Do Social Norms Explain Unethical Behaviors in the Workplace?

We experimentally test norm-behavior consistency by investigating the relationship between unethical behaviors in the workplace through financial reporting choices and the perceived social inappropriateness of unethical decisions. We conducted a norm-elicitation experiment in which we considered two unethical actions as observed in Amore et al. (2022) [J Bus Ethics]: leaders’ and workers’ untruthful financial reporting, and workers’ misalignment with their leader’s truthful reporting. We presented participants with Amore et al.’s background: in “experimental firms” (one leader, three workers), the profit is given by the sum of each member’s reported performance and equally split. Each member can report their performance via automatic or self-reporting, where the latter allows for profitable and undetectable earnings manipulation. As in Amore et al., we experimentally varied the leader’s ability to choose the reporting method. In addition, we test for prejudicial discrimination against female leaders by exogenously manipulating the leader’s gender. We elicited social norms using the Krupka-Weber procedure, asking participants to assess the social appropriateness of each reporting decision of firm members under different scenarios. We find a prevailing norm against self-reporting if used to artificially inflate earnings. A clear norm emerges against workers’ “negative” misalignment, i.e., choosing self-reporting when the leader used automatic reporting. This negative misalignment is viewed as less inappropriate if the leader is female. Overall, these findings reveal that social norms do not explain but rather contradict the predominant unethical behaviors observed in prior experimental research and many real-world workplaces