Business Society 2003 Scott 234 66

Business & Society
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About Face: How Employee Dishonesty Influences A Stakeholder's Image of an Organization

Elizabeth D. Scott and Karen A. Jehn
Business Society 2003 42: 234
DOI: 10.1177/0007650303042002004
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BUSINESS
10.1177/0007650303253166
Scott,
Jehn / &
ABOUT
SOCIETY
FACE
/ June 2003
About Face: How Employee

Dishonesty Influences A Stakeholders
Image of an Organization
ELIZABETH D. SCOTT
Eastern Connecticut State University
KAREN A. JEHN
University of Pennsylvania
This article presents a model of employee dishonesty and formation of stakeholders images of organizations, which applies theories of moral judgment and
attribution. It describes the person-situation interaction effects of characteristics
of employee behavior and of persons making moral judgments on stakeholders
moral judgments, amounts of blame, loci of blame, and images of organizations.
Using a situationally based definition of dishonesty, the article examines the effects of the act, the actor, the result, the person affected, and the intent of an employees behavior on stakeholders images of the organization, as well as the effects of the characteristics of the person making the moral judgment. The
situationally based definition of dishonesty provides a theoretical basis for understanding how differences in situations lead to differences in moral judgments by
the same individuals. The person making the moral judgment is presented as a part
of the model to explain how differences in viewpoints result in different moral
evaluations of the same situations by different judges. Research directions are
identified and discussed.
Keywords: employee behavior; stakeholder; organizational image
Obviously, there are numerous employee behaviors that potentially affect

stakeholders images of organizations. We have selected employee dishonesty as the behavior to examine for the following reasons: (a) it exists
AUTHORS NOTE We thank the Zicklin Center for Business Ethics Research for financial support, and Diana Robertson, Linda Trevio, Lorna Doucet, Craig Dunn, Bill Ross,
BUSINESS & SOCIETY, Vol. 42 No. 2, June 2003 234-266
DOI: 10.1177/0007650303253166
2003 Sage Publications
234
Scott, Jehn / ABOUT FACE
235
in all industries in a broad variety of forms (Murphy, 1993), (b) it can be

simultaneously encouraged (Hochschild, 1983) and discouraged
(Murphy, 1993) by employers, (c) it is generally agreed to be immoral
(Scott, 2000; Scott & Jehn, 1999), (d) the lay observer has the ability to
form opinions about employee dishonesty (Ekman, 1992), (e) it is often
directly stated as a component of stakeholders images of organizations
(Fombrun, 1996), and (f) it is used as a technique in managing image
(Schlenker, 1980; Sigmon & Snyder, 1993).
The initial reaction to our topic is often of course, employee dishonesty reflects poorly on an organization. Then, as we discuss various situations, people realize that in many instances, they do not blame the organization for an individual employees behavior or they actually praise the
employee for not telling the truth. People involved in organizational
events vary among themselves and their interpretations of the event; that
is, their view changes from one situation to the next, as our students or the
others we mention previously often notice. In addition, people vary across
the same situation; that is, one persons view is not necessarily the same as
anothers. This variation in assessment by people involved in the same
event is often related to the peoples various roles in the situation, amounts
of knowledge of the facts, previous experience with the organization, or
personal definitions of what constitutes dishonesty. Past work has
neglected to address this combination of variation in situation and across
people simultaneously (Bone & Corey, 2000). In this article, we present a
theory of how employee dishonesty influences a stakeholders image of an
organization to explain how these various judgments are made, given variation in the personal characteristics of the people making the judgment, in
the situation surrounding the employees behavior, and in the interaction
between the two.
STAKEHOLDERS IMAGES OF ORGANIZATIONS

We are interested in the individual-level, somewhat enduring images of
organizations held by stakeholders. We define stakeholders image as a
representation of the organization in the individual stakeholders mind,
including both cognitive and emotional dimensions, adapted from
Fombruns (1996) definition of organizational image (see Gioia, Schultz, &
Corley, 2000, for a review of this literature). We see this image as
Jane Dutton, Bob Drago, C. B. Bhattacharya, Joan Tomaszewski, and participants at meetings of the International Association for Business and Society for their helpful comments on
earlier versions of this work. We also thank Haiyi Li for her research assistance.
236
BUSINESS & SOCIETY / June 2003
something more lasting than an impression or a perception, but still able to

change with new information. By stakeholders, we mean all individuals
who have a present, past, or future interest in the organization. This can
include current, former, and potential employees, customers, and community members as well as employees of suppliers, competitors, and other
organizations that relate to the focal organization. Even though we recognize that stakeholders may vary in their importance to an organization, we
do not attempt to distinguish among stakeholders on this basis. Also, we
recognize that stakeholders may communicate their images of an organization with other stakeholders, but we do not attempt to model the process
by which individuals images of organizations merge to form reputations.
However, in recognition of the fact that multiple stakeholders may be
aware of the same event, yet view it differently, we develop a model that is
sufficiently broad to make predictions for all human1 stakeholders, not
just members of certain classes of stakeholders.
IMPORTANCE OF IMAGE TO
ORGANIZATIONAL OUTCOMES
The images stakeholders have of organizations have implications for
organizational performance, which is why organizations often actively
seek to manage their identities and reputations by attempting to place certain images in stakeholders minds (Bromley, 1993; Caldwell & OReilly,
1982; Fombrun, 1996). Stakeholderspositive images of organizations are
considered desirable because they are connected to behaviors that contribute to the organizations well-being (Boulding, Kalra, Staelin, &
Zeithaml, 1993). For example, stakeholdersimages of organizations may
affect their willingness to do business with them as customers, suppliers,
or investors (Fombrun, 1996), or, if the stakeholders are employees, their
productivity. We propose that the construct of dishonesty perception is
especially important to image because socially undesirable acts have been
shown to have large effects on judgments, such that experimental subjects
are much more likely to make negative attributions in cases involving
socially undesirable acts (Kanouse & Hanson, 1972) and to cause stakeholders to engage in vendettas, such as those against JP Stephens and the
Nestle Corporation (Shipp, 1987). Many businesses have been completely
destroyed because of the dishonest behavior of individual employees
(Fombrun, 1996), but even small instances of employee dishonesty may
affect stakeholders images of organizations.
237
FORMATION OF STAKEHOLDERS
IMAGES OF ORGANIZATIONS
Stakeholders images of organizations are often not rationally produced (Bromley, 1993). As advertisers know, emotion plays a large role in
the impressions customers have (Poiesz, 1989). And because people typically become angry when discovering lies (Lewicki, 1983), we believe
that the emotion dishonesty creates can affect image very strongly. In fact,
evidence suggests that attitudes toward organizations are strongly
affected by the impressions people have of the trustworthiness and honesty of the organizations advertisements (Kilbourne & Mowen, 1986).
What is less clear is how closely people associate the acts of employees
with the organization as a whole, and thus, how close the connection is
between employee dishonesty and stakeholdersimage of organizations.
We suggest that there is not a direct causal effect such that employee
dishonesty negative image of organization. Instead, there are three
intermediate constructs between the person or situation interaction and
the stakeholders image of the organization (see Figure 1). The first is the
moral judgment of dishonesty. This is the stakeholders view as to whether
a particular employee behavior constitutes dishonesty. The second is the
amount of blame. This is the stakeholders view of how much total blame
should be placed for the behavior, regardless of whether the blame is on
the organization, the employee, or someone or something else. It could be
considered an assessment of how bad the action is. The third is the locus
of blame. This is the place (or places) where the stakeholder believes
blame should be assigned.
Essentially, we argue that characteristics of the situation and of the
stakeholder affect whether the stakeholder believes the employee has
acted dishonestly, how serious the stakeholder believes the offense to be,
and who the stakeholder believes should be blamed. Our theory suggests
that the judgment of dishonesty and the amount of blame act as mediators
between the person or situation interaction and the stakeholders image of
the organization. The locus of blame acts as a moderator to the amount of
blame, which affects how much of the blame is attributed to the organization. We recognize that stakeholders may partially (or wholly) blame the
employee, the government, themselves, or many others for the dishonesty
of an organizations employee. As people and organizations, besides the
employees organization, are blamed, we argue that the effect of the
employees behavior on the stakeholders image of the organization is
moderated. Figure 1 describes our model. Following, we will discuss in
more detail how each of the links operates. First, we will use theories of
238
Characteristics of Employee Behavior (Situation)

