Dealing with Unethical Behavior in Your Team

Dealing with Unethical Behavior in Your Team Society for Government Meeting Professionals National Education Conference & Expo Portland Oregon 2014

OUTCOMES After working together we will: • The visible and invisible impact of unethical behavior • Looking at the fall out and developing communication strategies for stakeholders • Strategies for approaching and dealing with unethical behaviors such as breaches of confidentiality, plagiarism, embezzlement etc.

A BIT ABOUT ME • Assistant Professor of Business & Program Coordinator of Graduate Studies in Human Resources Management • Marygrove College • Business Ethics, Organizational Behavior, Management, Entrepreneurship, Values, and HR Finance. • Owner and Founder of Smith van Rossum & Associates LLC • Management Consulting firm • Strategy, Management and Organizational Development • Ethics and Corporate Social Responsibility Programs • Personnel and Executive Coaching

In My Spare Time

LET’S START WITH A STORY! The following is taken from a simulation case, and is used by permission: • What is wrong? • Have you ever experienced anything like this? • What should you do?

eGS CASE STUDY CEO Paula Chilton was irate. “$1,100? In one month? That’s completely out of line in any case! You’d better tell me more.” CHRO Marcia Jackson indicated that Judy Hawkins, an Industry Analyst, had accumulated $1,100 in phone charges this month, and that they were unable to allocate those to clients. “Have you spoken to her?” asked Paula. “Yes, briefly,” Marcia replied, “and she at first denied the calls…

ETHICAL DELIMMA • Situations in which there is a choice to be made between two options • Both options are fully justifiable • There are significant value conflicts between the differing interests • In such cases, societal and personal ethical guidelines can provide no satisfactory outcome for the chooser.

Ethical Dilemmas • They are everyday decisions that involve doing the right thing • Do I say to a customer, you can get this product cheaper at this company? • Should I give this person a raise when clearly they deserve it, but they have reached the top of their grade and there are no open positions in the next level? • The big issues are easy—it is the day to day issues that are really tough

eGS CASE STUDY “Yes, briefly,” Marcia replied, “and she at first denied the calls, but then after I called the number and found it was her mother, she recanted and indicated that she did not know that she had run up that amount of personal calls. She indicated that her mother is sick and after recently completing three successful projects for different clients, and putting in lots of overtime, she felt she needed to turn more attention to her mother.” “I am very sorry about her mother, but we have to hold the line on this somewhere! She needs to be fired, plain and simple. Did she have any other excuse for lying?” Paula wondered. Marcia responded “She did indicate that she did not know there was any policy against using the phone for personal use.”

COSTS OF UNETHICAL BEHAVIOR Visible Costs: • The Effect of Published Reports of Unethical Conduct on Stock Prices(Spuma M. Rao and J. Brooke Hamilton III, 1993) • correlated drops in Stock prices to reported unethical behaviors. Tracked companies stock prices published on WSJ from 1989-1993) • ENRON—went from best company to bankruptcy in 2 weeks

COSTS OF UNETHICAL BEHAVIOR Visible Costs: • Loss of reputation • Lower long-term profits • Face long term battle in regaining trust • B.P. Oil Spill • Bernie Madoff • ENRON

COSTS OF UNETHICAL BEHAVIOR Invisible Costs: • The Hidden Costs of Organizational Dishonesty, Robert B. Cialdini, Petia K. Petrova and Noah J. Goldstein • Lower productivity (higher operation costs) • Stress (increased health costs) • Absenteeism (3.6 M. annually) • Lower Job Satisfaction (higher turnover)

HOW TO CONFRONT Four Steps • Gather all the facts! • Who? • Is it one or throughout? • What? • Is it illegal? • Is hard business? • Is it unethical? • Where? • Why? • How? Is it really unethical?

How to Confront • Decide on how and where to confront • Privately? • Explain behavior and policies • Ask to step aside while investigation goes on • Report to Management/Hotlines when sure with evidence • Public Announcements? • Condemn the sin not the sinner • Clarify policies by general announcement • Illegal Activities • Consult legal department how to report • Do not shirk your responsibilities

How to Confront • Communicate clearly • Review Code of Ethics • Develop one if you don’t have one • Inform necessary Stakeholders • Be sensitive • Share pertinent information • Let stakeholders know that you have taken corrective steps • Do not spin! Communicate

How to Confront • Care for Team • Announce what has happened in broad terms • Let team vent feelings • Review Code of Ethics • Hold Ethics Training Care for the rest of the Team

REVIEW • Understand Ethical/Unethical behavior • Costs of Unethical Behavior • Gather facts before acting • Act • Communicate • Do not shirk from responsibilities

QUESTIONS

Contact • For further contact, speaking and consulting or questions: Smith van Rossum & Associates LLC Jerry@SmithvanRossum.com www.SmithvanRossum.com 248.854.8517 or 313.927.1218 jvanrossum@marygrove.edu

Thank You!

RESOURCES • http://www.scu.edu/ethics/publications/ethicalperspectives/confronting.html • http://businessethicsblog.com/ • http://www.scu.edu/ethics/ • http://www.justiceharvard.org/ • Hartman, Laura P.; Joseph DesJardins, Chris MacDonald. (2014) Business Ethics: Decision Making for Personal Integrity & Social Responsibility, 3rd Edition. New York, New York. McGraw-Hill Irwin.

Dealing with Unethical Behavior in Your Team