05 May 2011  What Do YOU Think?

How Ethical Can We Be?

Summing Up Managers like to think they act ethically, but at the end of the day ethical action is subjective, readers tell Jim Heskett. Reaction to the new book Blind Spots.

 

Summing Up

Our perceptions of whether we do "what's right" depend on such things as the situation, the time frame, the expectations of others, and whether we are face-to-face with the object of our actions. And we are much poorer judges of whether we are doing what's right than those observing us. In a nutshell, those are the feelings of many respondents to this month's column. Frances Pratt summed up the comments of others in three words, "ethics is subjective."

Ravindra Edirisooriya asked, for example, "Can humans be ethical in one environment and unethical in another environment?" Anyone who has studied business cultures in various parts of the world probably would respond affirmatively. Gerald Nanninga observed that "unethical decisions can often appear to be the 'best' decision when using a narrow time frame mindset." Shadreck Saili concluded that, under the circumstances, "we should be as ethical as the situation around us can determine while at the same time be mindful of the consequences …."

Turning to the core issue of the column, why do we so often regard ourselves as more fair and ethical than we really are? Why do those with whom we interact judge us differently than we judge ourselves? Phil Clark commented that "Ethics is in the 'eye of the beholder,' not the person carrying out the action." We may rationalize our behaviors depending on, as R. Keller put it, "pressure … to meet deadlines, desire to further one's career, or desire to protect one's livelihood (or, one might add, one's loved ones)."

In an organization, doing what's right starts at the top. Ashraf Khan commented that "Individual managers (tone at the top) play an essential role making sure (that unethical behavior) doesn't happen," noting also that "… it is a heck of a job to keep staying aware…" Vasudev Das suggests that words of Krishna are appropriate here, to wit: "whatever action a great man performs, common men follow; and whatever standards he sets by exemplary acts, the entire world pursues." Joe Schmid commented that "the 'highest behavior' any leader can expect from those they lead is the 'lowest behavior' they demonstrate."

To the extent that fairness and ethical behaviors are in the eye of the beholder, good leadership involves establishing expectations and meeting them, probably through a process, as Mike Flanagan put it, of "more open discussion at home, work and at play." Other suggestions came from C. J. Cullinane when he said "we can make better, fairer decisions by being aware of these biases." Ajay Kumar Gupta suggested hiring practices that place a great deal of weight on "attitude" and "listening skills."

Trust is a cornerstone of an efficient and effective system. Bad things happen when it is undermined by unmet expectations or ethical blind spots. What can we do to insure that we as well as our managers are taking steps to deal with their ethical blind spots? What do you think?

Original Article

Umpires and referees favor the home team. That's the conclusion of research by Tobias J. Moskowitz and L. Jon Werthheim that appeared in their recent book, Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won. It was biased judgment on the part of supposedly unbiased referees and umpires.

They hypothesize that the cause is a natural tendency to avoid excessive booing by the home team crowd, particularly in the later stages of a contest in which unbiased behavior is most necessary. Of course one could ask, "Are they cheating, especially when they are probably unaware of what they are doing?"

In a new book Blind Spots: Why We Fail to Do What's Right and What to Do about It, authors Max H. Bazerman, a professor at Harvard Business School, and Ann E. Tenbrunsel, a professor of business ethics at the University of Notre Dame, argue that something they call bounded ethicality leads "even good people to engage in ethically questionable behavior that contradicts their own preferred ethics."

We do it when it is easy to do, when it is hard to verify, when we have insufficient time or information ("bounded awareness," which often occurs in large organizations in which functions are walled off from one another). We may do it in ways that allow us to preserve our perception of ourselves as an ethical person. Doctors experience it when they make diagnoses and prescriptions biased by their special training while maintaining their belief that they are putting their patients first.

It helps explain why people systematically regard themselves as being much more ethical than they really are. And it supports a conclusion that, unless ways can be found to reduce bounded ethicality, most ethics "education" is missing a large part of the problem. In fact, one study found that ethicists who teach the subject are less likely to return library books associated with their research than the general public is to return books that it borrows.

Why should this matter to us? Employees tell us in one way or another that the single most important characteristic of their job is "a boss who's fair," who hires, promotes, and recognizes the right people. Nearly all bosses think they're fair, a much larger proportion than is perceived by their employees.

As antidotes to blind spots, Bazerman and Tenbrunsel argue that we can change ourselves, in part through awareness of the phenomenon itself, putting in place "precommitment devices" that seal you to a desired course of action--imagining your eulogy, or reviewing decisions with a friend. For organizations, greater transparency and fewer silos, among other things, can help (as opposed to such things as signing codes of conduct or undergoing training in ethics).

How do we address these problems? Do we just hire more ethical people? Or do we help people see how they act in ways that are inconsistent with their more reasoned ethical preferences? What can organizations do to increase the likelihood of employees acting ethically? And, what can society do to change the institutions that guide individual and organizational behavior? Or is the problem beyond us? After all, how ethical can we be? What do you think?

To Read More:

Max H. Bazerman and Ann E. Tenbrunsel, Blind Spots: Why We Fail to Do What's Right and What to Do about It (Princeton, N. J.: Princeton University Press, 2011).

Tobias J. Moskowitz and L. Jon Werthheim, Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won (New York, N.Y.: Crown Publishing Group, 2011).

Comments

    • Ashraf Khan
    • Governance advisor, De Nederlandsche Bank, Amsterdam

    Personally (which, I realize, is a word mostly misused for making bold claims but not taking responsibility for the effects...:-), I feel that excluding codes of conduct, ethic trainings etc from the described "precommitment devices" is a bit too rough of a statement.