P4
Act (Theft, Deceit)

Actor (Voluntariness, Social Category )
Person Affected (Social Category)
Motivation (Enrichment, Revenge, Altruism )
Consequences (Magnitude, Likelihood, Temporal Immediacy)
Attribution: Cause
Attribution: Locus
Attribution: Control
Locus of Blame
P1
P1
Attribution: Stability
P5
P3 Interaction
Moral Judgment of
Dishonesty
Amount of
Blame
Stakeholders
Image of the
Organization
Stakeholder Characteristics (Person)

Moral Development
Social Category
Past Behavior, Experiences, and Beliefs
Initial Image of Organization
P2
P4
P2
Figure 1: A Model of Employee Dishonesty and Stakeholders Image of the

Organization
moral judgment to advance propositions as to the judgment of dishonesty

and the amount of blame, and then we will use attribution theory to
advance propositions as to the locus of blame.
The person side of the model represents the stakeholder who is forming an image of the organization, whom we call the judge. We use this
terminology to denote one of this stakeholders roles in the situation, but
we do not mean to imply that this person is necessarily impartial or plays
only one role. In fact, our model allows for the possibility that the stakeholder who is the judge is also the stakeholder who is the actor or person
affected, or both. Four characteristics of the judge are discussed: (a) moral
development; (b) past behavior, experiences, and beliefs; (c) social category; and (d) initial image of the organization. We advance propositions
about the effect of variations in these characteristics on the moral judgment about the action, on the amount and locus of blame, and on the stakeholders subsequent image of the organization. We discuss several possible interactions between the person and situation, advancing propositions
about the moderating effects of these interactions.
We begin with the situation side of the model, proposing that there are
characteristics of the employee behavior that directly affect the intermediate constructs; that is, we propose there are specific characteristics of a situation that independently affect judgments, regardless of the particular
characteristics of the person making the judgment.
239
CHARACTERISTICS OF EMPLOYEE
BEHAVIOR (PROPOSITION SET 1)
There are many components making up every situation involving
employee behavior that might be construed as being dishonest. Elsewhere, we (1999) suggested five situational components as encompassing
all of the situational concepts represented in the honesty literature. The
first is the act itself. For example, was the behavior theft or deceit, active or
passive, and so on? (see Scott & Jehn, 1999, for a more thorough description of the typology). The second component is the actor. Did the actor act
voluntarily and responsibly? The third is the person affected. Is the person
affected by the action someone the evaluator values? The fourth component is the intention. What did the actor intend? And fifth is the result.
What were the consequences (or what could one expect to be the consequences) of the action? Although we find the typology useful, we did not
develop a model to predict behavior or attitudes based on these components, and other researchers who do develop models do not include all five
of these components. We build on the five-component typology by delineating different aspects of each component and developing propositions
linking each to judgments of dishonesty and amounts of blame. In general,
we propose that characteristics of the employee behavior in a situation
will affect judgments of dishonesty and amounts of blame (Proposition
Set 1).
The Act
As Shaver (1985) suggested, defining the event is one of the first difficulties judges have in trying to determine the cause of an event. The literature generally recognizes two main categories of dishonesty: theft, which
involves taking the property of another, and deceit, which involves causing someone to believe something one believes is untrue (Baier, 1993;
Scott & Jehn, 1999; Sweetser, 1992). Each of these categories has two
subcategories, one more active (e.g., property theft, lying) and the other
more passive (e.g., production theft, concealing). Theft is broken into
property and production theft, as first proposed by Hollinger and Clark
(1983) and empirically supported by Robinson and Bennett (1995).
Deceit is divided into lying and concealing, in accordance with Bok
(1978), as empirically supported by Elm and Teplensky (1998).
The identification of two different types of dishonesty naturally leads
to the question of whether one will be viewed more negatively than the
other. Is theft worse than deceit or is deceit worse than theft? Because it is
240
easier to attribute blame for action than inaction (Chisholm & Feehan,
1977; Ekman, 1992; Jones & Ryan, 1997; Spranca, Minsk, & Baron,
1991; Sweetser, 1992), we argue that those acts that by nature require the
actor to be more active will cause more severe judgments of dishonesty,
and therefore, larger amounts of blame. We suggest that a judge will evaluate a situation involving an employee who actively approaches a customer falsely claiming that the product is made in the United States as
more dishonest (and therefore, more blameworthy) as opposed to a situation involving an employee who passively fails to mention that the product
is made elsewhere, knowing that this information would be likely to
change the customers purchase decision. Specifically, we suggest the following proposition:
Proposition 1a: More active acts will have more negative effects on judgments
of dishonesty and larger amounts of blame than will more passive acts.
The Actor: Voluntariness and Social Category
The determination that an actor voluntarily caused an event is critical to

moral judgments as to whether a particular act constitutes dishonesty.
According to Frankena (1973), moral systems are often universalized,
such that the identity of the person engaging in the act is irrelevant. However, there are characteristics of the actor or the actors situation that affect
the amount of blame attributed by the judgevoluntariness and social
category (Backman, 1976; Shaver, 1985).2
Even though an action must be undertaken voluntarily to fit the definition of dishonesty, it is hard to conceive of truly involuntary speech or
concealment. Perhaps someone suffering from Tourette syndrome might
make involuntary utterances, or someone with laryngitis might be unable
to voice the truth, but by and large, people are physically free to speak or
not speak words they themselves choose. However, there are also degrees
of freedom or coercion people have that make actions more or less reprehensible. We propose that the more voluntary the action appears to be, the
more severe the judges determination of dishonesty will be and the larger
the amount of blame. An actor who freely chooses to withhold information relevant to a customers purchase decision will be judged as more dishonest and will suffer more blame than an actor who is constrained by
legal or ethical rules prohibiting disclosure. Similarly, a bank teller who is
forced at gunpoint to collect rings, watches, and wallets from customers
unfortunate enough to be present during a robbery will be seen more positively than another teller who shortchanges customers or embezzles from
their accounts. Therefore, we propose:
241
Proposition 1b: Acts perceived to be more voluntary will have more negative
effects on judgments of dishonesty and larger amounts of blame than will
acts perceived to be more involuntary.
Some actors, by virtue of their social category, are not held accountable
for their actions (Backman, 1985; Bok, 1978). Children, for example,
often are not expected to understand the moral content of their actions.
And people in certain occupations (e.g., clergy) are held to different standards (Backman, 1976; Barnes, 1994). By definition, professionals subscribe to a code of ethics of their profession. In an organizational context,
we suggest that higher level personnel and professional personnel will be
expected to have higher standards, and therefore, acts of dishonesty on
their part will result in harsher judgments and greater amounts of blame.
The mailroom staff of Enron who distributed reports misrepresenting the
companys debt will be perceived as less dishonest and blamed less than
the higher level professional accountants who drafted the reports. Even if
both parties knew that the reports were false and hoped that their Enron
stock would become more valuable as a result of the distribution of the
reports, this is still the case. Similarly, we would expect instances where
rank-and-file professional accountants at Arthur Andersen failed to report
accounting abnormalities to be judged more dishonest and more blameworthy than instances where Firestone Tire salespeople failed to report
high return rates for tires installed on Ford Explorers.
Proposition 1c: Actions perceived as undertaken by persons higher in the organization or by professionals will have more negative effects on judgments
of dishonesty and larger amounts of blame than will actions perceived as
undertaken by rank-and-file employees.
The Person Affected
Although utilitarian moral philosophy suggests that we should react

