Journal of Business Ethics

, Volume 131, Issue 4, pp 791–801

The Ethics “Fix”: When Formal Systems Make a Difference

Authors

    • Eccles School of BusinessUniversity of Utah
  • Ann E. Tenbrunsel
    • Mendoza College of BusinessUniversity of Notre Dame
  • Suzanne Chan-Serafin
    • Australian School of BusinessUniversity of New South Wales
  • Arthur P. Brief
    • Eccles School of BusinessUniversity of Utah
  • Elizabeth E. Umphress
    • Foster School of BusinessUniversity of Washington
  • Joshua Joseph
    • Partnership for Public Service
Article

DOI: 10.1007/s10551-013-2022-6

Cite this article as:
Smith-Crowe, K., Tenbrunsel, A.E., Chan-Serafin, S. et al. J Bus Ethics (2015) 131: 791. doi:10.1007/s10551-013-2022-6

Abstract

This paper investigates the effect of the countervailing forces within organizations of formal systems that direct employees toward ethical acts and informal systems that direct employees toward fraudulent behavior. We study the effect of these forces on deception, a key component of fraud. The results provide support for an interactive effect of these formal and informal systems. The effectiveness of formal systems is greater when there is a strong informal “push” to do wrong; conversely, in the absence of a strong push to do wrong, the strength of formal systems has little impact on fraudulent behavior. These results help to explain why the implementation of formal systems within organizations has been met with mixed results and identifies when formal systems designed to promote ethical behavior will be most efficacious.

Keywords

Ethics Formal systems Fraud Informal systems Unethical behavior

Copyright information

© Springer Science+Business Media Dordrecht 2014