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posted on 23 July 2017

Losing Your Ethical Way Through Competition And Rivalry

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An Investigator's Guide To Ethics, Part 4

Much of our culture is driven by competition. Just as people pursue individual successes, organizations also aspire to achieve. When certain groups tend to compete against each other on a frequent basis, rivalries are born. After a rivalry is established or perceived, both people and organizations act and react differently. Competition, especially when battling with someone considered to be a rival, can easily change how you and others in your organization manage issues and problems. Such changes are often undetected by your mind and can result in you as well as your colleagues abandoning some of your most cherished ethical ideals without even realizing it.

tug.of.war.cartoon

The theory of natural selection is based on competition in that only the strongest will survive. In business, you are required to perform or you could lose your job. Competition is seen by some leaders as a method to boost individual and group performance, but many leaders fail to consider the potential side effects of its’ use.

“A primary way in which competition may foster unethical behavior is by increasing the payoffs associated with high-ranking performance, encouraging unethical behavior that confers a competitive advantage such as cheating or sabotage."[1]

An investigator is likely to find that when people underperform as measured against their competition, there are certain personal threats that arise. Questions such as, “How will I feed my family if I don’t have a job?" and/or “How will I pay my mortgage and other bills?" suddenly have more importance causing the brain to consider decision outcomes primarily with a short-term view. Ethics can be easily discarded when there is a perceived threat to your ability to meet yours and your family’s basic needs.

Enron Corporation evaluated their employees twice a year and approximately 15% of their employees were placed into a “needs improvement" category, which was the lowest ranking designated. Once an Enron employee was designated as “needs improvement", the employee would have to sit down with their manager and draft a plan on how him/her were going to improve. Being designated “needs improvement" also meant that the employee would not receive a financial bonus further increasing the pressure and incentive to perform. If the employee didn’t raise their rating over the next six-month period, they were given a severance package and no longer employed.[2] With competition a main focus at Enron Corporation, should you be surprised by the unethical outcomes?


Ethics can be easily discarded when there is a perceived threat to your ability to meet yours and your family’s basic needs.


Enron Corporation employees were not the only people whose ethics were corrupted by competition.

“In a business simulation, MBA students more often allowed their salesmen to provide illegal ‘kickbacks’ to purchasing agents when they were placed in competition with one another, provided that this behavior benefited their performance."[3]

Competition changes the way dilemmas are framed and more often than not, you find a way to frame unethical behavior in a way that justifies it by using competition as an excuse. In Enron’s “rank and yank" hyper-competitive culture, it was kill or be killed.

“The process could be brutal, and often led to employees downgrading their peers to make themselves look better."[4]

Rivalry injects an additional dose of emotion into any competition. As such, the joy of winning is vastly greater as is the pain of losing when compared to a competition between two groups who simply are matched together.

“When competing against their rivals, individuals place greater subjective importance on competitive outcomes, above and beyond whatever tangible stakes are present, and this leads them to be more willing to engage in unethical behavior that can confer an advantage."[5]


your brain actively protects you after you have engaged in unethical behavior


It is important to note that even the suggestion of a rivalry has sub-conscious effects on people when they make ethical decisions. A rivalry does not necessarily have to be acknowledged by a competing party to produce these same effects. Oftentimes, a party may perceive another as a rival, but the so-called rival does not reciprocate in this belief. In studies done by Kilduff, Galinsky, Gallo, and Reade, the mere perception as well as the mere thought of rivalry conditioned behavior in such a way that test subjects easily violated their ethical norms.[6]

In addition, your brain actively protects you after you have engaged in unethical behavior by limiting the way it codes memories or automatically minimizing your involvement in the unethical acts. This concept has been referred to as ethical amnesia. In studies done by Maryam Kouchak from Northwestern University and Francesca Gino from Harvard University, they found that participants who cheated in a business simulation were less likely to retain vivid memories of their actions when compared with those who did not cheat.

“After they behave unethically, individuals’ memories of their actions become more obfuscated over time because of the psychological stress and discomfort caused by such misdeeds." Since your brain frequently works in ways that you are not consciously aware, the It was interesting to note that these same individuals were able to clearly remember other people’s transgressions in the same simulation. This suggests that ethical amnesia is an automatic and often unconscious behavior used to help you maintain your positive self-image. [7]

In 2008, Siemens, a German industrial engineering company, agreed to pay a then record fine of $1.6 billion dollars to American and European authorities in order to settle charges that it had bribed foreign officials to win major business contracts.[8] Richard Siekaczek, a Siemens mid-level executive who was heavily involved in the bribery scheme, was not surprised when he heard an early morning knock at his door and saw members of the German police and a prosecutor standing outside. Siekaczek had been expecting them to arrive for quite some time, but he never knew when the actual date would come.


Organizational leaders often focus their followers on competition and rivalries in order to improve performance.


