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Investigating the Effects of Moral Disengagement and Participation on Unethical Work Behavior Autoria: Adam Barsky, Gazi Islam, Michael J. Zyphur, Emily Johnson ABSTRACT With massive corruption uncovered in numerous recent corporate scandals, investigating psychological processes underlying unethical behavior among employees has become a critical area of research for organizational scientists. This paper seeks to explain why people engage in deceptive and fraudulent activities by focusing on the use of moral disengagement tactics or rationalizations to justify egregious actions at work. Additionally, participation in goal-setting is argued to attenuate the relationship between moral disengagement and unethical behavior through reducing the usefulness of these rationalizations. Across two studies, a lab simulation and field survey, a measure of moral disengagement was developed for use with working adults. The hypothesized main and interactive effects of moral disengagement, participation, and unethical behavior were tested and largely confirmed. TEXT BODY The literature linking individual difference and organizational factors to ethical decision making processes has developed substantially in the past two decades. Research has implicated individual differences (e.g., personality factors, demographics, values and beliefs) as well as contextual factors (e.g., codes of conduct, ethical climate/culture, and rewards and sanctions) as explanatory factors in individual wrongdoing (see O’Fallon & Butterfield [2005] for a recent review). However, a number of important gaps in the literature remain. First, the individual difference research has not provided a compelling window into the cognitive processes employed when people choose to lie, cheat, and steal. In attempting to fill this void, this paper takes an alternate approach to understanding unethical behavior, by focusing on breakdowns in selfregulation as a common factor underlying the perpetration of deceitful or otherwise unethical acts at work. In particular, we draw on Bandura’s (1999) social cognitive theory moral disengagement, which suggests that individuals’ selectively disengage their moral self-sanctions, which generally operate to keep behavior in line with moral norms, as a means of allowing themselves to act in deviant ways. The mechanisms of moral disengagement are rationalizations such as justifying the morality of a behavior and displacing responsibilities for ones actions. These mechanisms have shown promise as factors underlying misbehavior among juveniles (e.g., Bandura, Barbaranaelli, Caprara & Pastorelli, 1996), and are growing in popularity in the social psychological literature on wrongdoing. However, moral disengagement has yet to be integrated into mainstream business ethics research. A second important gap in psychologically focused business ethics research is the relative under-emphasis on the interaction between the person and the situation as a cause of corruption (Loe, Ferrell, & Mansfield, 2000). Organizational practices designed to promote productivity illustrate the ways in which situations might influence unethical behavior. For instance, popular cases of employee misconduct have been tied to organizational goal-setting practices (e.g., overcharging in Sears’ automotive centers, Stevenson, 1992), and experimental research has suggested that goal-setting may cause individual’s to engage in deception and other counterproductive behaviors (e.g., Schweitzer, Ordonez & Douma, 2004; Umphress, See, Barsky, Gogus, Ren & Coleman, 2005). In this paper, we will extend that literature as well, by suggesting 1 that the manner in which goal-setting is conducted (extent to which individuals participate in the process) has implications for self-regulatory failures among employees, and ultimately for unethical behavior. Therefore, this manuscript contributes to the understanding of unethical behavior at work by (1) integrating the concept of moral disengagement into current business ethics theory, and (2) demonstrating how individuals’ moral disengagement and participative goal-setting practices may interact to influence the perpetration of unethical behavior. To this end, the paper will unfold as follows. First, the nature of moral disengagement and how it relates to unethical behavior at work is discussed. Here, we focus on how two mechanisms of moral disengagement are independently related to ethical behavior during the pursuit of performance goals. The theoretical reasoning is then extended to link participation in setting performance goals to unethical behavior, and participation is argued to attenuate the effects of moral disengagement on the perpetration of unethical behavior. We then describe two empirical studies, a laboratory based business simulation and a field survey, designed to test the relevant study hypotheses. Study 1 develops a measure of moral disengagement and establishes an empirical relationship between moral disengagement and unethical behavior. Study 2 both extends the findings from Study 1 to a field setting, and demonstrates the interactive relationship between moral disengagement and participative goal-setting. Ethical Decision Making During Goal Pursuit While numerous definitions of unethical behavior exist in the literature, Jones’ (1991) broad conceptualization of unethical behavior as reflecting any action that is “either illegal or morally unacceptable to the larger community” (p. 367) has become increasingly popular. Using this definition, we attempt to contextualize unethical behavior in the current manuscript by focusing on deception/fraudulent behaviors to which people may engage while pursuing performance goals at