This is a week when many readers of the COI Blog are, I imagine, out of the office, and thus an appropriate time to explore connections between ethics in one’s home and business lives.

In “Truth Telling: A Representative Assessment,” published in October by the Institute for the Study of Labor in Bonn, Johannes Abeler, Anke Becker and Armin Falk report on the results of two recent studies in Germany which suggest that individuals who are given an opportunity and motive to lie/cheat are unlikely to do so where the wrongdoing would take place in their home.  That is, individuals were called in their homes and asked to flip a coin – with the understanding that if they reported tails they would be paid a certain amount of money but they would get nothing if the reported heads.  In one version of the experiment, 56% reported heads, a number which presumably reflects a near zero amount of cheating (and maybe underreporting of the profit maximizing result).   The results of a second version were essentially indistinguishable from the first.

What is noteworthy here is that earlier studies on honesty that were conducted in laboratories showed a substantially higher percentage of cheating.  Thus, comparing those results to the new ones suggests that context may have a significant impact on truth telling – and perhaps other forms of ethical conduct.  This is consistent in a broad way with many other behaviorist studies showing how surprisingly malleable we are with respect to ethical conduct.

But can this information be used to promote compliance and ethics in the workplace, or is it interesting but not especially helpful?  At least as a general matter, I expect that C&E training and other communications could evoke the sense of home that seems to engender honesty, although obviously one would need to take care not to go overboard with such an approach.  (Indeed, some training I developed years ago sought to draw this connection,  and I think it was well received.)

Moreover, building on the apparently well-understood need for being truthful at home may be especially important given the relatively tepid endorsement of truthfulness in the workplace that one finds in many companies, including some with otherwise strong C&E programs.  That is, from what I’ve seen over more than twenty years in the field, one finds far less attention in codes of conduct and other C&E communications to the general importance of truthfulness than one would expect.  This shortfall may reflect the commonly held view that some degree of “bluffing” is appropriate in business, as noted in a famous article in the Harvard Business Review.

The benefit of evoking a “domestic” sensibility regarding ethics is that whatever the apparent logic of the bluffing perspective might be in the business realm (and from my perspective, it was never persuasive) on a gut level we are far less likely to accept it in our home lives, where its unsustainability is self-evident to the point of being intuitive (particularly so for parents, but presumably for any type of family member).  That is, whereas one might be aware of successful business careers built on truth bending it is simply impossible to imagine a healthy family life resting on such a foundation, and, I believe this is something that we not only understand intellectually but feel emotionally.

Of course, C&E professionals can also draw upon some very good data showing that in business honesty really is the best policy, such as this study last year by the Corporate Executive Board.   Appealing to one’s colleagues with a direct case should always be the principal approach to promoting business ethics.  But, as with many behaviorist experiments linked to above, this recent study may provide another, and somewhat less obvious, set of tools for enhancing the ethical performance of organizations.



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