Managing Ethics in Business

It’s no secret that there is more pressure on people than ever before. Trend reports show that workers are expected to do more with less and adjust quickly to changes. In response to this pressure, people have a tendency to cut corners and even engage in expedient or questionable behavior to get the job done or to receive rewards and recognition. Factors such as equitable treatment of people from diverse backgrounds, the pressure to meet performance demands, and technology are now recurring themes in the workplace and these themes are challenging the moral decisions we make on a day-to-day basis.

In a 1997 joint survey conducted by the Ethics Resource Center (ERC) and the Society for Human Resources Management (SHRM) on National Business Ethics, 83 percent of 5,000 respondents said that, when under systemic pressure, they would engage in misconduct. In the 2000 National Business Ethics Survey, it was found that two-thirds of all employees feel pressure to compromise their ethical standards. Two-thirds of respondents attributed this pressure to internal resources — supervisors, top-management, and co-workers. In the same survey, respondents also identified lying, withholding needed information, abusive or intimidating behavior toward employees, misrepresenting actual time or hours worked, and discrimination as the top five types of ethical misconduct at work.

The Texas Instruments company, a leader in setting and supporting strong ethical standards for managers and employees, explained this phenomenon in their Articles of Ethics and the Tier publication stating, “Generally, there are two principles that govern why people engage in unethical behavior. First it is because we think that the company or management and supervisors want us to, and second, we identify through our work environment and culture what we perceive it takes to be successful and move toward it.” If this is true, then what is the root cause behind this rationale and how can it be explained?

Three Common Ethical Dilemmas

The daily ethical dilemmas top managers are faced with can be categorized into two types: micro-management and macro-management.

Micro-management issues include conflicts of interest, employee rights, fair performance appraisals, sexual harassment, proprietary information, discrimination, and accepting gifts or offerings. Macro-management issues include corporate social responsibility, product liability, environmental ethics, comparable worth, layoffs and downsizing, employee screening tests, employee rights to privacy in the workplace, and corporate accountability.

When the pressures of micro-management and macro-management are taken into account with societal pressures and influences, there is a major impact on the decline in ethics in the workplace. A decline in ethical practices can cost a company money as well as influence employee morale, stress, quality, turnover, productivity, pride, and customer satisfaction.

Avoiding Ethical Dilemmas

Research has revealed that the most significant factor that influences workplace ethics in any organization is the organizational leaders’ commitment to ethical policy, in addition to the organization’s culture. The chief executive officer of Texas Instruments suggests that by “creating an environment where people are valued as individuals and are treated with dignity and respect, fairness and equality ... employee pride blossoms.” He also suggests that in such an environment “unethical practices such as: the padding of labor charges and expense accounts, personal long distance phone calls on company accounts, untidy work areas, break areas and rest rooms, taking office supplies home, excessive breaks or sick days, improper use of copy machines and computer equipment can be avoided.”

However this type of environment does not happen overnight and managers should not expect that communicating an ethics policy to employees through a brochure or a training seminar will solve all seen or unseen problems. Preaching legal compliance and adherence to rules without including tools to help employees improve decision-making and reasoning will get only part of the message across. A strong ethics program starts with the support of top management coupled with the development of an ethics policy and program. Experts also agree that if bosses want employees to believe that ethical practices are important; top management must be involved from the start in an ongoing and visible variety of ethics-focused media crusade.

Solutions to Managing Ethical Dilemmas

How managers choose to respond to ethical issues in their organization is critical. They must take into account in their day-to-day routine, the varying groups of stakeholders, along with each group’s diverse interests in order to develop shared values and practices. Consideration of the values expressed in the organization’s mission statement and the company’s stated ethics policy will help all stakeholders make the best deliberate and ethical judgments. Assessing organizational culture, and providing company ethics training and models in ethical decision-making will also help to influence the practice of ethics policy adherence.

Companies that employ people who are successful with profit margins as well as possess the ability to create a positive environment which values, respects and leverages all employees’ talents, have made ethical practices a cornerstone to business.

You can test your company’s ethical management practices online by taking the Ethics Quick Test at www.ethics.org/quicktest. Though informal, this on-line instrument constructed by Frank Navran of the ERC provides immediate feedback in twelve ethics management content areas, specifically designed to measure organizational ethical effectiveness. Assessing your ethical effectiveness is the first start to managing ethical practices in business.

Dina Clark, of the Professional Employee, Inc., is an HRD practitioner and certified trainer. She can be reached by calling (941) 574-9569 or by e-mailing Dinaclark@aol.com