Ethical Behavior Starts at the Top

Organizations must both model and encourage ethical decision making.
Ethical Behavior Starts at the Top

THE WAY A LEADER chooses to act can have systemic ethical consequences for the entire organization. Two recent studies explore just how the actions of an organization’s leaders can impact the behavior patterns of employees—and the bottom lines at their companies.

Imitation protects the unethical.

When leaders are getting away with unethical behavior, employees are more likely to act unethically without punishment. That’s the finding of three scholars who study management and organizations: Christopher W. Bauman of the Merage School of Business at the University of California, Irvine; Leigh Plunkett Tost of the University of South­ern California’s Marshall School of Business in Los Angeles; and Madeline Ong of the University of Michigan’s Ross School of Business in Ann Arbor.

Bauman, Tost, and Ong conducted five experiments. The first three involved Amazon Mechanical Turk, an online marketplace where businesses crowd-source human workers to perform tasks that computers are currently unable to do. In one experiment, the researchers asked Turk participants to watch videos of two people, whom they were told were completing puzzles for money under an experimenter’s supervision. In some pairings, the people (both actors) wore T-shirts and jeans; in others, one wore casual clothes, and the other wore a suit. In all pairings, one actor acted unethical-ly—for example, waiting for the exper­imenter to leave the room, then taking money out of the envelope even without completing any puzzles. The behavior of the other actor varied.

The Turk participants were then asked to assign punishments for mis­conduct they witnessed—in this case, to advise whether to ban the individual from future studies. The researchers found that observers were less likely to inflict punishments on those who imitated the bad behaviors of someone dressed in a suit, indicating a position of authority. Participants were more likely to assign punishment if they witnessed people committing the same bad behav­iors as those dressed as peers, or if those people committed different bad behav­iors altogether.

The researchers also found that while committing the same bad behav­iors as those in authority offered some protection to imitators, that protection “disappeared when people were told that the first person to break the rules was punished. It wasn’t necessary to provide details about how severely the first person was punished,” says Bauman. “It was sufficient to simply signal that the misdeed did not go unchecked.”

These findings, the co-authors write, “demonstrate how unethical behavior changes the environment in which subsequent behavior is enacted and evaluated.” They conclude that future research is needed to identify conditions that determine not only whether em­ployees commit unethical actions, but also whether they tolerate them when committed by others.

“Blame the shepherd not the sheep: Imitating high-ranking transgressors mitigates punishment for unethical behavior” appeared in the November 2016 issue of Organizational Behavior and Human Decision Processes. It is available at

Ethics must be at the core.

“Promot­ing core values is a way to engage em­ployees and increase their commitment and loyalty to the organization and at the same time encourage ethical decision making,” according to Marlene Neill, an assistant professor of journalism, public relations, and new media at Baylor University’s College of Arts & Sciences in Waco, Texas. Some companies even tie annual awards and job performance evaluations to how well the employee exhibits core values such as honesty and respect. For her study on what is known as employer branding or internal brand­ing, Neill interviewed 32 executives from 26 companies in 11 states.

Organizations spend about US$54 billion annually on orientation for new employees, which includes promoting company values, says Neill. But if work­ers come to believe employers do not “walk the talk” they espouse in orienta­tions and internal communications, they may decide that the company violated a “psychological contract,” she adds. That might lead to turnover, job dissatisfac­tion, distrust, and reduced performance, despite good salaries, benefits and chances to advance.

Employers can avoid those problems by linking ethics to reward systems, creating codes of conduct, offering employee training, conducting ethics audits, and creating ethics hotlines, Neill says. She also recommends that employers communicate ethics in rel­evant ways, perhaps through employee testimonials; review their core values to make sure they mesh with policies and reward systems; review recruitment and orientation materials to include core values; and review ethics programs to see if more resources are needed.

“The Influence of Employer Branding in Internal Communication” appears in the August 2016 issue of the Research Journal of the Institute for Public Rela­tions. The paper is available at

This article appeared in print in the March/April 2017 issue.