Re-establishing Ethical Behavior in American Business
Should American business take a critical look at where we stand on ethical behavior in the workplace? Given the state of our current economy, the recent need for bailouts, outsourcing to foreign lands, and unemployment figures in double digits a look inward is warranted. Have we allowed the perfect storm to cripple our ability to conduct what Stephen B. Young of the Minneapolis Star Tribune calls “responsible capitalism”? When did profits and greed overthrow our commitment to business practices that are legal, ethical and value the greater good? I heard the other day that Michael Douglas was gearing up to become Gordon Gekko again in Wall Street 2. Who can forget Douglas’ Academy Award winning performance as the slick, polished, corporate raider Gekko pontificating about American business in the 1987 Oliver Stone film Wall Street? Movies mirror life. Remember Gekko’s words from the original Wall Street.
“…The new law of evolution in corporate America seems to be
survival of the unfittest. Well, in my book you either do it right or
you get eliminated. In the last seven deals that I’ve been involved
with, there were 2.5 million stockholders who have made pretax
profit of 12 billion dollars. Thank you. I am not a destroyer of
companies. I am a liberator of them! The point is, ladies and
gentlemen, that greed, for lack of a better word, is good. Greed
is right, greed works.”
What happened to CEO’s like Whitney Mac Millian of Cargill who in 1975 wrote these words to his employees:
“ Business secured by any means other than legal, open, honest
competition is wrong. Cargill does not want to profit from any
practice that is immoral or unethical. Should we discover our
business being done in any other than an absolutely proper
manner, disciplinary action will be taken.”
Do you think the CEOs’ of Adelphia Communications, AIG, Enron, Lehman, World Com or Bernie Madoff ever considered Mr. MacMillan’s words? Just this week Goldman Sachs is in trouble with the government for fraud that cost stockholders and pension funds billions of dollars. But of course Goldman is keeping a stiff upper lip and claiming ignorance of wrong- doing. Has that become the “American way”? Profits up at any cost, the greater good be damned. Have we totally lost our allegiance to each other? Is there no room for responsible capitalism?
I looked at Forbes and US News & World Report’s listings for the Top Ten Best Business Schools in America. I wish that I had time to personally evaluate the business programs at Harvard, Stanford, Northwestern, University of Penn, MIT, University of Chicago, Berkeley, Dartmouth, Columbia and Yale. After all, our future MBA’s, Directors, Vice Presidents and CEO’s boast of degrees from the aforementioned institutions. In the university business programs do they spend an equal amount of time on business practices and business ethics or is business ethics a class or two after thought? I don’t know the answer and I would venture to say neither do many HR professionals. The school curriculums are public knowledge but we are more impressed by the reputation of the programs and the prestige associated with the school names. When an applicant comes to our company from one of the illustrious Top Ten, I suspect that questions about the applicant’s business ethics are not high priority. We assume that if the student graduated from a lauded business program legal and ethical issues were covered. Perhaps we should not be so complacent or awed by a university name. The applicant’s ethical “fit” is important to the future success of the company.
I am encouraged by some recent trends that have been showing up in business. However, I have a concern that bad economic times promote a more ethical tone in business because more eyes are aggressively watching business practices. When the economic climate improves and the watchdog eyes subside “business as usual” has historically resumed, and ethics has been put on the back burner in lieu of profits. Let’s remain positive. According to the 2009 National Business Ethics Survey done by the non-profit Ethics Research Center the recent recession has sparked interest in ethical behavior in business. The responses of 3,000 employees who worked at least 20 hours per week for their primary employer showed evidence that there has been a 5% decrease in ethical misconduct on the job since 2007. Whistle blowing has increased 5% in the same time period. The emphasis on ethical culture in the workplace is up 9% from 2007. And employees feel there is less pressure to participate in ethics violations by about 2% than in 2007. Unfortunately, the survey showed employees are still uncomfortable about perceived retaliation for reporting misconduct.
Is it time to turn back the hands of progress? People matter. Just because a team of lawyers can find a legal loophole to justify a business practice does not make it ethical or beneficial to the greater good. If we want to encourage more ethical behavior in American business responsible, ethical leadership is the key. Leadership sets the tone for company culture and business practices. According to James A. Nortz, Director of Compliance for Bausch and Lomb, in an article he wrote for Collateral, he has the following advice for executives:
- Take note of the messages you are sending employees now
- Measure the ethical culture of your organization
- If your findings of your cultural metrics are positive, heighten your current approach as business performance improves
- Establish performance goals for senior managers on ethical leadership and make ethical leadership part of an executive’s annual review
For more information about Ethics in Business check out our selections in the APLS Online Store.
