by Keith Larsen
The answer should be a no-brainer. Why then do so many businesses conduct themselves unethically? Just the past month we saw venerable Barclays Bank manipulating the LIBOR; JP Morgan losing almost $6 billion trading derivatives with investor money; Countrywide making VIP loans to Congress to influence legislation; and a lifeguard fired for saving a swimmer outside his designated area.
Perhaps to find an answer we first need a definition of “business ethics”. My MBA ethics class instructor defined an ethical violation as any breach of an agreement, even an implied one. This would include an employee bringing home a company-supplied pencil, for example. On the other hand, aren’t we just a bunch of sheep to follow a stupid or morally wrong rule?
Just as Supreme Court Justice Potter Stewart famously observed that pornography was hard to define, but “I know it when I see it“, we all can sense when we or someone else is not being treated ethically or fairly. In my career I came to “see it” when I was hired to manage a product that had been supplied by another company. They had been shipping empty modules to the U.S. military with a warning label across the covers that read “Warning! Opening voids the warranty”. I saw it again when I was managing a huge Navy contract and my boss and our customer requested I help them fund their pet project by charging labor and material to my approved projects. I said “no” and was terminated a month later.
Some of the factors that enter into these behaviors include the need for a “competitive edge” and the pursuit of profit. Employees and managers fear losing their jobs or not getting promoted so they want to be seen as team players. There is also a “Stakeholder vs. Shareholder” influence on managers. Stakeholders include shareholders, but also include employees, vendors and customers. A stakeholder-oriented company (more often privately held) tends to operate as if good ethics is good for business. Shareholders, however, rarely involve themselves in a business beyond looking at the quarterly results and punishing or rewarding the stock based on expectations. (JP Morgan shares increased 6% after reporting a Q2 profit.) This tends to influence executive bonus plans and yearly employee reviews. I do not know of an employer that offers a bonus for least pencils taken home.
So what happens to a person who goes to church, coaches little league, gives to charities, and then conducts his/her business unethically? One such person is Jack Abramoff, the notorious lobbyist convicted of corrupting public officials, tax evasion, and fraud. He said: “I was so far into it that I couldn’t figure out where right and wrong was. I believed I was among the most moral people in the business”.
Here is Rotary International’s 4-Way Test of the things we thing, say or do. The test, which has been translated into more than 100 languages, asks the following questions:
1. Is it the TRUTH? 2. Is it FAIR to all concerned? 3.Will it build GOODWILL and BETTER FRIENDSHIPS? 4.Will it be BENEFICIAL tto all concerned?
There is also the Publicity Test: What if your decisions were published in the local paper for your wife, kids and school teachers to read?
Keith is one of 30 experienced volunteers providing FREE business counseling in the Inland Empire. To make an appointment, e-mail k.larson@%20cox%20.net“>k.larson@ cox.net or score503@netzero.net“>score503@netzero.net. Or visit the SCORE website at http://www.inlandempire.scorechapter.org/