Not too many years ago, a prominent business leader in New York City noted that “educating and training people on the subject of ethics was not worth the effort because it couldn’t be done”. Indeed, in business and other professional schools across the country in the 20th Century it would have been hard to find a core course in ethics or the topic even addressed in academic curriculum. More recently, ethics and corporate social responsibility have become “hot topics” in academia and in professional training and education. But evidence abounds of ethical “melt-downs” and misconduct in all types of organizations- banks (Royal Bank of Scotland), corporations (ENRON), government (George Washington bridge scandal), public school systems (changing student test scores)…This brief essay will address ethics, what causes people to act unethically, and what should be done to prevent it.

Briefly defined, ethics relates to principles, standards, and values that guide honorable behavior. It is being able to distinguish “right from wrong” and then doing the right thing. Scholars have viewed ethics from many perspectives. Absolute ethics calls for people to adhere to strict codes or commandments. Situational ethics notes that one should consider the influence of external factors in determining “right from wrong”. In his “stages of moral development”, Robert Kohlberg offers even more insight into the nature of moral and ethical decision-making. He has written elegantly about the moral stages that individual’s progress through from infancy to adulthood.

What causes people to act unethically in group settings? It is a complex, multi-faceted issue, but some of the usual culprits are: greed, dishonesty, lack of time or resources, conflicting guidance, ambition, excessive “bottom-line” emphasis, and the organizational paradigm of “producing more with less” (no matter what the collateral damage). In my experience, some of the worst ethical lapses have occurred when great pressure is put on young supervisors who are often overworked and under resourced to just “make it happen” and get results.

What can organizations do about this? Fortunately, there are many programs and strategies that can be pursued. Among these are the following: personal example of senior leaders (never underestimate this), developing an internal code of ethics, training supervisors and employees in topics related to fraud, waste, and abuse, rewarding people who report ethical lapses, instituting negative consequences for potential “bad actors”, unannounced audits, and involving fiduciaries more in oversight. Many of these steps only require emphasis, and can be instituted without great cost to the organization. Failing to proactively act, however, or hoping that issues will just go away or might never surface can be very costly. It can also greatly damage the organizations hard earned reputation.

One of the most effective strategies to use in promoting an ethical culture can be TRAINING.
Workshops can be designed to give senior leaders the opportunity to address ethics. Short cases can be developed using scenarios and examples from the business and then allowing time for group analysis and discussion. The value is in learning from different perspectives and exploring diverse views. In this manner, organizations can proactively diffuse potential issues before they occur.

Organizations are run by people, and people are capable of lapses in moral judgment and acting out of unethical self-interest. It behooves all organizations in the 21st Century to attend to the issue of ethics through policy, example, and training, just as they would other “bottom-line” challenges. Research suggests that ethical awareness and sensitivity can indeed be taught. Moral courage may then be called for to do the right thing and pursue the harder right over the easier wrong.

his essay was submitted by Al Vitters, PhD. He is a LIMBA member, Colonel (US Army-ret) and a Professor at St. Joseph’s College. He teaches “Ethics & Social Responsibility” in management courses.