equally to harm regardless of the identity of the victim, there is still a tendency to evaluate behavior more severely if it harms certain people. At the
very least, the person affected must be someone we believe can be
offended by the act.3 For example, Brenkert (1998) argued that marketers
have a special obligation toward the vulnerable that they do not have
toward normal customers, and Collins (1989) proposed that harms
would be evaluated on the basis of the social class of the person harmed.
Our proposition suggests that if a bus dispatcher lies to a customer, saying
that the bus has departed when in fact it could be held long enough for the
customer to board, the behavior will be judged to be more dishonest and
242
more blameworthy if the customer is a frail, elderly woman than if the customer is a strong, young man.
The excuse-making literature suggests that people often try to excuse
their behaviors by denying that anyone was hurt by their actions (Sykes &
Matza, 1957). Certain victims, by virtue of previous actions they have
taken, are sometimes deemed to have given up their right to claim redress
against harm. Victims who have been labeled as liars, murderers, or
thieves are often deemed less deserving of the truth than are others who
have not been so labeled (Backman, 1976; Bok, 1978; Sykes & Matza,
1957). Bonhoeffer (1955) suggested that the very definition of telling the
truth depends on whether the hearer deserves the truth. We suggest that
dishonesty that harms people seen as vulnerable or innocent, such as children or the elderly, will be judged more harshly than dishonesty harming
people who are not seen as vulnerable, such as competitors or people who
are seen as guilty, such as shoplifters or corporate spies. In light of this, we
offer the following proposition:
Proposition 1d: Acts harming someone who is perceived as being more vulnerable or innocent will have more negative effects on judgments of dishonesty
and larger amounts of blame than acts harming persons who are perceived
as less vulnerable or less innocent.
The Intent
Definitions of dishonesty require that the actor intends the action to be

dishonest (Barnes, 1994; Chisholm & Feehan, 1977), so we are excluding
actions viewed by stakeholders as honest mistakes from our model.4
However, there are many reasons that can motivate intentionally deceptive
behavior, and we suggest that people judge acts of dishonesty differently
based on those perceived motivations.
Research on theft, for instance, suggests that its motivation may be
physical enrichment, social enrichment, or revenge. Physical enrichment
entails theft for ones own use, social enrichment entails theft for another
person (often a customer), and revenge entails using the theft to harm the
company (Greenberg & Scott, 1996; Hollinger, Slora, & Terris, 1992).
Robinson and Bennett (1997) found two different motivations for deviance, outrage and disparities in treatment. Barnes (1994) divided lies into
categories according to the actors intention, benevolent and malicious, suggesting that benevolent lies are not morally culpable. And Bok
(1978) suggested that there are four reasons offered to justify lying: avoid
harm, do good, fairness, and veracity. We summarize the motivations
243
identified in the aforementioned literature into three basic categories:

revenge (outrage, disparities in treatment, maliciousness), personal gain
(physical enrichment, social enrichment), and altruism (benevolence,
avoidance of harm, doing good, fairness, veracity). Research suggests that
people judge those who set out to do harm more harshly from those who
set out to do good (revenge vs. altruism; Barnes, 1994; Maier & Lavrakas,
1976) and also judge those more harshly who are self-serving than those
who are altruistic (personal gain vs. altruism; Backbier, Hoogstraten, &
Terwogt-Kouwenhoven, 1997). In the following example, we propose
that a lazy restaurant employee who tells a rude, overweight customer that
there are no more french fries when there is actually one serving of french
fries remaining, may be doing it to get back at the customer for a previous
slight, to avoid having to make more french fries or to help the customer
stick to a diet. Our proposition suggests that the first two motivations will
have more negative effects than the third on amounts of dishonesty and
blame assessed, even though the result is the same in all three cases.
Specifically,
Proposition 1e: The perceived motivation of revenge or the perceived motivation of personal gain will have more negative effects on judgments of dishonesty and larger amounts of blame than the perceived motivation of
altruism.
The Consequence
Some utilitarians would contend that consequences are all that matter
in determining whether an action is right. Joness (1991) measure of moral
intensity considered harm important enough to examine three different
characteristics of the consequences: magnitude of consequences, probability of effect, and temporal immediacy. Collins (1989) included six
aspects in his construct, nature of harm: intentionality, visibility, severity,
repetitiveness, permanency, and verifiability. He differentiates among
three types of harm: physical, economic, and psychological. Obviously,
ethics researchers consider many different aspects of an acts consequence
to be important to decisions about the act. Psychology and organizational
behavior research have shown that the effect of the lie is associated with
judges assessments of reprehensibility (Maier & Lavrakas, 1976;
Shapiro, 1991), and that people are more likely to lie in situations where
they believe the truth will harm the object (DePaulo & Bell, 1996). We
suggest that there are direct effects of supposed consequences, as well as
interaction effects, which consider whether the consequences harm or
benefit the person making the judgment. We believe the continuum
244
actually can range from helping the recipient to being very harmful to the
recipient.
Because the actual harm may differ from the intended or envisioned
harm, we have developed two separate propositions. The first addresses
the actual harm. It is based on the findings from attribution theory, suggesting that when consequences are more severe, there is a greater tendency to allocate responsibility even when everything else about the situation is the same (Kelley, 1967). This proposition (P1f) suggests that the
coat-check employee who steals a coat when it has car keys and a cellular
phone in the pocket will have a more negative effect on the owners assessment of dishonesty and amount of blame than in the situation in which the
coat-check employee steals the same coat when the pockets are empty.
The second harm-related proposition (P1g) addresses potential harm. It is
based on the fact that individuals have different perceptions of what could
have happened if circumstances had been only slightly different. This
proposition suggests that the car mechanic who assures the cars owner
that the brakes have been fixed when they havent will have a more negative effect on the owners assessment of dishonesty and the amount of
blame than will the car mechanic who says that the radio has been fixed
when it has not. Therefore:
Proposition 1f: Acts perceived as having greater harm will have more negative
effects on judgments of dishonesty and larger amounts of blame than acts
perceived as having lesser harm.
Proposition 1g: Acts perceived as having greater potential to harm will have
more negative effects on judgments of dishonesty and larger amounts of
blame than acts perceived as having less potential to harm.
In this section, we predicted that the characteristics of the situation have

direct effects on the moral judgment that an employee behaved dishonestly and on amounts of blame. However, we also expect the characteristics of the stakeholder, in the role of judge, to affect his or her judgments,
and we theorize about this in the following section, further delineating the
model and relationships presented in Figure 1.
CHARACTERISTICS OF THE STAKEHOLDER

