Transcript Leadership Symposium - University of Nevada, Las Vegas

“The Ethics of Bluffing: The Effects of
Individual Differences on Perceived
Ethicality and Bluffing Behavior”
G. Stoney Alder
&
Rebecca M. Guidice
University of Nevada, Las Vegas
Competitive Bluffing
 Bluffing is the practice of knowingly and
intentionally communicating a misleading signal
of intended action with the expectation that
recipients interpret and react as if the signal were
truthful (Guidice, Alder, & Phelan, 2009)
 Bluffing is a common practice
–
–
–
–
Coke and Pepsi with Monsonto (Brandenburger & Nalebuff, 1996)
Intel bluffing Oregon (Sheketoff, 2005)
Kabi and Genentech Inc.using decoy patents (McKelvey, 1996)
North Korea nuclear weapons (Herman, 2005)
Competitive Bluffing:
Philosophical Debate
 Proponents
– Carr (1968)
• “bluffing may be an
unspoken rule of the
game”
– Carson (1993)
– Althoff (2003)
 Critics of Bluffing
– Eliashberg et al. (1996)
– Lewicki & robinson (1998)
• an objectionable form
of lying that serves to
misinform the
opponent
Competitive Bluffing
 Attitudes toward bluffing likely vary based on a
number of variables.
 Little research examines individuals’ beliefs
concerning the ethicality of bluffing and what
factors influence such beliefs
– Content
– Target (Guidice et al., 2009)
– Context (Althoff, 2003)
Competitive Bluffing
 Individual differences may also affect judgments
of the ethicality of bluffing.
 Research in organizational behavior indicates that
individual differences influence perceptions,
attitudes, and behaviors.
 Ethics research similarly suggests an important
role for individual variables (Kohlberg, 1984;
Rest, 1986; Sparks & Merenski, 2000).
 Research has ignored the effect individual
differences may have on attitudes toward
bluffing.
Objective
The current study examines how one
individual characteristic – ethical
orientation – affects assessments of the
ethicality of bluffing, willingness to bluff,
and bluffing behavior.
Ethical Orientation
 An individual’s ethical value system (Douglas,
Davidson, & Schwartz, 2001) or form of ethical
reasoning (Brady, 1990), which is used to explain
how individuals interpret ethical situations and
engage in ethical problem solving
 Research differentiates formalism (deontology)
and utilitarianism (teleology)
– Formalism is concerned with the idea of universal truths and principles
that are adhered to regardless of circumstances.
– Utilitarianism subordinates principles to context and may be understood
as ‘‘consequentialism’’ such that ethical decisions are made based on
expected outcomes
Ethical Orientation and Perceptions of the
Ethicality of Bluffing
 Formalists look to rules/principles for guidance
 A behavior or decision is ethical (unethical) to
the extent that it adheres to (violates) one’s
principles
 Formalists should adhere to a principle for truth
and therefore, view bluffing unfavorably
Ethical Orientation and Perceptions of the
Ethicality of Bluffing
Hypothesis 1: Ethical formalism will be
negatively related to individuals’
perceptions of the ethicality of bluffing
Ethical Orientation and Perceptions of the
Ethicality of Bluffing
 Utilitarians evaluate the outcome of an action to
determine its ethicality
 An act is ethical if it produces the greatest good,
accomplishes a goal, or promises the best results
 Boils down to weighing the non-moral gains and
losses that will accrue as a result of the bluff.
 Bluffing will be favorably when it is thought of
as a means to achieve a valued outcome
Ethical Orientation and Perceptions of the
Ethicality of Bluffing
 Hypothesis 2: Ethical utilitarianism will be
positively related to individuals’ perceptions of
the ethicality of bluffing
Bluffing Perceptions, Intentions,&
Behavior
The theory of reasoned action (Fishbein &
Ajzen, 1975, 1980) states that attitudes are
meaningful predictors of intentions
Guidice et al (2009) found that perceptions
of ethicality affected individuals’
willingness to engage in bluffing behavior.
