Protecting someone else from harm is the next most important reason why people tell serious lies. It is not certain whether society approves of these lies. When policemen refuse to testify against a fellow officer they know has broken the law, we respect their motives but many people believe they should be truthful. Yet the terms we use — rat, fink, snitch — are derogatory. Anonymous call-in lines exist so those who volunteer information can avoid any loss of reputation or danger by informing.
Do we have different standards for people who take the initiative to inform as compared to those who inform when directly asked to reveal information? To protect yourself from being harmed even when you have not broken any rule is still another motive. Some lies are told to win admiration from others.
Boasting about something untrue is an obvious instance. It is common in children, some adolescents, and even adults. If discovered it harms the reputation of the boaster, but not much more than that. Claiming falsely to have earned money for previous investors moves into the criminal realm. To maintain privacy, without asserting that right, is another reason why people may lie. Another topic I will return to in my newsletter about trust.
Some people lie for the sheer thrill of getting away with it, testing their unsuspected power. Many children will at some point lie to their parents simply to see if they can do it. Some people do this all the time enjoying the power they obtain in controlling the information available to the target. It turns out we are a combination of both of these forces.
Now, you could say that you could do one or the other, you could look in the mirror and either feel good about yourself or you could be dishonest, you can't do both. But, it turns out that due to our flexible psychology, we can do both as long as we cheat just a little bit. As long as we cheat just a little bit we get to benefit from cheating, just a little bit and we get to think of ourselves as honest people.
So the way to think about it is, imagine that you went with a friend to dinner 10 times over the last year and then you ask yourself, can you submit those things as expenses to the IRS on your report and, you know, maybe you would not feel comfortable submitting all 10, but two or three you would feel okay with. And that's basically what we find, people kind of make their own judgment and as long as we cheat just a little bit, we benefit from cheating a little bit, but we can still think of ourselves as honest, moral people.
It's this psychological game that's all around rationalization that is incredibly important to understand because that is where dishonesty in the market comes from and if we hope to stop it, we need to stop this ability that we all have to cheat a little bit and quickly rationalize our actions. Well, it's about managing our career and other people's careers. You can speculate that there are basically bad apples out there, that some people are bad and some people are good. All the only thing you want to do is make sure you are a good apple and not a bad apple and that your company doesn't hire bad apples and that you don't have bad apples as friends.
But, the reality what we shown in the research is that we all have the capacity to become bad apples. Of course, there are some psychopaths out there, but outside of those very very few individuals all of us basically have the capacity to start misbehaving and over time increase our misbehavior step by step until we become quite rotten. The question of course is how do we stop it because it is not as if people start their lives wanting to end being corrupt and having a chance of being caught and going to jail, but we do it step by step without thinking too much about what we are doing.
Of course, they found justification for that, but of course the next quarter was harder to justify and harder to justify until things became too bad. Eventually he ended up in jail. He wasn't thinking when he started that this would be the end game, but it did become the end game because it was time after time after time, slightly one step after the other without thinking about the end game. I'm not saying that we're all likely to kind of behave as badly as this CFO, but the reality is that we have a much higher capacity for this behavior than we realize and we really have to create very strict rules and regulation to protect ourselves against it.
And, by the way, the same thing works for me and the same thing works for science. We often think that rules and regulations are to protect other people from our misbehavior, I think they also have an incredibly important meaning to protect us against ourselves. They are basically to protect us against misbehaving in ways that we, ourselves, wouldn't want to. Finally, I should say that I think of dishonesty as one, but great, example of irrationality, there is many irrationalities, we have many odd and curious instincts and many odd and curious quirks and motivations and dishonesty is one of them.
If you think about it from this perspective, it is something that acts on us not within the rational framework. There are things that are rational that don't influence us and irrational influences that do influence us.
On top of that, we don't exactly understand how it works on us and because of that we really need to rely on science and findings, rather than our intuitions when we come to think about how to create a better environment or better regulations or how to protect ourselves.
Dan Schawbel is the managing partner of Millennial Branding , a Gen Y research and management consulting firm. He is also the 1 international bestselling author of Me 2. Magazine 30 Under 30 list in Subscribe to his updates at Facebook. This is a BETA experience. When the salesman arrived, we made sure the phones were ringing and the extras were scurrying around. Further evidence comes from professional sports. In our study, one respondent cited the case of Rick Pitino, who had recently announced his decision to leave as coach of the New York Knicks basketball team with over three years left on his contract.
Pitino was quoted in the New York Times the week before as saying that he never broke a contract. The stupidity of it all is that they get their way. Compared with the ambiguity of the Hutton and Exxon cases, the clear causality in the Kahn and Pitino cases is striking. Without subterfuge, Borland International would almost certainly have folded. And there is a hard dollar number with lots of zeros in it that professional athletes and coaches gain when they shed a contract.