    Precommitment devices are merely means to an end. Research described by e.g., Paul Stern, Dan Ariely and yes even Marc Hauser seems to indicate that activation of (dormant) norms helps us to "get back on track". If signing a corporate code (a) reflects norms that are de facto not shared or (b) the code is not brought back now and then to re-activate us, it will be ineffective to precommit individuals.

    What I gathered from my own share of issues in life and my job as a corporate governance advisor: a) Once you start becoming more aware of your own behaviour, it is a heck of a job to keep staying aware (while simultaneously there is no way back), b) Organisational checks and balances to maintain this awareness easily fall into a "tick the box" exercise (there and done, let's get on with business), c) Individual managers (tone at the top) play an essential role in making sure this doesn't happen: make employees feel as "insiders", people who can identify themselves with the norms (see Akerlof & Kranton).

    And this, again, requires working on your own behaviour first and foremostly. There is no easy consulting possibility I fear.

     
     
     
    • Anonymous

    The key is senior management involvement. Every, and I mean every report of ethical issues must be reviewed by a senior (VP or the president) and the reporter MUST be treated as a valued team member. Far too often the issue is damage control not institutional self correction. The old Us versus Them kicks in and the messenger get's shot in the foot!

    This is from personal experience as a corporate whistle blower.

     
     
     
    • Timothy Long
    • Executive VP, Rustic Ridge Hospitality

    The comments regarding "a boss who's fair" is interesting in that the perception of an unfair boss is levied by those directly affected by the boss's decisions. Therefore, the perception is flawed under the stance of this article and adds credibility, correctly or incorrectly, to the perception held by the boss that he is "fair".

     
     
     
    • Jian
    • Student, Human Race

    I think the point is people are easily influnenced by all the facts that surrounded them. Sometimes, people were told to do what's right, but it didn't mean it was the right thing to do. Being more ethical is real hard, I say sometimes it does beyound us, myabe let's just say, the world are now very patheic, people are confused by all those social norms, and most of people are just working for the survival, they don't have the excessive energy to think about being ethical.

     
     
     
    • Ravindra Edirisooriya
    • Senior Accounting and Finance Major, Missouri Southern State University

    Professor Heskett has come up with the hub of our modern day small world problems: How Ethical Can We Be? What are ethics? What makes humans ethical or unethical? Can humans be ethical in one environment and unethical in another environment? Are animals ethical or unethical? We need to start with an anthology of ethics: personal ethics, family ethics, student ethics, teacher ethics, passenger ethics, driver ethics, shopper ethics, consumer ethics, producer ethics, marketing ethics, sports ethics, professional ethics, business ethics, corporate ethics, institutional ethics, national ethics, social /political /governmental ethics, law enforcement ethics, international /national force ethics, science ethics, religious ethics, judicial ethics, local ethics, regional ethics, global ethics, universal ethics and humanitarian ethics. The dictionary defines ethics as "moral standards; system of morals". Every human interaction w ith other humans including oneself (for example to or not to commit suicide), institutions, commerce, society and environment is based on his or her moral standards. Humanely, we know (or do we not know?), deceit, greed, stealing, lying, lust, and harmful conduct (to oneself and others) are unethical. Humans can have upward, downward or zigzagging ethical short-term trends since we are human. The dilemma is how to find harmony given the humans have a shade different to widely opposite moral systems.

    There is no place for ethics anywhere in the equation of profits. Hence, the free market model (frame) does not require its adherents to be ethical. Humanistic and moral frames are based on ethics.

    One glaring example of deceit among our presidential hopefuls is that they canvass the public by saying in essence that they will bring down the gas prices since they know that Americans are hurting with the sky rocketing gas prices. Their solution is "Drill Baby Drill" which helps them with corporate campaign contributions. The OPEC countries tell us that there is enough world production (is it true?). The Obama administration is going after the speculators in the oil market but is there any misconduct? The problem is either the oil refineries controlling the distillate production capacity to less than the market needs or we do not have enough capacity to produce the market needs. In order to bring a refinery online, probably it may take (a long time) four years or more!

    As recently exposed in a short film, another glaring example of deceit is how some economists color (doctor) there reports depending on whose payroll they are in.

    Moral systems cannot be regulated. In the free market frame, ethics will take a back seat. Perhaps, could we solve the problem if we can reduce the number of (materially and morally) needy on this earth? The best we can do is to talk about the importance of ethical conduct and wish for increasingly ethical behavior from the free market adherents: citizens, students, teachers, passengers, drivers, shoppers, consumers, producers, marketers, sportsmen and sportswomen (umpires and referees included!), professionals, businesses, corporations, institutions (UN for one!), nations, societies, politicians, governments, law enforcement officers, international /national forces, scientists, clergymen, judges and etc ...

     
     
     
    • Tom Dolembo
    • Founder, New North Institute

    Kastellec and Lax at Columbia have published an interesting paper on the effect of the choice of cases taken in the Supreme Court and the subsequent path of decisions taken and their inferential bias. Ethics in business is largely a matter of what is chosen as the ethical target. Do we apply different ethics (or any at all) when trading on an anonymous market, when we trade face-to-face OTC with derivatives, or when we agree to contracts? Is it unethical to abbrogate union contracts for the cause of budget, what do we choose to be ethical about? In fierce international competition, do we select out the choices and acts made on swaps, say, and include in ethical judgement bonuses derived from transactions (regardless of losses in those trades)?

    We are seeing continuing CEO banditry in salaries and bonuses defended as fair and equitable among the princes, but grossly unfair in general. Should a CEO choose to draw the line and not accept them for ethical reasons and is he/she guilt of unethical conduct? Should a client of an IB firm engaging in nefarious dealings turn back those profits on portfolios? Should a pension fund engaging in high risk dealings disclose to their members the real risk to their future? Choose the ethical target wisely or it shoots back.

