ORGANIZATION?: THE EFFECT OF SELF-ORIENTATION VERSUS
ORGANIZATION-ORIENTATION ON THE RELATIONSHIP
BETWEEN POWER AND UNETHICAL BEHAVIOR
Master of Science, MSc, specialization Human resource management University of Groningen, Faculty of Economics and Business
2 ABSTRACT
This research examines the roles of power and a self- versus organization-orientation in relation to unethical behavior. Specifically, I posits that power is positively associated with unethical behavior when the behavior benefits the self, while power is negatively associated with unethical behavior when the behavior benefits the organization. Quantitative analysis on this moderation model among 124 employees of a Dutch financial firm was conducted. The participants were randomly assigned to one of the conditions of the moderating role. Surprisingly, results did not support the proposed relationship. Instead, analysis revealed an effect of the powerful on organization unethical behavior and there was no effect for the powerless on organization unethical behavior. The unexpected results are reviewed in the discussion. Theoretical and practical implications are discussed, the study’s limitations are identified, and recommendations for future research are suggested.
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INTRODUCTION
Over the past few decades many corporate scandals have come to light (e.g. the Enron Scandal, the Worldcom scandal and the Volkswagen scandal). These scandals have led to the collapse of several businesses, harmed employees, customers, and investors, and even led to public and political outbursts. Although, no two scandals are the same, a common factor of these scandals is that the ones responsible for the scandals, are generally those in high power. In accordance, scientific research has shown that power corrupts (Gruenfeld, Inesi, Magee & Galinsky, 2008; Lammers, Stapel & Galinsky, 2010).
However, research suggests that the influence of power depends on whether the unethical behavior benefits the self- versus others. This is for example the case with the Enron and Worldcom scandal, with these scandals the unethical acts committed benefited the ones in power (Carson, 2003; Li, 2010). With the Volkswagen scandal, on the other hand, the benefits of the unethical acts were mostly for the company (Burki, 2015). These examples show that unethical behavior can either benefit power holders themselves, or benefit the organization as a whole. Therefore, it is important to understand when power holders act unethically: whether this is to benefit the self or the organization.
Research suggests that, people in positions of power tend to act more in their own interest (DeCelles, de Rue, Margolis & Ceranic, 2012; Fast, Halevy & Galinsky, 2013). Keltner, Gruenfeld and Anderson (2003), for instance, found that powerful people are directed to satisfy their own goals and needs in contrast to powerless people. In accordance, Williams (2014) stated that powerful people are less obligated to fulfill the wishes of others, and are therefore more likely to pursuit their own goals and desires. Abundant research has shown that power corrupts (Bendahan, Zehnder, Pralong & Antonakis, 2015). Specifically, power leads to derogating others (Kipnis, 1976), to abusive behaviors (Mitchell, Hopper, Daniels, Falvy & Ferris, 1998), and to self-interested behaviors (Haslam, 2006; Lammers et al., 2010).
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differ. Specifically, while the unethical behavior of the powerful is more likely to be self-interested, the unethical behavior of the powerless is more likely to be other-interested.
The current research elaborates on this line of research by examining the influence of power on unethical behavior, and whether this unethical behavior benefits the powerholder or their organization. Umphress and Bingman (2011) already suggested that unethical behavior is not always bad for organizations. Instead, people can act unethically to benefit their organizations.
This research contributes to the power literature in multiple ways. First, most studies in the field of power have only focused on the corrupting effects of power (e.g. Wiltermuth, 2011; Winterich, Mittal & Morales, 2014). To date, there has been little research about the more positive effects of power. In addition, this research has gathered data in a field study. In their article, Flynn, Gruenfeld, Molm and Polzer (2012), already stated that research on power is examined mostly in lab settings (Gino & Pierce, 2009; Gruenfeld, et al., 2012) and rarely in the field. For this reason, they questioned, whether the effects of being powerful, or assigned power, in lab settings distinguish from actual being powerful within an organization. Several experimental studies tried to explain what people leads to behave unethically in the workplace. The characteristics of the individual as well as the characteristics of the situation in which the individual finds himself influence the likelihood of an individual to behave unethically (Wiltermuth, 2011; Winterich et al., 2014). Therefore, this research will examine the effect of power within a field study.
