Dishonesty in an unethical company is a hidden malignant
tumor - it will grow and spread and be difficult to find.
Companies should be ethical because it's the right thing to do, but there's also another reason, one that companies might listen to more strongly - being dishonest can hurt the bottom line.
That's the premise of a 2004 article in The MIT Sloan Management Review called The Hidden Costs of Organizational Dishonesty. One of the authors was Robert B. Cialdini, who wrote the popular book Influence: The Psychology of Persuasion.
They detail three types of dishonest "malignancies" that harm businesses:
- The company's reputation will degrade, and once people think a company is deceitful, it's very hard to regain that trust.
- If the values of the company and its employees don't match, employees won't perform as well and the ones who are left will increasingly be the ones who are dishonest.
- The company will increase its surveillance of employees, increasing the hostility between workers and management, decreasing employee productivity and, perversely, increasing employee dishonesty.