Management Communication About Ethics

1. Management Communication About Ethics The Difficulties of Managing for Ethics

2. Compliance with Laws Ethical Behavior SWEET SPOT Compliance and Ethics Program

3. Moral Muteness • The fact that managers rarely talk about ethics directly. Managers talk instead about: • a. organizational interests • b. practicality • c. economic good sense

4. In reality, many of their decisions are actually guided by • a. morally defined standards codified in law • b. professional conventions • c. social mores

5. And they defend moral activities such as: • a. service to customers • b. effective cooperation among personnel • c. use of resources for company’s benefit

6. Go it Alone: • Managers struggle with ethical issues, but don’t talk to one another about it much: • “Morality is a live topic for individual managers but it is close to a non-topic among groups of managers.”

7. Communication& Follow-Through are Essential • While normative expectations are explicitly given through legal rulings, regulatory agencies decrees, professional codes, organizational policies and social mores, if these are not communicated well, and acted upon, the message will not get out.

8. What is communicated?

9. Methods of Communication Evaluate current ethics communication lines • Formal and informal • downward, upward, and two way Clear, consistent, credible messages across communication lines

10. More about Methods of Communication • Hiring Announcements • Website • Email • Brochures • Meetings – Formal & Informal • Orientation sessions • Newsletters • Manuals • Code Handbooks w/certifications • Badges and Wallet Cards • Key Fobs

11. Causes of Moral Muteness: • 1. Threat to Harmony: moral talk often requires some challenge and confrontation

12. Causes of Moral Muteness: • 2. Threat to efficiency: • a. if done with ideological exhortations it • i. does not facilitate problem solving • ii. doesn’t usually clarify issues • iii. seems self-serving

13. Causes of Moral Muteness: • Threat to Efficiency (cont’d): • b. moral talk adds an extra burden to business decisions—seen as distraction • c. Adds additional rules and regulations, may hinder quick decisions

14. Causes of Moral Muteness: 3. Threat to image of Power and Effectiveness • a. moral ideals highlight imperfections in current practices • b. managers don’t want to expose their own moral illiteracy • c. lower managers are expected to solve their own problems

15. Consequences of Moral Muteness • 1. Moral Amnesia: forget that ethics is part of business • Ex: Milton Friedman acts as though business should be concerned only with profit, not social responsibility, yet he alludes to 8 important ethical issues: no fraud, no deceit, fair competition, respect law, respect contracts, recognize employee and investor rights, maximize consumer satisfaction and freedom

16. Consequences of Moral Muteness • 2. Narrowed conception of morality: Discuss business only in terms of strategy and common sense, and avoid discussing the ethical reasons for the decision. Ethics is construed to be only for the severely immoral—rules to punish breakers.

17. Consequences of Moral Muteness • 3. Moral Stress: managers who don’t discuss the ethical issues will have more stress that they internalize

18. Consequences of Moral Muteness • 4. Neglect of Abuses: Many moral issues are simply not organizationally recognized and addressed. “Many moral abuses are ignored, many moral ideals are not pursued, and many moral dilemmas remain unresolved.”

19. Consequences of Moral Muteness • 5. Decreased authority of moral standards: The less we talk about it, the less those standards will seem real.

20. Not Just Cheerleading • Charismatic Leadership and forceful commands bring about short term change, but long term changes require shared values which provide a common vocabulary for identifying and resolving problems.

21. How to make Changes • Must provide an opportunity for open discussion without any danger of retribution or corporate punishment.

22. Making Changes • 2. Important to help all involved realize that they hold similar long-run objectives and value common principles • Help make shared commitments seem basic/core • Less likely to become contentious if unity is emphasized • Legitimate dissent will be more cordial and controlled if ground-rules are set up first.

23. Making Change Happen 3. Role of Senior Managers: • Must demand that these ethical conversations take place • Need to build these into fabric of organizational life • Interventions require patience

24. Management Creates a Culture

25. Management is All About Ethics • “Typically, unethical business practice involves the tacit, if not explicit, cooperation of others and reflects the values, attitudes, beliefs, language, and behavioral patterns that define an organization’s operating culture. Ethics, then, is as much an organizational as a personal issue. Managers who fail to provide proper leadership and to institute systems that facilitate ethical conduct share responsibility with those who conceive, execute, and knowingly benefit from corporate misdeeds.”

26. Gallup Research Based Findings During nearly forty years of research and tens of thousands of interviews, Gallup has determined the Seven Demands of Leadership. These are behaviors of individuals who are perceived as leaders within their organizations, communities and nations.

27. WHAT GREAT LEADERS DO MOST - the most commonly expressed demandsGallup Organization VISIONING 7 D E M A N D S MENTORING BUILD ACONSTITUENCY CHALLENGINGEXPERIENCES MAKING SENSE OFEXPERIENCES STABILIZINGVALUES KNOWINGSELF

28. Values Gallup Organization “The true test of character is how we behave when we don’t know what to do.” John Holt

29. Our Values Communication We have an obligation to communicate. Here, we take the time to talk with one another and to listen. We believe that information is meant to move and that information moves people. Respect We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Integrity We work with customers and prospects openly, honestly, and sincerely. When we say we will do something, we will do it. When we cannot or will not do something, then we won’t do it. Excellence We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.

30. Tone at the Top Gallup Organization The challenge at the top is to lead in accordance with the true values of the organization. If your organization does not have an entrenched value system, don’t claim that you do. Just writing it down doesn’t make it so.

31. Enforcement • Reality: Codes and rules without enforcement and adherence are useless. • Question: How do we ensure compliance with legal rules and corporate policies?

32. Types of EnforcementThe best policy is to prevent wrongdoing • Getting Compliance (preventative) • Training and Education (‘I didn’t know’) • Review: Audit for compliance and quality • Incentives: compensation and recognition • Model: Leadership talks, and walks the talk • Punishment (responsive) • Clear Sanctions in place • Ethics Committee (method in place) • Someone with oversight responsibility

33. Summary • Avoid Moral Muteness through Communication • Good leadership will help create a strong corporate culture of ethics/compliance • Talking the talk and walking the walk both are essential

34. Final Thoughts • Often, doing the right thing is clear, even if its not easy • We tend to cut corners for short-term apparently inconsequential issues, but this can come back to haunt us • Having Ethical Habits takes practice, and some thoughtfulness.