Bluffing Perceptions, Intentions, &
Behavior
Hypothesis 3:Perceived ethicality will
mediate the relationship between
participants’ ethical orientation and their
willingness to mislead competitors and
other organizational stakeholders
Bluffing Perceptions, Intentions, &
Behavior
The theory of reasoned action also
indicates that attitudes and intentions
precede behavior (Fishbein & Azjen, 1975)
Hypothesis 4: Individuals’ perceptions of
the ethicality of competitive bluffing will be
positively related to the extent to which
they actually attempt to bluff competitors
Performance Pressure
 Other factors may explain bluffing behavior
 Neither individual nor situational variables alone
completely account for behavior (Kenrick &
Funder, 1988)
 Individual characteristics interact with
characteristics of the environment
 Research suggests that stress and intense pressure
to succeed may influence ethical behavior
– The greater the situational pressure to “win”, the more
likely an individual will perform a potentially
questionable act
Performance Pressure
 Hypothesis 5a: Individuals’ felt pressure to
perform will be positively related to their efforts
to bluff competitors
Performance Pressure
 For formalists, moral imperatives are without
exception
 Bluffing by high formalists will be driven more by
judgments of ethicality than pressure to perform
 Low formalists have greater response flexibility
 Low formalists may be more apt to bluff in
response to performance pressures
Performance Pressure
 Hypothesis 5b: Formalism will moderate the
relationship between felt pressure to perform and
bluffing efforts such that the relationship will be
weaker for high formalists than for low formalists
Instrumentality
 Individuals are motivated to do things that have
high instrumentality either for themselves or for
their organization
 Individuals will be more likely to mislead their
rivals when they believe it enhances their chances
of “winning” the competition
Instrumentality
 Hypothesis 6a: Individuals’ beliefs in the
instrumentality of misleading competitors will be
positively related to their efforts to do so
Instrumentality
 The ends justify the means for high utilitarians
 When bluffing proves advantageous, other factors
will be less important for high utilitarians
 Low utilitarians are less concerned with outcomes
 The effect of instrumentality in bluffing behavior
will be less pronounced for low formalists.
Instrumentality
 Hypothesis 6b: Utilitarianism will moderate the
relationship between perceived instrumentality
and bluffing such that the relationship will be
stronger for high utilitarians than for low
utilitarians.
Ethical Predisposition, Perceived
Instrumentality, Perceived Ethicality,
Pressure, and Bluffing Behavior
H6b
Perceived
Instrumentality
Utilitarian Orientation
H2
H6a
H3 & H4
Perceived
Ethicality
Formalist Orientation
H5a
H1
Pressure
To
Perform
H5b
Bluffing Behavior
Methodology
 Two part study using 40 first-year MBA students
and 67 senior business students
–
–
–
–
Mean age of students was 26.5 years
59% were female
97% had work experience, with an average of 8 years
54% had managerial experience, with an average of 2
years
 Hypotheses 1-3 relied on data gained from a
survey taken before attending laboratory session
 Hypotheses 4-6 relied on data gathered as
participants competed in a simulated marketentry game
Variables
 Ethical Orientation. The Ethical Viewpoints by Brady and
Wheeler (1996) was used to assess relative strength on
utilitarianism (α = .81) and formalism (α = .75)
 Perceived Ethicality of Misleading Stakeholders. Using a
scenario adapted from Ross and Robertson (2000) participants
indicated on a 5-point scale how ethical it would be to mislead
a competitor, customer, distributor, or employer to complete
an important sale
 Willingness to Bluff. Using the same scenario and a 5-point
scale, participants indicated the extent to which they would be
willing to mislead the aforementioned targets in order to make
the sale
Variables
 Pressure to Perform. New three-item measure that used a 5-point
disagree/agree scale to assess participants’ felt need to do well in
the game (α = .66)
 Perceived Instrumentality. Newly created three-item measure that
used a 5-point disagree/agree scale to rate a participants’ belief that
misleading competitors was a useful tactic in the market entry game
(α = .71)
 Perceived Ethicality of Bluffing. A newly created three-item
measure that used a 5-point disagree/agree scale to measure the
extent to which a participant believed it was ethical to mislead
competitors in a competitive situation (α = .63)
 Bluffing Behavior. The extent to which participants attempted to
mislead their competitors was assessed with three items using a 5point disagree/agree scale (α = .81)
Ethical Orientation on Perceived
Ethicality of Bluffing Stakeholders
Dependent
Variable:
Constant
Age
Gender
Citizenship
Formalism
Utilitarianism
Ethicality of Bluffing
Distributors
Model 1
Model 2
-.08
-.15
.11
Ethicality of Bluffing
Competitors
Model 1
Model 2
Ethicality of Bluffing
Customers
Model 1
Model 2
-.04
-.19*
.10
-.03
-.14
.13
-.22*
.10
-.06
-.18
.09
-.05
-.10
.13
-.29**
.24*
-.12
-.13
.02
-.11
-.09
.03
-.16
.00
Adjusted R2
.01
.06
.02
Model F
1.44
2.39*
1.82
n = 107.
