Jeffrey Saltzman's Blog

Enhancing Organizational Performance

A Discussion on Ethics

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Is it time to abandon ethics as a construct? Organizations come in all shapes and sizes ranging from governmental entities (cities, states, countries and cross-country entities), private sector corporations, NGOs, not-for-profits, educational institutions, and criminal organizations, not to mention within any one of these there can be departments, divisions, business units and enterprise-wide structures each a unique organization unto themselves. Each of these  organizations internally develop codes both formally and informally regarding what acceptable organizational behavior is, often thought of as ethics, and what is beyond bounds.

Externally, organizations are held up to societal standards to determine if they are operating in an acceptable fashion, with the degree of oversight to  determine that being a hotly contested point of contention. Society debates and struggles with the degree of regulation required to promote and safeguard the greater well-being vs. the ability of organizations to offer products and services in a competitive unhindered fashion. Some organizations are exceedingly profitable because they operate at the very edge of general acceptability, performing services or providing products that most others choose not to or view as too risky, and there are CEOs who routinely retain criminal attorneys in case they are perceived as going too far. Organizations themselves though are rarely charged with a crime, unless the criminal activity suspected is seen as having become institutionalized and a part of the way the organization does business. When an organization is charged with a crime (e.g. Enron, Arthur Andersen) they rarely survive.

Some of the hotly charged emotions surrounding the debates of acceptability of behavior may be driven by the word “ethical” and the construct of “ethics” in and of itself. For the word ethics sets up a potential false dichotomy of there being a clear right and wrong, a good and bad, a moral and amoral path of decision making and behavior.

Is organizational behavior ethical because it follows various laws, regulations and guidelines or do the guidelines, regulations and laws arise from the behavior we define as ethical? This illustrates the classical correlational conundrum of cause and effect. But in this case if we state that behavior gives rise to rules, we can also state that the rules are unnecessary for there are those who would behave ethically regardless of whether the rules or societal standards are in place, and that the standards are there only for those who actually need guidelines to know and define what is ethical.

In a sane version of the world we would want every person, every organization to have an intuitive sense of right and wrong, ethical and unethical, with rule-based or legal guidelines being unnecessary, but given that organizations are made up of people, some of whom are operating at the edge or beyond the edge of acceptability, that is just not going to happen. Additionally, past research has shown that what employees (people) define as ethical behavior by an organization varies by position within the organization, with line workers, professionals, lower and higher levels of management each having their own unique twist to their definition of ethics. This implies that the difficulties in measuring ethics and providing guidance on ethical behavior may not lie with people but with the construct of ethics itself. What one person may perceive as ethical another may perceive as unethical.

An important question that should be explored is how the construct of ethics can be improved upon, perhaps shifted away from the emotionally laden right and wrong, moral and amoral, and more to this is what individuals and society deem as acceptable or unacceptable.

  • One organization will make extensive use of temporary and causal labor, creating a continuing sense of uncertainty among the workforce, while another will hire permanent labor.
  • One organization moves its production off-shore eliminating jobs, while another chooses other paths to cost cutting to keep its production local.
  • One organization may make a decision to layoff a woman, 7-months pregnant, and think nothing of it, while another would never consider that behavior as acceptable.
  • One organization may decide to partner and work jointly with its unions; another will choose to hold the union at arm’s length, while another will treat the union as the enemy.
  • One organization chooses to offer development opportunities to all employees while another views that expenditure as unnecessary, as the CEO has a point of view that employees should come to work completely trained up.
  • One organization uses a meritocracy approach to promotions another uses tenure.
  • One organization eliminates testing and quality control oversight that is not regulatory in nature as a way to save costs, another views that as an unacceptable risk with the potential of putting harmful product in circulation.

These are, along with a myriad of other “muddy” business decisions, are the kind of decisions that many of us may be called upon to weigh in on or decide upon ourselves. What should we consider as we deliberate on our course of action or advice?

  • What does the research show?
  • What will the impact be on the effectiveness and the vitality of the organization?
  • How do we interpret what people desire and expect from the organization?
  • How will these various decisions affect the motivation of others in the workforce?
  • How can these decisions bind the organization together, creating common purpose or how can they damage that?

While important questions and worthy of exploration, these decisions are not clear cut at all from an ethical perspective, being seen from various points of view as having competing or conflicting objectives. Those objectives can be viewed, each, as having varying degrees of ethical acceptance by differing groups. And just because a decision path does not violate any laws, regulations or guidelines it may not be an ethical thing to do, or is it?

Some of the lack of clarity here may be due to the debate regarding the role of organizations in society. Are private organizations simply there to maximize the profit for their investors? Do they have other responsibilities to society (which could be argued enabled them to come into existence in the first place)? Many organizations, including my own, have signed on to the concept to operate in a sustainable fashion, being simultaneously concerned with the 3Ps – Profit, People, and Planet. And if you take the long term view of organizational performance rather than a short term orientation the wisdom of that approach is inescapable.

In bringing about better “ethical” decision-making processes and communicating decisions in a manner that creates acceptance by as large a group as possible, there are some unique skill sets which can play a constructive role, such as:

  • Unbiased data-based observer
  • Negotiator
  • Conciliator
  • Behavioral Interpreter and
  • Scientifically based cause and effect determiner.

In today’s world, it could be argued that we all need to build additional skill sets and decision-making paradigms to facilitate decision-making that is viewed by as large a percentage of the organizational population as possible as ethical and proper. The issues that organizations face today in order to succeed are not unique but are enduring, however, the current environment greatly magnifies them, necessitating greater skill at handling them and facilitating a common, scientifically sound understanding of how to resolve them.   _____________________________________________________________________

© 2011 by Jeffrey M. Saltzman. All rights reserved.

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Written by Jeffrey M. Saltzman

August 26, 2011 at 11:33 am

One Response

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  1. Jeff thanks for this. I do think that there are some moral compass points which can be effectively be institutionalised via a comprehensive company approach to ethics. We note a lot of good practice in our work with companies at the IBE (www.ibe.org.uk). Although the code of “do unto others as you would have them do unto you” is a high bar, we do find that giving employees throughout the organisation guidance (see Ethics in Decision Making as a recent example publication) of the questions they should ask themselves when they have a dilemma to resolve is helpful. The “red face test” or ” would you be able to explain why you took this action to your (mother/child/spouse – delete as appropriate)?” or “what is the worst headline you could imagine a hostile red top reporter would write?” are useful tests. Our work will never be finished, but I do feel a lot of progress is being made by progressive companies.

    Chris Moorhouse

    August 26, 2011 at 2:03 pm


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