THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, March 31, 1996 TAG: 9603300015
SECTION: COMMENTARY PAGE: J5 EDITION: FINAL
TYPE: Opinion
SOURCE: KEITH MONROE
LENGTH: Medium: 82 lines
When the pressure is on, business executives are quick to commit fraud. This isn't an opinion. It's the doleful finding of a study published by the oxymoronically titled Journal of Business Ethics, as reported in The Wall Street Journal this week.
Business professors, a former SEC commissioner and other luminaries expressed shock and disappointment that 47 percent of executives and 76 percent of MBA students tested were prepared to cook the books.
The findings came in a so-called in-basket test. Generally, these exercises ask participants to work through a stack of business documents as quickly as possible, filing some, acting on others, making fast decisions. But in this case, hidden in the memos and letters, was a scenario inspired by actual SEC cases. It gave participants a chance to hide write-offs illegally or inflate sales figures fradulently in order to overstate the company's profitability.
Those taking the test were led to believe the object of the game was to improve the bottom line and the reward was a promotion to president of the imaginary company. So, they took the bait and improved the numbers by illegal means.
Those amazed at this turn of events can't have been paying close attention. We live in go-along-to-get-along times. We are taught to play on the team, to conform, to succeed. We're more often rewarded for saluting than for questioning. Iconoclasts, independent thinkers, moralists and individualists aren't really honored and rewarded in our schools, businesses and public life. Often, not even in our churches. Whistle-blowers are treated worse than those they report. From an early age, tattling is frowned upon.
The Japanese have a somewhat brutal saying that nevertheless describes part of the process: The nail that sticks out gets hammered down. It doesn't just happen in regimented Japan. It happens here, every day in subtle and not-so-subtle ways.
People do what they think is expected of them. People follow the leader. People adapt to the culture they find themselves in. That's true on the job, at the Tailhook convention, in the church choir, in the classroom, on the school board. On the in-basket test, the participants were told to improve the bottom line to get rewarded. They improved the bottom line.
We like to think we'd refuse to cut corners or follow dubious orders, but there's room for doubt. A widely reported experiment of a few years back showed subjects willing to administer increasingly severe shocks to another person when told to by a man in a lab coat. In fact, the shocks were fake. But the willingness to follow orders even if they inflicted pain was real enough.
In legislative bodies, it appears to take real courage to buck the trend, to vote on one side of an issue if everyone else is going in the other direction. The Virginia Beach School Board has been criticized for docilely following as it was led down the garden path. But that's often standard operating procedure.
We all know how potent peer pressure is in the teen years, for instance. Young people grow their hair, cut it off or dye it purple if that's the mode. On a more serious level, if academic prowess is valued, it will be practiced. If athletic valor is highly prized, it will be emulated. If acting like a hood is defined as heroic, schools will turn into armed camps. If cheating on tests is the norm, the virus will spread.
There's a lot of lip service paid to ethics and excellence in this society, but a look at actual behavior tells more about actual values than all the rhetoric. The in-basket test demonstrated that many business executives and graduate students are willing to do what it takes to pass the test, win the game, snare the prize.
In our schools, academic excellence is too often sneered at as nerdy and what's valued is being the best dressed or most popular. In civic life, winning votes or garnering contributions can take precedence over the principled stand.
Perhaps the real message is this: If individuals really are malleable, we need to pay a lot more attention to the messages that the people and institutions that influence their behavior are sending - schools, businesses, civic leaders and the media.
If we reward winning at all costs, the price we pay will be in lost honor. If we reward going along, we can't complain about a lack of integrity. If we reward groupthink, we can't expect individual insights. If we applaud adequacy, why bother struggling to achieve excellence? MEMO: Mr. Monroe is editor of the editorial page of The Virginian-Pilot. by CNB