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Cheating and NASCAR: Who’s at the wheel?
Melissa Baucus *, William I. Norton Jr., Beth Davis-Sramek, William Meek
College of Business, University of Louisville, Louisville, KY 40292, U.S.A.
Business Horizons (2008) 51, 379—389
www.elsevier.com/locate/bushor
KEYWORDSNASCAR;Cheating;Ethics;Misconduct;Leadership
Abstract This article embarks on a road trip to NASCAR, the National Association forStock Car Auto Racing, to take a close look at why cheating occurs within thatorganization. Two arguments drive the article, namely that NASCAR (1) may not beable to stop cheating particularly within the current context, and (2) might not wantor be motivated to stop cheating. Obstacles complicating NASCAR’s efforts to stopcheating include the long-standing culture of unethical behavior within stock carracing, and the inconsistent imposition of punishments by NASCAR which drivers andrace teams perceive as favoritism and unfair treatment. Yellow flags that raise cautioninclude pressure from unwavering fans, and the friction between innovation andmaintaining parity among teams. Proposed solutions include changing the culturewithin the NASCAR community, as well as developing ethical role models, both ofwhich require major action by NASCAR’s top managers to signal the importance ofethical behavior. Other key stakeholders such as sponsors and fans must createincentives and rewards for ethical behavior, and consider reducing or ending supportfor drivers and teams that engage in unethical conduct. Our analysis and recommen-dations have broad applications because NASCAR is an archetype of a large organiza-tion attempting to reduce cheating and unethical behavior.# 2008 Kelley School of Business, Indiana University. All rights reserved.
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Anyone who still thinks of NASCAR racing as aquaint sport for good ol’ boys is in for a monu-mental surprise . . . We need only a quick review ofattendance numbers, track expansion, and tele-vision ratings to see that NASCAR is an economicforce to be reckoned with. — Hagstrom, 1998,p. 190
NASCAR isn’t all about Bubba, beer and barbequeanymore. . . . a large portion of NASCAR fans
Corresponding author.E-mail addresses: [email protected] (M. Baucus),[email protected] (W.I. Norton Jr.), [email protected]. Davis-Sramek), [email protected] (W. Meek).
07-6813/$ — see front matter. # 2008 Kelley School of Business,i:10.1016/j.bushor.2008.03.001
are relatively affluent: More than 40 percenthave household incomes topping $75,000.— Fay, 2005
1. NASCAR’s impact
NASCAR, the National Association for Stock Car AutoRacing, has thundered into the corporate suites,living rooms, and shopping carts of America. Itstelevision ratings are second only to the NationalFootball League (Fay, 2005); its 75 million fans fillmore seats than any other sport, and purchase over$2 billion of licensed NASCAR products annually
Indiana University. All rights reserved.
380 M. Baucus et al.
(www.nascar.com); and its revenue from broadcastrights alone would make it a Fortune 500 company ifit were publicly held (Hoovers, 2007).
NASCAR is a sanctioning body, overseeing morethan 1,500 races in the U.S., Canada, and Mexicoeach year. These venues include the Nextel Cup(NASCAR’s premier racing series), Busch series,CraftsmanTruck series, andeight regional series.Thisstudy focuses on theNextel Cupbecause it commandsthe most resources and attention. NASCAR controlsmost aspects of national stock car racing, particularlyin major series such as the Nextel Cup. It decides onthe number of races in a series, which tracks will hostraces, rules to which drivers and race teams mustconform, what behaviors constitute rule violations,and the nature and scope of penalties assessed whencheating occurs. NASCAR recognizes the impact it hason other organizations and tries to use its powerjudiciously, especially its marketing power.
The focus of NASCAR’s marketing effort is promot-ing the sport not only for itself, but for trackowners and teams. . .The underlying strength ofNASCAR is tied to its continuing mission to providefinancial stability for all participants, not just foritself. (Hagstrom, 1998, p. 45)
We argue that NASCAR, an organization with amajor and ever-increasing impact on American so-ciety, should play a significant role in reducingcheating and unethical behavior in stock car racing.This endeavor would require major changes in theculture of NASCAR and stock car racing in general.
Not everyone understands or celebratesNASCAR’s broad appeal. The answer may be disarm-ingly simple: Many Americans love fast cars. Carssuch as the Corvette andMustang have become iconswith entire industries focusing on them. We’re cap-tivated by the speed, noise, and drama unfoldingaround the track at every NASCAR event. Fans areenthralled as they watch a favorite driver battle forthe lead or pit crews scramble to get drivers back onthe track as quickly as possible. Corporate sponsorsof NASCAR teams know the significant payoffs forsponsoring a racing team. Virtually all fans under-stand the link between a corporate sponsor andtheir favorite driver: Three of every four fans makea concerted effort to purchase products from thosesponsors (Hagstrom, 1998). NASCAR has become asports entertainment powerhouse with tremendousimpact in American society.
2. Cheating: NASCAR’s dark side
For all its extrinsic and intrinsic value, NASCAR has adark side. Cheating has become a broadly practiced,
dysfunctional behavior deeply embedded in theculture of stock car racing. The Daytona 500, asignature event that launches each Nextel Cup rac-ing season, has been marred by cheating scandalsfor the past 2 years. In 2006, Jimmie Johnson’screw chief was fined $25,000, and suspended fromthe Daytona 500 and three subsequent races forbreaking rules related to the aerodynamics of thenumber 48 car (Schmadtke, 2007); Johnson ulti-mately became the Series Champion that year.The 2007 Daytona 500 saw five crew chiefs sus-pended for multiple races and fined for cheating;additionally, the drivers for those teams were finedand docked points in the Nextel Cup championshipseries (Schmadtke, 2007). The most visible scandalof the 2007 race surrounded long time driver MichaelWaltrip. After qualifying for the race, an impermis-sible substance (a fuel additive that enhances com-bustion) was found in his car’s intake manifold. Thatrule violation resulted in record penalties: a$100,000 fine, the loss of 100 Nextel Cup pointsfor Waltrip and his team, and indefinite suspensionsof Waltrip’s crew chief and his vice-president forcompetition (Martin, 2007). These incidents oc-curred despite NASCAR’s continuing efforts to crackdown on cheating.
