Management Ethics: The Psychology of Positive vs. Destructive Rule Breaking

Management Ethics: The Psychology of Positive vs. Destructive Rule Breaking

Jay Finkelman (California School of Professional Psychology, USA) and Louise Kelly (Marshall Goldsmith School of Management, USA)
DOI: 10.4018/978-1-61350-510-6.ch010
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This chapter looks at some of the psychological underpinnings of rule breaking behavior in business -what drives rule breaking behavior and how can it be shaped. The authors contrast the positive and productive rule breaking, with the destructive and unethical rule breaking behavior seen in companies such as Enron. They consider some of the causes of deviant behavior using a social bonding framework and other potential predictors such as lack of self-awareness, lack of future commitment to the organization and lack of supervisory support. Narcissistic leaders are a special case that the authors examine because of their potential influence on either positive or negative rule breaking. Narcissistic leaders can have a positive impact on innovation, or they may elect to engage in unethical rule breaking. The chapter also explores practical prevention strategies and ends with an explanation of some of the major findings of positive psychology.
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While rule breaking may appear at first to have only a pejorative connotation, we argue that it should not be an automatic assumption and that there is a credible alternative interpretation that should be considered. Sometimes rule breaking is necessary to facilitate change and correct inequities through non-traditional channels (Morrison, 2006). And sometimes the absence of rule breaking should be viewed negatively - as a sign of authoritarian thinking and intolerance to change.

The challenge is somewhat akin to asking which is more important, flexibility or rigidity, consistency or adaptability? The answer, of course, is both. The implication is that rule breaking may be a positive attribute under certain circumstances. Obviously it is misleading to simply label any rule breaking behavior as unethical and inappropriate.

In order to appreciate the utility and potential instrumentality of rule breaking behavior, we must first understand the predictors – or at least the correlates – of such conduct. We first view rule breaking within the context of deviant behavior in order to gain perspective as to the traditional negative interpretation and the supporting research. Then we consider the opposing interpretation of rule breaking behavior and the potential value to the organization – positive rule breaking. We conclude that both positions may have merit and that perhaps a contingency model framework is required in order to make a proper assessment.

We consider the ethics and efficacy of breaking stupid rules, about which we are all too familiar. We look at the intriguing personality trait of productive narcissism and how it might surprise advocates of traditional models of leadership thinking. We also explore “coopetition”, an innovative although counter-intuitive approach to competitive strategy in limited resource environments, as a promising win-win solution (Brandenburger & Nalebuff, 1996).

We start our chapter with a review of our understanding of the traditional basis of deviant behavior.

Key Terms in this Chapter

Social Learning Theory/Social Bonding Theory: Based on the work of Albert Bandura, Social Learning Theory suggests that social learning occurs through four stages of imitation: close contact, imitation of superiors, understanding of concepts, and role model behavior.

Coopetition: Blended model of competition and cooperation where companies work together to overcome resource deficiencies and share common costs because they lack the competitive advantage.

Creative Destruction: Associated with the work of Economist Joseph Schumpeter. It describes a theory of economic innovation and progress based on creating innovation and in the process destroying the value of previous innovations by rendering previous technologies obsolete.

Positive Psychology: Lead by Martin Seligman, is a type of psychology where psychologists focus on what is working as opposed to what is not. The goal is to cultivate an individual’s talent and leave them fulfilled.

The Interactive Ethics Model (IEM): A descriptive model which proposed to explain how individuals in the context of the workplace proceed from dilemma to the final ethical or unethical outcomes.

Narcissistic Personality: Personality traits including being excessively preoccupied with issues of personal adequacy, power, prestige and vanity; emotionally isolated and highly distrustful whose grandiosity is fed by their achievements.

Benevolent Hacking: Jensen and Klein (2010) describe the phenomenon of benevolent hacking as being a way to create a culture where employees break stupid rules to create smart results.

Rule Breaking: Often viewed negatively, rule breaking is at times necessary to facilitate change and correct inequities through non-traditional channels. It is important to distinguish between unethical and inappropriate rule breaking, and rule breaking behavior that rids organization of dysfunctional elements and increases motivation and commitment.

Edgewalkers: People who walk between worlds building bridges, resolving problems, being leaders, and leading change.

Game Theory: Looks at analyzing an individual’s choices as those choices depend on the choices of others. These choices are made in the context of rules and payoffs and are thus considered games.

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