Is There Hope for Ethics in Business?

Can there be any hope in promoting ethical behavior in the modern business culture? The public's general skepticism of corporate ethics is understandable considering the track record of organizations in recent years of continued downsizing, outsourcing, scandals, increasing executive pay and decreasing employee benefits. "Many believe that executives are not being held accountable for bad management decisions and the pain they inflict on employees as a result(Trevino and Nelson, 2005, p. 3).

For there to be any hope of promoting ethics in a business culture, ethics training, policies, programs and finally, actions, must be deeply ingrained into a culture of an organization in order to be seen as more than half hearted public relations gimmicks that only provide lip service to ethical behavior while the real culture of an organization runs in the opposite direction. Ethics must become a primary function and responsibility of the modern leader in order to have real impact on organizations and teams. While these leaders still must protect and promote the healthy profits of their organization, they also must recognize "that business has a responsibility to address certain social problems because of its unique abilities, and because a healthy social environment is a prerequisite for a healthy business environment (p. 7). Such a leader recognizes that by serving all of its stakeholders to the utmost of their ability, including their customers, employees, and community, that in the long run they will best bring a return on investment to their shareholders (p. 7).

"Ethics is a body of principles or standards of human conduct that govern the behavior of individuals and groups" (Bottorff, n.d., p.1). While ethical behavior is based on a set of values and principles, ethical behavior goes beyond mere belief; it also encompasses actions of individuals, groups and organizations (p. 2). For there to be ethical behavior in an organization, leaders must not only state a belief in a set of actions, their actions as a leader must be in alignment with those values and beliefs. The leader must work to establish clear business practices within the organization that reward and promote positive ethical behavior and promote the reasoning and consequences of ethics as strongly as they promote business results. In time all individuals and teams must be able to follow the ethical decision-making process involving; "moral awareness (recognizing the existence of an ethical dilemma), moral judgment (deciding what's right), and ethical behavior (taking action to do the right thing) Trevino and Nelson, 2005, p. 15). They can only do this if an organizational culture has been developed that clearly defines its values and supports actions in alignment with those values. Because individuals may have different values and cognitive ability that influences their ability to recognize and act ethically, leaders must ensure that training, rewards, recognition and consequences are clearly defined in the organization in order to help individuals act accordingly.

A perfect example of such a leader is the story of Aaron Feuerstein, who was the owner and CEO of Malden Mills, the New England manufacturer of "climate control" materials like Polertec and Polarfleece (p. 38). Feuerstein was a business leader who had built his business based on Talmudic teachings and values that extended beyond his responsibilities to the shareholders, but also to the workers and community (Shafran, n.d., p. 1). When a fire destroyed the companies' New England factories in 1995, Feurestein faced an ethical dilemma (moral awareness). While most other fabric manufactures were closing plants in the US in order to reduce manufacturing costs, he had maintained his factories in Maine. Now he faced a dilemma; would he rebuild in New England or re-establish his facilities overseas where construction and manufacturing costs would have been less. Feuerstein explained "that the ideas of his religious heritage had played the major role in his decision" (p. 1), (moral judgment). He stated in an interview with Parade Magazine in 1996 that "I have a responsibility to the worker; both blue-collar and white-collar...I have an equal responsibility to the community" (p.1). His final decision (ethical behavior), which was in alignment with his stated values, was to rebuild the plants and keep as many employees on the payroll until they opened operations again (p. 1).

All leaders must have the same moral courage to support and to make similar ethical decisions, even if they are on a much smaller scale. I lead the learning and development department for on of the world's leading organizations for all of Europe, Africa and the Middle East. The company attracted and maintained top talent in part based on one of its stated core values of developing people. Because of this core value and our international approach to development, the company had been recognized for several years as on the world's top training organizations. I faced an ethical dilemma when the company, which was projecting loses in revenue in the coming years, decided to "downsize" and re-align the Leaning and Development Department. I saw this as a major departure from the company's stated value of people development (moral judgment). I had to decide whether to abandon this key value and go forward in support of the re-alignment or leave the company. I decided (ethical behavior) that I would stay with the company for one more year in order to ensure all cuts and re-alignments were carried out in a manner that showed respect to the people who had dedicated themselves to people development and to help our clients finish their learning and development commitments. I then left the organization in order to start my own training business where I could contribute to the development of others.

The public's trust in ethical business behavior can only be re-established by strong leadership of individual leaders within their own sphere of influence; great or small. Leaders must take strong actions to elevate the importance of ethical behavior based on clearly stated values that emphasize equal commitment to all stake holders equally. This may be a strong departure from traditional bottom line focus. Leaders and organizations would benefit from development and coaching from ethics trainers and coaches who can help leaders understand the steps to establish ethics within a team and/or organization.

References:

Bottorff, D. (n.d.). What is Ethics? Retrieved July 6, 2007 from http://www.ethicsquality.com/about.htm

Shafran, A., (n.d.). Aaron Feuerstein: Bankrupt and wealthy. Retrieved July 6, 2007 from http://www.aish.com/societyWork/work/Aaron_Feuerstein-Bankrupt_and__Wealthy.asp

Trevino, L., and Nelson, K., (2005). Corporate social responsibility and managerial ethics. Hoboken, NJ: John Wiley and Sons, Inc.

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