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Status differentiation and the protean self: A social-cognitive model of unethical behavior in organizations. (2011)

“The news lately is replete with ..  high level executives of nearly bankrupt companies cutting jobs, pay, or pensions with one hand, while accepting bonuses and fantastic perquisites for themselves with the other .…we demonstrate how high status individuals will be more vulnerable to engaging in unethical activities.”

Bella L. Galperin, University of Tampa,
Rebecca J. Bennett, Louisiana Tech University
Karl Aquino, University of British Columbia

Journal of Business Ethics, 98(3), 407-424.

“The news lately is replete with .. examples of high level executives of nearly bankrupt companies cutting jobs, pay, or pensions for rank and file employees with one hand, while accepting bonuses and fantastic perquisites for themselves with the other. For example, less than a week after the American International Group Inc. accepted a $85 billion loan from the U.S. government, its executives went on a $440,000 luxurious retreat which included spa treatments worth $23,380.

“What makes these top level executives engage in practices that observers might consider unethical? How do top executives justify record increases in compensation for cutting ‘costs’ such as employee jobs, salaries, and benefits?

“This article proposes a model to explain why executives in organizations with a great deal of status differentiation may be inclined to behave unethically.

“We believe that status differentiation in organizations creates social isolation. As a result, executives’ high status group identity dominates, and their moral identity is suppressed. The high status group identity results in insensitivity to the needs of out-group members (ie. less empathy for lower status employees), consequently resulting in decreased motivation to self-regulate ethical decision making.

“As a result of this identity activation, we demonstrate how high status individuals will be more vulnerable to engaging in unethical activities.

“Unlike the majority of research in this area, our model focuses on the role contextual factors (eg. status related cues in the environment) play in explaining unethical behavior.”

Access the full article here: Status differentiation and the protean self

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