work. The rationale for focusing on deception is due to the high frequency and cost of such behaviors to organizations (Grover, 1997), and the generality in which such behaviors are considered unethical. we have concentrated on explaining unethical behavior in the context of goal pursuit due to increasing evidence that performance objectives set a context where deceptive behavior is likely due to high self-interested motivation to misbehave (Schweitzer et al, 2004) and the availability of rationalizations to do so (Lewicki, 1983). Moral Disengagement and the Use of Rationalizations This manuscript presupposes that most wrongdoers in organizations are psychologically “normal,” in the sense that they see themselves as fair, moral, and honest (Allison, Messick, & Goethals, 1989). Given that individuals typically imagine themselves as moral people, one would expect that, if a moral issue were recognized, then individuals would always attempt to act ethically to maintain a consonant self-image. However, this reaction is often not the case, as ethical recognition is often a necessary but insufficient condition for ethical behavior. A further process is also required, whereby individuals judge their behavior as acceptable and form an intention to behave in a given way (Bersoff, 2001). In attempting to explain deviant behavior among juvenile delinquents, Sykes and Matza (1957) asserted that most delinquents possess conventional values and are able to commit delinquent acts by subscribing to certain rationalizations that define such acts as situationally appropriate. Similarly, Bandura (1999) suggested, “the self-regulatory mechanisms governing moral conduct do not come into play unless they are activated, and that there are many psychosocial maneuvers by which moral self-sanctions are selectively disengaged from inhumane conduct” (p. 193). In other words, moral disengagement is predicated on the use of “psychological maneuvers,” which are consistent with the rationalizations described by Sykes and Matza (1957). Below, we will briefly discuss two rationalizations (i.e., moral justification 2 and displacement of responsibility), and review evidence suggesting that rationalizations disrupt moral behavior by providing justification to morally disengage, and therefore, to act in an unethical manner. Although people may use a variety of rationalizations (see Ashforth & Anand, 2004 for examples), moral justification and displacement of responsibility are focused on here as both have been widely researched and have the clearest links to goal-directed work behavior. Moral justification. Rationalizations facilitate moral disengagement by articulating reasons why the specific unethical acts are justifiable or excusable exceptions to the general normative rules (Ashforth & Anand, 2004). The first rationalization, moral justification, involves cognitive reconstruction of the behavior itself. That is, people often do not intend to engage in unethical behavior until they have justified to themselves the morality of their actions (Bandura, 1999). In this process, unethical behavior is made personally and socially acceptable by portraying it in the service of valued or moral purposes. This concept is similar to Sykes and Matza (1957) idea that people neutralize their wrongdoing by appealing to higher loyalties. That is, people construe that ethical norms have to be sacrificed for more important causes. Experimentally, Bandura et al. (1996) found that “moral reconstrual of harmful conduct by linking it to worthy purposes” (p. 364) was the most powerful predictor of detrimental activities (e.g., violence, lying). Even the decision makers at Enron were quoted as justifying their fraudulent behavior in terms of creating a deregulated and ultimately better energy market (see Eichenwald, 2005). To the extent that individuals access moral justifications for their behavior, they are more likely to engage in behavior that would otherwise be considered normatively harmful or unethical. Hypothesis 1: Moral disengagement through moral justification is positively related to engagement in unethical behavior. Displacement of responsibility. A second commonly identified rationalization is displacement of responsibility (Ashforth & Anand, 2004). Researchers argue that people are most likely to form ethical intentions when they acknowledge that they have an agentive role in the ethical behavior in which they engage (Bandura, 1999). Thus, people may disengage their moral controls if they deny responsibility of their actions due to circumstances beyond their control. The circumstances may include such things as management orders, peer pressure, dire financial straits, existing precedent, that everyone else is doing it, or that they play a small part (e.g., Greenberg, 1998). Empirical studies have demonstrated that, in fact, displacement of responsibility can interfere with individual’s intention to act ethically. For instance, in a laboratory study, Bersoff (2001) found that people were likely to take an “accidental” overpayment by an experimenter, unless a displacement of responsibility “neutralization” was made unavailable. This neutralization was made unavailable by asking subjects explicitly if they had received correct payment. Thus, to the extent that individuals displace responsibility for their actions away from themselves, they will be more likely to engage in questionable behavior at work. Hypothesis 2: Moral disengagement through displacement of responsibility is positively related to engagement in unethical behavior. Thus far, we have reviewed theory and research suggesting that unethical behavior may be the result of decision-making processes that involves rationalizing away the need to act