Business Ethics

Published: May 18, 2012

By Jim Lichtman
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Several years ago, I was speaking to a business group. The people sat in the room according to hierarchy: managers sat with the sales force in front; the administrative staff and lower echelon work force sat in back. During the Q&A, one individual from sales asked, “Don’t you think that sales should have a different set of standards than others in the company?”

Before he finished asking his question, I saw three people from the lower echelon shake their heads, “No.”

“Can you explain what you mean?” I asked.

“Well, sometimes we can’t always be truthful with a client about the exact timeline of a project. There are a lot of variables.”

“Why not explain that to the client?” I asked.

“When there’s pressure to beat the competition, sometimes we have to be a little less than forthcoming about some things. We don’t want to lose the contract, and besides,” he added, “we’re not the only ones who do this.”

The back of the room just rolled their eyes at two of the most common rationalizations: If it’s necessary, it’s ethical; and the “everybody-does-it” defense.

Another client once told me, “You don’t understand Jim. We don’t want to do these [unethical] things, but in order to operate from a level playing field, sometimes we have to be a little unethical.”

Pressure is not a legitimate excuse for a lack of ethics.

The problem I have with the term business ethics is that it seems to imply that there should be a different set of ethical considerations for business than those we may utilize in our private lives. The reality is that business ethics is the same as regular ethics with business scenarios.

“The purpose of a corporate ethics program,” writes Josephson “is not to make people ethical but to increase the likelihood that they’ll act ethically. This is definitely achievable. In today’s environment, failing to protect a company from employee misconduct is irresponsible.

“The objective of such programs,” Josephson says, “is to establish a business culture in which it’s easier to do the right thing than the wrong thing, and where concerned coworkers and vigilant supervisors repress illegal or improper conduct that can potentially endanger or embarrass the company.

“An organization can further improve its ethical track record by assuring that it has clear and credible statements of values and standards of conduct. When supplemented with quality training, those values and standards can clarify expectations and reduce misconduct resulting from ignorance or misinterpretations of laws or company policies.”

When accountability and integrity are compromised for the sake of getting the contract, endless forms of dishonesty begin to take hold and eventually spread throughout the organization.

The ultimate challenge for managers, presidents and CEOs is to make it very clear that integrity is a ground rule that cannot be compromised. Management has a responsibility to not only create and maintain a culture that fosters integrity, but sets organizational goals that are both fair and realistic without unrealistic pressure to achieve specific numbers.

In a commencement address made to Harvard graduates in June of 1999, former Chairman of the Federal Reserve Alan Greenspan laid out just what is required in business as well as life.

“I do not deny that many appear to have succeeded in a material way by cutting corners and manipulating associates, both in their professional and in their personal lives. But material success is possible in this world and far more satisfying when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.

“I cannot speak for others whose psyches I may not be able to comprehend, but, in my working life, I have found no greater satisfaction than achieving success through honest dealings and strict adherence to the view that for you to gain, those you deal with should gain as well. Human relations – be they personal or professional – should not be zero sum games.

“And beyond the personal sense of satisfaction, having a reputation for fair dealing is a profoundly practical virtue. We call it “good will” in business and add it to our balance sheets.

“Trust is at the root of any economic system based on mutually beneficial exchange. In virtually all transactions, we rely on the word of those with whom we do business. Were this not the case, exchange of goods and services could not take place on any reasonable scale. …Without mutual trust, and market participants abiding by a rule of law, no economy can prosper.”



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