{"id":594,"date":"2018-01-25T08:01:54","date_gmt":"2018-01-25T05:01:54","guid":{"rendered":"http:\/\/kusuaks7\/?p=199"},"modified":"2025-04-22T11:47:15","modified_gmt":"2025-04-22T11:47:15","slug":"behavioral-ethics-compliance-and-big-data","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/bigdata-cloud\/behavioral-ethics-compliance-and-big-data\/","title":{"rendered":"Behavioral Ethics, Compliance, and Big Data"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\t\t\t\tReady to learn Big Data Analytics? Browse courses<\/a>\u00a0like\u00a0Big Data – What Every Manager Needs to Know<\/a> developed by industry thought leaders and Experfy in Harvard Innovation Lab.<\/em><\/strong>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIn another Conduent blog post this week, we took a look at Uber\u2019s recent cybersecurity<\/a> incident involving a failure at the highest levels of the Company to act ethically in compliance with the law in failing to report a data security breach. The breach took place in October 2016 and what took place thereafter was a deliberate cover-up at various levels of management to disclose the breach to regulators in accordance with the law, potentially implicating Uber\u2019s CEO, who knew of the breach two months prior to its actual disclosure in November 2017.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIn that blog post, we point out that an effective compliance monitoring solution could have brought not only the breach incident to Uber\u2019s compliance department but, perhaps more importantly in this case, the failure of Uber\u2019s compliance department to take subsequent ethical actions to light.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIn a recent, article in MIT Sloan Management Review titled, \u201cThe Trouble With Corporate Compliance Programs\u201d, Todd Haugh, assistant professor of business law and ethics at Indiana University Kelley School of Business, posits that true prevention of unethical decisions lies in understanding how \u201crationalization\u201d factors in to a conflicted employee\u2019s decision-making process[1] . Professor Haugh identifies eight different types of rationalizations that prospective bad actors may engage in: (1) denying responsibility, (2) denying injury, (3) denying the victim, (4) condemning the condemners, (5) appealing to higher loyalties, (6) using a ledger metaphor (using their positive actions as an excuse for bad behavior), (7) claiming entitlement, and (8) claiming relative acceptability or normality.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIn the Uber example, one could identify at least a few different rationalizations that could have been drawn on by the bad actors covering up the breach \u2013 for example, appealing to higher loyalties (e.g., \u201cit is in the best interests of the company\u201d), or denying the injury or victim (e.g., \u201cthe sensitive data was ultimately destroyed and not released and so there is no harm to anyone\u201d).\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tA behavioral ethics approach to understanding employee behavior \u2013 and in particular, identifying and remediating \u201cpockets of bad culture\u201d in the organization that can lend to these types of rationalizations is a key component of creating a \u201cculture of compliance\u201d within an organization.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tThe recent experiences of Wells Fargo are also illustrative, where, as Prof. Haugh observes \u201con the heels of the bank\u2019s $185 million settlement agreement with the CFPB regarding the creation of fake accounts \u2026 the bank\u2019s aggressive sales culture drowned out any explicit compliance measures\u201d suggesting that \u201cemployees, under pressure to meet unrealistic goals, rationalized their conduct by denying responsibility and claiming relative normality\u201d.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tTo combat rationalizations, Prof. Haugh points to the use of Big Data-based approaches to monitor for scenarios where employees are asked to engage in behavior that creates a compliance risk and there is a competing culture that allows for potential rationalization. In our view, the key to such systems should not only identify the obvious, discrete behavioral shortcomings, such as where an employee fails to report a compliance incident a la Uber but also the less discrete and generalized pockets of bad culture within the organization \u2013 such as the aggressive sales climate at Wells Fargo \u2013 that may support an employee rationalization to depart from a company\u2019s culture of ethical behavior. It is important for the organization to understand not only when a violation has occurred but to also the countervailing pockets of bad culture that can lead to those violations through employee rationalization.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tTechnology solution should be tailored to fit organization needs, to diagnose and address ethical and compliance risks and to ensure your business can manage these risks in a comprehensive, cost-effective manner.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tThis article originally appeared on the Conduent blog\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Technology solution should be tailored to fit organization needs, to diagnose and address ethical and compliance risks and to ensure your business can manage these risks in a comprehensive, cost-effective manner.<\/p>\n","protected":false},"author":182,"featured_media":3263,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[187],"tags":[122],"ppma_author":[1708],"class_list":["post-594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bigdata-cloud","tag-big-data"],"authors":[{"term_id":1708,"user_id":182,"is_guest":0,"slug":"sanjay-manocha","display_name":"Sanjay Manocha","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","user_url":"","last_name":"Manocha","first_name":"Sanjay","job_title":"","description":"Sanjay Manocha is Vice President, Compliance,Conduent Legal & Compliance Services. He leads compliance services strategy across all industry verticals including financial, pharmaceutical, technology, and communications sectors."}],"_links":{"self":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/users\/182"}],"replies":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/comments?post=594"}],"version-history":[{"count":5,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/594\/revisions"}],"predecessor-version":[{"id":37675,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/594\/revisions\/37675"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media\/3263"}],"wp:attachment":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media?parent=594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/categories?post=594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/tags?post=594"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}