OR JUDGE (PROPOSITION SET 2)
Models of individual moral decision making frequently rely on Rests
(1986) four-part model that suggested that moral behavior is a function of
recognizing a moral issue, using moral reasoning processes about that
issue, and forming an intention to act in accordance with ones moral
245
reasoning. We focus on the second part, the judgment made through reasoning about an issue. Not all moral judges view the same situations in the
same manner (Maier & Lavrakas, 1976; Marshall & Philip, 1997;
Murphy, 1993; Shapiro, Trevio, & Victor, 1995). We suggest that individual differences will affect the moral decision-making process by
changing the weights people assign to different situational components,
the amount of blame assigned, or the locus of blame. Past work holds constant many individual differences among judges, by modeling judgments
by only one type of stakeholder group at a time. For example, Trevios
(1986) person-situation model took the perspectives of actors, whereas
Webers (1996) model took the perspective of impartial observers. Our
model includes all kinds of stakeholders and, thus, considers the effects of
a variety of individual differences. First, we will discuss the direct effects
of individuals characteristics on their judgments. Then, we will discuss
how individuals characteristics interact with situations. In general, we
propose that characteristics of the judge will affect their judgment of dishonesty and the amount of blame (Proposition Set 2).
Ones level of moral development and ones social category are two
characteristics of individuals that have been shown to have direct effects
on moral judgment (Colby, Kohlberg, Gibbs, & Lieberman, 1983; Miller
& Bersoff, 1992). Level of moral development is a construct that describes
how people develop more sophisticated understandings of morality as
they mature (Kohlberg, 1976). This construct places the concern for justice for all people, regardless of their social background, at the highest
level (Lickona, 1976). Therefore, we suggest that people who have higher
levels of moral development are less likely to consider the social category
of the actor or person affected. That is, they are less likely to decide that it
is acceptable to harm people in certain social categories than it is to harm
people at lower levels of moral development. Similarly, they are less likely
to believe that people from certain social categories can be excused for
their behavior. We offer the following proposition:
Proposition 2a: Judges with high levels of moral development will weigh the
social category of the actor and the social category of the person affected
less heavily in their judgments of dishonesty than people will with lower
levels of moral development.
Evidence also shows that past experiences, behaviors, and beliefs of individuals cause them to judge situations differently. In general, we propose
that people who live their own lives within moral codes are harsher in their
judgments of others than people are who do not. By moral code, we
mean beliefs about what is moral and immoral behavior. There is not
246
much past work to provide the mechanisms by which this occurs, though
there is evidence that it does occur (Maier & Lavrakas, 1976). For example, people who believe that sex outside of marriage or eating non-Kosher
food is morally wrong, yet who have engaged in these behaviors, judge
others transgressions less harshly than do those who share the same
beliefs but have not engaged in the behaviors. These relationships hold
even if the otherstransgressions are of other parts of a moral code, such as
prohibitions against lying or stealing, rather than the area where the person making the judgment has transgressed. We propose that people who
adhere to moral codes may misjudge how difficult compliance is for
another person who has become habituated to violating moral codes. In
addition, causality also can run in the opposite direction; that is, people
who make harsh judgments about behavior are less likely to engage in it. A
third mechanism we propose is that people who do not live their lives
within their own moral codes are driving the distinction. They may want to
feel better about themselves, so they judge others less harshly (Batson,
Bowers, Leonard, & Smith, 2000). Based on these mechanisms, we suggest the following proposition:
Proposition 2b: Individuals whose past behavior has complied with their moral
codes will be harsher in their judgments of dishonesty and assess higher
amounts of blame than will individuals whose behavior has frequently
strayed from their moral codes.
In the following section, we discuss the interaction effects of the situation

and the judge on judgments of dishonesty and amounts of blame (Proposition Set 3). Then, we turn to developing Proposition Set 4, which refers to
the effects of the characteristics of the employee behavior and characteristics of the judge on another dependent variable, locus of blame.
INTERACTIONS OF CHARACTERISTICS
OF EMPLOYEE BEHAVIOR AND THE JUDGE
ON JUDGMENTS OF DISHONESTY AND
AMOUNTS OF BLAME (PROPOSITION SET 3)
Even though the characteristics of the judge have some direct effects, it
is in interaction with the situation that they are most interesting and predictive, thus allowing a more fully specified model of moral judgments of
dishonesty and blame, and therefore of stakeholders image formation.
The old adage,It depends on whose ox is gored, reflects just one way
that judgments are affected by how a particular judge interacts with
247
particular situational characteristics (in the instance of this adage, the person affected). In addition to the separate main effects we previously
described in Proposition Sets 1 and 2, we also argue that there will be
interaction effects. Specifically, we argue that there will be interactions of
the characteristics of the judge with the act, with the actor, and with the
person affected. Each is discussed in turn, but in general, we propose that
characteristics of the employee behavior will interact with characteristics
of the judge to affect judgments of dishonesty and amounts of blame
(Proposition Set 3).
Judge With Act
Blasi (1980) suggested that the nature of a task might evoke individual
differences among judges as to whether particular acts are dishonest. He
suggested that this is the reason why much empirical research finds a difference between what subjects believe to be moral and how they act: they
simply define their acts differently. Scott (2000) suggested that moral values are idiosyncratic understandings of situations. She provided an organizational example of individuals who are exceedingly careful not to use
an organizations supplies or equipment for personal reasons but who
have no compunctions about using its services or staff for personal reasonswhereas others see both behaviors as theft. Although little is
known or has been postulated about how these individual differences
operate, we suggest that judges past personal behavior will influence
their evaluation of the act. Specifically, we propose that judges will be
more lenient in their assessments of behaviors they themselves have
engaged in. This is different from Proposition 2b, which says that judges
will be more lenient if they frequently violate their moral codes, regardless
of whether their violation is the same as the violation being judged. Here
we suggest that the judges must have engaged in the particular behavior,
but it need not be a violation of their own code. So, someone who inflated
figures on expense reports would judge another person who did so less
harshly. This may be because the person did not view the act as wrong.
(One of the authors once had a boss who encouraged subordinates to claim
nonexistent expenses to make up for caps on reimbursement of actual
expenses. His logic was that they deserved to be fully compensated for
their travel.) Or it may be because the person feared that judging anothers
action as wrong would call attention to his or her own wrongdoing. Therefore, we would expect interaction effects consistent with the following
proposition:
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Proposition 3a: There will be an interaction between the judges previous

