic and fragmented workdays of leaders may increase the likelihood that they violate ethical norms. This highlights the necessity to carefully schedule tasks that may have ethical implications. Similarly, organizations should be aware that overloading their managers with work may increase the likelihood of their leaders transgressing ethical norms