What makes a church-going soccer coach cross the line and commit fraud?  Why does the well-intended, hard-working sales manager fudge numbers at the end of the quarter? 

     Most people intend to be ethical on the job.  But studies by John Darley of Princeton University show that even those with scruples of steel will falter and make bad decisions when put in an environment that encourages them to do so.

     When it comes to why good people do bad things it turns out that your organizational culture is the deciding factor.  Take, for example, the culture where budgets are routinely exceeded, performance reviews are meaningless, and sales projections are never addressed once they have been made.  These cultures give people permission to make promises they don’t have to keep.  If the culture is “talk” only and no accountability then otherwise good people will sacrifice accuracy, quality, or integrity.

     In a 2003 study of 1,503 companies, the Ethics Resource Center found that when talk dominated action, misconduct soared.  But when top management walked the talk with their actions, misconduct plummeted.

     It is your culture that creates an environment where good people will make good decisions when placed in a position of conflict.  So if you want to create a culture to encourage your good people to do good things in difficult situations, then start at the top with your actions.