     
     
     
    • Ajay Kumar Gupta
    • Doctoral Researcher and Faculty(ITM), Tata Institute of Social Sciences

    Hiring ethical people may not necessarily make people or organisation ethical. We need practices that encourage and reward ethical decisions and that is top down. In the organisations, that do not value ethical decisions and value more performance or profitability may fail to value the power of ethics. On the other hand, when leaders are more concerned about numbers and their positions, unethical practices take place. And people at lower level start doing the same practices. So, publically rewarding ethical decisions, committed effort and employees extra initiatives will definitely create and value ethics in the organisations. And certainly, it is top down approach. Leaders need to create leadership trust and transparency at top and across all level in every actions, decisions and behaviours. Leaders should follow SSCEE Model to restore and create ethics in the organisations. Showing self example of taking ethical decision and setting trends for future employee to follow the path; this also includes being self role model of ethics. Creating opportunity for people to take ethical decisions, engaging them into opportunity and encouraging them to take ethical decisions will help organisation to be ethically right. This actually make virtuous circle of making ethical decisions in the organisations. While hiring, employers should put more weight on attitude than anything else. Listening skills is more important than talking skills. Managers should design their performance appraisal to include decision, effort and initiative that could build brand reputation and leadership credibility in future. Long term value creation should be focused more than short term profitability alone. Organisations should also follow "Zero Tolerance Policy" for outcome based on unethical decision. They should focus more on means rather than outcome by any means. Societies can play both complementary and supplementary role to help organisations to encourage ethical decisions. For this, organisations should engage them into employee feedback system and also what they think about activities of the organisation. It should be make integral part of organisational survey. Engaging societies into organisations actions, decision, and activities as a complementary partner could strongly build reputation and trust that will definitely create long term organisational and social value. Society should organisation event, seminar or workshop to reward individual employee whom they think encourage and make ethical decision. They should felicitate effort and outcome of organisations that have benefitted societies, communities or people.

     
     
     
    • CJ Cullinane

    The Ethics we profess are developed over the years by a great many things, such as parents, religion, media, training and I believe education. Take for example the way a lawyer looks at Jury selection. The potential Juror may be honest and want to be fair but the lawyer looks for the nuances that would favor their case.

    I believe every decision making person has some bias that they may not even be aware of. I have met some CCOs (Chief Compliance Officers) who were responsible for 'fairness' and enforcing regulations but had their own blind spots and biases. Pointing out what you feel is a bias or blind spot (after they calm down) does seem to help but for how long!

    When hiring, do we really know who is 'ethical'? It is a very tough call. I think we have to work at teaching our employees to be alert to their "blind spots" and biases. I also believe we have to question decisions that may not be the best decisions (instant replay in the boardroom).

    In closing, I do feel we all have some deep seated biases and blind spots. I also believe we can make better, fairer decisions by being aware of these biases.

    Charlie

     
     
     
    • mike flanagan
    • corp purch mgr

    Ethics is becoming more interesting as I get older, as I apply my past and current experience to rule on my ethical response. Bosses seem fair, but are they really and we only know if we have all of the information that they have.

    In order for us to be more ethical we need more open discussion at home, work and at play. We need to expose our thinking process to our surrondings so that we can judge our final decision based on the "norm."

     
     
     
    • Philippe Gouamba
    • Vice President of Human resources, Skyline Windows, LLC

    As human beings, whether we are engaged in "umpiring" a softball game or conducting business, we need to be as ethical as possible. I suppose that in order to arrive at the best decision making, we now have decision making by committee, where there is a bit of a "thinktank" atmosphere where the brightest minds offer various strategies to resolve a problem and the leader of the group will make a decision based on all the sage input he/she has received from his/her team. Here we suppose that the entire committee cannot be UNETHICAL. It is also important to consider what is driving the decision making. I believe that a prosperous company does not need to cut corners to survive and afford to behave more ethically, whereas one that is struggling to keep its doors open is more likely to cut corners and more likely to behave in an unethical manner. If the decision is driven by the bottom line, then oftentimes ethics fly right out the window. Wall Street brokers are a prime example; "buy/sell" is their game, that is how they get wealthy. They do not care If make money or lose money on the trades that's they encourage you to make. On the other hand we have workers that are driven by the job satisfaction they get from doing a good job. I certainly would hope that this group would behave very ethically. Since I am an HR professional, please allow me one indulgence. HR is supposed to be conducted in a fair and ethical manner. Discrimination is unacceptable; unethical conduct is grounds for removal. That keeps us on the straight and narrow path. It is also important to remember that it only cost 24.00 dollars to file a suit with the labor board and an arbitrator will examine your case for you so you do not even need an attorney. That too is a great reason to behave ethically. I do not want to be sued and my employer does not want to be sued either.

     
     
     
    • Frances Pratt
    • CEO, Metisan Pty Ltd

    I think that the point here from the original piece and the comments so far is that ethics is subjective. For all people (using the umpires as an example) at some level (either conscious or subconscious) our actions are about who you want to please / appease / annoy etc. We have inherent and learned biases. So - if this is true then how do we work within that? For me the answer is about honesty. To expand, I think we need to work harder and spend more time on being honest with ourselves in uncovering and stating our biases. This takes effort, we need to reflect on our actions and uncover question our biases and very often it takes the shared insight from an external party (such as a mentor, husband or co-worker) to draw to our attention to the bias in the first place. So the question then becomes, in my mind, how do we create our world so that people feel that they have permission to bring this up with you? How do we teach people these skills of insight, reflection and sharing that enables them to say and us to listen? And lastly when we have listened - what skills do we have to use this information when talking with others or to change ourselves? These tools need to be used in balance with the others that perhaps we are more familiar with in running a business so that things are done on time, with fulfilled clients and money to pay the wages and other expenses.