Our purpose here entails understanding whycheating occurs in NASCAR and how it might bereduced. We ground this study in the explorationof two potentially polarizing arguments. The first isthat NASCAR may not be able to stop cheating. Fewpeople would challenge the statement that theentire NASCAR community should exhibit ethicalbehavior and end all cheating. Our assertion thatNASCAR may not be able to stop cheating reflectsthe realities of NASCAR’s extant culture. We discussthe lack of ethical leadership, the unfortunate linkbetween success and cheating in Nextel Cup racing,the ineffectiveness of rules in bringing about ethicalbehavior, and NASCAR’s inconsistent responses tocheating. We link these phenomena to theoreticalframeworks in ethics, leadership, and organization-al behavior literature.
Our second argument may be even more provoc-ative: NASCAR may not want to stop cheating. Themotivation may not exist to alter the status quo inthe stock car racing community. The present incen-tive structure provides few reasons for race teams tostop cheating or for NASCAR to respondmore harshlyto cheating, which they could do with actions suchas imposing a single-season or a lifetime ban ondrivers or teams who cheat. Cheating and otherunethical behaviors by race teams, such as inten-tionally bumping a competitor’s car to gain positionin a race, may enhance revenues for NASCARthrough increased publicity and media attention.
Cheating and NASCAR: Who’s at the wheel? 381
Fans remain intensely loyal to their favorite drivers,refusing to alter their buying behaviors, viewinghabits, or attendance at races after those driversand their race teams get caught cheating. Corporatesponsors do not put the brakes on the substantialdollars they funnel into NASCAR when race teamsthey support get caught cheating. Television ratingsoften increase after publicity regarding unethicalconduct in NASCAR as race fans tune in for thepossibility of more drama. Few incentives exist tomotivate NASCAR and its most critical stakeholders(drivers, race teams, corporate sponsors, and themedia) to end cheating; therefore, NASCAR cannotand may not want to stop cheating and unethicalbehavior. The following sections identify primarystakeholders, use the ethics and organizational be-havior literature to explain why cheating occurs inNASCAR, and offer a prescriptive framework forpositive change.
3. Defining NASCAR’s criticalstakeholders
NASCAR interacts with a wide variety of internal andexternal stakeholders, including race track opera-tors, corporate sponsors, original equipment man-ufacturers (OEMs), car owners, race teams, drivers,broadcast media, vendors, fans who watch or attendraces, individuals purchasing products from corpo-rate sponsors or NASCAR licensees, communitieswith existing or proposed race tracks, environmen-tal groups such as those pushing for use of unleadedfuel, and society as a whole. We cannot explore theimplications of unethical behavior for this entire anddiverse set of stakeholders, so we limit our scope tothe bad actors, or those members of the racingcommunity who cheat or perpetuate a culture thatfosters cheating. This restricted set includes mem-bers of the Nextel Cup race teams (team owners,drivers, crews, engine builders, and others directlyinvolved in the competitive effort) and NASCARitself as the sanctioning body. These two groupsengage in dysfunctional behavior but hold the powerto affect positive change.
4. NASCAR’s culture: Fast and loose
The start of the 2007 season was marked by rampantaccusations of cheating by Nextel Cup teams, fines,suspensions, point penalties, impounded cars, em-barrassed OEMs, confused drivers, denials, inconsis-tent application of rules, and other high octanedrama. If this behavior were to continue unabated,NASCAR’s credibility could devolve to the level of
professional wrestling. Continued cheating mayhave a long-term negative impact on the entireNASCAR community. The principle of social influ-ence (Cialdini, 2001) suggests that the public mayperceive that all race teams cheat and that alldrivers behave dishonestly. Stock car racing couldlose its broad appeal if the fan base and sponsorsperceive that winning results from cheating morethan the competition, rather than from superiorracing performance.
Cheating in 2007 is not an anomaly. NASCAR has a60 year history of misbehavior that may accountfor today’s culture. NASCAR’s predecessor organiza-tion was the National Championship Stock CarCircuit (NCSCC), founded in 1947 by Bill France,Sr. (Hoovers, 2007). NCSCC was a showcase forthe driving skills of former moonshine runners.The term moonshine runner arose during the Prohi-bition era to describe drivers who transported un-taxed whiskey or moonshine from unregulated stillsto waiting customers. These drivers were runnerswho often led Revenuers (typically federal agentsfrom the Bureau of Alcohol, Tobacco and Firearms)on spirited chases through the countryside to avoidapprehension, seizure, and prison. Moonshine run-ning goes beyond unethical conduct to patentlyillegal behavior. This early cultural imprint likelyinculcated the NCSCC’s and NASCAR’s principal ac-tors with enduring norms of unacceptable behavior.
Junior Johnson, a living legend in NASCAR, epit-omizes these norms. Johnson won 50 Cup races as adriver and 6 Cup championships as a car ownerbefore retiring in 1998. When interviewed prior toNASCAR’s Toyota/Save Mart 350 race on June 24,2007, Junior spoke candidly about his 2-yearimprisonment for moonshining, his start in stockcar racing in 1957 shortly after his release fromprison, and his race career experiences. With obvi-ous pride, he observed that he’d ‘‘done it his way’’(Snider 2007), and that he had neither misgivingsnor regrets.
