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1 March 2016 CFA Institute Journal Review

Them’s Fightin’ Words: The Effects of Violent Rhetoric on Ethical Decision Making in Business (Digest Summary)

  1. Biharilal Deora, CFA, CIPM

In a business context, violent rhetoric and its source interact to shape individual decision making. The use of violent metaphors makes unethical behavior by individuals more easily justified, but this effect depends on the source of the rhetoric.

What’s Inside?

The authors examine how the use of metaphorical violent rhetoric (e.g., the use of such words or phrases as declare war, destroy, attacking problems, fighting the competition) affects the decision making of employees depending on the source of the rhetoric. The use of violent rhetoric by the management of competing firms increases employees’ willingness to engage in ethical violations, whereas the use of the violent rhetoric by their own management decreases their willingness to engage in unethical behavior. Another key finding of the study is that employees make less-ethical decisions inspired by violent rhetoric of a competing firm’s CEO and fail to recognize their decisions as less ethical.

How Is This Research Useful to Practitioners?

The results of this study provide insight that should be useful to managers and academics who want to increase employee motivation without increasing a willingness to engage in unethical behavior.

It is important for business managers to understand and appreciate the importance and impact of the linguistic choices of their competitors on their own employees’ decision making. When the source of violent rhetoric comes from the CEO of a rival firm, employees are more likely to engage in ethical violations. When an employee’s own CEO uses violent rhetoric, employees are less likely to cross ethical boundaries.

Furthermore, when the CEO from another company has used violent rhetoric, employees are less likely to believe they are making an unethical decision. They believe they are acting in self-defense because they are not the aggressors. When the source of violent rhetoric is an employee’s own CEO, those individuals will pay greater attention to standards that are being adopted because the justification of self-defense is not applicable.

Managers who are interested in improving the ethical practices of their employees must consider a broad range of factors and not just tone from the top or tone at the bottom. Tone from the side seems to play an important role because tone from one company can have significant effects on the decision making of employees at competitor companies.

How Did the Authors Conduct This Research?

The authors chose 129 participants from Amazon Mechanical Turk (AMT) who were currently employed, US citizens, and at least 18 years old. The participants had to assume the role of a sales associate and read a short business case study and an excerpt from the CEO’s recent address to the sales force. Within that paragraph, the authors manipulated whether violent rhetoric was present and whether it came from the CEO of one’s own company or from a rival. Participants were given action choices and asked questions to measure unethical behavior and how they perceived the ethicality of their decision. The authors use multivariate analysis of variance with contrast coding and analysis of variance to test the results of each hypothesis.

The results support the interactive effects proposed by the authors’ model—when the source of violent rhetoric comes from the CEO of a rival firm, employees are more likely to make unethical decisions (Hypothesis 1). The results also show that when employees’ own CEO uses violent rhetoric, they are less likely to make unethical decisions (Hypothesis 2). Furthermore, the results suggest that when the CEO from another company uses violent rhetoric, participants do not believe they are making an unethical decision (Hypothesis 3), whereas when employees’ own CEO uses violent rhetoric, they view their decision, which is relatively more ethical, as a more ethical decision (Hypothesis 4).

Participants received $0.50 for a 10-minute survey and may thus not necessarily be wholly representative of corporate employees who face significant ethical decisions. Furthermore, many firms currently regulate their own information flow (partly because of regulation).

Abstractor’s Viewpoint

The results of this study have important ramifications for business leaders and people managers. Keeping track of the rhetoric of rival managers and its impact on employees seems to be as critical as management’s own tone and rhetoric. The authors’ findings become more relevant in today’s highly digital world, where the avenues for spreading rhetoric from rival (as well as own) managers have multiplied, thereby further compounding this issue. Regular ethics workshops must be conducted by companies to ensure that employees do not experience ethical fading, do not rationalize their unethical behavior (e.g., by using self-defense reasons), and do participate in regular ethical deliberations.

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