Have you earned enough moral credits to engage in some less upright behavior?
It seems that, for a number of firms and their employees, acting as a good corporate citizen earns you points, somewhat akin to monetary currency, to “sin”. At least, that’s what some recent studies suggest.
Researcher Margaret Ormiston, of the London Business School and her colleague Elaine Wong, at University of California, conducted a study of Fortune 500 companies and “found that firms that engage in socially responsible behavior towards their stakeholders are subsequently more likely to engage in socially irresponsible behavior towards their same stakeholders at a later point.”
The authors point to other studies, like this one, which concludes that people are more likely to steal and cheat after purchasing green products. The studies suggest that altruistic purchasing behavior gives people the sense that they have a license to offset the good behavior with bad behavior in other realms, and that the behavior is something they may or may not be explicitly aware of.
Could this be the same mechanism behind IKEA‘s largely rigorous sustainability efforts even while their forestry practices lag far behind, or Nestle‘s water-mongering even among other strong sustainability practices, or Walmart‘s abysmal record on employee treatment despite being a leader in other sustainability-related areas?
Ormiston and Wong suggest that firms and their boards be aware of this psychological “licensing” mechanism, and create monitoring processes that discourage the behavior. That may work for those firms, leaders, and employees who are not aware of the behavior, but what about those that are more intentional? Creating incentives that penalize for irresponsible behavior on the executive level may help. (Incentives that reward behavior through bonuses and other financial means can backfire, particularly if they do not incorporate a longer term focus).