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Bribery, Beneficiaries and Guilty Feelings (or lack thereof)

Given the response to my recent Q and A with Jamie-Lee Campbell on “Culture Corrupts,” (post here) which from an analytics and engagement perspective, was one of my most read pieces on a global basis since I started blogging, I decided to continue my deep dive into the behavioral dynamics which from my perspective, intersect with those who work on the front lines of international business. I return to my Matt Ellis ‘go-to’ line that “corruption is a crime of opportunity” (How to Pay A Bribe, 2014: Wrage) which at some level involves the behavioral calculation that the benefits of receiving and giving bribes outweigh the risks and consequences of getting caught. While one would think from afar that such thinking would be one of the most frequent topics of discourse in the compliance field, it is actually one of the least. However, the good news is that there is a deep and rich field of writing and research that pertains to connections between business, psychology and ethical behavior.

As stated, while the fields of organizational psychology and business ethics present no shortage of incredibly relevant materials, I focus only on those works which produce a “hey, that was me” moment. Accordingly, today I call attention to a paper co-authored by Francesca Gino, Shahar Ayal and Dan Ariely titled “Self-Serving Altruism: When Unethical Actions That Benefit Others Do Not Trigger Guilt.” (Working Paper, Draft Form, Harvard Business School, 2012, HBS Link here). Let me also share that I wave Professor Gino’s book Sidetracked (Author site here) at every chance I get during my speaking engagements, as a must read for those who manage international field personnel, and who are tasked with helping them to manage corruption risk. But more on Sidetracked in another blog, and fingers crossed for a future Q and A with Professor Gino.

“Hey, That Was Me”

The context to my “that was me” moment pertains to my own ‘perfect storm’ of rationalizing bribery, and how I embraced the illusion that bribery has no victims, and worse, that from the front-lines, it was a win-win. While it was relatively simple for me to describe those emotions and rationalizations, “Self-Serving Altruism” elevates the dangers that such thinking presents to those who work in the field as well as to their managers. How? As the Authors state “when others can benefit from one’s dishonesty people consider larger dishonesty as morally acceptable,” and “simultaneously feel less guilty about it.” Furthermore, the Authors demonstrate how “the presence of others who may benefit from our dishonesty influences our willingness to cross ethical boundaries.”

First, a reminder to my readers that these posts are in no part an attempt to justify my own conduct. I knew what I was doing was illegal and ethically wrong when I did it, so my attempt here is to only “pull the curtain back” on the rationalizations, emotions, and calculations that front-line personnel face when deciding to “engage in or refrain from” corrupt conduct. So, with that said, how could someone possibly think of corruption as either victimless or a win-win where “others can benefit?” It makes no sense, right? Well, lets put together a checklist.

If I Win This Deal…

Imagine the front lines of international business for a moment, specifically in a high-risk (low integrity) region. Is it inconceivable for someone in the field to ponder and reflect on the following ‘checklist’ about a corrupt transaction involving bribery?

  1. If I win this deal my agent (third party) will be pleased and will continue to pursue continued business, albeit by intertwining corrupt and legitimate services.

  2. If I win this deal I make my financial forecast, sales target and hence, bonus.

  3. If I win this deal, the state official, who is poorly compensated and trained gets to make some “pocket money” from this bribe which will help him/her to make ends meet.

  4. If I win this deal, my company is pleased by the transaction and hence, my performance.

  5. If I win this deal, the end user still gets a high quality product at a reasonable cost. After all, I am not sacrificing quality to win.

If you think it impossible for your field personnel to “think such thoughts” about corruption, no need to continue to read. However, for those still interested, what could embracing these illusions possibly mean in terms of behaviors and outcomes?

Back to the Authors, who share early in their paper that “the potential benefits dishonesty may create for others not only help us justify our bad behavior but also serve as a (self-serving) motivator for it.” Such was my own “that was me moment,” further amplified when the Authors state “people feel less guilty about their dishonest behavior when others (in addition to themselves) can benefit from them.” And let us not underestimate the lure of Ms. Campbell’s “social cocoon” of corruption, where that eco-system elevates and strengthens the benefits of corruption to all who participante.