NASCAR’s culture, meaning the values, beliefs,and norms shared by the organization’s members,can contribute to unethical and illegal behavior byencouraging or pressuring employees to behave in-appropriately (Baucus & Beck-Dudley, 2005). Pres-sure to meet organizational objectives—whetherprofits in corporations or winning races inNASCAR—can lead employees to cut corners andengage in misconduct to meet goals (Baucus & Near,1991). Brian France, CEO of NASCAR, pointed out inhis 2007 State of the Sport speech that cheating hasalways been and will likely always be part ofNASCAR: ‘‘You’re going to have a couple of peoplewhowant to try the system. There’s a lot on the line.That’s been going on forever. It will go on forever’’
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(France, 2007). A culture that emphasizes cuttingcorners to win may result in cheating and othertypes of unethical behavior.
Employees in some organizations learn illegal orunethical behaviors as part of their normal jobduties (Geis, 1982), and this may represent anunintended influence on some NASCAR drivers. Anumber of today’s drivers represent intergenera-tional families with strong ties to NASCAR, such asthe Burtons, Earnhardts, and Pettys. Many currentdrivers grew up in a NASCAR culture where cheatingrepresented an almost standard competitive prac-tice. Jeff Hammond describes the culture of NASCARthat he experienced as a crew chief for JuniorJohnson:
When Junior retired from driving and became anowner, he kept looking for ways to win, to get thatextra little something out of the car. He taught usto use every advantage, every little crease in therules. If the rule book didn’t say you couldn’t dosomething, then you went ahead and did it. If youfound out that it gave you an advantage, you keptright on doing it unless they rewrote the rule bookand said you couldn’t do it. Then you looked forsomething else . . . Of course, some people didcheat outright. Sometimes they got away with it,and sometimes they got caught. There is an oldsaying in NASCAR: ‘‘If you’re going to cheat, thencheat neat.’’ (Hammond, 2005, pp. 12—13)
The garage community of car owners, drivers,crew chiefs, and teams has developed shared normsthat relax the interpretation of the rules. Normsrepresent unwritten standards of behavior devel-oped and enforced by a group (Elster, 1989). Broadagreement exists that no member of the garageshould tamper with rules commonly described asthe Big Three: tires, fuel, or engine displacement.Drivers, car owners, and crew chiefs publiclydeclare these rules to be inviolate; compelling evi-dence suggests, however, that the garage subcul-ture regards everything besides the Big Three aschallengeable.
The tradition of cheating in the NASCAR racingcommunity has gone on for so long that manypeople regard it as an integral part of competition.Richard Petty, winner of seven Cup championshipsin NASCAR, matter-of-factly notes that cheatingreflects how the game is played in NASCAR: ‘‘Ev-erybody knows everybody does it . . . Some getcaught. Some don’t. That’s part of the magic ofracing: trying to get away with every little bit youcan’’ (Newberry, 2005). These shared norms direct-ly conflict with many of NASCAR’s codified rules,and help explain why NASCAR may not be able tostop cheating.
5. Why rules can’t brake cheating
Drivers and race teams who cheat exhibit surprisingsimilarity to some corporations’ approach to thelaw. Federal, state, and municipal statutes codifyunacceptable behaviors and propose sanctions forviolators. Efforts to enforce compliance with thelaw often result in an unintended outcome: Someorganizational actors strictly comply with the lawwhile looking for behaviors not explicitly prohibited.Similarly, NASCAR race teams try to adhere to theletter of the NASCAR rulebook while ignoring thespirit or intent of those rules.
From the earliest days, drivers and mechanicshave looked for ways to increase speeds withoutrunning afoul of the inspectors. It’s a game of catand mouse with no clearly defined boundariesbecause the NASCAR rulebook is notorious forits vagueness. (Newberry, 2005)
This cat and mouse game has become part of theculture. It helps explain why NASCAR’s reliance onrules may not stop cheating and unethical behavior.
Organizations have long attempted to use rules asthe primary means to elicit desired behavior, anapproach that rarely works except in highly stableand structured environments. For example, the U.S.Sentencing Commission adopted new guidelines inthe 1990s based on the broadly held belief thatstricter sanctions were needed for corporate law-breakers. The Commission’s stricter guidelinesadopted a compensatory model in which firms thatengaged in illegal activities could reducepenalties byshowing they had compliance programs in place. Thisopportunity for offset resulted in corporations scram-bling to develop codes of conduct, establish ethicsofficers and training programs, create reporting hot-lines, and so forth to prevent illegal acts or lessenpunishment if wrongdoing occurred. The Commissioncame to realize that its new guidelines brought unin-tended consequences: Firms were making a concert-ed effort to adhere to the letter, but deviated fromthe spirit of the law (Allenbaugh, 2001).
Many corporations have established codes of con-duct, statements of core values, and other forms ofrules to guide employee behavior. These rules rangefrom specific statements, such as absolute prohib-itions against accepting gifts from suppliers, tomore general admonitions, such as Google’s motto:‘‘Don’t Be Evil.’’ Specific rules and procedures canbe written when jobs involve a fairly high degree ofstructure and routine activities in a stable environ-ment. However, many organizations operate in dy-namic environments, grant reasonable autonomy indecision-making, and must rely on abstract guide-lines and employees’ good judgment. NASCAR has
Cheating and NASCAR: Who’s at the wheel? 383
chosen to rely primarily on formal written rules, butits rules often do not fit the dynamic environment ofracing.
