How to Prevent Cheating

How to Prevent Cheating
Preventing Corruption
By Margaret Steen
WHEN A CORPORATE SCANDAL throws a company into crisis or even destroys it, many onlookers’ reaction is that the people involved must have been immoral. Certainly they, the onlookers, would never become involved in cooking the company books, approving mortgages without proper documentation, or lying to customers about a product’s capabilities.
Yet it’s easier than most people realize for ordinary, well-meaning people to get caught up in activities they should have known were wrong. These activities do “real harm to real people,” says GSB accounting Professor Maureen McNichols, who teaches an elective course called Understanding Cheating. Among other things, the course helps students see how good leadership and the right organizational structure can cut down on the opportunities for corruption.
Creating a structure that reduces the chances of cheating requires a balancing act: between too few controls and too many, and between understanding why people cheat and intolerance for such behavior.
Many people, including students at business schools, resist discussing how the influence of a group or a situation can lead good people to do bad things. It seems to excuse the behavior, and they want individuals to be held accountable for their actions. But research indicates that leaders who don’t acknowledge that group pressure exists—so they can use that understanding to promote an ethical organizational culture and appropriate controls—may be setting their organizations up for corruption.
“I would say that there are some people who are just flat-out corrupt: They would steal the offering from the church plate,” says Douglas Brown, MBA ’61, who was named treasurer of the state of New Mexico in 2005 after a corruption scandal led to the indictment of the two previous treasurers. But there’s a much larger group who are deeply conflicted about what to do and finally “just kind of tunnel under and put up with...