Secondly, this research contributes to the research on ethics as well. Most research on ethics is focused on unethical behaviors which benefits the powerholder (e.g. DeCelles et al., 2012; Winterich et al., 2014). Research on other-interested unethical behavior is limited. The current research focuses on a specific form of other-interested unethical behavior, namely interested unethical behavior. To date, we know little about organization-interested unethical behavior. This research aims to fill this gap by examining the moderating role of self-interested versus organization-interested orientation on the relationship between power and unethical behavior.
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repercussions of the unethical behaviors since there are high costs involved (Weaver, Treviño & Cochran, 1999). Because of these negative consequences, it is important to gain more knowledge about the causes of unethical behavior. Making companies aware of the self-interested orientation of the powerful or the organization-self-interested orientation of the powerless, gives organizations the opportunity to take measures to tackle these problems.
In order to investigate the influence of power on unethical behavior in a real environment, this paper will conduct a field study within one organization to investigate the relationship between organizational power and unethical behavior and the moderating role of self-interested versus organization-interested orientation. To examine the moderating role, the participants will be randomly assigned to one of the two conditions of the moderating role.
THEORY
Power and Unethical Behavior
Previous literature has shown that there is no clear way to define power. The definition of power largely depends on the type of research (Keltner et al., 2003). Power has, for example, been defined as the control over outcomes (Dépret & Fiske, 1993) or as the capacity to influence others (Dahl, 1957), but power can also be defined by the unit of analysis (e.g. societies, institutions, individual or groups). In this research the definition of Magee and Galinsky (2008) is followed. They define power as “the asymmetric control over valued resources in social relations; those with high power depend less on the resources of those with low power than vice versa and, thus, are more easily able to satisfy their own needs and desires” (p. 361). Of importance is, that the resources are valuable, because the resource must be of a certain importance to at least one of the parties involved (Magee & Galinsky, 2008) and the powerful need to have control over these resources by the ability to withhold or provide these resources to the powerless (Emerson, 1962).
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Previous research has studied the effect of power for unethical behavior and has shown that power increases self- interested unethical behavior (Piff, Stancato, Côté, Mendoza-Denton & Keltner, 2012). Kipnis (1976) is known for his research on power, and stated that the acquisition and use of power can influence power holders’ values and beliefs, in a way that powerholders start seeing themselves more positive and subordinates more negative. Subsequently, the powerful can use their influence tactics in self-serving ways. Specifically, power has been associated with corruption, the misuse of organizational power to benefit the self (Bendahan et al., 2015), and with greed, powerful people are more subject to greed, tested according to the violation of traffic codes (Piff, et al., 2012).
Power has also been associated with abusive behaviors like adultery, such that the powerful are more likely to intend to and to commit adultery (Lammers, Stoker, Jordan, Pollmann & Stapel, 2011), and with sexual harassment, power is an underlying motive for sexual harassment (Popovich & Warren, 2010). Mitchell and colleagues (1998) elaborated on the thoughts of Kipnis (1976) and introduced the concept of the “dark side of power”, and found that powerful people have a higher chance of acting unethically, like abuse of power and misconduct. The distance between the powerful and the powerless can influence different behaviors like the amount of discretion of the powerholders, the monitoring by powerholders of the subordinates and biased evaluations by the powerholders (Mitchell et al., 1998).
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The Moderating Role of a Self- versus Organization orientation
The present research proposes that the relationship between power and unethical behavior is dependent on whether the unethical behavior benefits the self-versus the organization. This assumption is based on the research of Dubois and colleagues (2015). They examined the relationship between social class and power. Social class has been defined by Piff and colleagues (2012) as “an individual’s rank vis-à-vis others in society in terms of wealth, occupational prestige, and education”, and they say that the upper class have “abundant resources and elevated societal rank” (p. 4086). Despite the fact that social class and power are two distinct constructs, they are related to each other because they both include the control over resources. Previous research has found evidence for the relationship between social class and unethical behavior (Piff et al, 2012; Piff, Kraus, Côté, Cheng & Keltner, 2010). Dubois and colleagues (2015) found that the effects of social class are moderated by whether the unethical behavior benefited the self or others, such that participants in the upper class were more likely to act unethically when this benefited the self, and participants in the lower class were more likely to act unethically when this benefited others.
