Distance: a surprising way to keep your company ethical Friday, 15 May 2015

It is often assumed that unethical behaviour at the top ‘trickles down’ to lower levels in organisations. However, if middle managers keep their distance from misbehaving bosses, they can prevent unethical behaviour from dripping down through the organisation and break the top-down chain of unethical guidance, according to new research by Gijs van Houwelingen of Rotterdam School of Management, Erasmus University (RSM). So companies that want to be moral shouldn’t only look to the top layer of management for guidance.

One of the issues that companies are faced with when trying to maintain an ethical culture is that people often subconsciously copy the behaviour of others. This effect is especially pronounced when these others are important role-models, like organizational leaders. So, when top management misbehaves, unwanted behaviour may spread throughout the organization. This is why Van Houwelingen became interested in the factors that help top-level misbehaviour from spreading. Middle managers, as it turns out, can be seen as the most important gatekeeper against the spread of unethical behaviour from the top.

Van Houwelingen’s research reveals that distance plays an important part in either rejecting or copying unethical behaviour demonstrated by a misbehaving supervisor or top-level manager. Distance provides a form of ‘insulation’ against the influence of higher-level misbehaviour. In other words: The closer an employee feels to their boss, the more likely they are to subconsciously mirror the behaviour. When distance is larger, this effect diminishes or even reverses: when the distance between middle managers and the top is sufficiently big middle managers were found to be more likely to contrast top-level misbehaviour. They actually became fairer once confronted with a boss behaving unethically.          

Distance may mean here simply physical proximity or remoteness such as sharing an office, sitting at adjacent desks, being on the same floor or building or being on the same rung of the hierarchical ladder. Or it can mean psychological or social distance; having empathy for someone, being able to relate to that person, or feeling like part of the same team. In fact, the research shows that physical distance often translates into social or psychological distance; we are better able to relate with those that are (physically) closer to us.

Surprisingly, up to now higher interpersonal distance has mostly been seen as an impediment to safeguarding the ethical climate of the organizations. For instance, distance may make employees think they can get away with fraud or theft. However, as Gijs van Houwelingen shows, there are indeed unexpected virtues of distance: it may help prevent misbehaviour from spreading throughout the organization. Organization should thus strive to manage distance: levels of management should neither be too close or too distant from each other.

Physical distance can simply be created by seating staff in separate buildings or on different floors. Psychological distance can be maintained by keeping a degree of formality in interpersonal interactions. Van Houwelingen also recommends avoiding that people only identify with their superior. Middle managers and members of staff with responsibilities to several managers and who look for mentoring to several mentors find it easier to find a good moral compass to follow, he says.

Van Houwelingen conducted this research in collaboration with Marius Van Dijke, endowed professor of behavioural ethics at Rotterdam School of Management, and David de Cremer, KPMG chair of management studies at Judge Business School, University of Cambridge. The paper entitled ‘Fairness Enactment as Response to Higher Level Unfairness: The Roles of Self-Construal and Spatial Distance’ has been published online by the Journal of Management and will appear in print sometime in 2016.

Caught on the wrong side of ethics in business

Ethics in business is the major feature of the Summer 2015 issue of RSM Outlook magazine, available online from 20 May. Three features in the magazine present three perspectives; on being led astray by cultural and behavioural dynamics; a view of ethics and integrity management by someone who got caught on the wrong side; and what the recent prominence of ethics means for business.

Read the entire RSM Discovery Magazine article on Gijs van Houwelingen's research below.

By Gijs van Houwelingen

Follow the leader whilst showing a good example to your subordinates – such is the lot of the middle manager. This juggling of obligation and responsibility is made even more complicated when some of the decision-making at the top is deemed unfair. How do middle managers respond in such instances? Do they reproduce the unfair practices of their superiors or react against them? New research shows that creating physical distance from senior management reduces the chances of such unfair behaviour spreading.

Managerial unfairness is not only morally undesirable, it has also been shown to have a negative effect on the bottom line. This is especially the case if such a trend filters down to lower level managers who, in turn, emulate such behaviour. Middle managers are a particularly interesting case in point as senior management may potentially influence them and, in turn, have an impact upon the professional practices of their subordinates. Creating distance between managerial levels may also play a part in the extent to which middle managers replicate their superiors’ behaviour and decision-making. However, the right balance needs to be struck between healthy distance (so that middle managers are less exposed to questionable practices at the top) and remoteness (so that superiors are not too distant to be sensitive to their needs).

The trickle-down effect

Until now it has been widely supposed that questionable decision-making and treatment of employees by senior management will be replicated by those lower down the ladder. This “assimilation effect” is based upon the assumption that middle managers view their superiors as role models. As part of their desire to serve, they end up aping some of the behaviour and practices they see above them. Whilst it is probably true that ethical leadership tends to breed ethical behaviour lower down, it is surely too simplistic to deduce that unethical leadership will trickle down to subordinates and subsequently bring out the worst in them.