NASCAR’s rulebook contains standards intendedto govern what drivers and race teams can andcannot do to their race cars on track or in the pits.NASCAR constantly revises the rulebook to clarifyrules, eliminate loopholes, and reduce cheating, butthe very nature of the sport presents a dilemma.Stock car racing takes place in a dynamic competi-tive environment; race cars undergo dramaticchanges during a race.
High speeds coupled with track surface irregu-larities and collisions often cause considerable re-alignment, damage, or wear to chassis and bodycomponents. Pit crews make numerous adjustmentsin real time to optimize on-track performance.These changes, whether induced by the interactionof track and car or made by pit crews in response todriver reports, make it extraordinarily difficult tohold the narrow parameters that race cars mustmeet both before and after a race.
Brian France, NASCAR’s CEO, believes that the2007 introductionofanewplatform forall race teamscalled the Car of Tomorrow (COT) may reduce cheat-ing. The Nextel Cup series raced the COTon a limitedschedule during 2007, with full implementation con-templated for the 2008 race season. Though its adop-tion was driven by safety considerations, the COTcould have positive, unintended effects on racingperformance. Innovation seekers could potentiallyuse the commonplatformas a stepping stone to noveland useful discoveries, a process that will againchallenge existing rules. France wants to ‘‘makewinning even more important’’ by changing thepoints awarded for winning Cup races (France,2007). Historically, the path to a championship hasbeen consistency. Changing the rules to place a pre-mium on winning puts significant pressure on driversand teams to win outright, rather than simply finishraces and place reasonably well.
Frequent changes in rules, constant technical in-spections, and the Car of Tomorrow epitomize NAS-CAR’s inability to specify the correctness of everypart on every car, every possible situation, and everycontingent response. Ambiguous rules and changingconditions interact with NASCAR’s cat-and-mouseculture to create opportunities for drivers and raceteams to find ways around the written rules. JeffHammond describes the distinction drawn by JuniorJohnson and other NASCAR competitors betweenbreaking rules (cheating) and seeking advantage byexploiting gaps in the rulebook:
But there was a lot of gray in the rule book, andJunior’s attitude was if you want to win, you study
the rule book for what it doesn’t say as much as forwhat it does. So we weren’t necessarily cheating,but we were always looking for some kind of ad-vantage where the rules weren’t really clear or,maybe, where there weren’t any rules at all. Ofcourse, everybody was doing the same thing. Thetrick was to do it better. (Hammond, 2005, p. 13)
NASCAR needs to recognize that it cannot relysolely on rules to effectively prevent or eliminatecheating. Rules generally work well in communitiesof professionals who receive significant socializationin appropriate behaviors, and who generally adhereto supraorganizational codes of conduct to remain inthe group: examples include professions such asmedicine, engineering, or accountancy. Today’sNASCAR community does not benefit from that ho-mogeneity of training or shared professional values.NASCAR emphasizes reliance on rules, and pre- andpost-race inspections and sanctions, rather thanself-policing behavior among drivers and raceteams. This hegemony creates a cycle of oversight,distrust, ever-increasing rules, and the potential formisconduct. The resulting environment becomescharacterized by a low level of trust in which ‘‘em-ployees will behave ethically while under directsupervision or when rules directly apply, but theymay behave unethically when not monitored orwhen facing uncertain and ambiguous situations’’(Baucus & Beck-Dudley, 2005, p. 360). NASCAR sig-nals that it does not trust drivers or race teams tobehave responsibly, compounding the problem ofincomplete or vague rules.
Drivers and race teams who diligently try toadhere to rules struggle with the ambiguity inherentin the NASCAR rulebook, and with varying and in-consistent interpretations of the rules by NASCARofficials. Crew chiefs complain that they sometimesdo not know something is against the rules until theircar undergoes inspection by NASCAR officials, whichis what happened during the 2007 Daytona 500.Alternatively, a car may pass inspection beforequalifying or racing, only to be found in violationof the rules after the event, often for a chassis partor body panel that was approved in the earlierinspection. Rule breaking can happen inadvertently,as in the case when a NASCAR inspector foundoutdated seat belts (more than 5 years old) inJeff Burton’s car. Jack Roush, then owner of Burton’scar, was angry that NASCAR imposed major penal-ties, including the suspension of Burton’s crew chieffor two races and fines for the team, while implyingthat Roush willingly put his driver’s safety at risk(Miller, 2002). Roush believed NASCAR took theseactions to deflect criticism it faced after DaleEarnhardt’s death in a Cup race, saying that
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‘‘I see the action they’ve taken against me as acheap shot in order to try to relieve the pressurethat they’ve got’’ (Miller, 2002, p. 65).
The lack of trust in drivers and race teams fuelsNASCAR’s efforts to tighten up and rely heavily onrules to govern behavior. NASCAR’s interpretation ofrules and imposition of penalties discussed in thenext section creates an uneven track for race teamsand drivers; they feel they cannot count on NASCARfor equity of process or outcome. Sometimes, thebest car doesn’t win.
6. Uneven penalty track
Procedural justice, social learning, and reinforce-ment theory help explain the persistent, dysfunc-tional behavior within NASCAR. Procedural justicepredicts actors’ reactions to decisions in which theyhave a vested interest but no control over out-comes. This theoretical framework focuses onequity embedded in decision-making processes. Pro-cedural justice suggests that organizational actorswill accept and support a decision, even if theoutcome is negative, as long as they perceive theprocess as fair and just (Lind & Tyler, 1988). It turnsout that Cup teams often do not perceive the pen-alty assessment and enforcement processes as eq-uitable.
