Proof of Faulty Ethics Alarms in the Business World

We tend to think that unethical conduct by individuals in business arises from “bad” individuals, people who either have no ethics alarms at all, or those whose alarms are merrily ringing loudly while they go about their corrupt ways. Certainly there are people like this, but it is increasingly clear to me that most people behave unethically because they have been completely confused by the rationalizations and unethical arguments all around them. Combine this with the absence of ethics training in the schools, and you have a large segment of the public with ethics alarms that are like digital alarm clocks carelessly set to go off at 7 PM  instead of 7 AM. (An analogy that occurs to me now because that’s exactly what I did last night.)

A stark example was on display over the weekend at Computer World, where Mark Gibbs helpfully presented an ethics quiz to his readers entitled “Seven ethical questions.” This is a good thing to do, and Gibbs deserves praise for raising the subject. He introduced his post by writing,

“I have recently found myself pondering business ethics. In case you’re wondering, ethics are defined as ‘standards or codes of behavior expected by the group to which the individual belongs’. Thus, business ethics are concerned with how organizations behave with respect to the culture in which they exist.”

I don’t know where Gibbs got that definition of business ethics, but it’s a really bad one.  Ethics are not codes or printed standards. He needs to read—quickly—the superb post by Dr. Chris MacDonald on his Business Blog, which explores the meaning of business ethics beginning with this definition:

“Business Ethics” can be defined as the critical, structured examination of how people & institutions should behave in the world of commerce. In particular, it involves examining appropriate constraints on the pursuit of self-interest, or (for firms) profits, when the actions of individuals or firms affects others.”

Bingo…exactly. Unfortunately, because Gibbs really doesn’t know what ethics is, his seven questions are astoundingly obvious, naive and very depressing for anyone who would like to believe the workplace has rudiments of an ethical culture. These questions would be appropriate for a sixth grade ethics quiz in a not-so-challenging elementary school. If he’ really been wondering about the answers to any of these questions (well, six of them; one is a genuine dilemma), it is horrifying to speculate on what other conduct he’d be willing to consider.

Here are his questions, with my answers…

Question 1: You open an e-mail to find a huge file of your company’s HR data that was sent to you in error. You can see how much everyone makes, their performance reports … everything that is pertinent to their employment. So, do you a) take a quick skim through before notifying the sender; or b) close it immediately and notify the sender? Is it wrong to look even if you keep the information to yourself?

Answer: This is private, proprietary information sent in error. You are obligated not to look at it, read it, circulate or use it. The Golden Rule applies.

Question 2: You find that you can examine people’s expenses claims and you see that your boss is cheating for a hundred or so dollars per month: Would you a) report him if you wouldn’t face any consequences; or b) report him, consequences be damned, or c) forget about it?

Answer: Easy: b). You have a duty of loyalty to the company, and have to report.

Question 3: Now assume the false claims amount to thousands, not hundreds of dollars: What do you do now? If your answer is different to your answer from question 2, explain.

Answer: No difference whatsoever. The boss is stealing, and cannot be trusted. The company has to know, and you must alert it.

Question 4: In these tough economic times many people are desperate to get a job. Is it unethical to intentionally and significantly underpay a highly qualified candidate?

Answer: This is the one good question in the batch. There is no objective scale of what “underpaying” or “overpaying” is. Your duty is to be fair to the employee while doing what is in the company’s best interest. For the company to earn the respect of its employees by treating them fairly and with respect is certainly in the company’s best interest, as is having employees who feel they are valued and who are not looking to jump ship as soon as they can get a salary that approaches their sense of what they are worth. It is ethical to negotiate as low a salary as the candidate will accept, as long as the agreed-upon amount isn’t unconscionable or exploitive.

Question 5: You “know” you are underpaid. You can pad your expenses and get away with it and in the grand scheme of things, your overbilling would be virtually negligible. Is this wrong? If it isn’t, why not? If it is wrong, why?

Answer: Of course it’s wrong. It’s stealing. Next question.

Question 6: You discover that a service provider has violated their terms of service and should have refunded some small portion, say a few dollars, of what they charge your organization, but they don’t make a correction on their bill. If you say anything, it’s going to be a huge fuss and could make your life difficult. Do you a) keep quiet or b) make a fuss. If you keep quiet because it’s only a few dollars then how much would it have to be before you took action?

Answer: It’s your job to see that the terms of the contract are met. You are paid to have your life made difficult. Do the job. The amount involved is irrelevant to the ethical obligation.

Question 7: You are part of the team looking for a new CIO. You are down to three candidates and, given the importance of the job, you have the candidates’ backgrounds investigated by a private investigator to see whether there is any “dirt” on them. Is it ethical to probe their backgrounds like this? If you were the candidate, would that change your answer?

Answer: It is ethical to do legitimate due diligence regarding representations by the candidates. Using illicit or deceptive means to find private information is unfair, dishonest and wrong. Digging up “dirt” is per se unethical. Public information, however, is always appropriate to check, if the employer chooses.

At least this least confirms the need for regular business ethics training.  Chris and I have a lot of potential clients out there.

One thought on “Proof of Faulty Ethics Alarms in the Business World

  1. Excellent analysis as always. I admire the depth of your understanding of ethical principles and their applications to the real world.

    People are quick to say that ethical matters are not always black and white, but often gray. My counter is that I don’t think it’s a matter of grayness. Grayness is just our lack of information or our lack of understanding of the underlying ethical principles.

    It’s like looking at a black and white photograph in a newspaper. At first glance, there appears to be a lot of gray. But pull out a magnifying glass and look closer. What do you see? A bunch of black dots on a white background. So what appears to be gray on the surface is really just black and white when we analyze it more closely.

    Ethical situations can be a lot like the photo. We sometimes have to pull out our “ethical magnifying glass” is we are to see and understand the underlying principles more effectively. Once we can bring the black and white into focus, our ethical decisions become easier.

    That’s one of the things I like about Jack Marshall and Ethics Alarms. His commentary challenges me to polish up my magnifying glass…

    Sheriff Ray

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