Actual and potential exclusion as determinants of individuals’ unethical behavior in groups

Employees often justify their unethical actions by referring to how their organizations benefited from these actions. These justifications are not necessarily post-hoc rationalizations of bad behavior as the actions may have been undertaken to help the organization. Take for example the description of the General Electric executives who were caught when conspiring to fix prices as "good organizational men who surrendered their own individualities to the corporate gods they served" (Randall, 1987, p. 466). Or the case of the prosecution of Gulf Oil executives for bribery where the Security and Exchange Commission stated, "there is no reason to suspect or believe that the motive of the employee or officer was anything other than a desire to…act solely in the best interest of Gulf and its shareholders" (Ermann & Lundmann, 1982, p. 119). On the other hand, there are many examples of unethical behavior by individuals which are clearly intended to harm the organizations of which they are members. A famous case is Nick Leeson who broke all rules of trading in securities and incurred heavy losses that eventually led to the bankruptcy of Barings, one of Great Britain's oldest merchant banks (Stein, 2000). Leeson, who considered himself an outsider in an organization dominated by the British upper class, did attempt to defend his actions as helping the bank as one would expect, but most observers believe that his actions were not motivated by a desire to help the organization (Stein, 2000). Clearly, people whose unethical actions are motivated by a desire to help their group or organization have a different relationship with their group than individuals whose unethical actions are undertaken without any regard for the benefits that accrue to the group. Surprisingly, little attention has been paid to how individuals' relationship with their organization or group affects their propensity to engage in unethical behavior. In this paper, we examine how an individual's standing within a group affects the likelihood that he or she will engage in unethical behavior. Specifically, we examine how the risk or exclusion from a group or actual exclusion from the group affects individual propensity to engage in unethical behavior