Isolated application of deterrence theory isn’t enough to solve most of the problems regarding unethical behavior in business and enterprises.
Recent studies presented in our new article titled:
‘The future of regulation is culture’: opportunities to change unethical behaviour in business and public administration in Brazilby Christopher Hodges, Ruth Steinholtz, Alexandre Aroeira Salles
… show that deterrence is frequently ineffective in affecting future behavior, which conducts enterprises to a “compliance trap”: a false belief that the merely institution of compliance policies would reverse the current ethical crises.
The thesis of the article is that such change requires the adoption of an ethical culture, which concerns a switch in regulatory approach, able to modify the nature of law enforcement, but also the engagement of enterprises, it ́s directors and collaboratives with this culture.
The article also confronts evidence based on behavioral science and recommended by international bodies (such as the OECD) with recent legislative changes in Brazil (in particular the new LINDB and the Economic Freedom Act) that expand the strength of consensus between Public Administration and individuals.
Access the full article through the digital library at FGV – and connect with the authors to learn more: Professor Christopher Hodges OBE, Ruth Steinholtz, Alexandre Aroeira Salles