Organizations Appear More Unethical than Individuals

  • Arthur S. Jago
  • Jeffrey Pfeffer
Original Paper


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.


Corporate personhood Punishment Organizations 


Compliance with Ethical Standards

Conflict of interest

All authors declare that they have no conflict of interest.

Ethical Approval

This article does not contain any studies with animals performed by any of the authors. All procedures performed in studies involving human participants were in accordance with the ethical standards of an institutional a research committee and with the 1964 Declaration of Helsinki and its later amendments or comparable ethical standards. Informed consent was obtained from all individual participants in these experiments.


  1. Alicke, M. D. (2000). Culpable control and the psychology of blame. Psychological Bulletin, 126, 556–574.CrossRefGoogle Scholar
  2. Alicke, M. D., Buckingham, J., Zell, E., & Davis, T. (2008). Culpable control and counterfactual reasoning in the psychology of blame. Personality and Social Psychology Bulletin, 34, 1371–1381.CrossRefGoogle Scholar
  3. Baayen, R. H. (2008). Analyzing linguistic data: A practical introduction to statistics using R (Vol. 2). New York, NY: Cambridge University Press.CrossRefGoogle Scholar
  4. Berinsky, A. J., Huber, G. A., & Lenz, G. S. (2012). Evaluating online labor markets for experimental research: Amazon. com’s Mechanical Turk. Political Analysis, 20, 351–368.CrossRefGoogle Scholar
  5. Boeker, W. (1992). Power and managerial dismissal: Scapegoating at the top. Administrative Science Quarterly, 37, 400–421.CrossRefGoogle Scholar
  6. Bradford, J. L., & Garrett, D. E. (1995). The effectiveness of corporate communicative responses to accusations of unethical behavior. Journal of Business Ethics, 14, 875–892.CrossRefGoogle Scholar
  7. Buhrmester, M., Kwang, T., & Gosling, S. D. (2011). Amazon’s Mechanical Turk: A new source of inexpensive, yet high-quality, data? Perspectives on Psychological Science, 6, 3–5.CrossRefGoogle Scholar
  8. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. (2014).Google Scholar
  9. Carlsmith, K. M., Darley, J. M., & Robinson, P. H. (2002). Why do we punish?: Deterrence and just deserts as motives for punishment. Journal of Personality and Social Psychology, 83, 284–299.CrossRefGoogle Scholar
  10. Chandler, J., Mueller, P., & Paolacci, G. (2014). Nonnaïveté among Amazon Mechanical Turk workers: Consequences and solutions for behavioral researchers. Behavior Research Methods, 46, 112–130.CrossRefGoogle Scholar
  11. Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).Google Scholar
  12. Coates, D. J., & Tognazzini, N. A. (Eds.). (2013). Blame: Its nature and norms. New York, NY: Oxford University Press.Google Scholar
  13. Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A review and assessment. Journal of Management, 37, 39–67.CrossRefGoogle Scholar
  14. Conroy, S. J., & Emerson, T. L. (2004). Business ethics and religion: Religiosity as a predictor of ethical awareness among students. Journal of Business Ethics, 50, 383–396.CrossRefGoogle Scholar
  15. Cushman, F. (2008). Crime and punishment: Distinguishing the roles of causal and intentional analyses in moral judgment. Cognition, 108, 353–380.CrossRefGoogle Scholar
  16. Douglas, T. (1995). Scapegoats: Transferring blame. New York, NY: Routledge.CrossRefGoogle Scholar
  17. Dutta, S., & Pullig, C. (2011). Effectiveness of corporate responses to brand crises: The role of crisis type and response strategies. Journal of Business Research, 64, 1281–1287.CrossRefGoogle Scholar
  18. Epley, N., & Gilovich, T. (2006). The anchoring-and-adjustment heuristic: Why the adjustments are insufficient. Psychological Science, 17, 311–318.CrossRefGoogle Scholar
  19. French, P. A. (1984). Collective and corporate responsibility. New York, NY: Columbia University Press.Google Scholar
  20. Gangloff, K. A., Connelly, B. L., & Shook, C. L. (2014). Of scapegoats and signals: Investor reactions to CEO succession in the aftermath of wrongdoing. Journal of Management,  42, 1614–1634.CrossRefGoogle Scholar
  21. Gino, F., Shu, L. L., & Bazerman, M. H. (2010). Nameless + harmless = blameless: When seemingly irrelevant factors influence judgment of (un) ethical behavior. Organizational Behavior and Human Decision Processes, 111, 93–101.CrossRefGoogle Scholar
  22. Graham, J., Haidt, J., & Nosek, B. A. (2009). Liberals and conservatives rely on different sets of moral foundations. Journal of Personality and Social Psychology, 96, 1029–1046.CrossRefGoogle Scholar
  23. Gray, H. M., Gray, K., & Wegner, D. M. (2007). Dimensions of mind perception. Science, 315, 619.CrossRefGoogle Scholar