behavior and the act such that judges who have previously engaged in the
act will be less harsh than judges who have not previously engaged in the act
in their judgments of dishonesty and in the amount of blame they assess.
They will be similar to other judges on acts they have not engaged in.
We believe the social category of the judge also interacts with the act to
affect their moral judgment. There is empirical evidence that people from
different national cultures emphasize different acts (Miller & Bersoff,
1992; Wartick, 1995). The evidence is mixed as to whether different genders focus on justice or care (Derry, 1989; DesAutels, 1996; Gilligan,
1982; Rothbart, Hanley, & Albert, 1986). It is entirely possible that other
differences may be found between people of different economic or religious groups as well (Andre, 1995). Therefore, in this proposition we
include a broad view of social groupings of people, including such things
as national origin, race, gender, class, age cohort, and religion, under the
heading social category.5
Proposition 3b: Individuals who are from social categories that emphasize
honesty will weigh the act more heavily in their judgments of dishonesty
than people will from social categories that do not.
Judge With Actor
The evidence is clear that people judge situations differently when they
are the actors than when they are the objects or neutral observers (Brief,
Dukerich, & Doran, 1991; du Boulay, 1974; Jones & Nisbett, 1972; Pitts,
Wong, & Whalen, 1991). Actions that seem reasonable and necessary to
an actor may seem morally bankrupt to an outside observer. We propose
that the distance, or proximity6 (physical, social, psychological, or economic) between the judge and the actor may affect the harshness of the
judges evaluation. Some empirical evidence from other research areas in
organizational behavior and communications support our assumptions.
For instance, similarity-attraction theory suggests that people are
attracted to others who are similar to them (Byrne, 1971). Social psychology research shows that people are more persuaded by the speech of people they perceive to be like them (Brock, 1972), and Lincoln and Miller
(1979) showed that similarity between individuals might lead to more frequent communication. Byrnes (1971) theory also suggested that individuals tend to apply negative assumptions to those with whom they are dissimilar. We suggest, therefore, that the social category of the judge will
249
interact with the social category of the actor as described in the following
proposition:
Proposition 3c: People who perceive themselves as being closer to the actor
(physically, socially, psychologically, or economically) will be more
lenient in their judgments of dishonesty and will assess less blame than people will who perceive themselves as being distant from the actor.
Judge With Person Affected
The last proposition compared the judge with the actor (i.e., the
deceiver), and here we examine the comparison of the judge with the person affected and propose that the closeness of the person affected to the
judge affects the judges perception of the blameworthiness of an action.
According to Aristotle (1952), It is a more terrible thing to defraud a
comrade than a fellow-citizen, more terrible not to help a brother than a
stranger. Utilitarians disagree, arguing that one individuals pain is no
more or less important than anothers (Parfit, 1984; Smart & Williams,
1991), although Messick (1998) argued that in-group favoritism has the
benefit of promoting altruism. Gene Talmadge, former governor of Georgia, was reelected on the slogan, I stole, but I stole for you! (Anderson,
1975).
This concept of the closeness of the person affected to the judge is similar to Joness (1991) notion of proximity, one of the components of the
moral intensity of an issue: The proximity of the moral issue is the feeling of nearness (social, cultural, psychological, or physical) that the moral
agent has for victims (beneficiaries) of the evil (beneficial) act in question. As Jones noted, Milgrams experiments bore out this view by showing that people were less likely to harm people physically near to them
(Milgram, 1974).
Applying these preferences to the organizational sphere suggests that
judges will use closeness (physical, cultural, social, or psychological) of
the person affected in evaluating the act. Empirical research suggests that
consumers are more likely to see an action as unethical if it affects them
directly (Pitts et al., 1991; Shapiro, 1991) and that they are more likely to
respond negatively if the victim is also a consumer (Creyer & Ross, 1994)
or a friend of theirs (Singer & Singer, 1997). We do not expect these reactions to be limited to consumers. If the person affected and the judge are
both suppliers or supervisors or stockholders, we expect the same kind of
interaction effect to occur. Similarly, if the person affected is a friend of
the person making the judgment, we expect that judge to be harsher and
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assess more blame regardless of the role the judge plays in the situation.
Therefore, we suggest the following proposition:
Proposition 3d: Judges who perceive the person affected as being closer to
themselves (physically, socially, psychologically, or economically) will be
more harsh in their judgments of dishonesty and will assess more blame
than if the person affected is perceived as being more distant to themselves.
This proposition is different from Proposition 1f (acts perceived as having

greater harm will have more negative effects on judgments of dishonesty
and larger amounts of blame than acts perceived as having lesser harm) in
that it takes the judges perspective on the harm in relation to the closeness
of the person affected. Proposition 1f assumes a neutral perspective such
that the death of a person is a greater degree of harm than a broken fingernail. Proposition 3d suggests that it matters whose death and whose fingernail as relative to the similarity to the judge, as evidenced in the eulogy
for a Jewish man who killed 40 Palestinians at worship and was subsequently beaten to death: One million Arabs is not worth a Jewish fingernail (New York Times, February 28, 1994; cf. Baron, 1996).
Theories of moral judgment describe how stakeholders determine
whether acts constitute dishonesty, how bad the acts are, and how much
blame should accrue. However, it is attribution theory that suggests
whether the blame should accrue to the organization, which is what we
discuss in the following sections.
LOCUS OF BLAME AND ATTRIBUTION

THEORY (PROPOSITION SET 4)
Once a moral judgment is made that an act is dishonest and that some
amount of blame should be placed somewhere, our model (Figure 1) suggests that stakeholders decide where the blame should be placed (locus of
blame). We use attribution theory (which shows how blame is assigned to
individuals) to suggest how blame may be assigned to organizations as
well.
Assignment of Blame to Individuals
There is a rich literature as to how individuals are assigned blame for

their actions. In general, the person assigning the blame judges whether
the individual in question voluntarily caused a harmful event (Shaver,
1985). Degrees of blame correspond to degrees of harm, degrees of
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causality, and degrees of voluntariness, though not necessarily in a completely rational manner (Miller, Turnbull, & McFarland, 1990). The person assigning blame often uses situational data to attribute motivation and
volition to the actor, as well as to define the event (Douglas, 1970; Heider,
1958; Shaver, 1985). For example, a supervisor might notice an
employees pattern of calling in sick on summer Fridays and conclude that
the employee was intentionally lying to beat the weekend traffic to the
lake. The supervisor attributes motivation based on things the supervisor
knows about the situation, such as that the employee has a lake house and
that traffic to the lake on Friday evenings is especially bad.
Assignment of Blame to Organizations
Bell and Tetlock (1989) developed a complex model describing how

blame is attributed to individuals within organizations, but we have not
found models describing how organizations are assigned blame for the
actions of their employees. We suggest that organizations are assigned
blame for the actions of their employees when the cause of a harmful
employee action is attributed to the organizations.
As previously noted, attribution theory suggests that people determine
causality for unexpected events by considering stability, locus, and controllability (Weiner, 1986). It suggests that stable, internal, and controllable causes lead judges to blame individuals. Although the literature does
not address this, we argue that these dimensions apply to organizations as
well. Therefore, we suggest that behavior that is unstable, external to the
organization, and uncontrollable by the organization would in the extreme
not result in blame to the organization, even if it caused harm. However,
we do not argue that organizations are any more immune than individuals
from judges misperceptions of controllabilityairlines are as likely as
weather forecasters to be blamed for weather they cannot actually control.
Following, we discuss how each of these dimensions is understood in the
attribution literature and how we suggest it would apply in the organizational context. In general, we propose that characteristics of employee
behavior and characteristics of the judge will affect locus of blame (Proposition Set 4).
Stability
Stability represents the likelihood that the same cause of an event or