One recurring problem involves inconsistency.NASCAR appears to lack articulated standards forassessing point deductions, suspensions, or fines forvarious infractions. We tried to drill deeply into thisissue of inconsistency by establishing open dialoguewith NASCAR’s Director of Communications over a6-week period. We introduced ourselves, set forthour objectives, and asked for four things: a copyof the rulebook (routinely given to journalistswho cover the sport); contact data for NASCAR’sDirector of Competition; a list of penalties forthe most recent 5 year period by driver/crewchief/owner, augmented by any reversals; andthe protocol for distributing monetary fines. NAS-CAR promised full compliance, but did not deliveron any of the four requests. This broken promisekept us frompresenting amethodologically rigorousanalysis of this important issue.
A related problem involves the limitless scope ofNASCAR’s authority. If a team gets caught breakingthe rules, NASCAR exerts singular authority. Thesanctioning body determines the nature of theinfraction, decides the team’s intention, considersteam history such as prior incidents of cheating orunethical behavior, levies and enforces whateverpenalties it sees fit, and hears appeals and mayunilaterally overturn penalties. NASCAR renders
binding decisions with no other opportunities forrecourse by drivers or race teams.
Two examples of cheating in NASCAR–—one newand one old–—illustrate procedural justice problems.In amovewithout precedent, NASCARofficials foundfive teams in violation of rules immediately prior tothe 2007 Daytona 500 pre-race qualifying. NASCARlevied substantial point penalties against the teamsof Michael Waltrip, Matt Kenseth, Kasey Kahne,Scott Riggs, and Elliott Sadler. All five drivers’ crewchiefs were suspended and monetary fines werelevied against the teams before the race began. Afew days later Jeff Gordon, four-time NASCAR Cupchampion, won a 150-mile qualifying race, but post-race inspection of his car revealed a violation of theminimum ride height. No point penalties were as-sessed, no monetary fines were assessed, and nomembers of Gordon’s crew were suspended, al-though Gordon was required to start at the backof the field for the Daytona 500. NASCAR justified itsposition by saying that this violation of minimumride height was probably unintentional, and couldbe attributed to a part failure, and that any advan-tage Gordon gained from the infraction would bemarginal at best. A number of drivers and crewchiefs publicly disagreed with NASCAR’s explana-tion, pointing out that an aerodynamic advantagewas achieved by lowering the car and creating moretractive force. Teams penalized for similar infrac-tions were particularly annoyed by NASCAR’s failureto penalize Gordon. Roush Fenway Racing’s presi-dent, Geoff Smith, filed an appeal of the penaltyassessed against his driver on the basis thatNASCAR’s system of assessing penalties is inconsis-tent. Smith subsequently shared his perception of aprocess that lacks equity in an interview: ‘‘MichaelWaltrip gets two-thirds the penalty of the last fueladditive alteration situation, and Kenseth got anunprecedented, never-seen-before penalty. Nowyou’ve got Jeff Gordon, who gets absolutely nothingfor a deal that was similar to ours’’ (Fox News,2007).
Procedural justice theory maintains that fair pro-cesses should ignore an actor’s intent and treatviolations in a similar fashion, but NASCAR did nei-ther in this case. It turns out that prohibited fueladditives were found in Michael Waltrip’s car. Smithbluntly observes that Waltrip’s penalty was lesssevere than prior identical infractions. Separately,Smith’s driver was penalized for failing to plug holesin a wheel well, arguably yielding an aerodynamicadvantage. Smith asserts that NASCAR had neitherdefined unplugged holes in wheel wells as an infrac-tion or previously assessed penalties for unpluggedholes in wheel wells. His team lost 50 points and acrew chief, while Jeff Gordon received no penalties
Cheating and NASCAR: Who’s at the wheel? 385
for violating rules that may have given him anadvantage. These examples illustrate inconsistencyin assigning penalties, and drivers and race teamsperceive that preferential treatment occurs as well.NASCAR needs to recognize that the absence ofprocedural justice extracts a very high cost if itwishes to discourage unethical behavior.
There is another example of cheating that is oldbut durable in its message. Jeff Hammond, a longtime crew chief, describes an incident from the 1983season as ‘‘NASCAR’s biggest cheating scandal ever,involving NASCAR’s most famous driver ever’’ (Ham-mond, 2005, p. 132). The context involves theOctober 1983Winston Cup race, the precursor seriesto Nextel Cup, in Charlotte when Hammond wascrew chief for Darrell Waltrip. The outcome wasthat Richard Petty beat Waltrip by 3 seconds to winthe race. Hammond explains that NASCAR found inthe post-race inspection that Petty was running fourleft-side tires, an illegal action because it makes thecar run faster but is unsafe. In a prior race, anotherdriver had been penalized 5 laps for the sameviolation; taking 5 laps from Petty would cost himthewin. NASCAR then discovered that Petty’s enginewas almost 30 cubic inches larger than NASCAR’srulebook allowed. Hammond’s frustration was thatNASCAR allowed Waltrip’s team to leave the trackwithout verifying that Waltrip had raced with a legalmachine. This inaction prevented NASCAR from be-ing able to disqualify Petty and give Waltrip the win.Hammond complains that:
Richard [Petty] claimed he didn’t know anythingabout the tires or the engine. ‘‘I just drive thecar’’, he said. Right. And the owner was PettyEnterprises, out of Level Cross, North Carolina,which has been running NASCAR longer than any-one could remember. (2005, pp. 132—134)
Hammond confesses to frustration and anger aboutNASCAR’s decision that day, but he tries to view itfrom a broader perspective:
We all step into this thing with our eyes wideopen, and we learn really early that when NASCARmakes a decision . . . they will do what they con-sider to be ‘‘in the best interests of the sport.’’ Itwas in the best interest of the sport, that day, forPetty to get the win even though we deserved itand had earned it. (2005, p. 134)
Hammond implies that the ‘‘best interest of thesport’’ may conflict with procedural justice. Wesee a clear link to our second argument that NASCARmay not want to stop cheating.