Standardized regression coefficients are shown
† = p < .10, * = p < .05, ** = p < .01
.04
1.88†
.02
1.64
.08
2.75*
.01
1.20
.01
1.21
Hypothesis 1 largely supported
Hypothesis 2 partially supported
-.06
-.07
.14
-.30**
.14†
Ethicality of Bluffing
Company
Model 1
Model 2
Perceived Ethicality on Willingness to Bluff
Stakeholders
Dependent Variable:
Constant
Age
Gender
Citizenship
Formalism
Utilitarianism
Distributor Ethicality
Company Ethicality
Competitor Ethicality
Customer Ethicality
Willingness to Bluff
Distributors
Model 1
Model 2
-.03
-.04
.09
-.39**
.26*
.01
.01
-.01
-.20*
.17*
.55**
Adjusted R2
.11
.50
Model F
3.57**
18.20**
n = 107.
Standardized regression coefficients are shown
† = p < .10, * = p < .05, ** = p < .01
Willingness to Bluff
Company
Model 1
Model 2
.02
-.17†
.05
-.29**
.15
.04
-.09
-.02
-.17†
.09
Willingness to Bluff
Competitors
Model 1
Model 2
-.11
-.14
.10
-.16
.20†
-.07
-.07
.02
.04
.04
Willingness to Bluff
Customers
Model 1
Model 2
-.13
-.07
.15
-.18
.15
-.06
-.01
.13†
-.07
.15†
.59**
.68**
.67**
.08
2.88*
.42
13.23**
.05
2.09†
.47
16.09**
.08
1.80
.51
16.83**
Hypothesis 3 largely supported.
Perceptions mediate the relationship between ethical orientation and one’s willingness to misleading
competitors, distributors, and one’s company. Mediation cannot be concluded for all relationships
since formalism was not significantly related to the ethicality of misleading a customer and
utilitarianism was not significantly related to the ethicality of misleading a customer or one’s company
Perceived Ethicality on Bluffing
Behavior
Dependent Variable:
Bluffing Behavior
Constant
Age
Gender
Citizenship
Ethicality
Model 1:
Model 2:
Controls Direct Effects
.17†
-.01
-.05
.15
.01
-.02
.29**
Adjusted R2
Model F
.00
1.09
.08
3.20*
n = 107.
Standardized regression coefficients are shown
† = p < .10, * = p < .05, ** = p < .01
Hypothesis 4 supported
Indirect Effects of Ethical Orientation on
Bluffing Behavior
Dependent Variable:
Performance (Points in a Round)
Constant
Age
Gender
Citizenship
Pressure to Perform
Instrumentality
Formalism
Utilitarianism
Pressure x Formalism
Instrumentality x Utilitarianism
Model 1:
Controls
Model 3:
Interaction
.18†
-.00
-.10
-.08
.38**
.15
-.02
-.12
-.14
.42**
.15
-.00
.17*
.16†
Adjusted R2
.00
.11
Model F
1.09
3.76**
n = 107 Stndardized regression coefficients are shown
† = p < .10, * = p < .05, ** = p < .01
.13
2.71**
Hypothesis 5a not supported
Hypothesis 5b supported
Hypothesis 6a supported
Hypothesis 6b marginally supported
.17†
-.01
-.05
Model 2:
Direct Effects
Implications
 Ethical dilemmas often involve misconduct and deception
of one form or another
 Interpretation of these acts falls in a gray area and
depends on a number of contingencies
 Bluffing research has ignored individual differences
 Ethical orientation interacts with contextual factors to
explain bluffing attitudes and behavior
 Understanding the ethics of bluffing requires
consideration of both the individual and the context
Implications Cont.
 Awareness of ethical orientation may help
practitioners design effective ethics programs
 Enhance their ability to communicate the
organization’s ethical values and expectations
 Person-organization fit
– If bluffing is an accepted organizational norm, high
utilitarians may be a better fit than high formalists
– This fit entails an element of risk as high utilitarians are
also more willing to mislead their own company
Limitations and Future Research
 Self-reports were used to a number of variables. However,…
– this approach corresponds to that used in prior research interested in
attitudes, intentions, and behavior.
– the objective of our study was not to differentiate between individuals’
attitudes and intentions per se, but rather to examine whether attitudes and
intentions differed as a function of the target of the bluff and how this was
related to one’s ethical orientation.
– factor analyses indicated that participants distinguished between different
key constructs (e.g., ethical orientation)
 Future research should:
– consider other individual difference variables, such as stage of
moral development or Machiavellianism and how they may
influence beliefs about and willingness to bluff.
– explore the effects of other contextual variables, such as a
company’s ethical policies and programs and their effect on
observed relations.
Thank You