outcome was the cause each and every time of that event or outcome.7
Thus, at an individual level, poor performance on a job task because of
252
lack of ability is a stable cause, whereas poor performance because of lack

of effort is an unstable cause. Kelley (1967) suggested that observers
attribute causality to individuals when they note that the same result
occurs repeatedly when the same individual is involved. We argue that this
can be applied at an organizational level as well. If an individual observes
the same behavior in repeated interactions with an organizations many
employees, we propose that the individual judge is likely to conclude that
the behavior is stable, caused by the organization, and not by some personality quirk of one employee. A person who flies frequently and is often
told by employees of one airline that delays were due to weather even
when there is no evidence of bad weather will be likely to conclude that the
airlines policy is to lie about the causes of delays.
There are individual differences among judges related to their past
experiences with a particular organization that will influence these perceptions and their ultimate effects. When the judge has had previous experiences with the same organization during which the judge perceived dishonesty, the judge is more likely to attribute subsequently perceived
dishonesty to the organization. On the other hand, when the judge has had
numerous experiences with the organization in the past during which there
were no instances of dishonesty, the judge will be less likely to attribute an
instance of dishonesty to the organization. However, if the judge has no
experiences with the organization and bases the initial image of the organization on some other factor, an experience that is different from the
expected one will have a strong effect on the judges image of the
organization.
Proposition 4a: The locus of blame will vary with the extent and nature of the
judges past experience, including the image of the organization as held by
the judge before the act of dishonesty occurred, such that judges who perceive the organization as a stable cause of the employees behavior will
blame the organization more than judges will whose past experience precludes such a perception.
There are also individual differences among actors that might lead them to
be more or less likely to perform dishonest acts: self-monitoring
(Caldwell & OReilly, 1982), moral development (Grover, 1993), intelligence (Blasi, 1980), locus of control (Grover, 1993), Machiavellianism
(Giacalone & Knouse, 1990; Ross & Robertson, 2000), work ethic
(Eisenberger & Shank, 1985), and conscientiousness (Murphy & Lee,
1994) to name a few. Insofar as stakeholders perceive employees to possess these characteristics and see these characteristics as stable and therefore likely to cause dishonest acts in the future, they may hold
253
organizations accountable for hiring and retaining employees with these

characteristics. It has been suggested that organizations with climates or
cultures of dishonesty may have more frequent instances of dishonest
behavior due to their hiring and socialization practices (Cherrington &
Cherrington, 1985; Kamp & Brooks, 1991; Ross & Robertson, 2000; Victor & Cullen, 1988). We suggest that stakeholders may hold organizations
accountable for outcomes of organizational practices such as hiring and
socialization that encourage the prevalence of certain employee characteristics and will assign the locus of blame to the organization.
Proposition 4b: More of the locus of blame will be assigned to the organization
when the stakeholders perceive the causes of dishonest behavior to be stable employee characteristics that were known by the employer.
Locus
Locus represents the location attributed to the cause of the action. In

our model, the internal locus is within the person being judged; the external locus is outside of the person being judged. Therefore, conflicting
directions from supervisors would be external to the task-performer being
judged, whereas lack of knowledge would be internal to the individual
being judged. This dimension of individual-level attribution theory is difficult to translate into mesolevel theory because we do not have comprehensive theories yet that provide clear ideas of what is inside and outside an organization. One possible approach is Pfeffer and Barons
(1988) examination of three possible ways of moving employees toward
the outside of the organization: location of employment (distant from the
main office), duration of employment (time-limited), and amount of
administrative control (not able to direct others work). The closer the
actor is to the inside of the organization, we argue, the more likely the
behavior is to be seen as having been done by the organization. Inside
may be someone high in the hierarchy, someone who works in the main
office, or someone with a permanent job. Outside may be someone low
in the hierarchy, someone who works in a branch location, or someone
with a temporary job.
There are some individuals, usually top management personnel, who
are more closely associated with a stakeholders image of the organization, whose actions are thus likely to be more closely associated with the
stakeholders image of the organization as well (Higgins & Snyder, 1989;
Scott & Lane, 2000; Sutton & Callahan, 1987). We suggest that higher
level personnel will be more likely to be seen as representing the organization and that therefore the locus of blame will be with the organization.
254
This is different from Proposition 1c, which refers to the effect of a persons place in the hierarchy on whether the act is seen as being dishonest
and how bad the act is seen to be. With this proposition, we are discussing
where the blame is placed. It may be that a professional employee (e.g., a
psychologist) is judged more harshly for falsifying market research data
because the judge expects a professional to adhere to a higher standard of
conduct, but the judge does not place much blame on the organization for
the psychologists behavior because the psychologist is relatively low in
the organizational hierarchy.
Proposition 4c: More of the locus of blame will be assigned to the organization
when actions are perceived as being done by persons higher in the organization than when actions are perceived as being done by rank-and-file
employees.
Controllability
Controllability represents whether the person engaging in the action

could have done otherwise. For example, a lawn maintenance worker who
frequently stopped work to sneeze during allergy season will be seen as
having less control over low productivity than a coworker who frequently
stopped work to dig for fishing worms. Organizational control of the
actions of employees has been described by Simon (1976, p. 133) as
occurring within an area of acceptance, where employees relinquish
their decision-making rights to their organizations. We suggest that attribution theory can be applied to the organization-level phenomenon of
organizational blame when the person making the attribution believes that
the behavior in question can be controlled by organizational policy or
supervision. In attribution theory, at the individual level, controllability is
a hypothetical view as to whether the organization could control the
behavior if it wanted to, whereas locus is the assessment of whether the
organization actually did control the behavior in a given case. At the organizational level, this becomes more complicated, because it is very difficult for judges to know what an organization can or does control.
Earlier, we argued that more voluntary acts would cause more severe
judgments of dishonesty, and therefore, larger amounts of blame. Attribution theory would suggest that even if there were more blame, the locus
would not be the organization but the actor acting voluntarily, because the
actor would be seen as having more involvement. Although an action must
be undertaken voluntarily to fit the definition of dishonesty, there are also
degrees of voluntariness that make actions more or less reprehensible.
Jones and Ryan (1997) argued that the extent of organizational pressure to
255
act unethically is one of the factors considered in determining the moral

disapprobation that accrues to individuals. We argue that the extent of
pressure to act unethically acts in the reverse for assessments of moral disapprobation at the organizational level. The same organizational pressure
that excuses individuals from blame places more blame with the organization. As attribution theory suggests, controllability is important in
determining causality. If the organization makes its employees engage
in dishonest acts, the locus of blame will be with the organization.
In Proposition 1b, we distinguished between an actor who freely
chooses to withhold information relevant to a customers purchase decision and an actor who is constrained by legal or ethical rules prohibiting
disclosure. Similarly, we distinguished between a bank teller who is
forced at gunpoint to collect rings, watches, and wallets from customers
present during a robbery, and a teller who shortchanges customers or
embezzles from their accounts. This proposition envisions a third case
the actor who is required by company training or coerced by company
incentive systems to withhold information or the bank employee who is
required by orders from superiors to charge customers fees that were not
properly disclosed to them. Our next proposition suggests that these cases
will result in the judges finding the locus of blame at the organization
level rather than the individual actor level.
Based on this, we propose that the more voluntary the action appears to
be on the part of the employee, the less will the judge attribute the locus of
blame to the organization. That is, we believe the stakeholders image of
the organization will suffer more when the judges believe that the organization has required employees to behave deceptively than when judges
believe that employees are acting on their own.
Proposition 4d: Acts perceived as being more voluntary on the part of employees will have less negative effects on the organization as locus of blame than
will acts perceived as being coerced by the organization.
As is demonstrated by the final proposition, the locus of blame moderates