 “Cheating Won’t Hurt Anyone”

The Authors do a great service to the compliance community when they share how this dynamic can be a tipping point for those who struggle with ethical decisions. Indeed, “cheating won’t hurt anyone” serves to de-conflict emotions “through creative reassessment and self-serving rationalizations” where someone can “act dishonestly enough to profit from their unethicality, but honestly enough to maintain a positive self-concept.” In addition, as the Authors state “it appears that having the available justification that group members will benefit from one’s selfish behavior enables people to hide their self-serving motivation.”



The illusion that “#corruption does not hurt anyone” presents great #behavioral peril

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For my compliance readers, look at the history of FCPA personal indictments: what we see are people well paid and educated, with a lack of criminal history, taking tremendous personal risk by engaging in bribery. What the Authors describe is the process by how one can so easily move to the dark side. If you review my “if win this deal” check list you can see how they all support the illusion that corruption brings financial benefit to others, and as the Authors reflect “people are more likely to engage in unethical behavior if they split the spoils of such behavior with another person than when they are the only ones benefiting from it.” As their research suggests, “people use the potential benefit for others as a way to justify their self-serving and often unethical actions.”

Again, return to the checklist and think of how someone at the front-lines might see corruption as benefiting others, including third parties, state officials, as well as their own employer. The fact that the corporation may not be a direct participant does not serve to remove it as beneficiary in an individual’s thinking, which from my perspective, makes it all the more dangerous. Indeed, from my perspective, to ignore “the presence of other beneficiaries” as a part of how “people easily justify their dishonesty,” is to disregard a significant element of how those who struggle with corruption in their work might “tip” toward engaging in unethical and illegal conduct. In fact, as the Authors state “the more people can benefit from an individual’s unethical actions, the greater the cheating,” and as the checklist elevates, there are no shortages of beneficiaries, real and/or imagined.

The research, methodologies and underlying experiments (three) that are used to support the Authors conclusions are extensive and impressive. It also makes regretful that I did not pay more attention to Applied Data Analysis when I was an undergraduate! Nonetheless, ‘correlation analysis’ aside, all three experiments “show that participants cheated the most in the condition that included the opportunity to favor another participant in addition to the self.” In addition, the research shows that “dishonest behavior further increases as the number of people benefitting from this dishonesty rises.” Where there is even greater peril is “when there are other beneficiaries for people’s dishonest actions in addition to themselves, they perceive their unethical behavior to be morally acceptable.”

 Going back to Ms. Campbell’s “Culture Corrupts” where corruption is the organizational norm, “Self-Serving Altruism” suggests that ethical conduct “should be studied not only at the individual level but also at the group level, where members can influence one another in their ethical as well as unethical behavior.” Let us remain mindful that in most regions, those touch points with those who can influence (ethically and unethically) are everywhere: among peers, competitors, third parties and state personnel. While my own Masters Degree is in Foreign Affairs and not Organizational Psychology, I hope that by connecting these two works of individual and organizational relevance, that compliance practitioners can see the behavioral dangers which front-line personnel face in their struggles with overseas corruption.

 To underestimate this behavioral research is to discount a psychological dynamic that has great influence on ethical business thinking. Indeed, and as Dr. Roger Miles, Behavioral Risk Lead, Thomson Reuters, states in a 2013 Thomson Reuters White Paper, Risk Culture and Conduct Control: Time for a More Enlightened Approach: “Shouldn’t the designers of financial controls spend some time looking at the dark side? Instead of regulating by defining and enforcing some formulated version of normal behavior, a better approach for supervisors seeking to regulate conduct might be to identify the pathologies of “bad behavior.” What are its warning signs, its leading indicators? Can these be found in financial reports? (Hint: No, they cannot). Where do we need to look?”

More importantly, to disregard this research is to forfeit a major weapon in the struggle against corruption, for when you understand the thinking, you can take down the illusions, some gently, some by smashing. But better to react like ‘bull in a china shop’ than an ‘ostrich with your head in the sand.’

#RichardBistrong

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