     
     
     
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    At the outset, let's understand the term ethics.It has various definitions. It is stated to be the science of morals in human conduct. Ethical behaviour is honourable and morally correct actioning. In commercial terms, ethics refers to taking actions in accordance with the letter and spirit of the laid down rules and regulations in keeping with the available legal framework. To be totally ethical, one has to be completely above board and not get tempted by forces giving more by hook or by crook. At times, there are opportunities which could be grabbed by twisting morals a bit and lot many do so. This too is unethical. To be ethical, one's conscience should be the guide, Even if one can't remain entirely untouched by unethicality, if greed is shunned, this touch will be brushed away. Somewhat difficult but a strong character can really make one ethical to a great extent.

     
     
     
    • Ratnaja Gogula
    • Kenexa

    Any degree of Bounded Ethics should never be tolerated as Ethics by either organizations or society. Ethical adherence, if not already driven by the Atman of an individual, should be imposed by the family, organizations and society in their individual capacities and roles. The Atman of an individual is selfless and has no reason to violate ethics. Some steps that organizations can initiate to ensure that ethical behavior prevails: ?Devise HR processes that keep at bay nepotism; nepotism breeds non-ethical behavior; ?Reward and support ethic-vigilantes; they need strong support to sustain the vigil

     
     
     
    • Noaman Al-Saleh
    • CSR & Media Manager, ENOC

    Being an ethical is a part of a total lined up pyramid, which the foundation is based on the Code of Conducts. Everyone who is a part of the pyramid is part of the whole ethical order. Yet to fit and to be viewed as one; however, not being so, will affect the stability of the total grid where an ethical issue could raise and cause an ethical gap in the grid in which it could lead to unexpected outcome. In organization the grids are the functions and the employees are responsible to fill the grid. Some will learn how to be an ethical employee just to sustain their income and some are ethically by nature due to their paradigm. Both do reflect on their surrounding and on their careers, which do reflect at the end on the overall picture of being ethical. Getting the right way or the wrong way of being ethical will depends on our own ethics; however, do we -organizations- sought to be any less than ethical or do we treat this matter as a point of perception?

     
     
     
    • Gerald Nanninga
    • VP, Retail Ventures, Inc.

    One point to consider is the fact that unethical decisions can often appear to be the "best" decision when using a narrow time frame mindset. In other words, the highest near-term outcome often requires unethical choices.

    Usually, it takes a much larger time horizon until the negative consequences of unethical decision-making appear. For example, a pattern of unethical behavior over time erodes trust. When customers, suppliers, and fellow employees stop trusting you, all sorts of bad outcomes can occur.

    Until people take responsibility for the long-term consequences of their actions, unethical behavior will appear desirable. Unfortunately, given our preference for emphasizing the next quarter's earnings, annual reviews, and short tenure at any given position, there is no reason to expect people to own up to the long term consequences.

    I had the pleasure of talking to some of the Enron employees shortly before and after their fall. In my mind, it was Enron's excessively short-term orientation which triggered most of their ethical problems.

     
     
     
    • Phil Clark
    • Clark & Associates

    Ethics is in the "eye of the beholder" not the person carrying out the action. Therein lies the issue. Everyone can justify their actions, and do, to maintain their sanity. How others perceive those actions measured against "their" standards causes the angst and frustration we see in society today. Nearly every business thinks they are ethical...nearly every customer who feels wronged does not. Can that be changed? Can that be taught? It is the battle of perceptions that has existed and will exist until the end of time.

    As a weather forecaster, I was often lambasted over an errant forecast. I had a CEO of a company chew me out over a forecast one day with many unkind words and disparragement. Finally, I had enough and ask him, "When you make decisions are they sent to every TV, radio or newspaper in the country to be widely broadcast to everyone in the nation?" A huge silent pause was heard on the line. In a quiet and appologetic voice the CEO said if that every occured he would be linched overnight. He said, "You must have one of the toughest jobs in the world. Everyone knows when you are right or wrong, you cannot hide. That would be catastrophic for a CEO." After that he was the nicest customer I ever visited with.
    Everyone has their own ethical foundation. Trying to fit into the judgement mold is nearly impossible. If, as Mike Flanagan mentioned we exposed our thinking more, we might make some progress. Listening instead of judging would go a long way to better understanding.

     
     
     
    • Joe Schmid
    • Managing Principal, Oak Leaf Consulting, Llc

    If you think about behavior as a mountain of possibilities, surrounding the mountain close to the base is a fence line. That fence separates legal from illegal behavior. Somewhere up higher on the mountain is a second fence that separates ethical from unethical. The posts that hold that fence are foundational principles (e.g. vested power is for service; statements made should only be made in an objective and truthful manner; one shall not maliciously or falsely, directly or indirectly, injure the reputation and prospects of another, etc.). A bit further up the mountain is a third fence I'll refer to as the "Stuck-on-Stupid" fence. It bounds behavior that is not illegal or unethical but just plain stupid.

    Is there an ethical litmus test? The California Ethics Orientation online certification (except for 2 pages out of 200) deals with misuse of power to personal financial gain. Is this what bad behavior boils down to - I don't think so. Should the "12th man" be barred from football stadiums - I don't see that happening - it's part of the game. Is "fair" in the eye of the beholder - sure is. Are "precommitment devices" the answer? The corporate "chastity belt" or "shock collar" - a patent waiting to happen (outside of the automotive insurance industry which already has such devices). My guess is it will be some time.

