Why Do Good People Do Bad Things in Business? Lessons from Research for Responsible Business Managers

Promoting ethical behavior in business requires an understanding of why and when seemingly good people do unethical things. Research on this issue consists of theoretical models of moral decision-making and empirical studies of the ethical sensitivity, attitudes and behaviors of people in a variety of contexts. These studies reveal that explanations of unethical conduct include considerations of a person’s psychological disposition as well as the circumstances in which they live. They also identify general principles that help explain why individuals might engage in unethical conduct, such as when asked to do so by an authority, when acting in a group, or when there are incentives for misbehavior. This chapter reviews empirical studies conducted over the past 50 years that provide clear lessons relevant to the problem of unethical decision-making in business so that business managers can improve the ethical climate of business and ethical behavior of their employees. While the chapter does not break new ground, the presentation is important because it synthesizes the collective wisdom of scholars in simple language accessible to both scholars and business professionals. This chapter also identifies directions for future research that can enhance and supplement these lessons