When Good People Behave Badly

Exploring the psychology of fraud and unethical behavior

Posted Jun 06, 2012

I’m sitting on a plane to Washington, DC, thinking about unethical behavior.  (Insert your own politician joke here.)

No, it’s not my impending proximity to Congress that has me pondering such matters.  Rather, it’s that I’m headed to give a keynote address at the annual meeting of Compliance Week, a magazine/website dedicated to corporate governance, risk management, and compliance.  That, plus I was just reading about Dan Ariely’s new book, The Honest Truth About Dishonesty, released today.

First, I plan to talk about how unethical behavior is context-dependent.  NPR ran a great story last month about the psychology of fraud.  One of their first examples was a study done by a researcher at Notre Dame, Ann Tenbrunsel, which provides a compelling illustration of just how influential the framing of a decision can be.

What Tenbrunsel did was observe two different groups of respondents.  The first group was asked to ponder a business decision; the other to consider an ethical decision.  People in both groups made mental checklists of what they’d want to consider in making their decision. Subsequently, participants were given another, presumably unrelated task on which the opportunity existed to cheat.  Who cheated more on this second task?  Those previously primed to think about a business decision.

So was it that thinking earlier about ethics made people more ethical?  Did thinking in bottom-line business terms make people less ethical?  Maybe both?  In any case, the study clearly demonstrates that how decisions are framed—and how salient the concept of ethics is in a situation—has a big impact on how we act.

Unethical behavior is also incremental.  I’ve written about this before: big bursts of bad behavior often start with a slow trickle.  Perhaps the most notorious example of harmful behavior ever captured in a research lab comes from Stanley Milgram's work on obedience to authority.  In these studies—ostensibly investigations of punishment and learning—a majority of people followed a researcher’s instructions to administer potentially lethal doses of electric shock to a man they believed to be a fellow participant (in reality, he was an actor in league with the researchers; no actual shocks were given).

So it goes for other examples of problematic behavior as well.  The little white lie that snowballs out of control.  The ambiguous résumé half-truth that evolves into the outright fabrication perpetuated in public.  The fudged expense report that eventually becomes out-and-out embezzlement.

Finally, unethical behavior can be contagious.  It’s an interesting question, how observing the questionable behavior of others affects our own actions.  Multiple, viable hypotheses exist.  Perhaps seeing someone else get away with something convinces you that the odds of getting caught are lower than you previously figured.  Maybe seeing others behave poorly loosens the social conventions that otherwise pressure you into behaving well.  Or it could be that seeing the transgressions of others simply brings the notion of ethics to the forefront of your mind.

It turns out that a key determinant on this question is who is the unethical role model?  Francesca Gino, now at Harvard, and colleagues investigated this by having students complete a task on which they could cheat in order to earn more money.  Upon seeing cheating from another student from their own school—wearing university paraphernalia—students became more likely to cheat themselves.  It would seem that seeing someone you affiliate with engage in unethical behavior can make you view cheating as less problematic.

But witnessing a student from a rival school cheating had the opposite effect.  Students became less likely to cheat in this scenario, indicating that when the cheater in your midst is part of them instead of us, bad behavior can make prevailing ethical standards more salient.

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So does fraud sometimes result from premeditated schemes of malfeasance?  Of course.  Are some unethical actors also generally unethical people?  Sure.  But otherwise “good” individuals engage in bad behavior as well, often through fairly “normal” psychological processes.  This is a conclusion that we’re too quick to overlook in daily life, and it’s one that's worth bearing in mind even outside the hallowed confines of our nation’s capital. 


Like this post? Then check out the website for Sam's book, Situations Matter: Understanding How Context Transforms Your World (now available!).  You can also follow Sam on Facebook here and on Twitter here.  Catch Sam's recent TEDx talk on the power of context here or below: