different kinds of ethics
EBBF member Marc Avanzo (France) will be interviewed on Voice of America next week and is seeking EBBF members’ points of view on the questions that will be presented:
Why is ethics trendy now ?
Last noteworthy international events that have attracted attention on Ethics ?
How is ethics mirrored in business strategies ?
What is a realistic excample of a business ethical dilemma ?
Can you give us some examples of non-ethical business practices ?
Perhaps a coincidence but new EBBF member Adib Birkland (USA) completing his PhD in human resource management has his dissertation at the Carlson School of Management focused on the topic of ethics among senior leaders.
He is attempting to compare the perceptions of what is considered ethical or unethical between different cultures.
He is looking to interview individuals and capture their perceptions and cases, would you like to offer your point of view?
If you have input on either of the two SOS requests from members, you can either comment below this entry or go to the EBBF contact line.
July 7th, 2006 at 12:59
To the question of why ethics is trendy now, I think there are very practical reasons why ethics is a growing concern for corporate executives. The first reason is the extremely visible collapse of Enron, Arthur Anderson, Worldcom and others that are attributable to ethical blindness. This led, in the United States, to the Sarbanes-Oxley bill that requires the CEO to sign off on the accuracy of financial statements.
There is a nothing like a good public hangining in the village square to increase attendance at Sunday Services!
Second, and perhaps more importantly, is the growing recognition of the importance of social and spiritual capital. Social capital is trust, both internally and externally. Brand equity is based on trust in product identity and corporate identity. This trust is just as valuable as money in the bank. Internal social capital is the defines the “spontaneous sociability” that is the fuel of all problem solving and creativity.
Spiritual capital, I have defined as commitment to a higher purpose, a purpose that gives one motivation, direction and resilience in effort toward that purpose; and, commitment to a set of values that define “right” and “wrong” behavior.
I have just published a book on this subject so I could go on for a long time on why these are important and how they are created or destroyed. The important thing is that executives are beginning to recognize, sometimes without being able to define why, that these forms of capital are just as significant to the organization as financial capital.
July 7th, 2006 at 02:36
I’m not sure ethics is trendy or not in Ukraine or Russia, but it should be. In my work with credit unions in Ukraine, we deal alot with the issue of values and ethics. A credit union is supposed to be a cooperative, democratic, locally controled financial institution. Unfortunately, the movement was hijacked by commercial interests after peristroika and many so-called credit unions are being run as pocket banks. This is a short term strategy for these businessmen, as sooner or later the regulatory agency will catch up with these guys, who are using loopholes in the law (that a tank could drive through). For the credit unions that care about values, they are faced with 70+15 years of the soviet “cooperatives,” which are not true cooperatives as they are centralled planned and non-democratic. We emphasize the need for ethics, as well as measurement and transparency of their adherance to the stated ethics (because if they are not measured no one would believe it, as everyone has heard too much here of high values that never became reality). We developed measurement instruments and local associations that perform audits. But in the end, the main issue is “spiritual capital” and transformation, which means individual transformation (as organizations do not transform, it is the individuals).
July 7th, 2006 at 02:38
1. Why is ethics trendy now?
A number of factors combine to make business ethics one of the leading topics being discussed in business circles and schools today. First, the wide
publicity which has accompanied a number of major corporate scandals has triggered demands from society, governments, and NGOs for more ethical
behaviour. As a result, students are insisting that more ethics be brought into the curriculum of business schools; they are also asking corporations
trying to recruit them about their codes of ethics and practices. Employees are showing more concern about their companies’ ethical practices. A
number of NGOs are speaking up about ethics such as EBBF and the Institute for Global Ethics. Executives are much more concerned about their own
conduct as they see other top executives being put into jail for unethical conduct. Few executives ever imagined five years ago that they might be put
in jail for breaches of ethics, and some are running scared. Further, increasing concern about global warming, climate change, and poverty are raising
questions about the fundamental role of business in society.
2. Noteworthy events that have attracted attention on Ethics?
All of the arrests and trials of top executives of major companies in the USA and Europe have increased public consciousness of the importance of
ethics. Certainly all AIESEC conferences touch on ethics and corporate responsibility. The Enron case was one of the major cases discussed at a recent
reunion of Harvard Business School graduates. Ethics were very much on the agenda of the recent Tallberg Foundation gathering of 500 world leaders
(Daniel: can you confirm?) The UN Global Compact has also brought ethics on to their agenda.
3. How ethics is mirrowed in business strategies
There is increasing evidence that ethics and corporate responsibility can enhance corporate competitiveness and intangible capital. To win the ‘war for
talent’ corporations are changing their human resource policies and practices in an attempt to attract, retain and motivate managers. Reputation
enhancement has become a strategic concern as has risk management.
4. What is a realistic example of a business ethical dilemma?
Ethical dilemmas do not usually involve good vs bad but rather trade offs between conflicting good or bad factors. Example : the man whose wife was
dying of a disease that required purchase of an expensive drug to save her life. He had no money; he could not find credit or a pharmacy that would
permit him to obtain the drug needed to save her life. The dilemma: should he break into the pharmacy and take the drug? Or let her die?
