Journal of Business Ethics

, Volume 131, Issue 4, pp 791–801 | Cite as

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

  • Kristin Smith-Crowe
  • Ann E. Tenbrunsel
  • Suzanne Chan-Serafin
  • Arthur P. Brief
  • Elizabeth E. Umphress
  • Joshua Joseph
Article

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 

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Kristin Smith-Crowe
    • 1
  • Ann E. Tenbrunsel
    • 2
  • Suzanne Chan-Serafin
    • 3
  • Arthur P. Brief
    • 1
  • Elizabeth E. Umphress
    • 4
  • Joshua Joseph
    • 5
  1. 1.Eccles School of BusinessUniversity of UtahSalt Lake CityUSA
  2. 2.Mendoza College of BusinessUniversity of Notre DameNotre DameUSA
  3. 3.Australian School of BusinessUniversity of New South WalesSydneyAustralia
  4. 4.Foster School of BusinessUniversity of WashingtonSeattleUSA
  5. 5.Partnership for Public ServiceWashingtonUSA

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