Social learning theory and reinforcement theoryhelp account for why NASCAR may not be able tostop cheating. Social learning theory holds that we
often learn by observing others, and then modelbehaviors perceived as effective (Bandura, 1977).Teams who observe others cheating and gettingaway with it will likely cheat, as long as the per-ceived advantages of cheating outweigh the disad-vantages. In a sport launched by men doing thewrong things, such as the moonshine runners’ dancewith the Revenuers, race teams may have learnedcheating as an effective behavior. Reinforcementtheory adds to this because behaviors positivelyreinforced will be repeated. Behaviors punishedor ignored are discontinued. Teams that cheat some-times win. NASCAR’s inconsistent penalties and hab-it of overturning penalties, fines, and suspensionsthrough an internal and nonpublic appeals processcompound the problem, so drivers and teams cannoteasily distinguish between desirable and undesir-able behavior. Cheating often becomes reinforcedas acceptable behavior with few negative conse-quences.
7. Unwavering fans in the stands
One of the keys to understanding why NASCAR maylack the motivation to stop cheating involves themost influential stakeholders in this multi-billiondollar industry: the fans. Fans support their favoritedriver by attending races, watching on television,and buying merchandise. Corporations invest mil-lions of dollars sponsoring race teams because ofthat fan base. Many loyal fans in this sport zealouslysupport and identify with their favorite drivers. Thephrase basking in reflected glory (BIRGing) has beenused in social identity theory to account for the wayfans often showcase their association with success-ful sport teams by wearing and displaying teamparaphernalia (Cialdini et al., 1976). Market re-search shows NASCAR fans exhibit strong loyaltyto a driver, such as wearing Dale Earnhardt, Jr.shirts and flaunting #8 flags and bumper stickerson their vehicles, and to the driver’s sponsors. Forinstance, a Dale Earnhardt, Jr. fan will typically be aloyal Budweiser drinker, and would rarely considerdrinking Miller Lite, the firm sponsoring the #2 cardriven by Kurt Busch. Companies in many industrieswould love to find the formula for creating such loyalcustomers.
Consumer research tells us that individuals formattitudes about products, services, and behavior.They develop expectations that play an importantrole in many decisions, including determining theirlevel of satisfaction or dissatisfaction. Researchusing attitude theory in the leisure sciences hasimportant implications for NASCAR fans, showingthat individuals highly involved with a particular
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sport are likely to (a) have feelings of high personalrelevance, (b) engage in more biased thinking, (c)display a willingness to support the team publiclyduring controversy, and (d) highly resist changingteam affiliation (Mahony, Nakazawa, Funk, James, &Gladden, 2002). The entrenched loyalty created inNASCAR leads fans to be more likely to dismisscharges of cheating: Fans can more easily ratio-nalize or justify the behavior. Cheating typically willnot turn an avid fan against his or her favorite driver.Individuals also evaluate outcomes from a referencepoint, often the status quo, which then offers veryexplicit predictions about their valuation of ethicaland unethical behaviors (Creyer & Ross, 1997). Fanswho expect teams in NASCAR to cheat as part of thestatus quowill be evenmore likely to overlook cheat-ing when it happens. They may even encourage thebehavior because it can provide that winning edge,and cheating that has been discovered adds dramaand intrigue to their own self-concept.
8. Limiting innovation’s trajectory
One of NASCAR’s truly demanding challenges entailsmanaging the opposing goals of maintaining a levelplaying field for all competitors, juxtaposed withthe drivers’ and teams’ objectives of innovating toimprove performance and win races. The NextelCup’s rich history stems largely from its success intaking plebian cars and extracting extraordinaryperformance from them. Arguably, the Cup seriesshould be a laboratory for learning and innovationwith best practices knowledge available to others.However, this drive for learning and innovationdirectly conflicts with NASCAR’s two primary rolesof rule making and enforcement.
Rules create natural tension between progressand inertia. Obsessive adherence to rulesmaymeanthe suppression of innovation, one reason NASCARmay not want to stop cheating, and also increasedcheating, one thing that NASCAR can’t stop. Forexample, NASCAR mandates that all Cup cars mustuse a naturally aspirated, small block, push rod,carbureted V8 engine on a rear wheel drive chassis.Equity may be served by all teams using comparablepower trains, but comparable need not mean iden-tical. Four OEMs currently operate in the Cup series(DaimlerChrysler, Ford, General Motors, and Toyo-ta), each offering proprietary engines as the basesfor their affiliate race teams’ power trains. Thenotion of identical power trains seems unachiev-able given the distinctly different manufacturingorigins. We have no bias toward newness for its ownsake, but push rod engines represent a 55 year oldarchitecture and, with rare exception, are no lon-
ger offered in production cars. Innovation appearsto be a casualty of this rule-based culture.
