When Organizations Don’t Walk Their Talk: A Cross-Level Examination of How Decoupling Formal Ethics Programs Affects Organizational Members

Abstract

This research illustrates dangers inherent in the gap created when organizations decouple ethics program adoption from implementation. Using a sample of 182 professionals in the pharmaceutical and financial services industries, we examine the relationship between structural decoupling of formal ethics programs and individual-level perceptions and behavior. Findings strongly support the hypothesized relationships between decoupling and organizational members’ legitimacy perceptions of the ethics program, psychological contract breach, organizational cynicism, and unethical behavior.