When ‘hallowed’ leaders fall, they fall very hard
There’s a limit, however, even at the very top, as former CEOs Bernie Ebbers of Worldcom, Dennis Kozlowski of Tyco International and Kenneth Lay of Enron discovered.
When it comes to infractions around the office,business leaders seem to get away with a great deal that underlings don't. A blind eye may be turned when a manager uses a company credit card to cover a $200 private lunch, but a worker caught stuffing a coffee tin from the break room into his backpack could lose his job over it.
There's a limit, however, even at the very top, as formerCEOs Bernie Ebbers of Worldcom, Dennis Kozlowskiof Tyco International and Kenneth Lay of Enron discovered. When top leaders fall, they fall hard. New research at business school Insead suggests that leaders generally receive greater leniency for perceived anti-social or inappropriate behaviour, but when a line is crossed — when their actions are perceived to be "most severe" — they face harsher punishment than an underling would face.
"Research shows that, because of their power and status, leaders are perceived as deserving of certain privileges," says Natalia Karelaia, an assistant professor of decision sciences at Insead and coauthor of the paper When Deviant Leaders Are Punished More than Non-leaders: The Role of Deviance Severity. "But prototypical leaders are also expected to act in a responsible and just manner, so when severe deviances — those that inflict significant harm on others - are committed, they are likely to be seen as significant acts of betrayal of leadership expectations."
Power Corrupts
Prior research has suggested that too much power can lead to unconstrained, socially inappropriate, less moral behaviour. In fact, there is some evidence that such behaviour abounds among high-status power-holders because rule-breaking, aggressive risk-taking and lack of self-restraint are perceived as traits of a successful leader, and therefore is accepted until it becomes too severe to ignore. Whether questionable behaviour is seen as severe or as within society's norms depends on the perceived harm done to others, Karelaia says.
It is therefore subjective and open to manipulation, which gives the media, with its ability to manage public sentiment, a great deal of power when it comes to how leaders are punished. Take Rupert Murdoch, CEO of News Corporation, the global media conglomerate.
The operating tactics adopted by his company ran virtually unchecked, resulting in reporters spying on the private lives of high-profile movie stars and politicians in search of scandal. Though the 'victims' in question were public figures and therefore legally subject to public scrutiny, a line was crossed. When the telephone-tapping allegations focused on the harm inflicted on the family of a murdered child, public condemnation resulted in an official probe into the tactics used.
That also explains why some banking chiefs survive trading scandals, as JPMorgan Chase's Jamie Dimon did, while others such as Barclays' CEO Bob Diamond and president Marcus Agius were not so lucky. When it was revealed that Barclays and other major banks had attempted to manipulate Libor (London Interbank Offered Rate) interest rates, affecting millions of people and trillions of dollars' worth of student loans, home mortgages and credit cards, Diamond stepped down.
"If the media brings to the attention of the general public the impact certain acts have on employees, clients and their families," Karelaia says, "then the perception of the magnitude of harm can be affected. The findings from our research imply that, by changing the perceived magnitude of harm, we can change the extent to which wrongdoers are seen as more or less villains."
A Case of Four Studies
Karelaia's paper was based on four studies. The first two involved surveys in which participants were asked to assume the role of HR consultants and evaluate the actions of two employees, a senior executive in a large company and a staff assistant.
One of them provided descriptions of four inappropriate acts, ranging from being late for meetings to sexually harassing co-workers, and asked participants to rate the severity of each act and how severely the hypothetical wrongdoers should be punished. The second survey kept the nature of the acts the same but changed the extent of the harm.
There's a limit, however, even at the very top, as formerCEOs Bernie Ebbers of Worldcom, Dennis Kozlowskiof Tyco International and Kenneth Lay of Enron discovered. When top leaders fall, they fall hard. New research at business school Insead suggests that leaders generally receive greater leniency for perceived anti-social or inappropriate behaviour, but when a line is crossed — when their actions are perceived to be "most severe" — they face harsher punishment than an underling would face.
"Research shows that, because of their power and status, leaders are perceived as deserving of certain privileges," says Natalia Karelaia, an assistant professor of decision sciences at Insead and coauthor of the paper When Deviant Leaders Are Punished More than Non-leaders: The Role of Deviance Severity. "But prototypical leaders are also expected to act in a responsible and just manner, so when severe deviances — those that inflict significant harm on others - are committed, they are likely to be seen as significant acts of betrayal of leadership expectations."
Power Corrupts
Prior research has suggested that too much power can lead to unconstrained, socially inappropriate, less moral behaviour. In fact, there is some evidence that such behaviour abounds among high-status power-holders because rule-breaking, aggressive risk-taking and lack of self-restraint are perceived as traits of a successful leader, and therefore is accepted until it becomes too severe to ignore. Whether questionable behaviour is seen as severe or as within society's norms depends on the perceived harm done to others, Karelaia says.
It is therefore subjective and open to manipulation, which gives the media, with its ability to manage public sentiment, a great deal of power when it comes to how leaders are punished. Take Rupert Murdoch, CEO of News Corporation, the global media conglomerate.
The operating tactics adopted by his company ran virtually unchecked, resulting in reporters spying on the private lives of high-profile movie stars and politicians in search of scandal. Though the 'victims' in question were public figures and therefore legally subject to public scrutiny, a line was crossed. When the telephone-tapping allegations focused on the harm inflicted on the family of a murdered child, public condemnation resulted in an official probe into the tactics used.
That also explains why some banking chiefs survive trading scandals, as JPMorgan Chase's Jamie Dimon did, while others such as Barclays' CEO Bob Diamond and president Marcus Agius were not so lucky. When it was revealed that Barclays and other major banks had attempted to manipulate Libor (London Interbank Offered Rate) interest rates, affecting millions of people and trillions of dollars' worth of student loans, home mortgages and credit cards, Diamond stepped down.
"If the media brings to the attention of the general public the impact certain acts have on employees, clients and their families," Karelaia says, "then the perception of the magnitude of harm can be affected. The findings from our research imply that, by changing the perceived magnitude of harm, we can change the extent to which wrongdoers are seen as more or less villains."
A Case of Four Studies
Karelaia's paper was based on four studies. The first two involved surveys in which participants were asked to assume the role of HR consultants and evaluate the actions of two employees, a senior executive in a large company and a staff assistant.
One of them provided descriptions of four inappropriate acts, ranging from being late for meetings to sexually harassing co-workers, and asked participants to rate the severity of each act and how severely the hypothetical wrongdoers should be punished. The second survey kept the nature of the acts the same but changed the extent of the harm.
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