What makes good people do bad things? The mere smell of money can make people behave unethically

  • Researchers from  Harvard and University of Utah found that the mere promise of money is enough to  cause people to make unethical decisions
  • Results of the  study found people would engage in insider trading and lying if they stood to  gain financially, but they wouldn’t if there was no money involved
  • Participants ‘completely lost track of everything’ in  the effort of pursuing cash

By  Daily Mail Reporter

PUBLISHED: 15:47 EST, 14  June 2013 |  UPDATED: 21:29 EST, 14 June 2013

The mere prospect of cash can make unethical  behavior much more likely, found a study released last month.

Researchers from the University of Utah and  Harvard wanted to  find out exactly what kind of effect the promise of money had  on  people’s behavior.

The study found that when people stood to  gain financially, they were much more likely to behave unethically than  otherwise.

The price of ethics: The study found that people behave more unethically when they stand to gain financially, especially in the realm of business 

The price of ethics: The study found that people behave  more unethically when they stand to gain financially, especially in the realm of  business

‘We were interested in why good people would  do bad behavior,’ Kristin Smith-Crowe, a management professor and co-author of  the study told CNBC.

Smith-Crow of the University of Utah and  Maryam Kouchaki of Harvard University used 324 university students for the  study. The group was broken into two groups and took part in the same exercises  – only one group was offered a financial reward for certain behavior, and the  other wasn’t.

In one exercise, the students were presented  with unethical acts and asked how likely they were to engage in the acts – one  group for money, and one group for nothing.

 

In another, they played a ‘deception game,’  in which one group could earn more money by lying rather than telling the truth,  and the other would gain nothing from the lies.

A third game allowed the students to choose  to hire an employee who would share insider information if hired, and for the  second group the candidate had no inside knowledge.

Greed is good: Gordon Gekko's mantra rings true for a lot of top executives in the business world 

Greed is good: Gordon Gekko’s mantra rings true for a  lot of top executives in the business world

In the fourth game, students engaged in a  performance task in which they could earn money by being dishonest (there was  nothing to gain by being dishonest for the second group).

The study found that people given an  opportunity for financial gain were much more likely to be unethical in their  intentions, decisions and behavior than those who weren’t.

A sample scenario is: ‘You work as an office  assistant for a department at a University. You’re alone in the office making  copies and realize you’re out of copy paper at home. You therefore slip a ream  of paper into your backpack.’

‘The study didn’t ask people to do horrible  acts, there were more mundane like stealing office supplies,’ Smith-Crowe told  CNBC.

Cold hard cash: It's been said that money corrupts, but the latest study shows the mere thought of it is enough to prompt unethical behavior 

Cold hard cash: It’s been said that money corrupts, but  the latest study shows the mere thought of it is enough to prompt unethical  behavior

‘But it just shows how insidious this can be.  These were normal people and  this is something we can all be affected by,’ she  said.

Smith-Crowe said that when it comes to making  a business decision, study participants with the promise of money set aside  their moral issues across the board.

It’s this kind of behavior we’ve seen often  in the downfall of major corporations: white collar crimes that begin with a  small ethical misstep and snowball into huge acts of fraud.

In recent years, we’ve seen huge corporations  such as Enron and Lehmann Brothers collapse due to fraud, and Bernie Madoff who  defrauded investors of almost $65 billion.

Smith-Crowe said that when participants in  the study had an opportunity for financial gain, they became single-minded in  the pursuance of it.

‘They completely lost track of everything  else except pursuing their self interests,’ Smith-Crowe told  CNBC.

‘They focused on the cost benefit of their  decisions rather than how it might affect other people.’

Cashing in: Study participants set aside all moral questions when making business decisions that would bring in more money 

Cashing in: Study participants set aside all moral  questions when making business decisions that would bring in more  money

The study is just the latest in a series of  academic studies that show that money corrupts. One 2012 study by the University  of Michigan showed that ‘upper class individuals behave more unethically that  lower-class individuals’, which researchers said showed a more favorable  attitude towards greed.

The findings show that ‘the mere presence of money…  can serve as a prompt for immoral  behavior operating through a business decision frame,’ the study notes.

‘These findings suggest that money is a  more insidious corrupting factor than  previously appreciated, as mere, subtle  exposure to money can be a corrupting influence,’ it concludes.

‘The next question is how business decisions  can be framed so that money won’t be corrupting,’ said Smith-Crowe to  CNBC.

‘We’re looking into that. We hope there’s a  positive story out there.’

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