Cheating, misconduct, deception and other forms of unethical behavior are widespread today, not just in business but in sports, government, schools, and many other arenas. While the media often focuses on extreme cases of cheating and sensational scams (such as Madoff’s ponzi scheme), less attention is paid to what researchers call “ordinary unethical behavior.”
For example: not reporting income on one’s taxes, buying clothing with the intention of wearing it once and returning it, stealing from one’s employer, or cheating on an exam. These forms of unethical behavior are often the results of ordinary people giving into the temptation to cheat when confronted with the opportunity to do so. When combined, these behaviors are extremely costly for both businesses and society.
On this page we describe some of the major areas of research addressing the nature and causes of ordinary, everyday dishonesty. (For simplicity, we use the terms unethical, immoral, and dishonest behavior interchangeably.)
IDEAS TO APPLY (Based on research covered below)
- Focus on the situations you place your employees into. Research suggests that people’s moral compasses are malleable and that various factors influence them. People do differ in their levels of personal integrity, but everyone is susceptible to environmental influences. Most people cheat under some circumstances. Ethical systems design is about changing those circumstances, rather than (or in addition to) trying to change the people.
- Walk the talk. It is critical for leaders to “walk the talk” (e.g. demonstrate ethical behavior rather than simply encouraging it) as their actions can have a profound influence on followers’ decisions to cross ethical boundaries. Peer influence is also very important since unethical behavior can be contagious. Creating honest cultures can reduce ethical failures by strengthening norms of appropriate conduct rather than strengthening rules.
- Consider both formal and informal structures and cultures. In organizations, both formal (e.g., reporting) structures and informal cultures (e.g., office norms) shape conduct. Both are important levers in reducing cheating behavior. Don’t make the mistake of focusing on only one.
- Balance outcomes with growth. Organizations need to measure outcomes. But don’t let outcome focus and goal orientation lead to “goals gone wild.” Cultivate a growth mindset in your organization, focusing on people’s efforts, improvements, and learning, rather than their talents, gifts, and outcomes. Growth mindsets lead to better performance and less cheating.
AREAS OF RESEARCH
- Does everyone cheat, or is it just the habitual cheaters? Lab studies repeatedly find that while not everyone cheats when presented with the opportunity, under some circumstances most people will do so to a certain extent. For instance, in a typical laboratory experiment examining cheating, people are asked to complete a task (e.g., do a math test under time pressure, roll a die) and then self-report their performance. The higher participants’ self-reported performance, the higher the payment they receive. The results usually show that people inflate their performance in order to earn more money, but only to a certain level above their real performance, and far below the maximum payoff possible. Additional research (Ariely, et. al, 2009) show that increased compensation often erodes performance.
- How do people justify their cheating? A common finding is that people don’t cheat as much as they can get away with; rather they cheat up to the point at which they can continue to believe that they are good people. Decades of research in social psychology have found that people strive to maintain a positive self-concept both internally and publicly. In addition, people typically value honesty, and have strong beliefs in their own morality. Thus, when facing the opportunity to cheat, people seem to experience a conflict between their desire to maintain a positive self-image by behaving honestly and their desire to advance their self-interest (e.g., get a financial benefit) by crossing ethical boundaries. One way to resolve this apparent conflict is to cheat only a little, reinterpreting the incriminated behavior as an honest mistake. In many situations people behave dishonestly just enough to profit from their unethicality (see Mazar et al. 2008, on how people use “inattention to moral standards” and “categorization malleability” to cheat while believing they are honest).
- Why do we let ourselves get away with cheating that we would condemn in others? We tend to be “moral hypocrites,” judging unethical behaviors in others but not in ourselves (Batson et al, 1999; Valdesolo and DeSteno, 2008). This disconnect between our judgments of others and ourselves is often not conscious, but rather is likely the result of very “ordinary” psychological processes. “Bounded ethicality” (Chugh, Banaji, and Bazerman, 2005) which compromises the unconscious and automatic processes that affect our ethical decision-making, enables us to see ourselves as ethical while engaging in behaviors we would judge as unethical for others. See our handout on Bounded Ethicality.
- What increases cheating? Research has found that several factors may increase people’s likelihood to cheat:
- Diminished self-control (i.e., the capacity to override impulses to assure actions are in line with goals and standards)
- Creativity (both one’s own creativity as well as creativity triggered by the situation or job one is in)
- Having room to justify one’s own behavior
- The use of stretch goals for performance
- Loss framing
- Insecure attachment
- A fixed mindset in which one’s abilities are not malleable
- What reduces cheating? Research has shown that interventions are most likely to reduce cheating if they increase the salience of a person’s sense of self. For example, people are less likely to cheat if they know they are being monitored. They’re also less likely to cheat in the presence of mirrors, evoking childhood memories, and even if they’re primed with nouns (“cheater”) rather than verbs (“cheating”). One study that demonstrates the importance of a salient sense of self was done (Shu et al. (2012)); they found that signing one’s name at the top of a form makes one more likely to fill out the form honestly than signing one’s name at the bottom. These studies show that when people are reminded of moral standards or of their sense of self, they are less likely to cheat.
