Loyalty and Ethics in Business

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Loyalty and Ethics in Business
Kasper Hiddema, Student (University), Netherlands

Stories in the media about corporate scandals, political scandals or gang-related violence often cite loyalty as one of the most important drivers of corruption. There are countless reports of employees who did not report misconduct to their superiors out of loyalty to their co-workers, or who embezzled company money while remaining loyal to each other.
The previously mentioned incidents that make the headlines make it seem as if loyalty is a bad thing, harming many aspects of our professional and personal lives.

Practically everyone feels loyalty, to our family, our friends, an organization or a certain cause. These loyalties are often important parts of our social identity. Loyalty is deeply rooted inside the human evolution because it once was a necessity for survival and propagation of our species.

Recent research by Gino, Bazerman and Hildreth (2015) suggests that this concern about loyalty is largely misplaced. In contrast with popular belief, they found that loyalty to a group can actually increase, rather than decrease, honest behaviour. They collected data from nine different studies, with over 1,000 participants including college students, working adults, and brothers in various fraternities.

In one of their studies, they divided participants into groups of three members each and had them discuss a topic. Ten of the groups were asked to discuss the idea of loyalty for 10 minutes. Next, they asked them to sign a written loyalty pledge.The other nine groups simply discussed a neutral topic for 10 minutes and did not make a loyalty pledge.
After that, they broke up the groups and asked all of the participants to individually solve a series of math puzzles on a piece of paper that looked like a test sheet. Rather than having them turn in their answer sheets to be scored, they gave the participants answer sheets and were told to score themselves. They then had them throw away their test sheets in a recycle bin and tell the researchers the number of puzzles they got right. To sweeten the deal, participants could earn 25 cents for themselves for each problem they got right, and each member of their randomly preassigned group would also get 25 cents for each problem they answered correctly. With this procedure, they gave participants the opportunity and temptation to cheat: monitoring seemed absent, and they (and their fellow group members) would receive a clear benefit from cheating. This setup approximates the real struggles that exist within organizations.

The participants did not know they collected the sheets they thought they had recycled and traced them to individual participants thanks to ID numbers embedded in the puzzles. The results were surprising. Among those who took the loyalty pledge, 20% cheated on the test. But for those who didn’t take the pledge, more than twice as many — 44% — cheated.In a similar follow-up experiment, they also allowed participants to pay themselves in cash for completed puzzles. The results were even starker: 15% of those who took the pledge cheated, versus 43% who didn’t take it.

As these researches shows, loyalty highlights the importance of ethical principles, bringing people’s attention to the fact that behaving ethically is the right course of action.

Source: Francesca Gino. “Does Loyalty Compromise Ethics”. Harvard Business Review, 2015.


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