In accordance with Rucker, Galinsky and Dubois (2012), this research expect that there is a link between self-interested and other-interested unethical behavior and power. This link can be explained on the basis of the definition of power. Individuals who are higher in the hierarchy are less dependent on the resources of others and have the ability to pursue their own goals. In contrast, individuals who are lower in the hierarchy are more dependent on the resources of others, which means that they need others to pursue their goals which ultimately results in enhancing their lower standing in the social hierarchy (Lee & Tiedens, 2001; Rucker et al., 2012; Williams, 2014). Furthermore, power prompts disinhibited, self-serving behavior and individuals with high power have more influence on others (Keltner et al, 2003). Since this research will be a field study within an organization, the construct of other-interested unethical behavior will be specified to organization-interested unethical behavior or pro-organizational unethical behavior.
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Recent research suggests that the amount of power an individual has, influences the propensities of a person to engage in unethical behavior that benefits themselves versus others and that the powerless are more likely to foster a communal orientation then the powerful (Dubois et al., 2015; Rucker et al., 2012). This communal orientation means that the focus of an individual is on others, and that they have an aversion to act without considering others. In contrast to the powerful, the powerless do not have the freedom to pursue their own interest, but are dependent on others and therefore need others to achieve their goals (Dubois et al., 2015; Keltner et al., 2003; Williams, 2014). Furthermore, powerless people, are more likely to make more careful, controlled judgement about others, and are thus more likely to inhibit their own behaviors and act contingently on others (Fiske, 1993).
The research of Dubois and colleagues (2015) found that lower class individuals were more likely to engage in unethical behavior when this benefited others. The current research elaborates on these findings by replacing social class with power and other-interested by organization-interested unethical behavior.
9 METHOD
Participants and Procedure
Data has been gathered through an online questionnaire by the use of Qualtrics. All items were administered in Dutch. The questionnaire was distributed through email in name of the regional director with a direct request to the employees for their cooperation with the questionnaire. A reminder was send after ten days.
To test the hypothesis, a total of 240 employees were contacted, of which 124 participated in our study (response rate of 51.7%) All participants worked in the same organization in the North-Eastern region of the Netherlands in the financial sector. Participants were on average 46 years old (SD = 9.7), 38.7 % were female, and their organizational tenure was on average 20.4 years (SD = 12.8). All participants were Dutch and their educational level was high (47.6 percent of participants finished higher education level and 15.3 university level).
Measurements
The questionnaire contained questions about power, self-interested unethical behavior and organization-interested unethical behavior. Unless indicated otherwise all items were measured on a scale from 1 (strongly disagree) to 7 (strongly agree).
Power was measured in two ways. First, power was measured as participants subjective power by a method which has been successfully used by Lammers and colleagues (2010) and has proven to be reliable and to correlate with other indicators of power in previous research (Lammers et al., 2011; Seppälä, Lipponen, Bardi & Pirttilä‐Backman, 2012). With this method participants were asked to rate their current level of power within the organization on a line of 6 cm (2.4 inch). The scale range goes from 0 (power bottom) to 100 (power top).
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help my organization, I would misrepresent the truth to make my organization look good.” and “ If it would benefit my organization, I would withhold negative information about my company or its products from customers and clients.”
In the self-interested condition, participants were asked how likely they were to act unethically if it would benefit their career. This construct was measured by an adapted version of Umphress and colleagues (2010) scale (α = .78.). The items were changed so that the benefit of the unethical actions were for the self. Example items are: “If it would benefit my career, I would misrepresent the truth to make myself look good” and “If it would benefit my career, I would withhold negative information about my company or its products from customers and clients”. Reliability was calculated at α = .78. All items for self-interested unethical behavior and organization-interested unethical behavior can be found in appendix A.
Control variables. Participants’ age (in years), gender, tenure (in years), and educational level were considered as possible control variables, as previous research has shown that females are more concerned with ethical issues than men (e.g. Barnett & Karson, 1989; Beltramini, Peterson & Kozmetsky, 1984), and older workers tend to be more ethical (e.g. Barnett & Karson, 1989; Serwinek, 1992). There is no clear evidence in the literature for the effect of educational level. Some scholars found a influence of education on ethical dilemmas (e.g. Beltramini et al, 1984; Chonko & Hunt, 1985), but others did not (Stevens, Richardson & Abramowitz, 1992). Although there is no clear evidence for the effect of educational level, it is considered as a control variable in this research.