The tension between rigidity and innovationleads to a number of challenging issues. Some or-ganizations encourage employees to break the ruleswhen pursuing creative and innovative solutions,but this practice can invite unethical behavior (Bau-cus, Norton, Baucus, & Human, in press). NASCARhas to decide whether Cup teams should be permit-ted to use forced air induction systems such assuperchargers or turbochargers, big blocks, over-head cam engines, or fuel injection. Just as we nolonger restrict the heavily-regulated medical com-munity to bleeding patients as the only treatmentmodality for illness, NASCAR should not constrainracing teams to 1950s technology. The acronymNASCAR stands for National Association of StockCar Auto Racing, yet the vast majority of stock carscampaigned in the Cup series represent front-wheel-drive vehicles powered by four or six cylinderengines (for example, the Ford Fusion and ToyotaCamry). This striking disconnect between race carsand street cars suggests that the win-on-Sunday-sell-on-Monday model long coveted by the OEMsmay be nearing extinction. Manufacturers may dropinterest and investment if they detect no clearrelationship between supporting Cup teams andselling cars. The implications of such a shift areenormous since NASCAR depends heavily on theirinvolvement and investment.
9. Overhauling NASCAR’s engine
Persuasive evidence exists that NASCAR may not beable or motivated to stop cheating. We offer aprescriptive framework for substantial reductionsin cheating and unethical behaviors, based on theassumption that NASCAR’s leaders are motivated toaccomplish those worthwhile objectives. Our rec-ommendations focus on the creation of an ethicalcommunity, development of a code of conduct,ethical role models, a system of consistently appliedrules and procedural justice, renewed commitmentto innovation, the prospect of significant growth inthe fan base, and sponsors’ involvement in effectingchange.
The central goal of NASCAR’s leadership should bethe establishment of an ethical community. Trevino(1992) argues that individuals operating in an ethicalcommunity will likely behave ethically. Researchershave built on Solomon’s idea of an ethical community(see, for example, Baucus & Beck-Dudley, 2005),maintaining that organizations need to clearly com-municate the ethical virtues by which employeesshould conduct themselves. Employees’ identity
Cheating and NASCAR: Who’s at the wheel? 387
and meaning comes mainly from the social contextor community in which they operate. One aspect ofcreating an ethical community involves fully commu-nicating expectations for ethical behavior to employ-ees, and ensuring that the corporate culturereinforces ethical behavior and supports norms ofwho we are as ethical competitors.
Our second recommendation involves the devel-opment, inculcation, and enforcement of an orga-nizational code of conduct. Well-establishedcorporate models exist that can serve as templatesfor instilling ethical behavior. NASCAR should workcollaboratively with car owners and race teams todevelop a code of conduct, and then provide com-prehensive training to ensure that everyone under-stands the spirit as well as the specifics of the code.Kate Nelson developed an ethics training gamewhile at Citicorp, and the generic version of thegame (Trevino & Nelson, 2003) could be used intraining at NASCAR to foster discussion about sit-uations that arise and how to respond appropriately.Training sessions focusing on a code of conductshould include unambiguous declarations of whatconstitutes cheating and how cheating will be ad-dressed.
A third critical element for promoting ethicalbehavior involves NASCAR’s principal owners andsenior managers modeling ethical leadership. A sig-nificant amount of research on ethical behavior inorganizations has concluded that employees andother stakeholders form their perceptions about afirm based on top executive leadership. Therefore,NASCAR’s top management must pay close attentionto their actions, ensuring that their own behaviordemonstrates ethical virtues of honesty, fairness,integrity, respect for others, and so forth.
Leaders often use signals to communicatechanges in strategy or role modeling behaviors.The France family could exhibit ethical rolemodelingby divesting its interest in International SpeedwayCorporation (ISC), signaling that all race track ownershave an equal opportunity to host Nextel Cup races.Currently, track owners have limited stakeholderpower due to the symbiotic relationship betweenNASCAR and the ISC, which owns and operates13 major auto racing tracks. In 2006, 21 of theNASCAR Nextel Cup races (54%) were run at ISCtracks. Having NASCAR races at ISC tracks fuels thetop line at ISC, providing 88% of its fiscal 2006 rev-enues (International Speedway Corporation, 2008).Owners of independent racetracks argue that theFrance family, who are the founders and managingowners of NASCAR, favors ISC tracks because of theircontrolling interest in the ISC (34% equity ownershipand 63% of voting control). This cross ownershipbetween NASCAR and the ISC has clear implications
for a dysfunctional organizational culture, but it isamenable to corrective action.
Another important signal would come if NASCARreplaced Robin Pemberton as Vice-President ofCompetition. Pemberton, a long time crew chiefbefore his ascendancy to NASCAR’s highest manage-rial stratum, has been identified as one of the ‘‘topfive cheaters in NASCAR history’’ (McGee, 2007). Hisrole in enforcing NASCAR rules does not send amessage that resonates with credibility. The newVice-President of Competition should be someonewith a strong reputation for ethical behavior, pref-erably someone from within the NASCAR network,and this role model needs to have frequent close,personal interactions with NASCAR drivers and raceteams (Trevino, Weaver, & Reynolds, 2006). Rolemodels need close working relationships in orderto impact the ethical behavior of subordinates orfollowers. Role modeling or leading by example hasa long history of credibility going back to KennethAndrews, who maintains that:
Once a company’s leaders have decided that itsethical intentions and performance will be man-aged, rather than left unattended in the corrosiveenvironment of unprincipled competition, theymust determine their corporate policy and makeit explicit. (Andrews, 1989, p. 102)
The next recommendation involves simplifyingthe rules and ensuring procedural justice. This ini-tiative would balance progress with equity. NASCARcould respond to race teams’ complaints of ambigu-ity and inconsistent application of the rules byreducing the rules to the Big Three (tires, fuel,and engine displacement). This simplification shouldsimultaneously improve enforcement and foster in-novation. Single-source vendors currently providetires and fuel for all race teams (Goodyear andSunoco, respectively). Engine displacement canbe measured easily, pre or post race. Thus, NASCARcan easily ensure compliance on all three dimen-sions while simplifying the technical standards towhich all teams must comply.