The Tylenol case is of course a classic conflict between maximizing short term profits and maintaining customer confidence long term.
Another is the young consultant seeking competitive information for a client study: should he/she misrepresent himself/herself to get information? Or
tell his manager that it is against his/her personal ethics to do so?
5. Some examples of ethical business practices?
There are many: but why not turn the question around to give examples of good ethical practices? Non-discrimination in hiring, promotion and
compensation; paying suppliers and employees on time (many SMEs go bankrupt only because customers stretch out payments); delivering defective
products; cheating on taxes;
July 7th, 2006 at 11:02
The question here that triggered me was the first one. Why is ethics trendy in business today? The answer to me is communication, and in different words it has been said already. But in the past it must have been very comfortable to be corrupt, now it is becoming more and more scary and dangerous. When the circle of people that knows about you and you know about is limited to family, neighbours and collegues, it is much easier to live in your own world and feel safe then when all the world will know about it when you put one step wrong. The scale of our activities helps as well.
Besides, starting with regular mail services only a few hundred years ago, through telegraph, phone, radio, tv, satelites, internet with it’s email, news groups, the web, instant messaging, voip, blogs, etc, our horizon widened. Not only are we better informed about what is happening somewhere else, but we also receive more, faster and more diverse feedback to our own actions, which no doubt stimulates our thinking.
We all love some comfort, but in each and every person also lives or hides a spiritual being that loves love, justice, happiness for everybody. This spiritual being may wake up, stimulated by the good exemple of others (brought to us through communication), or by Faith. Faith is the biggest force and the biggest change factor in human history. It is of all ages and all societies and should not be left out. How people get there, that’s a different story.
July 8th, 2006 at 05:25
Why is ethics trendy now ?
A: EBBF and others started to work on that 15 years ago.
B: Economists proofed impact of ethics on financial results.
Last noteworthy international events that have attracted attention on Ethics ?
A: Andersen and Enron still is.
How is ethics mirrored in business strategies ?
A: Germany has a social market economy which succesfully demonstrates how profits can be shared between all shareholders and the unemployed as well.
B: There are significant business strategies around mainly focused on ethics with the expressed will to change poluting behaviours of society members. Car sharing companies (www.mobility.ch) succesfully have various car-types around the corner every minute at hand for a few cents and save the environment through the effect that less energy and materials are used for producing cars.
What is a realistic excample of a business ethical dilemma ?
A: Loose your job or betray your company / client / supplier as ordered by your boss.
B: Loose your client or destroy with dirty tricks the business of your clients competitors.
C: Have no client or get excellent payed for a marketing campaign of a cigarette giant.
Can you give us some examples of non-ethical business practices ?
A: Prevent members of government to attend decision making meetings relevant for turn over of a whole business branch by infecting ministers physically with a virus.
B: Producing nonsens articles lasting only for short time and having poluting effects and press them in the market with the power of marketing-billions.
C: Don’t allow your employees to think.
July 12th, 2006 at 12:02
Thank you all of you for your inspiring answers.
I am to ne interviewed this afternoon, and will keep you posted about the follox up.
What I take from your answers is the folowing:
thank you Larry for your very practical explaination (your answer just confirmed my intuitions so it has been vey helpful)
Thank you Gary for your insight from the East (could it be that ethics is only a luxury of western companies, a concern that arises only after some other important issues have been solved?).
Both you and Larry emphasised the concept of spititual capital, which is not so far from the Moral leadership, I will definitely have to mention this notion.
Thank you George for your indepth answers, as always you are always there to provide your forceful and enhanced help. You mainly stressed the “sociological” aspect of ethics: what is happening at the moment in business human ressources, in universities, which is also related to the notion of spiritual capital, without being mentionned though.
Thank you Onno, I will definitely keep in mind your analysis on communication; I also think that communication is one big reason why the world is going to need a new pardigm, as you hintyed, rapid and massive comunication makes unjustice more blatant. But as Stephan stated, communication can also be used in a bad way. you also hinted at the notion of spiritual capital without naming it.
Last but not least, thank you Stephan, you brought a more “German” and responsible view on the debate. You mentionned Enron and Andersen like Larry, I guess they still are big references in this matter. I also appreciated your examples of ethical dilemmas
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So to sum up:
Big financial scandals like that of Ennron, brought about a new consciousness, that arose in legislation (Sarbane-Oxley bill) and within personal thought (new human ressources strategies, new trends within business schools). Environment issues like polution, global warming, shortage of energy, of water, may also trigger this kind of questions as to what is the aim, role and duty of business after all?
New communication means make bad practices and injustices known to all and make them hence even more unbearable.
Some economists have showned a relationship between ethical business practices and healthy finantial results. More and more people in the social comunity and in the business world are now showing their interests for new kinds of paradigms, car sharing initiatices, or social entrepreneurships are amongst them.
A new path can open up, with considering the notion of individual responsibility and leadership, social and spiritual capital….
Well I stop here, the following will be heard on air. Thank you again
Marc