Institutionalising Ethics

1. Institutionalising Ethics

2. Successful managers have: Traits of the head – initiative, cooperativeness, flexibility, and coolness under pressure. At the expense of: traits of the heart – honesty, friendliness, compassion, generosity, and idealism. Michael Maccoby

3. Emotional detachment has an analogue in moral disengagement Note the responses of NASA to Challenger, of Union Carbide to Bhopal, of Exxon to the Exxon Valdez disaster, of Barings Bank to Nick Leeson’s dealings, of Alan Bond to the Tooheys hotel leaseholders, of Jodie Rich to One Tel, of Ray Williams to HIH, of Gordon Gekko to the world …

4. Jackall quotes a manager in Moral Mazes “What is right in the corporation is not what is right in a man’s home or in his church. What is right in the corporation is what the guy above you wants from you. That’s what morality is in the corporation.”

5. Jackall’s five rules of corporate morality (survival) • Don’t go around your boss; • even if your boss invites dissent, tell him or her what he or she wants to hear; • if the boss wants something dropped, drop it; • anticipate the boss’s wishes – don’t force him or her to act the boss; • do not report what the boss does not want reported, cover it up and remain silent.

6. Goodpaster’s notion of teleopathy the unbalanced pursuit of goals by an individual or group. Teleopathy ...is a suspension of “on-line” moral judgement as a practical force in the life of an individual or group. It substitutes for the call of conscience the call of decision criteria from other sources: winning the game, achieving the goal, following the rules laid down by some framework external to ethical reflection.

7. Rôles • No licence to act unethically • Rôles add to responsibilities, they do not exempt • Suggest that one is impersonating another like an actor – that the function of the rôle is what matters and the occupant doesn’t • Contribute to lost responsibility in organisations

8. Consider the structure of rôles in organisations ‘Rather than ask “What was going on with those people to make them act that way?”, we ask, “What was going on in that organization that made people act that way?”’ James Waters

9. Asking this does not relieve individuals of responsibility This question moves the focus to the incentives for good behaviour, the disincentives against bad behaviour, and the culture of risk or safety, retribution or support in which individuals and teams act.

10. A crook culture exhibits the following features 1. There is a “kill the messenger” ethos in the organisation – justifies distortion and concealment of information. 2. There is a low degree of confidence in the accuracy of internal reports. 3. Despite claims to doing the right thing, in the last analysis, top management does the most expedient thing. 4. Employees do not know of or refer to written ethics policies . 5. The operative value of the organisation is: if it’s legal, it’s ethical. 6. Top management’s stated concern for ethics is for public relations. 7. Managers while basically truthful are willing to deceive in order to accomplish organizational or personal goals. 8. Managers do not believe there is an obligation to be candid where it could harm personal or organizational goals. 9. People who ignore ethics but produce bottom line results get promoted.

11. How do you discover this? An ethics audit. An ethics audit is a survey of the members of an organization to test their perceptions of the health of its ethical culture. Building an ethical culture begins with an audit of the prevailing culture.

12. What else is to be done? Codes Leadership & mentoring Ethics training Incentives & disincentives Ethics officersHotlines Committees Ombudsman Newsletters Performance standards Can all support a culture of ethical excellence

13. Attending to the psychological contract When people join an organization they enter into what has been called a “psychological contract” – this is the unspoken set of agreements between employees and the organisations that employ them. This makes them hard to deal with for both parties, especially when the psychological contract is broken. One writer has argued that “the psychological contract may be the central determinant in whether a person behaves ethically” (Sims 1991, 495).

14. CODES • Rule of law • Common floor • State fundamental values • Can be codes of conduct or ethics or hybrid • Must be used frequently to be effective • Should be part of induction and development • Must cover whole organisation • Can be developed at top

15. Leadership Studies show that the single most important factor in employees adhering to ethical standards is example from the top. This is a more potent than peer pressure, or environmental factors. Managers ought to respond to problems identified in an ethics audit by making public statements about the organization’s ethical commitments, the ethos it is working to establish and its expectations of employees.

16. Incentives Reward good behaviour and never punish it. Punish poor behaviour and never reward it.

17. An aid to clarity:Decision models • Do not make the decision for you • Document the decision and the process • Make plain what values are sacrificed • Aid in moral reasoning • Objectify moral reasoning and allow an example to be set

18. If all else fails:Whistleblowing • Is public exposure of a danger to public interest • Permitted when a serious issue is not addressed within an organisation • Not internal • Involves a betrayal of kinds • Is a costly remedy • Motives of whistleblower not central • Difficult to legislate protection for