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In 2015, the car manufacturer Volkswagen was caught having installed “defeat devices” in its diesel vehicles. These devices detected when the vehicles were driven under emission test conditions and would only then turn on emission controls. They switched off during normal driving, meaning that the vehicles’ performance improved while up to 40 times more nitrous oxide was released. The cheating was designed to make the vehicles meet emission standards in the United States and other countries. Ensuing investigations revealed that the device had been installed in around 11 million vehicles worldwide. Volkswagen faced a corporate scandal. Almost one-third of its market value was lost in less than a week. Only two years earlier, the company had received an Ethics in Business award at the World Forum of Ethics in Business for its extraordinary efforts to reduce its negative impact on the environment and take social responsibility (Rhodes 2016).

In the scandal’s aftermath, researchers have explored how it affected Volkswagen’s reputation and how the company has worked to regain trust (Li et al. 2018; Bachmann et al. 2019; Jung and Sharon 2019). Sales have increased in the years after the scandal, confirming that customers tend to have short attention spans (Mena et al. 2016). The case has been used to illustrate how corporations can become ethically self-obsessed, simultaneously extolling their ethical virtues, and deliberately hiding their criminal activity (Rhodes 2016). Here, I will apply it to reflect on how the communication climate in a workplace affects the extent to which unethical suggestions and ideas can take hold and evolve into unethical practices. I will use concepts from moral psychology to highlight how alternatives that initially go against the decision-makers’ moral convictions can nevertheless become normal practice through processes of finding excuses and justifications for moving forward with them. A communication climate for questioning these attempts to neutralise moral misgivings can be crucial for avoiding small- and large-scale ethical misbehaviour in an organisation.

In a study of the antecedents of the 2008 financial crisis in Iceland, Salvör Nordal and I applied a three-step model to describe the possible emergence of unethical behaviour in an organisation (Kvalnes and Nordal 2018). Decision-makers can initially experience (a) moral dissonance, a conflict between their moral convictions and the alternative under consideration. When people experience moral dissonance, one option is to dismiss the alternative and remain committed to the moral convictions with which it conflicts. Another option is to engage in (b) moral neutralisation, a process of finding excuses for moving forward with the alternative despite the initial moral misgivings. This process can lead to (c) normalisation of questionable behaviour, where the unethical practice becomes unquestioned routine. We derived this third step from Donaldson (2012) and his analysis of how the international financial crisis around 2008 demonstrated how, “bad practices can become institutionalised, and initial queasiness gives way to industry-wide acceptance” (p. 6). What he calls “queasiness” is equivalent to what I call moral dissonance.

In our study, we found evidence that developments along these lines had occurred in the financial institutions in Iceland, creating practices that eventually caused a collapse of the country’s banking system in October 2008. Financial advisors and bank managers had developed practices of pushing high-risk product on their clients and of making dubious investments on their employers’ behalf. In the beginning, some of the individuals involved experienced moral dissonance. Those who did either quit the financial industry or engaged in moral neutralisation, a process that put them on course for normalising questionable behaviour.

Little is known about the internal processes in Volkswagen leading up to installing devices that were designed to deceive the emission tests. At least 50 engineers, technicians, and managers were reported to have known about the cheating (Mansouri 2016). They were working in a corporate environment where all the compliance elements were in place, including the required codes of conduct and reports on social and environmental responsibility. Simultaneously, they were under pressure to deliver on ambitious commercial goals. Did any of the senior or junior staff involved in the process experience moral dissonance, or did they simply follow orders to do whatever was needed to make the vehicles ready for the American market? Were executives in the company actively quelling moral dissent and disagreement? If anyone did experience moral dissonance, did moral neutralisation processes follow it, where they sought out excuses for why it was acceptable to install the deceptive device? Furthermore, did this process create a platform for normalising deception, where people stopped noticing the unethical nature of what practice? These empirical questions remain unanswered, but likely the level of friction and dissent among the people working on the task was low. It appears that they were using their competence to fix a problem and could do so without moral concerns holding them back.

The concept of moral neutralisation builds on the work of criminologists Sykes and Matza (1957). Based on interviews with juvenile delinquents, they identified five techniques of neutralisation, which can take the following form.