Analysis
To examine the relationship between power and unethical behavior, and the moderating effect of self-versus organization orientation, a hierarchical linear regression was conducted with use of the process macro method (Hayes, 2012). Predictor variables were standardized prior to the analysis.
RESULTS
Preliminary analysis
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significant, the skewness and kurtosis of unethical behavior were acceptable (skewness = .48 (SE = .22) and kurtosis = -.44 (SE = .43)). Analyses were conducted to search for the cause of non-normality. The data were checked for outliers for unethical behavior, which were not present. Despite the fact that the data is not normally distributed, the analysis of skewness and kurtosis values showed that for a medium-sized sample the data is approximately normal distributed as their scores are within the range of three standard deviations from the mean (Miller, 1991), and therefore the analysis can be conducted.
Descriptive Statistics and Correlations
The descriptive statistics and correlations are reported in Table 1. For both power measures there was no significant relationship found with unethical behavior. Tenure correlated positively with age (R = .82, p = .00), indicating that older participants had longer tenure. Association between age and unethical behavior was negative (R = -.27, p = .003) meaning that older participants tend to engage less in unethical behavior. In accordance with age, there was an negative correlation between unethical behavior and tenure (R = -.29, p = .001), meaning that participants who work longer with the organization tend to engage less in unethical behavior.
12 Table 1
Descriptive statistics and correlation matrix.
M SD 1 2 3 4 5 6 7 8 9 10 1. Subjective power 39.59 28.18 2. Hierarchical power 1.30 .68 .55** 3. Unethical Behavior 1.95 .74 -.03 .07 4. Condition .49 .50 .12 .04 -.47** 5. Organization- interested unethical behavior 2.30 .74 .07 .21 - 6. Self-interested unethical behavior 1.60 .55 -.004 -.02 - - 7. Gender 1.39 .49 .32** .19* .02 .12 .03 .18 8 Age 45.98 9.64 -.05 -.01 -.27** .26** -.24 -.08 .16 9. Tenure 21.53 12.76 -.18* -.10 -.29** .30** -.19 -.16 .03 .82** 10. Education 6.14 1.57 .29** .25** .16 -.15 .14 .06 .03 -.50** -.66**
13 Hypothesis test
The hypothesis proposed that the effect of power for unethical behavior is moderated by whether this behavior benefits the self-versus the organization, such that power is positively associated with unethical behavior when this behavior benefits the self, while power is negatively associated with unethical behavior when this behavior benefits the organization. First, an analysis with the subjective power measure was conducted. Table 2 depicts the results of the regression analysis. Analysis revealed that there is no main effect of subjective power on unethical behavior (B = .004, t = .50, p = .61). Furthermore, a main effect of the condition on unethical behavior was found (B = -.62, t = - 4.89, p = .00). Results show that subjective power and the self-versus organization-interested orientation did not interact in their effects on unethical behavior (B = -.08, t = -.66, p = .51), as such, the hypothesis was not supported.
Table 2
Results of regression analysis testing the model in which self-versus organization interested orientation moderates the relationship between subjective power and unethical behavior
Unethical behavior Predictor B SE t p Tenure Age Subjective power Self-vs organization orientation
Subjective power x self-vs organization R2 -.08 .12 -.63 .53 -.06 .11 -.55 .58 .004 .09 .50 .61 -.62 .13 -4.89 .00 -.08 .12 -.66 .51 .25
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interaction is almost marginally significant. According to these results, the hypothesis was not supported.
Table 3
Results of regression analysis testing the model in which self-versus organization interested orientation moderates the relationship between hierarchical power and unethical behavior
Unethical behavior Predictor B SE t p Tenure Age Hierarchical power Self- vs organization orientation
Hierarchical power x self-vs organization orientation R2 -.09 .12 -.75 .46 -.05 .11 -.46 .65 .23 .13 1.80 .07 -.29 .26 -1.09 .28 -.26 .18 1.49 .14 .27
15 Figure 2
Interaction effects of hierarchical power on unethical behavior for organization-interested orientation and self-interested orientation.
DISCUSSION
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A possible explanation is that people in position of low power do not have the possibility to behave unethically. Power was defined as the control over resources, therefore it is possible that people in position of low power are not able to behave unethically, because they do not own the resources to make the decisions which results in unethical acts.