    Codes of behavior and ethics set the table. How you behave at the table is always very visible and defines who you are (a true pig or a gentleperson) to wit "The Emperor's New Clothes." "Bounded awareness" is an excuse not a reason. I believe there is one overarching behavioral truth - the 'highest behavior' any leader can expect from those they lead is the 'lowest behavior' they demonstrate. The "disease" and the "cure" are that simple. "It" is not beyond us - it is us. Every time we give bad behavior a "free pass" we set a new standard and we become further entangled in the "Stuck-on-Stupid" fence. Stop giving out "free passes" in your organization. However, before you stop handing out the "free passes", be aware that doing so is not without personal risk - there is downside. The question in front of each of us is - Are we willing to take the risk?

     
     
     
    • Mark O'Connor

    The problem of ethically-challenged decisions in business, government, law enforcement, and the judiciary cannot be over-stated. I recently wrote about ethical issues in public accounting and consulting in a research note that was also published at re:theauditors.com, entitled "Honest Services Crisis: Professional Poison and the Chicago Connection." (http://retheauditors.com/2011/03/30/an-honest-services-crisis-professional-poison-and-a-chicago-connection/) Just a simple analysis of the ethical issues facing the Big Four was hard to cram into 5,000 words.

    The lead to this story is the questionable decisions of umpires. I like to think that my great uncle, Ed Hurley, was one of the good umpires. He was certainly one of the more famous ones. But I was too young to really get to know him. Here is a clip of his identity being guessed on What's My Line after a particularly controversial World Series game (http://www.yourememberthat.com/media/5834/UmpireEdHurleyonWhatsMyLine/). Perhaps we should hold up the examples of the honest umpires again today, and the honest CEOs, managers, and individual contributors that are just doing the right thing.

    But we need to stay away from the politically motivated examples. As Moskowitz and Werthheim point out, just as the ethicists that teach the subject have a lower propensity to return library books than the general population, there is a likelihood that disproportionately large number of amoral actors have worked their way to the top of organizations on the shoulders of other like-minded contemporaries. While this creates a perception of integrity, they're really just well-connected members of an unethical, and often criminal, cabal.

    We should reserve celebrated examples for those that are truly worthy. They're likely just doing what they always do, waiting to be discovered and recognized for their sacrifices. And the flip side is also true. We need to publicly expose the unethical CEO's and corporate leaders, cops and judges, public servants and everyday people that have long ago given up on doing the right thing. Beyond all the other damage they do on a daily basis, they obstruct the professional path of ethical people with honorable intentions.

    We need to do more beyond this, but it's a good start. It's hard for competent people, companies, and teams to win, when their opponents, and the "umpires," are cheating.

     
     
     
    • Nisar
    • Moosa, HBFCL

    Ethics are fine lines of the rights of two undividuals. if someone cross and claim ownership of rights without the consent of other,this become unethical. sometime we are not aware of these fine lines or sometime intentionally ignore them. so awareness and acceptance about these fine lines help us to be ethical. be in a corporate environment or a society as a whole we need to be firmly educated about these fine lines. people with growing self interest always erase these fine lines and promote unethical practices in society. daily hundred of thousand such actions occur in world and making this planet unpleasant living experiences. leaders can play an prominent role by being role models and promoters of ethical behavior. every environment need such strong character leaders to serve and saviour of rights of individuals. follower always looks on leaders actions. let us develop ethical leaders.

     
     
     
    • Shadreck Saili
    • UCT

    I read an article by the Jehovah witness that " you can not do certain jobs because they are out side the religious beliefs" i guess this is one god example of a standard of ethics.

    It is quite difficult though to balance and come up with what may be termed " the ideal ethics" . The reason being that ethics have more than one dimension and that includes individual feelings of what is right or wrong,religious belief, law requirement, society's nomes.

    Further these dimensions are perceived by different persons in various ways making the whole matrix more complicated. That being the case therefore, my view is that we should be as ethical as the situation around us can determine while at the same time be mindful of the consequences that what we may consider "the ideal ethics" will result into. It bring to my memory" If you are in Rome do what the Romans do" Whether that is ethical enough it remains a wonder.

     
     
     
    • R. Keller
    • President, BlindSpot

    As one of the authors of :The Ethical Enterprise, A Global Study of Business Ethics for the American Management Association, the Top 3 Reasons why people act unethically are:

    1. Pressure to meet unrealistic business objectives/ deadlines.

    2. Desire to further one's career.

    3. Desire to protect one's livelihood.

    As executive business coach, I am asked to "assist" Fortune 500's on addressing ethical behaviors amongst the company's leadership. My finding over the years is that a greater number of people act ethically and desire to behave so (yes even on Wall Street).

    For those few who "choose" to act unethically, my experiences in such matters lies fault at the feet of both one's organizational "culture" AND its leadership ( more accurately, what "behaviors" leadership rewards.)

    Inherent in driving unethical behaviors ( a correlating factor to aforementioned Top 3 Reasons) is the fact that in many cases where unethical business acts/ behaviors are in question, little to no consequences are suffered by the perpetrator- especially if they are "rain-makers": (no greater examples exist then in our politicians, athletes, executives or celebrities who smirk or outwardly laugh at the pithy suggestion that they are to be held accountable for their unethical behaviors as would "normal" citizens.)

    With the potent combination of lax whistleblowing policies, scarce SEC resources, increased deregulation, and in some cases "behind the scenes governmental protection", companies -and their leaders- who deem themselves, "Too Big To Fail" and those narcissistic company cultures whom think they are smarter than everyone else, have successfully gone from their "perception of impunity", to the realization of no consequences and immunity from prosecution will be doled out on them.

