Business Ethics

“The ethics of a business are whatever the top-dog says they are.”
- Bryce’s Law

INTRODUCTION

We hear a lot these days about the deterioration of ethics in business, e.g., graft,
corruption, cheating, favoritism, skimming money, etc. This has resulted in a public
relations nightmare for business. If consumers do not trust a company, its a matter
of time before it goes out of business. This is supported by recent studies that give
evidence there is a correlation between business performance and ethical practices
(see the Institute of Business Ethics). Basically, the Institute’s study suggests there
are long-term benefits associated with enacting an ethics programs. Such studies
and recent corporate snafus (e.g., Enron) are impetus for companies coming to
grips with ethics in the workplace.

There are essentially two considerations for devising an ethics program in
business; first, knowing what your ethics are, and, second; implementing them
in a consistent manner.

INTERPRETING ETHICS

There is little point in my telling you what is ethically right or wrong. You already
have an interpretation of this. But let us understand what influences our interpretation
of ethics; our interpersonal relations with others, such as our family, friends, neighbors,
fellow workers, as well as the media. Ethics is learned more than it is taught. It is based
on observations of the conduct of others, people we like and respect as opposed to those
we do not. It is then up to each of us to interpret these perceptions from which we will
base our conduct and behavior. The point is, we act on our perceptions, however accurate
or inaccurate they may be. Another influential factor are our own human frailties of
competitiveness, love, greed and ambition. But then again, this goes back to
interpersonal relations.

Let us recognize that ethical behavior is interpreted differently from person to person. What
one person may consider right or wrong may be different for the next person. The objective
in business is to implement a uniform form of behavior thereby instilling consumer
confidence in a company overall.

IMPLEMENTATION

Writing a corporate code of conduct is in vogue today as a means of articulating the
ethics of a business. Such codes are proudly displayed on web sites and in corporate
brochures more for public relations than anything else. True, they are useful for
disciplining an employee for an infraction of the rules, but I do not see them as an
effective way of implementing an ethics program. Understand this, regardless of what
the code of conduct states, the ethics of a business are whatever the top-dog says they
are. Too often I have seen companies say one thing, then act another, e.g.,
Enron.

Printed codes of conduct are nice, but we have to recognize that it is one thing to
enact legislation, quite another to enforce it. As stated earlier, ethical behavior
is based on observations. Regardless of what a code of conduct says in print, ethical
behavior is based on the relationship of superior and subordinate worker
relationships. If a subordinate observes an indiscretion by his superior, in all
likelihood it will be emulated by the subordinate. This phenomenon occurs
top-down in the whole corporate chain of command. If it breaks down anywhere
in the corporate hierarchy, it will become visible to the subordinate layers and
potentially create a “trickle-down” effect. This means the boss has to be a role
model for ethical behavior; they must “walk-the-walk” as well as “talk-the-talk.” If
they do not, it will not go unobserved by their subordinates. Managers, therefore,
should avoid the “do as I say, not do as I do” phenomenon. They must lead by
example. Anything less is sheer hypocrisy and will inevitably lead to changes
in behavior.

It is simply not sufficient to issue platitudes as to what is and what isn’t ethical
behavior. The manager must follow-up and assure ethical behavior is implemented
accordingly. In other words, we shouldn’t just “desire” truth and honesty, we
must “demand” it. If one person gets away with an indiscretion, others will surely
follow. As such, when writing out a code of conduct, be sure to stipulate the
penalties for its violation.

The success of a business ethics program is ultimately measured by how well it
becomes ingrained in the corporate culture. As we have discussed in the past,
corporate culture pertains to the identity and personality of the enterprise. All
companies have a culture; a way they behave and operate. They may be organized
and disciplined or chaotic and unstructured. Either way, this is the culture which
the enterprise has elected to adopt. What is important is that in order for an employee
to function and succeed, they must be able to recognize, accept and adapt to the
culture. If they do not, they will be rejected (people will not work with them).

