Something new regarding gifts and entertainment

I once asked students in an executive MBA ethics class if they thought that their employer organizations should have restrictive policies on gift receiving.  Nearly all said that such policies were unnecessary – as the students were certain that they would not be corrupted by receipt of gifts from suppliers or customers.  I then asked if the school should allow teachers to receive gifts and entertainment from students. As you can imagine, the response was very different.

Issues concerning gifts and entertainment are commonplace in the business world. There are many aspects to crafting and enforcing an effective compliance policy in this area, but one aspect of it that is often underappreciated is how even small gifts and entertainment can  still influence behavior in an undesirable manner.

This issue was raised several years ago in a particularly grim way (as described in this article in MarketWatch) by a study which “found that both deaths from opioid overdose and opioid prescriptions rose in areas of the country where physicians received more opioid-related marketing from pharmaceutical companies, such as consulting fees and free meals,…”

Another study “showed that the receipt of a single industry-sponsored meal, with a mean value of less than $20, was associated with prescription of the promoted brand-name drug at significantly higher rates to Medicare beneficiaries.”

Note that while these studies took place in the life sciences area they are potentially relevant to promoting compliance and ethics in conflicts/gifts in industries of all kind.

Finally, in a recently published study Julian Zlatev and Todd Rogers  contributed in a potentially important way to our knowledge of what makes giving gifts and providing entertainment effective    (Returnable Reciprocity: When Optional Gifts Increase Compliance, Harvard Faculty Research Working Paper Series  They found – somewhat surprisingly – that providing the recipient with an opportunity to return a gift increased the likelihood that she would respond positively to whatever the giver was seeking to have her do.

This is a phenomenon they call “returnable reciprocity” and it may work by triggering feelings of guilt in recipients who  have the opportunity to but do not return the gift.

Besides the question of efficacy there is the matter of ethics. Is it more ethical to provide returnable reciprocity – or less? An interesting subject for another post.