Another explanation is that people find it hard to admit that they would engage in unethical behavior which benefits themselves, because they do not want to admit that they are selfish. This behavior is referred to as social desirability and can cause that individuals present themselves in a favorable light, instead of presenting their true feelings about the issue (Podsakoff, MacKenzie, Lee and Podsakoff, 2003). Since unethical behavior is a sensitive topic, especially the unethical behavior that benefits the self, it could be possible that the participants gave social desirable answers to the questions of this research.
Another explanation lies in the research method. The items for self-interested unethical behavior were modified out of the items for organization-interested unethical behavior. Therefore the validity of these items could be lower than for the organization-interested items. Furthermore, the analyzes were conducted on common source data, meaning that the participants of this study were providing the measures of the predictor variable as well as the criterion variable and may result in an artefactual covariance between the two variables (Podsakoff et al., 2003).
Implications
The current research provides several contributions to the current literature on power and unethical behavior. First, this research points out that power does not always corrupts. Previous research has shown that power has negative implications such as self-interested behaviors (DeCelles et al., 2012; Piff et al., 2012 ) and abusive behaviors (Lammers et al., 20112; Popovich & Warren, 2010). However, this research aimed to show that power can also be used to benefit the organization. The results of this research prove that powerful people are more likely to engage in unethical behavior which benefits the organization. An explanation for this is that the powerful are focused on the consequences of their actions and therefore act more socially.
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reciprocity beliefs. However, the construct of power as a predictor of organizational-interested unethical behavior has not been examined before. Therefore, this research has provided insights into why individuals could show organizational-interested unethical behavior.
Apart from the theoretical implications, this research has also a practical implication. It is important to identify factors that can lead to unethical behavior, since these behaviors are morally unacceptable to the larger community (Jones, 1991). This also accounts for unethical behaviors which benefits the organization, even though these behaviors sounds less bad than the self-interested unethical behaviors, they are still morally unacceptable. An employee or manager can have all the good intentions with their behaviors, the costs of the results can be high. An organization which could benefit of the unethical act can lose its reputation and a lot of money. Besides the problems it can cause for the organization, it can harm the customers and the society in its whole as well. Therefore it is of importance for organizations to know which influence power has on individuals and that it can result in unethical behavior.
Furthermore, the findings of this study gives organizations the possibility to fight unethical behaviors within the organization by recognizing the former wrongdoing by the powerful or the powerless. They could for example give more attention to the consequences of their wrongdoing by providing warnings of the potential harm that unethical behavior can have.
Limitations and Future Research
Because the result of the analysis did not support the hypothesis, it is important to consider a number of important limitations. First, a possible limitation of this study is the generalizability of the results. The current study had a small sample group within one organization. A group of 124 people participated in this study and all participants had rather similar demographic backgrounds. Nowadays, organizations are more diverse according to demographic backgrounds. Furthermore, the levels of power were low on distribution, as such that most of the participants were low on hierarchical level and there were no participants with the highest level of power. Therefore the generalizability of the results should be done with caution.
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CONCLUSION
To conclude, this research has examined the moderating role of a self- versus organization orientation on the relationship between power and unethical behavior. The main goal of this research was to determine if a self or an organization orientation given to an individual would moderate the relationship between power and unethical behavior. Such that, power is positively associated with unethical behavior when this behavior benefits the self, while power is negatively associated with unethical behavior when this behavior benefits the organization. The results found in this research proved a different effect. There is no effect of low power on organization-interested unethical behavior, but there is an contrary effect of high power on unethical behavior which benefit the organization instead of the self. This study emphasize that power does not always corrupt , instead this research showed that the powerful do not always act in their own self-interest. More work needs to be done to investigate the effect of the moderating role of a self-versus organization orientation on the relationship between power and unethical behavior.
ACKNOWLEDGEMENTS
19 APPENDIX A
Organization-oriented behavior
If it would help my organization,
- I would misrepresent the truth to make my organization look good.
- I would exaggerate the truth about my company’s products or services to customers and clients.
- I would withhold negative information about my company or its products from customers and clients.
- I would give a good recommendation on the behalf of an incompetent employee in the hope that the person will become another organization’s problem instead of my own. - I would withhold issuing a refund to a customer or client accidentally overcharged. - I would conceal information from the public that could be damaging to my
organization.
Self-oriented behavior
If it would help my career,
- I would misrepresent the truth to make myself look good.
- I would exaggerate the truth about my company’s products or services to customers and clients.
- I would withhold negative information about my company or its products from customers and clients.
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