Ethics Is More Than Good Business 606.5
Ethics is a popular topic at corporate meetings today because management correctly sees the benefits. Good things tend to happen to companies that consistently do the right thing, and bad things tend to happen to those that even occasionally do the wrong thing. Being ethical is playing the odds.
Ethical companies have a competitive edge because people prefer to deal with firms they trust. They also benefit from high credibility; being believed is an enormous asset. In addition, ethical companies attract and retain employees better because they have higher morale. And finally, good ethics generates a good reputation, good will, and loyalty.
So it’s true: Good ethics is good business.
Most companies try to motivate employees to be ethical by stressing how doing so will benefit the corporation. The problem is, this amoral rationale is grounded in self-interest rather than morality. It has nothing to do with ethics.
Doing the right thing to get something in return is an investment, not a demonstration of character. Ethics based on self-interest is situational; ethics based on moral convictions is reliable. It’s the difference between acting ethically and being ethical.
Trying to motivate people to do the right thing by stressing benefits rather than values and virtue turns decision making into a cold cost-benefit analysis rather than a reflection of what’s right.
But if a company encourages employees to make decisions based on the supposed advantages, why should anyone put the firm’s interests above his own? In the absence of authentic moral conviction, why should employees refrain from unethical or illegal conduct if they think it will save their job or enhance their compensation? Clearly, what’s good for an enterprise is not always good for its employees.
My point is, it’s foolish and fruitless to expect most employees to sacrifice their financial well-being for the good of the company. On the other hand, many will do so in the name of honor, as a matter of conscience, and to earn the esteem and admiration of family and friends.
Corporations have a much better chance of deterring improper conduct by appealing to conscience and principle rather than risks and rewards.
This is Michael Josephson reminding you that character counts.
What do you think of this commentary?
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Comments
I’m curious, Michael, how you’d apply this same principle to the spectrum of public sector business behavior, to those entrusted with protecting and defending the principles embedded in the Constitution, regulatory governance, and the rule of law.
Ethics is also a popular topic in the public sector. For example, our new president chanted “Change…yes we can” as a mantra; yet finds ethics to be situational. Not everyone is created equal when it comes to the lawful requirement of paying taxes. The IRS is known to be one of the most heavy-handed of government agencies; yet a tax cheat is now at its head. Congress in dealing with the issue of ethics reform refuses to establish meaningful ethics standards of practice and refuses to relinquish the job of policing ethics to an independent body. The open and notorious breaches of not only ethics but laws are so numerous in the Congressional ranks the examples have become a comedic tragedy. The slimy-coat of partisan favors to special interests litters the landscape. Rewarding bad behavior, it seems, has become the standard of acceptable ethics.
Where is high credibility an asset in an environment where the American political system appears to attract and retain public servants (employees) who are rewarded for corrupt behavior?
Sadly, it seems a good reputation, good will, and loyalty has little value in this business environment. It just doesn’t appear to be true that “Good ethics is good business.” How could it be when bending the Constitution and laws of the land benefits powerful corporate and social special interests over that of the individual citizen? Quoting you, “The problem is, this amoral rationale is grounded in self-interest rather than morality. It has nothing to do with ethics.”
As cynical as it sounds, it appears that most politicians only view the cold cost-benefit analysis getting reelected rather than reflect on what’s right. While some politicians conduct themselves in the name of honor, as a matter of conscience, and to earn the esteem and admiration of those they represent, clearly that doesn’t appear to be the rule.
What’s good for the politician is not always good for the country. What chance is there for America’s survival when improper conduct by politicians has few risks against the potential of such high rewards?
If being ethical is playing the odds, it seems doing the wrong thing is the right thing. Getting found out, if you have friends, money, influence, and a good lawyer, has little consequence. Even worse, bending the Constitution and rule of law has become the norm. Lobbyists, despite absolute assurances to the contrary, are appointed to the new president’s cabinet. Special interest groups with the ear of corrupted politicians are actively trying to dismantle E-Verify, the most effective and efficient program ever created by the federal government. Why would politicians want to disenfranchise special interests groups seeking to reward the 20 million people breaking our law? So what if it violates Constitutional principles and U.S. laws? So what if someone who has the right to work loses a job to someone who doesn’t? What’s the problem with that?
Isn’t the conduct of our government on immigration and E-Verify (controlling employer activity) the same problem of “an amoral rationale grounded in self-interest rather than morality”?
Posted by: Brandon | February 20, 2009 5:20 PM
During 20 years in the business world, I've been repeatedly struck by the lack of attention to ethical thinking and behavior -- indeed, the negative reinforcement practiced by most (all?) companies, small and large. Certain "dirty words" consistently raise alarms: honesty, generosity, integrity, kindness, honor. Rather, what's promoted and reinforced is playing the game and winning no matter what the cost to others and to one's own moral integrity. The universal excuse: "It's human nature" to be selfish, dishonest -- whatever (fill in the blank).
So how in the world does one make inroads against such a deeply entrenched way of thinking, being, behaving? Especially when those who strive to do so face the ultimate choice: survival.
Posted by: Sarah | February 21, 2009 9:41 AM
What is wrong with you all?! Yes, immoral and unethical behavior permeates not only our government and businesses, but our society in general. This is when we need to rise to the challenge, not shirk our responsibility to stand up for what is right. Are we headed down the wrong road? Yes! But if the more ethical of us don't fight, then what hope is there? Is this what America was founded upon? Is this what so many have sacrficed for? So that we can become a nation of quitters? This great nation can be saved, but it may have to be done one person at a time. So raise your children to be moral. Demand your players be ethical. Expect everyone you come in contact with to be honest in their dealings or go elsewhere. Stop re-electing unethical lawmakers. Get more involved with your community. Do something besides whining your defeatist propaganda. Remember what Edmund Burke said, "All that is necessary for the triumph of evil is that good men do nothing." Well, it's time to do something!
Posted by: James | February 25, 2009 10:29 AM
James,
I'm not sure of your point. Are you suggesting that Mr. Josephson addressing this issue (see my post above) is whining? Please clarify.
Posted by: Brandon | February 26, 2009 6:34 PM