- What factors have been shown to influence cheating in college students? A great deal of research has been done, much of it summarized in McCabe, Butterfield, & Trevino (2012): Cheating in college; Why students do it and what educators can do about it. Results show that students with low grade point averages cheat more, as do students who are involved in athletics, or fraternities and sororities. These findings suggest that the social context matters a great deal: Sports teams, fraternities, and sororities create environments in which cheating may be reinterpreted as helping a teammate, brother, or sister. Also important are students’ perceptions of peer attitudes and behaviors. If students perceive cheating as rampant among peers, they will cheat too. So, institutions that wish to address a cheating problem must create cultures of integrity. Honor codes are one approach that has been studied extensively and has been found to be effective if implemented seriously and consistently over time. As part of creating such a culture, it is important that students perceive the institution’s academic integrity policy to be understood and accepted among both students and faculty. And it is crucial that they perceive that those who cheat are disciplined.
- Do people look to norms more than to rules when it comes to ethics? When people face the decision to cheat, they often look to others to gain information about appropriate behavior. Lab experiments have shown that when people see others like them (e.g., their peers, or people they feel similar to) behaving unethically, they are more likely to cheat themselves. Interestingly, others’ exemplary ethical behavior affects their likelihood to behave honestly, but it has a weaker influence compared to others’ unethical behavior.
- HBS case studies of culture turnaround after experiencing ethical failures:
- Among the situational and social forces that lead people to cheat, which ones are the most influential?
- Do interventions that work in one context (e.g., using honor codes in education) work in others to reduce cheating?
- What is the long-term effect of interventions that reduce dishonesty? What can be done to make them more self-sustaining instead of fading away in a year or two?
- How we can best equip people for the ethical challenges they face?
TO LEARN MORE
- David Hershleifer and Usman Ali‘s (2015) research on “Opportunism as a Management Trait: Predicting Insider Trading Profits and Misconduct”
- Dan Ariely‘s research on cheating, described in his 2012 book “The (Honest) Truth about Dishonesty.” New York: HarperCollins Publishers. (public library)
- Bazerman & Gino (2012). Behavioral ethics: Toward a deeper understanding of moral judgment and dishonesty. Annual Review of Law and Social Science.
- Moore & Gino (2013). Ethically adrift: How others pull our moral compass from true north. Research in Organizational Behavior
- Mazar, N., Amir, O., & Ariely, D. (2008). The dishonesty of honest people: A theory of self-concept maintenance. Journal of Marketing Research, 45, 633–644.
- Francesca Gino discusses getting sidetracked by dishonest behavior:
- Here is an RSA animate of Dan Ariely’s book, The (Honest) Truth about Dishonesty:
- Robert Frank brings a Darwinian perspective to cheating and honesty in contemporary business:
- In a series of short videos, Linda Treviño discusses cheating in business schools:
- View more from our collaborators on this topic on our Cheating & Honesty playlist at the Ethical Systems YouTube channel.
This page is overseen by Francesca Gino, Dan Ariely, and Robert Frank, although other contributors may have added content.
Miscellaneous Links & References
(This is where other contributors might list relevant links/references they come across.)
- Friesen, L. and Gangadharan, L. (2013). Designing self-reporting regimes to encourage truth-telling: An experimental study. Journal of Economic Behavior & Organization, 94, 90-102. In an experiment involving a production task with self-reporting of accidents, the results showed that dishonesty was prevalent, but accident reporting was more frequent with compulsory reporting compared with voluntary regimes. The average proportion of accidents reported in the compulsory treatment was double that for the voluntary treatment (20% versus 10%).
- Helen Gilbert, “More than a third of purchasers prepared to lie when negotiating,” Supply Management, September 27, 2013. Lying was found to be an acceptable part of the negotiation process with 37 per cent or buyers prepared to tell an untruth, compared to 15 per cent of sales people. In addition, buyers admitted to being less honest in highlighting mistakes in their favor compared to counterparts in sales: 45 per cent versus 72 per cent.
- People actually get a boost of happiness after cheating, as reported in the New York Times (citing Ruedy, N., Moore, C., Gino, F., Schweitzer, M. (2013). The Cheater’s High: The Unexpected Affective Benefits of Unethical Behavior. Journal of Personality and Social Psychology, 105(4), 531-548).
- Higher-status and more successful employees are more likely to engage in deception when faced with unfavorable social comparisons. Edelman, B.G. & Larkin, I. (2013). Social Comparisons and Deception Across Workplace Hierarchies: Field and Experimental Evidence. Harvard Business School NOM Unit Working Paper No. 09-096.
- Bounded ethicality is described in this chapter by Dolly Chugh, Mahzarin Banaji, and Max Bazerman.
- John Antonakis and colleagues on power, corruption and testosterone.
- Cohn et al. have an excellent study on “Business culture and dishonesty in the banking industry“
This collection of references and resources was created by Ethical Systems at the NYU Stern School of Business. This content is used by permission of Ethical Systems.