morally. In the next section, the reasoning is extended to the performance management domain, where some preliminary evidence has suggested that goal-setting and reward initiatives may have an impact on ethical work behavior (Schweitzer et al., 2004). Here we argue that the way in which goals are set (i.e., the extent to which they are set participatively) may have an impact on 3 wrongdoing directly, and also may attenuate the relationship between moral disengagement and unethical behavior. Participation and Unethical Behavior Worker participation in decision-making, such as the setting of organizational or work related task goals, has historically been an important variable in the organizational behavior and human resource management literatures. The particular method of goal-setting that has received the majority of research interest is whether goals are set in a top-down or “autocratic” manner, or made with subordinate participation (e.g., Erez, Earley, & Hulin, 1985; Latham, Erez, & Locke, 1988; Latham & Marshall, 1982; Latham, Steele, & Saari, 1982; Latham, Winters, & Locke, 1994; Leana, Locke, & Schweiger, 1990). Participation is defined as joint decision-making (Locke & Schweiger, 1979) or as influence-sharing between hierarchical superiors and their subordinates (Mitchell, 1973). One problematic issue with assigning performance goals is the likelihood that the goal recipient will engage in behavior based on goal-related criteria (i.e., that the behavior will help achieve the goal), while other criteria (e.g., ethicality) is potentially disregarded. However, the likelihood that individuals will pay attention to ethical considerations may be affected by whether they are involved in the decision-making process. Specifically, when a person is simply assigned a goal, evaluation of the available behavioral options is focused primarily on goal achievement. That is, since the goal has already been set, all subsequent consideration of behaviors is made through the lens of the preexisting-goal. Although, when an individual is involved in setting the goal, the consideration of behavioral options likely begins before the goal is set, and therefore may include other aspects besides effectiveness for goal attainment. Consistent with Latham and Steele’s (1983) assertion that participation in decision-making can lead to the development of strategies to accomplish the task, involvement in the decision-making process allows individuals to think more broadly and strategically about behavioral options before an objective is specified. This additional consideration, specifically towards ethical issues, would otherwise have been ignored or minimized if the performance goal was simply assigned. Therefore, individuals who participate in goal-setting should be more likely than those who are assigned performance goals to recognize the ethicality of their behaviors, thereby decreasing the likelihood that unethical behavior will occur. At least two studies can be considered supportive of this position. First, Latham et al. (1994) found that allowing for participation in goal-setting had the function of increasing the amount of task strategizing in which participants engaged. Thus, instead of the tunnel vision produced by assigned goal-setting, participation can encourage active evaluation of the process by which the goal may be accomplished, and thereby enhance ethical recognition. Secondly, Ludwig and Geller (1997), in a fascinating study on injury control among pizza delivery drivers, found that participative goal-setting produced increases in behaviors such as turn signal and safety belt us, targeted by the intervention as well as increases in behaviors not directly targeted by the goal-setting. The authors concluded that participative goal-setting can function to activate internal or personal norms governing behavior, thereby activating behaviors that are functionally related to goal achievement, even if not specified by the goal. Consistently, the activation of internal or personal norms can have an additional effect of enhanced ethical consideration of behaviors not specified by a performance goal. Taken together, the Latham et al. (1994) and Ludwig and Geller (1997) findings suggest that participation may directly impact an employee’s engagement in unethical behavior during goal pursuit. 4 Hypothesis 3: Participation in goal setting will be negative related to unethical behavior, such that increased opportunity to participate in setting task goals will lead to less unethical behavior on the part of the goal recipient. Participation and Moral Disengagement In addition to the impact of participation on ethical behavior at work, participative goalsetting may have a substantive effect on the relationship between moral disengagement and unethical behavior. This reasoning is predicated on two arguments. First, participation in the goal setting process may interfere with individuals’ disengagement of their internal moral controls by limiting the availability/usefulness of rationalizations for wrongdoing. In particular, moral disengagement is limited through participation by increasing an individual’s accountability for their actions. That is, assigning performance goals for employees may be perceived as an implicit order to act in an unethical manner, thus displacing the responsibility from the individual to the superior or organization. Simon (1945) asserted that “‘authority’ may be defined as the power to make decision which guides the actions of another” (p. 125). The superior exercises his or her authority by framing and transmitting decisions with the expectation that the subordinate will accept the decision. However, Simon noted that the implementation of authority requires no a priori