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Making sure that your organization is ethical will require you to develop an ethical culture, to
establish a working set of values, to lead the company in implementing those values, and to make
all of the tough decisions that those values are sure to present.
The history of unethical behavior within organizations would fill volumes. For example, the
University of Illinois’ main campus was tumbled by revelations that admissions could be based not
on what you know, but whom you know. Hundreds of people were admitted because of clout.
No one can forget the tapes we heard of Enron employees gleefully giggling over their success at
bilking elderly investors. The total bill from Enron’s collapse was in the many billions of
dollars. For years the tobacco industry lied about what they knew of the dangers of their
product. Even after smoking has declined in popularity, still more than 1,200 people die
every day from smoking-related illnesses in the U.S. Similar behavior was widespread in the
asbestos industry, resulting in hundreds of thousands of occupationally related deaths, more than
all other deaths from all other industries combined.
The Ford Pinto decision is shocking, but now not so unfamiliar. When Ford, in the Seventies,
wanted to make a small car but didn’t have the expertise to produce a front wheel drive car, they
eliminated the trunk on the Pinto, but then had to push the gas tank into a place where a sharp
rear end jolt might cause a fire. The Ford engineers predicted this problem, and suggested
how much it would take to change the design. Ford managers asked their actuaries to predict
how many people would die in such accidents, how many of those would successfully sue the company,
and how much the jury awards would be. They compared this number to the cost of changing the
design, and decided to go ahead and manufacture the car as is. This was certainly a low point
in ethical decision making.
Your organization can be ethical, but only if you make it so. And there will be prices to
pay. All important ethical decisions are zero-sum decisions. A zero-sum game is where
there are as many losers as there are winners. (If you add up the losses and the gains, you
get a zero as the sum; one winner and one loser, plus one and minus one.) Sports are zero-sum
games. Many political decisions have this zero-sum quality. Your organization will
almost always pay a price for the tough ethical decisions it makes.
You would hope that there were lots of benefits for making these decisions, and that those benefits
outweigh the price. There are benefits of being ethical, but they won’t ever match the
price. If you want to run an ethical organization, it is because you want the organization
you run to be ethical, not because of “what’s in it for you.”
Ultimately, this will take leadership and commitment on your part. But that is later in our
discussion. In this series of articles, we will address five questions:
1. Is organizational ethics a good investment?
2. Why would you do something that wasn’t a good investment?
3. How can you build an ethical organization?
4. What are the benefits of being an ethical organization?
5. What will it take, in terms of leadership and commitment, to make this happen?
So, first let’s ask whether or not being ethical contributes to your “bottom line.”
© Daniel Swartzman
2010
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