Mar 26th, 2012

by Ethics Newsline editor Carl Hausman

The “resignation letter heard round the world” continued to echo last week, as many in the business community and elsewhere shook their heads over the scathing piece in the New York Times in which former Goldman Sachs executive Greg Smith pilloried what he called the “toxic” culture at the firm, blaming a lack of morality for his exit.

Details of the incident and the aftermath are included in this week’s Newsline run-down, but something that might benefit from a little expansion and exploration is the concept of a “toxic ethical culture.”

What is it, specifically, in the culture of an organization that makes ostensibly good people go bad?

There are those who probe such questions. Caveat: As a college professor, I read more research studies than I care to and know that studies, especially isolated polls and experiments, rarely “prove” anything and frequently are contradicted by subsequent research.

Having said that, inquiry into the roots of unethical behavior, along with some plain old eyeball research, does identify some conditions that can cause people to run off the ethics rails.

From what I can see, ethical cultures deteriorate when:

We Rationalize. Doctors, one survey contends, are more likely to say it’s alright to accept a gift if the question is phrased in a way that mentions the sacrifice they’ve endured in their career — as opposed to a straightforward query about whether it is acceptable to take a gift. Another survey purported to show that people who believe they have acted with admirable ethics in one area may feel enabled to act unethically in another; the study indicated that those who applaud themselves for buying “green” products were more likely to rationalize bad behavior in other areas in a sort of “moral balancing.”

We pay attention to only the “shalt nots,” not the “shalts.” It’s intoxicatingly easy to think that avoiding unethical actions is the same thing as acting ethically. But there are many deceptions and prevarications that come about by not doing something. For example, some critics argue that scientists tend not to publish data that does not suit their purposes. For example, a study showing a particular drug did not perform well in a clinical trial may simply not be written up. There’s no law that requires that every research project be submitted for publication. A fisherman with a six-inch-mesh net might conclude that all fish are bigger than six inches because he’ll never see the ones that got away. The same might be extrapolated for public knowledge about many aspects of science and technology if we only are shown what researchers want us to see.

The same analogy can be applied to human behavior. Some researchers, for example, claim that anti-bullying programs are largely ineffective at best because they are simply a list of proscriptions, not affirmative training in how we shall treat each other.

We confuse ethics with rules. Generally something is either against the rules or it isn’t. When we reify ethical behavior as something that isn’t specifically prohibited, the meaning is perverted. As Rushworth Kidder often noted, among the better definitions of ethics are “obedience to the unenforceable” and “what you do when no one is looking.” Note that some of the first dominoes in the global economic crisis fell because of actions that were reckless and irresponsible but not specifically illegal, probably because no one had thought to write a rule against such doltish behavior. A side-effect of the “ethics equal rules” syndrome is that the existence of a “code” is interpreted as self-justification of the ethical behavior of the organization. Enron, it might be noted, is said to have had an ethics code totaling 64 pages.

We feel superior or privileged. This is a fairly obvious one: Some people clearly believe that standards of behavior apply only to the little people. And while it’s easy to read too much into this, two interesting recent studies purport to show that rich people tend to be ruder drivers and that people who identify themselves as upper-class tend to lie and cheat because they see selfish and greedy behavior as socially acceptable.

Authority figures sanction our actions. This tendency was demonstrated graphically by the studies conducted by Yale University psychologist Stanley Milgram in the 1960s. Milgram found that ordinary people could be prompted to deliver what they were led to believe were agonizing electrical shocks to an experimental subject when ordered to do so by a stern and authoritative professor. In 2010, a controversial French television show basically created the same scenario, finding that people were disturbingly compliant when hounded by an authority figure and led to believe they were giving shocks to participants on a television game show.

I’m sure there are many other contributors to a toxic ethical culture; this list is clearly not exhaustive. I’d like to continue this collection but would be grateful if you’d help me do the compiling! Please use the comment area below to explore the question, What are other reasons that cause ethical cultures to go sour?

©2012 Institute for Global Ethics