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The Psychology Behind Unethical Behaviour

4 May, 2020

On a warm evening after a strategy off-site, a team of executives arrives at a well-known local restaurant. The group is looking forward to having dinner together, but the CEO is not happy about the table and demands a change. “This isn’t the one that my assistant usually reserves for me,” he says. A young waiter quickly finds the manager who explains that there are no other tables available.

The group tries to move on but is once again interrupted by the CEO. “Am I the only one annoyed by the view? Why is there construction happening today?” he demands to know. The waiter tries to explain, but to no avail. “You really need to up your game here,” the CEO replies. The air is thick with tension. After the waiter walks away, someone makes a joke about the man’s competence. This seems to please the CEO, who responds with his own derogatory quip. The group laughs.

If you were present at that dinner would you let the CEO know that you disapprove of his language and behavior? Would you try to set a better example? Or stay silent?

This scene encapsulates three psychological dynamics that lead to crossing ethical lines. First, there’s omnipotence: when someone feels so aggrandized and entitled that they believe the rules of decent behavior don’t apply to them. Second, we have cultural numbness: when others play along and gradually begin to accept and embody deviant norms. Finally, we see justified neglect: when people don’t speak up about ethical breaches because they are thinking of more immediate rewards such as staying on a good footing with the powerful.

The same dynamics come into play when much bigger lines get crossed in the corporate arena: allegations of corruption at Nissansexual harassment charges in the media sector, privacy breaches at Facebookmoney laundering in the financial sector, and pharmaceuticals’ role in the opioid crisis.

While it is hard, if not impossible, to find evidence that leaders in general have become less ethical over the years, some are sounding the alarm. Warren Buffett, explaining Berkshire Hathaway’s practices in the annual letter shareholders, notes that he and vice chairman Charlie Munger

“…have seen all sorts of bad corporate behavior, both accounting and operational, induced by the desire of management to meet Wall Street expectations. What starts as an ‘innocent’ fudge in order to not disappoint ‘the Street’ — say, trade-loading at quarter-end, turning a blind eye to rising insurance losses, or drawing down a ‘cookie-jar’ reserve — can become the first step toward full-fledged fraud.”

Buffett’s note is important because it’s really about the majority of us:  neither saints nor criminals but well-meaning leaders who sometimes fail to consult their moral compass while speeding ahead in a landscape full of tripwires and pitfalls. For that majority, moral leadership is not simply a question of acting in good or bad faith. It is about navigating the vast space in between.

So how do you know when you, or your team, is on the road to an ethical lapse?  This article explores how to identify omnipotence, cultural numbness, and justified neglect in yourself and on your team, and offers a few tips on fighting each dynamic.

Read the full article by Merete Wedell-Wedellsborg here.

via Harvard Business Review , 12 April 2019

Photo by Ivan/Getty Images

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