Entries by David Newman

Airlines and Stakeholders: A First Class Relationship

U.S. airlines have recently hit some ethical turbulence, beginning last month when United Airlines personnel physically dragged a passenger from an overbooked flight and culminating last week when a “near riot” broke out in Fort Lauderdale after Spirit Airlines canceled 11 flights during a labor dispute with its pilots. The public has become increasingly critical of air travel.

Yet the business community seems to disincentivize airlines from pursuing a more ethics-forward approach. When American Airlines gave pay raises to its pilots and flight attendants ahead of contract negotiations, Wall Street analysts complained about the prioritization of labor over shareholders and exacted punishment on AAL’s stock price. The flight attendants’ union countered with a petition pointing out that shareholders have received ample compensation over the last three years.

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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?

A 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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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. In a study of 974 employees of for-profit organizations, Tenbrunsel and her colleagues found that formal ethical systems (e.g., explicit ethics training […]

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Week That Was in Ethical Systems, 5/12/14-5/25/14

More Evidence That Compliance & Ethics Education Clash, in Compliance Week Ethical Systems contributors Max Bazerman and Francesca Gino have published a new paper on the differences between “values-oriented” and “structure-oriented” programs to deliver ethical messages and improve behavior. Their conclusion? Ethics and compliance programs are not working as well as we’d like. The paper contains […]

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Report: Compliance Program Effectiveness Index

Culture and ethics advisory firm LRN has released its annual report on compliance program effectiveness, correlating a measure it calls PEI with observed outcomes over the last three years. As you can see from Figure 1, about two-thirds of companies surveyed reported positive changes in overall compliance-related outcomes over a three-year period. However, there is […]

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Week That Was in Ethical Systems, 5/5/14-5/11/14

Ethical behavior is just smart business, in The Boston Globe When we talk about ethics, we sometimes focus on the moral implications of a particular role in business. One role that is often overlooked is that of the customer. This article outlines how “the ethical customer always engages in business with a provider in an honest and […]

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Teaching Business Ethics Through Fiction

Harvard Business School professor Joseph Badaracco teaches a course titled “The Moral Leader,” in which he has defined leadership as “a struggle by a flawed human being to make some important human values real and effective in the world as it is.” To teach thoughtful moral decision-making to future generations of managers and CEOs, Badaracco employs […]

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Week That Was in Ethical Systems, 4/28/14-5/4/14

Is Ethics Winning in Business? Chart Points to That Trend, in The Wall Street Journal The Dow Jones Risk & Compliance annual anti-corruption survey indicates a decrease in the number of companies reporting they lost business to an unethical competitor (down to 33% from 45% last year). Along with this year’s National Business Ethics Survey, this […]

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Week That Was in Ethical Systems, 4/14/14-4/27/14

Today we have a roundup of articles from the past two weeks: Making Use of Non-Financial Disclosures, in The Wall Street Journal A recent survey found that 9 out of 10 investment professionals said non-financial disclosures (e.g., performance data related to the environment, governance, social responsibility, anti-corruption, and bribery) played a “pivotal role” in their decision-making […]

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Raising a Moral Company

Ethical Systems contributor Adam Grant wrote in the New York Times last week about how to raise a moral child. Drawing insights from several psychological studies, he came away with three primary suggestions: Praise good character, not behavior. Children who donated marbles who were praised as being “very nice and helpful [people]” showed more generosity in […]

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