The Contaminating Effect of Social Capital

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Having friends in high places is often considered necessary to achieve success. Indeed, having connections with upper-class individuals offers instrumental benefits, from better jobs to higher salaries. Despite the tangible benefits that upper-class network contacts offer, we find that these networks have a dark side: the increased potential for unethical behavior. We propose that because upper-class individuals are less constrained in their behavior, individuals with many upper-class contacts will perceive their network contacts as having looser social norms. As a result, individuals with upper-class network ties will view morality as more relative and will be more likely to engage in unethical behavior. To test our core hypothesis that having upper-class contacts increases unethical behavior, we conducted six multi-method studies (archival, field, quasi-experimental, and experimental) involving a range of samples (CEOs, nationally representative adults, student roommates) from multiple cultures. Importantly, we demonstrate that the effects of upper-class networks on a focal person’s unethical behavior occur over and above their own social class (thereby ruling out a class homophily effect) and the level of unethicality of their network contacts (thereby ruling out direct imitation). Overall, this research takes a property of networks (its class composition), links it to perceptions of that network (the perceived norm looseness of one’s network contacts) and connects it to a psychological mindset (moral relativism) that ultimately affects unethical behavior. These findings demonstrate the benefits of social capital can carry a moral cost.

Siyu Yu is an Assistant Professor of Management at the Jones Graduate School of Business, Rice University. Her research seeks to uncover new insights with respect to inequality and hierarchy, gender and diversity issues, social networks, and group dynamics. For example, one area of her research focuses on the accuracy of perceiving status hierarchies. She investigates how this perceptual accuracy, at the individual level, helps people form high-status network ties, ultimately benefiting their performance. At the group level, it helps groups avoid status conflict and improve group performance. Another line of her research examines how advantageous social networks, such as connections with high-status others, result in unexpected social sanctions for disadvantaged group members, thus presenting an obstacle to overcoming the social inequality.