The intuitive manager understands the corporate culture and how to manipulate
it. Changing the Corporate Culture involves influencing the three elements of the
culture: its Customs, Philosophy and Society. This is not a simple task. It must be
remembered that culture is learned. As such, it can be taught and enforced. For
example, a code of conduct is useful for teaching, as is a system of rewards and
penalties. Designating people to act as watchdogs of the culture can also be useful,
but be careful not to create a climate of paranoia. Ultimately, as a manager, you
want to create a culture that promotes the ethical behavior you desire.

For more information on “Corporate Culture,” see http://www.phmainstreet.com/mba/pride/eespcc.htm

CONCLUSION

We now live in strange socioeconomic times. 40-50 years ago we
normally had one parent staying home to raise the kids. Now it is commonplace
to find families where both the husband and wife are working and paying
less attention to their children, thereby relegating their parenting duties to
teachers and coaches. In other words, the family unit, which is the basic
building block for learning ethical behavior, is becoming severely hampered.

In business today we have a “fast-track” competitive mentality which does not
encourage a spirit of teamwork but, rather, more rugged individualism. Nor
does it promote employee loyalty. Further, we now live in a society that
encourages people to go into debt, thereby causing financial tensions.

Bottom-line, ethics is about people and trust. Consequently, we should be
sharpening our people skills as opposed to avoiding it. We don’t need more
maxims of how we should conduct our lives; we need to lead by example. As
such, we need more role-models and heroes than we do paperwork.

Let me close with one last thought on how ethics impacts business; there
is probably nothing worse in business than being caught in a lie, particularly
by a customer. Any trust that there may have been before disintegrates
immediately and business is lost. In this day and age, there is something
refreshingly honorable about a person where their word is their bond. Ethics
just makes good business sense.

Tim Bryce is the Managing Director of M. Bryce & Associates (MBA)
of Palm Harbor, Florida and has 30 years of experience in the field. He is available for training and consulting on an international basis. He can be contacted at: timb001@phmainstreet.com

Copyright © 2006 MBA. All rights reserved.

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Some say that work ethic in America is in decline, but is it really or are Americans simply getting too over weight and feel more lackadaisical when performing tasks? Is this then triggering a perception of laziness in some and a work effort riddled with excuses, delegation and blame gaming with most?

We have so many important jobs in our society that must be done, but if everyone is lazy, has a poor diet and refuses to put forth their best efforts, then all the work cannot get done on time and correct the first time. This in fat will lead to inefficiencies, increased costs and more work being created.

If more work is being created due to humans working less in their own civilizations then they will need to import others to help them do the work. But if they import a lesser class of citizen to do this work then they will cause animosity amongst the masses and further hardships down the road in the form of protests, demonstrations, boycotts and angry underpaid, under appreciated, second class citizen work force.

The poor work ethics and work force of America today is leading to an over all economic decline and tearing down at the fabric of society as a whole. We need a war on mediocrity, laziness and this new paradigm of “blame game” style excuses being currently promoted by Donald Trump’s Reality TV Series; “You’re Fired” and we may wish to consider the affect this change in attitude is having on our over all civilization. So, consider this in 2006.

Lance Winslow

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Corruption in business and government is legendary. Don’t become a legend. You could end up disgraced and in the slammer.

When I was a kid, my friend’s father piled me in the family car along with my friend and his sister. We took a long drive around the city and we were treated to ice cream and candy. It was a big day for us kids. It was the last day for my friend’s father.

My father was the auditor of a large city in the mountain west. Sometimes his accountants would find discrepancies in certain accounts. My father was aware of what could happen to a person caught in embezzlement. He wanted no more suicides like the one that had taken his friend and my friend’s father. Sometimes he was able to prevent a suicide. Other times he could not. Some folks are so embarrassed that no retribution seems sufficient. They take their own lives.

Unfortunately, too many still take the suicide way out. Most others face the court.

Even here in Idaho we read in the newspapers of individuals taking funds that are not theirs from government and business coffers. Some get a tap on the wrist; others are sent to jail. Each case is an individual and family tragedy.

