Editors

Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Bill Steinman
Contributing Editor

Who’s to blame? The bad apple or the barrel?

According to the recently published EY Global Fraud Survey 2018, only 22 percent of respondents said that integrity is an individual responsibility. The remainder believe the primary responsibility for ensuring integrity sits with other groups in the organization including management (41 percent), the board (15 percent), HR (11 percent) and legal & compliance (9 percent).

At first blush the result looks startling — lack of personal ownership is likely to lead to unethical behavior, that’s what we think. Or is it just a matter of perspective?

Explaining (un)ethical behavior is no easy task — it is very complex and rarely that straightforward. Due to our natural tendency to simplify, we tend to focus on identifying bad apples or rogues and assigning responsibility to these individuals. To express it more scientifically, we thereby consider the personality perspective which suggests that the person and her inherent personality traits are key in predicting behavior. This approach instantly provides a simple and intuitive explanation.

By definition, personality traits are stable individual differences in the reactivity of mental mechanisms designed to respond to particular classes of situations. Sounds very academic, but certainly worth consideration, as it points to another important viewpoint on why we may sometimes behave unethically, the situation perspective. The supporters of this approach believe that the situation people are in is a better immediate predictor of their behavior than personality scores are.

Despite often being overlooked, the system in which one operates is an important driver of human behavior, ethical or otherwise. General context, or working environment, within which we find ourselves plays a crucial role in shaping our decisions, choices and moral character. Oftentimes that can happen in very subtle ways without awareness from our side. Therefore, as a starting point, any explanation of unethical conduct should consider the broader organizational culture or the “barrel” in which “apples” operate.

Second, as the majority of decisions made in modern organizations are made in teams, the group dynamics at play and its role in shaping ethical behavior should be considered as well. Whether it is the board, the executive committee, a project team or any other formal or informal group at any level of organization, it is very rare that an individual in an organization makes a unilateral decision without someone else being aware of it. As Dennis Gentilin points out, “Dysfunctional group dynamics can cause people to condone behaviors and decisions they would ordinarily consider to be totally inappropriate when acting alone.” In this way, group membership can drive us to behave in unethical ways.

In a recent study, H. Kakkar and S.Tangirala analyzed which of the two perspectives, personality or situation, matters more when it comes to speaking up at work. The researchers have found that both personality and environment had a significant effect on employee’s tendency to speak up with ideas or concerns. However, strong environmental norms could override the influence of personality on employees’ willingness to speak up. In this way, the study suggests that the work environment and social norms in teams both play a crucial role in creating a speak-up culture. Encouraging employees to raise their voices helps to speak up even those with a personality less inclined toward reporting concerns.

The two perspectives are not mutually exclusive. The perpetual interplay between the personality and the situation as a source of human behavior define our actions and decisions. It is important to understand, however, that when exploring the origins of unethical conduct, the situation perspective must be given as much (if not more) consideration as the personality perspective. Contextual influences have strong power over individual behaviors. Fostering ethical conduct requires creating an ethical climate that reminds people of their moral principles, as well as middle managers actively translating this message into their teams’ daily work life. Eventually, maybe the survey respondents were not that far from the truth?

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Vera Cherepanova, FCCA, CIA, MSc (pictured above), has more than 10 years’ experience as a compliance officer. She’s the founder of Studio Etica, a boutique consultancy that provides advice on corporate ethics and compliance programs to companies around the world. She speaks English, French, Italian, and Russian. She can be contacted here.

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