Does Doing Good Encourage Bad Behavior?

Ava Roberts

Dr. Chung

Business 105

September 23 2018

Does Doing Good Encourage Bad Behavior?

It is certain that at some point everyone has pondered the philosophical quandary of whether or not humans are “bad” or “good” by nature. In the article “Does Doing Good Give You License to be Bad?”, Stephen J. Dubner speaks with John List, an economics professor from the University of Chicago who performed two studies to determine whether working for an openly socially responsible company increases productivity, and Daniel Effron, a professor at the London Business School who expertly defines the concept of moral licensing and how people use it to rationalize irresponsible business behaviors; after examining the effects of Corporate Social Responsibility (C.S.R.) mission statements in List’s experiments, Dubner hypothesizes that moral licensing assists in unproductive, if not morally unacceptable, behavior in the business world, and therefore C.S.R. should be practiced with caution to the fact that workers can easily manipulate its optimistic motives. Finally, after listening to this podcast, it is evident that many comparisons can be made between Dr. Sandra Taylor’s description of what working in the C.S.R. department of Starbucks is like and List’s recount of C.S.R. in the podcast, as well as the ideas in Chapter Four of the Exploring Business textbook.

“Does Doing Good Give You License to be Bad?” primarily weighs the positives and negatives of businesses including a Corporate Social Responsibility statement, and how these upsides and downsides influence corporate workers. Dubner first interviews Professor John List, an economics professor at the University of Chicago who conducted two field experiments concerning Corporate Social Responsibility (Dubner). The first experiment he conducted dealt with the question of whether people who work for a C.S.R firm work harder than those who don’t (Dubner). List posted ads for a fake business who was supposedly entered characteristics of google street view photos, but the dependent variable was that the ads were different; one group of ads claimed that they paid anywhere between eleven and fifteen dollars per hour, while the other not only claimed that they paid the same array of wages, but also donated money to underprivileged children (Dubner). List not only concluded that whenever an advertisement stated that it paid fifteen dollars per hour, the amount of applicants increased by thirty-three percent, but when a C.S.R. statement was included on the ad, the amount of applicants also increased by thirty-three percent (Dubner); this implies the phenomenal notion that “You can use C.S.R. to increase the pool of applicants by roughly the same magnitude as a 27 percent wage increase” (Dubner). Keeping this in mind, List also found that the applicants who sent in an application to the C.S.R. firm were “more productive per hour for us, and they enter more data accurately” because “if a C.S.R. worker believes in the cause that they’re working for, they will work day and night,” (Dubner). While this conclusion may deem it a better business decision to hire C.S.R. sensitive workers, List’s next experiment yielded why this data may be unreliable. The second experiment consisted of hiring 1,500 workers to complete a short-term job, one that included transcribing German texts from home. One group was told that they would be both paid and that half of the proceeds raised after completing the project would go to UNICEF, and the other group was just told that they would be paid for completing the task. The one interesting piece of information, for the participants, was the fact that if they found that a text was unreadable, they would still be paid for attempting to translate it; Because the task allowed a great deal of room for cheating, List examined whether or not one group cheated more than the other, and shockingly found that 24 percent more employees in the C.S.R. group took part in this “moral licensing” (Dubner). This is where Daniel Effron comes in, explaining the title (Does doing good license people to do bad?) means that moral licensing, or when “People feel like they have a license when they reflect on the bad things they could have done, but didn’t do”, occurs whenever companies posit that they have a strong Corporate Social Responsibility presence (Dubner). Effron explains that the primary reason this occurs in Corporate Social Responsibility firms is because people are torn evenly between doing positive, ethical things, such as donating to charity, and enlisting in morally unethical behavior (Dubner); “Moral licensing is one way that people balance those forces and enable themselves to not always act perfectly virtuously” Effron explains (Dubner). How does this affect the corporate business climate, you ask? John List perfectly describes why C.S.R. is a dangerous two way street; “It can importantly influence the types of workers who want to come and work for your firm... there is a bit of caution in saying that you need to put up safeguards when you use C.S.R., because there might be this bad guy lurking around the corner who might end up causing C.S.R. not to be as effective as what it otherwise could be” (Dubner).

Though the term “moral licensing” is not quoted directly in the textbook, Corporate Social Responsibility is discussed directly in Chapter Four of Exploring Business; it defines C.S.R. as “the approach that an organization takes in balancing its responsibilities toward different stakeholders when making legal, economic, ethical, and social decisions”. Like John List acknowledged when he found that a company can use C.S.R. to attract more diligent employees, the textbook also establishes that “[i]f too many groups see a company as a poor corporate citizen, it will have a harder time attracting qualified employees, finding investors, and selling its products”. While this is true, the book primarily highlights the benefits of being a socially responsible company, while it does not acknowledge the new findings showing that C.S.R. can cause people to make unethical decisions.

Much like the information gathered in Chapter Four of the Exploring Business textbook, On September eleventh, Dr. Sandra Taylor came into explain the ins and outs of working in a Corporate Social Responsibility sector of a firm. Much like the textbook, she told the class about how C.S.R. can bring a greater purpose to working in the business world, and that’s why she enjoyed working at Starbucks in the C.S.R. department for many years. She explained that much of her duties included figuring out how Starbucks could be better supporters and friends to coffee farmers, as well as working to improve the community where each Starbucks location is. She also worked on issues with water shortages and educational benefits in the communities where Starbucks were located. While the podcast by S.J. Dubner explains similar purposes of C.S.R., such as donating to charities and improving local communities, the interview conducted by Dubner summarizes how C.S.R. can make employees more motivated, but not always to do the right thing.

As for completing my other individual assignments, I am planning on working ahead of time in order to get all of my information and meetings secured. For example, I research who would best fit my interests about two weeks ahead of time and I will email the subject of my interview a good week ahead of our meeting for Assignment Two. For Individual Assignment Three, I would focus on thinking about what I would want to do with my business, what group of people I would be marketing to, and how that would affect what product I would market. For Individual Assignment Four, I would designate a day on my calendar to attend a business or entrepreneurship seminar or speaking event, and then record the information down in order to formulate a coherent discussion about it. Finally, for Individual Assignment Five, I would reach out to my favorite guest speaker, Dr. Sandra Taylor, and ask her a little more about herself in order to create a better and more in-depth presentation about what I learned from her.

References

Dubner, S. J. (2018, May 16). Does Doing Good Give You License to Be Bad?

Retrieved September 23, 2018, from

http://freakonomics.com/podcast/corporate-social-responsibility/