From 2002 to 2006, Siekaczek oversaw a bribery budget, which spent between $40 and $50 million each year bribing foreign officials so that Siemens could obtain business contracts.

“The payments, he says, were vital to maintaining the competitiveness of Siemens overseas, particularly in his subsidiary, which sold telecommunications equipment."[9]

In his explanation, Siekaczek falls into a familiar trap where he turns an ethical dilemma into a business decision. Siekaczek believed that if he didn’t bribe officials to get the contract, his competitors would and that could jeopardize the livelihoods of himself and the other employees of Siemens.

“It was about keeping the business unit alive and not jeopardizing thousands of jobs overnight."[10]

The act of rationalizing your unethical behavior is a natural process. In the Siemens case, Siekaczek admitted knowing that bribery of officials was illegal, yet he still took steps, consciously or unconsciously to preserve his positive self-image. As Siekaczek spoke about the case, he diminished his role in the crime:

“"I was not the man responsible for bribery. I organized the cash." [11]

Siekaczek used a technique referred to as advantageous comparison, which is where someone measures their actions/behaviors against someone who acted/behaved more egregiously, thereby making your choice look better than it actually was. An investigator should take note when an advantageous comparison is offered because such a statement can be re-addressed if you need to establish rapport or if you seek a confession.

If you take the time to learn the formal as well as the informal culture of an organization, you might be able to better understand and properly assess the risk profile. Organizational leaders often focus their followers on competition and rivalries in order to improve performance. While this method can produce results, an investigator should quickly determine how employees are rewarded. If rewards are based solely on winning a competition and the decision processes, which led to the win are ignored, the lesson learned is that you do whatever it takes to win. Because of competition and rivalry, people are less likely to consciously recognize when they have taken the jump from ethical to non-ethical behavior and an investigator who recognizes this can better facilitate conversations with people who, at least temporarily, lost their way.


[1] Kilduff, G.; Galinsky, A.; Gallo, E.; & Reade, J. (2016). Whatever It Takes: Rivalry and Unethical Behavior, Academy of Management Journal, Vol. 59(5), October 1, 2016, pp. 1508-1534. Taken from the Internet on May 2, 2017 at https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/16170/Galinsky%20Rivalry%20and%20unethical%20behavior.pdf

[2] Greenwald, J. (2001). Rank and Fire, Time Magazine, June 11, 2001. Taken from the Internet on May 3, 2017 at http://content.time.com/time/business/article/0,8599,129988,00.html

[3] Kilduff, G.; Galinsky, A.; Gallo, E.; & Reade, J. (2016). Whatever It Takes: Rivalry and Unethical Behavior, Academy of Management Journal, Vol. 59(5), October 1, 2016, pp. 1508-1534. Taken from the Internet on May 2, 2017 at https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/16170/Galinsky%20Rivalry%20and%20unethical%20behavior.pdf

[4] Fowler, T. (2004). Enron’s Implosion Was Anything But Sudden, Houston Chronicle, June 30, 2004. Taken from the Internet on May 3, 2017 at http://www.chron.com/business/enron/article/Enron-s-implosion-was-anything-but-sudden-1569592.php

[5] Kilduff, G.; Galinsky, A.; Gallo, E.; & Reade, J. (2016). Whatever It Takes: Rivalry and Unethical Behavior, Academy of Management Journal, Vol. 59(5), October 1, 2016, pp. 1508-1534. Taken from the Internet on May 2, 2017 at https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/16170/Galinsky%20Rivalry%20and%20unethical%20behavior.pdf

[6] Ibid.

[7] McDonald, C. (2016). Why Cheaters Keep Cheating: Scientists Say They Suffer ‘Ethical Amnesia’ When Remembering Past Transgressions, The Daily Mail, May 17, 2016. Taken from the Internet on May 2, 2017 at http://www.dailymail.co.uk/sciencetech/article-3595771/Why-cheaters-cheating-Scientists-say-suffer-ethical-amnesia-remembering-past-digressions.html

[8] Lichtblau, E. & Dougherty, C. (2008). Siemens To Pay $1.34 Billion In Fines, The New York Times, December 15, 2008. Taken from the Internet on May 3, 2017 at http://www.nytimes.com/2008/12/16/business/worldbusiness/16siemens.html

[9] Schubert, S. & Miller, T.C.(2008). At Siemens, Bribery Was Just A Line Item, The New York Times, December 20, 2008. Taken from the Internet on May 3, 2017 at http://www.nytimes.com/2008/12/21/business/worldbusiness/21siemens.html

[10] Ibid.

[11] Ibid.

Previous articles in this series:

  1. Why Traditional Ethics And Compliance Training Programs Don't Deter Fraud (23 May 2017)
  2. An Investigator's Guide To Ethics, Part 2: Why Good People Do Bad Things (10 Jun 2017)
  3. The Ethical Dimensions Of Power (06 Jul 2017)

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