What of the long term? Does treachery eventually get punished? Nothing in the record suggests it does. The robber barons who promoted them enjoyed great material rewards at the time—and their fortunes survived several generations.
Power can be an of effective substitute and for trust. But they continue to prosper. Why do reputation and retaliation fail as mechanisms for enforcing trust? Power—the ability to do others great harm or great good—can induce widespread amnesia, it appears. Its early deceit is remembered, if at all, as an amusing prank.
Prestigious New York department stores, several of our respondents told us, cavalierly break promises to suppliers. You used the wrong carrier. Financial types have taken control, the merchants are out.
I delayed payments an average of 22 days from my predecessor at this kind of amount, and this is what I saved. They have too much power—they screw one guy, and guys are waiting in line to take a shot at them again. Heroic resistance to an oppressive power is the province of the students at Tiananmen Square, not the businessfolk in the capitalist societies the students risk their lives to emulate.
Businesspeople do not stand on principle when it comes to dealing with abusers of power and trust. You have to adjust, we were told. If we dealt only with customers who share our ethical values, we would be out of business. But the deal was so good, I just accepted it, did the best I could, and had the lawyers make triply sure that everything was covered.
Sometimes the powerful leave other no choice. The auto parts supplier has to play ball with the Big Three, no matter how badly he or she has been treated in the past or expects to be treated in the future. Suppliers of fashion goods believe they absolutely have to take a chance on abusive department stores. Power here totally replaces trust.
Nevertheless, even those with limited power can live down a poor record of trustworthiness. To illustrate, consider the angry letters the mail fraud unit of the U. Post Office gets every year from the victims of the fake charities it exposes. They want to avoid information that says they have trusted a fraud. When the expected reward is substantial and avoidance becomes really strong, reference checking goes out the window.
In the eyes of people blinded by greed, the most tarnished reputations shine brightly. Such investors want to believe in the fabulous returns the broker has promised. The search for data that confirm wishful thinking is not restricted to naive medical practitioners dabbling in pork bellies.
The Wall Street Journal recently detailed how a year-old conglomerateur perpetrated a gigantic fraud on sophisticated financial institutions such as Citibank, the Bank of New England, and a host of Wall Street firms.
A Salomon Brothers team that conducted due diligence on the wunderkind pronounced him highly moral and ethical. A few months later…. Even with a fully disclosed public record of bad faith, hard-nosed businesspeople will still try to find reasons to trust.
Lured by high yields, junk bond investors choose to believe that their relationship will be different: Wyatt had to break his contracts when energy prices rose; and a junk bond is so much more, well, binding than a mere supply contract.
Similarly, we can imagine, every new Pitino employer believes the last has done Pitino wrong. Their relationship will last forever. Ambiguity and complexity can also take the edge off reputational enforcement. When we trust others to and keep complexity their word, we simultaneously rely on their integrity, native ability, and favorable external circumstances.
So when a trust appears to be breached, there can be so much ambiguity that even the aggrieved parties cannot apprehend what happened. Was the breach due to bad faith, incompetence, or circumstances that made it impossible to perform as promised?
No one knows. Yet without such knowledge, we cannot determine in what respect someone has proved untrustworthy: basic integrity, susceptibility to temptation, or realism in making promises. We own the market.
Then the company went on the skids. The funny thing is, afterwards he bought the business back from us, put a substantial amount of his own capital in, and still has not turned it around.
He was independently wealthy from another sale anyway, and I think he wanted to prove that he was a great businessman and that we just screwed the business up. If he was a charlatan, why would he have cared? Where even victims have difficulty assessing whether and to what extent someone has broken a trust, it is not surprising that it can be practically impossible for a third party to judge. That difficulty is compounded by the ambiguity of communication.
Aggrieved parties may underplay or hide past unpleasantnesses out of embarrassment or fear of lawsuits. A final factor protecting the treacherous from their reputations is that it usually pays to take people at face value. Assuming that others are trustworthy, at least in their initial intentions, is a sensible policy. Mistrust can be a self-fulfilling prophecy. Most respond to circumstances, and their integrity and trustworthiness can depend as much on how they are treated as on their basic character.
Initiating a relationship assuming that the other party is going to try to get you may induce him or her to do exactly that. Overlooking past lapses can make good business sense too. People and companies do change. It is more than likely that once Borland International got off the ground, Kahn never pulled a fast one on an ad salesman again. Trust breakers are not only unhindered by bad reputations, they are also usually spared retaliation by parties they injure.
Many of the same factors apply. Power, for example: attacking a more powerful transgressor is considered foolhardy. Getting even can be expensive; even thinking about broken trusts can be debilitating. Businesspeople consider retaliation a wasteful distraction because they have a lot of projects in hand and constantly expect to find new opportunities to pursue.
The loss suffered through any individual breach of trust is therefore relatively small, and revenge is regarded as a distraction from other, more promising activities. It will take away from everything else. You will take it out on the kids at home, and you will take it out on your wife.
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