Ethics In Corporate America
In researching for this subject, I unearthed so much information on ethics in corporate America that I began to think that I might have bitten off more than I could chew. And while ethics is everyone's business, it is not a subject I claim as my expertise -- only one in which I daily endeavor to do better.
In The Beginning: A Commentary
Once upon a time in Corporate America, your job was your home away from home. A place to which you looked forward to going in the morning (can you believe it)! You worked for a company of "like-minded thinkers" who made the company successful and who were proud of you and your contributions -- you were a team players in every traditional sense of the word. The company for which you worked defined strict ethical codes of conduct, expected to be followed by all its employees and strongly enforced both by internal and external forces.
These codes of conduct not only defined you professionally, but personally, too. You were expected to take the "high ground" on all fronts your life. Heck, your next-door neighbor was probably a colleague of yours! You got together after work and on weekends for a friendly barbeque in your backyards with the wife and kids where information was freely shared. Your "comings and goings" were an open book where what you did after work was as much fodder for the next day's water cooler convergence as the job you did for your employer. You got to work by nine, put in a hard day's work until five, went home for a nice dinner with your wife and kids, collected a steady paycheck at the end of the week -- life was simple, good and uncomplicated. If you did a good job (proactive thinkers need not apply), stayed out of trouble, took care of your family, didn't cause any waves at work, remained morally sound, and could probably count on retiring someday with a full pension and a move to Florida.
Flash forward In the early 1980s, companies began to look at increasing their bottom line through mass mergers and acquisitions with unlike companies. This diversified their corporate investments and moved them out and away from traditional business models and what had long been their core competency focus. However, as they began to consume, reorganize and consolidate these newly acquired assets, they found that they had unnecessary multiple overlaps in expertise-overlaps that could be cut. While companies were quick to cut overhead overlaps through layoffs, they neglected to consider that the very people they were laying off were the same people to whom they were selling their product! BIG MISTAKE.
Why would I, as a consumer, purchase products from a company that had just taken my job away from me or from someone I knew? Thus began the downslide in company allegiance from their workforce/consumer markets. No longer could you count on a company's commitment to you or your job. Hey, if your competitor was after you and offered you more money and a better position, you took it without any regard to the impact your leaving would have on your current employer. And rightfully so.
This movement, fueled by moral and economic shifts in other sectors, began to redefine a workers mindset. The new mantra became "Everyone for yourself," and "Lead, follow or get out of the way."
Hence it's no surprise that worker loyalty in the latter part of the 20th and early part of the 21st century has hit an all time low. In today's economy automation, offshore production and outsourcing have redefined the allegiance a company has to its workforce and its workforce to the company. Corporate profits and their impact on Wall Street and to shareholder expectations have become the new dictator of corporate policy. Corporate training programs -- once a given at any company -- have, because of their cost, been scaled back considerably.
Now, the two main considerations for hire is the candidate's ability to "hit the ground running" and to take proactive measures in accomplishing his or her job. The thinking is that if you can bring these assists to a company immediately, you can pay for yourself! The workplace became a "dog eat dog" existence, and this attitude was strongly encouraged by management in order to make the numbers that the boys upstairs wanted to see. Corporate profits seem to rise as work ethics decline.
Flash Forward The New Ethic: A Corporate View
General Electrics chairman and CEO Jack Welch recently said, "Values and behaviors are what produce high performance numbers, and they are the bedrock upon which we build our future."
Welch further explains that there are four types of employees. "Type 1: shares our values; makes the numbers -- sky's the limit! Type 2: doesn't share the values; doesn't make the numbers -- gone. Type 3: share the values; misses the numbers -- typically, another chance or two.
None of these three are tough calls, but Type 4 is the toughest call of all: the manager who doesn't share the values, but delivers the numbers; the "go-to" manager, the hammer, who delivers the bacon but does it on the backs of people, often "kissing up and kicking down" during the process. This type is the toughest to part with because organizations always want to deliver -- it's in the blood. And to let someone go who gets the job done is yet another unnatural act. But we have to remove the fouth type because they have the power, by themselves, to destroy the open, informal, trust-based culture we need to win today and tomorrow. They weaken the trust of our entire organization.
