A Tangled Web: The Consequences of Dishonesty

“Oh what a tangled web we weave…”

We all know that lying can lead to bad consequences for the liar, but what happens to everyone else?

2015 article by Scott Wiltermuth, David Newman, and Medha Raj in Current Opinion in Psychology reviews findings that illustrate how dishonesty can yield a host of unexpected consequences, which arise when individuals privilege other values over honesty. Although many people act dishonestly for the sake of material gain, others do so from a desire to maintain a positive self-concept, or even out of compassion.

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R-E-S-P-E-C-T: How can banks win it back

At a recent banking summit in China, the focus was on how international banks can regain the moral high ground. In response, Norman Chan, chief executive of the Hong Kong Monetary Authority, wrote a piece in the South China Morning Post that argues this will be difficult unless banks move from a shareholder model to a stakeholder focus. At Ethical Systems, we couldn’t agree more.

When companies- especially banks- prioritize short-term profits over the health of their long-term relationships and reputation, they invite ethical problems, long term costs, and the animosity of the general public. Yet, while the call to action is simple, the steps needed to get there are anything but.

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Featured Collaborator of the Month: Marc Hodak

Interview with Marc Hodak, adjunct professor at The NYU Stern School of Business, visiting lecturer at the University of St. Gallen and founder of Hodak Value Advisors

What are your main areas of research?

I look at corporate governance in the context of how agency mechanisms (e.g., the formal and informal relationship between employees, directors, and owners) contribute to value creation, both at the firm level and for overall economic welfare. My particular areas of research include performance measurement, executive compensation and organizational behavior, where I have a couple of decades of practical experience in working with corporations and institutional investors. I have recently broadened my research to look at governance innovations through history, and attempts to create new models of interaction between owners and other stakeholders.

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The Ethics ‘‘Fix’’: When Formal Systems Make a Difference

What makes a company's ethics program effective at deterring fraudulent conduct? In a 2014 paper, Ethical Systems collaborator Ann Tenbrunsel demonstrated the interdependence of formal and informal systems in fostering ethical behavior in organizations.

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Rediscovering the Human Purposes of Business, by Mark Goyder

Below is the text of a speech given by Mark Goyder, Founder and Director of Tomorrow’s Company, at the Caux Initiatives for Business Conference, Panchgani India, on 12 November 2013. Goyder sent me (Jon Haidt) the text of this speech when we were first introduced. I loved it. I thought Goyder expressed a vision of business that automatically inspires better ethics.

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Featured Collaborator of the Month: Linda Treviño

My research demonstrates why it is important for organizations to create structures and systems that support doing the right thing (because in the ethics realm, most normal people are susceptible to external influences). 

My work also demonstrates the importance of a variety of these structures and systems, both formal and informal ones. For example, performance management systems are crucial, and leaders at all levels have an extraordinary influence (both good and bad) on followers through their behaviors, the messages they send (subtle and not so subtle), and the cultures they create.  

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Featured Collaborator of the Month: Daylian Cain

I study judgment and decision making, or, as I like to say, “why good people do bad things, and why smart people do dumb things.” Much of my work is on conflicts of interest and how they are problems not only for the intentionally corrupt but also for well-meaning professionals who fall prey to unintentional bias.

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2014- Fighting Corruption: An Assessment

As 2015 begins, despite vigorous enforcement activity, corruption appears to be holding its own against efforts to contain and deter it.  In its 2013 year-end FCPA Update, the law firm Gibson Dunn reported:

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It’s time for policy makers to enter the 21st century

Can you imagine a world where marketers promoted products without knowledge of psychology and persuasion? Well, the equivalent is happening in policy making and international development- in fact it is the standard.

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(Un)Ethical Behavior in Organizations

Wouldn’t it be helpful if there was a review of some of the most influential, recent work on ethical behavior in organizations?  Well Ethical Systems collaborator Linda Trevino and colleagues have provided just that with their excellent review piece on “(Un)Ethical Behavior in Organizations.” 

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