the effects of the amount of blame on image. If the locus of blame is not the
organization, then, regardless of the amount of blame, we predict no effect
on the stakeholders image of the organization. On the other hand, as soon
as the judge determines that the organization is at least partially where the
blame should lie, the amount of blame has a negative effect on the image
of the organization held by the stakeholder. Therefore (see Figure 1):
Proposition 5: The effect of amount of blame on stakeholders image of the
organization is moderated by the locus of blame such that no effect will
256
occur when the locus is not the organization, and more negative effects on
the stakeholders image of the organization will occur as the proportion of
the locus of blame for the organization rises.
This stakeholders image of the organization feeds back to the individual

stakeholders initial image of the organization and, if it is shared with others, also becomes part of the organizational reputation (see Figure 1, feedback loop). We note this as an important final note in the model as our
experience in conducting empirical research on dishonesty in organizations suggests that the likelihood that the stakeholders image of the organization will be communicated to others is greater for instances of dishonesty (and perhaps all negative experiences) than it is for instances of
honesty or other positive experiences.
CONTRIBUTIONS OF THE MODEL

We see three basic contributions of this model to the literature. First, it
presents a person-situation model of moral judgment that is not limited to
actors or victims, to employees, customers, stockholders, suppliers, or
competitors. By modeling the moral judgment of a broader range of stakeholders, this model combines streams of research that are obviously interrelated but have been discussed and modeled separately. Previous models
have assumed the perspectives of actors (e.g., Trevio, 1986), perspectives of coworkers (e.g., Victor, Trevio, & Shapiro, 1993), perspectives
of impartial observers (e.g., Weber, 1996), perspectives of victims (e.g.,
Shapiro, 1991), or perspectives of other types of stakeholders, but each
previous model attempts to isolate the variables related to a particular perspective. Even though we believe that these models have been helpful in
building theory, we pull together common themes in these models to predict how most stakeholders will make a judgment. Our model, though
more complex than any one of the other models, is more parsimonious, we
believe, than identifying which model applies to the particular situation
under consideration. In addition, by recognizing multiple stakeholders
(with different stakes) involved in the same event, we reduce the possibility of drawing erroneous conclusions. For example, a model that considered only the supervisors perspective might find certain kinds of
untruthful statements to be not only acceptable, but even desirable,
whereas the same statements seen from an employees perspective might
be emotional labor, causing undesirable employee burnout. Similarly,
models that address only customers perceptions may rely heavily on the
fact that customers do not have much information about the transaction,
257
ignoring that employees witnessing the event may formulate their own
images of the organization and determine the organization not to be worthy of their talent or their honesty.
A second contribution of our model is that it describes the mechanism
by which encounters with individual employees are transformed into
stakeholders images of the organization. This recognizes the shift from a
manufacturing, product-based system of image formation to a service,
interpersonal encounter-based system of image formation. The mechanism is complex, because human beings are complex. And third, our
model describes the iterative process through which stakeholders images
of organizations are shaped with each new encounter with employees.
This emphasizes the fact that reputations undergo serial changes over time
(Bromley, 1993).
RESEARCH DIRECTIONS
This model is presented to facilitate research and to allow researchers
to compare apples to apples and oranges to oranges. We have already
begun to explore small segments of the model using vignettes that control
for the possible variations in situation. Our experience has been that it is
extremely difficult to construct vignettes that actually hold many of the
dimensions constant, but we believe that without some framework such as
we offer here, it is difficult to understand the implications of much of the
empirical work in the area.
Further work in theory development could explore how other
employee behaviors besides dishonesty affect stakeholders images of
organizations and how the individual-level perceptions of organizations
merge to form reputations. Are the mechanisms by which slow service or
sloppy work affects image the same as the ones outlined in our model? Are
there opinion leaders whose perceptions stimulate others to see the same
image?
Empirical research to test the model will help in further theory development and in practical applications. Theory will be advanced by efforts
to operationalize the constructs identified in this model and by evidence
that confirms or disconfirms the relationships specified. Practitioners who
are interested in improving stakeholdersimages of organizations by eliminating or reducing dishonesty in their organizations will have a clearer
understanding of the interaction of different components of the model,
enabling them to identify which type of dishonesty in the organization
causes the most severe negative effect on image held by the average
258
stakeholder of the organization. And individuals may benefit from understanding how their own personal characteristics interact with situational
characteristics to affect their moral judgments or how they as organizational employees may be judged.
Empirical tests of the model might include approaches that focus on the
magnitude of the effects. For example, a researcher could test how much
of an effect increases in the magnitude of the consequences have on stakeholders images of the organization. Is there a strict linear relationship
such that more harm causes worse image? Or are there amounts of harm
above or below which effects on image are constant? Likewise, researchers could test how much of an effect having the same social category of the
person affected has on stakeholdersimages of organizations. Information
such as this would be valuable to practitioners in identifying which types
of dishonesty should be most strongly discouraged.
Empirical tests of the model also might explore interactions not specified in this article. There may be interactions between the person and situation that we did not specify in the model. We have found no strong theoretical or empirical evidence for other interactions (e.g., the judges
Machiavellianism and the acts motivation) affecting stakeholders
images of organizations, but later researchers could determine whether
they do and elaborate on the current model. Although we did not discuss
them, there may be also interactions within the situation or person (act
with result, Machiavellianism with locus of control) that have effects on
stakeholders images of organizations.
This theory has implications for practitioners in different areas, even
for practitioners who are committed to some form of dishonesty in their
relationships with the public. Strategy practitioners might seek different
niches if they knew which potential customers would be less likely to perceive their behavior as dishonest. Human resources practitioners might
change selection requirements for market-research positions to ensure
that deception deemed necessary to research does not affect the images
stakeholders have of the organization. We are not interested in encouraging practitioners to lie, but we have come to recognize in our research that
we, too, are judges, with our own interactions with situations. What we
call emotional lies, others may call politeness.
LIMITATIONS
Because of our effort to limit the complexity of the model, it does not
address how stakeholders who are important to the organization discover
259
acts of dishonesty. We do know that individual differences among judges