Most people are not intentional thieves. A clerk with access to funds decides that she must get some money to buy her kid a birthday present. She “borrows” ten bucks from the cash box. She puts it back the next Monday after she has cashed her paycheck. She does that over again and again.

Then one day, she doesn’t replace the stolen money (loan to her).

Pretty soon she looks at the money box as a cash cow. She starts juggling the books to cover her pillage.

Then she gets caught.

The accountants say that she has embezzled twelve grand.

She didn’t imagine it was that much.

She promises to pay it all back out of her paycheck. She is terminated and prosecuted. She is fined and she spends three years cooling her heals in the state prison for women.

At least she doesn’t kill herself.

With some of our noble congressmen-who are supposed to be icons of truth and justice-they take a little gift from a lobbyist. Then they go to Canada with him on a fishing trip. Next, the lobbyist is throwing money into the congressman’s charity trust or campaign fund. When the congressman leaves office, he has a ton of money he can spend on himself. Charity begins at home.

Some business men-educated in our noblest institutions-have no morals after graduation. They want power and money. They obtain exorbitant salaries, stock options, and quirks. They suck money out of the corporation denying the owners-stock holders-a decent return on their investment. They cut the benefits to employees and they rifle the company pension funds. These men are called crooks.

To rifle the corporation, they get fancy with the accounting. They claim false profits to drive up the stock so that they can exercise their stock options. They spend company money on personal travel. Some purchase personal items with company money. They accept gifts from suppliers.

They have no shame.

I don’t know what to do about these lowlifes that have no respect for themselves. We have to wait until they get caught so that the courts can handle them.

I’m interested in helping those who have a basis for proper conduct. The ones who had parents that were able to teach them proper conduct. Those who would like to stay honest in all of their dealings.

Here are some suggestions:

1. If your associates are doing wrong that does not justify you in doing the same things. (Are you listening Congress?) If they try to get you in bed with them, tell them that you are not interested. When you get promoted and they don’t, you can straighten them out as to what is proper conduct. If you are kept from advancement because of honest conduct, find another job. Tell your attorney why you left the company.

2. If you were a Boy Scout, recite the Scout Oath occasionally to remind you to stay away from corrupting influences. If you were not a Boy Scout, remember what your mother taught you. (You Girl Scouts figure this out for yourselves.) Try to remember what you were taught in school and at church. Recite the Ten Commandments. Well, do something of this order that doesn’t sound silly to you.

3. Teach your children to be honest. Be an example of honesty to them. Don’t redefine honesty to suit your interest. Don’t let greed (yours or your wife’s) dictate your actions. When you pick up your child ask yourself if you are a good example to your child.

4. We had instructions at one company where I worked to always pay for samples and never to tell the supplier what we were doing with the samples. Another company asked that we take suppliers to lunch part of the time rather than have the supplier always pay the bill. The deeper suppliers get into your business, the more leverage they have. Keep your distance to avoid gifts and overindulgence.

5. Find a picture or a motto that you can hang in your office. A friend of mine had a motto in his office that read: Integrity is being good when nobody is looking. If you have a picture, when you hang it up, say to yourself, “I’m hanging this picture here to remind me to be honest in all that I do.”

6. If you are CEO of a company and the Board offers you and other company officers exorbitant wages, stock options, insurance, and other quirks, suggest that they could be more prudent and that they place the stockholders first. If you want a huge estate like the other CEOs that are ripping off the workers and stockholders, ask yourself this question: Would that really make my family happy or do we have more than what we need now?

7. Give your excess assets to charity or return them to the company when you retire. Don’t spoil your kids with excess. Leave them what they need, not what they want.

8. When you look in the mirror ask yourself: Am I truly being honest?

The End

John T. Jones, Ph.D. (tjbooks@hotmail.com, a retired VP of R&D for Lenox China, is author of detective & western novels, nonfiction (business, scientific, engineering, humor), poetry, etc. Former editor of Ceramic Industry Magazine. He calls himself “Taylor Jones, the hack writer.”

More info: http://www.tjbooks.com

Business web site: http://www.dumbincome.com

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