Do Social Norms Explain Unethical Behaviors in the Workplace?

We experimentally investigate the relationship between unethical behaviors through misreporting choices in the workplace and the perceived social inappropriateness of these unethical decisions. We conducted a norm-elicitation experiment in which we considered two unethical actions as observed in a comparable experiment by Amore et al. (2023) [J Bus Ethics]: leaders’ and workers’ untruthful reporting, and workers’ misalignment with their leader’s truthful reporting. We presented participants with Amore et al.’s background: in “experimental firms” (one leader, three workers), the profit is given by the sum of each member’s reported performance and equally split. Each member can report their performance via automatic or self-reporting, where the latter allows for profitable and undetectable earnings manipulation. As in Amore et al., we experimentally varied the leader’s ability to choose the reporting method. As an additional analysis, we test for prejudicial discrimination against female leaders by exogenously manipulating the leader’s gender. We elicited social norms using the Krupka-Weber procedure, asking participants to assess the social appropriateness of each reporting decision of firm members under different scenarios. We find a prevailing norm against self-reporting if used to artificially inflate earnings, yet most individuals behave unethically through misreporting to gain private benefits. A clear norm emerges against workers’ “negative” misalignment, i.e., choosing self-reporting when the leader used automatic reporting. Overall, these findings reveal that social norms do not explain but are rather disconnected from the predominant unethical behaviors observed in prior experimental research and many real-world financial contexts