    It is with this mindset that the current- and future- laws enacted to thwart unethical behaviors DO NOT apply to them. So each will continue to behave in a manner which has, thus far, ONLY rewarded them: Please remember: what gets rewarded always gets repeated.

    In closing, I am passing on this breaking news story. The Manhattan federal jury announced its unanimous verdict on Raj Rajaratnam. Raj Rajaratnam will spend a very long time in prison. Twenty-one pleaded guilty and one defendant is at large.

    R. Keller

     
     
     
    • Jay Somasundaram
    • Systems Analayst

    How can we pretend to be ethical? Our very basis for commercial transactions is built on selfishness - that individual selfishness somehow transforms into good for all.

    Convictions such as bribery by Alcatel and insider trading by Galleon cover up the fact that such behaviour is standard operating practice for all organisations in their sector - companies that don't cheat can't survive.

    Nor is the government exempt. As US offiicials repeatedly state: US foreign policy is primarily to further US interests. Ethics is a secondary factor.

    Our political system is designed on the basis of selfishness - politicians are motivated to get elected, and there is an assumption that this gets translated into the public good (and therefore ethical).

    If we really want to build an honest society, we need to redesign the fundamental systems by which our society functions.

     
     
     
    • Anonymous

    Adam Smith, "The Wealth of Nations" is often misquoted. Adam Smith's idea that the whole is greater for everyone when everyone is doing what is best for their self-interest; was never intended to be in a moral/ethical vacuum. That is simple greed. As earlier people have posted a system lacking moral/ethical standard will erode trust, which eventually freezes capital.

     
     
     
    • Jacoline Loewen
    • Director, Loewen & Partners

    Who defines a "fair" boss? The workers, the managers, the CEO, the owner, the Board, the community, the labour board, the government, the UN - or all of these stakeholders? A fair boss is situational - corporate vs. business owner, size, industry, country, public vs private ownership. Canada is a remarkably "fair" place to do business because of the level of ethics drilled into the Canadian culture from childhood. Yet, many Canadians will say their boss is not fair because expectations for standards of fairness rise as all boats rise. A Zambian miner would think they were in heaven if they were working for a Canadian boss. The Canadians may think they deserve more pay or consistency in treatment because they are higher up Maslow's Hierarchy of Needs. Canadian employees do indeed regularly say their boss is not "fair". The problem is that it is cheaper to do business in Zambia with the lower level of definition of "fair" boss. In Zambia, The Economist reports that workers do not have safety helmets. This would be illegal in Canada, never mind be unfair. I believe that if you want to see "fair" boss levels, it shows at a granular level in the economy. Right at company level, you can see the turnover rate. In private equity, we work with family owned businesses and I notice just anecdotally that there is zero turnover rate. Consequently, I look more to see who is being a "fair" employee and who is behaving in an entitled manner.
    In the private sector, with businesses under $300M, it is very hard to hide unfair treatment in the market place where employees come from the same town. As for the ethics researchers not returning their books, I would assume that the people interested in ethics are on the more touchy-feely side of business rather than the harder minded finance types. Here is another angle, personality types also influence the definition of "fair" and perhaps people who do not return books are going to believe an employee should have far more given to them than that hard-nosed business owner who has to reach payroll every month. Realistic expectations are everything and employees definitions will be far from the business owner's definition. I see owners writing checks for old time employee retirement and ultimately, it is trying to regulate "fairness" which stops this generosity as it is seen to be "unfair". Who defines "fair" is the most important question of all.

     
     
     
    • Sriram
    • Employee

    Ethics is the most valued word that every company promotes say by 'pre commitment' strategies like 'code of business conduct' trainings, and if used in right perspective, can bring glory to a company and trust of customers not necessarily business. In the neck throat competetive corporate world, any single miss can prove costly to business and share holders. So the fear of being answerable to many people and not giving their due return for the money invested is motivating the companies to get business by hook or crook, sometimes making slight compromises to ethics factor. This may be a good solution to withstand the competition in short term, but can be detrimental in long term. Even the employees can take cue from such unethical company behavior and apply it in thier work place. Boss typical should lead by example and so his behavior has direct impact on his subordinates

     
     
     
    • Jay Somasundaram
    • Systems Analayst

    I've just beem introduced to the concept of Servant Leadership. It appears to be a fairly mature discipline, with methodologies and metrics. For those interested in finding out more about it, I'd suggest starting with the Wikipedia entry. There are several books on the topic.

     
     
     
    • Anonymous

    it is really a difficult to define ethics as it is contexual e.g. killing animal for food may be ethical for some for cardinal sin for others. Similarly eye for an eye may be ethical for some and highest level of cruelty for others. Boss may take decision in the overall interest of organisation but may be unethical some. Where to draw line is a difficult. Ethics is relative terms and comparing it as something absolute may not be right.

     
     
     
    • Praveen Kumar Suman
    • IT professional, Tata consultancy Services

    How ethical one can be? I think this is question which everyone should ask to him self. The decision taken by someone entirely depends on situation and surrounding of the event. For me may be some decision are ethically correct but it can be wrong for the other. There is no set of rule are defined for being ethical for someone. It just a matter of situation analysis and the action performed for the issue. In my opinion, we all are ethical as long as our decisions are correct in absolute manner.

     
     
     
    • Prodosh Sen
    • Manager, ITC Limited

    Ethics is a grey area in most of the situations encountered in a Corporate life. One has to take a judicious call in such situations while being ethical. Of course, there are situations which are clearly unethical e.g. seeking special favour in a tendering process in lieu of a consideration. Senior management must take a considered view whenever the line of difference is thin; but for clear-cut situations there must be a Standard Operating Procedure (SOP) as to how an employee should behave (dos and donts). The idea should be to reduce the grey areas as much as possible and to the the extent possible, not leave it to personal discretion.