command. Instead, the “rule of anticipated reactions” holds, whereby subordinates may and are expected to ask themselves “what would my superior wish me to do in these circumstances” (e.g., Friedrich, 1937). An individual on the receiving end of an assigned performance goal may feel that he/she was ordered to engage in immoral behavior, even if no explicit order was given. If individuals feel “ordered,” they may simply displace the responsibility for their actions on their superior, thus freeing them to act in whatever way they see fit. In contrast, when a goal is participatively set, the employee takes on some amount of accountability for the decision, and can no longer simply attribute the goal to his/her boss. By extension, the responsibility for the actions employees take to achieve their performance goals cannot be easily displaced to superiors, given that the employee was partially responsible for the level and/or type of performance goal set. Second, as discussed above, participation may have the effect of increased task strategizing (Latham et al., 1994). The increased use of strategizing with regard to behavioral options to achieve the goal may attenuate the impact of rationalizations such as moral justification and displacement of responsibility on behavior. Specifically, to the extent that an individual derives behavioral options through being involved in the decision making process, they may use less personal discretion in deciding what behaviors to engage in to achieve their performance goal. Thus, while an individual may rationalize wrongdoing, the previously participatively derived (and presumably legitimate) behavioral strategies may override an individual’s likelihood to choose an illegitimate course of action. Given the previous arguments, we propose the following two hypotheses: Hypothesis 4a: Participation in goal setting and moral justification will interact to predict Unethical Behavior, such that participation will attenuate the relationship between moral justification and unethical behavior. Hypothesis 4b: Participation in goal setting and displacement of responsibility will interact to predict Unethical Behavior, such that participation will attenuate the relationship between displacement of responsibility and unethical behavior. The next section describes Study 1, which is designed to develop a measure of moral disengagement, and link the construct to unethical behaviour in a controlled setting. Then, we describe a second study (Study 2) intended to extend the reasoning and generalize the findings to a field setting. 5 Study 1 Method Participants One hundred and sixty-four undergraduates were recruited from business (n =65) and psychology classes (n=99) at a private, Southern U.S. university. The sample was 61% female, with an average age of 19.2 years. While the stimulus materials used in the current study required individuals to assume the role of a business person, previous studies using the current in-basket exercise (e.g., Trevino & Youngblood, 1991) and similar exercises (e.g., Umphress, 2003) used psychology students successfully. Stimulus Material and Measures Participants were asked to play the role of “Pat Mason,” the National Sales Manager of Micrometer Electronics Inc., an electronics components manufacturing firm. First, participants were given background information in order to facilitate their role-playing exercise. Next, participants were presented with the first of three sections. The first section of the in-basket contained 16 items, including an organization chart, a company newsletter, and 14 letters, memos, or phone messages. Two of these decisions (placed 14th and 16th among the items) were ethical in nature. The other 11 decisions were included to mask the ethics focus of the study. Subjects were given 45 minutes to read through the in-basket and make decisions using a response form to record decisions after each message. Unethical Behavior. Unethical behavior was measured through two decision opportunities. The first decision was taken directly from the in-basket developed by Trevino and Youngblood (1990). In the first ethical decision opportunity, the parts decision, subjects responded to a memo from William Wyley, Vice-President of Production, in which he stated that he had decided to change the material used in a particular product component to save on production costs. He advised that customers should not be informed despite potential problems. Mason was informed that sales revenues would likely suffer a $500,000 loss if customers were informed of the change. Participants decided what to do, if anything, in response. The second ethical decision situation was adapted from an in-basket developed by Brief and Motowidlo (1996). Mason was asked to decide whether or not he/she wished to recognize the impending sales of a wiring system on this quarter’s financial statement even though the sale had not been completed. For each decision, participants were provided a response form that listed a number of options and instructed to choose one. The available options were coded a priori as ethical or unethical (an equivalent number of each) on the basis of criteria developed by Trevino and Youngblood (1990). In the first situation regarding product components, a decision not to inform customers was coded as unethical. In the financial reporting decision, participants could choose either to record the $750,000 gain on the current quarter, or wait for the sale to be completed before reporting the gain. A decision to record the gain in the current quarter was unethical because it entailed dishonestly reporting the company’s current financial situation (i.e., recording the sale of a wiring system before the sale actually