Building a company that does the right thing might not be cheap or easy, but firms that have such a foundation can avert crises and show real returns -- loyal employees and a better bottom line (Dayton Fandray, "The Ethical Company").
Business ethics is based on broad principles of integrity and fairness and focuses on internal stakeholder issues such as product quality, customer satisfaction, employee wages and benefits, and local community and environmental responsibilities (Jon Entine, "Ethics and Accountability").
Corporations will soon be constructing integrity Web sites highlighting their values policies. They will be publishing annual integrity reports as detailed and comprehensive as current annual statements of financial accounts. These reports will cover employee and customer privacy, compliance with workplace ethics regulations, environmental protection, responsible labor conditions in poor countries, human rights, respect for the law and for anti-bribery conventions, as well as greater transparency in areas of scientific and technological product development.
Integrity programs will be the glue that attract and retain the best employees. They will build the uplifting corporate culture so necessary at a time when employee loyalty is less firmly anchored than in the past. Value policies will be the backbone of the corporate culture in enterprises that have leaner and flatter management structures, and whose divisions are much more entrepreneurial.
Rather than the manufacture of products, the business of most leading U.S. global corporations will be driven by the development of knowledge and its distribution. Reputation will be more important than ever in distinguishing one company from another, and this reputational excellence will depend on effective integrity management.
And, in manufacturing, CEOs will recognize that they can win an edge with consumers if they can project an image of trust into their brand labels. This will be essential when products, from computers to polo shirts, will be virtually identical except for their brand logo. And, in the competition for capital, firms will find that the strongest levels of long-term investor support are likely to be secured by those companies that are seen to place integrity at the heart of their business operations.
Corporate Consensus On Values In The 21st Century
To implement corporate integrity programs successfully, there must be: commitment, accountability, set policies in place, audience, programs, monitoring, communication and leadership alliances.
- Outstanding employees will only want to work for corporations whose leadership they trust, whose values they respect.
- Joint venture partners will only be willing to enter into alliances with corporations that enhance the venture's public reputations.
- Consumers will focus on the values behind the brand labels.
- Investors will more clearly see the relationships between integrity management, competitiveness and the resulting bottom-line benefits. Shareholders will press for stronger transparent corporate governance and for greater accountability by boards of directors and top managers across the landscape of social responsibility, ethics and privacy issues. (Frank Vogl, "Corporate Integrity and Globalization -- The Dawning of a New Era of Accountability & Transparency").
Q. Professional and personal responsibility to ethics -- are these two different landscapes?
A. No.
Questions we may want to ask ourselves when deciding whether or not the action(s) we are about to take is ethical and employs values:
- Is the action legal?
- Is it right?
- Who will be affected by my actions?
- Is this treatment something to which I would willingly subject myself?
- Is there harm being done to anyone?
- Is what I am doing something I would feel comfortable explaining to my boss or a client, friend, husband or wife?
- Is the activity something I am proud of and would publicize as a trait?
- Does the action I am about to take fit in with my company's values?
- How will I feel afterward?
- Will my action reflect poorly on the company?
- What does what I am about to do, say about me?
Again, as I said in the beginning of this article, the subject on ethics is a vast one -- so vast that just to begin to disseminate the information available to me on this subject was at first a bit overwhelming.
But as I read and read and read, I realized that this is stuff we all already know about, really. I mean, if we all think back to when we were kids, this is what our parents were always talking to us about -- trying to get us to understand -- wasn't it? And while the saying "Do unto others as you would have done unto you" may be short and sweet and rather simple in the shadow of all the information out there on the subject of ethics, I think it just about says it all. Doesn't it?
Corporations will soon be constructing integrity Web sites highlighting their values policies. They will be publishing annual integrity reports as detailed and comprehensive as current annual statements of financial accounts.
Next Week: Mailbag
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Written By Ella Kallish
For more information on Ella Kallish go to www.ellakallish.com
Ella Kallish is available for corporate and group seminars.