     
     
     
    • Paul Nicholas
    • Director, Soul-Chaplain Consultancy

    This is fascinating! Much has been published on cognitive biases, and it's good to see something on the influence of such biases on ethics.

    The statement "people systematically regard themselves as being much more ethical than they really are" brings to mind the Dunning-Kruger effect - that many people overrate themselves on a variety of attributes. Part of the effect seems due to poor metacognitive ability among the least competent, causing them to overrate themselves very significantly. But another part of the effect is the most competent underestimating themselves.

    This seems to be paralleled by the effect described here - the most ethical (or in historical terms "saintly" or "holy") judging themselves harshly (as "sinners" even) while the most unethical remain oblivious to their own wrongdoings.

     
     
     
    • Vasudev Das
    • Doctoral researcher of Applied Management and Decision Sciences, Walden University., ISKCON

    Re: How ethical can we be?

    I would like to appreciate the scholarly comments in this discussion on "How ethical can we be?" Heskett (2011) asseverates that an investigative study brought to bear that "ethicists who teach the subject are less likely to return library books associated with their research than the general public is to return books that it borrows." This is interesting. Most people would have expected that scholars should not only philosophize, but also actually practice what they profess. If someone is teaching ethics, but his/her private/public life is devoid of ethical values, then such a teacher needs help. Such an ethicist ought to become a scholar-practitioner. Krishna (Prabhupada, 2011) asserts that "whatever action a great man performs, common men follow; and whatever standards he sets by exemplary acts, the entire world pursues." Unfortunately, in the 21st century - subsumed in the Kali-yuga or Iron Age, which is predominantly characterized by hypoc risy and quarrels - people do not walk their talks, but this is uninspiring. It is not surprising, therefore, that even great policy formulators become victims of the very laws they enact and promulgate.

    An introspective sage may wonder if such non-practitioner scholars, who are masquerading as mentors, deserve to be heard. I should think that ethicists who are devoid of ethical values should be relieved of their services, inasmuch they are quacks. Such ethicists are pretenders and cheats. Of course, the cosmic creation is replete with the cheaters and the cheated, but it would be a bunch of hogwash and an unintelligible misdeed to condone such cheating in the academy. There is the probability of some of their students following the footsteps of such non-practitioner scholars, if we have to take Lewin's Field theory into consideration. Prabhupada (2011) corroborates Lewin's premise that our operational field has an impact on our behavior/actions. Bhakti-Tirtha (1998) brings to bear that there are gross and subtle exchanges that take place when people associate with each other. Therefore, hiring ethical people will positively influence the behavior of the employees. One may cherish ethical choices, and yet he/she can act in unethical ways, against his/her better judgment, due to the influence of organismic lust. One approach to address the inherent lust of employees is to resort to sonic therapeutic intervention (Prabhupada, 2011; Das, 2003) which helps to purify living entities of unethical consciousness. On a Likert scale of 0 to 10, 10 being the optimum, I would suggest leaders of society should at least be up to a 9, as far as ethicality is concerned, so as to be proper role models worthy of emulation.

    References

    Bhakti-Tirtha, S. (1998) Leadership for an Age of Higher Consciousness, volume 1. Washington, D. C.: Hari-Nama Press.

    Das, V. (2003) Lawmakers and corruption: Sonic therapeutic approach, Journal of curriculum and instruction, 11(2), 88-92.

    Heskett, J. (2011). What do you think?: How ethical can we be? Harvard Working Knowledge. Accessed on May 17, 2011, from http://hbswk.hbs.edu/item/6711.html?wknews=05162011.

    Prabhupada, A.C.B.S. (2011). Bhaktivedanta VedaBase. Los Angeles, CA: Bhaktivedanta Book Trust International.

     
     
     
    • Nupur
    • student

    I have come across people who have considered themselves on being "ethical" or being "educative" on this matter & have gone as far as preaching others about ethics. But, with observation,i have reached a conclusion that they contradict their verdict.i.e. they practice less of ethics than the people who are not so much in it. Here, the author is right. But, again, "a boss who's fair" becomes questionable because in an organization people work for profits,not ethics apart from corruption and favoratism. My point is,being ethical is not wrong and it is right to some extent.But,practicing ethics to the core is just next to impossible in today's life. Thus,i would state that we are ethical in some way or another and not only that we do make concious effort to be the one.But,practically,it is not possible to be completely ethical in today's present day and years to come.

     
     
     
    • Santhanam Krishnan
    • AGM, Mumbai

    Ethics as a practice is as fluid as clay in a potter's hand. The corporate ethics is a by-product of social ethics. The very fact that we are seriously discussing ethics as a subject tells volumes of the present day malady our civilization faces i.e. the steep divergence between the two. Sterling values are ethical but their unbiased and continued practice is temporal. Bosses are no different from the potter in moulding the clay of ethics to suit their convenience and interest. Every potter knows what he is up to - ultimately it is a question of survival. Since organizations as organisms follow the top down model it flows "down" unless there is a 'stopper' somewhere. I also wish to point out that perhaps the majority of the 'whistle blowers' act in the manner they do so, as they taste unethical treatment in their own game of 'unethics'. Ultimately in anything what a Corporate manager does the following questions need to be raised -

    1. Am I violating any law or ethically accepted practices in whatever decisions I take?

    2. Are my subordinates raise the similar points as in 1 before theymake any decisions?

    3. How will I deal with if the decisions and followup actions are contrary to what is in question 1?

    It is also a matter of concern how the corporates themselves deal with every issue of unethical practices that haves been unearthed? In the end unless our universal moral values do not form the basis of all our actions the ulcer of unethical behaviour can never be eliminated. Thats why the Vedas in Hinduism proclaim the following - "Protect the Dharma (ethics) and the Dharma (ethics) will protect you". Then what is Dharma (ethics)? It is that action/decision which does not bring any harm to any one.

