Jeremy Willinger's blog

Behavioral Ethics: From nudges to norms

Scott Killingsworth, Senior Counsel with Bryan Cave, LLP, writes a broadly applicable and thought-provoking piece on nudges vs. culture. Killingsworth illustrates how a strong ethical culture can take the place of consistent, ongoing nudges and shows that culture should be considered through the lens of not just preventing ethical mishaps, but also about creating a positive environment “where the good apples can thrive”. 

We encourage you to read this informative article >>

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2016 Collaborators in the News: A Year of Many Achievements

2016 was a year of many achievements for our growing collaborator network. We invite you to browse a highlight list of the research, articles, appearances and talks that helped advance our mission and promote a greater understanding of ethics, decision making, and ethical systems design.

Browse our collaborators and their highlights and achievements from this year >>

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MBA: Means Being Aware to Short-Termism

It takes a commitment to business and a desire to better oneself that motivates earning a Master in Business Administration. The degree is seen as a passport to financial success and business leadership, a necessary piece of the puzzle should you want to attain keys to the executive suite.

Yet, a new study by Danny Miller, research professor at HEC Montreal and Xiaowei Xu, an assistant professor at the University of Rhode Island shows that for MBA-holders who go on to lead companies and achieve a level of recognition in mainstream media, self-interested behavior becomes more apparent and their firms can suffer as a result.

Acknowledging that earning an MBA does not cause people to be any less reliable, honest or ethical than others, Miller and Xu’s findings have implications for executive compensation, the dangers of short-termism and how the drive to be distinguished among peers may create a blind spot when thinking about other areas of the business.

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Ethical Systems Design: Crosspost from AuditFutures

ethics-conf-p2Cross posted from the AuditFutures Blog. See original post here.

 

On 23rd November, we hosted a conference exploring the concept of organisational culture and what systemic approaches we can take to foster ethical culture within organisations, particularly professional service firms. This interdisciplinary conference engaged around 100 leading international academics, business leaders and accounting professionals in a holistic discussion on the significant role of culture in organisations.

The event built on our Future Firms project which explores in a systemic way the interdependencies of the different aspects of the firm: culture, governance, technology, services, structure, and people and what this means for the future of .

Our Ethics by Design Conference explored the key challenges and trends, faced through the interaction between the three levels of employees, the organisation and society. Participants explored the possible design ideas that can be implemented to work towards overcoming these challenges and forming a more ethical culture.

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Corporate Scandal, Reputation Risks and Common Sense

When corporate scandal occurs- whether it makes headlines or not- there is a tendency to blame bad apples instead of examining the organizational culture to identify areas in need of further improvement or oversight.

In a recent piece in The Wall Street Journal, Lou Gerstner, a former chairman and CEO of IBM and RJR Nabisco, now chairman of the board of directors at the Broad Institute of MIT and Harvard, outlines why there is continued misunderstanding around culture and the various ways companies undercut their own efforts to strengthen it.

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Featured Ethics Scholar for October: Charles H.Green

Interview with Charles H. Green, founder and CEO of Trusted Advisor Associates

 

What are your main areas of research?

I’m not an academic, so I’ll have to define “research” a little loosely. But for the last 20 years, what I’ve focused on is the role played by trust in business relationships, particularly complex B2B relationships – and particularly in sales and in advisory relationships.

In practice, that has meant pointing out a distinction rarely used in business, even though it’s fairly obvious: the relationship between the trustor and the trustee.  You can’t talk about trust in practical terms without distinguishing between those two very distinct roles (though most general discussions about ’trust’ do just that).  The trustor initiates the relationship by taking a risk; the trustee responds, or not. And then the roles shift for the next go-round. Trust is iterative, dynamic, and creates itself around risk. 

I have also focused on the role of personal relationships rather than institutional relationships, because trust is like politics – as Tip O’Neill said years ago, it’s all local.  Or personal, in the case of trust. Institutional trust, like branding, is a far weaker force. The role of institutions in trust is largely to foster or hinder personal trust.

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ETSY: A Positive Culture of Negative Confessions

What happens when people make a mistake at work? That depends on the culture of the organization- covering it up or passing the buck are options when competition drives behavior or if there is a low trust environment. But at Etsy, employees are not only asked to own up to their errors but reveal them to the entire company.

In a recent piece on Quartz, Etsy CEO Chad Dickerson revealed that people at the company are encouraged to document their mistakes, how they happened and what they learned from it, in public emails. The company “also gives out an annual award—a real three-armed sweater— to whomever who made the most surprising error, not the worst one, as a reminder to examine the gap between how things are expected to happen and how they actually do.”

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Cultures of Compliance with Donald C. Langevoort

Donald Langevoort, Thomas Aquinas Reynolds Professor of Law at Georgetown Law has provided a copy of an article written for the American Criminal Law Review in which he deftly outlines a series of acute observations drawn from different social sciences—economics, psychology, sociology and anthropology—about cultures of compliance and noncompliance.

The abstract:

In the last few years especially, law-makers have increasingly invoked culture as something crucial to good compliance. The phrase “culture of compliance” has thus made its way into common legal discourse as describing both a goal and a marker. Precisely they mean by this is contestable, but there is enough evidence that the demand for healthy compliance culture is serious to invite careful thought. What is it, or should it be, and how might we know? This article draws from organizational behavior, behavioral ethics, and financial economics to develop an approach to how and why corporate cultures resist naively appealing interventions of “tone at the top” and ethical exhortation.

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Why Your Hiring Process Keeps Missing Candidates' Character Flaws

In a captivating article for Fast Company ES collaborator David Mayer, of the Ross School of Business at the University of Michigan, outlines “Why Your Hiring Process Keeps Missing Candidates' Character Flaws.”

We at Ethical Systems talk a lot about hiring for ethics and culture, as opposed to hiring for skills and personality, during the interview process. The reason is that the dialogue between employer and potential employee is wrought with miscues, overestimations, hyperbole and a reliance on presenting the best possible version of oneself. In addition, research by ES collaborator Nick Epley, and cited in the Fast Company piece, highlights how we are actually less reliable than we may think when it comes to identifying deceits and spotting potential bad apples.

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Crediting the Behavioral Approach

This piece has been cross-posted from the NYU Law Compliance and Enforcement blog.

By: Timothy J. Lindon, Vice President and Chief Compliance Officer at Philip Morris International Inc.

 

The compliance message to companies from Washington is practical and encouraging.  Regulators are not looking to reward check-the-box programs or companies that simply say the right things about integrity in their Codes of Conduct.  They are looking for innovative approaches that work to prevent misconduct in the real world, and can be measured.

The problem of course is identifying and measuring what works.  We have lots of compliance metrics like training completion rates and the number of helpline calls, but none of them measures fully the impact of our programs on ethical decisions by individual employees.  In fact, research shows that many of the activities credited under the federal sentencing guidelines may actually be counter-productive.  For example, training that is regarded by employees as a check-the-box exercise is viewed as insincere and undermines compliance with policies.

So what works?

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