Santa Clara University

Ethics Center Blog
Bookmark and Share

At the Center

Back to Blog

Power and Ethics in the Executive Suite

Wednesday, Feb. 2, 2011

If, as Lord Acton tells us, "power tends to corrupt, and absolute power corrupts absolutely," then what effect does power have on the ethics of C-level business executives? Dennis Moberg, Wilkinson Professor of Management and Ethics at SCU, reviewed recent research on how power impacts behavior at the February meeting of the Markkula Center for Applied Ethics Business and Organizational Ethics Partnership (BOEP). The partnership includes business executives who are tasked with ethics and compliance in their organizations as well as business ethics scholars from Bay Area universities.

Moberg cited four different areas of difference between powerful and powerless people—inhibition, rules, hypocrisy, and “sucking up”—and led the group in exploring the implications of this research for businesses.
A study by Keltner and Gruenfeld in the Psychological Review (2003) found that when powerful people communicate with their subordinates, they are often uninhibited. They may fail to exercise self-control, with frequent outbursts and violations of social norms. Moberg discussed how businesspeople could apply this information in their organizations to control this potential abuse of power. He suggested:
  • Reminding the powerful about the consequences of overly candid or inappropriate communications, such as leaks and false innuendos
  • Making sure the CEO has subordinates who are willing to call executives on inappropriate behavior and recall them to their better selves
In a finding that surprised many of the attendees, Lammers and Stapel reported in The Journal of Personality and Social Psychology (2009) that powerful people rely on rules, policies, or codes when deciding right from wrong, while powerless people rely on “consequences, outcomes, and results.” Moberg pointed out that both these modes of ethical reasoning are legitimate, but that the different approaches may cause misunderstandings between bosses and employees. 
Several participants noted that in their own experience, powerful people tended rather to bend the rules or to think that the rules did not apply to them, which proved a perfect segue to Moberg’s next area of difference, hypocrisy.
Another study by Lammers and Stapel (Psychological Science, 2010) found that while powerful people condemn other people’s cheating , they themselves may be guilty of this behavior,” Moberg said. So, while C-level executives may be strict when dealing with rule violators, they “tend to be oblivious to their own rule violations.”
As one of the partners noted, that description probably applies to most people, although the study’s findings suggested hypocrisy is a particular problem for the powerful. Since no one likes to see him or herself as hypocritical, the group discussed ways to approach executives about the problem, including talking about the double standard as if it had been noted by others or telling stories about other executives who had acted hypocritically in the hope that the boss would recognize the application of the story to him or herself. 
Sucking Up
Many executives think they are immune to flattery, but Moberg described the results of a study that suggested powerful people can be swayed by “sophisticated interpersonal influence behavior,” which Moberg rechristened, “sophisticated sucking up.” The research, by Stern and Westphal (Administrative Science Quarterly, 2010), looked at who was appointed to boards of directors at companies and what behaviors led to that result. Where outright flattery might be perceived as insincere, framing flattery as advice-seeking or complimenting the person to a colleague who would pass on the flattery can be very effective. Where being a “yes man” might be seen as manipulative, arguing prior to agreeing or agreeing “referencing common social affiliations” before agreeing seemed to massage the ego of the person in power and left a positive impression. In the business context, Moberg suggested that organizations alert the powerful to these tactics to make them more aware of when they are being manipulated.  
Although acknowledging the difficulty of fostering a work environment where criticism is welcomed, many of the BOEP members saw “speaking truth to power” as critical to maintaining an ethical organizational culture where the tendency for power to corrupt is held in check.


Tags: business ethics