The role of ethics in any business is unquestionable, setting the groundwork for all internal and external interactions. What’s intriguing, however, is the significant effect social influence, particularly peer behaviour, has on shaping a manager’s ethical conduct. The world of real estate, with its high stakes and competitive landscape, is particularly susceptible to these dynamics.
This article explores this interesting correlation between social influence and ethical standards, emphasizing the implications for the real estate sector, and suggests approaches to cultivate a more ethical business environment.
Let’s imagine a real estate office buzzing with activity. The atmosphere is charged with competitive spirit, the consequences of actions are significant, and the constant pressure to outperform is palpable. Amid this scenario, an interesting trend emerges: the behaviour of a manager tends to mirror that of their peers. Witnessing an act of honesty from a colleague, such as accurate budget reporting, inclines the manager to follow suit. On the flip side, if they observe dishonest behaviour, like inflating costs, they may be more likely to mimic this unscrupulous act. This phenomenon, termed “ethical adjustment,” sheds light on how powerfully social interactions can mould our behaviour.
However, this pattern takes an interesting turn when the manager begins interacting with a new set of colleagues or clients. In such scenarios, previous experiences with dishonest peers seem to have a stronger impact on the manager’s behaviour compared to interactions with honest peers. This demonstrates a more fluid and adaptable moral compass than we traditionally attribute to individuals, especially when navigating new social interactions.
Despite these general trends, individual managers display varying degrees of susceptibility to peer influence. To dissect this further, researchers employed a moral reasoning framework. This framework categorizes an individual’s sensitivity to social norms into three distinct schemas: personal interest, maintaining norms, and post-conventional, each indicative of a different aspect of moral reasoning.
In the real estate context, ‘personal interest’ corresponds to managers prioritizing their commission over their clients’ best interests. ‘Maintaining norms’ implies adherence to societal norms and rules, while ‘post-conventional’ indicates a balance between personal principles and social norms.
Interestingly, managers who align more closely with ‘maintaining norms’ initially demonstrate the most honesty. However, these individuals also appear most susceptible to altering their conduct based on peer behaviour.
These findings deliver crucial insights for real estate leaders aiming to foster an ethical business environment. They highlight that individuals differ not only in their inherent ethical standards but also in their receptiveness to social influences.
Understanding the dominant moral schema within their organization can equip real estate leaders to navigate these dynamics effectively. If the organization leans towards ‘maintaining norms,’ promoting honest role models becomes essential, as such individuals are likely to emulate their peers’ honesty. However, leaders should also ensure these individuals are insulated from dishonest influences, which could potentially trigger a chain reaction of unethical conduct. If, on the other hand, the organization is predominantly self-interested, the risk of unethical behaviour being replicated is heightened. In such instances, enforcing stringent control measures such as regular audits and robust surveillance is paramount.
Promoting Ethics in Real Estate: Practical Measures
Acknowledging that social influence significantly shapes ethical behaviour is the first step towards a more ethical real estate organization. Based on this understanding, there are several practical measures that leaders can implement.
Ethical Role Models: Recognizing that those who highly value ‘maintaining norms’ are likely to mirror the honesty of their peers, it becomes critical to promote ethical role models. These role models could be managers who consistently demonstrate integrity in their interactions, dealings, and decision-making processes. The actions of these individuals would likely set the tone for their peers, fostering a more honest and ethical working environment.
Training and Development: Implementing training programs that focus on ethical decision-making can reinforce the importance of integrity and honesty within the organization. These programs can equip managers with the skills and knowledge to navigate complex ethical dilemmas. They could also serve to clarify the organization’s expectations regarding ethical conduct and the consequences of failing to uphold these standards.
Robust Monitoring Systems: For organizations that are predominantly self-interested, having robust auditing and surveillance mechanisms is crucial. Such systems can discourage unethical behaviour, given the heightened risk of detection and the associated penalties. While fostering a culture of trust is crucial, a certain degree of oversight can ensure that self-interest does not overshadow ethical conduct.
Open Communication Channels: Encouraging open dialogue about ethical challenges can also contribute to a more transparent and ethical work environment. Creating platforms where managers can discuss ethical dilemmas they face, share their experiences, and seek advice can foster greater understanding and better handling of such situations.
Repercussions of Unethical Behaviour: Finally, implementing clear repercussions for unethical behaviour is an essential deterrent. Managers should understand that their actions have consequences and that unethical conduct will not be tolerated. This can range from performance-related penalties to more severe actions like suspension or termination, depending on the gravity of the ethical breach.
Real Estate Ethics: An Ongoing Commitment
Promoting ethics in the real estate industry, or any sector for that matter, is not a one-time endeavour. It’s an ongoing commitment that requires consistent effort, monitoring, and reinforcement. By understanding the power of social influence and the role it plays in shaping ethical conduct, leaders in the real estate industry can take a proactive stance. They can devise effective strategies to promote a culture of honesty and integrity, encouraging their managers to make ethical choices, even in the face of social influences that might lead them astray.
The dynamics of social influence on ethical behaviour are nuanced and complex, particularly so in an industry like real estate, where transactions involve high stakes and the consequences of unethical behaviour can be far-reaching. By remaining vigilant to these shifting ethical norms and understanding the social influence on ethical conduct, leaders can guide their organizations towards more ethical, transparent, and trustworthy practices.
This understanding serves as the foundation upon which to build a robust real estate ethics framework, leading to a more transparent, reliable, and successful real estate industry.
Karun Varma