Recession's after-effects could lead to cheating and workplace theft suggests new study

Oct 16, 2013

We like to think we'd stick to our ethical principles no matter what. But when people feel financially deprived—as many did from losses suffered thanks to the last market and banking meltdown—they are more likely to relax their moral standards and transgress to improve their financial situation. They are also more likely to judge other deprived moral offenders who do the same more leniently, says a new paper to be published in Organizational Behavior and Human Decision Processes.

"We found that most respondents did not think financial would lead them to behave immorally," said Nina Mažar, an associate professor of marketing at the University of Toronto's Rotman School of Management and one of the lead researchers of the study. "Yet, once they actually experienced financial deprivation, they were more likely to loosen their ethical principles."

This could result in workplace sabotage and the pilfering of supplies and equipment, the paper says. Public policies that entrench financial inequalities, such as through regressive taxation plans or tax cuts for the wealthy, could also lead to more cheating inside and outside the office.

And those who interpret or enforce policies or regulations as part of their work—in corporations, law enforcement, or the judicial system—need to be mindful of the deprivation effect too. Temporary upsets in their own financial position could lead them to go easier on others demonstrating unethical behaviour while under , the paper says.

There are many ways people assess their financial health. But research has found one of the strongest influences is comparing oneself to other people. A sense of financial deprivation can happen when people simply feel financially inferior to their peers.

The findings are based on a series of experiments that studied people's views about dishonest behaviour, and how they behaved once they were induced to feel financially-deprived themselves. The effects were observed both in experiments where people actually experienced financial loss and in those where they were merely made to feel financially-deprived, relative to others.

The effects were lessened however, when people saw that acting unethically either would be unfair, or would not improve their —or when they accepted that their financial position was deserved.

Perceptions of fairness were key to participants' decisions to act honestly or dishonestly, said Prof. Mažar. That suggests that one reason why workplace theft is so common is because employees may see their own, and other colleagues' financial positions as inferior and unfair, relative to the companies and executives they work for.

Explore further: Researcher debunks myths that play into soldiers' financial readiness

add to favorites email to friend print save as pdf

Related Stories

Financial deprivation prompts consumers to seek scarce goods

Apr 12, 2013

In a recently published study in the Journal of Consumer Research, assistant professor of marketing Adam Alter and Ph.D. student Eesha Sharma at the Stern School of Business reveal why people who feel financially constrained might ...

Older is wiser, at least economically

Sep 24, 2013

The brains of older people are slowing but experience more than makes up for the decline, a University of California, Riverside assistant professor of management and several colleagues found when asking the participants a ...

Recommended for you

Study finds law dramatically curbing need for speed

19 hours ago

Almost seven years have passed since Ontario's street-racing legislation hit the books and, according to one Western researcher, it has succeeded in putting the brakes on the number of convictions and, more importantly, injuries ...

Newlyweds, be careful what you wish for

Apr 17, 2014

A statistical analysis of the gift "fulfillments" at several hundred online wedding gift registries suggests that wedding guests are caught between a rock and a hard place when it comes to buying an appropriate gift for the ...

Can new understanding avert tragedy?

Apr 17, 2014

As a boy growing up in Syracuse, NY, Sol Hsiang ran an experiment for a school project testing whether plants grow better sprinkled with water vs orange juice. Today, 20 years later, he applies complex statistical ...

Creative activities outside work can improve job performance

Apr 16, 2014

Employees who pursue creative activities outside of work may find that these activities boost their performance on the job, according to a new study by San Francisco State University organizational psychologist Kevin Eschleman ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Osiris1
not rated yet Oct 16, 2013
Yep, bosses set the example. If they are greedy cheatin theivin monsters, then their minions will also be the same, and would add sneaky to that mix for theives especially do not like to be done the same way they do others.

More news stories

Study finds law dramatically curbing need for speed

Almost seven years have passed since Ontario's street-racing legislation hit the books and, according to one Western researcher, it has succeeded in putting the brakes on the number of convictions and, more importantly, injuries ...

Impact glass stores biodata for millions of years

(Phys.org) —Bits of plant life encapsulated in molten glass by asteroid and comet impacts millions of years ago give geologists information about climate and life forms on the ancient Earth. Scientists ...