  24. Gray, K., Waytz, A., & Young, L. (2012a). The moral dyad: A fundamental template unifying moral judgment. Psychological Inquiry, 23, 206–215.CrossRefGoogle Scholar
  25. Gray, K., & Wegner, D. M. (2009). Moral typecasting: Divergent perceptions of moral agents and moral patients. Journal of Personality and Social Psychology, 96, 505–520.CrossRefGoogle Scholar
  26. Gray, K., Young, L., & Waytz, A. (2012b). Mind perception is the essence of morality. Psychological Inquiry, 23, 101–124.CrossRefGoogle Scholar
  27. Greene, J., & Haidt, J. (2002). How (and where) does moral judgment work? Trends in cognitive sciences, 6, 517–523.CrossRefGoogle Scholar
  28. Haidt, J. (2001). The emotional dog and its rational tail: A social intuitionist approach to moral judgment. Psychological Review, 108, 814–834.CrossRefGoogle Scholar
  29. Haidt, J., Koller, S. H., & Dias, M. G. (1993). Affect, culture, and morality, or is it wrong to eat your dog? Journal of Personality and Social Psychology, 65, 613–628.CrossRefGoogle Scholar
  30. Haran, U. (2013). A person-organization discontinuity in contract perception: Why corporations can get away with breaking contracts but individuals cannot. Management Science, 59, 2837–2853.CrossRefGoogle Scholar
  31. Hayes, A. F. (2013). Introduction to mediation, moderation, and conditional process analysis: A regression-based approach. New York, NY: Guilford Press.Google Scholar
  32. Hearit, K. M. (1994). Apologies and public relations crises at Chrysler, Toshiba, and Volvo. Public Relations Review, 20, 113–125.CrossRefGoogle Scholar
  33. Jago, A. S., & Laurin, K. (2017). Corporate personhood: Lay perceptions and ethical consequences. Journal of Experimental Psychology: Applied,  23, 100–113.Google Scholar
  34. Jenkins, A. C., Dodell-Feder, D., Saxe, R., & Knobe, J. (2014). The neural bases of directed and spontaneous mental state attributions to group agents. PLoS ONE, 9, e105341. Scholar
  35. Kim, P. H., Ferrin, D. L., Cooper, C. D., & Dirks, K. T. (2004). Removing the shadow of suspicion: The effects of apology versus denial for repairing competence-versus integrity-based trust violations. Journal of Applied Psychology, 89, 104–118.CrossRefGoogle Scholar
  36. Knobe, J., & Prinz, J. (2008). Intuitions about consciousness: Experimental studies. Phenomenology and the Cognitive Sciences, 7, 67–83.CrossRefGoogle Scholar
  37. McCann, E. (2017). United’s apologies: A timeline. Retrieved from:
  38. Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York, NY: Harper & Row.Google Scholar
  39. Plitt, M., Savjani, R. R., & Eagleman, D. M. (2015). Are corporations people too? The neural correlates of moral judgments about companies and individuals. Social Neuroscience, 10, 1–13.CrossRefGoogle Scholar
  40. Rai, T. S., & Diermeier, D. (2015). Corporations are Cyborgs: Organizations elicit anger but not sympathy when they can think but cannot feel. Organizational Behavior and Human Decision Processes, 126, 18–26.CrossRefGoogle Scholar
  41. Robertson, C., & Fadil, P. A. (1999). Ethical decision making in multinational organizations: A culture-based model. Journal of Business Ethics, 19, 385–392.CrossRefGoogle Scholar
  42. Rucker, P. (2011). Mitt Romney says “corporations are people.” Washington Post, August 11, 2011.Google Scholar
  43. Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394. (1886).Google Scholar
  44. Schweitzer, M. E., Brooks, A. W., & Galinsky, A. D. (2015). The organizational apology. Harvard Business Review, 94, 44–52.Google Scholar
  45. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124–1131.CrossRefGoogle Scholar
  46. Tyler, T. R., & Mentovich, A. (2010). Punishing collective entities. Journal of Law and Policy, 19, 203–230.Google Scholar
  47. Uhlmann, E. L., Pizarro, D. A., & Diermeier, D. (2015). A person-centered approach to moral judgment. Perspectives on Psychological Science, 10, 72–81.CrossRefGoogle Scholar
  48. Van Kenhove, P., Vermeir, I., & Verniers, S. (2001). An empirical investigation of the relationships between ethical beliefs, ethical ideology, political preference and need for closure. Journal of Business Ethics, 32, 347–361.CrossRefGoogle Scholar
  49. Waytz, A., & Young, L. (2012). The group-member mind trade-off: Attributing mind to groups versus group members. Psychological Science, 23, 77–85.CrossRefGoogle Scholar
  50. Wells, G. L., & Windschitl, P. D. (1999). Stimulus sampling and social psychological experimentation. Personality and Social Psychology Bulletin, 25, 1115–1125.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Stanford Graduate School of BusinessStanford UniversityStanfordUSA

Personalised recommendations