Liar, liar, pants on fire! Groups lie more than individuals.

 Researchers have found that something as simple as communication within groups, even if each group member has previously behaved honestly, can be the key to triggering collaborative, dishonest behavior. Prior honest behavior is no match for the potentially negative influences present in a group dynamic, especially when money is at stake, according to a new study, published in the journal Management Science.

What the researchers say: When organizations are exposed for large-scale deceptive or corrupt behavior, often it is not the actions of one or two employees, but a coordinated effort of many individuals, including upper level management. Prominent examples include the bankruptcies of WorldCom and Enron, and even more recently, the alleged issuance of faulty emissions certificates by German car manufacturer Volkswagen. The study explored what motivates a group of people, especially those who previously behaved honestly, to work together to deceive.

The authors studied 273 participants in both individual and group situations. Participants, who were paid for their role in the study, were shown video of dice rolls and asked to report the number shown on the die. The higher the reported die roll, the larger the monetary compensation. Participants were evaluated on an individual basis, and in two group settings: one in which all members of the group must report the same die roll to receive a payoff, and another in which members do not have to report the same die roll to receive a payoff. In the group settings, members are able to communicate with each other via a chat feature.

“We observed that groups lie significantly more than individuals when group members face mutual financial gain and have to coordinate an action in order to realize that financial gain,” said the lead author.

Of the 78 groups that participated in the study, 51 percent colluded dishonestly—as their chats revealed. In only 15.6 percent of the chats did the participants argue the case for honesty. Interestingly, the authors found that the number of individuals in each group who had exhibited dishonest behavior in the individual portion of the study had no real impact on these results, as dishonesty occurred even in groups where all members had previously responded honestly.

“The ability for group members to exchange and discuss potential justifications for their dishonest behavior can create an overall shift in the group's beliefs of what constitutes moral behavior,” said the researchers. “This allows them to establish a new norm regarding what does or does not constitute dishonest behavior.”

So what? This is a really important study, especially for all risk, compliance and governance professionals—or, indeed anyone who is interested in the ethics of political or corporate behavior. Any group that is put together, no matter how temporary, begins to create its own culture. Culture is about two things overall: collaboration and group survival. The norms of the group—the cultural behaviors—become established and members of the group find it very difficult to understand that there are rational norms outside those that they have established. In these studies the majority of groups decided that dishonesty was in the best interest of the group and so collaborated to follow that course. Considerable earlier research on this topic has been posted in previous TRs.

What now? The only way around this is to make sure that the organization—or the society—has a culture which binds people so closely together that they are less likely to be seduced by the dark side. This is possible—but extremely difficult in times when trust in management is decreasing and uncertainty of employment is rising.