occurred). Thus, each participant received a score of 0, 1, or 2, indicating the number of unethical decisions made. Unethical behavior scale/DV check. We checked the unethical behavior dependent measure to ensure that individuals were aware of the behaviors in which they had engaged (i.e., independent of judging the ethicality of the behaviors). That is, one manner of arguing for the validity of a measure is to show convergence in findings across operational definitions (Cook & Campbell, 1979). Specifically, a stronger case could be made that the decisions to deceive customers about new parts (i.e., the parts decision) and to fraudulently report financial information (i.e., the financial reporting decision) actually represent unethical behavior if a 6 correspondence exists between making these decisions and a separate operational definition of unethical behavior such as self-reported behavior. Therefore, participants were given an unethical behavior scale which included 12 items measured on a one to seven scale (1 = Never and 7 = More Than Ten Times) and indicated how often they had performed each behavior while in the role of Pat Mason. Five of the 12 unethical behavior items were taken from an unethical behavior scale originally developed and used by Umphress (2003). Examples of these unethical behaviors were “conceal information from the public that could be damaging to your organization” and “withhold negative information about your company’s product or services to customers and clients.” In the current study, the unethical behavior scale showed high internal consistency (α = .90). The unethical behavior scale showed validity as a measure of unethical behavior, as the number of unethical decisions made by participants was significantly correlated with responses to the unethical behavior scale (r = .43, p < .01). The fact that individuals who made unethical decisions in the simulation received higher scores on the unethical behavior scale, indicated that people were aware of the behaviors they engaged in, even if they did not recognize the ethicality of their behaviors. This implies that the unethical behavior scale could be acceptable to use in a non-experimental design as well, given that the scale appeared to represent recall of actual behavior. Moral Disengagement. Using a priori theoretical categories of rationalizations, Bandura et al. (1996) developed a moral disengagement scale that measured the propensity to use rationalizations for violence and delinquency among schoolchildren. Items in the original measure tapped eight mechanisms (e.g., rationalizations) of moral disengagement: (a) readiness to construe injurious conduct as serving righteous purposes, (b) rendering harmful activities benign by advantageous comparison, (c) using morally neutral language to describe harmful activities, (d) disowning responsibility for harmful effects by displacement or (e) diffusion of responsibility, (f) minimizing the harmful effects of one's detrimental conduct, (g) devaluing those who are maltreated, and (h) attributing blame to them (Bandura, 1999; Bandura et al., 1996). To cite some examples, “If people are careless where they leave things it is their own fault if they get stolen” was one of the items measuring attribution of blame to the victims. The item “Kids cannot be blamed for misbehaving if their friends pressured them to do it” measured displacement of responsibility. “Some people deserve to be treated like animals” measured proclivity for dehumanization (Bandura et al., 1996). For the purposes of the current study, a modified version of the moral-disengagement scale was created. The current scale includes items exclusively pertaining to the rationalizations discussed in the introduction regarding moral justifications and displacement of responsibility. In addition, the detrimental activities and social context embedded in each item were modified to be relevant for working adults and to refer to activities in which the individual could have engaged during the course of the in-basket. For example, an original moral justification item stated “It is alright to fight to protect your friends,” and the modified item read: “It is alright to stretch the truth to protect your company.” An original displacement of responsibility item stated “Kids cannot be blamed for misbehaving if their friends pressured them to do it,” and was modified to state “Employees cannot be blamed for wrongdoing if they feel that their boss pressured them to do it.” The moral disengagement scale consisted of 13 items rated on a 7-point Likert-type scale (1 = Strongly Disagree to 7 = Strongly Agree) indicating the degree to which participants had the following thoughts while in the role of Pat Mason. As discussed above, moral disengagement was conceptualized to be a construct composed of rationalizations that allow an individual to 7 disengage their internal moral controls by (a) justifying unethical behavior in moral terms as moral justification and (b) displacing responsibility for the behavior to an external agent, displacement of responsibility. Study 1 Results Descriptive statistics and intercorrelations are presented in Table 1. As predicted, both moral disengagement through moral justification and displacement of responsibility were significantly related to unethical behavior. However, the magnitude of the relationships was quite different, with moral justification strongly related (r = .34, p < .01) and displacement of responsibility only weakly related (r = .15, p < .05) to unethical behavior. When both variables were simultaneously entered into a regression equation predicting unethical behavior, the effect of moral justification on unethical behavior changed very little (β = .33, t = 