Ethical systems design is based on the principle that behavior in organizations must be understood by examining the interaction of many factors and forces; you should not start by looking for good and bad people.
This is particularly true in business, where leaders, managers, and employees face conflicting incentives, messages, and pressures from multiple stakeholders. If you want to improve ethical behavior within your organization you have to think about many moving parts, take many different perspectives, and draw on research from many scientific fields. The purpose of Ethical Systems is to help you do that. See an article in Ethisphere on our organization.
For instance, if you want to improve trust and morale within your company, you could change your hiring practices, improve the fairness of your internal procedures and change some toxic social contexts, while modeling ethical leadership at the top and supporting it in the middle. If you do all of these things, you’ll profoundly change your company’s culture in ways that will make the changes self-sustaining—and ultimately profitable.
The heart of our site is the "Research" tab, where we review the existing research and distill best practices based on insights from the behavioral and management sciences. Find a summary of our research below.
Accounting:
Accounting is the language of business. Like spoken language, people sometimes use it to try to hide the truth. One common problem is “measure management,” in which people focus on improving measures of their performance, rather than improving their true performance. Another common problem is “earnings management,” in which firms manipulate the earnings numbers reported to outside investors. Such manipulations often benefit someone in the short run but usually hurt the firm in the long run. Ethical systems designers should therefore find ways to make reports reliable and consistent. We present the research on what has been shown to work -- for example, regulations that require partners to sign off on audits with their own names, rather than the firm’s name.
Cheating and Honesty:
Research shows that most people cheat in some situations, as long as they can find a way to justify their cheating to themselves. This is why appealing to people’s sense of honesty and begging them to be honest is not very effective; often people don’t even know that they are cheating. On this page we cover a variety of more indirect methods that shown to decrease cheating and increase honesty. For example: you can activate moral values moments before an opportunity for cheating, and you can arrange things so that people feel that others are looking -- even of the “others” are just images of eyes on a computer screen. Above all, leaders should model honest and ethical behavior (walking the walk, not just talking the talk).
Compliance and Ethics Programs:
In recent years several US laws gave companies greater protection from prosecution and penalties if they could show that they had created effective Compliance and Ethics programs. Many companies have created such programs, but they administer them in perfunctory “check the box” ways. On this page we show that a good C&E program is part of good management, particularly when the program strives to create a more ethical organizational culture (rather than merely complying with the mandated rules). We also show that good C&E programs--when strongly supported by top management, who exemplify ethical behavior themselves--deliver many benefits to companies, including greater employee engageme