Lisa D. Ordóñez

Goal Setting as a Motivator of Unethical Behavior

We explored the role of goal setting in motivating unethical behavior in a laboratory experiment. We found that people with unmet goals were more likely to engage in unethical behavior than people attempting to do their best. This relationship held for goals both with and without economic incentives. We also found that the relationship between goal setting and unethical behavior was particularly strong when people fell just short of reaching their goals.

Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal Setting

Executive Overview Goal setting is one of the most replicated and influential paradigms in the management literature. Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. Advocates of goal setting have had a substantial impact on research, management education, and management practice. In this article, we argue that the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored. We identify specific side effects associated with goal setting, including a narrow focus that neglects nongoal areas, distorted risk preferences, a rise in unethical behavior, inhibited learning, corrosion of organizational culture, and reduced intrinsic motivation. Rather than dispensing goal setting as a benign, over-the-counter treatment for motivation, managers and scholars need to conceptualize goal setting as a prescripti...

Multiple reference points in satisfaction and fairness assessment

Most studies of reference point effects have used a single referent, such as a price, a salary, or a target. There is considerable evidence that the judged fairness of, or satisfaction with, an outcome is significantly influenced by discrepancies from such single referents. In many settings, however, more than one reference point may be available, so the subject may be confronted simultaneously with some referents above, some at, and some below the focal outcome. Little is known about the simultaneous impact of such multiple reference points. We examine here the effects of two referents on ratings of salary satisfaction and fairness. Subjects were presented with a series of scenarios that described a salary offer made to a hypothetical MBA graduate and provided information about the salary offers made to either one or two other similar graduates. For each scenario, subjects judged how fair the focal graduate would feel the offer to be, and how satisfied he or she would be with it. Satisfaction ratings displayed asymmetric effects of comparisons: the pain associated with receiving a salary lower than another MBA is greater than the pleasure associated with a salary higher than the other student by the same amount. Fairness ratings showed a different pattern of asymmetric effects of discrepancies from the reference salaries: the focal graduates salary was judged somewhat less fair when others received lower offers, and much less fair when others received higher offers. The asymmetric effects occurred for both reference points, suggesting that the focal salary was compared separately to each of the referents rather than to a single reference point formed by prior integration of the referents. Copyright

A change-of-process theory for contextual effects and preference reversals in risky decision making

Abstract Three experiments were conducted to investigate contextual effects and response mode effects (e.g., preference reversals) in risky decision making. Judgments of the worth of binary gambles were examined using two different contexts (positively and negatively skewed distributions of expected values) and two different response modes (attractiveness ratings and buying prices). Changes in the response mode affected the preference order of gambles, and changes in the context due to variations in skewing influenced the metric properties of the judgments but had a minimal effect on preference orders. Data were inconsistent with contingent weighting theory (Tversky, Sattath, & Slovic, 1988) and expression theory (Goldstein & Einhorn, 1987) . Results could be described by a change-of-process theory which assumes that the method of elicitation influences the manner in which people combine information and arrive at judgments. Under certain conditions, attractiveness ratings could be described by an additive combination of subjective probability and utility ( s and u ), whereas pricing judgments were accounted for by a multiplicative function, with the same scales of s and u in both tasks. When the range of outcomes included zero and negative values, preference orders for attractiveness ratings of gambles changed. This change in rank order was consistent with the hypothesis that inclusion of these levels caused more subjects to use a multiplicative rule for combining u and s when rating the attractiveness of gambles. Thus, preference reversals can be explained by the theory that the combination rule changes, while utilities and subjective probabilities remain constant.

Preferences, prices, and ratings in risky decision making

Systematically different preference orders are obtained when different procedures are used to elicit preferences for gambles. Three new experiments found different preference orders with attrativeness ratings, risk ratings, buying prices, selloing prices, avoidance prices, and strength-of-preference judgments. Preference reversals persisted event when Ss were given financial incentives to motivate them to rank the gambles identically. Results were consistent with a change-of process theory in which Ss are assumed to use different strategies in different tasks with the same scales. Attractiveness and risk ratings could be described by an additive combination of probability and amount, and prices could be predicted by a multiplicative combination of the same scales. Strength-of-preference judgments were consistent with contrast-weighting model in which the weight of a dimension (either probability or amount) depends on the contrast between the 2 gambles along that dimension

The slippery slope: how small ethical transgressions pave the way for larger future transgressions.

Many recent corporate scandals have been described as resulting from a slippery slope in which a series of small infractions gradually increased over time (e.g., McLean & Elkind, 2003). However, behavioral ethics research has rarely considered how unethical behavior unfolds over time. In this study, we draw on theories of self-regulation to examine whether individuals engage in a slippery slope of increasingly unethical behavior. First, we extend Banduras (1991, 1999) social-cognitive theory by demonstrating how the mechanism of moral disengagement can reduce ethicality over a series of gradually increasing indiscretions. Second, we draw from recent research connecting regulatory focus theory and behavioral ethics (Gino & Margolis, 2011) to demonstrate that inducing a prevention focus moderates this mediated relationship by reducing ones propensity to slide down the slippery slope. We find support for the developed model across 4 multiround studies.

On Good Scholarship, Goal Setting, and Scholars Gone Wild

Executive Overview In this article, we define good scholarship, highlight our points of disagreement with Locke and Latham (2009), and call for further academic research to examine the full range of goal settings effects. We reiterate our original claim that goal setting, like a potent medication, can produce both beneficial effects and systematic, negative outcomes (Ordonez, Schweitzer, Galinsky,& Bazerman, 2009), and as a result, it should be carefully prescribed and closely monitored.

Tacit Coordination in Choice Between Certain Outcomes in Endogenously Determined Lotteries

Tacit coordination is studied in a class of games in which each of n = 20 players is required to choose between two courses of actions. The first action offers each player a fixed outcome whereas the second presents her the opportunity of participating in a lottery with probabilities that are determined endogenously. Across multiple iterations of the game and trial-to-trial changes in the composition of the lottery, we observe a remarkably good coordination on the aggregate but not individual level. We further observe systematic deviations from the Nash equilibrium solution that are accounted for quite well by a simple adaptive learning model.

Utility Invariance Despite Labile Preferences

Publisher Summary This chapter discusses the robustness of preference reversals as well as the research in the domain of risky decision making that goes beyond simple demonstrations of preference reversals based on a few pairs of gambles. It explains how the entire preference order over a large set of gambles changes with the response mode. It examines preference reversals in a riskless domain in which subjects state their preferences for apartments using choices and ratings of attractiveness. The chapter proposes a two-pronged theory of preference reversals. The attribute judged more important has a greater effect in choices than in ratings. There is also an explanation as to how two pronged theory, which assume that subjects change either strategies or weights across tasks, give a coherent account of many important properties of the data while allowing the elicitation of utilities or psychological values to remain constant across tasks. The chapter illustrates that, with the appropriate models, utilities are stable and have meaning over and beyond the task from which they are derived.

THE DARK SIDE OF GOAL SETTING: THE ROLE OF GOALS IN MOTIVATING UNETHICAL DECISION MAKING

A substantial literature has demonstrated that goal setting improves task performance (Locke & Latham, 1990). In this article we explore the proposition that challenging goals motivate not only con...