A B-School Prof On Ethics, Power & Gender

Scandals make good headlines. Whether it’s a high-profile political figure, a big-name CEO, or even someone less well known, when we see the mighty fall we can’t help but watch and wonder. We’re reminded, time and again, that power corrupts. But Jessica Kennedy, an assistant professor at Vanderbilt University’s Owen Graduate School of Management, suggests we rethink that assumption.

Over the last five years, in numerous studies, Kennedy has researched the origin of unethical behavior, and why it takes hold. She has found that the whole story is more complex. It’s not always about power corrupting. Rather, power causes people to identify so strongly with their group that they lose sight of whether that group’s actions cross an ethical line. This identification can lead them to support misconduct, rather than stopping its spread.

Kennedy, a graduate of the Wharton School at the University of Pennsylvania, spent several years working as an investment banker before deciding to pursue a Ph.D. from the University of California at Berkeley’s Haas School of Business. In other studies, she has explored the interplay of gender and ethics, identifying differences in the ways men and women respond when they are pressured to sacrifice values for profits. Kennedy spoke recently with strategy+business about her body of research — all of which is rooted in her search for ways that businesspeople can achieve their goals while acting ethically.

When we hear about ethical misconduct, the common assumption is that it must stem from the person in charge.

Previous research has often traced ethical misconduct to high-ranking people’s orders. It shows that power leads to bad behavior, in essence. Other studies have shown that the behavior of high-ranking people sets the tone in their groups — that it trickles down.

But I don’t think that presents a complete picture of how unethical practices emerge. In fact, such practices often emerge from groups. For example, prior research has found that people making decisions as a group are more willing to lie than when they are making decisions as individuals. What I found in multiple studies was that high-ranking people are more inclined than low-ranking people to accept what their group recommends to them, even when it represents a breach of ethics. That is, higher-ranking people are less likely to engage in principled dissent and actively oppose such recommendations than are lower-ranking individuals.

Why are people in positions of power more likely to go along with the crowd?

The higher a person’s rank in a group, the more they identify with that group. If you show high-ranking people statements such as “I identify with this group” or “Being part of this group [the group in which they hold high rank] is an important part of who I am” or “I really value this group membership,” they agree with these statements more strongly than low-ranking people. Power creates identification with the group that accorded that power. And when people identify strongly with a group, they’re more inclined to accept that group’s norms and practices. That makes sense, because you’re motivated when you identify with something to view it positively. The idea is that people merge their sense of self with their sense of the group.

Of course, identification isn’t the only factor at play. One of the things that I’d like to study in the future is how a sense of responsibility for the group’s success plays in. I think it’s possible that high-ranking people feel a sense of loyalty and duty to help enable positive outcomes for groups that have given them these valuable positions, and so they might be more likely to go along with practices that enable success even if those practices are unethical. But in the studies that I have conducted to date, identification clearly emerged as a powerful driving force.

How did you test your hypothesis?

In one study, I analyzed data that had been collected from people across the hierarchy within about 20 organizations. I looked at how their level in the organization related to whether they had reported unethical practices to someone — be it a coworker, an immediate supervisor, a higher-level supervisor, a person in an ombudsman-type role, a person external to the organization, or others — and found that higher-ranking people were less likely to have reported unethical practices within the last 12 months.

These results aligned with my hypothesis, but because there were alternative explanations that I couldn’t rule out due to the correlational nature of the data, I turned to the lab and manipulated people’s rank. In groups, people had to decide whether to lie to members of another group in order to earn more money for themselves. I varied whether the majority of the people in the group wanted to lie or tell the truth. The “high-ranking” people were much more likely than the “low-ranking” people to support the group’s decision in both cases.

These are just two examples — I’ve found similar results in other studies over the years. And I should note that I have also looked at “positive affect,” or happy feelings. I wanted to see if people are just happier when they hold high rank, and if that might explain why they go along with the group. When we’re in a positive mood, perhaps we’re just less likely to be critical of things in general. But when I measured positive affect alongside other variables using statistical analyses, it did not explain the results as powerfully as identification did.

Are people with high rank blinding themselves to wrongdoing, or do they know something is wrong but choose to ignore it?

I’ve found that high-ranking people actually see what the group is recommending as more ethical than lower-ranking people do. Recently, I analyzed a decision from a business school case study about whether to dramatically raise the price of a medical product following a natural disaster. People were told that they were either a high-ranking or low-ranking individual in the group, and were then told that their group’s majority recommendation was to raise the price in light of increased demand following the disaster. High-ranking people were more likely than low-ranking people to classify that decision as “reasonably ethical.”