The alternative scenario sees middle managers reacting against what they perceive to be poor or unfair senior managerial practice. Whilst they may not openly contest the behaviour they see at the top, they may intentionally seek a fairer approach when dealing with people hierarchically beneath them. However, to understand this contrasting behaviour requires a deeper investigation of the factors that can trigger it. New research indicates that managerial self-image and physical distance are crucial in this respect.

Forming a self-image

People base their self-image to varying extents upon their relations with other people within an organisation – who you feel close to can affect how you understand yourself. Our research indicates that self-image has a substantial impact on how middle managers respond to leader unfairness. Known as “relational-interdependent self-construal”, this phenomenon can be embedded into the hierarchical context of working within a company with other people.  For example, lower level managers may be more or less inclined to define themselves in terms of their relation to their higher-level managers. A middle manager who identifies strongly with their manager may for instance describe themselves as “part of my manager’s team”. A manager who does not so strongly identify with the manager will be less likely to have their relationship with the superior as part of the self-definition.

The level of relational-interdependent self-construal can impact the extent to which people emulate the behaviour of others, good or bad. High relational-interdependent self-construal (high identifiers) are likely to emulate other people’s behaviour. For this to happen, people must perceive a certain similarity with those others in order to then replicate their behaviour. By contrast, it is less likely that, for example, a middle manager within a company would aim to mirror the questionable actions of a hierarchical superior with whom they felt little connection and not much in common. It is for this reason that recent research activity has sought to make the connection between relational-interdependent self-construal and the likelihood of unfair managerial practice being replicated.

Interpreting physical distance

Physical distance is an antecedent to relational-interdependent self-construal. The reason for this is that, on the whole, people are less likely to find a similarity with someone located farther afield. Hence, in general, middle managers are less likely to be inclined to emulate the behaviour of superiors that are farther away – located in another building, city or country. Our research shows that this is mainly important when superiors act in undesirable ways.

Recent research activity has shown distance and relational-interdependent self-construal to affect the way in which people respond to high-level unfairness. A wide-ranging, multi-part study examining the reactions of undergraduate populations as well as currently active professionals has delved into this issue from a variety of angles. These include the importance of relations with a team leader to self-image, the creation of distance via a network set-up, the fairness of hierarchical superiors during annual pay negotiations, and reactions to the distribution of tasks by supervisors.

Results all point in the same direction: undesirable behaviour at the top is contrasted by middle managers relatively far away (they become more fair), but assimilated by those closer by (they become less fair). Middle managers, in their dual role as supervised and supervising members of a company, are especially impacted by this situation – they may experience unfairness from those above them and then have to decide whether to inflict this same behaviour on those beneath them.

Avenues for exploration

On a practical level, the implications of this phenomenon underscore the importance to strike the right balance between distance and remoteness. A little distance allows middle managers to “be their own man or woman”, but too much and they may be “out of the loop”. In more general terms, our research shows how important it is to create a physical work environment that suits the needs of the organisation and its employees – significant enough distance to reduce the chances of bad practices filtering down but not so large a distance as to make senior management appear remote.

Company heads therefore need to think twice when considering increasingly virtual, physically distant professional set-ups or when planning to expand on a geographical level. In companies where leadership is very much “by example” (implying that senior management act as role models), creating physical distance will reduce the chances of such an approach being successful. On the other hand, distance also offers certain advantages as it reduces the chance of unfair behaviour spreading within an organisation. Finding a happy medium between the two scenarios is the challenge.

On a theoretical level, the interrelation of the physical and the psychological is worthy of deeper investigation beyond the notion of distance. For example, it has been suggested that a darker workplace can induce less ethical behaviour from employees. How this and other aspects of the working environment can influence professional behaviour remains to be seen. In addition, most research activity has so far concentrated on the response of individuals to their superiors, in the “follower” mode. However, who is to say that many people within the workplace are not just as, if not more, impacted by the behaviour of those beneath them?

These and other points deserve continued consideration and exploration. However, the crucial lessons to emerge so far are that distance need not be a bad thing in order to do business effectively. Above all, senior managers need to strike a balance between leading by example and creating the right conditions for their “followers” to also enjoy a degree of autonomy and a healthy distance from goings-on at the top, especially when some of those goings-on are viewed in a dim light.

This article draws inspiration from the paper Fairness Enactment as Response to Higher Level Unfairness: The Roles of Self-Construal and Spatial Distance, written by Gijs van Houwelingen, Marius van Dijke and David De Cremer and published in the Journal of Management, April 16, 2014. DOI: http://dx.doi.org/10.1177/0149206314530166

Gijs van Houwelingen is an academic researcher within the Erasmus Centre for Behavioural Ethics and the Department of Business-Society Management at Rotterdam School of Management, Erasmus University. Email: ghouwelingen@rsm.nl

This article was published in RSM Discovery Magazine 21. More information about and back copies of RSM Discovery Magazine can be found here.