An Ethics Expert Explains How To Maintain Ethical Employee Culture In Your Organization
Professor Muel Kaptein explains why bad apples can exist in the cleanest of barrels.
By Mark Travers, Ph.D. | January 5, 2023
I recently spoke to Muel Kaptein, a faculty member at Erasmus University Rotterdam, to understand how organizations can manage unethical employee behavior effectively. Here is a summary of our conversation.
What prompted you to explore unethical behavior in ethical organizations?
Research shows that the frequency of unethical behavior within organizations has remained relatively steady over the past decades. The usual explanation for this is that organizations are not really motivated to prevent unethical behavior.
However, I see many organizations that invest many resources and time in improving their ethics. This triggered me to think about the idea that, when an organization becomes more ethical, forces are activated that threaten the ethics of an organization.
When these forces exist it would mean that the more ethical organizations become the more difficult it is to become more ethical and stay ethical. In that case, it would present an explanation for why people in good organizations do bad things.
How would you define an 'ethical' organization?
Following the approach of the organization viewed as a barrel, the ethical content or level of an organization is the extent to which the organizational context prevents employees from behaving unethically.
Different models have been developed to define the ethical content of an organization. In my previous research, I have developed a model and scale to assess the ethical culture of an organization.
The ethical culture consists of dimensions like:
- Role-modeling by management
- Clarity of ethical standards
- Room to discuss ethical dilemmas
- Room to speak up about unethical behavior
My previous research also shows that the more ethical the culture of an organization is (i.e the better the barrel becomes), the less likely their employees are to behave unethically.
Unethical behavior is then defined in terms of behavior that is morally unacceptable to the larger community, such as:
- Sexual harassment
Could you walk us through four threatening forces to an ethical organization and their corresponding effects?
To understand the forces that emerge and intensify when an organization becomes more ethical, I used the literature on organizational life cycles. This literature suggests that threatening forces in the external and internal environment of an organization vary with the stages in the life cycle.
To explore whether the ethical development of organizations may activate threatening, countervailing forces, I started to explore which forces in and around organizations can arise when organizations become more ethical. I identified four forces and, for each force, I identified two corresponding effects:
- Upward force. The first force is about the expectation, in and around organizations, that the organization should become even more ethical. The belief that something good can and should be better triggers this force. I call this force the upward force because the expectation is that the ethics of an organization should go upward.
- Downward force. A second force is in the opposite direction in the sense that it tries to pull down the ethics of an organization. This downward force is about unethical behavior becoming more seductive when an organization becomes more ethical. This force is triggered by the belief that the better something is, the more tempting badness becomes.
- Backward force. The third force is about the expectation that the organization should reduce its investments in ethics. This force is triggered by the belief that when something is good, it can and should stay good with less resources. This force can be called a backward force because it pressures the organization to go back to the time when the organization was less ethical and paid less attention to ethics.
- Forward force. The fourth force is in the opposite time direction in the sense that it is about staying the same in the future. This forward force is about the expectation that the organization should continue its ethics and not change it. This force is triggered by the belief that when something goes well, it should remain well.
I found for each force two effects that may be activated when organizations become more ethical and that increase the likelihood of unethical behavior:
- The Gold digger effect: The more ethical an organization becomes, the more its imperfections are scrutinized until they are found.
- The High-jump bar effect: The more ethical an organization becomes, the higher the ethical standards are set until they cannot be met.
- The Retreating-cat effect: The more ethical an organization becomes, the more the oversight on the organization decreases until this situation is abused visibly.
- The Forbidden-fruit effect: The more ethical an organization becomes, the more attractive unethical behavior becomes until it could not be resisted.
- The Cheese slicer effect: The more ethical an organization becomes, the lesser the investment in ethics until the investment is no longer enough.
- The Moving-spotlight effect: The more ethical an organization becomes, the more the focus is on what is not good, until what is good is no longer good as a result.
- The Repeat-prescription effect: The more ethical an organization becomes, the longer its way of managing ethics continues until it becomes outdated.
- The Keeping-up appearances effect: The more ethical an organization becomes, the more defects are disapproved of and hidden until they cannot be hidden anymore.
How do you suggest an ethical organization cultivate an ethical employee culture?
Many organizations cultivate an ethical employee culture by embedding an ethics program. An ethics program usually consists of a code of ethics, training in ethics (e-learning and classroom), ethics officers, ethics reporting lines (whistleblowing hotlines), and ethics discussion methods (such as an ethics dilemma game).
Research shows that a good ethics program has a positive impact on the ethical culture of an organization. However, the most important way to improve the culture is by management creating the culture directly.
Management can cultivate an ethical employee culture directly by demonstrating role-modeling behavior, explaining to employees what their ethical responsibilities are, motivating employees to act in an ethical way, sharing ethical dilemmas with employees, addressing unethical behavior, and rewarding ethical behavior of employees.
What are some practical takeaways from your research for people occupying leadership positions as well as employees in an organization?
When the identified threatening effects are present and become stronger, those who manage the ethics of their organization should define how to best deal with these effects if these are to be prevented from leading to unethical behavior. These managers can try to change the beliefs that shape the effects.
For example, they can try to convince those who set the standards for the organization that becoming or being an ethical organization does not necessarily imply that new responsibilities should always be added (the high-jump bar effect), or to convince those who evaluate the organization that becoming or being an ethical organization does not necessarily mean that there will be no future defects in the organization (the keeping-up appearances effect).
My research presents arguments to help convince those who create the effects that their actions, even if their motive is to reduce unethical behavior, can tragically lead to more unethical behavior. However, when the beliefs cannot be changed sufficiently, managers can try to prevent the effects from leading to unethical behavior by mitigating the effects.
For example, when external supervisors retreat (the retreating-cat effect; which usually happens when an organization becomes more ethical), organizations can increase their own oversight in general; or organizations can set an absolute minimum level of investments in ethics management to prevent that they are going to divest in ethics when they become or are ethical (the cheese slicer effect).
Understanding the threatening effects is relevant for those who regulate, supervise, and evaluate the ethics of organizations. On one hand, it helps them understand that unethical behavior in an organization should not always be caused by bad people and bad organizations (the bad barrel approach) but also by good people and good organizations (the good barrel approach).
This insight may hopefully soften our evaluations of unethical practices within and by organizations.
On the other hand, society plays a large role in creating the effects. For example, when organizations meet an ethical standard, it is usually society that raises the standard or introduces a new standard (the high-jump bar effect). Or regulators and inspectors that especially want to find unethical behavior at those organizations that become or are ethical (the gold digger effect).
So an understanding of the effects will help society to change the way ethical standards are set, regulated, inspected, and evaluated.
In developing and testing my model, I gave many presentations to regulators, compliance officers, and managers. During all presentations, participants recognized the threatening effects. I received many actual examples of how the presence of each of the eight effects leads to negative, devastating outcomes.
For example, a board member said that her company recently stopped improving its compliance program because the regulator never gave positive feedback, was never satisfied, and always wanted a higher perfection.
People inside and outside organizations should wonder if they are victims of one or more of these threatening effects and if they (co-)create one or more of these threatening effects.