Our recommendation for procedural justice fo-cuses on the process through which NASCAR assessessanctions. The current practice is shrouded in se-crecy, lacks a systematic approach, and representsone of the most problematic areas in NASCAR, likelyresulting in the unintended consequence of greatercheating. The dominant culture in NASCAR may beresponsible for the development of deviant identi-ties that encourage amoral behavior (Trevino et al.,2006). Greater transparency in developing rules,sanctions for violations, and an open and equitableappeals process would benefit all stakeholders. Apriori standards should thoughtfully match sanction
388 M. Baucus et al.
to infraction. Simple rules facilitate consistent ap-plication and eliminate the need to assess intent orpossible patterns of past behavior.
Sanctions would take on genuine potency in thisnew environment. Driver fines hover around $25,000for most infractions, a sum with little deterrentvalue to drivers with an annual income in the mil-lions of dollars. This huge gap between reward andpunishment may explain why NASCAR has continu-ally increased penalties in recent years. One benefitof simplifying and clarifying the rules entails insti-tuting reliable and just punishments for violations.Ethical organizations require reliability in their im-position of rules and punishments. Rule violations, inthe extreme, could result in suspending participa-tion for one or more races, or permanently banningbad actors. If NASCAR meets the standards of pro-cedural justice, including the development of atransparent process of rule enforcement and allow-ing race teams to appeal violations, the garagecommunity and all other stakeholders would likelysupport harsh penalties for transgressors.
The fifth prescription suggests that innovationcan coexist with ethicality. If the power train pa-rameters (naturally aspirated, pushrod, small blockV8s) remain unchanged, engine builders could seekto obtain advantage with simple combinations ofpower enhancing modifications, including differentcarburetors, intake manifolds, cylinder heads, andcamshafts. Some configurations may be track prov-en, others experimental, but none would be outsideof the spectrum of reasonable innovation availableto all teams. This thrust toward simplification couldextend to chassis design. Each contemplated im-provement, whether power train or chassis, repre-sents a set of physical or mechanical relationships.That knowledge exists in the public domain, so anycompetitive advantage would be temporal and con-testable. One team may outperform others in theshort term, but other teams would then redoubletheir efforts to innovate and improve. A new cham-pion would emerge from this intense competition,but possession of the crown would be short lived.The entire sport would move forward, probably in arecurring pattern of advantage followed by parity.No dynasty would emerge, but every stakeholderwould benefit by this natural form of progression. Anemergent issue would be the impact on innovation,if any, by the Car of Tomorrow. We cannot fullyassess the impact of the COT as it has raced just ahandful of times in the 2007 season, and teamscontinue to work out unanticipated problems suchas toxic fumes in the car and compliance with bodytemplates. However, the notion of a common plat-form across race teams may serve a duality; that isto say, a radical reduction in cheating coupled with a
renewed commitment to power train and chassisadvances.
One critical stakeholder group not yet embracedin this prescriptive framework is the fan base. NAS-CAR appeals broadly across social strata, and cur-rent fans appear unconcerned with race teams’aberrant behaviors, remaining fiercely loyal to driv-ers and their sponsors. However, we believe NAS-CAR’s continued growth is seriously constrained bycountless, potential fans who view deviant behav-iors as repugnant. We point to the harsh publiccondemnation of Tour de France bicyclists whodope, major league baseball players who juice withsteroids, and professional football players whosechronic encounters with the law suggest recidivistbehaviors. NASCAR represents one of the few pro-fessional sports that has escaped these image prob-lems so far. It may simply be a matter of time ifNASCAR does not take action. Few family units,schools, churches, or other social entities exaltcheating or any other form of unethical behavior.A strong stance on ethical behavior could grow thefan base.
Our final recommendation involves sponsors tak-ing a proactive role as change agents. NASCARdepends heavily on corporate support, so sponsorsrepresent a key pressure point for eliciting mean-ingful change. Most sponsors articulate codes ofconduct on their websites that proclaim the ethicalstandards of their companies. As yet, sponsors havenot suffered tarnished reputations from the miscon-duct of affiliated teams because the public has notlinked sponsorship and cheating. Sponsors undoubt-edly recognize the beneficial relationship betweensponsorship of a race team and sales of their prod-ucts. Sponsors may want to consider how cheatingcould become a public issue wherein sponsors’ rep-utations and sales would be negatively impacted bysupporting race teams that cheat. Sponsors couldavoid potential problems and perhaps enhance theirreputations by exerting teams to play by the rules orlose financial support.
10. The finish line
We conclude our article with several observations.NASCAR does not represent an anomaly among or-ganizations that wrestle with cheating and unethicalbehavior by its members. Compared to Enron,HealthSouth, Tyco, and other corporations confront-ing major ethical scandals, NASCAR’s problems ap-pear fairly mild. We focus on NASCAR’s problems toexplore one highly visible, high impact organiza-tion’s encounters with and attempts to deal withunethical behavior. Its efforts to grapple with a
Cheating and NASCAR: Who’s at the wheel? 389
culture of rule breaking, an over-reliance on rules togovern behavior, questions about procedural jus-tice, and difficulties in balancing a need for rulesversus innovation, represent challenges faced bymany organizations. Our prescriptions focus on cre-ating change in NASCAR, but many of the sameapproaches can work in other organizations as theyaddress similar issues and attempt to foster ethicalbehavior.
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