4.12, p <.01), while the effect of displacement of responsibility dropped to near zero (β = .01, t = .12, ns). Thus, the sub-dimensions do not explain independent variance, as moral justification appears to account for virtually all of the variability in unethical behavior. The significance of this finding is discussed in the following section. Study 1 Discussion Consistent with previous theorizing on the subject (Bandura, 1999), moral disengagement through moral justification and displacement of responsibility was significantly related to individuals’ propensity to make unethical decisions. However, while moral disengagement through the use of rationalizations is implicitly (e.g., Rest, 1986) or explicitly (e.g., Bandura et al., 1996; Sykes & Matza, 1957) central to most models of ethical decision-making, this study represents the first empirical demonstration of the relationship in the orgnizational literature. Therefore, this paper may provide some important findings regarding the nature of moral disengagement in organizational behavior. First, the factor structure of the moral disengagement scale corresponded to the theoretical dimensions specified in the original scale developed by Bandura et al. (1996). That is, items tapping moral justification, or rationalizations that construe misbehavior as moral, tended to cluster together, and items related to displacement of responsibility tended to cluster together. Second, we suggested that moral disengagement may represent a unitary construct, with moral justification and displacement of responsibility as alternate mechanisms through which this may take place. However, given the results of Study 1, treating moral disengagement as a general factor does not appear to be appropriate. Instead, moral disengagement though moral justification and moral disengagement though displacement of responsibility, appear to operate differently, and should be assessed independently. This is, consistent with studies suggesting that individuals seek to appear “moral” (Batson, Thompson, & Seuferling, 1997), justifying the morality of a harmful or deceitful act seems to be substantially more important, in terms of releasing an individual to engage in the behavior, than simply appearing “not responsible.” Given the demonstrated a link between moral disengagement and unethical behavior in the simulation study described above, a number of important questions must be addressed. First, to what extent do the results generalize to a working population? As with all simulation based studies using college students, the issues of external validity is an important one. Second, what are the boundary conditions for the relationship? Specifically, what contextual factors may limit the availability of rationalizations, or attenuate the force of peoples’ disengagement on their tendency to engage in unethical behavior at work? These questions are addressed in a second field study, described below. Study 2 Method Sample 8 For the current study, 111 participants were recruited from two sources: (a) professional MBA (PMBA) and executive MBA (EMBA) classes at a private, Southern U.S. university, and (b) a professional association of purchasing managers. One requirement for inclusion in this study was that individuals were employed at the time of the survey administration. Of the 111 initial participants, 83 reported that they were currently employed. One individual reported only working 3 hours per week, and therefore, was dropped from analysis. The remainder of the participants worked at least 15 hours per week, with an average of 44.4 hours/week. Individuals were told specifically that their participation was completely voluntary. Given the nature of the sample for the current study, participants held a variety of different jobs. The sample was primarily male (64%), with 42% identifying themselves as supervisors or managers, and 6 individuals identifying themselves as business owners. In addition, all responses were confidential and only utilized for research purposes. Measures Participation in Goal-setting. The participation in goal-setting scale (hereafter referred to as the participation scale) was designed to assess the extent to which people participated in setting their performance goals at work. The items for the goal-setting method scale were taken from the GSQ (Locke & Latham, 1984) and contained items related to choice of goals (i.e., item 2: “My boss lets me have some say in deciding what my performance objectives will be”; and item 3: “I do not have any input in deciding what my performance goals will be [reverse coded]”), involvement or voice in the process of setting goals (i.e., “My boss works with me to come up with my performance goals”; and item 5: “My boss tells me what my performance objectives are without consulting me [reverse coded]”). The measurement properties of the scale were assessed in the current study, and indicated that the scale was highly reliable (α = .83) and a single factor solution was extracted from a principle axis exploratory factor analysis (eigenvalue = 3.29) explaining 65.87% of the variance. A second factor had an eigenvalue of only 0.61, far below the second factor eigenvalue of 1.09 estimated by parallel analysis. Consequently, all 5 items were retained and averaged to form a scale where higher scores indicated greater participation in goal-setting. Moral Disengagement. The moral disengagement scale used in the current study is described in detail in Study 1. In the current study, the instructions were altered such that participants were asked to report the extent to which they experienced a list of thoughts while in their current job. Consistent with Study 1, moral disengagement items were subjected to a principle