Cheating and Lying: Personal or Embedded
Cheating and purposeful lying are not only individual personality issues. As we have noted, these behaviors can be embedded in corporate culture. We have reported findings at the individual level, but there is also a group dynamic associated with unethical behavior – for example in corporations. Hall (2006) describes that honest individuals can become caught up in cheating behaviors when the corporate culture justifies (and even glorifies) it:
… the organisation develops a collective ego (culture) that serves much the same function (and dysfunction) as the individual one. The collective egocentric bias is compounded by the diffusion of responsibility characteristic of large organisations, which encourages self-protective inference. It is quite likely, moreover, that people with a particular facility for rationalisation dominate organisational hierarchies. In business settings, promotion patterns place a premium on ‘team players’, those able to accommodate their attitudes to the immediate needs of the team (typically, as articulated by its leader). The highly judgmental person with strong convictions tends to get weeded out early on, those able to justify to themselves the pragmatic course of action move up.
As Hall’s research clearly describes, cognitive biases and blind spots (described in a previous essay), can potentially play a big role in generally ethical individuals overlooking, justifying or ignoring unethical behaviors. For example, an ethical senior leader hired by an organization is likely to believe she/he have conducted their due diligence into the firm prior to being hired, and thereafter be less likely to be critical of the company’s ethics.
However, it is leaders and other influencers that shape corporate culture in the first place. And this is where coaching can have the biggest impact. As Hall notes:
Clearly, it is generally productive for corporations to employ individuals who are confident and have a high self-image. (But) It can lead to risk-taking, innovation and a can-do approach. However, it can also lead towards narcissism and dishonest behaviour.
Hall continues to describe what both of us have personally experienced (and about which we have previously written). Senior executives tend to develop high levels of hubris over years of success—and are surrounded by sycophants who praise and support the leader despite their concerning and unethical behaviors. This kind of hubris supported and encouraged by “kissing the ring” can lead to overestimation of one’s skills and knowledge levels and result in poor judgement and sometimes unethical decision-making – a feeling of infallibility!
The path to cheating and lying is often a slippery slope – small incremental decisions, which are initially not considered unethical, but tolerated by the company, that become “the way we do things” and ultimately become part of the corporate culture. An article written by Merete Wedell-Wedellsborg (2019) that appeared in the Harvard Business Review provides a powerful quote from Warren Buffet:
Download Article 1K ClubWarren Buffett, explaining Berkshire Hathaway’s practices in the annual letter shareholders, notes that he and vice chairman Charlie Munger “…have seen all sorts of bad corporate behavior, both accounting and operational, induced by the desire of management to meet Wall Street expectations. What starts as an ‘innocent’ fudge in order to not disappoint ‘the Street’ — say, trade-loading at quarter-end, turning a blind eye to rising insurance losses, or drawing down a ‘cookie-jar’ reserve — can become the first step toward full-fledged fraud.”