  • Denial of responsibility: The ordinary conditions for responsibility are not met. The agent is following orders or doing what everyone else is doing. There is no real choice involved.

  • Denial of injury: Nobody will notice the difference if the agent refrains from behaving in this manner. The negative effect from this individual act is minimal.

  • Denial of victim: The people involved are neither innocent nor naïve. They would most likely have done the same if roles had been reversed.

  • Condemnation of condemners: Those who are critical to this practice do not know about what they are talking. Ideology or false assumptions about the activity they are condemning govern them.

  • Appeal to higher loyalties: The agent owes it to family, employer, organisorganisation, or other supporters to go forward with this alternative.

Subsequent research has identified other categories of techniques, some of which overlapping with the initial five techniques. One pattern we found in the Icelandic study was an appeal not to break any rules. Sykes and Matza’s (1957) outline did not capture this kind of moral neutralisation set of techniques. Decision-makers in the financial sector in Iceland claimed that their activities were in accordance with the standards the governing authorities established. If this kind of practice were unethical, the rule makers would surely have identified it and formulated a rule. Building on Pogge’s (1992) initial work, I have previously labelled this way of thinking as loophole ethics (Kvalnes 2019). It is operative when decision-makers systematically look for and exploit loopholes in the rulebook. If the legislators respond to this activity by making new rules to cover up the loopholes, it will likely initiate more loophole ethics because this countermeasure can be interpreted to confirm that the appeal to a lack of rules is a valid justification. A critique of loophole ethics would argue that ethical concerns and expectations go beyond following specific rules. It is reasonable to expect that the decision-maker applies common sense and personal judgement to the case, and thus, goes beyond mere rule abidance.

When Sykes and Matza (1957) introduced their neutralisation theory, they presented an alternative to a character explanation of misconduct. They challenged a dominant assumption about juvenile delinquents. These people were considered morally damaged, operating from moral standards that deviated from those found in society. Bad character explained their criminal activities. During interviews, the two criminologists found that the delinquents actually adhered to the same moral standards as their noncriminal peers. What set them apart from others was that they had engaged in moral neutralisation. Initial moral misgivings had disappeared when they could convince themselves and each other that the activity of breaking into people’s homes was morally acceptable.

These findings point towards circumstance explanations of misconduct to supplement at least the character explanations. Whether a person becomes engaged in moral wrongdoing can depend on the social setting and the amount of friction and opposition that others raise towards moral neutralisation attempts, more so than on character and inner moral qualities. Each individual depends on colleagues, friends, and other people to interfere in situations where they sense that they are providing dubious excuses for moving forward with a questionable alternative. This topic has ancient roots. Nussbaum (2001) explored it in her work on classical Greek conceptions of morality. The fragility of goodness preoccupied philosophers, poets, and dramatists at that time, and it remains a concern for humans everywhere. We are morally frail in the sense that we can be blind to unethical aspects of our behaviour and may at crucial decision points engage in moral neutralisation. In circumstances where nobody points out the destructive tendencies in our reasoning or behaviour, we can end up like the juvenile delinquents in the Sykes and Matza (1957) study. There may be nothing wrong with our moral convictions and beliefs, but we have found ways to silence or avoid them under these circumstances. I have previously described our dependency on others to intervene as a case of being susceptible to relational moral luck, or luck in the social company when we face these challenging situations (Kvalnes 2019).

An organisation’s communication climate sets the foundation for countering moral neutralisation. When leaders and employees attempt to find excuses for moving forward with an alternative that has created moral dissonance, there is a need for active opposition. Decision-makers may suffer from inattentional blindness and fail to see the unethical aspect of what they are considering. The situation calls for moral dissent and opposition. One or more engineers in Volkswagen came up with the idea to create a device that would camouflage the real emissions from the company’s diesel vehicles. When that idea first came into view, it likely caused some form of moral dissonance, either from the initiators or from the colleagues to whom they presented it. The public might never know what happened next and whether extensive moral neutralisation took place before the idea was washed free of moral misgivings and brought forward to be executed. I am curious whether there were any critical quality moments during the process, situations where a sharp and precise intervention could have stopped the plan. If the whole process from idea work to realisation was frictionless, it does not reflect well on the engineers, executives, and other professionals involved.