affect their ability to detect deceit (DePaulo, Lanier, & Davis, 1983;
DePaulo, Stone, & Lassiter, 1985; Ekman, 1988). There are also certain
settings in which judges do not desire to detect deceit, generally when the
speaker is saying good things about the judge (Ekman, 1988), and certain
organizational settings in which deceit is harder to detect (e.g., boundaryspanners vs. supervisor-subordinate interactions; DePaulo, DePaulo,
Tang, & Swaim, 1989). Finally, there are individual and organizational
efforts of impression management and public relations designed to create
positive images and reputations among influential stakeholders (Bromley,
1993). A more complex model that included the likelihood that an act of
dishonesty would be discovered, that addressed impression-management
techniques, and that varied the importance of the stakeholders opinion to
the organization would address this problem.
The model also does not address how honest accounts, apologies, and
excuse making may also mitigate the effects of blame to the organization
by repairing damage to stakeholders images of it (Benoit, 1995), nor do
we address how the organization becomes aware of the need for repair.
Most people do not complain when they are dissatisfied, so an organization is not likely to know that an employees behavior has affected a stakeholders image of the organization. However, once an organization does
become aware, its subsequent behavior can do much to change (or reinforce) an image. A more complex model included the individual and organizational characteristics that made complaints more likely, and accounts,
excuses, and apologies more effective would address this problem.
Finally, the model addresses only perceptions of dishonesty, not an
objective measure of actual dishonesty. Although this is appropriate for a
model considering the effects of dishonesty on stakeholders images of
organizations, researchers interested in applying it to the effects of dishonesty (especially theft) on profitability might be better served by considering actual, rather than perceived, dishonesty.
CONCLUSION
This much I know, that even he who teaches that we ought to lie wants to
appear to be teaching the truth.
Augustine (1952)
We discuss multiple stakeholders in the same model, because we

believe that one of the problems associated with current ethical decision
260
making is that people take into account the viewpoint of only one stakeholder at a time. For example, when they take the supervisors viewpoint,
researchers focus on employees lying to or stealing from the company.
This ignores lying to customers in a way that benefits the company, such
as business bluffing or emotional labor. When one has customers who
are, in essence, paying for dishonesty by asking an accounting firm to file
a deceptive audit report, a focus on the customers desires without considering whether stockholders or government agencies would make the same
positive judgments about the act is myopic. Although individual models
of customer reaction, stockholder reaction, or employee reaction may
each be more parsimonious than our model, we offer our model as a way to
encourage consideration of an actions effect on more than one stakeholders image of the organization.
NOTES
1. We expressly exclude the natural environment, stakeholder groups, or other organizations from the category stakeholder in our model because of the problems associated with
positing the existence of a mind of the environment, a group, or an organization.
2. There are many individual differences among actors that have been theorized or
shown to increase the likelihood that they will lie, for example, self-monitoring (Caldwell &
OReilly, 1982), intelligence (Blasi, 1980), Machiavellianism (Giacalone & Knouse, 1990;
Ross & Robertson, 2000), work ethic (Eisenberger & Shank, 1985), and conscientiousness
(Murphy & Lee, 1994). However, if we did not find evidence that judges will be less likely to
blame them (or their employing organizations) because they have these characteristics, we
did not include the characteristics in our model.
3. We use the term person affected without meaning to exclude other living beings, organizations, institutions, or the natural environment from those who may be affected by dishonesty. However, we would argue that in general, harms to other human beings are closer to
us than are harms to organizations or harms to other nonhuman life. See Collins (1989) for a
discussion of harms inflicted on non-persons.
4. Were not suggesting that honest mistakes have no effect on stakeholders images of
organizations, just that the process by which they affect those images is different. Were also
not suggesting that stakeholders are perfect in their recognition of honest mistakes.
5. Although much work needs to be done to specify which social categories and why, we
believe that it is important to include this general proposition in the model regarding social
categories, as most Western-developed theories of dishonesty and image ignore such cultural, national, or racial categories as relevant (Khera, 2001).
6. Our use of the term proximity differs from Joness (1991) construct in that we examine the judges proximity to the actor as well as to the person affected (see Proposition 3d).
Jones defined proximity solely in relation to the person affected.
7. This may be similar to Collinss notion of repetitiveness of the harm, which suggests
that if the same harm keeps occurring, it is worse than if the harm happens only once (Collins,
1989).
261
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Elizabeth D. Scott received her Ph.D. from the Wharton School of the University of
Pennsylvania. She is currently an associate professor of management in the Department of Business Administration at Eastern Connecticut State University. She
has published research on moral values and dishonesty in organizations in Business & Society, Business Ethics Quarterly, Journal of Business Ethics, and
Teaching Business Ethics. She can be reached via e-mail at scotte@easternct.edu.
Karen A. Jehn received her Ph.D. from Northwesterns Kellogg Graduate School
of Management and is now a professor in the Management Department of the
Wharton School at the University of Pennsylvania. She has researched workplace
conflict in the United States and internationally, focusing on transnational teams
in joint ventures. Recently, she has been interested in two new topic areas related
to organizational conflict: diversity and deviance. Dr. Jehn has published work in
266
Business & Society, Administrative Science Quarterly, International Journal of

Conflict Management, Academy of Management Journal, and Journal of Organizational Behavior. She can be reached via e-mail at jehn@wharton.upenn.edu.

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Business & Society

About Face: How Employee Dishonesty Influences A Stakeholder's Image of an Organization

International Association for Business and Society

>> Version of Record - Jun 1, 2003

Downloaded from bas.sagepub.com by alina ciabuca on October 30, 2013

About Face: How Employee

Obviously, there are numerous employee behaviors that potentially affect

Scott, Jehn / ABOUT FACE

in all industries in a broad variety of forms (Murphy, 1993), (b) it can be

STAKEHOLDERS IMAGES OF ORGANIZATIONS

BUSINESS & SOCIETY / June 2003

something more lasting than an impression or a perception, but still able to

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

Characteristics of Employee Behavior (Situation)

Act (Theft, Deceit)

Stakeholder Characteristics (Person)

Figure 1: A Model of Employee Dishonesty and Stakeholders Image of the

moral judgment to advance propositions as to the judgment of dishonesty

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

The determination that an actor voluntarily caused an event is critical to

Scott, Jehn / ABOUT FACE

Although utilitarian moral philosophy suggests that we should react

BUSINESS & SOCIETY / June 2003

Definitions of dishonesty require that the actor intends the action to be

Scott, Jehn / ABOUT FACE

identified in the aforementioned literature into three basic categories:

BUSINESS & SOCIETY / June 2003

In this section, we predicted that the characteristics of the situation have

CHARACTERISTICS OF THE STAKEHOLDER

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

In the following section, we discuss the interaction effects of the situation

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

Proposition 3a: There will be an interaction between the judges previous

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

This proposition is different from Proposition 1f (acts perceived as having

LOCUS OF BLAME AND ATTRIBUTION

There is a rich literature as to how individuals are assigned blame for

Scott, Jehn / ABOUT FACE

Bell and Tetlock (1989) developed a complex model describing how

Stability represents the likelihood that the same cause of an event or

BUSINESS & SOCIETY / June 2003

lack of ability is a stable cause, whereas poor performance because of lack

Scott, Jehn / ABOUT FACE

organizations accountable for hiring and retaining employees with these

Locus represents the location attributed to the cause of the action. In

BUSINESS & SOCIETY / June 2003

Controllability represents whether the person engaging in the action

Scott, Jehn / ABOUT FACE

act unethically is one of the factors considered in determining the moral

As is demonstrated by the final proposition, the locus of blame moderates

BUSINESS & SOCIETY / June 2003

This stakeholders image of the organization feeds back to the individual

CONTRIBUTIONS OF THE MODEL

Scott, Jehn / ABOUT FACE

BUSINESS & SOCIETY / June 2003

Scott, Jehn / ABOUT FACE

acts of dishonesty. We do know that individual differences among judges

We discuss multiple stakeholders in the same model, because we

BUSINESS & SOCIETY / June 2003