What really motivates people to be honest in business | Alexander Wagner

Summary

The speaker explores the prevalence of corporate fraud, citing a study that suggests one in seven large public corporations commit fraud annually, costing society billions. They contrast Adam Smith's view of self-interest driving economic benefits with Immanuel Kant's moral absolutism, using experiments to show people's intrinsic values can motivate honesty. The talk emphasizes the importance of aligning corporate values with employees' protected values to foster integrity and trust, ultimately benefiting organizations.

Takeaways

• 😀 The speaker suggests that on a typical day, one might interact with at least seven different companies, each with varying levels of trustworthiness.
• 🔍 A US academic study reveals that one out of seven large public corporations commit fraud annually, affecting both shareholders and society to the tune of approximately $380 billion per year.
• 🚗 The car industry and financial services are cited as examples where fraud has become a notable issue, with the latter's reputation being particularly impacted by such scandals.
• 🌍 Despite the prevalence of fraud, the majority of companies—six out of seven—remain honest, highlighting the importance of integrity in business operations.
• 🎓 The speaker introduces the concept of 'protected values,' values that individuals are willing to uphold at a personal cost, which can influence their behavior in the face of temptation.
• 🐶 Using a humorous dog metaphor, the speaker illustrates the idea that people may act in their own self-interest but also consider the long-term consequences of their actions.
• 📊 The speaker discusses economic motivations such as codes of conduct and bonuses that aim to align employee behavior with corporate principles.
• 🤔 Two contrasting philosophical viewpoints are presented: Adam Smith's idea that self-interest ultimately benefits society, and Immanuel Kant's belief in intrinsic moral values that guide behavior regardless of consequences.
• 🧪 An experiment is described where participants toss a coin and report the results for payment, revealing that a significant portion of people do not maximize their earnings by reporting dishonestly, suggesting the presence of intrinsic values.
• 💰 The concept of 'protected values' is further explored, showing that individuals with such values may devalue monetary gains obtained through dishonest means.
• 🌟 The speaker concludes by advocating for the importance of selecting individuals with the right values as a preventative measure against fraud and a strategy for building trust within organizations.

Q & A

How many companies does the speaker claim one interacts with on a daily basis?

The speaker claims that on average, one interacts with at least seven companies in a day.

What is the statistic mentioned regarding the rate of fraud among large public corporations?

The speaker cites a US academic study stating that one out of seven large, public corporations commit fraud every year.

What is the estimated annual cost of fraud to shareholders and society according to the study mentioned in the script?

The study suggests that fraud costs shareholders and society approximately 380 billion dollars per year.

What industry is mentioned as having its secrets exposed due to fraud?

The car industry is mentioned as an example where its secrets have become not so secret due to fraud.

How does the speaker describe the current state of the financial services industry in relation to fraud?

The speaker states that fraud has become a feature, not a bug, of the financial services industry, as claimed by the president of the American Finance Association.

What is the speaker's profession and how does it relate to the topic of the talk?

The speaker is a researcher and scientist who collaborates with various experts to understand human behavior and address the issue of corporate fraud.

What are the two contrasting views on human behavior presented by the speaker?

The speaker presents the views of Adam Smith, who believes that self-interest ultimately benefits everyone, and Immanuel Kant, who argues that some actions are inherently right or wrong, regardless of consequences.

What is the concept of 'protected values' as discussed in the script?

Protected values are values that individuals are willing to pay a price to uphold, even in the face of temptation, and adhering to these values can make people feel better about their actions.

How does the speaker describe the experiment involving a five-franc coin and its purpose?

The experiment involves tossing a coin four times and reporting the number of tails, with payment based on the reported results. It aims to test whether people are motivated by self-interest or by intrinsic values.

What was the surprising result of the coin toss experiment?

Surprisingly, around 30 to 35 percent of people reported getting four tails, which is highly unlikely, suggesting that many participants were not being completely honest.

What advice does the speaker give regarding the selection of people in organizations to prevent fraud?

The speaker advises that it pays off to select people with the right values and intrinsic motivations, as they are less likely to engage in fraudulent behavior even when not monitored.