Alex Fradera surveys research into how cheating executives harm the whole company:
In a series of online studies, Takuya Sawaoka and Benoît Monin presented participants with information about a hypothetical company employee involved in unethical activity such as deceptive marketing. When the culprit’s position in the company was senior rather than low-ranking, participants were more likely to see his behaviour as representative and go on to make assumptions about other dodgy company practices.
It’s probably not hard for people to believe that ripping off clients is a company-wide policy, especially if they hear that their boss is doing it. But what about less likely policies that directly harm the company? In fact, when bosses were presented as rigging performance data to maximise their bonuses, participants continued to suspect the wider organisation – and not just in a linear, cause-and-effect fashion. A bonus-fiddling boss made people suspicious of mid-ranker’s motives for giving investment advice that turned out to be poor. The assessment seems a more fundamental one: people assume a dishonest leader means a dishonest organisation.
The Dish 