Schumpter On Dishonesty

http://www.economist.com/node/21556548/print

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"All human development, no matter what form it takes, must be outside the rules; otherwise, we would never have anything new." (Charles Kettering)
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Looking at the "Schumpeter" blog section of "The Economist," there's a post ("A tissue of lies") that features a social psychologist looking at why people lie and cheat in business (and even business school).

I didn't realize that I could have gotten my MBA (at least, over recent years) at Concordia College in the US Virgin Islands. In that particular institution, Mark Howard an attorney for BSkyB, a broadcaster, proved in a cross-examination that his pet schnauzer got very high grades having completed his MBA (in what appears to be record time).

Further, I find that in a survey of American graduate students, 56% of those pursuing an MBA admitted to having cheated in the previous year, compared with 47% of other students.

Schumpeter points out that the Sarbanes provision that makes misstated financials a criminally liable act for a CEO or CFO is a step in the right direction.

Schumpeter suggests that Dan Ariely's new book "The (Honest) Truth about Dishonesty," will reinvigorate the discussion. As a social psychologist who has spent years studying cheating (and teaching at the Duke Fuqua School of Business), Ariely contends that the vast majority of people are prone to cheating. He gets to a "vast majority" by including the "fudging" category: forgetting to put a few coins in an honesty box, etc.

Ariely has some interesting examples of fudging but his bottom line is: nudge people to police themselves by making it harder for them to rationalize their sins.

Some good thoughts.