How companies drift into unethical behavior
Unethical behavior inside organizations is often less sudden than companies assume. New research from ESMT Berlin shows how employees can collectively drift into misconduct as groups gradually reshape what they perceive as ethical or acceptable.
Organizational misconduct often emerges gradually, rather than suddenly, according to new research. A study from ESMT Berlin, co-authored by Ulf Schaefer, Urs Müller, and Johannes Habel, explores how employees collectively drift into unethical behavior within groups. The paper, published in the Journal of Business Ethics, introduces the concept of "collective moral disengagement" and outlines a three-phase process through which it occurs.
This process involves shared justifications and social reinforcement of questionable actions among employees, gradually normalizing unethical behavior within the organization. The research identifies several factors that can increase a company's susceptibility to this drift, such as influential employees legitimizing misconduct, internal narratives that justify unethical behavior, and strong group loyalty that discourages speaking up.
Leadership signals, internal discussions, and incentive structures also play a crucial role in shaping how employees collectively interpret ethical boundaries before misconduct escalates. The study analyzes major corporate scandals like Volkswagen's Dieselgate, Siemens' bribery case, Wells Fargo's fake accounts scandal, and Purdue Pharma's OxyContin promotion to illustrate these dynamics.
The findings suggest that companies should focus on early organizational dynamics to prevent unethical behavior from becoming embedded over time.
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