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Organizations Appear More Unethical than Individuals

Author

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  • Arthur S. Jago

    (Stanford University)

  • Jeffrey Pfeffer

    (Stanford University)

Abstract

Both individuals and organizations can (and do) engage in unethical behaviors. Across six experiments, we examine how people’s ethical judgments are affected by whether the agent engaging in unethical action is a person or an organization. People believe organizations are more unethical than individuals, even when both agents engage in identical behaviors (Experiments 1–2). Using both mediation (Experiments 3a–3b) and moderation (Experiment 4) analytical approaches, we find that this effect is explained by people’s beliefs that organizations produce more harm when behaving unethically, even when they do not, as well as people’s perceptions that organizations are relatively more blameworthy agents. We then explore how these judgments manifest across different kinds of organizations (Experiment 5) as well as how they produce discrepant punishments following ethically questionable business activities (Experiment 6). Although society and the law often treat individuals and organizations as equivalent, people believe for-profit organizations’ behaviors are less ethical than identical individual behaviors. We discuss the ethical implications of this discrepancy, as well as additional implications concerning reputation management, punishment, and signaling in organizational contexts.

Suggested Citation

  • Arthur S. Jago & Jeffrey Pfeffer, 2019. "Organizations Appear More Unethical than Individuals," Journal of Business Ethics, Springer, vol. 160(1), pages 71-87, November.
    • Handle: RePEc:kap:jbuset:v:160:y:2019:i:1:d:10.1007_s10551-018-3811-8
    DOI: 10.1007/s10551-018-3811-8
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    References listed on IDEAS

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    1. Uriel Haran, 2013. "A Person--Organization Discontinuity in Contract Perception: Why Corporations Can Get Away with Breaking Contracts But Individuals Cannot," Management Science, INFORMS, vol. 59(12), pages 2837-2853, December.
    2. Rai, Tage S. & Diermeier, Daniel, 2015. "Corporations are Cyborgs: Organizations elicit anger but not sympathy when they can think but cannot feel," Organizational Behavior and Human Decision Processes, Elsevier, vol. 126(C), pages 18-26.
    3. Dutta, Sujay & Pullig, Chris, 2011. "Effectiveness of corporate responses to brand crises: The role of crisis type and response strategies," Journal of Business Research, Elsevier, vol. 64(12), pages 1281-1287.
    4. Adrianna C Jenkins & David Dodell-Feder & Rebecca Saxe & Joshua Knobe, 2014. "The Neural Bases of Directed and Spontaneous Mental State Attributions to Group Agents," PLOS ONE, Public Library of Science, vol. 9(8), pages 1-11, August.
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    Cited by:

    1. Grolleau, Gilles & Mungan, Murat C. & Mzoughi, Naoufel, 2022. "Seemingly irrelevant information? The impact of legal team size on third party perceptions," International Review of Law and Economics, Elsevier, vol. 71(C).
    2. Aneka Fahima Sufi & Usman Raja & Arif Nazir Butt, 2024. "Impact of Peer Unethical Behaviors on Employee Silence: The Role of Organizational Identification and Emotions," Journal of Business Ethics, Springer, vol. 190(4), pages 821-839, April.

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