axis exploratory factor analysis with varimax rotation to assess factor structure, and once again a two factor solution emerged. Therefore, given the similar pattern of results, and to remain consistent across studies, a 4 item moral justification subscale (α = .72) and a 6 item displacement of responsibility subscale (α = .77) was created using the items specified in Study 1. Unethical Behavior. The same 12-item unethical behavior scale used as a dependent measure check in Study 1 was used as the DV in Study 2. Participants were asked to indicate on a scale from one to seven (where 1 = Never and 7 = More Than Ten Times) how often they had performed a list of behaviors since they began their current job. Consistent with Study 1 results, the scale displayed acceptable internal consistency (α = .78), and a single factor solution using principle axis factor analysis. Study 2 Results Descriptive statistics and correlations are reported in Table 1. Hypotheses 1 and 2 were tested by examining the bivariate relationship between the mechanisms of moral disengagement, moral justification and displacement of responsibility, and unethical behavior. As evident in Table 2, both mechanisms were significantly related to self-reported fraudlent and deception, 9 although moral justification showed a slightly stronger effect (r = .36, p < .01) than displacement of responsibility (r = .29, p < .05). However, consistent with Study 1, when unethical behavior was regressed on moral justification and displacement of responsibility together, the independent effects were drastically different. That is, while moral justification remained a strong predictor of reported unethical behavior (β = .29, p<.05), the independent effect of displacement of responsibility on unethical behavior, was substantially diminished (β = .11, ns). Therefore, once again, when individuals disengage their moral and social controls through moral justifications, the use of alternate rationalizations to morally disengage by displacing responsibility to one’s supervisor does not appear to elicit more unethical behavior. Support for the third hypothesis was inferred by examined the bivariate relationship between the participation scale and the unethical behavior scale. This analysis was conducted only with the sub-sample of participants who were exposed to goal-setting at work. The null hypothesis was rejected, as a significant correlation (r = -.34, p < .05) was observed between paticipation and unethical behavior, indicating that individuals who responded more affirmatively to items asking if they were allowed to participate in setting performance goals, were less likely to report engaging in unethical behaviors at work. To test the fourth hypotheses, a moderated regression analysis (Cohen & Cohen, 1983) was conducted to assess whether the magnitude of the relationship between moral disengagement and unethical behavior varied across levels of participation. Moderated regression analysis is conducted by comparing a reduced regression model composed of an equation regressing unethical behavior on moral justification and displacement of responsibility and the moderator participation, with a complete model that includes the independent and moderator variables and a cross-product term representing the interaction of IV and the moderator. As shown in Table 2, participation significantly moderated the moral justification → unethical behavior relationship, but did not moderate the displacement of responsibility → unethical behavior relationship. Therefore, hypothesis 4a was supported, while hypothesis 4b was not. To elucidate the significant findings, a plot of the significant interaction is presented in Figure 1. Study 2 Discussion The results from Study 2 replicate the findings from study 1 to a working field sample, and extend the reasoning to incorporate the influence of contextual factors as well. As predicted, both moral justification and displacement of responsibility were significant predictors of unethical behavior. However, once again, displacement of responsibility does not appear to add much additional information. In addition, participation in goal-setting was shown to decrease the likelihood of unethical behavior, which represents the first such finding in the organizational literature. Perhaps most interesting, while moral justifications tended to increase in the reported incidences of unethical behavior, this was only true when employees did not feel that they had the opportunity to participate in setting their performance goals at work. As such, participation may have value as both a predictor and buffer for individuals to act ethically at work. The second study was not without its limitations. First, while cross-sectional data does not provide adequate control for causal or directional statements, the link between moral disengagement and reported unethical behavior is provocative. In the general discussion, we will return to this point, but for now it is worth recognizing that mechanisms for moral disengagement and unethical behavior may have a reciprocal relationship. That is, while rationalizing wrongdoing may make unethical behavior more likely, engaging in unethical behavior may entice individuals to justify their actions to make their behavior more palatable (Bandura, 1999). As long as unethical behavior is conducted without repercussions, this cycle may continue unabated. Second, the measurement of unethical behavior was generic and, therefore, may not have applied 10 equally across occupations. For example, an unethical behavior measure for car salespeople may look different than an unethical behavior measure for project managers, given that each group has more or less opportunity to engage in a given