16 September 2005
Successful Intentions Newsletter
Hi ,
As Groucho Marx famously said: "The secret of business success is honesty and fair dealing. If you can fake that you've got it made!"
Business [Ethics]
What constitutes ethical behaviour at work? Is it all about who's nicking the paper clips? (Answer: everybody!). Or who's got the inside information? (If you have to ask then you're not in the game!). Or who's sleeping with the boss? (Actually, it's not the ‘sleeping' bit that's the problem!). Is there a difference between individual ethics and business ethics?
Yes, according to the near religious mantra that says the purpose of business is to maximize the wealth of business owners and shareholders. Yet this leads to what social researcher Hugh Mackay calls "managerial moral muteness".
Every jailed executive from Bernie Ebbers (WorldCom) to "Rocket" Rodney Adler (HIH) believed they were acting "for the good of the company". They convinced themselves that what they were doing was morally and ethically OK. Yet, they failed to ask the most basic question: "Is it right?" Worse, they didn't know how to answer this question even if they had asked it! Ignorance and the self-delusion of one's importance leads to ethical corruption.
Ethical Work Climate
But individual decisions about what's right are made in the context of the prevailing work climate. There are five types of corporate ethical climate. Which one are you working in?
- Caring: "The most important concern here is the good of all the people in the company," and "In this company, people look out for each other's good."
- Law and Code: "In this company, the first consideration is whether a decision violates any law," and "In this company, people are expected to follow strictly legal and professional standards."
- Rules: "It is very important to follow strictly the company's procedures here," "Everyone is expected to stick by the company rules and procedures," and "Successful people in this company go by the book."
- Instrumental: "In this company, people protect their own interests above all else," "In this company, people are mostly out for themselves," and "People are expected to do anything to further the company's interests, regardless of the consequences."
- Independence: "In this company, people are expected to follow their own personal moral and ethical beliefs," and "The most important thing in this company is each person's own sense of right and wrong."
Ethical Leadership
Do Chief Executives set the moral tone for the companies they lead? You betcha! A recent study from the Department of Management, University of Central Florida (2005) indicated that leader moral development exerts an influence above and beyond that of the ethical work climate. Even though employees may not work closely with the organization's overall leader, value congruence with this leader seems to affect their attitudes. This congruence effect is small, accounting on average for only about 5% of the variance in attitudes, but nonetheless influential given the myriad of influences that affect attitudes.
The leader's influence is greatest at the climate extremes. That is, the leader's moral development is reflected most strongly in the egoistic (i.e., the Instrumental) and the principled (i.e., the Independence, Rules, and Law and Code) climate levels.
Moral Reasoning
Thinking ethically flows from the Socratic question: "What should I do?" Or in many cases: "What can I get away with?!" It all depends on our level of moral reasoning and our perceptions of the "moral intensity" of the presenting ethical issue. Ethical decision processes vary as a consequence of four components of moral intensity:
- Magnitude of consequences: "What will be the overall harm (if any) done as a result of my decision?"
- Probability of effect: "What is the likelihood that my decision will actually cause harm?"
- Concentration of effect: "Will my decision harm a few people (if any)?"
- Proximity: "Will my decision affect my co-workers?"
Next time you're faced with a moral dilemma try asking yourself these questions and truthfully listening for the answers. Like a 3-D picture you will recognize ethical corruption when it emerges. You will most definitely know it!
Coming up in the next edition of the Successful Intentions Newsletter - Power of Intention©
Keep your intentions clear,
Peter Webb
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