Abstract

This paper explores the relationship between declining organizations and unethical behavior. Data from a four month long management simulation indicate that declining organizations demonstrate a greater propensity for unethical activities than do more successful companies. The results indicate that: 1) organizations in decline are more likely to be involved in unethical activities; 2) the more severe the decline is, the more unethical the behavior is likely to be; and 3) it is organizational decline and not initial propensities toward unethical conduct that explains the unethical behavior. The paper also discusses the implications of these findings and outlines future streams of research.Honesty is the best policy - When there is money in it. - Mark Twain.