set of behaviors. One potential solution would be to study a single occupation and develop an idiosyncratic measure composed of unethical behaviors specific to that occupation. Alternatively, a measure of unethical behavior based on a welldeveloped construal of the unethical behavior construct would have much greater utility. Unfortunately, the organizational and psychological literatures lack even a generally accepted taxonomic structure for domains of unethical behavior. While Warren (2003) and other researchers have attempted to specify the domains of employee deviance, unethical behavior remains a rather amorphous construct, embodying a variety of socially unacceptable behaviors. However, the consistency in the findings across studies is at least encouraging that the measures tapped the appropriate constructs. General Discussion The results regarding the mechanisms moral disengagement are provocative for future research, both as in terms of conceptualizing the variables and understanding how disengaging one’s moral controls may influence one’s propensity to act unethically. The findings related to the differential impact of moral disengagement facets on unethical behavior has important implications for understanding why (a) an individual might engage in an egregious act, and (b) where an organization seeking to reduce such acts may target an intervention. For instance, as the world is stunned by images of soldiers brutalizing prisoners in recent conflicts (e.g., Glanz, 2004), many question whether the soldiers engaged in their criminal behavior because they felt that their superiors were ultimately responsible (although they were apparently not given specific orders to abuse the prisoners) or because they felt that their brutality had a just and moral rationale given the potential to eventually save lives. If the former is the case, then investigators should look to a breakdown in accountability in the chain of military command. However, if the latter is the case, then one must look to the ideological climate that would allow for such acts to be morally justified. In addition, given that organizational researchers have shown that providing justifications for wrongdoing can influence other types of organizationally undesirable behaviors such as discriminatory behaviors (e.g., Brief et al., 2000), establishing a connection between rationalizations for moral disengagement and unethical conduct is a reasonable next step. Indeed, the availability of rationalizations may be amenable to change, thereby providing an avenue for combating unethical behavior at work. For example, moral justifications such as “If an employee needs to stretch the truth to do their job, they cannot be blamed for lying” (item 8) could be countered by executives who emphasize the priority of honest business dealing over increasing revenue. Finally, if rationalizations cannot be changed, at least the impact of moral disengagement on future behavior can be minimized. Consistent with the emerging trend in organizational research to study outcomes other than employee productivity and organizational effectiveness (see Griffin & O’Leary-Kelly, 2004), the widespread organizational practice of participative goal-setting is studied through the lens of workplace ethics rather than the lens of employee productivity. As such, we further demonstrated that the method of managing performance through participatively setting goals may limit the effect of individuals’ rationalizations on their willingness to act unethically. Taken together, the findings suggest that individual reasoning and judgment are central to, but not solely responsible for, misbehavior in the workplace. While this paper may raise more questions than it answers, we see it as a step in the right direction. 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Constructive and destructive deviance in organizations. Academy of Management Review, 28, 622 – 632. 15 Table 1 Means, Standard Deviations and Intercorrelations of Variables Used in Study1 and Study 2 Mean Study 1 Mean Study 2 SD Study 1 SD Study 2 1 2 3 4 0.62 1.49 0.69 0.67 (.78) - .34** .15* - 5.54 - 1.16 -.34* a (.83) - - 3. Moral Justification 2.74 2.24 1.17 0.95 .36** b -.14 a [.82] (.72) .44** 4. Displacement of Responsibility 2.92 2.64 .93 1.04 .29* b -.15 a .63** b [.71] (.77) Variable 1. Unethical Behavior 2. Participation in GoalSetting Note. Study 1 correlations are above the diagonal. N = 164 for all Study 1 correlations. Study 2 correlations are below the diagonal. N= 59 – 80 for all Study 2 correlations. Reliabilities for Study 1 are in brackets on the diagonal, reliabilities for Study 2 are in parentheses on the diagonal. a = correlations computed on N = 59; b = correlations computed on N = 80. * = p < .05; ** = p < .01. Table 2 Summary of Moderated Regression Analysis Predicting Unethical Behavior ∆R2 Variable β Reduced Model .23** Participation .34** Moral Justification -.29* Complete Model .08** Participation .33** Moral Justification -.33** Participation X Moral -.31** Justification Reduced Model SE .08 .07 .07 .06 .06 .24** Participation Displacement of Responsibility Complete Model -.28* .07 .36** .07 -.28* .06 .32** .07 -.21 .05 .04 Participation Displacement of Responsibility Participation X Displacement of Responsibility Note. N = 59. Moderation is evidenced by significant change in R2 in the complete model, or a significant parameter estimate for the interaction term in the complete model. * p < .05; ** p < .01. 16 Figure 1. Plot of Interaction between Moral Disengagement and Participation Predicting Unethical Behavior. Participation X Moral Justific 2.50 Unethical Behavior 2.00 1.50 Participation high med low 1.00 0.50 0.00 low • med high Moral Justification 17