All five qualities that characterise a well-functioning communication climate can be tested in circumstances where moral neutralisation takes place. This is an opportunity to (a) apply friendly friction and offer counterarguments to efforts to make the moral dissonance disappear. With unfriendly friction, there is less likelihood that the neutralisers will listen and take the misgivings seriously. They can dismiss the misgivings as unkind attacks, directed at them personally and not at the alternative they are considering. With friendliness without friction, the initiators can interpret the lack of criticism as support for the stance they are developing. The combination of friction delivered in a friendly manner is needed. It can also be important with (b) a tolerance for false alarms. To encourage people to intervene whenever they sense that moral neutralisation is taking place, it is necessary to tolerate that they sometimes misunderstand the situation and raise concerns that result in being unwarranted. Such instances also help to maintain (c) psychological safety in the group. People experience that they can express moral concerns about the ongoing justifications of a plan that is soon to be initiated without being totally convinced about their argument. If it turns out that they have overlooked an important aspect of the situation, it does not put them in a bad light with the initiators. Those who perceive that moral neutralisation is taking place in their work environment depend on a high level of psychological safety to formulate a challenge. If they sense that this form of interpersonal risk will lead to repercussions against them, they will likely remain silent. If there is (d) scope for agency in such situations, people can adopt an agent position, and not simply be pawns waiting for instructions. In the aftermath of internal strife about moral neutralisation, it is possible to (e) push plus buttons and acknowledge the efforts of those who have actively opposed what they have seen as moral neutralisation attempts. Doing that can strengthen the resolve to provide friendly friction in future similar circumstances.

Moral neutralisation can generate constructive friction and dissent in an organisation. I question how likely such responses will emerge within powerful corporations. As Rhodes (2016) noted, Volkswagen’s emission scandal came about through initiatives from a network of individuals and institutions outside the organisorganisation and beyond the business sphere. Probing from researchers and NGOs brought about the disclosure of deception. In his study of the case, Rhodes (2016) launched the idea of a democratic business ethics, where the free press, trade unions, political pressure groups, social movement organisations, and universities question corporate practices. Traditional business ethics as the corporations practice tends to signal sovereignty and self-sufficiency. It indicates there is no need for members of civic society to monitor, doubt, or question the decision-making that takes place in business. Executives can point to elaborate codes of conduct that all employees must read, and to annual ethical training as part of compliance work. Crises emerging in the financial sector and in Volkswagen and other powerful corporations give rise to deep suspicion of this way of thinking. Dissent and friction from outside the organisations are necessary to force a reorientation in business.

Despite these misgivings about the internal capacity for opposition to moral neutralisation, it is worthwhile to attempt establishing and maintaining a constructive communication climate in organisations. This can be a climate where it is normal and appreciated to raise concerns and disagree with ideas and plans being considered. There may be further serious and systematic internal dissent in corporations than what Rhodes indicated. The narratives that gain attention are about ethical scandals and processes that brutal self-interest drive. Narratives about people who speak up and manage to steer their organisations more ethically seldom receive media attention. They may turn up in glossy self-representations the corporations publish, and in that context, they lack plausibility. However, there can be situations in both the private and the public sectors of working life where there is real opposition to moral neutralisation, and initiatives from people within an organisation stops morally questionable initiatives.

This chapter has discussed countering moral neutralisation. I have shown that a constructive communication climate can serve as a counterweight to inattentional blindness regarding ethical aspects of an organisation’s activities. When people become involved in moral neutralisation processes to overcome moral dissonance, they depend on others to challenge their dubious excuses and justifications. This line of thinking points to a limitation in character explanations of misconduct. Those who have been involved in ethical scandals at work may not have acted from deviant moral convictions or beliefs. Instead, they may have suffered from bad relational moral luck. Before we condemn and criticise wrongdoers, we should remember the fragility of goodness and how dependent we are on interventions from others at the times when we fail to see the gorilla in our midst.