The management of moral hazard through the implementation of a Moral Compliance Model (MCM)

• Leire San-Jose ^[1] ; Jose Felix Gonzalo ^[2] ; Maite Ruiz-Roqueñi ^[2]
  1. [1] Universidad del País Vasco/Euskal Herriko Unibertsitatea

     Universidad del País Vasco/Euskal Herriko Unibertsitatea

     Leioa, España

     
  2. [2] UPV/EHU. Facultad de Economía y Empresa. Grupo ECRI
• Localización: European Research on Management and Business Economics, ISSN 2444-8834, Vol. 28, Nº. 1, 2022, págs. 97-107
• Idioma: inglés
• Enlaces
  • Texto completo
• Resumen

  • Moral hazard in an organization occurs when people make decisions and take a high risk for their own bene- fit, given that they would not have to bear all the negative ensuing consequences should they occur. This risk transferred to third parties is generally due to the catalysts that foster this risk, namely, information asymme- tries, power, trust and temporality. The contribution of our research lies in the inclusion of moral decisions in project management, thus demonstrating the feasibility of a Moral Compliance Model (MCM). This model is a complement to legal compliance and allows a connection to be established between Risk Management, Gov- ernance & Compliance. In 2019, experimental action research, combined with a Plan-Do-Check-Action applied to a company, were used to perform the analysis. The findings show that implementing this moral model in organisations is possible. However, what moral hazard is needs to be shown, along with identifying moral hazard situations and planning how to introduce moral hazard into the risk management model in order to reduce its negative effect or, ideally, eliminate it. We provide an overview of risks, including those around moral dilemma decisions; moral hazard situations that will expand compliance to integrated compli- ance in which not only legal, but also moral aspects are identified and assessed. Incorporating ethical dilem- mas in strategic decisions is a robust advance towards responsible businesses