Our first research tidbits of the year starts with articles considering leadership behaviour at the very top of the decision chain.
Normalisation of questionable behaviour: The financial crisis in Iceland
In this paper, the authors explore the 2008 financial crisis in Iceland through the lens of Donaldson’s concept of normalisation of questionable behaviour. The authors study the report published by the Special Investigation Commission, an investigation initiated by the Icelandic Parliament near the end of 2008.
The report provides a detailed and systematic account of the processes leading up to the crisis. The aim is to determine the extent to which the behaviours of professionals in the Icelandic financial sector can be explained as a gradual fading of moral concerns to the point that they perceived the sale of high-risk products to unassuming customers for their own short-term benefit to be morally unproblematic. In doing so, the authors consider both character and circumstance explanations of moral misbehaviour.
The authors expand on Donaldson’s initial description of normalisation of questionable behaviour by applying the concept of moral neutralisation, which is defined by criminologists Sykes and Matza as the process of convincing oneself that an option that initially conflicted with one’s own moral beliefs is actually morally acceptable. The authors find indications that individuals in the Icelandic financial sector did engage in moral neutralisation in their attempts to frame their own actions in an acceptable light.
In this study, the authors identify one way of neutralising away moral dissonance not captured in the original theoretical framework. Icelandic bankers justified their behaviour by claiming that they did not break any relevant rules or regulations when they engaged in what were later labelled questionable activities. The name for this kind of justification is claim of having breached no rule.
Øyvind Kvalnes and Salvör Nordal. 2019. Normalization of Questionable Behavior: An Ethical Root of the Financial Crisis in Iceland.
Journal of Business Ethics, 159(3), 761–775.
Misleading country rankings perpetuate destructive business practices
Countries are ranked on many criteria, the results of which can have far-reaching ethical and practical implications, particularly for emerging nations seeking role models. One highly influential ranking, the World Economic Forum’s Global Competitiveness Report (GCR), has been criticised for containing multiple methodological, conceptual, and logical flaws that bias competitiveness rankings toward countries that favour neoliberalism.
Using datasets not afflicted by such flaws, the authors examine Bergsteiner and Avery’s (J Bus Ethics 109(4):391–410, 2012) prediction that competitiveness scores of the USA and the UK are substantially overstated. Results of re-ranking 104 countries using 29 economic, environmental, and social datasets from reputable sources support this assertion, with the USA showing the greatest discrepancy on a 100-point scale between its 2013–2014 GCR score (5) and this study’s 2013 score (57), and the UK falling from GCR score 9 to 40.
The authors explore reasons for this discrepancy, including examining the relationship between a country’s neoliberal traditions and its rankings on the indicators.