The Psychology Behind Unethical Behaviour

HBR, 2019-04-12

Crossing the Ethics Line

  • Certain top managers treat their employees and service staff like dirt, and no one is there to stand up to them. This behaviour is due to the following psychological dynamics:

Omnipotence – feeling so entitled that usual rules of decent behaviour don’t apply to them;

Cultural numbness – playing along with the perpetrator and gradually accepting and embodying the deviant norms;

Justified neglect – it looks wise to keep the relationship with the powerful and ignore the ethical breaches.

  • Sadly, the same dynamics are responsible for the breaches in the corporate arena, which often result in corporate fraud.

  • Corporate life (especially on the top and with investor pressure) is navigating the grey area between good and bad faith. It’s part of life, and there’s no universal set of rules or principles providing clear answers to every possible ethical question.

Identifying and Dealing with these Dynamics

  • Omnipotence. Feeling of invincibility, untouchability and hyper-capability. Breaking rules is OK to get what’s rightfully theirs. And the higher one gets up the corporate ladder, the more it becomes a liability: if there’s no honest feedback (with occasional “no”), the more withdrawn the manager becomes at the detriment to the company.

  • Owning one’s flaws is the counterweight to omnipotence. The people capable of saying no and providing honest feedback (especially at a career risk) must be cherished. [MK: For instance, in Aviasales all top managers encourage constructive dissent, and we’re far from alone here.]

  • Cultural Numbness. This is a dark side of the corporate culture where people start taking the group’s values as their own. The cognitive dissonance of one’s own values and the demonstrated (not claimed) values eventually gets less irritating. This is not an immediate process, and that’s why it’s all but impossible to recognize the slow descent to the unethical behaviour.

  • Look for signs of moral capture. A good test is whether one would allow publishing a story about a certain behaviour on the front page of a major newspaper – or not. It’s hard to be able to look at one’s own organization from the outside, so it’s up to the trusted circle to tell the manager to challenge themselves in their thinking and attitudes.

  • Justified Neglect. [MK: Looking at a famous fraud triangle, for fraud to occur, three conditions need to be present: Opportunity, Incentive and Justification. The Incentive can be positive – a reward – or negative – losing the job.] Most managers face an occasional choice of not saying something to keep their jobs or slightly stepping over the line to get an annual bonus. Over time people become more skilled at justifying their behaviour.

  • Creating formal and social contracts with employees [MK: as well as weeding out the culture of blame] is part of the solution. Doing the right thing must be encouraged and rewarded. Creating a list of “We don’t do it” things and making it part of corporate training is essential for the company’s well-being regardless of whether compliance insists on it or not.