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Are B-Schools to Blame? (Part 2)

Thursday, May 14th, 2009

In my previous blog post, I argued that while a major change in values is rare, we are all vulnerable to gradual – and I’d add, largely unnoticed – changes in our judgment about morally acceptable behavior.

The reason is that we are social beings, and immersion in the enacted norms and values of any social group can ultimately have either an edifying or corrosive effect on what we do, and in what we consider OK to do. It happens at school.  It happens in the workplace.  And there’s a feedback loop: what we believe informs what we do, but there’s also overwhelming evidence that what we do also affects what we believe.

There are a couple of powerful psychological forces that shed light on this. Both are described in Influence: Science and Practice, a terrific book by social psychologist Robert Cialdini

The first force is the remarkable power of “social proof.” We often gauge the correctness or acceptability of a behavior by the degree to which we see others perform it. If “everyone is doing it,” it must be OK… right? The potency of social proof can be seen in all sorts of “herd” behaviors, ranging from teen “sexting” (circulating explicit photos or video of themselves via cell phone), to Enron traders bragging about ripping off “Grandma Millie,” to the orderly mass suicides of 910 souls in Jonestown, Guyana in 1978.

Relying on social proof is a natural, often automatic response that is abetted when the environment is ambiguous. In the realm of moral lapses, we’re particularly vulnerable in the gray areas. But how do you explain the folks at Enron who found themselves way beyond the gray areas?

That takes the one-two punch of another psychological force. Once we commit to a course of action, our innate desire to see ourselves as consistent leads us to look for further justification for our behavior. We’ve committed to a path – sometimes, a slippery one – and now we’re figuring out why it was OK.

Worse, there’s compelling evidence that we interpret who we are by what we see ourselves do.  In other words, our behavior can ultimately change our attitudes, beliefs and values. The more effortful that first step – and the more public – the greater the impact on our self-perception. We started by trying to boost revenues a little. Soon, abetted by others around us responding to the same psychological forces, we’re all joking about ripping off Grandma Millie.

To my mind, the challenge in the workplace is to consciously foster an environment that inspires us to pursue our noblest instincts. Social proof and commitment/consistency can have a positive as well as negative impact on behavior, and ultimately, attitudes, belief, and values.

As individuals, the challenge is to “rust-proof” ourselves against morally corrosive environments. The principles of social proof and commitment & consistency work precisely because they are so innate and automatic. One way to short-circuit these automatic responses is to sensitize ourselves to their impact, and this is a place where business schools can play a useful role. Case studies, role plays, and other exercises that force us to bring our largely automatic assumptions and behaviors to the surface — along with our often unvoiced beliefs and values — can help “rust-proof” our values against corrosive influences.

Are B-Schools to Blame? (Part 1)

Wednesday, May 6th, 2009

Yesterday, MBA alumna Jashmin Shrestha sent a link to a current Forbes.com article entitled, “Are B-Schools to Blame?”  Among other things, the article asks whether MBA programs and/or the firms that hire their graduates are culpable for the spate of corporate scandals and ethical lapses we’ve seen over the years.

Jashmin’s question: “your thoughts?”   Here’s part 1.

When I started teaching at William and Mary in 1988, one of the then-“Big 8” accounting firms was so concerned about the ethical standards of new hires that they established a remarkably ambitious training program.  Their goal was to bring faculty from every accredited business school in the nation to their headquarters, at company expense, to have world-renowned ethicists teach us ways to better incorporate ethics into our curricula.  The firm?  Arthur Andersen… the one that went down for obstruction of justice in the Enron scandal in 2002.

How could such an organization be brought so low?  It’s easy to point to a few bad apples in a great firm, but I’ll bet the folks who ordered the shredding of Enron documents couldn’t have envisioned themselves as “justice obstructers” just a few years earlier.  I’d make the same bet on the principals in other major scandals, right up to today.  I doubt Bernie Madoff ever aspired to be what Bernie Madoff became.

Alex Gibney, Director of the film ENRON: The Smartest Guys in the Room, said this about his experience with the Enron project:

I became somewhat sympathetic about some aspects of some of the people from Enron—even some of the higher-ups.  I don’t think they started out running a scam; they fell into it, incrementally.

He also said this:

I am interested in self-deception: how human beings find ways to deceive themselves that they are, in the words of [former Enron CEO] Jeff Skilling, on the ‘side of the angels,’ when, in fact, they are working for the man with the pitchfork and the pointy tail.

How and why does this happen?  Big, dramatic changes in values are rare.  Folks don’t suddenly “go bad” (or good), but that doesn’t mean that values are locked in stone.  One’s cultural environment can ultimately have an edifying or corrosive effect on the values we arrive with.  With that in mind, one task for business schools and employers is to create edifying environments that nurture our noblest instincts.  The other task is to “rust-proof” ourselves against the corrosive environments that we will encounter. 

There’s a large body of work in social psychology that sheds light on all this, but we’ll get to that in the next blog.  For a great read on the social psych stuff, check out Influence: Science and Practice (5th Ed), Robert Cialdini. 

Jim Olver
Jim.Olver@mason.wm.edu