Managing for ethical conduct (1) Geoffrey G. Bell, PhD, CA University of Minnesota Duluth October, 2003

A model of ethical behavior Individual characteristics: Moral development Multiple ethical selves Situational factors: Work context Reward system Roles & expectations Peer behavior Resource scarcity Observed Behavior Constraints of observation

Consequences of model We must be careful in attributing causes of behavior. What we may think is caused by “ethical” or “unethical” people may be importantly influenced by situational factors. We must make sure we’re accurately observing what’s going on. By changing elements of the work environment, we may be able to importantly modify people’s behavior. Sloganeering is rarely effective.

Multi-dimensional personalities According to the text, people are trained from childhood to have multiple facets to their personalities. People use ethically neutral terms to define the conduct of business (“bluffing;” not “lying”). Ken Lay is cited as an example of a highly multi-faceted individual.

The power of reward systems Reward (and punishment) systems importantly influence a person’s behavior at work.  Note: I didn’t use the term “determine” behavior, but “influence.” Other factors influence the rewards → behavior relationship. People will normally behavior in ways that are rewarded.  Note “the fallacy of expecting A while rewarding B.”  What does the organization reward? Is that what we want to reward?  Nick and extra work. People will also look at how others’ behavior is rewarded or punished (social learning theory).

Some conclusions People who behave in an unethical manner may not be “bad apples.” Rather, there may be important systemic factors that lead them to behave in an undesirable way. Controlling the reward / motivation system may importantly influence employees’ behavior, but that too is influenced by other factors. Make sure you’re really rewarding desired behavior. Make sure there’s a consistency between what you espouse and what you reward.