     
     
     
    • Frank Riganelli
    • Author, Former Fortune company management, and consultant and trainer

    Looking at the conclusion which the articles questions are based on, I would continue on to make this specific point. Bounded ethicality can be addressed in ethics education by teaching a type of ethics management. This is similar to the notion of politics in an organization, which some propose should be accepted for the fact that is has become more common over the years, while at the same time business schools teach that politics is bad for an organization.

    Something to recognize in the case of bounded ethicality, and responses to reduce its effect toward eliminating it, is that the approaches will find resistance from other organizational approaches, which put ethics low on the list of priorities. These are the those organizational styles which primarily value results above all else, where the concept of entrepreneurialism, for instance, is promoted to the detriment of structure and the procedures that come with, including procedures intended to foster good ethics. I think the ethics training currently provided is helping people see how they act in ways that are inconsistent with their more reasoned ethical preferences, as Jim Heskett, the articles author, puts it. But still the problem remains, begging the article's question, 'How do we address this problem?'. I suggest that hiring more ethical people into leadership positions higher and higher up in an organization is an effective answer. This helps address the conflict of organizational styles which has a waterfall effect down through an organization, disseminating the idea of good ethics and countering any ill-effects from silos, the lack of transparency, and matrix-management, for example.

    Although the business world is different enough than a society that it needs to be looked at differently, societies have historically gone the approach of ethical leadership. The promises to promote the rights of people or the credos about bringing about change have been common among those wanting the societal leadership position. And as in the business world, improving ethics in a society presents its own difficulties, but the ethical leadership approach has been very popular.

    Having worked in the operations end of multinational businesses myself, I appreciate the complexity of the business environment and the difficulties in implementing the ideas spoken of here. When people, information, products, and resources of various types must come together in a way that meets very stringent criteria, any solutions sought will present many considerations and challenges. It is no surprise the manufacturing sector has gained the reputation of being the most complex system of work.

    The problem of bounded ethicality is only beyond us if we acknowledge it to be, and we can only be as ethical as the boundaries forced on us permit. I think it is dangerous to entertain thoughts of ethical and moral behavior being beyond us. Without these, we step into a boundlessness world which in essence moves toward a no-rules environment. And once that is accepted and considered acceptable as a rule, we have to start asking very basic questions, like is the information in this article real at all? A bit absurd to ask, of course, but it makes the point that nothing will be worthy of being trusted, and why would it if there are no ethics?

    I will not go so far as to talk about what a solution to bounded ethicality would look like, my consulting days are over, I do however offer thoughts on business related and other topics in the books I write. I realize this is not a forum for promoting products or services, but if you are interested, my books; A Business Diary and The Swindle look at issues pertaining to the business world, some the same as the ideas presented in this article. My novel Legend Station relates to societal ethics in terms of people's vices.

     
     
     
    • Renuka
    • Professor

    The phrase "Bounded Ethicality' to me sounded like an oxymoron. The moment you bind ethical stands or issues, there will creep in a judgmental tilt. So, who 'binds' ethics? The person to takes the stand or the person whom it affects?

    "How Ethical can we be?" makes me wonder how we are shaped to get affected by the environment. Whether its the umpire or the mom who is mad at her child or a boss who appears to favor. We learn to forgive!

     
     
     
    • Stephen Basikoti

    We are all like ships on the open sea: pressure to appear better than we are and to satisfy unscrupulous individuals, some with more authority than we have, are like winds and waves constantly buffeting us off course; equally, our landscape can be fluidy, hard to tell what is ethical at a particular moment. Hence, organizations need values that are as unchanging as a campus and need everyone, particularly captains, scanning surroundings and their behavior and actions in relation to the campus (values) to ensure their position is constantly correct and, if not, to quickly correct course.

     
     
     
    • Varun Sahay
    • Principal, VARUNSAHAY Consulting

    In my involvement with German SME's as well as multinational corporations it is easy to see that we have two issues that need to be redressed. One is domestic and the other is international; on the one hand domestic SME's tend to be people of one nationality where everyone mirrors the boss, his style, his behaviour, a bunch of mini me's if you must, which addresses the issue: is the boss ethical? If yes, the organisation is ethical. On the other hand international, multinational companies have people from different countries working in them therefore what is ethical for one is not for the other. Here the corporation needs to set the standard in black & white so that there is no discrepancy in behaviour between it's employees. People by nature are ethical, circumstances change, changing people's behaviour, hence organisations need to understand how their employees act, behave and try to maintain the status quo hence maintaining the equilibrium between ethical and unethical behaviour. Ethics can be compared with the law, there is a lot of grey area.

     
     
     
    • Anonymous

    How ethical can we be? To what extent can we be ethical in situations. How to react to the ethical dilemmas that we face in our day to day life? In many situations we are encountered with 2 options both of which seem unethical. It is interesting to note that people do tend to get biased without they themselves realizing that they do. Of course they react to in such a way that is easy to do, and cannot be easily comprehended. In a scenario, should we consider the intentions of the people or should we consider the consequences, if so the consequences on whom? Whether a person should give priority to the well being of oneself or the others and that upto what extent? There is no hard and fast rule to answer these questions. The impossible task is to judge others based on an action because we ourselves are not very sure of what are the ethical parameters to be considered and which ones to be given priority.